Can a New York State agency reimburse an employee's attorney's fees for defending a Department of Motor Vehicles license revocation hearing after an on-duty accident?

Plain-English summary

A Department of Transportation employee involved in an on-duty accident faced a DMV hearing to decide whether his driver's license should be suspended or revoked. Losing the license would have cost him his job. DOT's counsel had already concluded that defending the employee in-house was a conflict of interest (a vigorous DMV defense might mean pointing the finger at faulty State equipment or negligent State highway maintenance). The Commissioner asked the AG whether DOT could at least reimburse the employee for his outside attorney's fees.

The AG said no.

Public Officers Law § 17 requires the State to defend, or reimburse defense costs for, an employee in "any civil action or proceeding in any state or federal court" arising out of acts within the scope of public employment. Public Officers Law § 19 requires reimbursement of reasonable attorneys' fees in a "criminal proceeding in a state or federal court" arising out of public duties, on acquittal or dismissal, and for grand jury appearances that do not result in indictment. Both statutes are confined by their own text to court proceedings (with the grand jury extension in § 19).

A DMV license revocation hearing is an administrative proceeding. It is held within the DMV, not in a court. By their express terms, §§ 17 and 19 do not authorize reimbursement for administrative hearings. The AG was not aware of any other statute that did so for this kind of hearing.

The opinion noted that occasional carve-outs exist (the example given was Public Health Law § 14, which provides defense for certain health-related professional discipline). The Legislature has extended coverage in narrow contexts. Generally, however, an administrative hearing reimbursement requires its own statutory authorization, which can also come from legislation implementing a collective bargaining agreement.

The opinion closed with a constitutional point. Paying defense costs without statutory authorization would be a "gift of public funds," prohibited by the State Constitution (citing Corning v Village of Laurel Hollow). The constitutional prohibition is what makes the answer absolute: without legislation, even a sympathetic case cannot justify the payment.

Currency note

This opinion was issued in 1997. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Why doesn't Public Officers Law § 17 cover administrative hearings?

The text says "civil action or proceeding in any state or federal court." A DMV hearing is not in a state or federal court; it is an administrative proceeding within an executive-branch agency. The opinion read "state or federal court" as a deliberate limitation. The Legislature could have written "any civil action or administrative proceeding" if it had wanted broader coverage.

Could a collective bargaining agreement fix this?

The opinion specifically mentioned that "a legislative authorization to implement the terms of a collective bargaining agreement could provide the necessary authority." That is the standard path. A negotiated agreement plus enabling legislation could authorize reimbursement.

What about the employee's lawyer arguing the accident was caused by State equipment failure?

That defense theory was the source of DOT counsel's conflict in the first place. The opinion did not address whether the employee was entitled to any State assistance in raising such a defense. It addressed only whether attorney's fees could be reimbursed; the answer was no without specific authorization.

Are there any other administrative proceedings that the State pays for?

Yes, but each one rests on its own statutory carve-out. The opinion cited Public Health Law § 14 as an example of the Legislature having extended defense coverage. The point is that coverage of administrative proceedings has to be enumerated; it is not the default.

What is a "gift of public funds"?

Article VII, § 8 of the New York Constitution prohibits the gift or loan of public money or credit to or in aid of any private corporation, association, or undertaking. If the State pays defense costs for an employee in a proceeding the State is not authorized to defend, that payment is treated as a gift to the employee, which is unconstitutional. Corning v Village of Laurel Hollow applies the same principle at the municipal level. The doctrine is what makes the absence of statutory authorization fatal.

Background and statutory framework

Public Officers Law § 17 is the State employee defense and indemnification statute. Subdivision (1)(a) defines "employee." Subdivision (2)(a) covers defense in civil actions or proceedings in state or federal court. Subdivision (2)(b) covers reimbursement of defense costs in such actions. Subdivision (3)(a) covers indemnification of judgments. Subdivision (3)(a) extends coverage to administrative or quasi-judicial proceedings only as expressly listed in the subdivision and is read narrowly.

Public Officers Law § 19 is the criminal defense reimbursement statute. Subdivision (1)(a) defines "employee" in parallel with § 17. Subdivision (2)(a) covers reasonable attorneys' fees in a criminal proceeding in a state or federal court on acquittal or dismissal, and grand jury appearances that do not return an indictment.

The two statutes function as a matched pair. Together they cover civil and criminal court proceedings arising out of public duties. They do not cover administrative or licensing proceedings.

Public Health Law § 14 was cited as the kind of separate statutory authorization the Legislature has provided for specific public-health-related administrative or professional-discipline contexts. It is one example of the targeted extensions that fill gaps in the general framework.

Corning v Village of Laurel Hollow, 64 AD2d 918 (2d Dept 1978), affirmed at 48 NY2d 348 (1979), is the leading case for the gift-of-funds doctrine in the public defense context. The case held that a municipality could not pay an officer's defense costs without statutory authority.

Citations

• Public Health Law § 14 (example of separate statutory defense authorization in a public health context).
• Public Officers Law § 17 (State defense and indemnification framework).
• Public Officers Law § 17(1)(a) (definition of "employee").
• Public Officers Law § 17(2)(a) (defense in civil action or proceeding in state or federal court).
• Public Officers Law § 17(2)(b) (reimbursement of defense costs).
• Public Officers Law § 17(3)(a) (indemnification).
• Public Officers Law § 19 (criminal defense reimbursement framework).
• Public Officers Law § 19(1)(a) (definition of "employee").
• Public Officers Law § 19(2)(a) (criminal proceeding reimbursement and grand jury appearance reimbursement).
• Corning v Village of Laurel Hollow, 64 AD2d 918 (2d Dept 1978), aff'd, 48 NY2d 348 (1979) (gift-of-public-funds prohibition).

Source

• Landing page: https://ag.ny.gov/libraries-documents/opinions/opinions-year
• Original PDF: https://ag.ny.gov/sites/default/files/opinions/97-F9_pw.pdf

Original opinion text

PUBLIC HEALTH LAW § 14; PUBLIC OFFICERS LAW §§ 17, 19.
There is no authorization for the Department of
Transportation to reimburse an employee for legal fees incurred
in a hearing before the Department of Motor Vehicles to determine
the right of the employee to retain his driver's license.
November 5, 1997
Hon. Joseph H. Boardman
Commissioner
Department of Transportation
State Campus
Albany, NY 12232

Formal Opinion
No. 97-F9

Dear Commissioner Boardman:
Your counsel has inquired whether the Department of
Transportation (DOT) is authorized to reimburse an employee for
legal fees expended to defend his right to retain a driver's
license in a motor vehicle hearing convened to investigate an
accident.
Counsel has explained that under provisions of the Vehicle
and Traffic Law the Department of Motor Vehicles is authorized to
hold hearings to investigate the causes of accidents and to
determine whether drivers' licenses should be suspended or
revoked. DOT employees involved in accidents in the course of
their employment who are the subject of these hearings are at
risk of losing their licenses and as a result their employment.
DOT has been requested to defend employees at these hearings.
While the Department has concluded that defense by Department
attorneys is inappropriate because of conflicts of interests that
may result from a defense based on faulty equipment, negligent
maintenance of a State highway or other factors contrary to the
State's interests, your counsel has asked whether the Department
can reimburse these employees for their legal fees.
Sections 17 and 19 of the Public Officers Law provide
authority for defense of an "employee" of the State. For
purposes of both provisions, "employee" is in part defined as
"any person holding a position by election, appointment or
employment in the service of the state, whether or not
compensated, or a volunteer expressly authorized to participate
in a state-sponsored volunteer program". Public Officers Law
§§ 17(1)(a), 19(1)(a). Under section 17, upon compliance by the
employee with procedural requirements, the State is required to
defend him or reimburse defense costs in any "civil action or

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proceeding in any state or federal court arising out of any
alleged act or omission which occurred or is alleged in the
complaint to have occurred while the employee was acting within
the scope of his public employment or duties . . .". Id.,
§ 17(2)(a), (b). A parallel provision provides for
indemnification. Id. § 17(3)(a). Section 19 of the Public
Officers Law requires the State to reimburse an employee for
reasonable attorneys' fees and litigation expenses incurred by
the employee in his "defense of a criminal proceeding in a state
or federal court" arising out of any act which occurred within
the scope of the employee's public employment or duties and upon
his acquittal or the dismissal of criminal charges against him.
Id., § 19(2)(a). Also, the State is required to reimburse
reasonable attorneys' fees incurred by an employee in connection
with an appearance before a grand jury which returns no
indictment against the employee and where the appearance resulted
from actions occurring within the scope of the employee's public
employment or duties. Id.
Sections 17 and 19 are the two general statutes providing
for defense of State employees. The Legislature has on occasion
extended the provision of defense and indemnification. See, for
example, section 14 of the Public Health Law. Your question is
whether reimbursement of legal fees paid by an employee to defend
his right to retain a driver's license in a motor vehicle
hearing, as described above, is authorized by section 17 or 19 or
some other provision.
We are not aware of any provision authorizing reimbursement
of these legal fees. Further, by their express terms sections 17
and 19 do not authorize reimbursement of these fees. Section 17
authorizes defense or payment of defense costs in relation to
civil actions or proceedings "in any state or federal court".
Id., § 17(2)(a). Section 19 provides for reimbursement of
defense costs in any criminal proceeding "in a state or federal
court" or in connection with an appearance before a grand jury.
Id., § 19(2)(a). These provisions do not cover administrative
proceedings, such as a hearing conducted by the Department of
Motor Vehicles. An act of the State Legislature would be
required to authorize the reimbursement of defense costs with
respect to such an administrative proceeding. For example, a
legislative authorization to implement the terms of a collective
bargaining agreement could provide the necessary authority.
The payment of defense costs without appropriate authorizing
legislation would constitute a gift of public funds in violation
of the provisions of the State Constitution. See, Corning v

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Village of Laurel Hollow, 64 AD2d 918 (2d Dept 1978), affd,
48 NY2d 348 (1979).
We conclude that there is no authorization for the
Department of Transportation to reimburse an employee for legal
fees incurred in a hearing before the Department of Motor
Vehicles to determine the right of the employee to retain his
driver's license.
Very truly yours,

DENNIS C. VACCO
Attorney General