Maisonet v. New Jersey Dept. of Human Services, Div. of Family Development

• Decision Date: 23 May 1995
• Citation: 140 N.J. 214,657 A.2d 1209
• Parties: Laura MAISONET, Petitioner-Appellant, v. NEW JERSEY DEPARTMENT OF HUMAN SERVICES, DIVISION OF FAMILY DEVELOPMENT, Respondent-Respondent.
• Court: New Jersey Supreme Court

Page 214

140 N.J. 214

657 A.2d 1209

Laura MAISONET, Petitioner-Appellant, v. NEW JERSEY DEPARTMENT OF HUMAN SERVICES, DIVISION OF FAMILY DEVELOPMENT, Respondent-Respondent.

Supreme Court of New Jersey.

Argued Jan. 30, 1995.

Decided May 23, 1995.

Madeline L. Houston, Paterson, for appellant (John D. Atlas, Executive Director, Passaic County Legal Aid Soc., attorney; Ms. Houston and Cary L. Winslow, Garfield, on the briefs).

Peter D. Wint, Deputy Atty. Gen., for respondent (Deborah T. Poritz, Atty. Gen. of New Jersey, attorney; Joseph L. Yannotti, Asst. Atty. Gen., of counsel).

Jonathan Romberg, Newark, for amicus curiae The American Civil Liberties Union of New Jersey (Crummy, Del Deo, Dolan, Griffinger & Vecchione, attorneys; Mr. Romberg and Lawrence S. Lustberg, on the brief).

Joseph Harris David, New Brunswick, submitted a brief on behalf of amicus curiae Legal Services of New Jersey (Melville D. Miller, Jr., President, attorney; Mr. David and Mr. Miller, on the brief).

The opinion of the Court was delivered by

COLEMAN, J.

The novel issue raised in this appeal is whether the Appellate Division was compelled by the Supremacy Clause to exercise original jurisdiction over Laura Maisonet's claim for attorney's fees under the Civil Rights Attorney's Fees Awards Act of 1976, 42 U.S.C.A. § 1988 (section 1988), for an alleged violation of 42 U.S.C.A. § 1983 (section 1983) based on the State's administration of a federally funded food-stamp program. The Appellate Division declined to exercise original jurisdiction. 274 N.J.Super. 228, 643 A.2d 1038 (1994). We now affirm and establish guidelines for handling federal fee claims raised for the first time in the Appellate Division.

I

On August 15, 1990, Maisonet applied for participation in the Food Stamp Program (FSP), designed "to supplement the purchasing power of low-income households." 274 N.J.Super. at 232, 643 A.2d 1038. The FSP is "authorized by the U.S. Congress and regulated by the U.S. Department of Agriculture (USDA)." N.J.A.C. 10:87-1.2(a). "In New Jersey, the county welfare agencies ... are responsible for certifying eligible households," ibid., although "the State is ultimately responsible for ensuring that program operations conform with Federal laws and USDA regulations." N.J.A.C. 10:87-1.2(b). The "[p]olicies and procedures for the administration of the program are derived from the Food Stamp Act of 1977 (7 U.S.C. 2011-2029) and current USDA, Food and Nutrition Service ... regulations and instructions (which are uniform nationwide)." N.J.A.C. 10:87-1.3.

Maisonet stated in her application that the rent for her apartment was $400 per month. She did not indicate, however, that from August 1990 through July 1991, her cash payment for her apartment was $150 per month. That $250 monthly reduction in rent was in exchange for her performance of janitorial services for her landlord, but that compensation was not reported as income. After the Passaic County Board of Social Services (PCBSS) had become aware of Maisonet's failure to report the rent savings as income, it instituted an administrative disqualification hearing in the Office of Administrative Law pursuant to N.J.A.C. 10:87-11.1 to -11.33. PCBSS charged Maisonet with an intentional program violation pursuant to N.J.A.C. 10:87-11.5(a)1 and 2 for failing to report receipt of earned income, which had resulted in an overpayment of food stamps in the amount of $732.

The Administrative Law Judge (ALJ) who presided over the hearing relied exclusively on New Jersey regulations and concluded that the "rental allowance" provided to Maisonet was "not essentially different from ... being given cash or a check." He found Maisonet was required to report that income to PCBSS the same as any other earned income. The ALJ also concluded that Maisonet had intentionally concealed this information and, pursuant to N.J.A.C. 10:87-11.1(a), disqualified her from participation in the FSP for six months. The Director of the Division of Family Development rejected the ALJ's finding of an intentional program violation, but accepted the ALJ's conclusion that the $250 monthly rental allowance should be treated as income. Maisonet appealed the Director's final decision. See R. 2:2-3(a)(2).

The claim of a 42 U.S.C.A. § 1983 violation, made solely to collect attorney's fees under 42 U.S.C.A. § 1988, was asserted for the first time in the notice of appeal. The claim was stated as follows:

Appellant Maisonet maintains this overpayment assessment is contrary to 7 C.F.R. [s] 273.9(c). She seeks from this court reversal of respondent Reitz's final decision holding her liable for any overpayment, the enjoining of respondents from further recoupment of this amount from appellant Maisonet's monthly food stamp allotments, and the restoration of food stamps withheld under respondent Reitz's final decision.

This action is brought under authority of R. 2:2-3(a)(2) and 42 U.S.C.A. § 1983. At all relevant times respondent Reitz has acted under color of state law. Attorney['s] fees and costs are authorized pursuant to 42 U.S.C.A. § 1988 and R. 4:42-9(a)(8).

Maisonet did not file any pleadings at the administrative level apparently because the pertinent regulations do not require pleadings. See N.J.A.C. 1:1-6.1(a) (stating "[s]pecific pleading requirements are governed by the agency with subject matter jurisdiction over the case"); N.J.A.C. 10:87-11.1 (establishing procedure for administrative disqualification hearings that does not include filing of pleadings). In any event, the federal claims could not have been decided in the administrative proceedings. See Paterson Redevelopment Agency v. Schulman, 78 N.J. 378, 386-88, 396 A.2d 573, cert. denied, 444 U.S. 900, 100 S.Ct. 210, 62 L.Ed.2d 136 (1979).

The Appellate Division held that because 7 U.S.C.A. § 2014(d) and 7 C.F.R. § 273.9(c)(1)(iv)(A) exclude from income housing provided by an employer, those regulations should also be interpreted to exclude employer reductions in rent. Maisonet, supra, 274 N.J.Super. at 234-35, 643 A.2d 1038. Thus, the value of housing, whether public or employer provided, should be afforded identical treatment. Id. at 234, 643 A.2d 1038. The same reasoning was applied to employee-discounted housing. Id. at 235, 643 A.2d 1038. The Appellate Division also found that N.J.A.C. 10:87-5.9(a) 2v(2)(A) requires the same result because it is consistent with the federal regulations. Id. at 234, 643 A.2d 1038.

The Appellate Division, however, refused to exercise original jurisdiction over the claim for attorney's fees pursuant to section 1988 for an alleged violation of section 1983. In declining to exercise original jurisdiction, the court stated that "[w]e do not tarry long with appellant's attempt to convert an appeal from an administrative determination into a § 1983 and § 1988 action at the appellate level. To do so would require us to exercise our original jurisdiction pursuant to R. 2:10-5. We see no basis for doing so here." 274 N.J.Super. at 231, 643 A.2d 1038.

We granted Maisonet's petition for certification to review the propriety of the Appellate Division declining to exercise original jurisdiction. 138 N.J. 265, 649 A.2d 1286 (1994).

II

Maisonet contends that because she could not raise her sections 1983 and 1988 claims at the administrative level for lack of jurisdiction, the Supremacy Clause of the United States Constitution compelled the Appellate Division to exercise original jurisdiction over the fee claim. Amicus curiae, American Civil Liberties Union of New Jersey, asserts that "a state court overturning an agency decision in an administrative appeal is forbidden by the Supremacy Clause from declining to reach the merits of a federal statutory claim brought in the same action under § 1983 or ... § 1988." The Division of Family Development makes three responses. First, it asserts that "the mere filing of a notice of appeal from a decision of a state agency does not give rise to a federal civil rights cause of action" where the agency based its decision on state regulations exclusively. Second, it argues that Maisonet should have commenced a separate law suit in the Law Division or in the federal district court alleging sections 1983 and 1988 causes of action. Third, it contends that a decision overturning plaintiff's food-stamp disqualification does not automatically entitle her to section 1988 attorney's fees.

A.

We first address the threshold issue whether, and in what circumstances, a state court may be required to entertain sections 1983 and 1988 claims pendent to state-law claims.

A section 1983 action may be brought in state court, Martinez v. California, 444 U.S. 277, 283 n. 7, 100 S.Ct. 553, 558 n. 7, 62 L.Ed.2d 481, 488 n. 7 (1980), and the section 1988 "fee provision is part of the § 1983 remedy whether the action is brought in federal or state court." Maine v. Thiboutot, 448 U.S. 1, 11, 100 S.Ct. 2502, 2508, 65 L.Ed.2d 555, 563 (1980). The Supreme Court, however, has reserved the question whether state courts are obligated to entertain section 1983 actions. Id. at 3 n. 1, 100 S.Ct. at 2503 n. 1, 65 L.Ed.2d at 558 n. 1. New Jersey courts have entertained section 1983 actions for many years. See Endress v. Brookdale Community College, 144 N.J.Super. 109, 131-32, 364 A.2d 1080 (App.Div.1976).

Whenever an action is brought in a state court to enforce federal rights or claims, the Supremacy Clause requires that federal substantive law and policy be applied by the state court. Urban League of Greater New Brunswick v. Mayor & Council of Carteret, 115 N.J. 536, 552 n. 3, 559 A.2d 1369 (1989). The Supremacy Clause of the United States Constitution, Article VI, Clause 2, "provides that laws made in pursuance of federal constitutional authority become the 'supreme law of the land.' " Maher v. New Jersey Transit Rail Operations, Inc., 125 N.J. 455, 464, 593 A.2d 750 (1991).

If claims are brought in state courts, state rules of...