Appellate Courts and Stare Decisis

The most difficult task facing any appellate attorney is convincing an appeals court to overrule its own precedent.

Because stare decisis has identifiable benefits it has a strong pull on appellate courts. The doctrine promotes political and social stability, adds certainty to commercial transactions, and fosters public confidence in the legal system by suggesting that the law does not change simply because some judges on an appellate court have been replaced by other judges.

But everyone agrees that precedent can be overruled. The question is when and for what reason. That is the rub. Courts, for example, are slow to overrule precedent in matters affecting real property and contracts so as not to unsettle long established legal relationships and expectations. On the other hand, it is argued that stare decisis should have less significance in constitutional law: because the Constitution is so difficult to amend the United States Supreme Court for all practical purposes has the final word on what the document means, and, therefore, the Court should be more amenable to rethinking some prior ill-considered or time worn decision.

Last week's Supreme Court ruling in Citizens Union v. Federal Election Commission brings all of this to mind. The five Justices in the majority not only overrule two of the Court's decisions, one from 1990 and the other from 2003. They also reject the distinction the Court and the Congress have drawn for a century between speech by a natural person and speech by a corporation, and discard Congressional restrictions on corporate financial contributions to candidates for public office. What effect this will have on political campaigns will be the subject of debate well into the future.

For appellate attorneys, however, the concurring opinion of Chief Justice Roberts, and the dissenting opinion of Justice Stevens, are required reading. Part Two of each opinion is devoted to an extraordinary analysis of stare decisis, and each opinion lays out its own road map for when an appellate court should, or should not, overrule precedent. The opinions are essential for any attorney preparing to argue that a precedent should be overruled, and for any attorney maintaining precedent should be reaffirmed.

Arbitration Award: First Department Reverses Itself and Adopts Second Department View

There is no en banc procedure in the four New York State Appellate Divisions as there is in the United States Courts of Appeals. As a result, when a panel of an Appellate Division issues a ruling it becomes Department precedent and will be followed by later panels until the New York Court of Appeals rules otherwise, or, if the ruling involves the interpretation of stature, the Legislature changes the law.

Today, however, in a major opinion interpreting when a court must confirm an arbitration award under CPLR § 7510, a panel of the the Appellate Division, First Department, rules that it will not follow First Department precedent, but will instead adopt a Second Department ruling to decide the case before the panel. Today's ruling, In re Bernstein Family Limited Partnership v. Sovereign Partners, L.P., can be found here.

In Organization of Staff Analysts v. City of New York, 277 A.D.2d 23 (2000), the First Department had ruled that the lower court correctly dismissed as moot a petition to confirm an arbitration award because the award had been completely satisfied. In Mtr. of Allstate Ins. Co. v. Dental Health Care, P.C., 24 A.D.3d 437 (2005), the Second Department reached the opposite conclusion, ruling that under CPLR § 7510 a party is entitled to confirmation of an arbitration award regardless of the fact that there has been compliance with the award.

In today's ruling the First Department panel concludes that the Second Department is correct, and it declines to follow its own precedent in Organization of Staff Analysts.

Today's ruling offers three reasons for rejecting First Department precedent. First, the panel states that the reliance in Organization of Staff Analysts on a particular section of the CPLR was "misplaced." Second, the panel acknowledges that the Second Department's reading of CPLR § 7510 better conforms to the plain words of the statute than Organization of Staff Analysts. But it is the third reason is that startling.

Today's decision states that the parties in Organization of Staff Analysts "did not alert this Court" to the fact that the Court of Appeals affirmed a Fourth Department ruling which had reached the opposite conclusion from Organization of Staff Analysts. The Court of Appeals ruling, however, came in 1983, or 17 years prior to Organization of Staff Analysts.

The acknowledgement that the First Department was unaware of a Court of Appeals ruling is, of course, disturbing. Plainly the attorneys can be faulted because they did not "alert" the First Department that the Court of Appeals had affirmed the Fourth Department ruling 17 years before. But today's decision is an implicit acknowledgment that the First Department itself had not shepardized the Fourth Department decision when it decided Organization of Staff Analysts in 2000.

The message here is clear: busy appellate courts do rely on the work of appellate counsel, and however careful a court is, something important can slip past it if not brought to its attention by appellate counsel.

Finally, today's ruling is a good example of when an Appellate Division panel should decline to follow Department precedent. Court of Appeals authority belatedly has been brought to its attention, and the decisions in other Departments correctly apply that authority. There is no point in waiting for the Court of Appeals to say First Department precedent is wrong.