HoganWillig is a multi-office law firm in western New York State. Among its practice areas is real estate closings, which enabled it to obtain designation from the state as an “essential” business even under Andrew Cuomo’s coronavirus lockdown orders.

The firm also has gained expertise in advising businesses how to weather the coronavirus regulatory storm, and now finds itself in the center of one of those storms as the New York Attorney General’s Office has been threatening the firm over its continued real estate operations, claiming the firm was not complying with Cuomo’s Orders. The firm is fighting back with a federal court lawsuit.

On April 20, 2020, the NY AG sent a cease and desist letter to the firm, to which the firm responded, and an ongoing exchange of correspondence took place in which the firm denied many of the accusations and insisted it was in compliance.

None of this satistified the NY AG’s office, and on May 13, 2020, HoganWillig filed a Complaint (pdf., w/out exhibits) seeking not only a declaration that it had violated no laws, but also seeking a court ruling that the governing statute that purports to empower the Governor to lock down the state was unconstitutional.

You can read the complaint for the details according to HoganWillig. None of the parties responded to a request for comment on the case.

What makes this case particularly interesting, is the apparent extent to which the NY AG’s office has gone to investigate HoganWillig, and that such investigation was the result of alleged complaints from unnamed persons.

From the Complaint:

56. Defendant [NY Attorney General Letitia] James, through two Assistant Attorneys General, began making inquiries of Plaintiff starting on or about April 6, 2020. There were telephone calls and emails.

57. On April 20, 2020, HoganWillig received a letter from AAG Foshee electronically titled “HoganWillig Cease & Desist Letter” (the “Cease and Desist Letter”). The Cease and Desist Letter provided that “[(Defendant James)] . . . demands that HoganWillig take immediate steps to implement a work plan to reduce the number of employees reporting to the Getzville office and transition to telecommuting or working from home on a regular basis.” Exhibit 1.

58. HoganWillig responded to AAG Foshee via a letter dated April 22, 2020, and signed by HoganWillig’s Safety Officer, Steven M. Cohen, Esq. Exhibit 2.

59. HoganWillig’s April 22, 2020 letter outlined the actions taken by HoganWillig to do just that – implement a work plan to reduce the number of employees reporting to its office. These actions, as well as additional actions concerning the safety of those employees and clients reporting to the office, are set forth in HoganWillig’s Workforce Reduction and Safety Protocols.

60. AAG Foshee responded on April 27, 2020 via a letter titled “HoganWillig Directive Letter” (the “Directive Letter”), which required that HoganWillig take additional actions, further to those already taken, to further “fulfill [its] obligations” under the Executive Orders. Exhibit 3.

61. HoganWillig responded to the Directive Letter via a letter dated April 28, 2020. HoganWillig’s April 28, 2020 letter again set forth the actions taken by HoganWillig to promote the safety of its employees and the cleanliness of its office, to comply with Defendant Cuomo’s numerous Executive Orders, and to respond appropriately and sufficiently to each of Defendant James’ requests with respect to HoganWillig’s continued operations. Exhibit 4.

62. When HoganWillig did not receive an immediate response from AAG Foshee in response to its April 28, 2020 letter, HoganWillig contacted AAG Foshee via telephone and email on April 30, 2020, so as to ensure that Defendant James had all of the information she required.

63. AAG Foshee responded later that same day, indicating that Defendant James “continue[d] to be concerned,” and accusing HoganWillig of “continu[ing] to engage in circumlocution.”

64. AAG Foshee concluded her April 30, 2020 email by stating: “Our dialogue has been largely unproductive, as nothing has changed since we first contacted you. Our concerns with your continued operations have not been addressed, so we will be in further contact.”

65. Plaintiff had continuous and intense dialogue with AAG Foshee, and responded tofurther demands made by Defendant James,  up through and including May 13, 2020. Copies of HoganWillig’s correspondence with AAG Foshee is annexed hereto. Exhibit 5.

66. Even the implementation of strict protocols including electronic monitoring of HoganWillig employees would not satisfy Defendant James.

67. Nor would Defendant James advise whether the complaint had been received by another business in the community, or a disgruntled employee, or someone else entirely. Defendant James, through AAG Foshee, made it clear that Plaintiff was being watched and monitored and was conducting car counts in the parking lot and underground garage, that she knew who was and was not working in other non-HoganWillig offices at the Amherst building, but she would not give Plaintiff specifics so that they could respond.

Here is the claim for relief:

WHEREFORE, HoganWillig demands judgment as follows:

a. On its First Claim for Relief, that this Court issue and enter a declaratory judgment, pursuant to 28 USC § 2201 and Rule 57 of the Federal Rules of Civil Procedure declaring that New York State Executive Law § 29-a is unconstitutional, as an unconstitutional delegation of legislative authority to Defendant Cuomo;

b. On its Second Claim for Relief, that this Court enter an Order declaring that Defendant Cuomo’s actions exceed the scope of his authority under New York State Executive Law § 29-a, and that such actions are an unconstitutional abuse of Defendant Cuomo’s executive powers thereunder;

c. On its Third Claim for Relief, that this Court enter an Order permanently enjoining Defendants, or other applicable governmental/law enforcement authorities, from enforcing the Executive Orders, as any such enforcement would unconstitutionally impede Plaintiff’s representation of clients and would unduly and excessively burden interstate commerce;

d. On its Fourth Claim for Relief, that this Court enter an Order permanently enjoining Defendants, or other applicable governmental/law enforcement authorities, from enforcing the Executive Orders, as any such enforcement would unconstitutionally impede HoganWillig’s private contracts with clients, independent contractors, vendors, and other third parties;

e. On its Fifth Claim for Relief, that this Court enter an Order permanently enjoining Defendants, or other applicable governmental/law enforcement authorities, from enforcing the Executive Orders as arbitrary restrictions on HoganWillig, in violation of Plaintiff’s Fifth and Fourteenth Amendment substantive due process rights;

f. On its Sixth Claim for Relief, that this Court enter an Order permanently enjoining Defendants, or other applicable governmental/law enforcement authorities, from enforcing the Executive Orders as arbitrary restrictions on HoganWillig, in violation of HoganWillig’s Fifth and Fourteenth Amendment procedural due process rights under the United States Constitution;

g. On its Seventh Claim for Relief, that this Court enter an Order declaring that the issuance and enforcement of the Executive Orders is an unconstitutional taking without just compensation under the Fifth and Fourteenth Amendment; a permanent injunction preventing Defendants, or other applicable governmental/law enforcement authorities, from enforcing arbitrary restrictions on HoganWillig in violation of HoganWillig’s Fifth and Fourteenth Amendment rights; and compensatory damages adequate to justly compensate HoganWillig for the regulatory taking of its Property;

h. On its Eighth Claim for Relief, that this Court enter an Order declaring that the issuance and enforcement of the Executive Orders violates Plaintiff’s rights under the Equal Protection Clause of the Fourteenth Amendment, and permanently enjoining Defendants, or other applicable governmental/law enforcement authorities, from enforcing the Executive Orders as arbitrary restrictions on HoganWillig, in violation of HoganWillig’s Fourteenth Amendment equal protection rights under the United States Constitution;

i. On its Ninth Claim for Relief, that this Court enter an Order permanently enjoining Defendants, or other applicable governmental/law enforcement authorities from enforcing the Executive Orders, in violation of the Ninth and Tenth Amendments to the United States Constitution;

j. On its Tenth Claim for Relief, that this Court enter an Order awarding Plaintiff its reasonable attorney’s fees pursuant to 42 U.S.C. § 1988, for Plaintiff’s seeking redress for Defendants’ violation of HoganWillig’s constitutional rights under 42 U.S.C. § 1983; and

k. Such other and further relief as this Court may deem just and proper.

Here is an excerpt from the AG’s April 20, 2020, cease and desist letter about monitoring cars in the parking lot (bold in original, underscoring added):

Thank you for your email dated April 13, 2020 responding to our request for additional information about HoganWillig’s ongoing operations during the COVID-19 pandemic. We continue to have serious concerns about the number of employees that are reporting to work at HoganWillig’s Getzville and Lancaster offices during this time of spreading epidemic. As you know, Governor Cuomo’s Executive Order 202.8 specifically requires that “All businesses and not-for-profit entities in the state shall utilize, to the maximum extent possible, any telecommuting or work from home procedures that they can safely utilize.” This applies to businesses operating what are deemed to be providing essential services under the Executive Order. Based on the information that we have, HoganWillig is not in compliance with that provision of the Executive Order….

You characterize the Getzville office as a “ghost town,” with only perhaps 20% of the ordinary attendance. While this may be true, there were on average 20 cars in your parking lots on a daily basis last week. This number is concerning as it suggests significant in-person work being performed regularly in that office. We have received multiple complaints that attorneys, paralegals and support staff report to work from all departments within the firm, regardless of the type of matter being worked on and the fact that the work could be performed remotely.

Here is an excerpt from HoganWills’ April 22, 2020, response:

As the Safety Officer for my law firm, I share your goal of protecting all of our employees, clients and transactional participants. Let me start by sending you the protocols we have put in place in all our offices. Tab B is the protocol developed on March 28th in response to Empire State Development Corp designating HoganWillig an essential business. Tab C is the protocol revised on April 16th due to the evolving nature of the crisis.

To that end, each of our protocols, procedures, and our workplan have already been implemented, such that Hogan Willig has cut its in-office staff to the minimum required to carry out the essential business of our clients. Thus, it is my belief that no further implementation is required pursuant to Executive Orders 202.6 et seq. and applicable ESD Guidance, particularly given that, for those employees and clients who do report to our offices, all appropriate social distancing and cleaning/ disinfecting protocols have been fully complied with.

* * *

With respect to our conducting in-person real estate closings, these transactions are oftentimes required to be performed in-person. Thus, to the extent that they can be performed remotely, we have, and will continue to, require that our Real Estate Department do so; but, in the event that these services cannot be provided remotely, we will proceed to give our clients the option and ability of coming in to our professionally and dailysanitized offices to take the actions necessary therefor, while of course observing all appropriate social distancing and cleaning/ disinfecting protocols.

Your concern about the number of employees reporting to work at our Getzville and Lancaster offices is based, I believe, on misinformation. You make reference to specific data you collected. Please tell me exactly what you have been told (I’m not concerned with the source, just the data) so I can respond with precision. Let me say at the outset that if Hogan Willig is out of compliance with any Executive Order or ESDC directive, we will take prompt and austere measures to immediately come into compliance.

* * *

With regard to your unnumbered paragraph 4, I take no issue with the facts set forth up until the last three (3) sentences. There is no “law” requiring in-person real estate closings while the EO is in effect. However, such statutes as NY RPL Article 9 and NY GOL and NY Exec Law §130, et seq. set forth execution requirements that inherently require in-person contact. While at one point virtual notarial executions were permitted by EO, the time for that has expired, and lenders, title insurance companies, etc. wouldn’t and won’t honor or “insure over” virtual notarizations….

I respectfully disagree with your statement that remote-only real estate transactions are “nonetheless required in order to reduce the spread of the COVID-19 virus.” That statement is contrary to my understanding of the express language of the EO’ s and ESDC’ s interpretations of the EO’ s. The only real estate deals that are being closed in-person are those that must be closed in person to comply with the relevant laws (cited in greater detail below) in light of the requirements of primarily lenders and title insurers concerning the proper execution of deeds, mortgages, promissory notes, lien releases, etc., that the above laws be complied with….

With regard to your unnumbered paragraph 6 on page 2 of your letter, I don’t dispute the car count, as I have not counted the cars myself, but I point out that there are six (6) businesses in my building. Please see Tab E. At least one of them is a real estate company, and one of them is a bank….

In addition, as a major title agent in Western New York, none of our underwriters for title insurance are allowing us to issue policies without inperson notarization on documents such as deeds, mortgages, affidavits, and/ or other documents required to be recorded pursuant to Article 9 of the RPL. Title insurance is required by lenders and issued in accordance with the New York State Department of Financial Services as a necessary component of real estate transactions. Further, while we are working with at least one lender to provide electronic notarization to clients, no lender that we represent has permitted a closing to be completed with electronically notarized documents. Moreover, Chautauqua County is requiring in-person notarization on all documents offered for recording….

There have been multiple exchanges since then, including this April 27 response from the AG’s Office. which provided in part:

As you are aware, Governor Cuomo’s Executive Order 202.8 requires that “All businesses and not-for-profit entities in the state shall utilize, to the maximum extent possible, any telecommuting or work from home procedures that they can safely utilize.” This applies to businesses operating what are deemed to be providing essential services under the Executive Order. Despite our repeated requests that you provide us with information evidencing compliance with this order in your Getzville office, you have failed to do so.

To comply with the Executive Order, HoganWillig must do more than encourage employees working on essential matters to work remotely whenever possible. It is your responsibility to mandate teleworking on a daily basis, and permit reporting to work in person only if necessary to perform work in support of an essential business, service or provider. This applies to all attorneys, paralegals and support staff. You have not demonstrated that this mandate has been implemented in your Getzville office.

You request that we provide you with the name(s) of HoganWillig employee(s) who wish to be transitioned to teleworking in your Getzville office. This is not our duty, nor are the wishes of employees relevant under the terms of the Executive Order. As the employer, you surely know who is reporting to work each day. You know who is working from home; who is taking a personal day, a sick day, or a vacation day. We understand that this information is compiled and emailed to staff every day. We further understand that only 8-12 employees work from home each day, from your staff of nearly 70 employees. Many employees – without being told to work remotely, and particularly where so many are not – may be under the tacit understanding that it is not a genuine option. You have provided no evidence contradicting our understanding, despite our repeated requests.1

[fn 1 We have confirmed that HoganWillig is the only tenant currently occupying space in the building located at 2410 North Forest Road, as all other tenants performing essential services areunder work from home mandates (as you should be).]

* * *

As for your contention regarding remote notarization, Executive Order 202.7 which, inter alia, authorized remote notarization, was extended through May 7, 2020 by Executive Order 202.14:

202.14: NOW, THEREFORE, I, Andrew M. Cuomo, Governor of the State of New York, by virtue of the authority vested in me by Section 29-a of Article 2-B of the Executive Law, do hereby continue the suspensions and modifications of law, and any directives, not superseded by a subsequent directive, made by Executive Order 202 and each successor Executive Order to 202, for thirty days until May 7, 2020, except as limited below.

Executive Order 202.18 extended the provisions of Executive Order 202.14 through May 15, 2020. The “which” clause referencing “closed or otherwise restricted public or private businesses or places of public accommodation” is properly construed as nonrestrictive, such that the entire provisions of each of the referenced Executive Orders have been extended. Hence, remote notarization remains authorized through May 15, 2020.

* * *

We have clearly set forth HoganWillig’s obligations under Executive Law 202 et seq., and our directives to fulfill your obligations. Your response is required by close of business on Tuesday, April 28, 2020. The Attorney General reserves the right to take all available measures, including seeking emergency relief in court, to ensure your compliance with Executive Order 202 et seq.

To which there was an April 28, 2020, response from HoganWillig that read, in part:

As of the date of this letter, our Real Estate Department anticipates 42 closings this week. While they have worked diligently to complete these closings with the least person-to-person interaction as possible with other attorneys, clients, and third parties, most of our real estate closings still require in-person signing of lender and title documents, in-person notarization of deeds, mortgages, and affidavits, and the printing of checks where wires are not possible. As previously stated, our title underwriters and lenders have both refused to accept e-notarized documents which has required us to prepare and have executed bank packages  sale documents, title affidavits, and other documents related to closings. Even with your interpretation that remote notarizations are extended, many buyers and sellers don’t have scanner/ printing capability.

I will mention that as I was walking around the building looking for HW staff coming and going, I personally saw someone enter an office, other than Hogan Willig, in my building on the second floor today. Your data that Hogan Willig is the only tenant currently occupying space at 2410 is wrong, regardless of the mandates under which you believe other offices are operating.

According to the Complaint, there was continuing communications and disagreements leading up to the filing of the Complaint.

I provide the detail above not to prove who is right or wrong, but to demonstrate the extent to which the Attorney General’s office went to investigate a law firm what was designated an essential business and which clearly was making great efforts to comply with the law and to protect employees.

The state apparatus was so concerned with this law firm in an area far away (NY State is huge) from the epicenter of the pandemic over six hours drive away.

While forcing nursing homes to take coronavirus-infected patients leading to thousands of deaths, and disastrously bungling coordination with NYC government leading to thousands more deaths, the state government has found time to threaten this “essential” business, investigate it, and consume what must be hundreds of person-hours on both sides.

While thousands die in NY nursing homes and the state economy collapses, this is how state government spends its time.

 

 
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