Greater N.Y. Health Care Facilities Assn., Inc. v. DeBuono, 91 N.Y.2d 716 (1998)
In Article 78 proceedings, a proposed intervenor’s claim can only relate back to the original petition’s filing date if both claims stem from the same transaction or occurrence, and the original petitioner’s claim provided the respondent with sufficient notice of the intervenor’s specific claim to avoid prejudice.
Summary
This case addresses whether proposed intervenors in an Article 78 proceeding can relate their claims back to the original petition’s filing date, thus avoiding a statute of limitations bar. The New York Court of Appeals held that relation back is permissible only if the intervenor’s claim and the original petitioner’s claim are based on the same transaction or occurrence and the original claim gave the respondent notice of the intervenor’s specific claim, preventing prejudice. Because the proposed intervenors’ claims were not closely related to the original petitioners’ and would increase the respondents’ liability, the Court denied intervention.
Facts
An association of nursing homes and eight individual nursing homes (petitioners) initiated an Article 78 proceeding challenging regulations by the Department of Health that established Medicaid reimbursement rates. The petition purported to be on behalf of all similarly situated residential health care facilities, but no class certification was sought. Eight other nursing homes (proposed intervenors), not members of the association, sought to intervene after discovering they wouldn’t be included in a settlement between the original petitioners and the respondents, claiming they were misled by the petition’s caption. These proposed intervenors’ claims were time-barred if not related back to the original filing date.
Procedural History
Supreme Court initially granted the motion to intervene, deeming the claims not time-barred due to relation back. On reargument, the court upheld intervention, finding the claims similar and no prejudice to the respondents. The Appellate Division reversed, holding the claims were time-barred and did not relate back under CPLR 203(f) because they exposed respondents to additional liability from unrelated claimants. The Appellate Division then certified the question to the Court of Appeals.
Issue(s)
Whether the claims of proposed intervenors in an Article 78 proceeding may be related back to the filing date of the original petition, where the proposed intervenors are unrelated to the petitioners, but similarly aggrieved by the challenged administrative action, and their claims would expose respondents to additional liability.
Holding
No, because the proposed intervenors’ claims were not based on the same transaction or occurrence as the original petitioners’ claims, and the original petitioners’ claims did not provide sufficient notice of the proposed intervenors’ specific claims to avoid prejudice to the respondents.
Court’s Reasoning
The Court of Appeals acknowledged that CPLR 7802(d) grants courts broader authority to allow intervention in Article 78 proceedings. However, intervention cannot revive stale claims. Relation back is permissible only if the proposed intervenor’s claim and the original petitioner’s claim are based on the same transaction or occurrence, and the original petitioner’s claim would have given the respondent notice of the proposed intervenor’s specific claim, so that the imposition of the additional claim would not prejudice the respondent.
The Court found that the petitioners and proposed intervenors were not closely related, and their claims, though similarly aggrieved by the regulations, were based on different transactions because each nursing home has an individualized reimbursement rate. The court emphasized that respondents had no notice of proposed intervenors’ particularized claims and that allowing intervention would expose respondents to additional liability from separate claimants whose claims were otherwise time-barred.
The Court rejected the argument that the inquiry in an article 78 proceeding should be limited to the interest of the intervening party because doing so would undermine the four-month statute of limitations: “[T]he relatively short limitation period ‘requires those subject to regulatory decisions such as Medicaid rate-making to bring their challenges promptly’ in order to facilitate rational planning by all concerned parties.” The Court reasoned that a contrary holding would allow a single nursing home’s litigation to preserve the rights of all nursing homes throughout the state despite the expiration of the limitations period.
Finally, the court stated that relying on the mere caption of the proceeding without inquiring into the status of the matter does not excuse the failure to protect their own interests.