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SPECIAL PROCEEDINGS AGAINST CORPORATIONS: ARTICLE 78

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Before the adoption of CPLR Article 78, parties were afforded the option of commencing one of three actions against a body or an officer:  a writ of mandamus, seeking an order to act, a writ of prohibition, seeking an order to prohibit an act, or a writ of certiorari, for judicial review.  These three actions are now subsumed within Article 78, which, since it was enacted in 1937, establishes the procedure for bringing certain actions against governmental and quasi-governmental bodies, including agencies, public bodies and officers.

In spite of the fact that Article 78 is broad and can be utilized against every “body or officer,” it has become synonymous with proceedings brought to challenge administrative agency decisions.  Attorneys and clients alike often misunderstand Article 78, forgetting that it can be used against private companies as well, who attain quasi-governmental status through their corporate charters and state filings.  Private entities can be compelled to fulfill obligations imposed by statute and also by their internal rules.  For example, an Article 78 proceeding can be brought against a private educational institution for wrongful termination of a faculty member, to compel a corporation to comply with its bylaws regarding governance, to compel a corporation to respect a shareholder’s right to inspect the corporate books and records, or to compel an incorporated social club to reinstate a member who was arbitrarily expelled, just to name a few.

Article 78 proceedings are commenced in New York State Supreme Court in any county within the judicial district where the body or officer acted in the complained-of manner by making a determination, refusing to perform a duty specifically enjoined upon him, taking an acting which the petitioner is seeking to restrain, or where the principal office of the body or officer is located.  There are two ways to commence an Article 78 proceeding:  via notice of petition or via order to show cause.  If you have concerns that the body or officer against whom you are seeking relief may act expediently to your client’s detriment, commence your petition via order to show cause and request a stay in the order so you can prevent anyone from taking action while your proceeding is pending.  If you commence your action via notice of petition, you cannot schedule the court date less than 20 days from the day you file the initial papers.  When deciding to commence an action via Article 78, be sure to pay special attention to the statute of limitations.  You only have four months to challenge a determination made by an administrative agency, body or officer.

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