Favorable Determination in LeadingAge NY Executive Compensation Suit

State Supreme Court Justice George B. Ceresia, Jr. reviewed our lawsuit to determine whether any of our claims should be dismissed prior to the State having to fully respond to our papers. Justice Ceresia found that our petition stated legitimate causes of action that: (1) the EO 38 regulations conflict with existing State laws, including both the Business Corporations Law and the Not-for-Profit Corporations Law; (2) the State regulatory agencies engaged in policy-setting that would otherwise be reserved for the State Legislature; and (3) the EO 38 regulations are arbitrary and capricious. By not dismissing these claims, we believe it would be difficult for the court to issue a final decision on the merits upholding the EO 38 regulations.

The court directed the State to answer the LeadingAge NY petition within 20 days. Once the State responds, plaintiffs can file a motion for summary judgment based on the pleadings, and the court can render a substantive decision on the merits which is expected to take 60-90 days.

This determination comes on the heels of a decision we reported on last week from a Suffolk County State Supreme Court justice upholding these regulations. Given the importance of the issue and the divergent opinions among the courts so far, it is likely that the Appellate Division or even the Court of Appeals – the State’s highest court – will have the final word on the validity of EO 38 and the regulations. In the meantime, the regulations remain in effect throughout the State, with the exception of Nassau County where an earlier Supreme Court decision stayed their implementation.

Contact: Dan Heim dheim@leadingageny.org, 518-867-8866