Chief Judge DiFiore and Judges Garcia and Feinman concur. Judge Wilson concurs in result in an opinion. Judge Rivera dissents and votes to affirm in an opinion in which Judge Fahey concurs.
OPINION BY JUDGE STEIN Regulations of the Office of Victim Services (OVS), as amended in January 2016, limit attorneys’ fee awards for crime victim claimants to the costs incurred on applications for administrative reconsideration or appeal and on judicial review (9 NYCRR §§525.3, 525.9). The question presented on this appeal is whether these regulations conflict with the authorizing statute, Executive Law article 22, or are otherwise irrational. We hold that the regulations are fully consistent with the governing statutory language and purpose, within OVS’s authority, and rational. I. Executive Law article 22 effectuates “the legislature’s intent that aid, care and support be provided by the state, as a matter of grace, for…victims of crime” and their dependents (Executive Law §620). OVS administers the provisions of article 22 and is authorized to “hear and determine all claims for awards filed with the office…and to reinvestigate or reopen cases as necessary” (id. §623 [5]). The parties agree that the statute empowers OVS to reimburse victims for “out-of-pocket loss,” which is defined as “unreimbursed and unreimbursable expenses or indebtedness reasonably incurred for medical care or other services necessary as a result of the injury upon which such claim is based” and “shall also include…the cost of reasonable attorneys’ fees for representation before the office and/or before the [A]ppellate [D]ivision upon judicial review not to exceed [$1,000]” (id. §626 [1] [emphasis added]). OVS is required to “adopt, promulgate, amend and rescind suitable rules and regulations to carry out the provisions and purposes of” the statute, “including…rules for the approval of attorneys’ fees for representation before the office and/or before the appellate division upon judicial review…, and rules for the authorization of qualified persons to assist claimants in the preparation of claims for presentation to the office” (id. §623 [3]). As relevant here, OVS regulations formerly provided that claimants had a “right to be represented…at all stages of a claim” (9 NYCRR former §525.9 [a]) and, “[w]henever an award [was] made to a claimant who [was] represented by an attorney, [OVS was required to] approve a reasonable fee commensurate with the services rendered, up to $1,000,” unless the request for attorneys’ fees was premised on a claim “submitted without legal or factual basis” (9 NYCRR former §525.9 [c]). OVS acknowledges that this meant that attorneys’ fees, if reasonable, were available at all stages of a claim. However, effective January 13, 2016, OVS amended 9 NYCRR §525.9 to provide that “[a]ny claimant…may choose to be represented before [OVS], at any stages of a claim, by an attorney-at-law…and/or before the Appellate Division upon judicial review of the office’s final determination,” but “only those fees incurred by a claimant during: (1) the administrative review for reconsideration of such decision…; and/or (2) the judicial review of the final decision of [OVS]…may be considered for reimbursement” (9 NYCRR §525.9 [a]). The new regulations expressly define “[r]easonable attorney’s fees for representation before the office and/or before the appellate division upon judicial review” to mean only reasonable fees incurred during the explicitly enumerated stages of the claim process (9 NYCRR §525.3 [h]). The amendments did not alter the preexisting regulation setting forth “factors to be considered in determining the reasonableness of a fee,” which include “the time and labor required [of the attorney], the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly,” and “whether any part of the cost of the legal service provided to the claimant has been paid or is payable by a third party” (9 NYCRR §525.9 [d] [1], [6]). OVS issued a regulatory impact statement indicating that the “purpose of th[e] rule change [wa]s to limit attorneys’ fees pursuant to article 22 of the Executive Law.” OVS stated that the amendments were “designed to conform the regulations to the enacting statute,” explaining that the prior regulations permitted claimants to recover attorneys’ fees that “far exceed[ed]” the “ reasonable expenses” specified under Executive Law §626 (1). OVS indicates that Victim Assistance Programs (VAPs) are federally funded with a state match, and it emphasized in its regulatory impact statement that it “fund[ed] 228 [VAPs] across New York State, distributing in excess of $35 million to these programs to assist and advocate on behalf of victims and claimants.” The required services provided by the VAPs include, among other things, “assist[ing] victims and/or claimants in completing and submitting OVS applications and assist[ing] claimants through the claim process.” OVS determined that the legislature did not intend that attorneys’ fees incurred in relation to assistance within the scope of services provided by VAPs would be considered reasonable under the statute. The individual petitioners herein are crime victims who were represented by petitioner Gordon, Jackson & Simon in their applications for awards from OVS. As relevant here, petitioners Michelle Soriano and Daniel Velez filed their applications in 2016, after the effective date of OVS’s amended regulations; Soriano was awarded $125 and Velez was awarded $365. Soriano also filed a separate emergency application for moving expenses, which included 23 supporting attachments. That application was granted and Soriano was awarded approximately $1,400 in moving and storage expenses. However, OVS denied the requests of both Soriano and Velez for attorneys’ fees, and for reconsideration of those requests, on the ground that the fees sought did not relate to assistance obtained in connection with administrative or judicial review. Soriano and Velez did not make separate applications for attorneys’ fees in applying for reconsideration. Thereafter, petitioners commenced this combined CPLR article 78 proceeding and declaratory judgment action in December 2016, arguing in pertinent part that the amended regulations and the denials of Soriano’s and Velez’s attorneys’ fee requests were arbitrary and capricious. In that regard, petitioners asserted that the 2016 amendments were contrary to the plain language of the Executive Law and the legislature’s intent that attorneys’ fees be awarded “for representation before the office,” without restriction. Supreme Court, as relevant here, granted OVS’s subsequent motion for summary judgment and declared that the amendments “constitute an appropriate and lawful exercise of OVS’s authority under [a]rticle 22 of the Executive Law to adopt rules governing the approval of reasonable attorneys’ fees for representation before [OVS].” The court held that OVS’s statutory authority to adopt regulations “governing the approval of attorneys’ fees for representation before the agency, together with the agency’s duty to award only reasonable reimbursement to crime victims, provide a sufficient statutory predicate for excluding attorneys’ fees incurred in the preparation and submission of claims as…’not reasonable expenses.’” Finally, Supreme Court concluded that neither the amended regulations, themselves, nor their application to Soriano’s and Velez’s fee requests, resulting in the denial thereof, were arbitrary and capricious. Upon petitioners’ appeal, the Appellate Division modified and, in relevant part, annulled the amendments to 9 NYCRR 525.9 (169 AD3d 52 [3d Dept 2019]). The Court held that “[t]he provisions in the amended regulations that limit counsel fee awards for crime victims to administrative appeals and judicial review are inconsistent with the language and purposes of Executive Law article 22 and in excess of the authority of OVS” (id. at 60). Noting that “Executive Law §626 (1) requires OVS to reimburse crime victims for out-of-pocket loss, which ‘shall…include…the cost of reasonable attorneys’ fees for representation before [OVS] and/or before the [A]ppellate [D]ivision upon judicial review,’” the Court determined that there is “no authorization in the statute’s plain language for OVS to conclude that counsel fees are never ‘reasonable’ during the early stages of a claim and, thus, to categorically exclude awards of counsel fees for such representation in every instance” (169 AD3d at 57). The Court also concluded that the amended regulations conflict with another OVS regulation — 9 NYCRR §525.9 (d) — which “requires OVS to determine the reasonableness of a counsel fee award based upon specified factors,” explaining that “[t]hese factors necessarily contemplate a case-by-case examination of the circumstances of each claim” (169 AD3d at 58), and rejected, as contrary to the record, OVS’s assertion, based on the agency’s experience, that the initial submission of a claim is a simple process (id. at 58-59). II. Neither party disputes the determination of the Appellate Division that Executive Law article 22 “requires OVS to reimburse crime victims for out-of-pocket loss, which ‘shall…include…the cost of reasonable attorneys’ fees for representation before [OVS] and/or before the [A]ppellate [D]ivision upon judicial review’” (169 AD3d at 57, quoting Executive Law §626 [1]). Their disagreement on this appeal concerns OVS’s interpretation of the term “reasonable” as reflected in the amended regulations. We conclude that, as OVS argues, the directive in Executive Law §623 (3) that OVS adopt “rules for the approval of attorneys’ fees for representation before the office and/or before the appellate division upon judicial review” must be read together with the provision that only attorneys’ fees that are “reasonable” and “reasonably incurred” may qualify for reimbursement (Executive Law §626 [1]), and that OVS’s regulations rationally implement that statutory limitation. Administrative agencies have “all the powers expressly delegated to [them] by the Legislature” (Matter of Consolidated Edison Co. of N.Y. v. Department of Envtl. Conservation, 71 NY2d 186, 191 [1988]), and are “permitted to adopt regulations that go beyond the text of [their] enabling legislation, so long as those regulations are consistent with the statutory language and underlying purpose” (Matter of Acevedo v. New York State Dept. of Motor Vehs., 29 NY3d 202, 221 [2017]). While “an administrative agency may not, in the exercise of rule-making authority, engage in broad-based public policy determinations” (Matter of General Elec. Capital Corp. v. New York State Div. of Tax Appeals, Tax Appeals Trib., 2 NY3d 249, 254 [2004], quoting Rent Stabilization Assn. of N.Y. City v. Higgins, 83 NY2d 156, 169 [1993], cert denied 512 US 1213 [1994]), “[t]he cornerstone of administrative law is…the principle that the Legislature may declare its will, and after fixing a primary standard, endow administrative agencies with the power to fill in the interstices in the legislative product by prescribing rules and regulations consistent with the enabling legislation” (Matter of Nicholas v. Kahn, 47 NY2d 24, 31 [1979]). As we have long recognized, “it is not necessary that the Legislature supply administrative officials with rigid formulas in fields where flexibility in the adaptation of the legislative policy to infinitely variable conditions constitute the very essence of the programs” (id.). Stated differently, “where flexibility is required to enable an administrative agency to adapt to changing conditions, it is sufficient if the Legislature confers broad power upon the agency to fulfill the policy goals embodied in the statute, leaving it up to the agency itself to promulgate the necessary regulatory details” (Matter of Consolidated Ed., 71 NY2d at 191). The standard for judicial review of those regulatory details “‘is whether the regulation has a rational basis and is not unreasonable, arbitrary or capricious’” (Matter of Acevedo, 29 NY3d at 226, quoting Matter of Consolation Nursing Home v. Commissioner of N.Y. State Dept. of Health, 85 NY2d 326, 331 [1995]). Where the legislature has left to an agency’s discretion the determination of “what specific standards and procedures are most suitable to accomplish the legislative goals,” the agency’s rulemaking, “[i]f reasonably designed to further the regulatory scheme,…cannot be disturbed by the courts unless it is arbitrary, illegal or runs afoul of the enabling legislation or constitutional limits” (Matter of Mercy Hosp. v. New York State Dept. of Social Servs., 79 NY2d 197, 204 [1992]) — regardless of our assessment of the “wisdom” of the agency’s approach (dissenting op, at 10). The questions before us, then, are whether the amended regulations are inconsistent with the statutory text; and, if not, whether they are “‘so lacking in reason’ that they are ‘essentially arbitrary’” (Matter of Acevedo, 29 NY3d at 226-227, quoting Kuppersmith v. Dowling, 93 NY2d 90, 96 [1999]). Here, petitioners’ argument and the dissent’s reasoning are flawed in that they overlook that the statute, when read as a whole, grants OVS the authority to determine whether attorneys’ fees are “reasonable.” Specifically, the legislature directed OVS to adopt rules for the approval of attorneys’ fees for representation before it and the Appellate Division (see Executive Law §623 [3]). However, the statutory language also expressly states that reimbursable out-of-pocket loss “shall also include…the cost of reasonable attorneys’ fees for representation before the office and/or before the [A]ppellate [D]ivision upon judicial review” (id. §626 [1] [emphasis added]). Petitioners focus primarily on the language in the statute providing that OVS “shall” reimburse attorneys’ fees, while concomitantly ignoring the statutory limitation that OVS reimburse such fees only if they are “reasonable.” It bears emphasis that the statute itself — as opposed to OVS’s own regulations — does not define the term “reasonable.” Nor does the statutory scheme dictate any relevant factors that OVS must consider or set forth a rigid formula to be used in determining whether attorneys’ fees are reasonable; rather, the legislature authorized and required OVS to determine what factors should be considered or what formula should be used — not simply how much to reimburse an attorney within the statutory limit of $1,000 (cf. Matter of Regan v. Crime Victims Compensation Bd., 57 NY2d 190, 195-196 [1982] [annulling an award on the ground that "serious financial hardship" --- a term left to the Crime Victims Compensation Board to define --- had not been established because the statute specifically required the Board to "consider all of the financial resources of the claimant," but the Board's rules exempted a wide variety of assets and income from consideration as part of claimant's financial resources]). Because Executive Law article 22 permits OVS to reimburse only fees that are “reasonable,” but is silent with regard to the parameters of what is reasonable, the legislature necessarily granted OVS the authority to determine the scope of that term. In other words, the definition of the term “reasonable” was left to OVS’s discretion. Critically, the legislative silence regarding what constitutes a “reasonable” fee does not create a conflict between the statute and the agency’s regulations. Unlike the rules at issue in Regan, the regulations challenged here do not permit OVS to disregard any factors that the legislature has explicitly required it to consider. Rather, the purpose of the amended regulations was to clarify which fees OVS would consider as falling within the meaning of the broad statutory term “reasonable,” consistent with the statutory directive that OVS “adopt…rules for the approval of attorneys’ fees for representation before the office and/or before the appellate division upon judicial review” (Executive Law §623 [3]). Petitioners and the dissent argue that attorneys’ fees must be awarded based on case-specific factors, but they can point to nothing in the statute that requires OVS to determine all aspects of fee applications on a case-by-case basis. Nor is there anything in the statutory language prohibiting OVS, in promulgating the challenged regulations, from making a categorical judgment that attorneys’ fees incurred in connection with the initial claim stage are not “reasonable” within the meaning of Executive Law §626 (1). Inasmuch as the legislature left the definition of the term “reasonable” to OVS, the statute is silent as to how OVS is to address fees for the various stages of a claim,1 and nothing in the statutory scheme prohibits OVS from deeming certain categories of fees unreasonable, the regulation does not conflict with the statute.2 Further, it cannot be said that the agency “use[d] its enabling statute as a basis for drafting a code embodying its own assessment of what public policy ought to be” (Matter of Acevedo, 29 NY3d at 222 [internal quotation marks and citations omitted]) or contradicted the public policy embodied in the statutory scheme. Rather, OVS simply defined a term — “reasonable” — that the legislature directed it to define (see Matter of Bernstein v. Toia, 43 NY2d 437, 440, 448 [1977] [upholding a DSS regulation fixing maximum, flat-grant shelter allowances without "making provision for exceptions due to circumstances peculiar to individual recipients" where the authorizing statute "itself [was] not explicit as to whether grants for shelter sh[ould] be fixed by the employment of flat grants or by special grants”]; see generally Matter of Acevedo, 29 NY3d at 220 [rejecting the argument that the Commissioner of the Department of Motor Vehicles contravened a "statutory mandate to exercise discretion on a case by case basis by adopting hard and fast rules that are waivable only under limited circumstances" because the Commissioner was granted exclusive, discretionary authority over relicensing of certain individuals convicted of driving while intoxicated, and "the Commissioner d[id] not abdicate her discretion by formalizing it”]). III. In light of our conclusion that the amended regulations do not conflict with the statute, the question before the Court distills to whether OVS rationally determined that attorneys’ fees for tasks such as preparing and submitting claim forms, or making telephone calls to ascertain the status of a claim, are not reasonable expenses (see Matter of General Elec., 2 NY3d at 255). Petitioners argue that the amended regulations conflict with OVS’s pre-existing regulation providing for the determination of counsel fee awards based on various case-specific factors (see 9 NYCRR §525.9 [d]) and, thus, violate the instruction in Executive Law §627 (1) that OVS “shall determine claims in accordance with rules and regulations promulgated by the director.” In addition, petitioners and the dissent question the accuracy of OVS’s description of the nature of the work involved in the initial application process, and petitioners argue that OVS is tacitly supporting an artificial “VAP bureaucracy” by discouraging victims from relying on independent attorneys. The Appellate Division agreed with petitioners that the factors set forth in 9 NYCRR §525.9 (d) “necessarily contemplate a case-by-case examination of the circumstances of each claim” and that the amended regulations conflict with this regulation because they “preclude[] such case-by-case consideration for fees incurred in the early stages of a claim, determining the reasonableness of a fee award based solely upon the stage of representation when the fees were incurred — a factor that does not appear in the regulation” (169 AD3d at 58). However, OVS could rationally construe the new regulations as defining the types of services for which fees are not available and then apply the section 525.9 (d) factors to those stages of the process for which attorneys’ fees are available (see Andryeyeva v. New York Health Care, Inc., 33 NY3d 152, 174 [2019] ["an agency's construction of its regulations if not irrational or unreasonable, should be upheld" (internal quotation marks and citations omitted)]). Such a construction does not conflict — and, indeed, comports — with section 525.9 (d) inasmuch as one of the factors that must be considered under that regulation is “the skill requisite to perform the legal service properly” (9 NYCRR §525.9 [d] [1]). The new regulations act to clarify this factor by making explicit that reimbursement of attorneys’ fees is not available for the initial filing of a claim because it is a relatively simple task, accomplished in most cases by the completion of a four-page form requesting basic information, and VAPs are available to assist claimants in any instance in which the initial claim process is more complicated. Moreover, nothing in the statute prohibits OVS from changing its regulations prospectively or suggests that it cannot modify them in response to changing circumstances (see Matter of Con. Ed., 71 NY2d at 191), as long as OVS determines individual claims in accordance with its current regulations (see Executive Law §627 [1]). Those changing circumstances include the increased funding of hundreds of local VAPs, which are available to assist claimants in completing the initial form to submit a claim. Although the Appellate Division rejected OVS’s consideration of the availability of VAPs (169 AD3d at 60), we agree with OVS that it rationally refused to disregard the role that VAPs play in the claims process in determining that attorneys’ fees for services rendered during the initial claim process or in the preparation of emergency applications cannot be deemed “reasonable” when VAPs exist in every county to provide assistance in the same manner (see Matter of Acevedo, 29 NY3d at 223 ["(b)alancing of costs and benefits is inherent in any rulemaking process, and…an agency would be acting irrationally if it adopted a particular rule without first considering whether its benefits justify its societal costs" (internal quotation marks and citation omitted)]. The questions of whether reimbursement for attorneys’ fees is reasonable for the types of tasks involved in those stages of the process and whether VAPs are capable of adequately assisting claimants with such tasks are matters involving OVS’s expertise and experience with the process, and OVS rationally relied on that experience in determining that requests for attorneys’ fees in connection with those tasks are not “reasonable” within the meaning of the statute (see Matter of Sigety v. Ingraham, 29 NY2d 110, 114 [1971] [upholding as rational regulations issued by the Commissioner of Health that limited Medicaid reimbursement rates to 50% of the weighted average adjusted in-patient cost at proprietary hospitals in the State based on the Commissioner's experience that efficiently run nursing homes will have costs below the regulatory 50% standard]). Finally, the express purpose of Executive Law article 22 is to provide “aid, care and support for crime victims,” not to promote economic activities and income for attorneys to enable them to render services that can be provided adequately by others trained and available to do so. OVS’s regulations defining “reasonable” attorneys’ fees represent an attempt to conserve its resources for use in the compensation of losses suffered by crime victims, rather than for attorneys’ fee awards it deemed unreasonable, consistent with the fundamental purpose of the statute, which is to provide “aid, care and support.. ., as a matter of grace, for…victims of crime” and their dependents (Executive Law §620). Although there may be other valid ways in which OVS could have defined “reasonable” attorneys’ fees, the definition in the amended regulations is rational and the application of those regulations to deny petitioners’ fee applications was not arbitrary and capricious. In short, because the regulations are consistent with the statutory language and OVS “appl[ied] its special expertise in a particular field to interpret [that] statutory language, [its] rational construction is entitled to deference” (Matter of Raritan Dev. Corp. v. Silva, 91 NY2d 98, 102 [1997]). Accordingly, the order of the Appellate Division should be reversed, without costs, and the judgment of Supreme Court reinstated.
