Clark v. Degnan
| Decision Date | 17 October 1978 |
| Parties | Edward F. CLARK, Jr., County Executive of the County of Hudson, William F. Pearl, Jr., Comptroller of the County of Hudson, the Board of Chosen Freeholders of the County of Hudson and the County of Hudson, Plaintiffs, and County of Union, County of Bergen, County of Burlington, County of Camden, County of Cumberland, County of Essex, County of Hunterdon, County of Mercer, County of Monmouth, County of Morris, County of Ocean, County of Passaic, County of Salem, County of Somerset, and County of Sussex, Plaintiffs-Intervenors, v. John J. DEGNAN, Attorney General of the State of New Jersey, John F. Laezza, Jr., Director of the Division of Local Government in the State of New Jersey, the Local Government Board in the Division of Local Government in the State of New Jersey, Ann Klein, Commissioner of the Department of Human Services in the State of New Jersey, Arthur J. Simpson, Administrative Director of the Courts in the State of New Jersey and Gori Carfora, Court Administrator for the County of Hudson, Defendants. |
| Court | New Jersey Superior Court |
Charles M. Schimenti, Jersey City, for plaintiffs (Harold Krieger, Hudson County Counsel, attorney; Frank T. Koserowski, Asst. County Counsel, Jersey City, on the brief).
William J. McCloud, County Counsel, Elizabeth, for plaintiff-intervenor County of Union and certain other plaintiffs-intervenors.
Glenn T. Leonard, Asst. County Counsel, Hackensack, for plaintiff-intervenor County of Bergen (Vincent P. Rigolosi, County Counsel, Hackensack, attorney).
William E. Ozzard, County Counsel, Somerville, for plaintiff-intervenor Somerset County.
Alfred J. Villoresi, Asst. County Counsel, Boonton, for plaintiff-intervenor Morris County (Armand D'Agostino, County Counsel, Dover, attorney).
Theodore W. Daunno, Asst. County Counsel, Newark, for plaintiff-intervenor Essex County (Peter G. Stewart, County Counsel, Newark, attorney).
Robert Budesa, Asst. County Counsel, Toms River, for plaintiff-intervenor Ocean County (Franklin Berry, Jr., County Counsel, Toms River, attorney).
M. Jefferson Davis, Burlington County Sol., Camden, for plaintiff-intervenor Burlington County.
John A. Yacovelle, County Counsel, Cherry Hill, for plaintiff-intervenor Camden County.
Ivan M. Sherman, Cumberland County Sol., Bridgeton, for plaintiff-intervenor Cumberland County.
Edwin K. Large, Jr., County Counsel, Flemington, for plaintiff-intervenor Hunterdon County.
Richard W. Raines, Asst. County Counsel, Trenton, for plaintiff-intervenor Mercer County (Harvey L. Stern, County Counsel, attorney).
Richard O'Connor, County Counsel, Freehold, for plaintiff-intervenor Monmouth County.
Martin Verp, County Counsel, Paterson, for plaintiff-intervenor Passaic County.
George S. Friedman, County Counsel, Salem, for plaintiff-intervenor Salem County.
Donald L. Kovach, County Counsel, Franklin, for plaintiff-intervenor Sussex County.
Benjamin D. Lambert, Jr., Deputy Atty. Gen., for defendants .
This action was instituted by filing of a verified complaint and issuance of an order to show cause on February 15, 1978 on application of Hudson County for certain declaratory and injunctive relief as a result of enactment of "An Act to place limits on expenditures by counties and municipalities and supplementing Title 40A of the New Jersey Statutes," L.1976, C. 68, effective August 18, 1976, L.1977, C. 10, effective February 3, 1977. N.J.S.A. 40A:4-45.1 Et seq. The act is referred to hereinafter as the "Cap" statute. Various motions to intervene were filed on behalf of 15 of the remaining 20 counties in this State. On May 12, 1978 an order was entered by the Supreme Court specially assigning the case to be heard in Bergen County. By a June 6, 1978 order the motions to intervene were granted. Complaints in substantially the same form as the original complaint were filed by the plaintiffs-intervenors, 1 and answers were filed on behalf of defendants.
Plaintiffs-intervenors and defendants moved for summary judgment on the adjourned return date of the order to show cause. On that date all parties stipulated that there were no disputed facts and requested the court to decide the legal issues based on the merits and the papers filed without the necessity of taking any testimony. It was stipulated that what was in dispute were certain costs mandated prior to the effective date of the Cap statute.
The central issue is thus whether the Cap statute also necessarily or by implication puts limitations on defendants and certain state mandated expenses imposed on the counties, authority for which preexisted or was enacted prior to the effective date of the Cap statute. Defendants argue that the Cap statute is illusory without concomitant limits on what the State can mandate.
Defendant Degnan is the State Attorney General and responsible for advising the various state departments and most state agencies in the Executive Branch of the State Government. Certain of the defendants are the heads of various Executive Department state agencies. For example, defendant Laezza is the Director of the Division of Local Government in the Department of Community Affairs, and defendant Klein is the Commissioner of the Department of Human Services. Defendant Simpson, the Acting Administrative Director of the Courts, and defendant Carfora, the Court Administrator for the County of Hudson, are employed by the Judicial Branch of the State Government.
It may be asked whether this case should properly be cognizable before the Appellate Division because certain challenges arising under the Cap statute relate to so-called formula costs for patient care and to welfare programs administered under direction of the Commissioner of the Department of Human Services and other state officials. Plaintiffs and plaintiffs-intervenors have argued, and in effect asserted, that defendants are required by N.J.S.A. 40A:4-45.1 Et seq. to limit their "demands" upon the complaining counties for appropriations to support certain governmental purposes and that no exception in the Cap statute applies.
This lawsuit actually challenges application of the Cap statute in large part as it relates to various formulas set forth in state legislation, or to mandatory provisions in statutes enacted prior to the Cap statute and which are still in effect. Under R. 2:2-3(a)(2) if this suit were primarily "to review final decisions or actions of any state administrative agency or officer * * * or to review the validity of any rule promulgated by such agency or officer * * *," the appeal or challenge would be as of right to the Appellate Division of the Superior Court. 2 However, the ruling requested before this court is essentially declaratory and for injunctive relief, involves interpretation of a statute, and is not, except insofar as it may have resulted from a decision or action by a state agency or officer under certain statutes, an appeal or review of a final decision or action of a state officer or agency. The court will, therefore, proceed to consider the matter.
Hudson County initially alleged that as a result of these increased demands under preexisting statutes, the budget for 1978 for Hudson County would exceed the limitations imposed by N.J.S.A. 40A:4-45.1 Et seq. by approximately $1,559,027. Thus, its complaint originally requested that the court direct defendants to reduce their 1978 "budget demands" to an amount within the 5% Limitation as to such items, and that the court enjoin defendants from submitting "budget demands or mandating annual expenditures" which exceed the asserted statutory limitations.
It is stipulated and conceded that on February 23, 1978 Hudson County approved its 1978 budget which provided that $57,292,782 was to be raised by the county-purpose tax in order to meet the total appropriation of $126,866,468. It is also undisputed that after appropriate adjustments provided by the Cap statute the increase in the amount raised by the county-purpose tax for Hudson County was $1,725,769, approximately 3.5% More than the amount raised by the tax in 1977 to which the 5% Limitation is applied. This increase is obviously less than allowable under the statutory limitation. Hudson County thus could have appropriated approximately an additional $1,500,000 without violating the Cap statute. The complaint of Hudson County was, therefore, amended to reflect that it was not required to and did not violate the provisions of the Cap statute for its 1978 budget. Likewise, all intervening plaintiffs adopted budgets within the limitations of the Cap statute. Indeed, the statement accompanying the budget adopted by Union County appears to reflect an air of pride that it was formulated within the framework of that statute.
It is further admitted that on April 14, 1978 defendant Director of the Division of Local Government Services, pursuant to N.J.S.A. 40A:4-79, approved the Hudson County budget and certified it was in compliance with the requirements of law. On various other dates the budgets of all plaintiffs-intervenors were likewise adopted and approved.
A preliminary question, therefore, is whether the case is now moot. All parties urge the court to enter a declaratory judgment notwithstanding adoption and approval of the 1978 county budgets because of the public importance of the issue and the necessity for a determination prior to preparing subsequent budgets, at least for the 1979 budget year and before this temporary legislation with an initial three-year lifespan, expires by its own terms. See Infra at 921. It may well be that this legislation will presently be extended for an additional three-year period in view of current legislative activity.
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