California Egg Production Laws Survive Lawsuit

–by Caitlin Lomazzo

Citations: Mo. ex rel. Koster v. Harris, 2016 U.S. App. LEXIS 20613 (2016); Mo. v. Harris, 2014 U.S. Dist. LEXIS 89716 (2014); Cal Health & Saf Code § 25990; 3 CCR 1350 § 1350(a–d).

Abstract: On October 19, 2016, the Ninth Circuit Court of Appeals reviewed a lower court’s dismissal of a suit brought by five states and the Governor of Iowa. The suit alleged injuries caused by California state laws and regulations that governed egg production. The court affirmed that the states did not have parens patriae standing, but it remanded the case for dismissal without prejudice.

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In 2014, five states (Missouri, Nebraska, Oklahoma, Alabama, Kentucky) and the Governor of Iowa, Terry Branstad, filed a complaint in the Eastern District of Northern California. The Plaintiffs asked the court to overturn California laws and regulations related to egg production, namely California’s Assembly Bill 1437 (“AB1437”) and California Code § 1350(d)(1). AB1437 provided that “a shelled egg shall not be sold or contracted for sale for human consumption in California” if the egg seller “knows or should have known that the egg is a product of an egg-laying hen that was confined on a farm or place” out of compliance with Proposition 2, a voter initiative that says a farmed animal must not live in conditions that prohibit “[l]ying down, standing up, and fully extending his or her limbs; and [t]urning around freely” for at least the majority of the day. The second item, a set of food safety regulations by the California Department of Food and Agriculture, included minimum cage size requirements.

The Plaintiffs argued the court should strike down the laws, known collectively as the “Shell Egg Laws,” based on their violation of the Commerce Clause or preemption by a federal statute. They also asked the court to bar the state’s enforcement of the laws. The district court determined the Plaintiffs lacked parens patriae standing to sue and dismissed the case with prejudice. It also denied leave to amend the complaint. The Plaintiffs appealed the decision.

The Ninth Circuit reviewed the Plaintiffs’ standing arguments on appeal. A plaintiff state that seeks to establish parens patriae standing must fulfill certain requirements in addition to the Article III standing requirements. It must demonstrate it has “an interest apart from the interests of particular private parties” that will impact “a sufficiently substantial segment” of the state’s population. The interest must also constitute a “quasi-sovereign interest.”

In its decision, the Ninth Circuit did not reach the second question of whether the states had quasi-sovereign interests because it determined that the Plaintiffs had failed to prove they had separate interests that would impact “a sufficiently substantial segment” of their respective populations. The court determined that harms to egg farmers alone would not support parens patriae standing and emphasized that egg farmers could obtain complete relief without state intervention if they filed their own suits. It also noted that price changes that might impact consumers could not constitute a harm to justify standing. Lastly, it determined that the Shell Egg Laws would not single out eggs based on their states of origin and thereby disadvantage certain states’ economies. Because the states could not prove discrimination, they could not establish parens patriae standing on that basis.

In addition to upholding the decision to dismiss the case, the Ninth Circuit also upheld the lower court’s decision to deny the Plaintiffs leave to amend their complaint. The states could not add descriptions of recent occurrences to the complaint they filed years ago and thereby establish parens patriae standing. Moreover, the states sought to modify the complaint to include price changes that would impact consumers of eggs or egg-containing products who did not purchase items directly from egg farmers. The court determined that price changes, which had, if anything, a tenuous relationship to the Shell Egg Laws, could not establish standing. Because the amendments would not save the complaint for lack of parens patriae standing, the Ninth Circuit affirmed the lower court’s denial of leave to amend.

The Plaintiffs had not described injuries that would establish parens patriae standing, but the Ninth Circuit determined that the Plaintiffs could theoretically establish standing if they demonstrated other, actual injuries that occurred after California implemented the laws and regulations in 2015. Therefore the Ninth Circuit remanded the case with instructions to dismiss without prejudice.

Survey: 2015 Administrative Law

Rose Mary Bailly and William P. Davies review the developments in New York Administrative Law during 2014–2015. For judicial developments, the authors review: (A) the due process rights of an incapacitated parolee; (B) the deferential weight of agency interpretation of the Environmental Conservation Law; (C) whether an agency decision finding no excess child-support payments were due was arbitrary or capricious; (D) the Court of Appeals’s test for standing in the context of a State Environmental Quality Review (SEQRA); (E) the proper remedy for a violation of the right to call a witness in a prisoner disciplinary case; and (F) the statute of limitations for claims under Section 8 of the Federal Housing Act. Bailly and Davies also discusses executive branch developments, such as (A) the Raise the Age legislation, an act intended to treat older teenagers differently from adults in criminal cases; (B) changes to the regulation of alcohol; (C) an executive order on the Freedom of Information Act; and (D) reforms to the Port Authority.

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Rose Mary Bailly, Esq., is Special Counsel to the Government Law Center of Albany Law School, and an Adjunct Professor of Law at Albany Law School where she teaches New York State Administrative Law, among other courses.

William P. Davies, J.D., Albany Law School 2016. He was an Executive Editor for Notes & Comments on the Albany Law Review, Volume 79. He was also the Senior Student Editor for the NYSBA Government, Law and Policy Journal.

Governor Cuomo Signs Executive Order Boycotting a Boycott

—by Ryan Lefkowitz

N.Y. Exec. Order No. 157 (June 5, 2016), https://www.governor.ny.gov/sites/governor.ny.gov/files/atoms/files/EO_157_new.pdf.

Abstract: New York State Governor Cuomo signed an executive order aimed to disallow transactions between New York State agencies and institutions engaged in the political protest of Israel through the use of boycotts, divestments, and sanctions.

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On June 5th, 2016, New York State Governor Andrew Cuomo signed into action Executive Order 157 which prohibits state agencies from conducting business with companies that endorse and support economic sanctions for Israel. The executive order comes on the heels of the New York State legislature failing to push through two similar bills, Senate Bill S6378A and S6086. Executive Order 157 explicitly declares a “special historical relationship” and “commonly forged cultural bond” between New York State and Israel as well as the intention of New York State to “stand[] firmly with Israel.”

There are two main components to the executive order. The first involves the creation of a public blacklist of companies that are deemed to support “boycott, divestment, and sanctions activity targeting Israel” (also known as BDS). The executive order defines “boycott, divestment, or sanctions activity against Israel” as engaging in or promoting any activity that is intended to adversely affect Israel’s economy (including limiting commercial relations with both Israel and people in Israel) as a means of affecting political change. Because the executive order’s definition of BDS activities includes a requisite intent of affecting political change, the order relies on the Commissioner being able to reliably distinguish between companies using their buying power to boycott versus purchasing for personal preference.

The list of institutions and companies is to be compiled by the Commissioner of the Office of General Services within 180 days after its enactment. Included in the list will be institutions and companies that the Commissioner finds, through “credible information available to the public,” involved in BDS activities (either directly or through a parent or subsidiary). The order fails to define what means of obtaining information would fall under the umbrella term of “available to the public.” The list is to be publicly posted on the website of the Office of General Services and will be updated every 180 days.

Companies will be provided with written notice prior to being placed on the list, at which point they have ninety days to produce evidence showing they do not actually participate in boycott, divestment, or sanctions activity targeting Israel. If the Commissioner then makes a “good faith” determination that the institution does not engage in such activity, they will not be included on the list.

Any institution that is placed on the publicly published list can petition for removal by providing “written evidence” that the company has ceased its participation in BDS activities. There is no provision for if a company has erroneously been placed on the list and alleges that it has never engaged in BDS activity at all. Although the only requirement for being initially included on the list is “credible information” as evaluated by the Commissioner, the institution bears the burden of providing “written evidence” that they have stopped engaging in BDS activities in order to be removed from the list once published. Therefore, companies can petition to prevent their inclusion on the list by providing evidence they do not engage in BDS activities, but once they are included on the list the only way off is to show they have stopped such activity, not that they never engaged in it to begin with.

The second component of the executive order involves banning business dealings between “affected state agencies” and businesses that are deemed to be involved in or promote BDS activity. The order defines “affected state agencies” as any and all agencies and departments that the Governor has executive authority over, as well as all entities to which the Governor appoints the Chair, the Chief Executive, or the majority of Board Members (with the Port Authority of New York and New Jersey being an exception).

These entities are prohibited from financial dealings with any of the institutions on the publicly available blacklist. Entities that are currently involved with institutions that are deemed to engage in BDS activities have one year from the effective date of the order to comply. The executive order itself is effective immediately and is indefinite in length.

Executive Order 157 is the first of its kind in the country and Governor Cuomo has faced both praise and backlash for it. In light of the inability of the New York State legislature to pass similar bills, some have seen it as an unwarranted executive overreach on a divisive issue. Opponents of the bill’s contents argue that it is a politically motivated attack on the freedom of speech, exercised here through engagement in BDS activities, and is unconstitutional.

Sodium Wars: New York City’s Effort to Warn

— by Forrest Young

ABSTRACT:   In 2015, New York City’s Board of Health announced new regulations requiring chain restaurants to provide warnings about the sodium in their menu options.  In February, a trial judge rejected the National Restaurant Association’s challenge. The First Department issued a temporary stay while the case is on appeal.

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On February 26, 2016, New York Supreme Court Judge Eileen Rakower issued an order denying the National Restaurant Association’s petition to prevent implementation of New York City’s new health code regulation requiring select restaurants to label foods with high sodium content. Nat’l Restaurant Ass’n v. N.Y.C. Dep’t of Health and Mental Hygiene, No. 654024/15, 2016 WL 751881 (Sup. Ct. New York Cty. 2016).

The new regulation, enacted as Section 81.49 of the New York City Health Code, would require chain restaurants (those with 15 or more locations under the same name) to post a saltshaker symbol next to standard menu items with 2,300 milligrams of sodium or more. The regulation also mandates the menu to include a warning that reads “Warning: [this salt symbol] indicates that the sodium (salt) content of this item is higher than the total daily recommended limit (2300 mg). High sodium intake can increase blood pressure and risk of heart disease and stroke.” Restaurants found in violation of the section would be required to pay a 200 dollar fine.

In New York, an administrative regulation will be upheld if it has a “rational basis, and is not unreasonable, arbitrary or capricious.” Nat’l Restaurant Ass’n, 2016 WL 751881 at *1.  To receive a preliminary injunction, the petitioner must show by clear and convincing evidence that must show (1) a likelihood of success on the merits, (2) a danger of irreparable harm without such relief, and (3) a balancing of equities in its favor. Id.   The National Restaurant Association argued that Section 81.49 was invalid because (1) it violated separation of powers; (2) it is arbitrary and capricious; (2) it violates members’ First Amendment rights; and (4) it was preempted by the federal Nutrition Labeling and Education Act (NLEA). Id.

The court took these issues in turn, first holding that the sodium warnings do not violate separation of powers because the Board of Health relied on its public health expertise in regulating restaurants and the rules are not outside the bounds of its authority. The court held that the Board did not overstep into legislative-policy making because it “relied on its expertise in weighing the scientific evidence concerning the risks associated with excess sodium consumption.” The court distinguished these regulations from previous regulations limiting proportions of sugary drinks because “in contrast to the Soda Ban, by adopting Section 81.49, the Board did not devise a new rule that “significantly changes” the manner in which menu items containing sodium are provided to customers at eating establishments. It is within the Board’s regulatory authority to require the posting of information and warning labels concerning health risks.” Id. at *3.

Next, the court rejected the Association’s claim that the regulations were arbitrary and capricious finding that the agency’s determination was predicated on rational concerns regarding known health risks caused by high sodium intake. Nat’l Restaurant Ass’n, 2016 WL 751881 at *3.   Judge Rakower accepted the City’s contention that the regulations were a reasonable approach to the problem because the average New Yorker consumes nearly 1,000 milligrams more than the daily recommendation, and the average chain restaurant meal contains 3512 milligrams of sodium,. Id. The court held that the regulations were not unduly burdensome on chain restaurants because of their uniformity of menus options and preparation techniques.   Id.

The First Amendment challenge was dismissed on the basis that the warnings empower consumers with necessary information. Although the court recognized that commercial speech is protected, it found that the regulation simply provides consumers with “factual and uncontroversial” information. Id. at *4. Judge Rakower reasoned that “[p]ersonal autonomy is not hindered, but rather encouraged by providing information so that consumers can make informed decisions about health; said differently, information promotes autonomy, giving a consumer the opportunity to make choices appropriate to himself or herself individually.” Id. at *2.

Finally, the court directly rejected the Association’s preemption claim using a plain language interpretation. The NLEA “provides that express preemption provision ‘shall not be construed to apply to any requirement respecting a statement in the labeling of food that provides for a warning concerning the safety of the food or component of the food.’” Id. at *4. The court held that this language clearly allows states and localities to require their own food safety warnings, and that Section 81.49 falls squarely within those confines. Id.

For those reasons, the court ultimately rejected both the Association’s petition for declaration judgment, and preliminary injunction.   On February 29, 2016, the First Department granted an interim stay on enforcing the new rule, which would have gone into full-effect on March 1, 2016.

Obama’s Executive Action for Gun Control

— by Hannah Lewis

 

Source: Press Release, Office of the Press Secretary, The White House, Fact Sheet: New Executive Actions to Reduce Gun Violence and Make Our Communities Safer (Jan. 4, 2016).

 

Abstract: President Barack Obama recently announced that taking executive action to increase gun control regulation and make the process of obtaining a gun more thorough. Obama is aiming to classify more gun sellers as gun dealers, which will require them to conduct background checks on potential buyers.

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In light of all the incidents, fatalities, and mass shootings occurring around the country that involve guns, President Barack Obama announced at the beginning of January that he is pushing for more regulation with gun control. Previous action by President Obama to pass gun control legislation has been unsuccessful and he has been unable to get Congress on board with his previous gun control plans. This new regulation is aimed at decreasing gun violence and illegal possession of guns. President Obama is taking executive action to achieve these ends.

 

This executive action consists of ten provisions. First, ATF states that if you are in the business of selling firearms, you must have a license and conduct background checks. Second, if a potential buyer is trying to purchase a weapon that is considered one of the most dangerous, through a trust, corporation, or other legal entity, then a background check is required. Third, the FBI is making the background system more effective and efficient, with improvements such as 24/7 processing and notifying authorities when a prohibited individual attempts to purchase a weapon. Fourth, in an attempt to make the communities safer, the 2017 federal budget will include funding for 200 new ATF agents to enforce gun laws. Fifth, the Internet Investigation Center has been established that will be responsible for tracking illegal online gun trafficking.

 

The six provision entails a requirement that gun dealers notify law enforcement if the guns are lost of stolen in the process of their sale. The seventh provision proposes an increase in access to mental health care through a $500 million investment. The eighth provision entails a requirement for the background checking system that requires information about beneficiaries who are prohibited from possessing a firearm due to their mental health. The ninth provision includes eliminating unnecessary legal barriers that prevent States from reporting information relating to people that are prohibited from possessing a gun due to their mental health. The final provision directs the sectors of the federal government, including the Department of Defense, Department of Justice, and the Department of Homeland Security, to conduct research on gun safety technology.

 

As with any new laws, these provisions have come with both high praise and scrutiny. Opponents argue that this is executive overreach and bypasses the legislative branch. Arguments that this these provisions are a violation of the Second Amendment have also been made. Additionally, they question whether these new laws will actually achieve the end of reducing gun violence because criminals are not going to follow the laws anyways. GOP presidential candidates have also spoken out against President Obama’s executive action. If elected, they vow to reverse the executive order once they are in office.

People v. On Sight Mobile Opticians

This appeal addresses the severability of a municipal ordinance section and the constitutionality of a content-neutral restriction on the posting of signs on public property. The defendant, On Sight Mobile Opticians, had placed a sign advertising its business on public property. The Town of Brookhaven’s investigator filed informations charging the defendant with violation a section of the Town Code prohibiting the posting of signs on public property. The defendant moved for dismissal on the ground that the Town Code chapter at issue was unconstitutional.

The district court denied the motion, holding that the chapter was constitutional. The defendant pleaded guilty and then appealed to the appellate term. The appellate term found the section itself constitutional, but it held that the entire chapter “unconstitutionally favor[ed] commercial speech over noncommercial speech.” It then found that the unconstitutional parts of that chapter could not be severed and as a result reversed the convictions, dismissed the informations, and ordered any fines returned.

Here, the Court held that the code section at issue dealt only with the posting of signs on public property and thus had a discrete, independent legislative purpose. It could therefore be severed from the rest of the chapter in which it appeared.

Considering the constitutionality of the code section in isolation from the rest of the chapter, the Court found it to be a ban that affected both commercial and non-commercial signs without regard to content. It also found the section to “serve[ ] the Town’s valid interest in traffic safety and aesthetics.” Since it was content-neutral and served a valid government interest, the Court held the section constitutional and reversed the order of the appellate term.

2 N.Y.S.3d 406 (N.Y. 2014)

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Matter of Ford v. New York State Racing and Wagering Board

This appeal addresses the legal grounds for rulemaking regarding out-of-competition race horse testing and whether such testing would involve unconstitutional intrusions by testing agents. In 2009 the defendant, the New York State Racing & Wagering Board (“Board”), promulgated a rule in response to the introduction of a new generation of doping agents into the competitive world of horse racing. The new drugs could enhance horse race speeds while eluding race day detection. To combat these new drugs, the defendant implemented a rule requiring race horse owners and trainers to make harness race horses available for random testing days before the race

The petitioners commenced this action prior to the rule’s effective date. The petitioners argued that creating such a rule was not authorized by the respondent’s enabling legislation, and that the rule constituted a constitutionally unreasonable intrusion upon off-track farms which stabled race horses. The Supreme Court found that the Board had acted in excess of its legislatively delegated power, while the Appellate Division held that the rule was valid under the Board’s “broad, legislatively conferred authority to regulate and supervise race meets . . . [where] wagering is permitted.”

During litigation, the challenged rule was amended. The Court therefore had limited review power, and confined its review to whether the Board’s promulgation of any rule mandating out-of-competition testing, and whether the sort of testing regimen proposed would be a constitutionally unreasonable intrusion by the Board’s agents. The Court then examined the long history of horse doping regulations and how legislation had struggled to keep up with changes in doping technology that would create regulatory loopholes that posed a threat to the integrity of the sport and the health and safety of both horses and jockeys.

The petitioners argued that tests were available which would avoid the intrusion issue; tests which—on race day—could pick up traces of the new protein-based enhancers, which could be administered long before the race and which would previously undetectable except for immediately after being administered. The court stated that though the tests existed, they were extremely expensive and their results questionable. The court stated it would be unreasonable to require the Board to use these tests, and instead applied a rational basis test to the Agency’s decision.

The Court rejected the petitioner’s view that section 301(2)(a) demonstrated that the Board only had testing authority at race meetings. It stated that the legislature may give reasonable discretion to administrative officials to determine what methods were to be used, and that the language of the statute explicitly allowed for general supervision over the race meetings. The plain language of the legislation allowed specifically for regulatory action to avoid the circumvention of existing rules. The use of long-term drugs that could pass game day testing, according to the Court, was the exact type of evasion that the legislation envisioned.

The Court concluded by stating that based on both the language of the text and legislative intent, random drug testing was a reasonable exercise of administrative authority and this authority extended both to private horse farm owners and to those licensed to board race horses. Those who stable race horses on their property could “reasonably be deemed to have relinquished a privacy-based objection” by opening up their property to horses of such a regulated nature.

24 N.Y.3d 488 (N.Y. 2014)

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Jones v. Town of Carroll

This appeal addressed the application of Town laws to Plaintiff’s land. In 1984, Plaintiff, Carol Jones (“Jones”), obtained a special use permit from Defendant, the Town of Carroll, allowing her to develop a construction and demolition landfill (“C & D landfill”) on her land. The Town’s Local Law No. I of 2005 (“2005 Law”) bars zoning ordinances being given retroactive effect against vested property rights. Town Local Law No. One of 2007 (“2007 Law”) is a health and safety regulation, prohibiting the construction of a solid waste management facility within the Town. The Court of Appeals found the 2007 Law not to be a retroactive zoning ordinance.

In Supreme Court, Plaintiff moved for summary judgment, alleging that the 2007 Law was arbitrary and capricious and that the law took her property without just compensation. Defendant responded that collateral estoppel applied, alleging that Jones I, also brought by Plaintiff against Defendant, was an action regarding the same issue. The Appellate Court reviewed whether collateral estoppel was appropriate.

In Jones I, the Court of Appeals determined whether the 2005 Law unconstitutionally deprived Jones of legal use of her land for a C & D landfill. It was held that the Law did not apply to the plaintiff since she had a vested right to use the land as a landfill before the zoning law was enacted. The Court of Appeals concluded that since the case from which this appeal stems, Jones II, involves the 2007 Law and not the 2005 Law, a different piece of legislation is at issue than in Jones I (57 A.D.3d 1379 (4th Dep’t 2008); 32 A.D.3d 1216 (4th Dep’t 2006). Therefore, the doctrine of collateral estoppel did not apply.

Addressing the merits of Plaintiff’s claim, the Supreme Court denied Plaintiff’s motion for summary judgment under the assertion that the 2007 Law was arbitrary and capricious. Plaintiff was found to have failed to demonstrate to the court that the Defendant’s actions were without legal justification. Plaintiff’s allegation that the 2007 Law took her property without just compensation was also rejected by the court, as she failed to show that a regulatory taking resulted from the law. It was noted that even if the 2007 Law had resulted in such a taking, declaring the law invalid, as Plaintiff sought, would not have been appropriate relief. Instead, a hearing to determine just compensation for the taking would have been proper.

The Supreme Court did not address Plaintiffs allegation that the 2007 Law was enacted in violation of the State Environmental Quality Review Act (“SEQRA”) after finding the law void as applied to Plaintiff. Because the issue was not addressed, the Appellate Court remanded the issue.

996 N.Y.S.2d 804 (4th Dep’t. 2014)

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Harwood v. Addison

This appeal concerns the termination of employment of a public employee. The Petitioner, Brenda Harwood, served as a senior account clerk typist in the City of Watertown’s Parks and Recreation Department. After a twenty-nine year career with the Department, the City brought incompetence and misconduct charges against Harwood, pursuant to Civil Service Law § 75. The Hearing Officer found that two of the charges could be sustained by the evidence, and found Petitioner guilty of one count of “fail[ing] to deposit cash and checks in a timely manner” and one count of “willfully misleading the City’s retained accountant.” The City also found that Petitioner was guilty of a second count of incompetence because she had “fail[ed] to bill for services in a timely manner.” Petitioner was found not guilty of the additional charges of incompetence and misconduct. As a result of the Hearing Officer’s findings, the City “terminated [Harwood’s] employment” with the Department. Petitioner filed suit in the Supreme Court pursuant to Civil Practice Law and Rules Article 78, and Supreme Court Justice Greenwood transferred this matter to the Appellate Division Fourth Department.

The Appellate Division reviewed each of the charges in turn, beginning with the Hearing Officer’s finding that Petitioner was guilty of “willfully misleading the City’s retained accountant.” The City alleged that Petitioner had been dishonest regarding a number of uncashed checks. However, the court found that evidence raised by Petitioner–namely, that she had previously stated that she had not deposited a check for the City–directly contradicted the City’s position that she lied about making the deposit. Therefore, the court found this count was “not supported by substantial evidence.”

The court next analyzed the remaining incompetence charges together, noting a number of mitigating factors in favor of a more lenient sentence for Petitioner. The court noted “that there were several factors beyond [Harwood’s] control that contributed in the delays” in making the deposits. Petitioner’s service to the City in her official capacity, although not named in her official job description, included a number of time-consuming clerical, scheduling, and other assorted responsibilities that “took in excess of 50% of her time.” Petitioner also suffered from an illness that forced her to intermittently miss work over a period of six months, and the court noted that because no one else in the office took over her assignments during that period, “several of [her] completed invoices were inadvertently deleted[.]” The court also relied on Petitioner’s “long service to the City and her previously unblemished work record[,]” the testimony demonstrating that “she was a hard worker and did her best to complete all of her assigned duties[,]” and that she often stayed late without extra pay to justify mitigating her sentence.

In assigning a proper sanction for Petitioner, the court explained that the initial punishment of termination was vastly disproportionate to the nature of the original charged offenses, noting the penalty was “so disproportionate to the offense, in the light of all of the circumstances, as to be shocking to one’s sense of fairness.” (citing Matter of Pell v. Board of Educ. of Union Free Sch. Dist. No. 1. of Towns of Scarsdale and Mamaroneck, Westchester Cnty., 313 N.E.2d 321, 326 (N.Y.1974)). Accordingly, the court found that a sentence of a two-month suspension without pay, rather than termination, was appropriate for the two remaining incompetence charges.

988 N.Y.S.2d 814 (4th Dep’t. 2014)

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