Cunningham v. Department of Civil Service

• Decision Date: 16 December 1975
• Citation: 350 A.2d 58,69 N.J. 13
• Parties: Joseph CUNNINGHAM and Wallace J. Schonwald, Plaintiffs-Appellants, v. DEPARTMENT OF CIVIL SERVICE and Department of Transportation, Defendants-Respondents.
• Court: New Jersey Supreme Court

Page 13

69 N.J. 13

350 A.2d 58

Joseph CUNNINGHAM and Wallace J. Schonwald, Plaintiffs-Appellants, v. DEPARTMENT OF CIVIL SERVICE and Department of Transportation, Defendants-Respondents.

Supreme Court of New Jersey.

Argued Sept. 8, 1975.

Decided Dec. 16, 1975.

Stephen F. Lichtenstein, Trenton, for plaintiffs-appellants (Stuart B. Dember, Trenton, on the brief, Coleman, Lichtenstein, Levy & Segal, Trenton, attorneys).

Erminie L. Conley, Deputy Atty. Gen., for defendant-respondents (Stephen Skillman, Asst. Atty. Gen., of counsel, Erminie Conley on the brief, William F. Hyland, Atty. Gen., attorney).

The opinion of the Court was delivered by

SCHREIBER, J.

Joseph Cunningham and Wallace J. Schonwald each held the Civil Service classified position of Director of Design (sometimes hereinafter referred to as DOD) in the Department of Transportation (DOT). Both were demoted to the status of Regional Highway Engineer when the position was eliminated in a reorganization of the Department in June 1971. They unsuccessfully contested the elimination of their jobs on the ground of bad faith. The challenge, which they carried through the Department of Civil Service and the Appellate Division of the Superior Court, terminated with a denial of their petition for certification to this Court. 67 N.J. 87, 335 A.2d 40 (1975).

When DOT renamed the position of Director of Administration as Director of Employee and Management Services (sometimes hereinafter referred to as DEMS) and placed it in the classified service, Cunningham and Schonwald asserted in a letter to the Commissioner of Transportation that they were entitled to a preemptive right to that position because its duties were comparable to those of the then non-existent DOD. Their claims were grounded on two statutory provisions, N.J.S.A. 11:15--9 and 10.

N.J.S.A. 11:15--9 provides that

When an employee of the State holding an office or position in the classified service * * * whose position or office has been * * * abolished, such employee shall, whenever possible, be demoted to some lesser office or position, in the same department * * *; and his name shall be placed upon a special re-employment list, which list shall take precedence over all other civil service lists.

N.J.S.A. 11:15--10 states that

Such person shall be entitled to reinstatement at any time thereafter in the same Or any comparable office or position of the same nature as that from which he was separated as soon as the opportunity arises. When an office or position of a character the same or comparable to that previously held by such person is to be filled, his name shall be certified from the special re-employment list for appointment. (Emphasis supplied).

The Commissioner of Transportation forwarded the Cunningham-Schonwald demand to the Civil Service Commission. William Druz, the Chief Examiner and Secretary of the Commission, after examining and comparing the specifications of DOD and DEMS, rejected their claim. He responded:

The application of management duties, the responsibilities, and the qualifications of the two concerned titles are substantially dissimilar.

Counsel for Cunningham and Schonwald wrote to the Commissioner and requested that 'consideration be given to an early hearing on the present appeal.' Mr. Druz replied that as Chief Examiner and Secretary he had the authority to determine 'what titles are comparable and hence, whether a special reemployment list is considered appropriate for other positions', and that the Commissioner had formally approved his decision, which 'must remain as the final administrative decision of this department.'

An appeal was taken to the Appellate Division, which affirmed the action of the Civil Service Commission on the ground that the record supported the decision. The Appellate Division also concluded that Cunningham and Schonwald were not entitled to a hearing because the Chief Examiner and Secretary of the Civil Service Commission, by only comparing the specifications for the two positions, was 'not performing a quasi-judicial function but an administrative function, ministerial in nature.'

We granted certification. 67 N.J. 87, 335 A.2d 40 (1975).

The primary issues projected are: (1) whether the appellants are entitled to a hearing and, if so, the nature of that hearing; (2) whether the decision of the administrative agency contains sufficient findings of fact; and (3) whether the conclusions of the administrative agency are supported by the record.

The Civil Service Act contains express provisions for a hearing on removal, demotion, suspension, fine or other discrimination contrary to the provisions of Subtitle 2 of the Civil Service Act. N.J.S.A. 11:5--1(d). Subtitle 2 of the Act includes N.J.S.A. 11:15--9 and 10. The plaintiffs, reiterating that the elimination of their former positions and the creation of the classified position of DEMS were part of a malevolent plan to demote them, assert that such discrimination entitles them to a hearing in accordance with the statutory mandate. The short answer to that contention is that the propriety of the abolition and demotion was the subject matter of the related case instituted by them in which the Commissioner held lengthy hearings and rejected their claims. Under these circumstances the Commission was fully justified in not reconsidering its prior determination (see Handlon v. Town of Belleville, 4 N.J. 99, 71 A.2d 624 (1950)), and the application of collateral estoppel to this claim is warranted. 2 Davis, Administrative Law Treatise § 18.03 at 559 (1958), Cf. Lubliner v. Bd. of Alcoholic Bev. Con., Paterson, 33 N.J. 428, 441--442, 165 A.2d 163 (1960).

The parties agree that, absent discrimination, no statutory provision in the Civil Service Act mandates a hearing where a person on the special reemployment list is refused reinstatement to a position alleged to be the same or comparable to the eliminated one. ¹ Though that may be so where there are disputed facts underlying the question of comparability, and the applicant has a necessary proprietary or special interest, the Commission is under an obligation to afford the affected party a hearing.

The right to a hearing before a governmental agency, whose proposed action will affect the rights, duties, powers or privileges of, and is directed at, a specific person, has long been imbedded in our jurisprudence. In State v. Newark, 25 N.J.L. 399 (Sup.Ct.1856), the City Council of Newark assessed landowners a portion of the cost of certain sewers which were being installed. An action was brought to set aside the assessments, and the court held that the resolutions fixing the assessments were void because, among other things, there had been a lack of notice and hearing before the levy. The court stated:

* * * This is contrary to all our ideas of natural justice, and contrary to the well settled legal principle, that 'whenever a court, or any person acting under legal authority, is to act judicially, or to exercise a discretion in a matter affecting the rights of another, the party thus to be affected is to have reasonable notice of the time and place when and where such act is to be done to the end that he may be heard in defense or for the protection of those rights.' This is the language of Ch. Just. Hornblower, in delivering the opinion of the court in The New Jersey Turnpike Co. v. Hall et al., 2 Harr. 337. The says that no principle or rule or action is better settled at the common law than this, * * *.' (At 411--412).

The principle of State v. Newark, that hearings may be required in proceedings before non-judicial bodies, was followed in a series of subsequent decisions. Township of Kearney v. Ballantine, 54 N.J.L. 194, 23 A. 821 (E. & A.1891); Decker v. Board of Excise, 57 N.J.L. 603, 31 A. 235 (Sup.Ct.1895); Lambert v. Rahway, 58 N.J.L. 578, 34 A. 5 (Sup.Ct.1896); Balling v. Elizabeth, 79 N.J.L. 197, 74 A. 277 (Sup.Ct.1909). Entitlement to the hearing may be ascribable to federal and state constitutional guarantees of due process (Williams v. Civil Service Commission, 66 N.J. 152, 329 A.2d 556 (1974); McFeely v. Board of Pension Com'rs, 1 N.J. 212, 62 A.2d 686 (1948)), or to the indispensability of fundamental procedural fairness (Avant v. Clifford, 67 N.J. 496, 520--521, 341 A.2d 629 (1975); Monks v. N.J. State Parole Board, 58 N.J. 238, 277 A.2d 193 (1971)).

As the administrative agency became a more widely utilized forum for governmental action, it was also recognized that, in the absence of a specific statutory or constitutional requirement, hearings before administrative agencies might not be feasible or desirable. The impracticability of holding hearings where a class or large number of persons may be affected is obvious. Bi-Metallic Investment Co. v. State Bd. of Equalization, 239 U.S. 441, 36 S.Ct. 141, 60 L.Ed. 372 (1915). Furthermore, since the legislature was not required to hold hearings and legislative matters usually involve substantial numbers, it was resolved that where the agency's action constituted 'purely a legislative function' a hearing was not required. State Bd. of Milk Control v. Newark Milk Co., 118 N.J.Eq. 504, 179 A. 116 (E. & A.1935); Jamouneau v. Harner, 16 N.J. 500, 109 A.2d 640 (1954) Cert. den. 349 U.S. 904, 75 S.Ct. 580, 99 L.Ed. 1241 (1955). Need for a hearing was to be ascertained by determining whether the administrative agency was acting in a legislative or a quasi-judicial capacity.

Finding that a certain activity is quasi-judicial or legislative presupposes an ability to recognize a judicial or legislative power, an ability which may well be lacking. C. C. Vogel, Study of State Administrative Agencies in New Jersey at 249 (1941) (prepared under the supervision of Justice Jacobs). Professor Glasser has referred to the distinction as a 'treacherous' one. 'Administrative Law,' 6 Rutgers L.Rev. 43 (1951).

Classification of the type of the proceeding as the determinant may also beg...