Legal Memorandum: Abuse of Discretion in an Article 79 Case

Issue: In an Article 79 proceeding involving a denial for medical assistance, what constitutes an abuse of discretion under New York law?

In an Article 78 proceeding, the court may consider not only whether the determination made by an administrative officer or agency is “supported by substantial evidence,” but also whether the determination was “arbitrary and capricious or an abuse of discretion, including abuse of discretion as to the measure or mode of penalty or discipline imposed.”  N.Y. C.P.L.R. 7803(3), (4).

The court annulled the Department’s determination denying public assistance benefits in Taylor v. Bane, 199 A.D.2d 1071, 606 N.Y.S.2d 112 (4^th Dep’ 1993).  The court held that “the Commissioner acted in an arbitrary and capricious manner in adhering to the agency’s [initial] decision in light of the fact that petitioner provided all of the requested information either before or at the fair hearing.”  Id., 606 N.Y.S.2d at 313.  The court further noted that the petitioner had “diligently sought to obtain the requested information.”  Id.  Thus, the court annulled the Department’s determination denying benefits.

First, there is nothing in Taylor that suggests that there is something unique or peculiar about applications for public assistance benefits that is absent from applications for medical assistance benefits and that would justify the court’s holding in the former but not the latter.  Second, and more important, the courts recognize and apply the rule in Taylor in medical assistance cases in which the applicant fails to meet the Department’s time limits but submits the requested information at or before the fair hearing.  Indeed, in Taylor itself the sole authority cited […]