1616 Second Avenue Restaurant, Inc. v. New York State Liquor Authority

550 N.E.2d 910, 75 N.Y.2d 158, 551 N.Y.S.2d 461, 1990 N.Y. LEXIS 66
CourtNew York Court of Appeals
DecidedJanuary 11, 1990
StatusPublished
Cited by50 cases

This text of 550 N.E.2d 910 (1616 Second Avenue Restaurant, Inc. v. New York State Liquor Authority) is published on Counsel Stack Legal Research, covering New York Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
1616 Second Avenue Restaurant, Inc. v. New York State Liquor Authority, 550 N.E.2d 910, 75 N.Y.2d 158, 551 N.Y.S.2d 461, 1990 N.Y. LEXIS 66 (N.Y. 1990).

Opinions

[160]*160OPINION OF THE COURT

Chief Judge Wachtler.

The issue on this appeal is whether public statements made by the Chairman of the State Liquor Authority (SLA) concerning charges then pending in an SLA proceeding against a licensee, disqualified the Chairman from participating in the administrative review of that proceeding. We conclude that, because the Chairman’s statements to a legislative oversight committee indicated prejudgment of facts in issue in an adjudicatory proceeding, his failure to disqualify himself from that proceeding deprived the licensee of due process of law under the Federal Constitution.

I.

Petitioner 1616 Second Avenue Restaurant, Inc., operates a Manhattan restaurant known as Dorrian’s Red Hand. Since 1962, Dorrian’s has sold alcoholic beverages for on-premises consumption pursuant to a license issued by respondent SLA. In August 1986, attention was focused on Dorrian’s because of its connection with the highly publicized "preppie murder” case: the young victim and the accused killer, Robert Chambers, had been in Dorrian’s on August 26, shortly before the crime. As a result, the SLA and the New York City Police Department’s Social Club Task Force began to closely monitor Dorrian’s for violations of the Alcoholic Beverage Control Law, especially those involving underage drinkers.

On February 10, 1987, Dorrian’s was charged by the SLA with violating section 65 (1) of the Alcoholic Beverage Control Law by allegedly selling or giving away alcoholic beverages to four underage patrons on November 14-16, 1986. Two of the charges were sustained following a hearing before an Administrative Law Judge commenced on April 15, 1987. The findings were controverted by petitioner and the matter was referred to the five Commissioners of the SLA, including its [161]*161Chairman, respondent Thomas Duffy, for factual review and for determination of an appropriate penalty (see, 9 NYCRR 54.4 [g]; 54.6 [a]).

In the interim between the filing of the charges and the commencement of the hearing, Chairman Duffy had been called upon to testify before a committee of the New York State Senate that oversees SLA operations. The questioning covered a wide range of topics, but for a time focused on the issue of underage drinking and the charges against Dorrian’s. Duffy’s public discussion of the charges prompted petitioner to request that Duffy recuse himself from consideration of the charges against Dorrian’s on the ground that he had prejudged the matter. Chairman Duffy declined to do so and, with his participation, the Commissioners adopted the findings of the Administrative Law Judge and imposed a 10-day suspension, a 10-day deferred suspension and a $1,000 bond claim.

Petitioner then commenced this article 78 proceeding seeking to annul the SLA’s determination. Upon transfer from Supreme Court pursuant to CPLR 7804 (g), the Appellate Division confirmed the determination without comment. We granted leave to consider whether the Chairman’s public statements disqualified him from participating in the SLA proceeding. Concluding that they did, we now reverse.

II.

Before examining the substance of the Chairman’s statements, we turn to the governing principles.

It is beyond dispute that an impartial decision maker is a core guarantee of due process, fully applicable to adjudicatory proceedings before administrative agencies (Withrow v Larkin, 421 US 35, 46-47; Matter of Warder v Board of Regents, 53 NY2d 186, 197; State Administrative Procedure Act § 303). No single standard determines whether an administrative decision maker should disqualify himself from a proceeding for lack of impartiality (see, 3 Davis, Administrative Law § 19:1 [2d ed 1978]). Many concepts are embraced under the heading of bias, including advance knowledge of facts, personal interest, animosity, favoritism and prejudgment. Not all require disqualification in all circumstances. Disqualification is more likely to be required where an administrator has a preconceived view of facts at issue in a specific case as opposed to prejudgment of general questions of law or policy (see, id., §§ 19:2, 19:4).

[162]*162For example, administrative officials are expected to be familiar with the subjects of their regulation and to be committed to the goals for which their agency was created. Thus, a predisposition on questions of law or policy and advance knowledge of general conditions in the regulated field are common, and it is expected that they will influence an administrator engaged in a legislative role such as rule making (see, Association of Natl. Advertisers v Federal Trade Commn., 627 F2d 1151, 1168-1169 [DC Cir]; see generally, 1 Koch, Administrative Law and Practice § 6.7 [1985]). Similarly, mere familiarity with the facts of a pending proceeding or taking a public position on a policy issue related to the proceeding have been held insufficient to require disqualification (Hortonville Dist. v Hortonville Educ. Assn., 426 US 482).

On the other hand, disqualification may be required for prejudgment of specific facts at issue in an adjudicatory proceeding (Kennecott Copper Corp. v Federal Trade Commn., 467 F2d 67, 80 [10th Cir]; Cinderella Career & Finishing Schools v Federal Trade Commn., 425 F2d 583, 591 [DC Cir]). It has been noted, moreover, that public statements that indicate prejudgment are especially problematic. While conscientious officials are presumably able to put aside privately held prejudgments, public statements touching on the facts of a proceeding create special problems. Such statements "may have the effect of entrenching [the official] in a position which he has publicly stated, making it difficult, if not impossible, for him to reach a different conclusion in the event he deems it necessary to do so after consideration of the record.” (Cinderella Career & Finishing Schools v Federal Trade Commn., supra, at 590.)

Thus, where, as in this case, an administrative official has made public comments concerning a specific dispute that is to come before him in his adjudicatory capacity, he will be disqualified on the ground of prejudgment if " 'a disinterested observer may conclude that [he] has in some measure adjudged the facts as well as the law of a particular case in advance of hearing it.’ ” (Cinderella Career & Finishing Schools v Federal Trade Commn., supra, at 591 [quoting Gilligan, Will & Co. v Securities & Exch. Commn., 267 F2d 461, 469 (2d Cir)]; see, Kennecott Copper Corp. v Federal Trade Commn., supra, at 80; Texaco, Inc. v Federal Trade Commn., 336 F2d 754, 760 [DC Cir].)

III.

Under this standard, Chairman Duffy was disqualified from [163]*163participating in the SLA proceeding against petitioner. During his testimony before the Senate committee overseeing SLA operations, the committee chairman brought up the issue of underage drinking, introducing it as follows:

"senator Goodman: One case in particular that I’d like to use to exemplify the problem has become rather notorious. It’s the case of a bar called Dorian’s [sic] at number 1616 Second Avenue in New York City.

* * *

"It’s my impression that, despite the issuance of four summons by the police task force and your intervention on several occasions, that absolutely nothing of any use has occurred in preventing the sale to under age people”.

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Bluebook (online)
550 N.E.2d 910, 75 N.Y.2d 158, 551 N.Y.S.2d 461, 1990 N.Y. LEXIS 66, Counsel Stack Legal Research, https://law.counselstack.com/opinion/1616-second-avenue-restaurant-inc-v-new-york-state-liquor-authority-ny-1990.