Horn v. Kean

• Decision Date: 16 July 1986
• Docket Number: No. 84-5729,84-5729
• Citation: 796 F.2d 668
• Parties: , 1 Indiv.Empl.Rts.Cas. 693 Patricia HORN, Mary Jane Reed, Edward Munley, Marvin Olinsky, Michael Tango, and the New Jersey Motor Vehicle Agents Association, Marie Luberto, Raymond E. Littleford, Joseph Nemyo, John Letz, Florenne D. Sweethood, J. Harold Webb, Leona B. Clyde, and Ann Laonne, Appellants, v. Thomas KEAN, Governor of the State of New Jersey, Irwin Kimmelman, Attorney General State of New Jersey and Clifford Snedeker, Director of Motor Vehicles State of New Jersey.
• Court: U.S. Court of Appeals — Third Circuit

Page 668

796 F.2d 668

55 USLW 2077, 1 Indiv.Empl.Rts.Cas. 693

Patricia HORN, Mary Jane Reed, Edward Munley, Marvin Olinsky, Michael Tango, and the New Jersey Motor Vehicle Agents Association, Marie Luberto, Raymond E. Littleford Joseph Nemyo, John Letz, Florenne D. Sweethood, J. Harold Webb, Leona B. Clyde, and Ann Laonne, Appellants, v. Thomas KEAN, Governor of the State of New Jersey, Irwin Kimmelman, Attorney General State of New Jersey and Clifford Snedeker, Director of Motor Vehicles State of New Jersey.

No. 84-5729.

United States Court of Appeals Third Circuit.

Argued June 18, 1985.

Argued In Banc May 5, 1986.

Decided July 16, 1986.

As Amended July 16, 1986.

Dennis O'Leary (Argued), Sussex, N.J., for appellants.

Andrea M. Silkowitz (Argued), Deputy Atty. Gen. of New Jersey, Newark, N.J., Irwin I. Kimmelman, Atty. Gen. of New Jersey, for appellees; Michael R. Cole, First Asst. Atty. Gen., Trenton, N.J., of counsel.

Before ALDISERT, Chief Judge, GIBBONS, Circuit Judge, and DIAMOND, District Judge. ^*

OPINION ANNOUNCING THE JUDGMENT OF THE COURT, in which

Judges HUNTER, WEIS, and HIGGINBOTHAM join, and in

which Judge BECKER joins except for part IV.

Before ALDISERT, Chief Judge, and SEITZ, ADAMS, GIBBONS, HUNTER, WEIS, GARTH, HIGGINBOTHAM, SLOVITER, BECKER, STAPLETON and MANSMANN, Circuit Judges.

ALDISERT, Chief Judge.

The ultimate question for decision is whether New Jersey motor vehicle agents, chosen for their positions by a Democratic governor through the political patronage process, are insulated by the first amendment from being replaced by the governor's successor, a Republican. The district court held that they did not come within the protection of Elrod v. Burns, 427 U.S. 347, 96 S.Ct. 2673, 49 L.Ed.2d 547 (1976), and Branti v. Finkel, 445 U.S. 507, 100 S.Ct. 1287, 63 L.Ed.2d 574 (1980), because they were independent contractors and not "public employees," and granted appellees' motion for summary judgment.

This appeal requires us to determine whether the motor vehicle agents are employees or contractors and, if contractors, whether this distinction makes a difference under the teachings of Elrod and Branti. We hold that the district court properly determined that the agents are not within the first amendment's protection, Horn v. Kean, 593 F.Supp. 1298 (D.N.J.1984), and affirm its judgment.

I.

The agents brought suit against the Governor, the Attorney General, and the Director of Motor Vehicles of New Jersey alleging that their dismissals as motor vehicle agents were based on political party affiliation and violated the first, fifth, and fourteenth amendments to the United States Constitution. ¹ These agents register motor vehicles, issue registration certificates, and license drivers. Unlike most public employees, they are not paid a fixed salary but receive a fee for every vehicle registered and license issued. ² Appellants, all Democrats, appointed by a Democratic state administration, were relieved of their duties as motor vehicle agents after Thomas Kean, a Republican, began his term as Governor.

The record here reveals that New Jersey historically has not required prospective motor vehicle agents, as a condition of their employment, to terminate existing employment relationships or business endeavors. App. at 47. Of the five original named plaintiffs in this action, only one accurately could be classified as working as a motor vehicle agent on a full time basis; the remaining four all worked in other occupations. 593 F.Supp. at 1302. They operate relatively free from state control or supervision and retain complete authority to establish the qualifications for employment in their agencies. They hire, fire, and promote employees in their agencies. App. at 47, 71, 89, 109, 118, 128, 129, 138, 148. Employees of the agents are paid by the agents, not by New Jersey. As employers, the agents make the usual deductions for withholding taxes, Social Security, and Workmen's Compensation.

The parties concede that no disputed issues of material fact exist. The court's determination that the agents' status as independent contractors precluded protection under Elrod and Branti is a question of law; our review is therefore plenary. Goodman v. Mead Johnson & Co., 534 F.2d 566, 573-74 (3d Cir.1976), cert. denied, 429 U.S. 1038, 97 S.Ct. 732, 50 L.Ed.2d 748 (1977).

Our analysis tracks two inquiries. First, we must determine whether the district court properly classified appellants as independent contractors. Second, we address the constitutional issue of whether the district court properly limited the Elrod-Branti protection from "patronage dismissals" to public employees, excluding from protection independent contractors.

II.

We are assisted in determining the motor vehicle agents' status under New Jersey law by, coincidentally, an opinion written by Justice Brennan--author of the plurality opinion in Elrod --when he was a judge on the appellate division of the New Jersey Superior Court. In Carluccio v. Ferber, 18 N.J.Super. 473, 87 A.2d 439 (App.Div.1952), a former motor vehicle inspection agent sought reinstatement to his position, arguing that as a veteran the state could not, under the Veterans' Tenure Act, discharge him at will. The New Jersey court, speaking through Judge Brennan, rejected this argument:

[A]n agent designated under R.S. 39:3-3, N.J.S.A., is not a person "holding any employment, position or office under the government of this State" and "receiving a salary from such State" within the intendment of the Veterans' Tenure Act.

....

... [T]he agent designated under R.S. 39:3-3, N.J.S.A. may act only "until his authority is revoked" by the Director, and his compensation is based upon registration certificates issued by him and for every license granted by him, and the Director has authority to limit the fee so paid to a maximum. The Legislature obviously intended to, and did, place in the hands of the Director large and unusual determinative powers, including the designation and removal, and the fixing of the number and the compensation of such agents. Plainly the agent is not within the class of persons in public service contemplated by the Legislature to be limited to persons holding "employment, position or office" and "receiving a salary from such state".... The legislative intention was to give the Director full rein to control the tenure of his agents and to appoint and remove at his pleasure.

Id. at 476-77, 87 A.2d at 440 (citations omitted). See also In re Fitzgerald, 188 N.J.Super. 476, 482, 457 A.2d 1208, 1211 (App.Div.1983) ("By their nature, motor vehicle agencies are independently run operations managed by independent contractors who are not subject to the benefits and protection of the State's pension and tenure statutes...."). As a federal court we are bound by this formidable state authority, and, accordingly, find no error in the district court's ultimate fact determination that the appellants were independent contractors. We turn now to the merits of the appellants' constitutional argument.

III.

For the purpose of this decision and by reason of the doctrine of stare decisis that requires inferior courts to follow decisions of a superior court, we are required to respect and adhere to the precise decisions in Elrod and Branti. We do this unqualifiedly. We wish to emphasize that our decision should rise or fall on an interpretation of the Constitution, not as a referendum on whether political scientist reformers were absolutely correct in demanding elimination of patronage and installing virtually universal civil service in its stead. Suffice it to say, there is much room for debate. For every horror story in, to use the pejorative, the "spoils system"--a litany that need not be repeated now--a civil service misadventure probably can be cited. But insofar as the Constitution is concerned, these matters are irrelevant.

IV.

The analysis of the constitutional issue begins with the first amendment's mandate that "Congress shall make no law ... abridging the freedom of speech, or of the press...." Decades of Supreme Court case law make it clear that the free speech mandate is no longer limited to statutes enacted by Congress; it "is made obligatory on the States by the Fourteenth" amendment. Jacobellis v. Ohio, 378 U.S. 184, 195, 84 S.Ct. 1676, 1682, 12 L.Ed.2d 101 (1964) (Black, J., concurring). The reasons for its incorporation into the fourteenth amendment are somewhat shrouded, and do not surface readily in Supreme Court opinions; perhaps a reasoned elaboration has never been set forth. For example, Gitlow v. New York, 268 U.S. 652, 45 S.Ct. 625, 69 L.Ed. 1138 (1925), often cited as the seminal case incorporating the free speech clause, substituted assumption for reason, and a conclusion for a point of beginning: "For present purposes we may and do assume that freedom of speech and of the press--which are protected by the First Amendment from abridgment by Congress--are among the fundamental personal rights and 'liberties' protected by the due process clause of the Fourteenth Amendment from impairment by the States." 268 U.S. at 666, 45 S.Ct. at 629. Notwithstanding the scanty, if not evanescent, explanation, we do recognize and reiterate that such incorporation has taken place, ³ and enthusiastically agree that "this freedom is an inestimable privilege in a free government...." Id. at 667, 45 S.Ct. at 630.

Moreover, the Supreme Court instructs that for the first amendment to be implemented, some form of state action must exist.

It matters not that the [state] law has been applied in a civil action and that it is common law only, though supplemented by statute.... The test is not the form in which state power has been applied but, whatever the form, whether such power has in fact been exercised. See Ex parte Virginia, 100 U.S. 339, 346-47, 25 L.Ed. 676; American Federation of Labor v. Swing, 312 U.S. 321, 61 S.Ct. 568, 85 L.Ed. 855.

New York...