IN RE: the Application of Maypole NYC Corp (2026)

The following e-filed documents, listed by NYSCEF under the petition as: 2, 10- 20, were read on this petition by the petitioner Maypole NYC Corp. to review an agency determination.

Upon the foregoing papers it is ordered that the petition is determined as follows:

On September 30, 2025, petitioner commenced this proceeding to review a determination by respondent Office of Administrative Trials and Hearings (OATH) on a summons which respondent New York City Department of Consumer and Worker Protection (Department) issued for unlawful sale of flavored tobacco products (see CPLR 7803 [3]). The petition alleged that respondent Vilda Vera Mayuga was the commissioner of Department. On December 12, 2025, respondents filed an answer to the petition.

At the outset, the court rejects respondents' contention that the matter should be transferred to the Appellate Division, Second Department pursuant to CPLR 7804 [g]. Although petitioner challenges respondents' determination after a hearing at which evidence was taken, petitioner only asserts that the determination was arbitrary and capricious, affected by an error of law, and based on an abuse of discretion (see Matter of Astoria Landing, Inc. v Del Valle, 188 AD3d 1189, 1191 [2d Dept 2020]; Matter of Small v City of NY Dept. of Sanitation, 74 AD3d 828, 829 [2d Dept 2010]; cf. Matter of Abramovitz v Zoning Bd. of Appeals of Inc. Vil. of Bellport, 194 AD3d 810, 811 [2d Dept 2021]; Matter of FCFC Realty LLC v Weiss, 192 AD3d 683, 684 [2d Dept 2021]).

Where, as here, respondents served an answer, the court may adjudicate the proceeding in the same manner as a summary judgment motion (see CPLR 409 [b]; Emigrant Bank v Solimano, 209 AD3d 153, 161 [2d Dept 2022]; Matter of Lake v Town of Southold, 189 AD3d 1588, 1591 [2d Dept 2020]). The court's determination will be based on the pleadings, papers and admissions to the extent no triable fact issues are raised (see CPLR 409 [b]; Matter of Lake, 189 AD3d at 1591). An agency's determination is arbitrary and capricious if it is made without a basis in reason or facts (see Matter of LL 410 E. 78th St. LLC v Division of Hous. & Community Renewal, 44 NY3d 232, 237 [2025]; Matter of Aponte v Olatoye, 30 NY3d 693, 698 [2018]; Matter of Peckham v Calogero, 12 NY3d 424, 431 [2009]; Matter of Scott v Village of Nyack Hous. Auth., 147 AD3d 957, 958 [2d Dept 2017]; see also Matter of Dobson v New York State Dept. of Motor Vehs., 218 AD3d 680, 681 [2d Dept 2023]) or exceeds the agency's authority or violates the Constitution or laws (see Matter of Lozada v Elmont Hook & Ladder Co. No. 1, 151 AD3d 860, 861 [2d Dept 2017]; Matter of Lilakos v Environmental Control Bd., 148 AD3d 893, 895 [2d Dept 2017]; Matter of Small, 74 AD3d at 829). The court must sustain the determination if it has a rational basis even if a different result would not be unreasonable (see Matter of LL 410 E. 78th St. LLC, 44 NY3d at 237).

Here, OATH's Appeals Division upheld an OATH hearing officer's determination that petitioner violated a New York City Administrative Code prohibiting sale of flavored tobacco products and imposition of a penalty for the violation. "It shall be unlawful for any person to sell or offer for sale, or to possess with intent to sell or offer for sale, any flavored tobacco product except in a tobacco bar" (Administrative Code § 17-715 [a] [1]). In addition, that section provides that "[t]here shall be a presumption that a retail dealer, as defined in section 17-702, in possession of four or more flavored tobacco products, which shall include individual tobacco products, packages of tobacco products, or any combination thereof, possesses such tobacco products with intent to sell or offer for sale." (Administrative Code § 17-715 [a] [2]).

Appended as exhibits to the petition were the summons indicating that 20 flavored tobacco products were recovered in an inspection on October 4, 2024, and Department's discovery packet, which included photographs of the interior and exterior of petitioner's store and the products found at the inspection, and summonses dated December 6, 2021, and April 3, 2023, which showed two prior violations of 17-715 [a] by petitioner (see NY St Cts Elec Filing [NYSCEF] Doc Nos. 4, 5). Applying the presumption, the hearing officer as affirmed by the Appeals Division, found that petitioner violated § 17-715 [a] [1] and imposed a $5,000.00 penalty for each of the 20 violations for a total of $100,000.00 and a 45-day license suspension (see NYSCEF Doc Nos. 7, 8). The petition alleged that the Appeals Division should not have affirmed the hearing officer's determination because the hearing officer failed to resolve the discrepancy between the summons, which indicated that the product was located in hidden compartments behind the sale register counter, and photographs which showed that no cabinets were behind the sale register. The petition also alleged that the Appeals Division improperly rejected the affidavit of petitioner's owner Tamanna Reza which indicated that the products were stored inside closed and locked cabinets inaccessible to customers awaiting disposal or return to suppliers and that they were not offered for sale (see NYSCEF Doc No. 6 at 5). The petition further asserted that no violations were issued for two prior inspections. A statutory presumption may be rebutted by evidence showing that the facts and circumstances triggering the presumption do not exist (see People v Walker, 237 AD3d 102, 107 [1st Dept 2025]; see generally City of New York v Land & Bldg. Known as 4802 4th Ave., 209 AD3d 972, 975 [2d Dept 2022]; Cheong Mei Inc. v Environmental Control Bd. of the City of NY, 81 AD3d 452, 452 [1st Dept 2011]). None of the allegations in the petition contradict petitioner's possession of four or more flavored tobacco products on the October 4, 2024 inspection date. Thus, the petition failed to rebut the presumption of intent to sell. Further, since the petition did not rebut petitioner's possession of 20 products, the circumstance that triggers the presumption, the Appeals Division's failure to give weight to the evidence that the product was stored in a manner inaccessible to the public and was not on display, and that no violations were issued after two other inspections of the store which included the same cabinet did not show that OATH's determination lacked a rational basis. Moreover, the Appeals Division addressed petitioner's arguments opposing the summons. Thus, OATH's determination that petitioner violated Administrative Code of City of NY § 17-715 [a] was not arbitrary and capricious (see generally Matter of Streeter v New York City Dept. of Envtl. Protection, 248 AD3d 933, 935 [2d Dept 2026]; Matter of Astoria Landing, Inc. v New York City Envtl. Control Bd., 148 AD3d 1141, 1143 [2d Dept 2017]).

The petition also asserted, in effect, that respondents' determination misapplied the presumption so was affected by error of law. A determination is affected by an error of law when the agency unreasonably interprets a relevant Administrative Code provision (see Matter of Arash Real Estate & Mgt. Co. v New York City Dept. of Consumer Affairs, 148 AD3d 1137, 1138 [2d Dept 2017]) or its noncompliance with Administrative Code provisions denies due process (see Wells Fargo Bank, N.A. v Mastromarino, 98 AD3d 662, 662—63 [2d Dept 2012]). Although the petition alleged that respondents improperly failed to give weight to Reza's attestation that the product was stored awaiting disposal or return, as addressed above, such explanation does not rebut the presumption which is triggered by possession of sufficient amounts of product. Further, as respondents correctly point out, the petition does not identify the lawful procedure they allegedly violated by not resolving the conflicting evidence regarding the location of the cabinet containing the products. Thus, the petition also fails to demonstrate that the Appeals Division's determination was affected by error of law.

Turning to the petition's allegation that the penalties imposed were an abuse of discretion, the petition correctly alleged that Administrative Code of City of NY § 17-716 [a] provided for a maximum penalty of $5,000.00 for a third violation of § 17-715 [a] in a three-year period. In addition, mandatory license suspension not exceeding one year must be imposed "for a third violation occurring on a different day and all subsequent violations occurring on different days at the same place of business within a three-year period" (Administrative Code of City of NY § 17-716 [a]). Although the petition alleged that respondents failed to make individualized findings before imposing the maximum penalty, contrary to the petition's allegation, Matter of Pell v Board of Educ. of Union Free School Dist. No. 1 of Towns of Scarsdale & Mamaroneck, Westchester County (34 NY2d 222 [1974]) does not require agencies to make such findings in determining a penalty. Rather, the Court of Appeals held that "[u]nless an irrationality appears or the punishment shocks one's conscience, sanctions imposed by an administrative agency should be upheld" (id. at 240). The abuse of discretion standard is to be applied to judicial review of an administrative penalty under CPLR 7803 [3], which requires upholding the administrative penalty unless it shocks the judicial conscience (see Matter of John Paterno, Inc. v Curiale, 88 NY2d 328, 336 [1996]; Matter of Afolayan v Industrial Bd. of Appeals, 229 AD3d 698, 699 [2d Dept 2024]; Matter of Mannino v State of NY Indus. Bd. of Appeals, 215 AD3d 846, 848 [2d Dept 2023]). Here, the Appeals Division upheld the hearing officer's penalty, which imposed the maximum allowable monetary penalty for each of the 20 violations and a license suspension far short of the maximum allowable period. Since the penalties imposed do not shock the conscience, they do not constitute an abuse of discretion and must be upheld (see Matter of John Paterno, Inc., 88 NY2d at 336; Matter of Afolayan, 229 AD3d at 699; Matter of Mannino, 215 AD3d at 848).Accordingly, the application is denied and the petition is dismissed.

Dated: October 13, 2026

ROBERT I. CALORAS, J.S.C.

Robert I. Caloras, J.