§ 5602.Appeals to the court of appeals by permission.

Subd (a) of this section, except for subparagraph 2, is based on former § 589(3). It has been reformulated because the former provision was not only confusing but probably incorrect. The rule intended—indeed, required by the Constitution—is that the Appellate Division and the Court of Appeals have concurrent jurisdiction to grant permission to appeal from an order which is not appealable as of right because neither a dissent, reversal or modification nor a constitutional question is involved but which satisfies two conditions: that it embody a final determination of the Appellate Division and that it be rendered in a case originating in a court other than an inferior court. When former §§ 588 and 589 were enacted in 1942, § 588(1), which provided for appeals as of right from final Appellate Division determinations, stated the two conditions and the requirement that there be either (a) a constitutional question, (b) a dissent or (c) a reversal or modification. CPA § 589(3) then correctly referred to a determination “which is not appealable as of right only because it does not comply with provisions (a), (b) or (c) of” § 588(1)—the effect of the “only because” formulation was that the two preliminary conditions had to be satisfied. When the inferior court limitation was removed from cases involving a constitutional question by constitutional amendment in 1944, § 588(1) was amended to state only the preliminary condition of finality, and, while the requirement that there be a constitutional question was retained as (a), the alternative requirement of a dissent, reversal or modification was combined in (b) and conditioned with the second condition, that the case originate in other than an inferior court. Laws 1944, c. 528. A few years later, in an attempt to catch up with the change, the words “or (c)” were stricken from the reference in § 589(3) to § 588(1) since there was no longer any (c) in the latter section. Laws 1955, c. 195. But in these changes confusion and error were introduced, for the “only because” language of § 589(3) no longer required satisfaction of both the preliminary conditions that should limit appeal by permission. It became possible for a final order (not involving a constitutional question) in a case which originated in an inferior court to be, in the terms of § 589(3), “not appealable as of right only because it does not comply with provision (a) or (b) of” § 588(1). It satisfied the preliminary condition of § 588(1), finality, and was therefore not appealable as of right only because it did not comply with either provision (a)—for it did not involve a constitutional question—or provision (b)—for though it might have contained a dissent, reversal or modification, provision (b) required that the case must not have begun in an inferior court. In effect, it was not appealable of right “only because” it failed to meet one of the original preliminary conditions in that it stemmed from an inferior court—a result wholly contrary to the intention of the formulation of § 589(3). In short, it appears that the formulation of § 589(3) can no longer be used. It is necessary to spell out both the finality and the inferior court conditions and this is what the new provision does. Provision (ii) of subparagraph 1 follows the former provisions allowing direct appeal by permission from a judgment or order of a court of original instance entered after an interlocutory determination of the Appellate Division (CPA §§ 589(3), 590); but since § 5601(d) extends this procedure to all nonfinal orders of the Appellate Division that necessarily affect the final decision, the application of provision (ii) is correspondingly broader. See notes to § 5601(d). It should be noted that the Appellate Division rarely grants leave in those cases where it has concurrent power with the Court of Appeals to do so, presumably because it considers that the higher court can better judge whether the appeal should be allowed. See Cohen & Karger, Powers of the New York Court of Appeals 356–57 (rev ed 1952). While the concurrent power arrangement may therefore involve wasted effort, it is provided for in the Constitution (Const art VI, § 7(6)) and could only be changed by constitutional amendment. Subparagraph 2 is based on former § 589(2), which was added in 1952 (Laws 1952, c 251) to reflect a new provision added to the Constitution in 1951. Const art 6, § 7(5). In language, the new provision is patterned more closely after the Constitution than the former statute although the substance of all three is the same. The 1951 constitutional amendment was designed to remedy the difficult situation faced by an administrative agency after the Appellate Division had reversed or annulled its determination and remitted for a new hearing or further proceedings. See Cohen & Karger, op cit supra at 292–94; 1 Benjamin, Administrative Adjudication in New York 366–68 (1942). While an ordinary party is generally free to relitigate the issues during such further proceedings, the administrative agency must follow the instructions of the Appellate Division. It could not appeal from its own determination pursuant to those instructions, for it would not be a “party aggrieved” by that determination. Hence, review of the Appellate Division order anulling its first determination could only be had by appealing from it directly; and since it was a non-final order this could be done only if the Appellate Division saw fit to grant permission. When a 1944 constitutional amendment extended the procedure of appeal by stipulation for judgment absolute to special proceedings, the situation became worse, by virtue of the rule that the stipulation procedure was the exclusive method of appeal from an order granting a new trial. The rule was held to apply when the Appellate Division reversed an administrative agency’s determination and remitted for further proceedings. See Cohen & Karger, op cit supra at 292 n 52. The Appellate Division was thus powerless to grant permission to appeal, and the agency was faced with a choice between appealing by the risky stipulation method or following the Appellate Division’s instructions with no chance of subsequent review. Although the problem could have been attacked by classifying the agency as a “party aggrieved” by its own subsequent determination (see Cohen & Karger, op cit supra at 293), the method chosen was the constitutional amendment, which broadly allows the Court of Appeals to grant permission to appeal from any non-final order of the Appellate Division in a proceeding involving an administrative agency, without regard to the availability of appeal by stipulation. Both the amendment and the implementing statute are ambiguous in that they authorize the Court of Appeals to grant permission but are silent as to the power of the Appellate Division. The Appellate Division has the general power to grant leave to appeal from its own non-final determinations. Of course, if the order is such as would invoke the rule of appeal exclusively by stipulation from the grant of a new hearing, the Appellate Division could not grant permission and the new subdivision so states. However, the former provisions were broad enough to include nonfinal orders that would not be classified as a new hearing. As to these, the provisions failed to state whether the Appellate Division retained power concurrent with the Court of Appeals to grant permission. Examination of both reported and unreported decisions of the Court of Appeals indicates that the Court has not resolved this ambiguity. The new provision, however, proceeds on the assumption that the Appellate Division’s power was not impaired by the amendment. This seems the only reasonable construction of a provision which explicitly applies only to the Courts of Appeals, constitutes a grant of power to that court, and contains nothing to indicate that existing power in the Appellate Division was to be curtailed. It has therefore been treated in this subdivision together with the other situations in which both courts have jurisdiction to grant permission.

Subd (b) of this section, corresponding to subd 1 of former § 589, covers those cases in which the Court of Appeals has no power to grant permission to appeal but the Appellate Division may do so. Subparagraph 1 of the new subdivision, prior to the “except” clause, is based on former § 589(1)(a), which in turn was required by § 7(6) of the judiciary article of the Constitution. The “except” clause is new; the former statute was misleading in failing to indicate that those exceptions existed. The reference to subd (c) of § 5601 codifies case law holding that the provision for appeal as of right by stipulation for judgment absolute, from an order granting a new trial or hearing, is the exclusive method of appeal from such an order; the Appellate Division is thus powerless to grant permission in that situation. See note to § 5601(c). The reference to subd (b)(2)(iii) covers orders granting a new trial or hearing when the case originated in an inferior court; in that situation, a stipulation for judgment absolute is required in addition to permission of the Appellate Division. The reference to subd (a)(2) covers permission to appeal from a non-final order in a proceeding involving an administrative agency (see CPA § 589(2)) and prohibits the Appellate Division from granting permission to appeal from an order granting a new trial or hearing in such a proceeding. Subparagraph 2, corresponding to former § 589(1)(b), is required by § 7(7) of the judiciary article of the Constitution, which declares that no appeal shall be taken to the Court of Appeals in a case originating in an inferior court (i.e., one other than the courts listed) unless permission of the Appellate Division is obtained or a constitutional question is involved. The words, “or an administrative agency” have been added since an administrative agency, although not listed in the constitutional provision, is not regarded as an inferior court for this purpose. See notes to § 5601(a). While former § 588 expressly reflected this rule, former § 589, apparently through some oversight, did not. In contrast to former § 589(1)(b), provision (i) of subparagraph 2 only encompasses an order of the Appellate Division which finally determines an action or special proceeding commenced in an inferior court. Subparagraph 1, however, covers all nonfinal orders of the Appellate Division, including those in cases originating in inferior courts. Provision (ii) of subparagraph 2 parallels provision (ii) of subparagraph 1 of subd (a). See notes to § 5601(d) and subd (a) of this section. It covers cases originating in inferior courts, in which only the Appellate Division may grant permission to appeal. In such cases, it should be noted, appeal as of right can exist if a constitutional question is involved. Provision (iii) of subparagraph 2, permitting an appeal by stipulation in a case originating in an inferior court upon securing the permission of the Appellate Division, clears up a misleading impression given by former § 588(3) that appeal by stipulation is not available in such a case. The rule is otherwise. Cohen & Karger, Powers of the New York Court of Appeals 291 & n 49 (rev ed 1952).

The Court of Appeals and the Committee recommend that CPLR 5601(d) and 5602(a)(1), be amended to remedy inequitable foreclosure of appeal to the Court of Appeals in certain instances involving an arbitration award.

This measure would amend CPLR 5601(d) and CPLR 5602(a)(1) which govern, respectively, appeal as of right and appeal on consent to the Court of Appeals from a final judgment of a specified court of original instance or a final determination of an administrative agency, thereby raising for review the prior nonfinal order of the Appellate Division necessarily affecting such judgment or determination. The bill would interpolate in each of the cited provisions the term “final arbitration award”.

Because the arbitration scheme is not contemplated by the cited provisions, an appellant may be foreclosed from such review in the Court of Appeals in certain circumstances. Where an Appellate Division order remits the matter to the same or different arbitrator, absent a stipulation for judgment absolute under CPLR 5601(c), such order is not appealable to the Court of Appeals because it does not finally determine the proceeding. Matter of Chusuk, Ltd. [Lane Bryant Inc.] , 63 N.Y.2d 603 (1984). Such review under CPLR 5601(d) or CPLR 5602(a)(1) will not lie on appeal from the final arbitration award because such an award is not specified in the cited provisions. Matter of Ford v. CSEA, 62 N.Y.2d 799 (1984). Nor does such review lie on appeal from an order in a second Article 75 proceeding brought to review the new arbitrator’s award because the prior nonfinal order of the Appellate Division arose in a separate proceeding. Matter of Local 345 of the Retail State Employees Union [Heinrick Motors, Inc.] 61 N.Y.2d 900 (1984).

The insertion of “final arbitration award” in CPLR 5601(d) would allow direct appeal as of right to the Court of Appeals of such arbitration award, thereby raising the prior nonfinal order of the Appellate Division which necessarily affected that award. Such appeal could be taken as of right only where the prior nonfinal order satisfies the requirements of CPLR 5601(a) or (b) except that of finality. Where this is not the case, such appeal must be by permission and therefore CPLR 5602(a)(1) likewise would be amended by this bill to include “final arbitration award.” The proposed amendment would close the present statutory gap by allowing a direct appeal to the Court of Appeals from the arbitration award, with the prior nonfinal order of the Appellate Division affecting the award being brought up for review. This is needed in view of increasing resort by litigators to the arbitral process, which would result in an accelerating recurrence of inequitable foreclosure of appellate review in the specified instances unless the proposal is enacted.

Add, L 1962, ch 308, eff Sept 1, 1963; amd, L 1967, ch 342, eff Sept 1, 1967; L 1985, ch 300, § 2, eff Jan 1, 1986; L 1986, ch 316, § 2, eff Jan 1, 1987.