38 N.Y.2d 260 | NY | 1975
The three cases under review raise the fundamental question of whether the Deputy Attorney-General, for his part in the ongoing investigation of the nursing home industry, has subpoena power as provided in subdivision 8 of section 63 of the Executive Law.
Deputy Attorney-General Hynes appeals from an order of the Appellate Division, First Department, which unanimously affirmed judgments of the Supreme Court, New York County, in Matter of Sigety v Hynes and Matter of East Riv. Nursing Home v Hynes. Each such judgment restrained Hynes from proceeding in excess of his lawful jurisdiction and quashed a subpoena duces tecum issued by him. Additionally, Kent Nursing Home appeals from an order of the Appellate Division, Second Department, which reversed an order of the Supreme Court, Westchester County, that had granted Kent Nursing Home’s application to quash a similar subpoena in. Matter of Kent Nursing Home v Office of Special State Prosecutor for Health & Social Servs. Because of the identity of
On January 10, 1975, in response to growing concern as to the quality of care provided by private nursing homes receiving public financial assistance, the Governor, in Executive Order No. 2 (9 NYCRR 3.2) and pursuant to section 6 of the Executive Law, appointed a commissioner to head an official inquiry, looking into, among other things, the ownership, financing and control of nursing homes and residential facilities to the end of insuring "that nursing homes and homes which shelter the aged and disabled provide the highest quality of care with the greatest degree of economy.” For, as the Governor stated in the preliminary paragraph of his Executive Order (9 NYCRR 3.2): "When public funds are channeled through private hands to finance health and residential services, government must insure that those funds are used honestly and efficiently in the promotion of the public welfare. The compassionate purpose of programs of residential and health care must not be subverted by the improper diversion of public funds for private benefit, nor through the inability of government to control the use of such funds under present regulatory structures.”
The commissioner, thereby appointed, was directed "to study, examine, investigate, review and make recommendations with respect to the management and affairs of any department, board, bureau, or commission of the State exercising any direction, supervision, visitation, inspection, funding or control of any nongovernmental nursing home, residential facility or home”. To assist him in his investigation he was granted subpoena power and "[e]very State department, division, board, bureau, commission, council and agency” was instructed to "provide to the Commissioner every assistance, facility and cooperation”.
In connection with the above-described investigation of the nursing home industry, and with acknowledgment of the January 10, 1975 appointment by the Attorney-General of Charles J. Hynes as Deputy Attorney-General to act as prosecutor to inquire into possible criminal violations in the nursing home industry, the Governor on February 7, 1975 issued Executive Order No. 4 (9 NYCRR 3.4). Finding it to be in the public interest to inquire into "matters concerning the public peace, public safety and public justice with respect to possible criminal violations committed in connection with or in any
While a request made upon the Attorney-General in accordance with either subdivision 3 or 8 would serve to initiate investigation, the powers and duties of the Attorney-General are detailed with more particularity in the latter. Subdivision 8 begins as follows: "Whenever in his judgment the public interest requires it, the attorney-general may, with the approval of the governor, and when directed by the governor, shall, inquire into matters concerning the public peace, public safety and public justice.” Said subdivision continues by providing, inter alia, that "[t]he attorney-general, his deputy, or other officer, designated by him, is empowered to subpoena witnesses, compel their attendance, examine them under oath before himself or a magistrate and require the production of any books or papers which he deems relevant or material to the inquiry” and by requiring that the Governor be provided with a detailed weekly report of the progress of the inquiry.
The subpoenas sought to be quashed were issued pursuant to subdivision 8 of section 63 of the Executive Law. The petitioner in each instance asserts that said subdivision does not serve as authority for issuance of such process. A similar challenge had been made to subpoenas issued pursuant to this statute in Matter of Di Brizzi (Proskauer) (303 NY 206). There, an investigation had been ordered by the Governor to be conducted by the Attorney-General and "officers of the Department of Law”, denominated collectively as the New York State Crime Commission. Subpoenas, issued by the commission in connection with the executive directive (p 211) " '[t]o investigate generally the relationship between organized crime and any unit of Government anywhere in the state’ ”, were unsuccessfully sought to be quashed. As this court stated in Di Brizzi (p 210) the words "inquire into matters concerning
Widespread corruption in the nursing home industry, care of the elderly and infirm and compensation for that care from the public treasury are "matters concerning the public peace, public safety and public justice” just as organized crime and its relationship to units of government were held to be in Di Brizzi. To be distinguished, as it was in Di Brizzi, is a situation such as that found in Ward Baking Co. v Western Union Tel. Co. (205 App Div 723) where the Governor directed the Attorney-General pursuant to the provisions of then section 62 of the Executive Law to inquire into the circumstances surrounding the death of Clarence E. Peters. The Appellate Division stating that the investigation therein was "directed and conducted with the sole purpose in view of obtaining proof that the individual Ward killed the individual Peters with malice aforethought” (p 727), concluded that subdivision 8 of then section 62 was not, nor could have been, intended to provide for criminal investigation against a particular individual.
Here, as in Di Brizzi, the court recognizes that there exists a reasonable relation between the action taken by the Governor, through the Attorney-General, and the proper discharge of the executive function. Investigations pursuant to Executive Orders Nos. 2 and 4 serve to inform the Governor, who, so informed, can more adequately fulfill the obligations of his office.
In Sigety, Special Term here noted that the Attorney-Gen
The subpoenas, here issued pursuant to subdivision 8 of section 63 of the Executive Law, call attention to the provisions of section 73 of the Civil Rights Law reproduced on the reverse side of the process. In People v Mitchell (40 AD2d 117, 121-122), the Appellate Division, Third Department, found that investigation of criminal conduct by the State Investigation Commission under said Civil Rights Law section met the
The issue of the Fifth Amendment privilege against self incrimination was raised by petitioner Kent Nursing Home and was properly disposed of by the Appellate Division. It is important to note that, while the Supreme Court in Beilis v United States (417 US 85) held that a partner in a small law firm may not invoke his personal privilege so as to justify noncompliance with a subpoena requiring production of the partnership’s financial records, that court did indicate that the result might be different if a small family partnership had been involved, citing to United States v Slutsky (352 F Supp 1105). In Slutsky, the test of United States v White (322 US 694, 701) was applied to determine whether the records of a two-brother partnership which operated a large resort, known as the Nevele Country Club, were to receive the protection of the Fifth Amendment. Simply, the test is "whether one can fairly say under all the circumstances that a particular type of organization has a character so impersonal in the scope of its membership and activities that it cannot be said to embody or represent the purely private or personal interests of its constituents, but rather to embody their common or group interests only.” Under the factual circumstances, the Slutsky court determined that "[i]f the Nevele were owned by a sole proprietor, there can be no question that the records would be immune from production under the Fifth Amendment. The reason for such protection does not change because there is a shared proprietorship” (p 1107).
A nursing home is not by its nature a family business which the owners can run in any manner they choose. It falls within the definition of a "hospital” under section 2801 of the Public Health Law and, as such, is subject to extensive State regulation pursuant to article 28 of said law and title 10 of the Official Compilation of Codes, Rules and Regulations of the State of New York. Additionally, a nursing home receiving Medicaid funds must keep and make available to the appropriate State agency records regarding patient care and payments, pursuant to title 42 of the United States Code (§ 1396a, subd [a], par [27]). It is for these and similar reasons that a nursing home, albeit family-run, cannot rely on Slutsky.
In Matter of Sigety v Hynes and Matter of East Riv. Nursing Home v Hynes the order appealed from should be reversed and the petitions dismissed, with costs. In Matter of
Chief Judge Breitel and Judges Jasen, Gabrielli, Jones, Wachtler and Fuchsberg concur;
In Matter of Sigety v Hynes and Matter of East Riv. Nursing Home v Hynes: Order reversed, etc.
In Matter of Kent Nursing Home v Office of Special State Prosecutor for Health & Social Servs.: Order affirmed.
Formerly section 62 of the Executive Law. (See L 1951, ch 800.)