                          State of New York
                   Supreme Court, Appellate Division
                      Third Judicial Department
Decided and Entered: June 25, 2015                     519039
________________________________

In the Matter of CONTEMPORARY
   SERVICES CORPORATION et al.,
                    Petitioners,
      v                                     MEMORANDUM AND JUDGMENT

CESAR A. PERALES, as Secretary
   of State, et al.,
                    Respondents.
________________________________


Calendar Date:   April 28, 2015

Before:   Peters, P.J., Lahtinen, McCarthy and Rose, JJ.

                             __________


      Hinman Straub, PC, Albany (James T. Potter of counsel), for
petitioners.

      Eric T. Schneiderman, Attorney General, Albany (Allyson B.
Levine of counsel), for respondents.

                             __________


Lahtinen, J.

      Proceeding pursuant to CPLR article 78 (transferred to this
Court by order of the Supreme Court, entered in Albany County) to
review a determination of respondent Secretary of State which
imposed a civil penalty upon petitioner Contemporary Services
Corporation.

      Petitioner Contemporary Services Corporation (hereinafter
CSC) is an event management company that provides various
services at major sporting and entertainment venues throughout
the United States as well as internationally. Its many services
include, as relevant here, providing security guards. Respondent
Department of State received a complaint that, when CSC provided
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its services for the 2009 US Open Tennis Tournament, it failed to
comply with New York's Security Guard Act (see General Business
Law art 7-A). As a result, the Department – through its Division
of Licensing Services – conducted an investigation that resulted
in allegations of hundreds of violations by CSC and its
qualifying officer, petitioner Henry R. Zazzi. The violations
regarding security guards included allegedly failing to comply
with various categories of "due diligence" in determining
qualifications of and reporting information about such
individuals as required by statute and regulation (see General
Business Law § 89-g; 19 NYCRR 174.6). Following a hearing, an
Administrative Law Judge sustained 287 of the alleged 535
violations and imposed a fine of $1,000 per offense for a total
of $287,000. Respondent Secretary of State (hereinafter
respondent) reduced the number of violations to 284 and,
correspondingly, reduced the fine to $284,000. Petitioners
commenced this CPLR article 78 proceeding challenging 219 of the
violations – all of which pertain to security guards – and also
contending that the penalty was an abuse of discretion as to all
violations.

      Petitioners argue that respondent's determination as to the
disputed 219 violations was arbitrary and capricious, contrary to
law and not supported by substantial evidence. More
specifically, they assert that respondent used a definition of
security guard that was inconsistent with the statutes and
regulations. As a general matter, "an agency's interpretation of
the statutes it administers must be upheld absent demonstrated
irrationality or unreasonableness, but where the question is one
of pure statutory reading and analysis, dependent only on
accurate apprehension of legislative intent, there is little
basis to rely on any special competence or expertise of the
administrative agency" (Lorillard Tobacco Co. v Roth, 99 NY2d
316, 322 [2003] [internal quotation marks and citations
omitted]). Although the Department is charged with administering
integral parts of the statute (see e.g. General Business Law
§ 89-g [1] [b]; [2]) implicating the deferential approach to its
statutory construction, nonetheless, even if this were considered
a situation of pure statutory analysis, we would find
petitioners' contention unpersuasive.
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      By way of background, the Security Guard Act was designed
to "establish uniform standards for the employment, registration
[and] training . . . of security guards," and the Act was
undergirded by legislative findings that "the proper screening,
hiring and training of security guards is a matter of state
concern and [there is a] compelling state interest to ensure that
such security guards meet certain minimum recruitment and
training standards" (L 1992, ch 336, § 1). The statute prohibits
a security guard company from employing a person as a security
guard unless the company has either verified with the Department
that the individual has a current Department issued registration
card or the company has submitted detailed information about the
individual in compliance with the Department's regulations (see
General Business Law § 89-g [1] [a], [b]). A security guard is
defined to include a person employed to "principally perform"
various listed functions (General Business Law § 89-f [6]). The
regulations further refine "principally perform" to include a
person armed with a weapon (see 19 NYCRR 170.1 [c] [2]) or
dressed in a military style uniform (see 19 NYCRR 170.1 [c] [3])
or, as relevant in this proceeding, a person who spends more than
50% of his or her regularly scheduled work hours engaged in the
security-related functions (see 19 NYCRR 170.1 [c] [1]).

      Petitioners acknowledge that CSC hired over 500 individuals
designated as security guards, but it needed less than 200, and
it would often assign individuals to tasks other than security-
related functions. Thus, petitioners urge that it was the
Department's burden to prove that each of the relevant employees
actually performed security guard functions for more than 50% of
his or her working hours. However, the regulations and
respondent's application thereof are consistent with the
legislative purpose and statutory scheme of ensuring a certain
level of competence at the time of hiring and before a person is
placed in contact with the public as a security guard. The
statute points to prospective compliance when hiring to ensure
that individuals who can be assigned by the employer to security
guard work have satisfied minimum requirements (see General
Business Law § 89-g [1]). The statute also mandates due
diligence by the employer in prospectively verifying information
about potential security guards (see General Business Law § 89-g
[2]). Although CSC may not have actually planned to use all of
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the individuals it hired as security guards in a capacity that
would meet the regulatory definition, it nevertheless designated
them as security guards and retained the power to assign those
individuals to security-related duties for more than half their
work schedules. In light of the statutory requirement of
prospective compliance, respondent acted consistent with the
statutes and regulations in requiring compliance at the time of
hiring under these circumstances.

      The remaining arguments do not require extended discussion.
There is substantial evidence, including, among other things,
CSC's own employment records, supporting respondent's
determination (see generally Matter of Bernstein v Department of
State, Div. of Licensing Servs., 96 AD3d 1183, 1185 [2012]; cf.
Matter of 2169 Cent. Ltd. v New York State Liq. Auth., 110 AD3d
1310, 1311-1312 [2013]). The penalty, while severe, is not "so
disproportionate to the offense . . . as to be shocking to one's
sense of fairness" (Matter of JMH, Inc. v New York State Liq.
Auth., 61 AD3d 1260, 1262-1263 [2009] [internal quotation marks
and citations omitted]; see Matter of Pell v Board of Educ. of
Union Free School Dist. No. 1 of Towns of Scarsdale & Mamaroneck,
Westchester County, 34 NY2d 222, 233 [1974]), particularly since
CSC settled a similar disciplinary action about one year earlier
and given the extensive nature of the current violations.

     Peters, P.J., McCarthy and Rose, JJ., concur.



      ADJUDGED that the determination is confirmed, without
costs, and petition dismissed.




                             ENTER:




                             Robert D. Mayberger
                             Clerk of the Court
