County of Morris v. Fauver

• Decision Date: 09 March 1998
• Citation: 707 A.2d 958,153 N.J. 80
• Parties: COUNTY OF MORRIS, Plaintiff-Respondent, v. William FAUVER, Commissioner of the New Jersey Department of Corrections, the New Jersey Department of Corrections and the State of New Jersey, Defendants-Appellants.
• Court: New Jersey Supreme Court

Page 80

153 N.J. 80

707 A.2d 958

COUNTY OF MORRIS, Plaintiff-Respondent, v. William FAUVER, Commissioner of the New Jersey Department of

Corrections, the New Jersey Department of

Corrections and the State of New Jersey,

Defendants-Appellants.

Supreme Court of New Jersey.

Argued Dec. 1, 1997.

Decided March 9, 1998.

Joseph L. Yannotti, Assistant Attorney General, for defendants-appellants (Peter Verniero, Attorney General of New Jersey, attorney; Mr. Yannotti and Mary C. Jacobson, Assistant Attorney General, of counsel; Andrew R. Sapolnick, Deputy Attorney General, on the briefs).

W. Randall Bush, First Assistant County Counsel, for plaintiff-respondent (Ronald Kevitz, Morris County Counsel, attorney).

Benjamin D. Leibowitz, Deputy County Counsel, for amicus curiae, County of Middlesex (Bruce J. Kaplan, Middlesex County Counsel, attorney).

The opinion of the Court was delivered by

GARIBALDI, J.

This appeal presents yet another facet of the prison overcrowding crisis in New Jersey. In County of Gloucester v. State, 132 N.J. 141, 623 A.2d 763 (1993), and Worthington v. Fauver, 88 N.J. 183, 440 A.2d 1128 (1982), we addressed the State's authority to house state prisoners in county facilities under executive orders issued under the Civil Defense and Disaster Control Act ("CDDCA" or "Disaster Control Act"), N.J.S.A. App. A:9-30 to -63. In this appeal, we address a similar issue under the County Correctional Policy Act ("CCPA"), N.J.S.A. 30:8-16.3 to -16.12. Specifically, this appeal concerns the per diem reimbursement rate due the County of Morris ("County") from the State under their CCPA contract for housing state prisoners in the County's prison facilities.

I.

A.

Commissioner's Authority to House State Prisoners in County

Facilities

On June 19, 1981, in response to the problem of prison overcrowding, which had reached "crisis dimensions" by the early 1980s, Governor Brendan Byrne issued Executive Order No. 106. Worthington, supra, 88 N.J. at 188-89, 440 A.2d 1128. That Order declared state prison overcrowding to be an emergency under the Disaster Control Act. Id. at 188, 190, 440 A.2d 1128. Under the authority of the emergency powers of that Act, the Order permitted the Commissioner of Corrections to alleviate the overcrowding problem temporarily by housing state-sentenced prisoners in county correctional facilities for the 90-day duration of the Order. Id. at 190-91, 440 A.2d 1128. That Order also directed the Commissioner to develop an appropriate program to compensate those counties holding state prisoners. Id. at 191, 440 A.2d 1128.

In Worthington, supra, this Court upheld the validity of the Governor's Orders because they had a basis in legislative authority--the Disaster Control Act--as well as a limited time span. Id. at 200-02, 440 A.2d 1128. The Court cautioned, however, that the Disaster Control Act did not permit a permanent delegation of power to the Governor to authorize the reallocation of prisoners by executive order; rather, if the Legislature wanted to change the prison housing system officially, "it could pass a statute to that effect." Id. at 203, 440 A.2d 1128.

The Legislature responded by passing the County Correctional Policy Act. The CCPA attempts to address the overcrowding crisis by establishing a "long-term, financial assistance program to provide State grants to participating counties to renovate and construct county correctional facilities so that county correctional services may be developed, implemented, operated and improved." N.J.S.A. 30:8-16.5(a). In return, the Act permits the Commissioner of the Department of Corrections ("DOC") to house state prisoners, excluding those with anticipated periods of confinement in excess of twenty-four months and those convicted of certain sexual offenses, in medium and minimum security county facilities. N.J.S.A. 30:8-16.5(b). The counties are instructed to establish a twelve member county corrections advisory board responsible for developing a comprehensive plan to provide, among other things, for the allocation of bed space for the housing of state prisoners and for the formation of "per diem reimbursement rates favorable to the State." N.J.S.A. 30:8-16.7. As noted by the Appellate Division, however, "there is no indication in the record when or if such a board was constituted in Morris County." County of Morris v. Fauver, 296 N.J.Super. 26, 30 n. 3, 685 A.2d 1342 (1996). Nevertheless, pursuant to the County Correctional Policy Act, the DOC entered into a contract for renovation and housing with the County of Morris, as well as with the following counties: Atlantic, Bergen, Camden, Cumberland, Gloucester, Hudson, Middlesex, Mercer, Monmouth, Ocean, Passaic, Somerset, and Union. ¹

Despite the passage of the CCPA and the DOC's contracts with various counties, however, the executive prison orders still remained in effect. They were extended continuously over the next twelve years by sixteen more executive orders issued by three different governors. County of Gloucester, supra, 132 N.J. at 149, 623 A.2d 763. Finally, in 1993, in County of Gloucester, supra, this Court held that prison overcrowding could no longer be classified as an "emergency" under the Disaster Control Act and thus, the line of executive orders were no longer valid. Id. at 150, 606 A.2d 843. The Court stated that the long-term overcrowding problem called for a more permanent legislative solution. Id. at 152, 606 A.2d 843.

In response to that observation by the Court, the Legislature passed P.L. 1994 c. 12, which declared once again that state prison overcrowding was an emergency and gave the Governor, for two years, independent statutory authority to issue executive orders deemed "necessary and appropriate to respond to the crowding problem." In 1996, the Legislature extended the Governor's authority in that area for an additional two years. P.L. 1996 c. 9. Pursuant to those two statutes, two more executive orders were issued allowing the DOC to house state inmates in county facilities for appropriate compensation. Executive Order No. 16 (1994); Executive Order No. 48 (1996). Thus, from the time period around 1981 or 1982 to date, the Commissioner has had the authority to house state prisoners in county facilities through the executive orders as well as under the CCPA and financial assistance contracts with the counties.

B. The Contract, Reimbursement Rates, and Actions of the Parties

In 1983, ² pursuant to the CCPA, the DOC and the County of Morris entered into the Morris County Correctional Facility Assistance Contract ("MCCFAC"). That contract provided that the County would "construct a forty bed addition and make renovations to its county correctional facility" in exchange for $2,156,676, which the Legislature had appropriated to the DOC to assist the County in meeting the construction costs of its facility. On the completion of that facility, the County was required to make available to the DOC forty cells to house forty minimum or medium security state prisoners, with certain restrictions on the identity of such prisoners.

Paragraph 11 set forth the method for computing the per diem reimbursement rates required under the CCPA as well as the forty-year term of the contract:

The Department shall pay the County a per-diem rate for housing of State prisoners in the 40 cells reserved for such prisoners in the county correctional facility. The rate shall be 75% of the average of the budgeted daily costs of housing state prisoners in the State prisons at Trenton, Rahway and Leesburg during that fiscal year. The 75 per cent per-diem rate shall remain in effect until such time as the total monies retained by the Department because of the discount equals $120,680.00. Thereafter, the County shall continue to make available to the Department a total of 40 cells for use by State prisoners, but the per-diem rate shall be 100 percent of the average daily cost of housing State prisoners in the State prisons at Trenton, Rahway and Leesburg during that fiscal year. The County shall continue to make 40 cells available to the Department for use by State prisoners for the useful life of the facility, as set forth in N.J.S.A. 40A:2-22 (forty years). At the end of this period, the Commissioner and the County shall reassess the need for continued use of the 40 cells by the Department, and may negotiate a continuation of this agreement upon such terms as are deemed appropriate.

Paragraph 12 provided that the ordinary and reasonable costs of housing the State prisoners in the county facility, including the costs of housing, facility maintenance, security, food, routine medical and dental care, prescriptions, transportation, and salaries of County personnel used to provide those services would be encompassed in the per diem rate. Furthermore, the DOC also was required to reimburse the County for the costs of all extraordinary and necessary medical, dental, surgical, psychiatric, and hospital services.

According to interrogatory answers by the Commissioner of the DOC, the County " 'began to house state inmates pursuant to the MCCFAC [the contract] in Fiscal Year 1986, beginning with the period October 1, 1985, through December 31, 1985.' " County of Morris, supra, 296 N.J.Super. at 32, 685 A.2d 1342 (alterations in original). At that time, " 'the average of the budgeted daily costs of housing state prisoners in the state prisons at Trenton [New Jersey State Prison], Rahway [East Jersey State Prison] and Leesburg [Bayside State Prison] ... was $36.51.' " Ibid. (alterations in original). For various other years, according to the Appellate Division, the average per capita costs for state prisoners, which were supposed to be the measure of payment under the contract, were the following: 1985--$36.87; 1986--$36.51; 1987--$42.74; 1988--$45.43; 1989--$48.26; 1990--$49.79; 1991--$53.13; 1992--$51.75; 1993--$56.87. Id. at 29 n. 1, 685 A.2d 1342.

Prior to the time that the DOC...