45 N.Y.2d 471 (1978)

When interpreting statutes, courts must give effect to the expressed will of the Legislature, and administrative agencies can only promulgate rules to further the implementation of the law as it exists, not create rules that conflict with the statute.

Summary

Finger Lakes Racing Association (FLRA) sued the New York State Racing and Wagering Board (Board) and Western Regional Off-Track Betting Corp. (WROTBC) regarding the distribution of retained commissions from off-track betting. FLRA argued that certain Board regulations were invalid and that WROTBC had wrongfully withheld its share of commissions. The court held that FLRA is a regional track only within its special betting district, that some Board regulations were valid, and others conflicted with the statute and were therefore invalid, reaffirming the principle that administrative rules cannot contradict the plain language of a statute.

Facts

FLRA operates a racetrack within the Western Region but also comprises part of a special betting district. This district was created to protect FLRA’s handle by prohibiting off-track betting on New York Racing Association (NYRA) races within the district during FLRA meetings. FLRA contended that WROTBC wrongfully withheld its statutory share of retained commissions from bets placed on NYRA races both within the Western Region (outside the special district) during FLRA meetings and within the special district when FLRA was not conducting a meeting.

Procedural History

FLRA initiated two actions, consolidated for appeal: (1) a controversy submitted upon agreed facts challenging the validity of the Board’s regulations; and (2) an action for an accounting against WROTBC to collect allegedly due moneys. The Appellate Division ruled in favor of the Board and WROTBC. FLRA appealed to the New York Court of Appeals.

Issue(s)

1. Whether FLRA has the status of a regional track for purposes of distribution of retained commissions on bets placed on NYRA races within the Western Region but outside the special district.
2. Whether the Board’s rules and regulations concerning the distribution of retained commissions are valid.

Holding

1. No, because the Legislature made specific distinctions between FLRA and regional tracks, intending FLRA to be a regional track only within the confines of its special betting district.
2. Some regulations are valid, and some are invalid. Valid regulations are consistent with the legislative scheme, but those in direct conflict with the plain language of the statute are invalid because administrative agencies cannot create rules out of harmony with the statute.

Court’s Reasoning

The court reasoned that the statute distinguishes FLRA from regional tracks outside the special betting district. The creation of the special betting district itself indicated a legislative intent to treat FLRA differently, protecting its handle from competition with NYRA races. The court emphasized that “[c]ourts are constitutionally bound to give effect to the expressed will of the Legislature and the plain and obvious meaning of a statute is always preferred to any curious, narrow or hidden sense that nothing but a strained interpretation of legislative intent would discern.” Regarding the Board’s rulemaking authority, the court acknowledged the Board’s broad authority to issue rules and regulations but emphasized that this authority is limited by the scope of the enabling statute. The court held that while some of the Board’s regulations were consistent with the legislative scheme, others directly conflicted with the plain language of the statute concerning the distribution of retained commissions within the special betting district when no thoroughbred race meeting is conducted. The court refused to interpret “district” to mean “region,” stating that “[t]o permit a court to say that the law must mean something different than the common import of its language would make the judicial superior to the legislative branch of government and practically invest it with lawmaking power.”