82 A.D.2d 83 | N.Y. App. Div. | 1981
OPINION OF THE COURT
The issue before us is whether an amended regulation establishing an administrative review procedure may be given retroactive effect in a pending proceeding. Special Term held that retroactive application could not be made. We disagree.
The underlying dispute involves Medicaid reimbursement
The question is whether Crouse-Irving should be allowed to continue its action at law or be forced to pursue the administrative remedy provided for in the amended regulation and not previously available to it.
It is, of course, hornbook law that a party must exhaust administrative remedies as a condition precedent to seeking review of an administrative determination (Watergate II Apts. v Buffalo Sewer Auth., 46 NY2d 52, 57). While Crouse-Irving admits this, it claims that it should not have to exhaust administrative remedies that were not available to it at the time the cause of action was commenced. CrouseIrving further alleges that the retroactive application of 10 NYCRR 86-1.17 (c) would unconstitutionally deprive it of a vested right to maintain the action and that it would be unfair to prolong this case by making it proceed in an administrative forum.
Special Term based its decision on Greene v United States (376 US 149). Such reliance is misplaced for several reasons. In Greene the Supreme Court found that claimant had exhausted his administrative remedy before initiating a court proceeding and that his entitlement to compensation had become fixed as a matter of substantive right by the
The citation in Greene v United States (supra, p 160) of an earlier case which held that “ ‘retrospective operation will not be given to a statute which interferes with antecedent rights’ ” unless such is the unequivocal import of its terms, has now been clarified and explained in Thorpe v Housing Auth. (393 US 268). In this later case the Supreme Court adopted a new “general rule” which stressed that an appellate court must apply the law in effect at the time it renders a decision (supra, pp 281-282). More recently the rule in Greene was abandoned when the Supreme Court held that “even where the intervening law does not explicitly recite that it is to be applied to pending cases, it is to be given recognition and effect” (Bradley v Richmond School Bd., 416 US 696, 715). Here the intervening regulation promulgated February 28, 1978 specifically provided that it “shall apply to all applications for rate reviews which are pending as of April 1,1978” (10 NYCRR 86-1.17 [c] [4]). Because
We are persuaded that the rules of retroactivity enunciated by the Supreme Court in Bradley v Richmond School Bd. (supra) and the differentiation between procedural rights and matured substantive rights (Greene v United States, supra; Matter of Clayton v Clement, supra, at p 390) will not serve as an impediment to the application of the amended regulation to Crouse-Irving. There remains only the argument it makes that where there is under the cited cases a “manifest injustice” to retrospective operation of an intervening regulation it will not be so applied. We find no such circumstances here. Nor do we consider it unjust to require Crouse-Irving to appeal administratively in a case that has been pending for five years. In addition, the result we reach would further the “salutory goals of relieving the courts of the burden of deciding questions entrusted to an agency (see 1 NY Jur, Administrative Law, § 5, pp 303-304), preventing premature judicial interference with the administrators’ efforts to develop, even by some trial and error, a co-ordinated, consistent and legally enforceable scheme of regulation and affording the agency the opportunity, in advance of possible judicial review, to prepare a record reflective of its ‘expertise and judgment’ (Matter of Fisher [Levine], 36 NY2d 146,150; see, also, 24 Carmody-Wait 2d, NY Prac, § 145:346).” (Watergate II Apts, v Buffalo Sewer Auth., 46 NY2d 52, supra, at p 57.)
Accordingly, the order should be reversed, the motion granted and the complaint dismissed.
Dillon, P. J., Doerr, Denman and Houle, JJ., concur.
Order unanimously reversed, without costs, motion granted and complaint dismissed.