New York Law Review

Tag: 1993

  • Reuters Ltd. v. Tax Appeals Tribunal, 82 N.Y.2d 112 (1993): Tax Treaty Nondiscrimination and Worldwide Income Apportionment

    Reuters Ltd. v. Tax Appeals Tribunal, 82 N.Y.2d 112 (1993)

    A state’s application of a worldwide net income apportionment method to calculate the corporate franchise tax of a multijurisdictional business enterprise does not violate the nondiscrimination clause of the United States-United Kingdom Tax Treaty.

    Summary

    Reuters, a UK corporation, challenged New York State’s franchise tax assessment based on worldwide net income apportionment, arguing it violated the U.S.-U.K. Tax Treaty’s nondiscrimination clause. Reuters maintained a branch in New York, incurring losses there, but earned profits abroad. New York calculated deficiencies using the worldwide apportionment method. The Court of Appeals affirmed the Tax Appeals Tribunal’s determination, holding that applying the apportionment formula to a single multijurisdictional enterprise does not violate the treaty. The court emphasized that Reuters-New York is not a separate entity but part of the larger UK enterprise and that the purpose of the nondiscrimination clause is to prevent economic discrimination against foreign taxpayers, which was not demonstrated here.

    Facts

    Reuters Limited, a UK corporation, operated in about 80 countries, with a branch in New York City serving as its principal U.S. office. During 1977-1979, the New York branch incurred losses, while Reuters earned profits abroad. Reuters initially computed its New York franchise taxes based on U.S. income only, paying no tax due to reported losses. In 1983, the Department of Taxation and Finance audited Reuters and issued deficiency notices totaling $1,280,000 based on a worldwide net income apportionment method, which was later compromised to $96,168.

    Procedural History

    Reuters challenged the deficiency assessment administratively. An Administrative Law Judge upheld the deficiency notices, and the Tax Appeals Tribunal affirmed this determination. Reuters then initiated an Article 78 proceeding to annul the Tribunal’s decision. The Appellate Division confirmed the determination and dismissed the petition. The New York Court of Appeals initially dismissed Reuters’ appeal, but later granted leave to appeal.

    Issue(s)

    Whether New York State’s calculation of Reuters’ franchise tax on the basis of the worldwide net income apportionment method violates the nondiscrimination clause of the United States-United Kingdom Tax Treaty.

    Holding

    No, because applying New York’s apportionment formula to the worldwide net income of a single multijurisdictional business enterprise operating internationally does not violate the nondiscrimination clause of the U.S.-U.K. Tax Treaty.

    Court’s Reasoning

    The court reasoned that the antidiscrimination clause in Article 24(2) of the U.S.-U.K. Tax Treaty requires a comparison between the taxation of Reuters’ U.S. branch and the taxation of a U.S. corporation with a branch in New York conducting international business through branch offices in other countries. The court rejected Reuters’ argument that its New York branch should be treated as a separate enterprise from its UK parent. The court emphasized that a branch office has no separate legal identity from the corporation. New York’s method ensures that Reuters’ franchise tax is calculated in a nondiscriminatory manner. The court cited Mobil Oil Corp. v Commissioner of Taxes, 445 US 425, 439, upholding the “unitary business” principle as “the linchpin of apportionability in the field of state income taxation.” The court also noted that the legislative history of the treaty supports the view that the treaty was not intended to restrict states’ use of worldwide income apportionment methods for a single business enterprise. As the Senate Foreign Relations Committee Report stated: “[A] state may take into account the income and assets of any other branches of that corporation, wherever located, because a corporation is considered to be a single enterprise regardless of how many separate branches or businesses it has.” The court also cited Bass, Ratcliff & Gretton v Tax Commn., 266 U.S. 271, rejecting a Foreign Commerce Clause challenge to New York’s apportionment methodology on similar facts.

  • People v. Martinez, 82 N.Y.2d 436 (1993): Reasonable Suspicion Justifying a Stop and Frisk

    People v. Martinez, 82 N.Y.2d 436 (1993)

    When reviewing a suppression motion denial, the Court of Appeals determines only whether there was record support for the finding that police possessed a reasonable suspicion of criminal activity justifying a forcible stop and detention.

    Summary

    Defendant Martinez appealed the denial of his motion to suppress vials of crack cocaine found on his person. The Court of Appeals affirmed the lower court’s decision, holding that the police officers possessed reasonable suspicion to stop and detain Martinez. The Court emphasized that its review was limited to whether the record supported the determination that the police had reasonable suspicion to believe Martinez was committing or had committed a crime. Because such support existed, the Court affirmed the denial of the suppression motion.

    Facts

    Police officers forcibly stopped and detained Martinez. A search incident to that stop revealed vials of crack cocaine in his hand and coat pockets. Martinez moved to suppress the evidence, arguing that the police lacked reasonable suspicion to justify the stop and search.

    Procedural History

    The trial court denied Martinez’s motion to suppress the evidence. The Appellate Division affirmed the trial court’s decision. An Associate Justice of the Appellate Division dissented, granting Martinez permission to appeal to the Court of Appeals.

    Issue(s)

    Whether the police officers had a reasonable suspicion that the defendant had committed or was committing a crime, thus justifying the forcible stop and detention.

    Holding

    Yes, because the determination that the police officers had reasonable suspicion was supported by the record.

    Court’s Reasoning

    The Court of Appeals emphasized that its review was limited to whether the determination of the mixed question of law and fact – whether the police officers had reasonable suspicion to support the forcible stop and detention – was supported by the record. Citing People v. Harrison, 57 NY2d 470, 477, the court stated that since the lower court’s determination was supported, the Court of Appeals’ review was concluded, and the order of the Appellate Division had to be affirmed. The court reiterated that only the application of the legal standard to the specific facts was at issue. The court did not detail the specific facts giving rise to the reasonable suspicion; however, the affirmance indicates the facts were sufficient to meet the reasonable suspicion standard. The decision highlights the limited scope of review for the Court of Appeals in cases involving mixed questions of law and fact, where the lower courts’ findings are supported by the record.

  • Cerami v. City of Rochester School District, 82 N.Y.2d 809 (1993): Defining Mental Incompetency for Workers’ Compensation Claims

    82 N.Y.2d 809 (1993)

    The standard for mental incompetency sufficient to toll the statute of limitations for filing a workers’ compensation claim requires an overall inability to function in society and protect one’s legal rights, not merely an inability to comprehend the basis for the claim.

    Summary

    Cerami filed a workers’ compensation claim in 1980 for a mental breakdown allegedly caused by stressful working conditions that led to his 1967 resignation. The claim was filed after the two-year statute of limitations. Cerami argued that his mental incompetency tolled the statute of limitations. The Workers’ Compensation Board denied the toll, finding Cerami competent to file a claim in 1967. The Appellate Division reversed, holding that the relevant determination was whether Cerami could comprehend the premise for his claim. The Court of Appeals reversed the Appellate Division, holding that the standard for mental incompetency requires an overall inability to function in society, not just an inability to understand the basis for the claim.

    Facts

    Cerami resigned from his position as a cosmetology instructor with the City of Rochester School District in 1967. In 1980, Cerami filed a workers’ compensation claim, alleging a mental breakdown caused by stressful working conditions. The Workers’ Compensation Law requires claims to be submitted within two years of the accident giving rise to the claim. Cerami argued that Section 115 of the Workers’ Compensation Law tolled the limitations period because he was mentally incompetent.

    Procedural History

    The Workers’ Compensation Board determined that the Section 115 toll was inapplicable because Cerami was competent to file a claim in 1967. The Appellate Division reversed, holding that the relevant determination was whether Cerami could comprehend the premise for his claim. The Court of Appeals reversed the Appellate Division and reinstated the Board’s decision.

    Issue(s)

    Whether the Appellate Division erred in defining mental incompetency for the purpose of tolling the statute of limitations under the Workers’ Compensation Law as requiring only an inability to comprehend the premise for the claim, rather than an overall inability to function in society and protect one’s legal rights.

    Holding

    No, because the definition of mental incompetency for tolling the statute of limitations under the Workers’ Compensation Law requires an overall inability to function in society and protect one’s legal rights, as established in McCarthy v. Volkswagen of Am., not merely an inability to comprehend the basis for the claim.

    Court’s Reasoning

    The Court of Appeals rejected the Appellate Division’s definition of mental incompetency. The court relied on McCarthy v. Volkswagen of Am., which construed CPLR 208, and held that the insanity toll applies only to those individuals who are unable to protect their legal rights because of an overall inability to function in society. The court reasoned that the same analysis should be applied to the Workers’ Compensation Law’s tolling provision, which constitutes that enactment’s own “statute of repose.” The court emphasized that the task of determining mental incompetency is a pragmatic one, requiring consideration of all surrounding facts and circumstances relevant to the claimant’s ability to safeguard his or her legal rights. The Court stated that the Workers’ Compensation Board is the proper arbiter of such a determination, and the role of the courts is simply to determine whether the Board’s determination is supported by substantial evidence. The Court found that the Board applied the correct legal standard and that its determination was supported by substantial evidence, noting that Cerami had applied for and obtained employment, consulted with attorneys, and filed discrimination complaints during the pertinent period. As the Court noted referencing McCarthy v Volkswagen of Am., the insanity toll is available “to only those individuals who are unable to protect their legal rights because of an over-all inability to function in society” (id., at 548).

  • Criscuola v. Power Authority, 81 N.Y.2d 649 (1993): Market Perception of Risk and Property Valuation in Eminent Domain

    Criscuola v. Power Authority of the State of New York, 81 N.Y.2d 649 (1993)

    In eminent domain proceedings, consequential damages based on market value diminution due to public fear of a condition (like power lines) do not require proof that the fear is reasonable; evidence of prevalent market perception is sufficient.

    Summary

    Criscuola sought consequential damages in an eminent domain case, arguing that public fear of electromagnetic emissions from power lines negatively impacted the market value of their property. The New York Court of Appeals addressed whether claimants had to prove the “reasonableness” of this fear to recover damages. The Court held that reasonableness is not a separate requirement. The relevant issue is whether the market value was adversely affected by a prevalent perception of danger, regardless of whether that perception is scientifically valid. The Court reversed the lower court’s decision, emphasizing that just compensation depends on market impact, not scientific certainty.

    Facts

    The Power Authority of the State of New York (PASNY) acquired a power line easement over Criscuola’s Delaware County property through eminent domain.

    Criscuola sought direct and consequential damages, arguing that “cancerphobia” and public perception of health risks from electromagnetic emissions from the power lines negatively affected the market value of the property.

    Criscuola claimed this perception rendered the remaining property “valueless”.

    Procedural History

    The claim was consolidated with similar claims under Zappavigna v State of New York.

    The Court of Claims in Zappavigna held that claimants had to prove the “reasonableness” of cancerphobia and denied consequential damages.

    The Appellate Division affirmed this decision.

    The New York Court of Appeals granted Criscuola leave to appeal, specifically to address whether proof of reasonableness is required.

    Issue(s)

    Whether, in an eminent domain proceeding, a claimant seeking consequential damages for a perceived public fear of danger or health risks must independently prove the reasonableness of that fear to demonstrate diminished market value.

    Holding

    No, because the central issue in just compensation is whether the market value of the property has been adversely affected by a prevalent perception, irrespective of the perception’s scientific validity or reasonableness.

    Court’s Reasoning

    The Court emphasized that the key issue is the impact on market value, which can exist even if public fear is unreasonable. Requiring proof of reasonableness would necessitate a new layer of expert testimony (e.g., electromagnetic power engineers, scientists, or medical experts), shifting the focus from market value to scientific validation.

    The Court adopted the view that “evidence of fear in the marketplace is admissible with respect to the value of property taken without proof of the reasonableness of the fear” (Ryan v Kansas Power & Light Co., 249 Kan 1, 7, 815 P2d 528, 533).

    The Court cited cases from other jurisdictions (Florida, California, Kansas) that similarly held reasonableness is not a factor. The court stated, “‘Adverse health effects vel non is not the issue in eminent domain proceedings: full compensation to the landowner for the property taken is’ (Florida Power & Light Co. v Jennings, 518 So 2d 895, 897 [Fla]).”

    The Court clarified that claimants must still provide credible, tangible evidence that a fear is prevalent and that this fear is connected to the market value diminution of the property. Claimants can present evidence that the market value of property near power lines has been negatively affected compared to comparable properties without power lines.

    The court distinguished between a personal or quirky fear, which is insufficient, and a public or market-based perception, which can suffice even without scientific proof.

  • Matter of Greenburgh No. 11 Union Free School Dist. v. Greenburgh No. 11 Fedn. of Teachers, 82 N.Y.2d 770 (1993): Applying Current Public Policy to Arbitration Awards

    Matter of Greenburgh No. 11 Union Free School Dist. v. Greenburgh No. 11 Fedn. of Teachers, 82 N.Y.2d 770 (1993)

    Controversies regarding arbitration awards should be decided based on the public policy in effect at the time of the decision, not at the time the collective bargaining agreement was created or the dispute arose.

    Summary

    This case addresses whether a 1986 amendment to Education Law § 1711, allowing negotiated agreements to modify superintendents’ power to transfer teachers, applies to a 1988 arbitration award resolving a dispute under a 1985 collective bargaining agreement. The school board challenged the award, arguing it violated public policy at the time of the agreement. The Court of Appeals reversed the Appellate Division, holding that the public policy in effect at the time of the decision (1993), not the policy at the time of the agreement (1985), should govern. The court confirmed the arbitration award, finding it consistent with the amended Education Law § 1711 and current public policy.

    Facts

    A teacher was transferred to a different grade level by the Greenburgh Board of Education without considering seniority, as stipulated in the 1985 collective bargaining agreement. At the time of the agreement, public policy (as reflected in Matter of Sweet Home Cent. School Dist. v Sweet Home Educ. Assn.) forbade delegating teacher transfer decisions to negotiation. An arbitrator’s award in 1988 ordered the teacher’s return to her original kindergarten class. By 1988, however, the Legislature had amended Education Law § 1711, nullifying the public policy reflected in the Sweet Home case. The school board challenged the arbitrator’s award.

    Procedural History

    The case began as an arbitration proceeding under the 1985 collective bargaining agreement. The arbitrator ruled in favor of the teachers’ federation. The School District then sought to vacate the arbitration award. The Appellate Division ruled in favor of the School District. The New York Court of Appeals granted leave to appeal and reversed the Appellate Division’s order, dismissing the CPLR article 75 petition and confirming the arbitration award.

    Issue(s)

    Whether the public policy reflected in a 1986 amendment to Education Law § 1711 should apply to the 1988 arbitral resolution of a dispute under a 1985 collective bargaining agreement.

    Holding

    Yes, because controversies of this kind should be decided on the basis of public policy operative at the time of decision, not at the time the agreement was made or the dispute arose.

    Court’s Reasoning

    The Court of Appeals reasoned that the relevant public policy is that which exists at the time of the decision, citing Matter of Board of Trustees [Maplewood Teachers’ Assn.] and Matter of Hodes v Axelrod. The court emphasized that the issue was not about retroactive application of the amended statute, but rather the application of current public policy. The amended Education Law § 1711 explicitly allows for negotiated agreements to modify the power and duties of superintendents regarding teacher transfers. The court stated, “the power and duties of superintendents of schools with regard to the transfer of teachers may be modified by an agreement negotiated pursuant to the provisions of the civil service law” (L 1986, ch 843, § 1 [legislative intent]). The court also rejected the School Board’s argument that the arbitrator’s award was irrational, without providing specific details.

  • Thoma v. Ronai, 82 N.Y.2d 736 (1993): Summary Judgment and Comparative Negligence

    Thoma v. Ronai, 82 N.Y.2d 736 (1993)

    A plaintiff is not entitled to summary judgment on the issue of liability in a negligence action where there is a factual question as to whether the plaintiff exercised reasonable care.

    Summary

    In this New York Court of Appeals case, the plaintiff, a pedestrian, sought summary judgment on the issue of liability after being struck by the defendant’s car. The Court of Appeals affirmed the lower courts’ denial of summary judgment, holding that a factual question existed regarding the plaintiff’s comparative negligence. Specifically, the plaintiff’s own admission that she did not observe the oncoming vehicle raised a question as to whether she exercised reasonable care while crossing the intersection. This case underscores the principle that even in negligence actions, a plaintiff must demonstrate the absence of any material issue of fact regarding their own negligence to be granted summary judgment.

    Facts

    The plaintiff, Marna Thoma, was injured when she was struck by a car driven by the defendant, Sandor Ronai, while she was crossing an intersection as a pedestrian. The plaintiff commenced a negligence action seeking damages for her personal injuries. The defendant asserted the defense of comparative negligence, alleging that the plaintiff’s own negligence contributed to the accident.

    Procedural History

    The plaintiff moved for summary judgment on the issue of liability in the Supreme Court (the trial court). The Supreme Court denied the motion. The plaintiff appealed to the Appellate Division, which affirmed the Supreme Court’s decision. The plaintiff then appealed to the New York Court of Appeals. The Court of Appeals reviewed the submissions and affirmed the Appellate Division’s order.

    Issue(s)

    Whether the plaintiff was entitled to summary judgment on the issue of liability in a negligence action, given the defendant’s assertion of comparative negligence and the plaintiff’s own admission that she did not see the defendant’s vehicle before being struck.

    Holding

    No, because the plaintiff’s concession that she did not observe the vehicle that struck her raised a factual question as to whether she exercised reasonable care. This unresolved question of fact precluded the granting of summary judgment.

    Court’s Reasoning

    The Court of Appeals reasoned that summary judgment is only appropriate where there are no genuine issues of material fact. In this case, the plaintiff’s own submissions, including her affidavit and the police accident report, suggested that she may have been negligent in failing to look to her left while crossing the intersection. The Court highlighted the plaintiff’s admission that she did not observe the vehicle that struck her as a crucial piece of evidence raising a factual question about her reasonable care. Since the defendant had raised the issue of comparative negligence, it was essential to determine whether the plaintiff had taken reasonable steps for her own safety. The court essentially determined that a reasonable jury could find that the plaintiff was comparatively negligent. Because the plaintiff had not demonstrated the absence of any material issue of fact, her motion for summary judgment was properly denied. The court did not offer extensive reasoning; it simply stated the well-established rule that summary judgment is inappropriate when there is a genuine issue of material fact. This case is significant because it reinforces the principle that a plaintiff seeking summary judgment in a negligence action must demonstrate the absence of any factual question regarding their own potential negligence. It serves as a practical reminder to attorneys that a plaintiff’s failure to exercise reasonable care can bar summary judgment, even if the defendant’s negligence is apparent.

  • Brooklyn Heights Ass’n v. Macchiarola, 82 N.Y.2d 100 (1993): Upholding Districting Commission’s Discretion in Balancing Charter Requirements

    Brooklyn Heights Ass’n v. Macchiarola, 82 N.Y.2d 100 (1993)

    A City Districting Commission’s decision, based on a reasonable policy of adhering to census block boundaries, will be upheld when balancing competing districting criteria, even if it arguably impacts neighborhood integrity.

    Summary

    Following the abolition of the New York City Board of Estimate, a City Districting Commission was formed to redraw City Council districts. The Commission, tasked with creating a Latino-majority district, included a waterfront tabulation block in that district despite objections from Brooklyn Heights residents who claimed the area was historically part of their neighborhood. The Court of Appeals reversed the lower courts, holding that the Commission’s decision to avoid splitting tabulation blocks was a reasonable policy choice to effectuate the Charter’s requirement that census data be used and the decision was not arbitrary or capricious.

    Facts

    After the New York City Board of Estimate was declared unconstitutional, a City Districting Commission was appointed to redraw City Council districts. To create a Latino-majority district (District 38), the Commission created a “land bridge” using 11 tabulation blocks, including block 105, a long waterfront area. Brooklyn Heights residents (in District 33) objected, claiming the northern part of block 105 and adjacent piers were historically part of their neighborhood and should be included in their district.

    Procedural History

    Brooklyn Heights residents and civic groups filed an Article 78 proceeding challenging the districting plan. The Supreme Court granted the petition, ordering the district lines redrawn. The Appellate Division affirmed. The City appealed to the Court of Appeals as of right.

    Issue(s)

    Whether the City Districting Commission acted arbitrarily and capriciously in declining to split a census tabulation block to preserve a neighborhood’s integrity when balancing competing districting criteria mandated by the City Charter?

    Holding

    No, because the Commission’s decision to avoid splitting tabulation blocks was a reasonable policy choice, and the Charter only requires that districting criteria be applied “to the maximum extent practicable,” allowing for flexibility and compromise.

    Court’s Reasoning

    The Court emphasized that the Commission was mandated to use the “final count results” of the 1990 census and adopted a policy of not splitting tabulation blocks, the smallest geographical units for which census data was available, to implement this mandate. The Court deferred to the Commission’s reasonable policy choice related to implementing the technical requirements of districting. The Court noted the Charter only required criteria to be applied “to the maximum extent practicable,” indicating a need for flexibility. The Court stated: “It is not our role to second-guess the Commission’s reasonable policy choice related to implementing the technical requirements of districting.” The Court found that the Commission’s policy was directly and reasonably related to implementing the census requirement and was not arbitrary or capricious. Because the land-based portion of block 105 was dispositive, the court declined to address the issue of the piers, stating, “In view of our conclusion with regard to block 105, it is unnecessary to consider the disposition of the five disputed piers, because they would not be contiguous to District 33 in any event”.

  • People v. Eiffel, 81 N.Y.2d 480 (1993): Predicate Felony Need Not Be Pending for Entire Bail Jumping Period

    People v. Eiffel, 81 N.Y.2d 480 (1993)

    A defendant can be charged with first-degree bail jumping if a Class A or Class B felony indictment was pending against them when they failed to appear in court, even if that felony is no longer pending at the end of the 30-day grace period for appearing.

    Summary

    Eiffel was released on his own recognizance while facing felony charges. He failed to appear for trial, and the trial proceeded in absentia. The most serious charge was dismissed during trial, and he was convicted of a lesser charge. Subsequently, he was indicted for first-degree bail jumping. He argued that because the predicate felony was no longer pending 30 days after his failure to appear, the bail jumping charge should be reduced. The Court of Appeals held that the bail jumping charge was valid because a qualifying felony was pending when he initially failed to appear, regardless of its status after the 30-day grace period.

    Facts

    Defendant Eiffel was arrested and charged with first and third-degree rape, and second-degree sexual abuse. He was released on his own recognizance, conditioned upon his appearance for trial on May 11, 1989. Eiffel failed to appear on the required date. The court held a hearing, found his absence voluntary, and proceeded with the trial in absentia. During the trial, the first-degree rape charge was dismissed for insufficient evidence. Eiffel was convicted of second-degree sexual abuse (a misdemeanor) and acquitted of third-degree rape (a Class E felony). Before sentencing, Eiffel was indicted for first-degree bail jumping under Penal Law § 215.57.

    Procedural History

    The trial court granted Eiffel’s motion to reduce the bail jumping charge, reasoning that the predicate felony had to be pending both on the date of non-appearance and at the end of the 30-day grace period. The People appealed. The Appellate Division reversed, reinstating the first-degree bail jumping charge. Eiffel appealed to the New York Court of Appeals, which granted leave to appeal.

    Issue(s)

    Whether a defendant can be charged with first-degree bail jumping under Penal Law § 215.57 if the Class A or Class B felony indictment that served as the predicate for the bail jumping charge was no longer pending at the end of the 30-day period following the defendant’s failure to appear.

    Holding

    Yes, because the statute requires that a Class A or Class B felony indictment be pending against the defendant at some point in the criminal proceedings, but it does not require that the predicate crime remain pending until the conclusion of the 30-day period.

    Court’s Reasoning

    The Court of Appeals reasoned that the 30-day period is a “grace period” designed to allow defendants to purge their non-appearance. Citing People v. Shurn, 50 N.Y.2d 914 (1980), the court stated that this period limits the scope of the offense, particularly because bail jumping is a “nonintent crime.” The Court distinguished the case from Shurn, where the defendant was arrested within the 30-day period, allowing him to avail himself of the grace period. Here, the charges were resolved within 30 days, but not because of Eiffel’s actions.

    The Court emphasized that Penal Law § 215.57 provides notice that serious sanctions may result from failing to appear. The statute aims to incentivize appearance by imposing a penalty for absconding and potentially frustrating the timely disposition of charges. The 30-day grace period allows a defendant to appear and “insulate” themselves from prosecution. The Court stated, “During this period, the statute focuses on defendant’s appearance before the court, not the status of the predicate charge.” Thus, if a defendant has not appeared at the end of the 30-day period, the elements of the crime are satisfied, regardless of the status of the predicate charges.

    The Court declined to judicially alter the legislative calibration for first-degree bail jumping. It concluded that when a defendant fails to appear, they have unlawfully violated a court order, and the 30-day grace period allows them to purge their nonappearance. The Court affirmed the Appellate Division’s order reinstating the first-degree bail jumping charge.

  • People v. Rivera, 82 N.Y.2d 697 (1993): Criminal Possession Requires Dominion and Control

    People v. Rivera, 82 N.Y.2d 697 (1993)

    To be convicted of criminal possession of stolen property, the prosecution must prove that the defendant exercised dominion and control over the property, mere presence is insufficient.

    Summary

    The New York Court of Appeals affirmed the Appellate Division’s order, holding that the evidence presented was insufficient to prove the defendant’s criminal possession of a stolen vehicle. While the defendant was aware the car was stolen, the prosecution failed to demonstrate that he exercised any dominion or control over it. The defendant was merely a passenger in the vehicle, and there was no evidence linking him to the theft or operation of the vehicle. The Court emphasized that “possess” requires more than physical presence; it necessitates the ability to exercise control over the property.

    Facts

    The defendant was found sitting in the passenger seat of a parked car. The car’s steering column was broken with exposed wires. Another individual occupied the driver’s seat. The driver’s side door lock and ignition switch were broken. A screwdriver was visible on the floor of the vehicle. The prosecution proved that the defendant knew the car was stolen.

    Procedural History

    The defendant was convicted of criminal possession of stolen property in the fourth degree. The Appellate Division reversed the conviction, finding insufficient evidence of possession. The People appealed to the New York Court of Appeals.

    Issue(s)

    Whether the defendant’s presence as a passenger in a stolen vehicle, with knowledge that it was stolen, is sufficient to establish criminal possession of stolen property under New York Penal Law § 10.00 (8).

    Holding

    No, because the prosecution failed to present evidence demonstrating that the defendant exercised dominion or control over the stolen vehicle.

    Court’s Reasoning

    The Court of Appeals based its decision on the statutory definition of “possess” as defined in Penal Law § 10.00 (8), which requires either “physical possession or otherwise to exercise dominion or control over tangible property.” The Court found that the prosecution’s evidence failed to satisfy this requirement. The mere presence of the defendant in the passenger seat of the stolen vehicle, even with knowledge that it was stolen, did not equate to exercising dominion or control. The Court highlighted the lack of evidence connecting the defendant to the vehicle’s theft or operation.

    The Court distinguished the defendant’s situation from scenarios where a defendant’s actions indicate control, such as driving the vehicle or having the keys. The Court cited prior cases, People v. Luter and People v. Gregory, reinforcing that mere presence is insufficient to establish possession. As the Court stated, “Here, there was no showing that defendant exercised dominion or control over the car… In these circumstances, defendant’s presence in the car cannot be equated with possession.” The absence of any evidence linking the defendant to the taking or operation of the vehicle was fatal to the prosecution’s case.

  • Fletcher v. Kidder, Peabody & Co., 81 N.Y.2d 623 (1993): Enforceability of Arbitration Agreements in Discrimination Claims

    81 N.Y.2d 623 (1993)

    In cases governed by the Federal Arbitration Act (FAA), the arbitrability of statutory discrimination claims is determined by reference to Congress’s intent regarding alternative dispute resolution for that class of claims.

    Summary

    This case addresses whether an arbitration clause in a U-4 form, signed as part of a securities industry registration, is enforceable for disputes involving claims of unlawful discrimination. The Court of Appeals of New York held that, in light of Supreme Court precedent, specifically Gilmer v. Interstate/Johnson Lane Corp., the FAA mandates enforcement of such arbitration agreements unless Congress intended to preclude a waiver of judicial forum for the specific statutory right at issue. The court overruled its prior holding in Matter of Wertheim & Co. v. Halpert to the extent it conflicted with this principle.

    Facts

    Alphonse Fletcher, Jr., an African-American equity trader, alleged racial discrimination by Kidder, Peabody & Co. Rita Reid, a registered securities representative, claimed gender discrimination by Goldman, Sachs & Co. Both Fletcher and Reid had signed U-4 forms containing broad arbitration clauses as part of their securities industry registration. These forms committed all disputes “arising out of [his] employment” to arbitration. Both then brought suit in court, alleging violations of New York’s Human Rights Law.

    Procedural History

    In Fletcher, the trial court denied the motion to compel arbitration, citing public policy concerns. The Appellate Division reversed, granting the motion to compel arbitration. In Reid, both the trial court and the Appellate Division compelled arbitration, relying on Gilmer. The Court of Appeals consolidated the appeals.

    Issue(s)

    1. Whether the FAA preempts state law regarding the enforceability of arbitration clauses in disputes involving statutory discrimination claims.

    2. Whether Congress intended to preclude a waiver of a judicial forum for claims arising under the New York Human Rights Law (Executive Law § 296 (1)(a)), which prohibits employment discrimination, and analogous federal laws such as Title VII of the Civil Rights Act.

    3. Whether the U-4 form signed by Reid was a contract of employment excluded from the FAA’s coverage under Section 1.

    Holding

    1. Yes, because in situations where the FAA is applicable, it preempts state law on the subject of the enforceability of arbitration clauses.

    2. No, because there is no evidence in the legislative history of Title VII or its amendments indicating a congressional intent to override the general rule that anticipatory contracts to arbitrate are enforceable under the FAA.

    3. No, because the Supreme Court in Gilmer specifically stated that the U-4 form is a contract with the securities exchanges, not a contract of employment, and thus not excluded from the FAA’s coverage.

    Court’s Reasoning

    The court relied heavily on Gilmer v. Interstate/Johnson Lane Corp., which established that statutory claims are subject to arbitration if the agreement to arbitrate is governed by the FAA, unless Congress intended to preclude a waiver of judicial remedies for the statutory right at issue. The court stated, “Under that methodology, the party seeking to avoid enforcement of an arbitration clause governed by the FAA must demonstrate a congressional intent ‘to preclude a waiver of a judicial forum’ for disputes based on a particular statutory right.”

    The court found no evidence in the legislative history of Title VII indicating that Congress intended to preclude arbitration of discrimination claims. It noted that the 1991 amendments to the Civil Rights Act, which authorize the use of alternative dispute resolution methods, do not shed light on Congress’ intentions regarding anticipatory agreements to arbitrate future disputes.

    Regarding the U-4 form, the court cited Gilmer‘s holding that it is a contract with the securities exchanges, not a contract of employment, and therefore not subject to the FAA’s exclusion for employment contracts. The court dismissed arguments about the adequacy of the arbitral forum, stating that Congress has already considered and balanced those concerns in enacting the FAA. Quoting Mitsubishi Motors v. Soler Chrysler-Plymouth, the court stated that agreeing to arbitration “trades th[ose] procedures and [the] opportunity for review * * * for the simplicity, informality, and expedition of arbitration”.