49 N.Y.2d 874 (1980)

When an administrative penalty is deemed excessive, the reviewing court should generally remit the matter back to the administrative agency to determine an appropriate penalty, unless the record is sufficient for the court to assess the permissible measure of punishment.

Summary

Rob Tess Restaurant Corp. had its liquor license canceled by the New York State Liquor Authority (SLA) due to a brief altercation on the premises, despite a 37-year unblemished record and the owner’s immediate intervention. The Appellate Division found the cancellation disproportionate to the misconduct. The Court of Appeals agreed that cancellation was excessive but modified the Appellate Division’s judgment, remitting the matter to the SLA for the imposition of a less severe penalty, holding that the administrative agency should determine the specific penalty within the permissible range of discretion.

Facts

Rob Tess Restaurant Corp. operated a licensed premises and had maintained an unblemished record for 37 years.

A short altercation occurred on the premises.

The owner immediately intervened to stop the altercation.

The New York State Liquor Authority (SLA) canceled Rob Tess Restaurant Corp.’s liquor license.

Procedural History

The SLA canceled Rob Tess Restaurant Corp.’s liquor license.

The Appellate Division found the cancellation disproportionate to the misconduct.

The Court of Appeals modified the Appellate Division’s judgment, remitting the matter to the SLA for the imposition of a less severe penalty.

Issue(s)

Whether a reviewing court, upon finding an administrative penalty excessive, should determine a more appropriate penalty itself or remit the matter back to the administrative agency for re-determination.

Holding

No, because determining an appropriate penalty is vested in the administrative agency. While a reviewing court can state the maximum penalty the record will sustain, the specific penalty should be determined by the agency, considering its expertise and the particular circumstances.

Court’s Reasoning

The Court of Appeals held that while the penalty of cancellation was disproportionate to the misconduct, the responsibility for fixing the specific penalty rests with the administrative agency. The court reasoned that the agency is best suited to determine an appropriate penalty within the acceptable range of discretion.

The Court distinguished between setting the maximum penalty (which a court can do) and determining the specific penalty within that range (which is the agency’s role). Remitting the matter allows the agency to fashion a penalty it deems preferable and appropriate, considering factors that a court might not fully appreciate.

Chief Judge Cooke dissented, arguing that remitting the matter could lead to a “circular process” where the agency imposes a series of penalties until the court finds one acceptable. The dissent advocated for the court to set the maximum penalty within the permissible range, avoiding unnecessary delays and expenditure of resources. Cooke stated, “when an excessive penalty has been imposed – a penalty which constitutes an abuse of discretion – this court should refrain from remitting such a case to the administrative body, unless the record is somehow inadequate, and should instead set the maximum penalty within the permissible range of discretion.”

The majority, however, emphasized the importance of respecting the administrative agency’s expertise and discretion in determining the specific penalty.