Opinion

Eileen Bransten v. State of New York

Court
New York Court of Appeals
Filed
Nov 21, 2017
Status
Published
Cited by
0 cases
Authority
More cited than 4.0%

The opinion

This opinion is uncorrected and subject to revision before

publication in the New York Reports.

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No. 67

Eileen Bransten, &c., et al.,

Respondents,

v.

State of New York,

Appellant.

Judith N. Vale, for appellant.

Alan M. Klinger, for respondents.

PER CURIAM:

The issue presented on this appeal is whether Civil

Service Law § 167 (8), as amended, authorizing a reduction of the

State's contribution to health insurance benefits for State

employees, including members of the State judiciary, violates the

Judicial Compensation Clause of the State Constitution (NY Const,

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art VI, § 25 [a]). We conclude the State's contribution is not

judicial compensation protected from direct diminution by the

Compensation Clause, and the reductions in contributions do not

have the effect of singling out the judiciary for disadvantageous

treatment. Therefore, plaintiffs' constitutional challenge

fails.

I. Statutory and Regulatory Background

State employees, including members of the judiciary,

are eligible to participate in health insurance plans that are

paid, in part, by the State's contributions towards insurance

premiums (Civil Service Law §§ 161, 167; see Governor's Mem, Bill

Jacket, L 1956, ch 461 at 3). Participation is optional and the

choice of which insurance to purchase is within the sole

discretion of employees.

In 2011, facing a budget crisis, the Legislature

negotiated with State-employee unions to avoid layoffs in

exchange for a percentage reduction to the State's premium

contributions, as well as salary freezes and unpaid furloughs.

Thereafter, the Legislature amended Civil Service Law § 167 (8)

to authorize the Civil Service Commission to make these

reductions for nearly all State employees and retirees. These

changes also applied to unrepresented State employees and

retirees not involved in negotiations, including approximately

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1,200 judges,1 and over 12,000 "managerial" or "confidential"

employees. At the time, the changes did not apply to members of

unions who had not agreed to modify their collective bargaining

agreement, but those employees were subject to layoffs (4 NYCRR

73.12).2 The implementing regulations, effective October 1,

2011, provided for a two to six percentage point reduction in the

State's health care contributions, depending on the employee's

salary grade (4 NYCRR 73.3 [b]). Judges are not assigned salary

grades, but all Supreme Court Justices receive a salary above

"salary grade 10," and therefore the State reduced its premium

contribution from 90 percent to 84 percent for judges who elect

to enroll in the State's health insurance plan, and for judges

who retired after January 1, 2012. The regulations also reduced

the State's contribution for employees who elected to participate

in the State plan and retired between January 1, 1983 and January

1, 2012 from 90 to 88 percent of the cost of coverage (4 NYCRR

73.3 [b]).

II. Plaintiffs' Action

Plaintiffs are 13 named current and retired Justices of

1

For ease of discussion, both judges and justices of the

Unified Court System are referred to here as "judges."

2

The managerial and confidential employees constitute

approximately six percent of the State's 189,000 employees, and

the union members who had not adopted the agreement were

approximately two percent. At oral argument, the State asserted

that the change to contributions now applies to all employees.

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Supreme Court, the Association of Justices of the Supreme Court

of the State of New York, and the Supreme Court Justices

Association of the City of New York. Plaintiffs filed suit

against the State seeking a declaratory judgment that the statute

that authorizes the reduction in contributions towards health

insurance premiums, Civil Service Law § 167 (8), violates the

Compensation Clause of the New York State Constitution, and

appropriate injunctive relief.

Supreme Court denied the State's motion to dismiss for

failure to state a claim pursuant to CPLR 3211 (a) (7). On the

State's appeal from this interlocutory order, the Appellate

Division affirmed, holding that compensation includes health

insurance benefits, and that the decrease in the State's

contribution level discriminates against judges because, unlike

public-sector unionized employees, judges cannot collectively

bargain to obtain compensation for the reduction in the State's

contributions (Bransten v State, 117 AD3d 455 [1st Dept 2014]).

The parties subsequently cross-moved for summary

judgment. Supreme Court denied the State's motion and granted

the plaintiffs' to the extent of declaring Civil Service Law §

167 (8) and its implementing regulations unconstitutional as

applied to members of the judiciary (Bransten v State of New

York, 2015 WL 1331265 [Sup Ct, New York County 2015]). The State

appealed to this Court as of right directly from Supreme Court's

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judgment pursuant to CPLR 5601 (b) (2).3

III. Judicial Compensation Clause Salutary Purpose

Article VI, section 25 of the New York State

Constitution provides that the compensation of State sitting and

retired judges: "shall be established by law and shall not be

diminished during the term of office for which [a judge] was

elected or appointed." The term "compensation" is not defined in

the Constitution, but its meaning is inextricably tied to the

purpose of the Compensation Clause, which is "to promote judicial

independence" and, relatedly, to "ensure that the pay of

prospective judges, who choose to leave their practices or other

legal positions for the bench will not diminish" (Matter of Maron

v Silver, 14 NY3d 230, 250 [2010], citing United States v Will,

449 US 200, 221 [1980]).

Historically, the focus of the Compensation Clause has

been to protect against the danger of external control over

judicial pay as a means by which to exert influence over the

judiciary. "[T]he Legislature was precluded from diminishing

salaries in recognition of the risk that salary manipulation

might be used as a tool to retaliate for unpopular judicial

3

Contrary to Judge Wilson's contention, this appeal is

properly before us (Wilson, J. concurring op at 2). Rent

Stabilization Ass'n v Higgins (83 NY2d 156, 168 [1993]) does not

suggest otherwise, as there the appeal involved more issues than

just the constitutional validity of a statute.

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decisions" (Matter of Maron, 14 NY3d at 252). As with the

similar prohibition contained in the federal Compensation Clause,

the anti-diminution language was intended to protect judges from

the corruptive force of financial uncertainty, in order to

maintain an able and independent judiciary, free of coercion from

the other branches (see US Const, art III, § 1 [judges'

compensation "shall not be diminished during their Continuance in

Office"]; Matter of Maron, 14 NY3d at 250 [purpose of State

clause is same as federal clause: to promote judicial

independence]; Will, 449 US at 218-220 [framers of federal

constitution made certain the compensation of judges was

protected from one of the evils that brought about the

Revolution]; United States v Hatter, 532 US 557, 568-569 [2001]

[founders recognized importance of protecting judiciary from

financial dependence on legislature]).

To that end, and as this Court explained in Matter of

Maron, the legislature may not enact laws that directly diminish

judicial compensation or accomplish the same result by singling

out judges for disadvantageous treatment that indirectly

diminishes their pay (14 NY3d at 252-54; see also Hatter, 532 US

at 571). Thus, plaintiffs may establish a Compensation Clause

violation here by demonstrating that the State's reduced

contribution to their health insurance premiums: 1) is a direct

diminishment of their compensation; or 2) is an indirect

diminishment that targets judges for disadvantageous treatment.

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IV. Prohibition on Direct Diminution in Judicial Compensation

Under our case law, protected judicial "compensation,"

as that term is used in the Compensation Clause, refers to a

judge's salary and any additional monies that serve as a

permanent remuneration for costs necessarily incurred in

fulfillment of a judge's judicial obligations. So, for example,

in People ex rel. Bockes v Wemple (115 NY 302, 310 [1889]), the

Court held that the legislature had increased judicial

compensation by providing a fixed amount "'in lieu of' expenses

. . . to compensate [the judge] further for what the office

entailed . . . in the way of duties and work." The Court further

explained that "the intention of the legislature was to make a

permanent addition to the stated salary, which should be beyond

the power of subsequent legislatures to affect" (id.).

Similarly, in Gilbert v Board of Supervisors of County of Kings

(136 NY 180, 185 [1892]), the Court recognized that "the word

compensation . . . was understood to mean salary of the judge as

such, and the allowance for expenses." Notably, the Court

distinguished between compensation within the meaning of the

Constitution -- what the Court described as the salary set for

judges in their role as sitting judges -- and a discretionary

allowance set by a municipality or board for a judge's local

service as a Commissioner of Jurors (see id. at 185-186; see also

Bockes at 309-310). From these cases the two essential

characteristics of constitutionally-protected judicial

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compensation can be gleaned: the remunerative purpose and the

permanence of the legislative allotment.4

The health care contribution at issue here exhibits

neither of these characteristics. It is not part of a judicial

salary or a permanent remuneration for expenses necessarily

incurred in fulfillment of judicial obligations. Nevertheless,

plaintiffs argue that compensation means anything of value

provided by an employer and includes health care benefits, as

they "are an integrated part of the compensation package provided

4

Justice Dillon notes the 1894 Constitution is "the

document that is of the most historical importance to this

matter" (Dillon, J. concurring op at 6). Consistently throughout

this document, "compensation" is used to describe a quantifiable

sum, while salary is used more specifically to describe payment

for labor. For example, article I, section 7, states that "just

compensation" is required for a taking of private property, which

will be an "amount" to be paid to the landowner. When

compensation is discussed in relation to various officeholders,

the term either refers to salary or to salary plus remuneration

for costs necessarily incurred in fulfillment of the

officeholders' obligations: the governor shall receive a set

salary and have a residence provided (article IV, section 4),

legislators shall receive salary plus a sum for the amount of

miles they travel to and from session, and in some circumstances

an additional per diem allowance (article III, section 6).

Tellingly, the 1894 Constitution set the "salary" of the

Lieutenant Governor, before clarifying that the officeholder

"shall not receive or be entitled to any other compensation, fee

or perquisite, for any duty or service he may be required to

perform by the Constitution or by law" (article IV, section 8).

A "perquisite" is defined by Black's as "[a] privilege or benefit

given in addition to one's salary or regular wages" (10th ed

[2014]; see also Black's 1st ed [1891]; Bouvier's Law Dictionary

[1914]). The rule against superfluities suggests that, contrary

to Justice Dillon's conclusion, "compensation," while undoubtedly

a broader term than "salary," was not used so broadly as to

include privileges or benefits (see Hibbs v Winn, 542 US 88, 101

[2004]).

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to State employees and Judges." While plaintiffs are correct

that the State pays a percentage of premiums for those employees

who choose to participate in a State subsidized health care plan,

that fact does not transform the State's contribution into

judicial compensation within the meaning of our State

Constitution. This Court has previously recognized that

compensation for constitutional purposes has a unique and

historical purpose (see Bockes, 115 NY at 306-307; Gilbert, 136

NY at 184-185).

Indeed, plaintiffs are unable to point to anywhere in

the legislative schema where the State's contribution is referred

to as "compensation." In fact, Chapter 567 of the Laws of 2010,

which created the Special Commission on Judicial Compensation,

states that the Commission's purpose was to "examine, evaluate

and make recommendations with respect to adequate levels of

compensation and non-salary benefits for judges and justices of

the state-paid courts of the unified court system" (emphasis

added). This suggests that, contrary to plaintiffs' argument,

judges' health care benefits are distinct from judicial

compensation.

Nor does the State's expansion of the class of benefits

available to its employees, including judges, provide clear

indication that the Legislature intended for its contribution

towards premiums to be treated as a permanent addition to a

judicial salary, whether as part of a judge's pay or as a fixed

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amount in lieu of expenses. In fact, since the Legislature

created a centralized State health insurance fund in 1956 (see

Civil Service Law § 167 [6]), the State has, on occasion,

adjusted the costs and benefits afforded to State employees who

have opted into the program by, for example, increasing

employees' annual deductibles or changing the amounts employees

must pay for out-of-network services. Notably, the State's

contribution to employee health insurance premiums have been

changed before, dropping from 100 percent in 1967 to 90 percent

in 1983 (Civil Service Law § 167 [1] [a]; see also L 1983, ch

14). Plaintiffs concede that the State is not required to keep

pace with increasing health care costs, which undermines their

argument that maintaining the level of State subsidy is necessary

to avoid constitutionally impermissible diminution of judicial

compensation. Tellingly, "the whole matter" of choosing a health

plan -- or whether to participate in one at all -- is left to the

employee (cf. Gilbert, 136 NY at 185 [additional payment for

serving as County Commissioner of Jurors is not compensation for

constitutional purposes where the whole matter was left to the

discretion of the county's board of supervisors]).

Plaintiffs' approach also lacks a standard by which to

distinguish between constitutionally protected compensation and

any amount of monies provided directly to judges or as a discount

for other costs. For plaintiffs, compensation would include even

those items that have an indisputably indirect impact on salary,

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as, for example, parking privileges, discounts in a cafeteria, or

even free coffee and bagels in a communal kitchen. As these

examples illustrate, adopting plaintiffs' position renders

meaningless "compensation" as a constitutional term of art. It

would also leave us without any standard by which to guide future

decisions.

Significantly, the challenged percentage reduction in

the State's contribution does not jeopardize judicial

independence -- the essential evil that the Compensation Clause

is intended to address (see Matter of Maron, 14 NY3d at 252).

Granted, health care benefits may be valuable to an employee, but

the percentage reduction to the State's contribution is not

equivalent to the base salary upon which a judge subsists, and

which, if tampered with, "amounts to a power over a [person's]

will" (Will, 449 US at 218; Hatter, 532 US at 568, quoting

Alexander Hamilton, Federalist No. 79, at 472; see also Matter of

Maron, 14 NY3d at 252).5 Simply put, the Compensation Clause

uses proscriptive language to ensure that a judge will not

hesitate to make a decision for fear that the outcome puts the

judge's livelihood in jeopardy.

5

We do not opine on whether the "wide array of

permutations" listed by Justice Dillon are compensation for

constitutional purposes (Dillon, J. concurring op at 12). Our

opinion is confined to the question before us: whether a

reduction in the percentage of the State's contributions to the

costs of health insurance premiums constitutes a diminution in

judicial compensation.

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While the reduction in the State's contributions to the

costs of health insurance premiums would increase a participating

judge's share of the cost associated with the chosen health care

plan, such an increase is not the equivalent of a direct

reduction in judicial compensation. It is a cost that is

voluntarily assumed by the participating judges, and affects

salary only indirectly as the judge must make up the difference.

V. Indirect Effect of Discrimination Against Judges

Plaintiffs argue that even if the reduction in State

contributions towards judges' health care premiums does not

reflect a direct diminution of their compensation, the amendment

to section 167 (8) nevertheless indirectly diminishes their

compensation and unconstitutionally discriminates against judges,

and is therefore still unconstitutional under the United States

Supreme Court's Hatter framework. The plaintiffs maintain that

the amendment to section 167 (8) treats judges worse than other

State employees who were able to negotiate benefits in exchange

for the premium contribution reductions, or even opt out from the

reduction entirely. They argue the legislation is similar to a

law struck down as violative of the federal Compensation Clause

in Hatter.

As we have done in the past, we apply the analysis of

Hatter -- that a cost increase that indirectly affects judicial

compensation is not unconstitutional, so long as the increase

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does not target judges for disadvantageous treatment -- and we

conclude that the State law is not the type of legislatively

targeted discrimination impermissible under our Judicial

Compensation Clause (Matter of Maron, 14 NY3d at 255-256

[applying Hatter to freeze on judicial salaries challenged in

companion case Chief Judge of State v Governor of State]). In

Hatter, the Supreme Court interpreted the federal Compensation

Clause, with its similar purpose and language to the State

Clause, when evaluating Medicaid and Social Security taxes

collected from federal judges. The Court concluded the Medicaid

tax was constitutional because it was a general tax burden borne

by all citizens, and no compelling reason existed why judges

should not share in such a nondiscriminatory tax. As the Court

explained,

"the likelihood that a nondiscriminatory tax

represents a disguised legislative effort to

influence the judicial will is virtually

nonexistent. Hence, the potential threats to

judicial independence that underlie the

Constitution's compensation guarantee cannot

justify a special judicial exemption from a

commonly shared tax, not even as a preventive

measure to counter those threats" (Hatter,

532 US at 571).

In contrast, the Hatter Court identified four features

of the Social Security tax that taken together lead to the

conclusion that it discriminated against judges in a manner the

Compensation Clause forbids (id. at 572-573). First, the Hatter

Court considered the class of affected persons that judges should

be compared against and determined the proper class consisted of

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those to whom the law applied, namely all federal employees.

Second, the Court considered whether the law imposed the same

financial obligation on all members of that class, or whether it

treated judges differently from other federal employees. The

Court found the law imposed a new financial obligation upon

sitting judges that it did not impose on any other group of

federal employees. Third, the Court determined that the law

adversely affected judges as it imposed a substantial cost on

judges with little or no expectation of substantial benefit for

most of them (see id.). Finally, the Court examined whether

there was a sound justification for the statutory distinction

between judges and other federal employees. The Court noted that

Congress did not explain its rationale, and the government's

position -- that the disparate tax treatment of judges was

instituted to make the judicial retirement system contributory

like the system for other federal employees -- was illogical

inasmuch as judges have life-tenure (see id. at 573-574).6

"Taken together," the Court concluded,

"these four characteristics reveal a law that

6

The Court further observed that the "'equaliz[ation]' in

question takes place not by offering all current federal

employees (including judges) the same opportunities but by

employing a statutory disadvantage which offsets a

constitutionally guaranteed advantage" (Hatter, 532 US at 574).

"Hence, to accept the 'justification' offered here is to permit,

through similar reasoning, taxes which have the effect of

weakening or eliminating those constitutional guarantees

necessary to secure judicial independence, at least insofar as

similar guarantees are not enjoyed by others" (id.).

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is special -- in its manner of singling out

judges for disadvantageous treatment, in its

justification as necessary to offset

advantages related to constitutionally

protected features of the judicial office,

and in the degree of permissible legislative

discretion that would have to underlie any

determination that the legislation has

'equalized' rather than gone too far" (id. at

576).

Applying the Hatter factors here, first, the "history,

context, statutory purpose, and statutory language, taken

together, indicate that the category of [State] employees is the

appropriate class against which we must measure the asserted

discrimination" (see Hatter, 532 US at 572). Second, when

plaintiffs filed this action, the vast majority of State

employees also saw the State's contribution to their health care

premiums diminish. Thus, the law imposes the new financial

obligation on all participating State employees, and does not

treat judges differently than nearly every other State employee

(cf. Hatter, 532 US at 573). Third, the new policy does

adversely affect judges, as it imposes a substantial cost on

judges with no benefit. The benefit enjoyed by the vast majority

of other state employees, however -- protection from layoffs for

unionized employees who accepted the reduction in premiums as

part of the collective bargaining process -- is a benefit already

enjoyed by state judges as part of protecting their judicial

independence. Furthermore, the "managerial" and "confidential"

employees are in the same position, suggesting that the increased

contributions operate more like the non-discriminatory Medicare

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tax in Hatter. Under these circumstances, where similarly

situated employees receive the same treatment, excluding judges

would be tantamount to offering "a special judicial exemption"

from the commonly shared burden (id. at 571).7 The fourth factor

is not relevant here, as the distinction in contributions is

based on salary grade, not judicial office (see id. at 573-574).

Taking these four factors together, the adjustment of the State's

contribution to its employees' health care premiums does not

"reveal a law that is special" in how it disadvantages judges

(id. at 576). As such, plaintiffs have failed to establish a

violation of the Compensation Clause based on discriminatory

treatment.

VI. Conclusion

The primary goal of the Compensation Clause --

protecting the independence of the judiciary -- is not implicated

when the State contributes a smaller percentage towards all

employees' health care premiums. A contribution to health care

7

In Hatter, Congress imposed a different financial burden

on federal judges that it did not impose on nearly any other

federal employees, and the government stated that the purpose for

the disparate treatment of federal judges was to compensate for a

constitutional guarantee intended to ensure judicial

independence. Here, by contrast, the State did not treat judges

differently when reducing its premium contributions because it

wanted to "equalize" the fact that state judges are not subject

to layoffs. Rather, the State did not treat judges differently

from other state employees at all, except insofar as the judges

were not offered a benefit to which they were already

constitutionally entitled and therefore could not be offered.

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premiums, which varies from year to year, is not compensation

within the context of the Compensation Clause. Moreover, even

though the reduction indirectly diminishes judicial compensation,

the Legislature has not singled out judges for disadvantageous

treatment. Where, as here, the reduction applies to all State

employees, there is not even a suggestion that judges are being

targeted. As such, the change in State contributions does not

jeopardize the independence of the judiciary or "represent[] a

disguised legislative effort to influence the judicial will"

(Hatter, 532 US at 571).

Accordingly, the judgment should be reversed, without

costs, plaintiffs' motion for summary judgment denied, and

judgment granted in favor of defendant declaring Civil Service

Law § 167 (8) does not violate the Compensation Clause of the New

York State Constitution (NY Const, art VI, § 25 [a]).

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Bransten v State of New York

No. 67

DILLON, J.(concurring):

Contributions by the State of New York toward the cost

of health care insurance premiums provided to the judges and

justices of the Unified Court System are part of the paid

"compensation" that falls within the protective provisions of the

State Constitution, article VI, § 25(a) (the Compensation

Clause). For reasons set forth below, the Compensation Clause

would be irrelevant to the State's health care insurance

contributions if the controlling constitutional language merely

guaranteed that no judicial "salary" be diminished during

jurists' terms in office. However, the presence of the broader

term "compensation" in the Compensation Clause casts a wider net

that includes more than mere salary.

I.

The bench and bar are frequently called upon to

interpret the precise meaning of words and phrases in

constitutions, statutes, contracts, wills, and other legal

documents. Such issues are parsed by examining words and phrases

in accordance with plain language, the drafters' intent, the

contexts in which words and phrases are applied, common usages

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and understandings, the parties' reasonable expectations, and the

affordance of meaning that is consistent with the whole of the

document being examined. These concepts are not alien to the

interpretation of provisions in our State Constitution. We have

held that the Compensation Clause is to be construed in a manner

"to give its provisions practical effect" (Ginsberg v Purcell, 51

NY2d 272, 276; see also Pfingst v State of New York, 57 AD2d 163,

165). The Compensation Clause is to be given "a fair and liberal

construction, not only according to its letter, but also

according to its spirit and the general purposes of its

enactment" (Pfingst v State of New York, 57 AD2d at 165, see

People ex rel. McClelland v Roberts, 148 NY 360).

The New York State Constitution has had a rich and

evolving history. Constitutional conventions were convened in

1776-1777, 1821, 1846, 1867-68, 1894, 1915, 1938, 1967, and a

Constitutional Commission was established for 1872-73 (see Albany

Law School, "Schaffer Law Library's Guide on the New York State

Constitution," available at https://www.albanylaw.edu/media/user/

librarypdfs/guides/nyconsti.pdf). The recommended Constitutions

were adopted only for the years 1777, 1821, 1846, 1894 and 1938

(see Historical Society of the New York Courts, "New York State

Constitutions," available at https://www.nycourts.gov/

history/legal-history-new-york/history-new-york-courts-constituti

ons.html). Along the way, there were many years where voters

approved ad hoc amendments to the then-existing Constitutions

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including, as relevant here, 1925 and 1961.

The first Constitution to address the issue of

compensation for State officeholders was that of 1821.1 It

provided in article I that "compensation" be paid to members of

the State legislature and to the governor (see 1821 NY Const, art

I, §§ 4, 9), but curiously made no reference to judicial pay.

The Constitution of 1846 addressed judicial remuneration for the

first time, entitling the State legislators, governor, lieutenant

governor, and justices to "compensation" in exchange for the

performance of their duties (see 1846 NY Const, art III, § 6; art

IV §§ 4, 8; art VI, § 7).

The Constitution of 1894 was the first to use divergent

nomenclature to describe the remuneration of State officeholders.

Under a heading of "Compensation," members of the legislature

were entitled to a "salary" of $1,500 per year plus reimbursement

of travel expenses at a defined rate of $1 for each ten miles

(see 1894 NY Const, art III, § 6). Under another heading also

titled "Compensation," the governor was entitled to a "salary" of

$10,000 per year plus a furnished residence (see 1894 NY Const,

art IV, § 4). A separate paragraph regarding the lieutenant

governor was titled "Salary," which was set at the sum of $5,000,

but as to that officeholder, the text prohibited receipt of "any

other compensation, fee or perquisite" for the performance of

1

The 1821 Constitution is sometimes also referred to in

literature as the Constitution of 1822, the year of its effective

date.

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State duties (see 1894 Const, art IV, § 8). Whereas legislators

and the executives were each expressly entitled to "salaries,"

judges and justices were instead entitled to "compensation,"

without elaboration, and with the only reference to their

"salary" being that such money be financed for the county and

surrogate courts by the counties in which they sat (see 1894 NY

Const, art VI, §§ 12, 15). The 1894 Constitution provided for

the first time the guarantee that judicial compensation not be

diminished during any term of office (see 1894 NY Const, art VI,

§ 12).

A 1925 amendment to the 1894 Constitution continued the

word "compensation" to describe judicial remuneration, and

continued the guarantee that compensation not be diminished

during terms in office (see NY Organization of State Jud. System,

Amend. 4 [1925]).

The 1938 Constitution continued the header of

"Compensation" for the State legislators, the governor, and for

the first time the lieutenant governor. It was specifically

defined for those officeholders within the definitional texts as

"salary" and travel expenses for legislators, "salary" and a

residence for the governor, and straight "salary" for the

lieutenant governor (see 1938 NY Const, art III, § 6, art V, §§

3, 6). However, the judiciary article continued to scrupulously

avoid use of the word "salary," and instead referred only to

"compensation" that was to be paid without diminishment to the

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remainder of the judicial terms (see 1938 NY Const, art VI, §

25[a]). The same language was unmolested by a 1961

constitutional amendment that reorganized the courts of the

State, and represents the language that is still controlling

today (see N.Y. Session Laws, Vol. III, 4025 [1962]; N.Y. Session

Laws, Vol. II, 2708-2734 [1961]).

A review of the various Constitutions and amendments

establishes that since 1894, legislative and executive

remuneration has been expressed as including "salary" and, where

applicable, certain defined perquisites and benefits. In

contrast, judicial remuneration has been expressed solely and

strictly as "compensation." The specific language of the

Compensation Clause today provides that the "compensation" of

State judges and justices "shall be established by law and shall

not be diminished during the term of office for which he or she

was elected or appointed" (NY Const, art VI, § 25[a]).

The 1894 Constitution is the document that is of the

most historical importance to this matter as it reflects the

first instance when the drafters of the New York Constitutions

expressly differentiated between the "salary" and other benefits

payable to legislators and executives, and the "compensation"

payable to members of the judiciary. There appears to be no

available original or secondary source materials that explain the

difference in terminology. The reason for differentiating

between salary and compensation in 1894 is not disclosed in the

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Journal of the Convention, the Report of the Debate and

Proceeding of the Convention, or in the Documents of the

Convention Vols. 1-2 (see New York State Library, "Documents from

the 1894 Constitutional Convention"). Not even Charles Z.

Lincoln's The Constitutional History of New York,2 which is

perhaps the most authoritative study of the State's early

constitutional history, provides any explanation or insight into

the contrasting terminology. Cases decided prior to 1894 on

matters involving judicial compensation, such as People ex rel.

Bockes v Wemple (115 NY 302), Gilbert v Board of Supervisors of

Kings County (136 NY 180), and People ex rel. Follett v Fitch

(145 NY 261 [interpreting a pre-1894 statute]), are of limited

value as they predate the significant language changes adopted in

the Constitution of 1894. Yet, there can be no question that for

the last 123 years, the distinction between "salary" and

"compensation" has conspicuously existed in the New York

Constitution. Absent convention debate or reports reflecting the

specific intent of the drafters on this issue, our interpretation

of the meaning of such nomenclature must necessarily rest upon

the words themselves and their common usage (see Anderson v

Regan, 53 NY2d 356, 362; Rahill v Bronstein, 32 NY2d 417, 421;

People v Carroll, 3 NY2d 686, 689).

Words matter. "Salary" and "compensation," while

2

Charles Z. Lincoln, The Constitutional History of New

York, Vols. I-V. Rochester: The Lawyers Co-operative Publishing

Company, 1905-06.

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related, are not one and the same. Tellingly, the Constitution

of 1894 referred to legislative and gubernatorial "Compensation"

as a mere title header to the description and obligations of

those branches of State government (see NY Const, art III, § 6;

art IV, § 4 [1894]). The texts within the legislative and

executive articles of the 1894 Constitution, underneath their

headers, then defined those officeholders' remuneration as

"salary" and in the specific case of the legislators and

governor, reimbursements and perquisites. The straight $5,000

"salary" of the lieutenant governor was plainly described as such

in the absence of other perquisites or benefits, and without

reference to any complicating reference to payable compensation

(see 1894 NY Const, art IV, § 8). Clearly the Constitution of

1894 employed the word "compensation" as a broad umbrella term,

and used the word "salary" as one component thereof, perhaps the

largest, fitting under the compensation umbrella. Therefore,

where article VI, § 12 of that Constitution described judicial

remuneration solely in terms of "compensation" without any

reference to "salary," the drafters purposely chose to cloak the

judiciary under that umbrella, without limiting judicial

remuneration to any narrower term or definition. The reason for

doing so might be self-evident and central to this appeal;

namely, that only remuneration for the judicial branch of

government was described in the same sentence as subject to

non-diminution during any terms of judicial office (see NY Const,

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art VI, § 12).3 By implication and reasonable construction, the

drafters of the Constitution of 1894 were seeking to provide

members of the judiciary with broad protections, such that the

non-diminution of compensation be expansive and extend to all

forms of emoluments that judges and justices could traditionally

expect to receive at that time.

For these reasons, the linguistic differential between

legislators' and executives' "salaries," perquisites and

benefits, as distinguished from jurists' "compensation," from

1894 forward, demonstrates that salary and compensation are not

synonymous terms.

II.

State-sponsored health care coverage was not

specifically mentioned in the Constitution of 1894 or its 1938

successor. The issue has "called into life a being the

development of which could not have been foreseen completely by

the most gifted of [constitutional] begetters" (see State of

Missouri v Holland, 251 US 416, 433). Litigation over the

meaning of judicial "compensation" has been sparse. Three cases

from the late 1800s that appear instructive on their faces

address issues of judicial compensation: People ex rel Bockes v

Wemple (115 NY 302), Gilbert v Board of Supervisors of Kings

3

The Constitution of 1821 had protected the governor's

compensation from diminishment during any term in office (see

1821 NY Const, art 3, § 4), but that provision was dropped in

subsequent Constitutions.

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County (136 NY 180), and People ex rel. Follett v Fitch (145 NY

261). However each of these reported cases involve

constitutional analysis, or in the case of Gilbert, a statute,

that became outdated with the subsequent adoption of the

Constitution of 1984 containing the distinction between "salary"

and "compensation." Nevertheless, to the extent arguably

relevant, Bockes, while dusty, actually supports the conclusion

that the Compensation Clause is intended to protect more than

mere salary.

In 1889, this Court faced the question of whether

judicial compensation was limited to a $6,000 annual payment, or

included an additional $1,200 annual payment authorized in lieu

of job-related expense reimbursements (see People ex rel. Bockes

v Wemple, 115 NY at 306). At that time, justices of the Supreme

Court were entitled to compensation to the end of their elected

terms in office, even if a term ended after a justice reached the

mandatory retirement age of 70. The legal questions posed were

twofold: 1) whether the justice's post-retirement compensation

was to be paid at the rate of $6,000 per year or $7,200 per year,

and 2) whether a payment of only $6,000 represented a diminution

otherwise prohibited by the then-existing Constitution. This

Court held that the $7,200 total amount that had been paid to the

justice prior to retirement remained intact, and a continuing

debt of the State, until the expiration of the official term in

office to which that justice had been elected (see People ex rel.

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Bockes v Wemple, 115 NY at 311). The Court described the $1,200

payment "as much a part of the compensation to the justice as

though his salary, eo nomine, had been increased to compensate

him further for what his office entailed upon him in the way of

duties and work" (People ex rel. Bockes v Wemple, 115 NY at

309-10). In other words, the precedent establishes that the

Compensation Clause is not limited to the mere and strict

"salary" that is scheduled and adjusted from time to time by the

legislature, but more broadly includes, at least in the instance

of Bockes, the "in lieu of" payment that substituted for the

reimbursement of itemized job-related expenses.4

4

Bockes was not without its limits. The Board of

Supervisors for Kings County voluntarily paid the justices in

that county an additional $6,000 annual allowance for drawing

local jurors. This Court held in 1892 that the reference in the

Compensation Clause to "compensation to be established by law"

did not extend to additional allowances that municipalities

might, in their discretion, add to remuneration for special local

services (see Gilbert v Board of Supervisors of Kings County, 136

NY at 185-86). The Court's reasoning reached a result that was

both practical and consistent with the State's constitutional

obligations (id. at 186). Judicial compensation extending beyond

the jurists' age-related retirement was enough of a hot-button

issue in the 1890s that it prompted an amendment to the

Constitution in 1894. The 1894 amendment eliminated the

post-retirement payment of compensation for jurists elected after

January 1, 1894 (see NY Const, art III, § 12 [1894]). Similarly,

in People ex rel. Follett v Fitch (145 NY 261), this Court

addressed the constitutionality of 1882 legislation that required

payment by the City of New York of up to $500 per year for

Supreme Court justices residing outside the City but assigned to

a General Term within the City, as reimbursement for expenses and

disbursements (L 1882, ch 410, § 1109, as amended; L 1883, ch

104). This additional sum was held to be not guaranteed and not

subject to the Compensation Clause, as job-related expenses and

disbursements were already subsumed by the then-existing $1,200

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Here, the majority maintains that Bockes limits

judicial compensation only to remuneration that is directly

related to the performance of official duties and work. In fact,

Bockes did not address whether other forms of remuneration or

benefits, which did not exist until decades later, could equally

qualify as compensation. Today, almost 13 decades after this

Court decided Bockes, judicial compensation bears little

resemblance to its 19th century predecessor. Indeed, judicial

compensation is complicated by a wide array of permutations

including tax-advantaged 401(k) plans, flex spending medical and

childcare accounts, deferred compensation options, the

reimbursement of itemized job-related expenses, pension

contributions and accounts, and as solely relevant here,

state-sponsored health care coverage paid for mostly by the State

and partially by the participating members of the judiciary.

III.

Turning attention more specifically to health care

insurance contributions, authority is scant in New York and

throughout the nation as to whether states' contributions toward

the expense is protected by judicial Compensation Clauses. In

New Jersey, where the Compensation Clause prohibits the

diminution of judicial "salaries" during the terms of judicial

annual payments made by the State in lieu of itemized expenses

(see People ex rel. Follett v Fitch, 145 NY at 266).

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appointment (see NJ Const, art VI, § 6, para 6), the New Jersey

Supreme Court held under facts similar to those present here that

an increase in jurists' percentage contributions toward health

care premiums, and toward pensions for that matter, was

unconstitutional (see Depascals v State of New Jersey, 211 NJ 40,

62; accord Hudson v Johnstone, 660 P2d 1180, 1182

[unconstitutionality of Alaska's increase in judges' paycheck

deduction toward the state's retirement system]; Stiftel v

Varper, 378 A2d 124, 132, affd 384 A2d 2 [same, as to Delaware]).

In contrast, the Court of Appeals of Michigan has held that a

city's elimination of payments for judges' health care coverage

and lesser fringe benefits did not violate that state's statutory

judicial compensation protections (see Garian v City of Highland

Park, 176 Mich App 379, 382). Michigan's non-diminution statute

is similar to New Jersey's Compensation Clause in that its

guarantees are directed at judicial "salaries," and not at

"compensation" (see M.C.L. 600.8202[5]).

New York's Compensation Clause, unlike the language

employed in New Jersey and Michigan, is not protective of

"salaries," which is a narrow and targeted term, but of

"compensation," which is broader and more inclusive. This Court

used the terms "pay," "salary," and "compensation"

interchangeably in Bockes, Gilbert, and/or Follett, but in those

cases, it was not called upon to define any distinctions between

the nomenclature, because doing so would have made no difference

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to the narrow decisions the Court was called upon in those

instances to render.

The interpretation of the "compensation" terminology

used in the New York Constitution arose in a 2009 Appellate

Division decision addressing the question of whether the

elimination of paid health care benefits to a village justice

during his term in office violated the State's Compensation

Clause. While not binding here, the Second Department held that

the mid-term elimination of the justice's paid health benefits

was an encroachment on the compensation protections afforded by

article VI, § 25(a) of the New York Constitution (see Roe v Board

of Trustees of the Vil. of Bellport, 65 AD3d 1211, 1212). During

the same year, the First Department viewed judicial "compensation

[as] consisting of the pay scale and benefits" (Larabee v

Governor of State of N.Y., 65 AD3d 74, 85 [emphasis added], affd

as mod Maron v Silver, 14 NY3d 230, rearg denied, 16 NY3d 736).

Interestingly, the record evidences that New York State

employees may opt out of the health care coverage offered by the

State, and receive in exchange an "incentive payment" that is

pro-rated in biweekly paychecks as taxable income (R 89, 109,

117). If incentive payments are treated by the federal

government as taxable income, the State's contributions toward

the cost of the health care insurance coverage that is not waived

by other employees should be construed as compensation as well.

Health care insurance coverage has been defined as part

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of compensation, outside the scope of the Compensation Clause, in

a variety of decisions from the Second, Third, and Fourth

Departments, and in state and federal statutes. The appellate

decisions include, from the Fourth Department, Matter of Board of

Educ. of Dundee Cent. School Dist. (96 AD3d 1536, 1539 ["a

contribution toward an employee's health insurance is a form of

compensation"]). The Third Department has separately opined that

"[i]t is generally undisputed that health insurance benefits are

a form of compensation 'encompassed within the definition of

terms and conditions of employment'" (Matter of Police Assn. of

City of Mount Vernon v New York State Pub. Empl. Relations Bd.,

126 AD2d 824, 825, quoting Matter of Town of Haverstraw v Newman,

75 AD2d 874, 874-75). Indeed, in Matter of Town of Haverstraw,

the Second Department declared that "[t]here is no reason to

distinguish legal insurance from health insurance or group life

insurance. All are a form of compensation and, as such, are

encompassed within the definition of terms and conditions of

employment" (id. at 874-75).

Likewise, Judiciary Law § 34, which apportions the cost

of judicial remuneration between the State and counties, defines

compensation as including "the employer's share of the premium

for the coverage . . . under the health insurance plan created by

article eleven of the civil service law." Under New York Tax Law

24-a(b)(3), "a 'qualified production expenditure' means . . . all

salaries, wages, fees and compensation including related

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- 15 - No. 67

benefits." A "living wage" under Administrative Code of the City

of New York § 6-134(b)(9) is defined as "an hourly compensation

package that is no less than the sum of the living wage rate and

the health benefits supplement rate for each hour worked . . .

The portion of the hourly compensation package consisting of the

health benefits supplement rate may be provided in the form of

cash wages, health benefits, or any combination of the two."

Under a federal statute, the Board of the Tennessee Valley

Authority must "approve all compensation (including salary or any

other pay, bonuses, benefits, incentives, and any other form of

remuneration) of all managers and technical personnel that report

directly to the chief executive office" (16 USC § 831[a][g]

[1][G]). In another federal statute, the Senior Executive

Service of United States "shall be administered so as to --

1) provide for a compensation system, including salaries,

benefits, and incentives, and for other conditions of employment,

designed to attract and retain highly competent senior

executives" (5 USC § 3131). Title 5 of the United States Code,

which sets forth federal employees' compensation rights,

"govern[s] all incidents of employee compensation, including

basic salaries; salary increases; overtime; holiday and sick pay;

life and health insurance benefits; retirement benefits; travel

and substance allowances; and compensation for injury and

unemployment" (Kizas v Webster, 707 F2d 525, 536).

The State's contributions toward the health care

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insurance premiums of judges and justices are not quantified in

the record in actual dollars, but as percentages of the total

costs only. The State's contributions are likely the single

largest emolument that the participating members of the judiciary

receive beyond scheduled salaries themselves. While the State's

health care contribution may not approach, in relation to salary,

the $6,000:$1,200 ratio that this Court protected as additional

compensation in Bockes, it is undeniably significant given the

high costs of health care premiums today. We need not concern

ourselves about whether the definition of compensation may or may

not impact negligible issues such as parking privileges or

cafeteria discounts. Only the State's contributions toward

health care insurance premiums are at issue here, the

significance of which cannot reasonably be compared to the lesser

job-related perquisites which are outside the scope of this

appeal.

Notably, the precursors to the current New York

Constitution broadly defined judicial remuneration as

compensation rather than as salary, at a time when

employer-provided health care insurance did not exist. What did

exist, as discussed in Bockes, were job-related out-of-pocket

expenses that were initially reimbursed by the State on an

itemized basis, then covered by an annual $1,200 "in lieu of"

payment, and which later reverted to the itemized reimbursement

practice that is in effect today. Clearly, there has always been

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an understanding, expectation, and practice that in one form or

another, judicial compensation included reimbursements for

expenses incurred on the job, even though no such entitlement is

specifically referenced in any state constitution or amendment

thereto. Now, nearly two decades into the 21st century, the

burgeoning cost of health care is undisputed. The State now

routinely offers employees health care policies and routinely

makes contributions toward their costs, reflecting a new and

additional understanding, expectation and practice. These

contributions, whether 90%, 88% or 84%, are significant for the

employees who receive them and the employer who pays them, in

both percentage and actual dollar terms.

When attorneys in private practice or employed in other

capacities consider whether to seek a full-time judgeship by

appointment or election, a prime consideration for many is the

financial affordability of the career change. In some instances,

the new jurist will incur a reduction in annual compensation by

choosing a career on the bench. Similarly, current full-time

judges and justices in New York assess their financial situations

when deciding whether to seek re-appointment or re-election, or

to choose higher remuneration in the private sector. Still other

members of the judiciary consider when and whether to retire from

the bench, with or without the intention of remaining in the

legal profession in some other form or fashion, and will factor

into their calculation the financial impact of the decision.

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Prospective, current, or retiring jurists examining the financial

ramifications of these career decisions will logically and

necessarily consider the total compensation package they would

expect to receive during a term in office or in retirement.

Health care expenses for the jurist, and for covered dependents

in many instances, are a significant sum of money as they are to

employees in any profession, and constitute an integral part of

the calculation which must be made in deciding the affordability

of entering, remaining in, or retiring from public service in the

judiciary.

In sum, the State's contribution toward the health care

insurance premiums of the participating members of the judiciary

should be acknowledged as part of compensation within the

protective cocoon of the Compensation Clause because, for reasons

noted, doing so gives "practical effect" to the terms and wording

of the Compensation Clause (see Ginsburg v Purcell, 51 NY2d at

276). It is a significant element of judicial remuneration and

has been treated as such, as a practical matter, by both employer

and employees, and in statutes and cases, no less so than the

annual $1,200 "in lieu of" allowance that was protected by

Bockes.

V.

The judgment appealed from should nevertheless be

reversed.

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Any direct reduction of compensation to members of the

State judiciary violates New York's Constitution, article VI, §

25(a) (see Maron v Silver, 14 NY3d 230, 252-54). At first blush,

the State's reductions in health care insurance contributions

embodied in Civil Service Law § 167(8) would appear to be

violative of the Constitution and warrant judgment in plaintiffs'

favor.

However, legislative enactments, such as Civil Service

Law § 167(8), are presumed to be constitutional, and those who

challenge them "bear a heavy burden of proving

unconstitutionality beyond a reasonable doubt" (City of New York

v State of New York, 76 NY2d 479, 485; see Elmwood-Utica Houses v

Buffalo Sewer Auth., 65 NY2d 489, 495). On this record,

plaintiffs have failed to satisfy their burden that the reduction

in the State's percentage contributions toward health care

insurance premiums -- from 90% to 84% for active jurists and from

90% to 88% for retirees -- represents any net reduction of the

value of the benefit to current and former members of the

judicial branch. Plaintiffs' claim is not that the State is

paying less money per jurist overall, or less than it previously

did for health care insurance premiums at the expense of

individual members or retirees of the judiciary. Rather,

plaintiffs' claim is only that the State now contributes a lower

percentage of those premiums. The record is silent on whether

the actual costs to the State have increased or decreased. If,

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for instance, the State's contributions toward health care

insurance premiums increase in a relevant year by a dollar amount

that exceeds the value of the State's 6% reduction in

contributions for jurists or the 2% reduction for retirees, the

judiciary, rather than suffering a diminution of overall

compensation, may arguably come out "ahead" in the equation. In

other words, the 6% or 2% contribution reductions toward

premiums, as authorized by Civil Service Law § 167(8), do not

necessarily and mathematically reduce the value of the insurance

payments provided by the State, like a see-saw, without

additional evidence that insurance payments by the State have not

independently risen by 6% or 2% or more, if at all. Absent a

mathematical showing by plaintiffs that the State's health care

contributions, protected by the Compensation Clause, have been

reduced in dollar terms for the insurance products provided,

rather than in percentage terms, plaintiffs fail, as constrained

by their allegations, to satisfy their burden of proof.

The record evidence also fails to address qualitative

differences that may exist in State-sponsored health care

insurance coverage from year to year. If, for instance, current

or former members of the judiciary pay an additional percentage

for their coverage, but the quality of that coverage improves by

some measurement by the same or greater percentage, it cannot be

said that their compensation has been diminished, because the

additional expenditure merely purchases an improved health care

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product to the same degree. This Court does not know whether the

percentage reduction in the State's contributions has been

accompanied by any increase or decrease in the quality of

coverage, because plaintiffs have failed to address their burden

of proof on the issue.

The foregoing is consistent with Maron v Silver (14

NY3d at 254), wherein we held that the Compensation Clause is not

violated if inflation erodes the value of compensation. Absent a

showing that the State's health care contributions have lessened

because of the 6% or 2% reductions at issue here, or proof that

the substance of the insurance has meaningfully decreased,

plaintiffs fail to meet their burden of overcoming the

presumption of constitutionality that is attached to Civil

Service Law § 167(8).

By concluding that a direct diminution of judicial

salary has not been mathematically established, in dollar terms,

we do not reach the secondary question of whether the State's

reduced percentage contributions toward health care premiums for

the judiciary and its retirees was accomplished in a

discriminatory or non-discriminatory manner as compared with

other employees of the State (see United States v Hatter, 532 US

551, 571).

Accordingly, the judgment should be reversed without

prejudice to plaintiffs recommencing a new action, if they be so

advised.

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Bransten v State of New York

No. 67

WILSON, J.(concurring):

I agree with Justice Dillon that health care benefits

are "compensation." I write separately because this appeal fails

for a simple reason or, if not, should not be here at all.

Plaintiffs sought a declaration that Civil Service Law

§ 168 (8) is unconstitutional. Their complaint does not seek a

declaration that the regulations subsequently promulgated

thereunder are unconstitutional. In moving for summary judgment,

plaintiffs reiterated their request for a declaration that the

statute was unconstitutional; they did not assert that the

regulations were. However, the statute says only this: "The

president, with the approval of the director of the budget, may

extend the modified state cost of premium or subscription charges

for employees or retirees not subject to an agreement referenced

above and shall promulgate the necessary rules or regulations to

implement this provision" (Civil Service Law § 168 [8]). It does

not require any change or reduction, or any action at all. Civil

Service Law § 168 (8) itself is decidedly constitutional.

The fact that the plaintiffs here are Supreme Court

Justices should not entitle them to any laxer pleading standard

than we afford other litigants. They did not seek a declaration

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that the regulations were unconstitutional, did not amend their

complaint, and did not move to conform the pleadings to the

proof. I would reverse on the ground that the statute itself

does not affect compensation however compensation is defined, and

strike the balance of Supreme Court's order because plaintiffs

did not seek any declaration as to the regulations.

If, for some reason, my simple analysis above is wrong,

then we lack jurisdiction to hear the appeal. The alleged

diminution in compensation arises not from the statute, but from

the subsequent regulations, at 4 NYCRR 73.3 (b) and 73.12.

Jurisdiction was asserted under CPLR 5601 (b) (2), which permits

a direct appeal to the Court of Appeals from Supreme Court "where

the only question involved on the appeal is the validity of a

statutory provision of the state or of the United States."

In similar circumstances, we have disallowed a direct

appeal when plaintiffs sought to challenge the constitutionality

of regulations (Rent Stabilization Ass'n v Higgins, 83 NY2d 156,

168 [1993] ["appellants sought a direct appeal to this Court,

which we transferred to the Appellate Division on the ground that

questions other than the constitutional validity of a statute

were involved"]).

It is unclear why we have permitted a direct appeal

from Supreme Court here, and passed on the constitutionality of

the regulations. Whatever the reason, our decision today creates

an amorphous jurisdictional portal, which may open for others in

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the future.

* * * * * * * * * * * * * * * * *

Judgment reversed, without costs, plaintiffs' motion for summary

judgment denied, and judgment granted in favor of defendant

declaring Civil Service Law § 167(8) does not violate the

Compensation Clause of the New York State Constitution (NY Const,

art VI, § 25[a]). Opinion Per Curiam. Judges Rivera, Fahey,

Garcia, Peradotto and Mulvey concur. Judge Dillon concurs in

result in an opinion, in which Judge Wilson concurs in a separate

opinion. Chief Judge DiFiore and Judges Stein and Feinman took

no part.

Decided November 21, 2017

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This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.

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