Can a New York town reimburse the legal fees of a town supervisor who pleaded guilty to criminal charges, or of town employees called as witnesses in his prosecution?

Plain-English summary

The Town of Stony Point's supervisor had been the target of a federal criminal prosecution for alleged official misconduct. The federal government interviewed town employees in connection with the case, and called several to testify before a grand jury. The employees retained private counsel and incurred legal fees. The town attorney himself was among those interviewed or who testified. After the AG's office received the request for opinion, the supervisor pleaded guilty.

The town attorney asked the AG two questions. First, could the town reimburse the supervisor's legal fees for defending himself against the criminal charges? Second, could the town reimburse the employees' legal fees for being interviewed or testifying as witnesses?

The AG said no to both.

The supervisor's legal fees. Public Officers Law § 18 is the standard statutory route by which a municipality provides defense and indemnification for its employees and officers. Stony Point had adopted § 18 without modification. By its terms, § 18(3)(a) covers "any civil action or proceeding" arising from acts within the scope of employment. Criminal defense is not "civil," so § 18 alone does not authorize reimbursement of criminal defense fees. Zimmer v. Town of Brookhaven confirms that reading.

The town can supplement § 18 by local law (§ 18(12)). The AG has long recognized this as a permissible exercise of home rule under Municipal Home Rule Law § 10(1)(ii)(a)(1), because providing defense functions as additional remuneration (Corning v. Village of Laurel Hollow). Reimbursement for successful criminal defenses of charges arising from in-scope conduct has been recognized as permissible (In re Kane v. McClellan and Op. Att'y Gen. (Inf.) No. 88-6).

But the supervisor pleaded guilty. The AG had already concluded in Op. Att'y Gen. (Inf.) No. 88-6 that paying the legal fees of an employee found guilty would violate Article VIII, § 1 of the State Constitution, the gift-of-public-funds clause. A guilty plea is functionally the same: the employee acted criminally, and criminal acts fall outside the scope of public employment. Public Officers Law § 19(2)(a) makes the contrast at the state level: state employees criminally charged based on in-scope acts may be reimbursed only upon acquittal or dismissal of charges. Even if Stony Point passed a local law allowing § 18-supplemental criminal-defense reimbursement, it could not constitutionally apply to a supervisor who had pled guilty.

The employees' legal fees. Public Officers Law § 18 again does not authorize reimbursement here. A witness is not "defending himself in an action or a proceeding," and § 18 reaches civil actions arising out of the employee's own acts or omissions, not a third party's. The employees were witnesses in a case against the supervisor, not parties.

Could the town pass a local law to provide this benefit? In theory, yes, under Municipal Home Rule Law § 10(1)(ii)(a)(1). The benefit would have to be reasonably related to a legitimate public purpose (Good Humor Corp. v. City of New York). The AG noted that prior opinions had recognized reimbursement of legal costs for officials who successfully defended criminal charges as a benefit serving the public purpose of attracting qualified workforce members (Op. Att'y Gen. (Inf.) No. 91-4 and the historical reasoning of Chapman v. New York City and Corning v. Village of Laurel Hollow). Whether the same rationale extends to witnesses was not clearly established. The AG flagged the absence of historical cases recognizing witness-related fees as a retention concern.

But even assuming a local law could be drafted, it could not constitutionally reach fees already incurred. New York's constitutional prohibition on gifts of public funds requires that defense or indemnification laws operate prospectively. Corning v. Village of Laurel Hollow explicitly framed this: a municipality can adopt a forward-looking ordinance promising defense for future charges, but cannot retroactively give away public funds to cover already-incurred private expenses. In re Guarino v. Anderson reached the same conclusion. The narrow moral-obligation exception (Ruotolo v. New York; Chapman v. New York City; Jensen v. City of New York) requires that not paying would "condone a travesty of justice," and the AG concluded the witness fees did not meet that bar.

The result: the town could not retroactively reimburse the employees' witness fees, regardless of whether it might enact a prospective benefit for future cases.

Currency note

This opinion was issued in 2003. 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

Q: Doesn't Public Officers Law § 18 cover criminal defense?
A: No. By its express terms, § 18(3)(a) covers "any civil action or proceeding." Criminal defense falls outside the statute. Towns can supplement § 18 by local law to cover criminal defenses, but only prospectively and only for in-scope conduct.

Q: Why does a guilty plea matter?
A: A guilty plea establishes that the employee acted criminally, which the AG treats as conduct outside the scope of public employment. The gift-of-public-funds clause (N.Y. Const., art. VIII, § 1) bars paying the legal fees of someone whose conduct fell outside that scope.

Q: Could the town reimburse the supervisor's fees if he had been acquitted instead?
A: If Stony Point had enacted a supplemental local law, the AG's prior opinions suggested that reimbursement for a successful criminal defense of in-scope conduct would be permissible. See Op. Att'y Gen. (Inf.) No. 88-6 and In re Kane v. McClellan. But a guilty plea forecloses that route.

Q: Why can't the town reimburse innocent employees who only had to testify?
A: Two reasons. First, § 18 itself doesn't cover witness fees. Second, any local law providing the benefit would have to operate prospectively to avoid violating the gift-of-public-funds clause. A local law passed now and applied to already-incurred witness fees would be a retroactive gift. Corning v. Village of Laurel Hollow and In re Guarino v. Anderson set out the prospective-only requirement.

Q: What about the 'moral obligation' exception?
A: New York recognizes a narrow exception where the retroactive payment fulfills a moral obligation, in cases where "not to act would condone a travesty of justice" (Ruotolo v. New York). The AG concluded the witness-fee scenario did not meet that high bar, citing Chapman v. New York City, Jensen v. City of New York, and Op. Att'y Gen. (Inf.) No. 2002-4.

Q: Could the town pass a forward-looking ordinance now to cover witnesses in future cases?
A: The AG suggested this might be permissible under Municipal Home Rule Law § 10(1)(ii)(a)(1) if the law served a legitimate public purpose, but flagged uncertainty about whether the public-purpose justification used in defense-of-criminal-charges cases extends to witness fees. That justification (attracting qualified candidates) had no historical analog tied to witness testimony.

Background and statutory framework

Public Officers Law § 18 is the standard municipal indemnification statute. Subdivision (2) governs adoption by the public entity. Subdivision (3)(a) creates the substantive defense and indemnification obligation, limited to civil actions arising from in-scope conduct. Subdivision (3)(b) handles the choice of counsel in conflict situations. Subdivision (12) preserves supplemental local laws. Section 19(2)(a) is the state-employee parallel, conditioned on acquittal or dismissal.

The constitutional backdrop is N.Y. Const., art. VIII, § 1, the gift-of-public-funds clause. Corning v. Village of Laurel Hollow held that prospective defense and indemnification operates as additional compensation and survives the gift clause. In re Kane v. McClellan upheld a statute providing reimbursement to a successful public-officer criminal defendant. The retroactive gift rule comes from In re Guarino v. Anderson and Chapman v. New York City; the moral-obligation exception from Ruotolo v. New York.

The case law on workforce-retention rationale comes from In re Kane (early articulation), Corning (modern restatement), and Wyatt v. Cole (federal qualified-immunity context). The AG drew on these to explain why prospective defense benefits serve a public purpose.

Citations and references

Constitution:

• N.Y. Const., art. VIII, § 1 (gift-of-public-funds clause)

Statutes:

• Civil Practice Law and Rules Article 78
• Municipal Home Rule Law § 10(1)(ii)(a)(1) (compensation of officers and employees)
• Public Officers Law § 18 (municipal defense and indemnification)
• Public Officers Law § 18(1)(b) (definition of employee)
• Public Officers Law § 18(2) (adoption)
• Public Officers Law § 18(3)(a), (b) (civil defense obligation)
• Public Officers Law § 18(12) (supplemental local laws)
• Public Officers Law § 19(2)(a) (state employee criminal defense reimbursement)

Cases:

• Zimmer v. Town of Brookhaven, 247 A.D.2d 109 (2d Dep't 1998)
• Corning v. Village of Laurel Hollow, 48 N.Y.2d 348 (1979)
• In re Kane v. McClellan, 110 A.D. 44 (2d Dep't 1906)
• In re Chapman v. City of New York, 168 N.Y. 80 (1901)
• Wyatt v. Cole, 504 U.S. 158 (1992)
• In re Guarino v. Anderson, 259 N.Y. 93 (1932)
• Ruotolo v. New York, 83 N.Y.2d 248 (1994)
• In re Jensen v. City of New York, 44 A.D. 509 (2d Dep't 1899)
• Good Humor Corp. v. City of New York, 290 N.Y. 312 (1943)

Prior AG opinions:

• Op. Att'y Gen. (Inf.) No. 98-4
• Op. Att'y Gen. (Inf.) No. 99-33
• Op. Att'y Gen. (Inf.) No. 88-6
• Op. Att'y Gen. (Inf.) No. 91-4
• Op. Att'y Gen. (Inf.) No. 2002-4

Source

• Landing page: https://ag.ny.gov/libraries-documents/opinions/opinions-year
• Original PDF: https://ag.ny.gov/sites/default/files/opinions/I_2003-16_pw.pdf

Original opinion text

N.Y. CONST., ART. VIII, § 1; CIVIL PRACTICE LAW AND RULES, ART. 78; MUNICIPAL HOME RULE LAW § 10(1)(ii)(a)(1); PUBLIC OFFICERS LAW §§ 18, 19(2)(a).

A town may not reimburse the costs incurred by the town supervisor who pled guilty to criminal charges pending against him. The town may not reimburse the legal costs incurred by town employees called to assist in the investigation and prosecution against the town supervisor.

November 4, 2003

Frank J. Phillips, Esq.
Town Attorney
Town of Stony Point
74 East Main Street
Stony Point, New York 10980

Informal Opinion
No. 2003-16

Dear Mr. Phillips:

You have asked two questions relating to the Town's authority to reimburse legal fees incurred by town officials and employees in connection with an investigation of the town supervisor regarding alleged official misconduct. The first is whether the legal expenses incurred by the town supervisor, in the event that he is acquitted of criminal charges pending against him, may be reimbursed by the Town. The second is whether a town employee may be reimbursed for legal fees associated with being interviewed or being a witness in the criminal prosecution of the town supervisor. We believe that neither the town supervisor nor town employees interviewed or called as witnesses may be reimbursed for their legal expenses under the circumstances presented.

I. Background

We understand the facts of the situation you describe to be as follows: The town supervisor was the subject of a federal criminal prosecution involving alleged acts of official misconduct. The federal government sought interviews with a number of town employees in connection with the prosecution of the town supervisor, and the employees retained private attorneys to accompany them to these interviews. Similarly, a number of town employees were called to testify before a federal grand jury in connection with the same prosecution, and retained and were accompanied by private attorneys. You also were interviewed and/or testified before a grand jury as a part of the prosecution of the town supervisor. We understand that the town supervisor pled guilty to the charges subsequent to your submission of this request for opinion.

II. Analysis

A. Payment of Legal Expenses for Employee Who is a Defendant in Criminal Case

Public Officers Law § 18 authorizes a municipality to adopt that section, and thereby provide defense and indemnification to its employees. Public Officers Law § 18(2). You have informed us that the Town has adopted section 18 without modification. Section 18 provides that:

Upon compliance by the employee with [statutorily mandated procedures], the public entity shall provide for the defense of the employee in any civil action or proceeding, state or federal, arising out of any alleged act or omission which occurred or allegedly occurred while the employee was acting within the scope of his public employment or duties. This duty to provide for a defense shall not arise where such civil action or proceeding is brought by or at the behest of the public entity employing such employee.

Public Officers Law § 18(3)(a). "Employee" is defined to include municipal officers. Id. § 18(1)(b).

A municipality providing defense pursuant to section 18 is limited to providing a defense "in any civil action or proceeding." Id. Thus, by its plain language, section 18 does not authorize the reimbursement of attorney's fees incurred by the town supervisor defending himself against criminal charges. See Zimmer v. Town of Brookhaven, 247 A.D.2d 109, 113 (2d Dep't 1998).

A municipality may, however, enact a local law supplementing the defense and indemnification provisions of section 18. See Public Officers Law § 18(12); see also, e.g., Op. Att'y Gen. (Inf.) No. 98-4. The provision of defense for employees may be considered additional remuneration, see Corning v. Village of Laurel Hollow, 48 N.Y.2d 348, 354 (1979), and as such, the enactment of local legislation allowing this benefit is authorized by Municipal Home Rule Law § 10(1)(ii)(a)(1). See Op. Att'y Gen. (Inf.) No. 99-33. We have previously concluded that such supplemental protections may include providing reimbursement for legal expenses incurred defending criminal matters where the employee is acquitted of the charges or the charges are dismissed. See Op. Att'y Gen. (Inf.) No. 88-6; cf. In re Kane v. McClellan, 110 A.D. 44 (2d Dep't 1906).

With respect to the defense costs incurred by the town supervisor in defending the instant prosecution against him, we have previously concluded that payment of legal fees when an employee is found guilty of criminal charges would constitute an unconstitutional gift of public funds because an employee acting criminally is not acting within the scope of his public employment. N.Y. Const., art. VIII, § 1; Op. Att'y Gen. (Inf.) No. 88-6; cf. Public Officers Law § 19(2)(a).

Therefore, while we are of the opinion that the Town may enact local legislation that would provide for reimbursement of legal costs incurred by an employee defending himself against criminal charges for acts that occurred within the scope of employment, we are of the further opinion that such legislation could not be applied for the benefit of the town supervisor to reimburse the costs of his defense which culminated in his guilty plea.

B. Payment of Legal Expenses for Employees Who Are Called as Witnesses

You have also asked whether a town employee can be reimbursed for legal fees incurred when the employee is accompanied by a private attorney to be interviewed as part of the investigation of the charges against the town supervisor or when called to testify before a grand jury. We are of the opinion that, in the instant investigation, these expenses may not be reimbursed.

With respect to town employees called as witnesses or being interviewed in connection with the prosecution of the town supervisor, section 18 authorizes the defense of a municipal employee in a civil proceeding. A potential or actual witness who is represented by an attorney is not defending himself in an action or a proceeding. Furthermore, the statute authorizes defense in a civil action arising out of an act or omission by the employee himself. Here, the employees seek reimbursement in connection with a case against a town official, not against themselves. For these reasons, section 18 does not provide authorization for the Town to pay the legal expenses of the town employees called to assist in the criminal investigation of the town supervisor.

We believe that local legislation that would provide for the representation or reimbursement of legal fees incurred by a public employee when accompanied by an attorney to be interviewed or to testify before a grand jury would fall within the Town's home rule powers. See Municipal Home Rule Law § 10(1)(ii)(a)(1).

To be valid, a local law providing this benefit to its employees would have to be reasonably related to a legitimate public purpose. See Good Humor Corp. v. City of New York, 290 N.Y. 312, 317 (1943). We have previously opined that legal costs may be reimbursed to public officials who successfully defend criminal charges brought against them for actions taken within the scope of their employment. Op. Att'y Gen. (Inf.) No. 91-4. Our opinion was based on the assumption that this benefit would be provided to municipal employees as a part of their total compensation package. Id. This benefit, we concluded, would not run afoul of the constitutional prohibition on gifts of public funds because it would serve a public purpose: the municipality would receive something in return, a public workforce. Id. The Town may find that the same purpose, or another valid public purpose, would be served by the provision of legal costs for town employees who are called to testify or be interviewed in an investigation against another town employee or official.

We note, however, that the risk of a public employee having to defend himself from unfounded charges for actions arising out of the public employment has long been recognized. See In re Chapman v. City of New York, 168 N.Y. 80, 86 (1901); Corning v. Village of Laurel Hollow, 48 N.Y.2d 348, 353 (1979). This risk has been used as a rationale for the provision of defense and indemnification for public officials and employees, to entice people who are reluctant to assume that risk individually to accept public employment. See In re Kane v. McClellan, 110 A.D. 44, 47-48 (2d Dep't 1906); cf. Wyatt v. Cole, 504 U.S. 158, 167 (1992). We have not, however, located comparable case law recognizing that the possibility that a public employee, as a result of his employment, will be called to testify before a grand jury or to be interviewed in connection with a criminal investigation of a third party has kept qualified individuals from accepting positions of public employment. It may be that this possibility is sufficiently remote to have had no detrimental effect on the establishment and maintenance of a public workforce.

In any event, we are of the opinion that such a law could not provide for the reimbursement of legal expenses incurred by the employees called as witnesses in the instant investigation against the town supervisor. This is because any local law providing for defense and indemnification must be prospective in operation to avoid violating the constitutional prohibition against gifts of public funds for private purposes. N.Y. Const., art. VIII, § 1; Corning v. Village of Laurel Hollow, 48 N.Y.2d 348, 354 (1979); In re Guarino v. Anderson, 259 N.Y. 93, 95-96 (1932).

In the situation presented in your inquiry, the prosecution against the town supervisor is complete, and thus, a law providing this benefit to its employees, including the employees involved in the investigation of the town supervisor, would not be prospective. Courts have established a narrow exception to the requirement that a law be prospective in application to avoid the prohibition against gifts that benefit only private interests. If a payment of public funds is in fulfillment of a "moral obligation," then its retroactivity does not invalidate it. See, e.g., Ruotolo v. New York, 83 N.Y.2d 248, 259 (1994). The standard for determining whether the municipality has a moral obligation to pay a claim against it is that "it must affirmatively appear that not to act would condone a travesty of justice." Id. We do not believe that this standard is met in the circumstances you present. See In re Chapman v. City of New York, 168 N.Y. 80, 86 (1901); In re Jensen v. City of New York, 44 A.D. 509, 515 (2d Dep't 1899); see also Op. Att'y Gen. (Inf.) No. 2002-4. Therefore, we believe that such a law could not be applied to reimburse the employees who have already incurred legal expenses as witnesses in the prosecution of the town supervisor.

The Attorney General renders formal opinions only to officers and departments of the State government. This perforce is an informal and unofficial expression of the views of this office.

Very truly yours,

KATHRYN SHEINGOLD
Assistant Solicitor General
In Charge of Opinions