Matter of Garnet Health Med. Ctr. v. People

Matter of Garnet Health Med. Ctr. v People 2026 NY Slip Op 05529 September 30, 2026 Appellate Division, Second Department Published by New York State Law Reporting Bureau pursuant to Judiciary Law § 431. This decision is uncorrected and subject to revision before publication in the Official Reports. In the Matter of Garnet Health Medical Center, appellant, v People of the State of New York, etc., respondent. Supreme Court of the State of New York, Appellate Division, Second Judicial Department Decided on September 30, 2026 2024-04253, (Index No. 2246/24) Betsy Barros, J.P. Lillian Wan James P. McCormack Phillip Hom, JJ. Jackson Lewis P.C., New York, NY (Bryn Goodman and Nicole E. Price of counsel), for appellant. Letitia James, Attorney General, New York, NY (Ester Murdukhayeva and Andrea W. Trento of counsel), for respondent. [*1] DECISION & ORDER In a proceeding, inter alia, pursuant to CPLR 2304 to quash a subpoena duces tecum dated February 23, 2024, the petitioner appeals from an order of the Supreme Court, Orange County (David S. Zuckerman, J.), dated May 3, 2024. The order denied that branch of the petition which was pursuant to CPLR 2304 to quash the subpoena duces tecum, granted that branch of the petition which was pursuant to CPLR 3103 for a protective order only to the extent of limiting the time period covered by the subpoena duces tecum from March 16, 2019, through May 3, 2024, and granted the respondent's motion to compel the petitioner to respond to the subpoena duces tecum to the extent of directing the petitioner to comply with the subpoena duces tecum, as modified, within 30 days of the date of the order. ORDERED that the order is affirmed, with costs. In 2023, the New York State Office of the Attorney General (hereinafter the OAG) commenced an investigation into the petitioner's policies and practices regarding toxicology testing for pregnant, perinatal, and newborn patients. In connection therewith, the OAG served a subpoena duces tecum dated February 23, 2024, on the petitioner seeking the production of records relating, inter alia, to those policies and practices, as well as the medical records of certain patients. The petitioner commenced this proceeding pursuant to CPLR 2304 to quash the subpoena and pursuant to CPLR 3103 for a protective order preventing the disclosure of confidential patient records. The respondent moved to compel the petitioner to respond to the subpoena. In an order dated May 3, 2024, the Supreme Court denied that branch of the petition which was to quash the subpoena, granted that branch of the petition which was for a protective order only to the extent of limiting the time period covered by the subpoena from March 16, 2019, through May 3, 2024, and granted the respondent's motion to compel the petitioner to respond to the subpoena to the extent of directing the petitioner to comply with the subpoena, as modified, within 30 days of the date of the order. The petitioner appeals. "The requirements for the issuance of an investigatory subpoena duces tecum are '(1) that the issuing agency has authority to engage in the investigation and issue the subpoena, (2) that [*2]there is an authentic factual basis to warrant the investigation, and (3) that the evidence sought is reasonably related to the subject of the inquiry'" (Matter of Evergreen Assn., Inc. v Schneiderman, 153 AD3d 87, 96, quoting Matter of Abrams v Thruway Food Mkt. & Shopping Ctr., 147 AD2d 143, 146; see Matter of Fulton Commons Care Ctr., Inc. v James, 227 AD3d 717, 718; Matter of County of Suffolk v Kennedy, 211 AD3d 937, 939; Matter of Broadway Stages, Ltd. v New York State Joint Commn. on Pub. Ethics, 201 AD3d 1066, 1067). "Executive Law § 63(12) authorizes the Attorney General to seek an injunction '[w]henever any person shall engage in repeated fraudulent or illegal acts or otherwise demonstrate persistent fraud or illegality in the carrying on, conducting or transaction of business'" (Matter of Evergreen Assn., Inc. v Schneiderman, 153 AD3d at 97, quoting Executive Law § 63[12]). "In connection with any such application, the attorney general is authorized to take proof and make a determination of the relevant facts and to issue subpoenas in accordance with the civil practice law and rules" (Executive Law § 63[12]). "An application to quash a subpoena should be granted [o]nly where the futility of the process to uncover anything legitimate is inevitable or obvious or where the information sought is utterly irrelevant to any proper inquiry" (Anheuser-Busch, Inc. v Abrams, 71 NY2d 327, 331-332 [citation and internal quotation marks omitted]; see Matter of Fulton Commons Care Ctr., Inc. v James, 227 AD3d at 718; Matter of County of Suffolk v Kennedy, 211 AD3d at 939). "'The person challenging a subpoena bears the burden of demonstrating a lack of authority, relevancy or factual basis for its issuance'" (Matter of Fulton Commons Care Ctr., Inc. v James, 227 AD3d at 718, quoting Matter of Hogan v Cuomo, 67 AD3d 1144, 1145; see Matter of Abrams v Thruway Food Mkt. & Shopping Ctr., 147 AD2d at 148). "In defending his [or her] inquiry, the Attorney General must show only that the materials sought bear a reasonable relation to the subject matter under investigation and to the public purpose to be achieved" (Matter of Evergreen Assn., Inc. v Schneiderman, 153 AD3d at 98 [internal quotation marks omitted]; see Anheuser-Busch, Inc. v Abrams, 71 NY2d at 332). "The information forming the factual basis for the issuance of an investigatory subpoena 'need not be sufficient to establish fraud or illegality, or even provide probable cause, as long as the futility of the process is not inevitable or obvious'" (Matter of Evergreen Assn., Inc. v Schneiderman, 153 AD3d at 97, quoting Matter of Hogan v Cuomo, 67 AD3d at 1146; see Matter of Fulton Commons Care Ctr., Inc. v James, 227 AD3d at 718-719). "Rather, '[a]ll that is required is that the scope of the subpoena and the basis for its issuance be more than isolated or rare complaints . . . lest the powers of investigation . . . become potentially instruments of abuse and harassment'" (Matter of Evergreen Assn., Inc. v Schneiderman, 153 AD3d at 97, quoting Myerson v Lentini Bros. Moving & Stor. Co., 33 NY2d 250, 258; see Matter of Stevens Imports v Lack, 52 AD2d 928). "'Moreover, in evaluating the Attorney-General's justification for the issuance of a subpoena, there is a presumption that he [or she] is acting in good faith'" (Matter of Evergreen Assn., Inc. v Schneiderman, 153 AD3d at 98, quoting Matter of American Dental Coop. v Attorney-General of State of N.Y., 127 AD2d 274, 280; see Matter of Fulton Commons Care Ctr., Inc. v James, 227 AD3d at 719). Here, the petitioner's challenge to the issuance of the subpoena is without merit. The evidence submitted by the respondent in opposition to the petition and in support of its motion sufficiently demonstrated that the documents sought pursuant to the subpoena were reasonably related to the subject matter of the investigation (see Executive Law §§ 291, 296; 10 NYCRR 405.7; see also Elaine W. v Joint Diseases N. Gen. Hosp., Inc., 81 NY2d 211; Board of Educ. of Union Free School Dist. No. 2, E. Williston, Town of N. Hempstead v New York State Div. of Human Rights, 35 NY2d 673; Costin v Glens Falls Hosp., 103 F4th 946 [2d Cir]), and the petitioner failed to demonstrate that the futility of the process to uncover anything legitimate was inevitable or obvious or that the information sought was utterly irrelevant to any proper inquiry (see Matter of Fulton Commons Care Ctr., Inc. v James, 227 AD3d at 720; Matter of County of Suffolk v Kennedy, 211 AD3d at 939; Matter of Plastic Surgery Group, P.C. v Comptroller of the State of N.Y., 155 AD3d 1417, affd 34 NY3d 507; see also Long Is. Moving & Stor. Assn. v Lefkowitz, 24 AD2d 452). Contrary to the petitioner's contention, the disclosure of the patients' records is not barred by the Health Insurance Portability and Accountability Act of 1996 (see 42 USC § 1320d et seq.), since, as the Supreme Court correctly determined, under the circumstances, the OAG qualifies [*3]as a health oversight agency (see 45 CFR 164.501; Matter of Plastic Surgery Group, P.C. v Comptroller of the State of N.Y., 155 AD3d at 1420; People v Marcus Garvey Nursing Home, Inc., 57 AD3d 201, 202). Furthermore, "the fact that the subpoena requires production of a substantial number of documents does not render it invalid, overbroad, or unduly burdensome," and "[relevancy], and not quantity, is the test of the validity of a subpoena" (Matter of Evergreen Assn., Inc. v Schneiderman, 153 AD3d at 99 [internal quotation marks omitted]; see Matter of American Dental Coop. v Attorney-General of State of N.Y., 127 AD2d at 282-283). BARROS, J.P., WAN, MCCORMACK and HOM, JJ., concur. ENTER: Darrell M. Joseph Clerk of the Court