Selective Due Process

Revocation of Lawyer's Pension Violated Due Process, Judge Says
The New York Law Journal by Vesselin Mitev - August 27, 2009

State Comptroller Thomas P. DiNapoli improperly revoked the $106,000 annual pension of a Long Island lawyer, an Albany judge has ruled in ordering the state to restore the benefit. The state violated Albert D'Agostino's due process rights by "depriving him of continuing retirement benefits prior to granting him a hearing and by failing to provide adequate notice" of the case against him, Acting Supreme Court Justice Gerald W. Connolly ruled in D'Agostino v. DiNapoli, 8134-08. The Albany Supreme Court decision appears on page 42 of the print edition of today's Law Journal. The state had sought the repayment of $605,874 in pension payments made to Mr. D'Agostino between August 2002 and March 2008—one of the largest amounts sought in a wide-ranging probe of payments to lawyers who were improperly enrolled in the state pension system as employees of government agencies they represented (NYLJ, Aug. 28, 2008). In a prior ruling, the judge had held that Mr. DiNapoli and Attorney General Andrew M. Cuomo have the authority to review pension payments and revoke benefits, but only if the recipients had received proper advance notice and an opportunity to contest the action (NYLJ, April 14). A spokesman for the comptroller said yesterday that the office would modify its procedure but would continue to pursue the case against Mr. D'Agostino.

In a series of letters starting in April 2008, Mr. D'Agostino, 65, was informed by the comptroller's office that his benefits were suspended pending a review of his record to determine whether he was eligible to receive service credit. In a June letter, the office advised Mr. D'Agostino, of Minerva & D'Agostino in Valley Stream, that he had been incorrectly registered as an employee of three school districts and the Nassau County Civil Service Commission for periods ranging from three to 23 years when in fact he was an independent contractor. But Justice Connolly said the investigation of Mr. D'Agostino was conducted by comptroller staff who had "no experience or expertise with respect to the retirement system or the issue of whether an individual is an employee or an independent contractor." He added, "It further appears that much of their investigation involved interviewing people who had no personal knowledge of the specifics of petitioner's employment history." A final letter in August 2008 informed Mr. D'Agostino that after reviewing his case, the comptroller had determined the lawyer was an independent contractor rather than an employee and thus ineligible to receive a pension.

Noting that no "other factual basis or reasoning" was given for the determination, Justice Connolly ruled that a pre-deprivation hearing would not have adversely impacted the state's ability to collect improper payments. Mr. D'Agostino's "significant private interests in continuing to receive his pension benefits outweigh the government's limited interest in effecting the deprivation prior to granting a hearing," the judge wrote, adding that due process "requires" that a pre-deprivation hearing be held. The judge dismissed an argument by the comptroller that Mr. D'Agostino could have paid to see a copy of his entire pension system file as insufficient to satisfy due process, given the lack of information about the probe that led to the revocation of his membership. "Due process requires meaningful notice of the nature of the charges and evidence against petitioner as well as a statement of the legal basis for the charges in order to allow petitioner to adequately respond to and rebut respondents' claim," Justice Connolly wrote. "Respondents failed to provide such notice." The judge also held that any improper payments to Mr. D'Agostino could be recouped by the state, "in the event petitioner's pension benefits and membership are properly terminated in the future."

Lawyer Feels 'Vindicated'

In an interview, Mr. D'Agostino said he felt "vindicated" in a case he described as politically motivated and brought by "first string rookies who worked for a rookie comptroller who is looking to stay in office." Any attempt by the comptroller's office to portray the ruling as a "procedural bump in the road" goes against the oath Mr. DiNapoli took as an elected official to "uphold the Constitution," Mr. D'Agostino said. Emily DeSantis, a spokeswoman for Mr. DiNapoli, said that while the office would not appeal the decision, it would continue to pursue the case against Mr. D'Agostino, "but through the Retirement System hearing process." In an e-mail interview, Ms. DeSantis said the decision "reaffirms our authority to revoke pensions but just requires more due process." She added that the comptroller has yet to determine whether to institute pre-deprivation hearings across the board, but said that "in light of the court's ruling, our office will make sure these individuals are afforded sufficient due process before their benefits are revoked."

To date, 63 individuals, 62 of them attorneys, have had their memberships revoked or service credits rescinded in the probe, netting $1.6 million in repayments to the state. Several other attorneys are claiming their pensions were revoked improperly. In April, Justice Connolly reiterated in Swergold v. Cuomo, 3897-08, his prior finding that the attorney general had the "authority and a proper basis" to subpoena the employment records of attorneys his office was investigating in the pension probe (NYLJ, April 14). The judge also held that Mr. DiNapoli had the power to review records and "correct any errors which would affect the amount of any pension a member might receive." An appeal by named plaintiffs Nathan M. Swergold of Woodbury and William M. Cullen of Lloyd Harbor, who both sought to be reinstated into the system, is pending at the Appellate Division, Third Department. James Roemer, of Roemer Wallins & Mineaux in Albany, represented Mr. D'Agostino. He called the ruling "significant on the merits of due process" and said it may have implications in the Swergold case, with which his firm is also involved. Vesselin.Mitev@incisivemedia.com