Court of Claims, April 2, 2019

Shaw & Binder, P.C. (Daniel S. LoPresti of counsel) for claimants.

Letitia James, Attorney General (Ellen S. Mendelson of counsel), for defendant.

In this action, claimants Mitchell, Maxwell & Jackson (MMJ), MMJ Appraisal Management, Inc., Steven M. Knobel and Jeffrey Jackson allege that defendant State of New York is liable for malicious prosecution and other violations of state law arising out of administrative proceedings brought by the New York State Department of State (DOS) to revoke Knobel's appraisal license. The case was premised on accusations by a former employee that MMJ appraisal reports contained forged signatures. An administrative determination upholding the charges was challenged in Supreme Court by a CPLR article 78 petition, and was ultimately annulled in that proceeding. Claimants argue that the charges against them lacked a factual basis, and that they were denied due process during the administrative proceedings.

The matter is now before me on a discovery dispute first raised at a conference before the court on December 19, 2018, and addressed in subsequent letter briefs. The dispute concerns claimants' efforts to depose Roger Schneier, the DOS Administrative Law Judge (ALJ) who presided over the administrative hearing at which the charges against claimants were initially upheld, and which is at the heart of their allegations in this case.

By letter submitted February 1, 2019 (defendant's letter), the State seeks an order barring the testimony, on the ground that (1) a judge cannot be called to testify about "the reasons which led [*2]to his findings of fact and conclusions of law in a particular matter over which he presided," or otherwise about his or her thought processes (defendant's letter at 1, citing Matter of Sheen, 145 Misc 2d 920 [Sur Ct, Bronx County 1989]); and (2) the testimony is not material and necessary, since a record of the proceedings exists, and any effort to ask Schneier to "elaborate on his written decision" would be "redundant, cumulative and irrelevant," as Schneier cannot "add[ ] to his written decision or explain[ ] his reasoning beyond his written word ex post facto" (id. at 2).

{**66 Misc 3d at 720}Claimants have responded by letter dated February 22, 2019 (claimants' letter). They argue that Schneier was a key player in the events underlying the claim at issue, and that questions regarding his "true motivations, biases and prejudices" are directly relevant to the malicious prosecution cause of action (claimants' letter at 2). In particular, they point to emails indicating that Schneier had communications with members of the Department's prosecutorial team regarding adjournment of the hearing date, and wish to question him about ex parte communications (claimants' letter at 2; exhibit A). They seek specifically to probe into the rationale for his decision, including why he discounted the testimony of particular witnesses.

They also wish to ask about what claimants characterize as his bias in favor of the prosecution, citing as evidence for such bias, inter alia, his exclusion of a deposition transcript because of his stated displeasure with how claimants' original counsel "conducts himself," on the basis of which he would not "burden this proceeding with a transcript . . . from" that attorney (claimants' letter at 3; exhibit D).

Claimants further argue that Schneier, as an ALJ, should not be subject to the restrictions generally imposed on taking the testimony of judges, and which the State cites to justify the limitations it seeks to place on his testimony. Finally, they contend that the State has waived its objections by pleading a defense of legal justification.

The parties to a civil action are entitled to "full disclosure of all matter material and necessary in the prosecution or defense of an action," unless it is privileged or work product (CPLR 3101 [a]). Under this broad standard, a party may discover "any facts bearing on the controversy which will assist preparation for trial by sharpening the issues and reducing delay and prolixity" (Allen v Crowell-Collier Publ. Co., 21 NY2d 403, 406 [1968]). Thus, "[i]f there is any possibility that the information is sought in good faith for possible use as evidence-in-chief or for cross-examination or in rebuttal, it should be considered [matter] 'material' in the action" (Vargas v Lee, 170 AD3d 1073, 1075 [2d Dept 2019] [citations omitted]).

Here, defendant maintains that whatever relevance ALJ Schneier's testimony may have, a judge's testimony regarding his thoughts and opinions about a proceeding that was before him is privileged against disclosure. This argument is consistent{**66 Misc 3d at 721} with a "cardinal principle of Anglo-American jurisprudence[:] a court speaks only through its minutes" (Perkins v LeCureux, 58 F3d 214, 220 [6th Cir 1995]), and thus "post-decision statements by a judge . . . about his mental processes in reaching [a] decision may not be used as evidence in a subsequent challenge to the decision" (id., citing Proffitt v Wainwright, 685 F2d 1227, 1255 [11th Cir 1982]). Moreover, while the above language specifically addresses only subsequent attacks on the decision at issue as to which the testimony is sought, the same principle applies to any testimony by a judge about his thoughts behind a judicial ruling (see Washington v Strickland, 693 F2d 1243, 1263 [5th Cir 1982 en banc] ["It is a firmly established rule in our jurisprudence that a judge may not be asked to testify about his mental processes in reaching a judicial decision"], revd on other grounds 466 US 668 [1984]; Morrison v Kimmelman, 650 F Supp 801, 807 [D NJ 1986] ["the trier of fact is not to be placed on the witness stand and cross examined as to the reasons for the outcome, absent evidence of improprieties in the decision making process itself"^[FN1]]).

The foundations of this rule were set forth by the United States Supreme Court's decision in Fayerweather v Ritch (195 US 276 [1904]). In that case, the Court reversed a determination rejecting the res judicata effect of an earlier judgment on the basis of the judge's testimony that he had not considered certain matters. The Supreme Court reasoned as follows: "A judgment is a solemn record. Parties have a right to rely upon it. It should not lightly be disturbed, and ought never to be overthrown or limited by the oral testimony of a judge or juror of what he had in mind at the time of the decision"^[FN2] (id. at 307). Although there is limited case law in New York on this issue, such as exists is fully consistent with these principles. Thus, in Ludwig v Walker (138 App Div 850 [1st Dept 1910]), the Court reversed the modification of a judgment, when the modification had been based on a judge's testimony regarding{**66 Misc 3d at 722} his intent in a prior ruling, quoting and relying upon the above language from Fayerweather. And in Matter of Sheen, the court found that "a judge shall not be permitted to testify as to the reasons which led to his findings of fact or conclusions of law in a particular matter over which he presided" (145 Misc 2d at 922). This principle precludes the questioning of a judge in a malicious prosecution case to testify as to the basis of his or her decision allowing such prosecution to go forward, or even to explore potential biases or conflicts of interest (see Drake v Village of Johnstown, 2011 WL 4091846,*1, 2011 US Dist LEXIS 104049, *4 [SD Ohio, Sept. 14, 2011, No. 10-cv-00137] [under Fayerweather and its progeny, judge could not be questioned in malicious prosecution suit as to basis for directing that plaintiff be jailed, or as to whether he was "acting as a tax collector, rather than a judge"]).

Claimants argue that defendant is not entitled to assert any privilege applicable to judicial testimony, since Mr. Schneier was an ALJ or "hearing officer," who was "controlled by the agency prosecuting the underlying administrative proceeding" (claimants' letter at 4 and n 3). Claimants analogize this situation to that of "the District Attorney's Office employing the presiding judge" (id.).

Whatever the surface appeal of such an argument, it is not consistent with administrative law and procedure. New York law recognizes that there is a "combination of investigatory, prosecutory and quasi-judicial functions in a single administrative agency" (Matter of Mauro v Division of Hous. & Community Renewal, 250 AD2d 392, 392 [1st Dept 1998]). Thus, ALJs like Schneier have been deemed "quasi-judicial" officers, and are generally subject to the same strictures and privileges applicable to judges generally (see e.g. Matter of Beer Garden v New [*3]York State Liq. Auth., 79 NY2d 266, 278 [1992] ["the common-law rule of disqualification embodied by the statute (and applicable to courts of record) has been applied to administrative tribunals exercising quasi-judicial functions"]; Tarter v State of New York, 68 NY2d 511 [1986] [administrative officials carrying out "quasi-judicial" functions entitled to judicial immunity]; Matter of Crosson v Newman, 178 AD2d 719, 720 [3d Dept 1991] ["nonjudicial employees performing quasi-judicial duties such as Administrative Law Judges" are subject to Code of Judicial Conduct]; Desalvatore v Washburn, 192 Misc 2d 321, 324-325 [Sup Ct, Oneida County 2002] [statements in "quasi-judicial" proceedings before ALJ subject to absolute privilege, {**66 Misc 3d at 723}as in judicial proceedings]; see also Schweiker v McClure, 456 US 188, 195 [1982] [proceedings before ALJ are "quasi-judicial"]).

Indeed, the United States Supreme Court has extended the testimonial privilege articulated in Fayerweather to administrative officials who carry out quasi-judicial functions. Thus, in United States v Morgan (313 US 409 [1941]), the Court barred the Secretary of Agriculture from being questioned in regard to a proceeding in which he "dealt with the enormous record in a manner not unlike the practice of judges in similar situations" (id. at 422). Citing Fayerweather, the Court held that since the matter before the Secretary "ha[d] a quality resembling that of a judicial proceeding" he "should never have been subjected to this examination" about the rationale for his decision, just as "[s]uch an examination of a judge would be destructive of judicial responsibility" and a judge "cannot be subjected to such a scrutiny" (id.).

In this case, the role played by Schneier—evaluating the evidence presented to him, making findings of fact and conclusions of law, and imposing a sanction following a hearing at which evidence was presented—consisted of "classically judicial tasks" (see Tarter, 68 NY2d at 518). Under the case law cited above, there is no reason he should be treated differently than judges in the court system for purposes of discovery generally, or in regard to any testimonial privilege in particular.

Claimants note that their amended claim encompasses allegations concerning Schneier, charging that he rendered his decision "maliciously, without basis in law or fact, and in violation of Claimants' due process rights" (see amended claim ¶ 61). But the case law makes clear that the elements of malicious prosecution must be established via the actions of those individuals who prosecuted the case, not as to a judge who ruled on an aspect thereof, and distinguishes the prosecutor's role from that of judicial and quasi-judicial officials involved in the case. For example, findings by an ALJ have been given estoppel effect in malicious prosecution cases, and are thus treated by the court as binding, rather than reviewed for improper motive (see Janendo v Town of New Paltz Police Dept., 211 AD2d 894 [3d Dept 1995] [decision of ALJ at license revocation hearing had collateral estoppel effect on issue of probable cause]; Regent v Town of Cheektowaga, 2007 WL 981771,*6, 2007 US Dist LEXIS 27701 [WD NY, Mar. 30, 2007, No. 03-CV-347A] [noting in regard to malicious prosecution claim that{**66 Misc 3d at 724} "under New York law, preclusive effect would be given to the ALJ's finding in the course of the DMV's license revocation hearing"]).

The fact that claimants have included allegations against the ALJ in their claim does not automatically make them relevant to the underlying cause of action. To the contrary, the above-cited allegations in regard to Schneier fall squarely within the protections of judicial immunity (see Tarter, 68 NY2d at 518 [judges—including administrative officials acting in a quasi-judicial [*4]capacity—"have long been immune" from liability even from suits "alleging that their decisions were tainted by improper motives"]).

In addition, I see no relevance of any testimony that would be given by Schneier in regard to his personal biases or thought processes that produced his ruling. To prove a cause of action for malicious prosecution, claimants will need to show "commencement or continuation of a judicial proceeding, malice, want of probable cause, and the successful termination of the precedent action" (G & T Term. Packaging Co., Inc. v Western Growers Assn., 56 AD3d 266, 268 [1st Dept 2008] [citations omitted]). I do not see how Mr. Schneier's testimony on the subjects suggested would be material to any of these questions, even if it were not deemed privileged.

Schneier's testimony bears no relevance to the issues of commencement or continuation, or successful termination of the prosecution. The element of malice requires some inquiry into the motives of those involved in the prosecution of the claims, and thus depends on inferences drawn from particular facts and circumstances (see Martin v City of Albany, 42 NY2d 13, 17 [1977]). Claimants state that Schneier's "motivation, bias and prejudices are in issue in this action," as his actions show that "the prosecutorial team and ALJ Schneier, all employees of the State, were on the same side—against Claimants" (claimants' letter at 2). They thus seek to probe these issues at deposition.

But the ALJ's malice is not relevant here, i.e., his administrative determination is not part of the "commencement and continuation" of a judicial proceeding. As noted above, courts have viewed ALJs as playing a quasi-judicial role—even if they are within the same agency carrying out the prosecution. For that reason, Schneier's motives and internal thought processes are not relevant to the question of malice.

Proof that defendant initiated an action without probable cause may be shown by "demonstrating that the evidence of {**66 Misc 3d at 725}guilt relied upon by the defendant was so scant that the prosecution was entirely baseless and maliciously instituted" (see De Lourdes Torres v Jones, 26 NY3d 742, 761 [2016]). Claimants apparently wish to demonstrate something different: that the ALJ's decision upholding the charges was "irrational," "not supported by the evidence" and "violated Claimant's due process rights" (claimants' letter at 2). But any such claims, to the extent they are relevant to this action, can be established via a showing of the evidence adduced at the hearing, and the text of the administrative determination. Any additional thoughts in Schneier's head about these matters bear no relevance to the question of probable cause.

Claimants also argue that defendant has waived its objection to the taking of Schneier's testimony by "putting [that testimony] in issue in its defense of legal justification." This contention is based on the State's second affirmative defense in the amended answer, which reads: "The defendants, through its employees, acted properly, lawfully without malice, with reasonable and probable cause, in good faith and with legal justification."

As I noted in my decision and order of March 19, 2018, a party may waive a privilege if it "asserts a claim that in fairness requires examination of protected communications" (United States v Bilzerian, 926 F2d 1285, 1292 [2d Cir 1991], cert denied 502 US 813 [1991]). Such may be the case when the party "places the subject matter of its own privileged communication at issue . . . , so that invasion of the privilege is required to determine the validity of a claim or defense of the party asserting the privilege, and application of the privilege would deprive the adversary of [*5]vital information" (Deutsche Bank Trust Co. of Ams. v Tri-Links Inv. Trust, 43 AD3d 56, 63 [1st Dept 2007] [citation omitted]). Applying this standard, I found that defendant cannot claim to have acted in good faith, and then "prevent claimants from seeing materials relevant to its decision to bring the underlying administrative proceeding" (decision and order, Mar. 19, 2018 at 11).

Claimants argue that the same logic applies here: since defendant put the "legal basis for the administrative determination" at issue, claimants should be allowed to question Schneier about that basis (claimants' letter at 4). That is not an accurate characterization of the defense, which in the context of a malicious prosecution claim relates to the actions of the prosecuting employees, not quasi-judicial officials. Therefore, the{**66 Misc 3d at 726} defense does not place at issue the internal thought processes of the ALJ who adjudicated the claim, or his particular biases. To the extent the validity of the ALJ's decision is relevant to this action, claimants have a copy of that decision along with the administrative record, and may make their arguments on that basis. What they may not do, under the case law cited above, is question a judge (including an ALJ) on the thinking behind the decision. Nothing in the defense places that subject at issue.

As noted in Morrison, "evidence of improprieties" may serve as a potential ground for disclosure of judicial bias and thought processes. While claimants do not cite this precise language, they essentially make this argument by pointing to what they characterize as ex parte communications between Schneier and members of the DOS prosecution team (see claimants' letter at 2; exhibit A). The emails which purport to show this concern an adjournment of the hearing, which is a topic generally exempt from the prohibition on ex parte communication^[FN3] (see Rules Governing Judicial Conduct [22 NYCRR] § 100.3 [B] [6] [a] ["Ex parte communications that are made for scheduling or administrative purposes and that do not affect a substantial right of any party are authorized, provided the judge reasonably believes that no party will gain a procedural or tactical advantage as a result of the ex parte communication, and the judge, insofar as practical and appropriate, makes provision for prompt notification of other parties or their lawyers of the substance of the ex parte communication and allows an opportunity to respond"]). For this reason, I do not find that communications between a party and a hearing officer related solely to scheduling are sufficient evidence of wrongdoing to undo the bar against questioning a judge on the reasons for his judicial opinion (see United States v Hooker Chemicals & Plastics Corp., 123 FRD 3, 22 n 36 [WD NY 1988] ["To trigger the 'impropriety' exception to the mental processes privilege . . . the party seeking discovery must make a prima facie showing that impropriety exists"]).

For all these reasons, I grant defendant's application to the extent that I direct that claimants are precluded from questioning{**66 Misc 3d at 727} ALJ Schneier about his rulings and thought processes at the hearing.

That leaves one final matter. Although the matter is not free from doubt, there is some authority indicating that the privilege discussed above does not bar a judge from giving testimony on factual matters relating to a proceeding that had been before him, rather than his bias, reasoning, etc.^[FN4] (See Matter of Sheen, 145 Misc 2d at 923 [no rule "precludes a judge from testifying in a subsequent proceeding about events which anyone could have observed had they been present at the prior proceeding before the Judge"]; but see Baghoomian v Basquiat, 167 AD2d 124 [1st Dept 1990] [judicial official may not be compelled to testify in separate proceeding about what transpired during settlement discussions]; Matter of Herald Cos. v Town of Geddes, 122 Misc 2d 236, 238 [Sup Ct, Onondaga County 1983] ["A Judge should not be required to testify for or against litigants who appeared before him"].) Ex parte communications from prosecutors which reflected their malice, for example, might fall within this principle. But I see no such relevance in communications between the ALJ and DOS officials responsible for the prosecution of the MMJ matter about scheduling. In light of the strict limitations on judicial testimony set forth above, claimants have not articulated a valid basis to question Schneier on factual matters, and thus have failed to show that his testimony would be material at this time. In the event they uncover specific evidence in their questioning of other individuals that Schneier is privy to factual information relevant to the elements of claimants' causes of action, claimants may then seek to revisit my ruling, but solely in this regard.

In light of the foregoing, claimants are barred at this time from taking the testimony of ALJ Schneier, without prejudice to claimants revisiting the question as to deposing Schneier on specific factual matters upon a sufficient showing in accordance with the above.