Albany partners Christopher Priore and Peter Lauricella successfully represented a research company and its owner/president in a CPLR Article 78 proceeding in the New York Supreme Court, Appellate Division, Third Judicial Department, challenging the New York State Department of Labor’s (DOL) denial of the clients’ application for a license to purchase, own, possess, and transport explosives (O&P license). The company, which conducts limited fireworks displays as part of its business, must maintain an O&P license issued under Labor Law Article 16, which must be renewed annually.

In July 2021, our owner client applied to renew the company’s O&P license. The DOL denied the application on the sole ground that neither the owner nor any employee held a current Pyrotechnician Certificate of Competence (PCC), despite the owner having held a PCC for many years and the company having previously obtained O&P license renewals without one. The denial was upheld after an administrative hearing and adopted by the Commissioner of Labor.

Chris and Peter challenged the Commissioner's authority to impose a blanket PCC requirement as a prerequisite for O&P licensure. The central legal issue was whether the Department of Labor's internal policy – mandating that all O&P license applicants hold or employ someone with a PCC credential – constituted a "rule" subject to the formal rulemaking procedures of the State Administrative Procedure Act (SAPA). They presented evidence that the DOL had historically approved O&P license applications without a PCC, and only later, after internal discussions and consultation with counsel, adopted this requirement and added a question about PCCs to the application form – all without undertaking the required rulemaking process.

The Appellate Division unanimously agreed and annulled the Commissioner's determination. The court held that the mandatory PCC requirement was a generally applicable rule that should have been promulgated in accordance with SAPA's formal rulemaking procedures. Because the DOL failed to do so, the requirement was unenforceable. The matter was remitted to the DOL to evaluate the O&P license application at issue in accordance with properly promulgated rules and our clients’ particular facts and circumstances.