IN RE: Application of Kathryn TORMOS, Petitioner-Respondent, For a Judgment, etc., v. Marva HAMMONS, etc., Respondent-Appellant, Brian J. Wing, etc., Respondent.
Order and judgment (one paper), Supreme Court, New York County (Beverly Cohen, J.), entered January 14, 1998, which, to the extent appealed from, required New York City Department of Social Services to pay $10,000, or one-half the amount of attorneys' fees awarded to petitioner pursuant to CPLR 8601, unanimously reversed, on the law, without costs, the allocation of attorneys' fees against City DSS is vacated, and respondent New York State Department of Social Services is liable for the entire $20,000 award.
We agree with the IAS court's determination that petitioner, as the prevailing party in this Article 78 proceeding seeking restoration of her public assistance benefits, is entitled to an award of attorneys' fees pursuant to CPLR 8601, also known as the New York State Equal Access to Justice Act (“EAJA”). The record shows that City DSS discontinued petitioner's benefits prior to the completion of the fair hearing she requested, in violation of State regulations (18 NYCRR 358-3.6) and a directive from State DSS to continue the same. It also introduced a notice of conciliation into evidence at the fair hearing which it concedes had been misaddressed. For its part, State DSS failed to secure City DSS's compliance with its directive to continue benefits pending completion of the hearing, and further acquiesced in the procedural irregularities which occurred at the hearing (see, Tormos v. Hammons, 240 A.D.2d 165, 658 N.Y.S.2d 272). As neither of respondents' positions were “substantially justified” (CPLR 8601[a] ), the IAS court properly determined that liability under the EAJA was established (see, Shvartszayd v. Dowling, 239 A.D.2d 104, 656 N.Y.S.2d 631).
However, the IAS court incorrectly allocated liability for one-half of the attorneys' fees to City DSS. The court reasoned that since EAJA defines “State” as “the state or any of its agencies or any of its officials acting in his or her official capacity” (CPLR 8602[g] ), and City DSS acts as an agent for State DSS in administering social services programs, then City DSS falls within the definition of “State” under EAJA and may be liable thereunder.
There is no question that local social service agencies “act on behalf of and as agents for the State” (Matter of Beaudoin v. Toia, 45 N.Y.2d 343, 347, 408 N.Y.S.2d 417, 380 N.E.2d 246; Social Services Law § 65 ). “Each is a part of and the local arm of the single State administrative agency” (Matter of Beaudoin v. Toia, supra at 347, 408 N.Y.S.2d 417, 380 N.E.2d 246). The IAS court interpreted this agency relationship as subjecting a local social services agency to independent liability. We disagree.
Under the Federal and State statutory schemes, State social service agencies have complete supervisory authority over the local departments (Beaudoin v. Toia, supra at 347, 408 N.Y.S.2d 417, 380 N.E.2d 246; see, Social Services Law §§ 20, ; 34[e], [f]; 42 U.S.C. § 602[a],  ). Because the local departments function “as agents of the State and not of their respective counties” (Beaudoin v. Toia, supra at 347, 408 N.Y.S.2d 417, 380 N.E.2d 246), they may not substitute their own interpretation of State regulations, or their own judgment, for that of the State agency (id.). Indeed, the local departments may be sanctioned for failing to comply with State agency directives (see, Social Services Law §§ 20[e]; 34 ). Accordingly, since the ultimate power and responsibility in this administrative scheme lies with State DSS, “[i]mposing responsibility for attorneys' fees on the State DSS takes this structure into account and avoids evasion of responsibility by bureaucratic fingerpointing and red-tape shufflings [citations omitted]” (Thomasel v. Perales, 78 N.Y.2d 561, 570, 578 N.Y.S.2d 110, 585 N.E.2d 359; see also, Mitchell v. Bane, 218 A.D.2d 537, 541-542, 630 N.Y.S.2d 495, lv. dismissed 88 N.Y.2d 1003, 649 N.Y.S.2d 371, 672 N.E.2d 596).
We have recognized in the past that State DSS may be vicariously liable for attorneys' fees under EAJA for actions or inactions of City DSS, and for failing to secure City DSS's compliance with its own determinations (see, Shvartszayd v. Dowling, supra; Mitchell v. Bane, supra ). In this case, where both City DSS and State DSS were found to have taken positions that were not substantially justified, we hold that State DSS is vicariously liable for the full amount of the attorneys' fees (Mitchell v. Bane, supra at 540-541, 630 N.Y.S.2d 495). To the extent the Second Department's decision in Seoane-Morales v. Rockland County Dept. of Soc. Servs., 250 A.D.2d 690, 671 N.Y.S.2d 700, is in conflict with our holding, we decline to follow it.