NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-3274-10T3

 A-3868-10T3

 A-3916-10T3

 A-4086-10T3

TEAMSTERS LOCAL 97, affiliated 

with the INTERNATIONAL BROTHERHOOD 

OF TEAMSTERS, and PROFESSIONAL 

FIREFIGHTERS ASSOCIATION OF NEW 

JERSEY, I.A.F.F., AFL-CIO,

Plaintiffs-Appellants,

v.

STATE OF NEW JERSEY, CHRISTOPHER J. 

CHRISTIE, as Governor of the State 

of New Jersey, THE NEW JERSEY SENATE 

AND ITS MEMBERS, STEPHEN M. SWEENEY, 

as its President and as a Representative 

of the Individual Members of the New 

Jersey Senate, THE NEW JERSEY GENERAL 

ASSEMBLY AND ITS MEMBERS, SHEILA Y. 

OLIVER, as its Speaker and as a 

Representative of the Individual 

Members of the New Jersey General 

Assembly, and ANDREW P. SIDAMON-ERISTOFF, 

Treasurer of the State of New Jersey,

Defendants-Respondents.

_________________________________________________

NEW JERSEY STATE FIREFIGHTERS' 

MUTUAL BENEVOLENT ASSOCIATION, 

NEW JERSEY STATE POLICEMAN'S 

BENEVOLENT ASSOCIATION, GLOUCESTER 

CITY FMBA LOCAL NO. 51, NORTH 

WILDWOOD FMBA LOCAL NO. 56, TRENTON 

FMBA LOCAL NO. 6, KEARNY FMBA LOCAL 

NO. 18, NEW BRUNSWICK FMBA LOCAL 

NO. 17, BELLEVILLE FMBA LOCAL NOS. 

APPROVED FOR PUBLICATION

January 31, 2014

APPELLATE DIVISION
2 A-3274-10T3

29 AND 229, SPRINGFIELD FMBA LOCAL 

57, SPRINGFIELD FMBA LOCAL 57A, 

SOUTH ORANGE PBA LOCAL NO. 12, NEPTUNE 

PBA LOCAL NO. 74, ESSEX COUNTY SHERIFF'S 

OFFICERS PBA LOCAL NO. 183, KEYPORT PBA 

LOCAL NO. 223, PASSAIC COUNTY SHERIFF'S 

OFFICERS PBA LOCAL NO. 286, RUTHERFORD PBA 

LOCAL NO. 300, PATERSON PBA LOCAL NO. 1 and 

SUPERIOR OFFICERS ASS'N WILLIAM LAVIN, ROBERT 

BROWER, and ANTHONY F. WEINERS,

Plaintiffs-Appellants,

v.

STATE OF NEW JERSEY, NEW JERSEY 

DEPARTMENT OF THE TREASURY, NEW JERSEY 

STATE HEALTH BENEFITS COMMISSION, 

ANDREW P. SIDAMON-ERISTOFF, TREASURER, 

STATE OF NEW JERSEY, individually and 

officially, NEW JERSEY STATE SENATE, 

as a body politic of the State of New 

Jersey, and NEW JERSEY STATE GENERAL 

ASSEMBLY, as a body politic of the 

State of New Jersey,

Defendants-Respondents.

_________________________________________________

NEW JERSEY EDUCATION ASSOCIATION, 

Plaintiff-Appellant,

v.

STATE OF NEW JERSEY, CHRISTOPHER J. CHRISTIE, 

as Governor of the State of New Jersey, NEW 

JERSEY DEPARTMENT OF THE TREASURY, ANDREW P. 

SIDAMON-ERISTOFF, TREASURER, STATE OF NEW 

JERSEY, individually and officially, 

NEW JERSEY STATE HEALTH BENEFITS COMMISSION, 

NEW JERSEY SCHOOL EMPLOYEES HEALTH BENEFITS 

COMMISSION, NEW JERSEY STATE SENATE, as a 

body politic of the State of New Jersey,

STEPHEN M. SWEENEY, as President and as a 

Representative of the Members of the New 

Jersey State Senate, NEW JERSEY STATE GENERAL 
3 A-3274-10T3

ASSEMBLY, as a body politic of the State of 

New Jersey, SHEILA Y. OLIVER, as its Speaker 

and Representative of the Members of the 

New Jersey General Assembly, 

Defendants-Respondents.

_________________________________________________

NEW JERSEY FRATERNAL ORDER OF POLICE,

Plaintiff,

v.

STATE OF NEW JERSEY, NEW JERSEY DEPARTMENT 

OF THE TREASURY, NEW JERSEY STATE HEALTH 

BENEFITS COMMISSION, ANDREW P. SIDAMON-ERISTOFF, 

TREASURER, STATE OF NEW JERSEY, individually and 

officially, NEW JERSEY STATE SENATE, as a body 

politic of the State of New Jersey, NEW JERSEY 

STATE GENERAL ASSEMBLY, as a body politic of 

the State of New Jersey,

Defendants.

_________________________________________________

KEARNY FIREMEN'S MUTUAL BENEVOLENT 

ASSOCIATION, LOCAL NO. 18, 

Plaintiff,

v.

TOWN OF KEARNY,

Defendant.

_________________________________________________

BELLEVILLE FIREMEN'S MUTUAL BENEVOLENT 

ASSOCIATION, LOCAL NOS. 29 & 229, 

Plaintiffs,

v.
4 A-3274-10T3

TOWNSHIP OF BELLEVILLE,

Defendant.

_________________________________________________ 

Argued February 27, 2013 - Decided

Before Judges Sapp-Peterson, Nugent and Haas.

On appeal from the Superior Court of New 

Jersey, Law Division, Mercer County, Docket 

Nos. L-1004-10, C-31-10, C-32-10, L-1291-10, 

L-2287-10, and L-2312-10.

James M. Mets argued the cause for 

appellants Teamsters Local 97 and 

Professional Firefighters Association of New 

Jersey (Mets Schiro & McGovern, LLP, 

attorneys; Mr. Mets, of counsel and on the 

brief; Brian J. Manetta, on the brief).

David I. Fox argued the cause for appellants 

New Jersey State Firefighters' Mutual 

Benevolent Association, its locals and 

members (Fox and Fox, LLP, attorneys; Mr. 

Fox, Craig S. Gumpel, and Jessica S. 

Swenson, of counsel and on the brief). 

Paul L. Kleinbaum argued the cause for 

appellants New Jersey State Policemen's 

Benevolent Association (Zazzali Fagella 

Nowak Kleinbaum & Friedman, attorneys; Mr. 

Kleinbaum, of counsel and on the brief; 

Edward M. Suarez, Jr., on the brief). 

Richard A. Friedman argued the cause for 

appellant New Jersey Education Association 

(Zazzali Fagella Nowak Kleinbaum & Friedman, 

attorneys; Mr. Friedman, of counsel and on 

the brief; Edward M. Suarez, Jr., on the 

brief). 

Jean P. Reilly, Deputy Attorney General, 

argued the cause for respondents State of 

New Jersey, Governor Christopher J. 

Christie, and Treasurer Andrew P. SidamonEristoff (Jeffrey S. Chiesa, Attorney 

January 31, 2014
5 A-3274-10T3

General, attorney; Robert T. Lougy,

Assistant Attorney General, of counsel; 

Natalia T. Chan, Deputy Attorney General, on 

the brief). 

Leon J. Sokol argued the cause for 

respondents New Jersey Senate, General 

Assembly, Stephen M. Sweeney, and Sheila Y. 

Oliver (Sokol, Behot & Fiorenzo, attorneys; 

Mr. Sokol, of counsel; Steven Siegel, on the 

brief).

This opinion of the court was delivered by 

NUGENT, J.A.D.

The issues in these consolidated appeals involve public 

employees of the State, its political subdivisions, and their 

agencies. As compensation for their services, many public 

employees receive, among other benefits, health care insurance 

and pensions. To the extent the employees are required to 

contribute toward their benefits, their disposable income is 

reduced. Yet, the money that funds employee benefits is not 

unlimited. The State's officials are charged with the profound 

responsibility not only of ensuring that the health care and 

pension systems remain fiscally sound, but also that the State 

remains fiscally strong and that the burden on the State's 

taxpayers does not become intolerable. The interests of public 

employees and their representatives sometimes clash with the 

obligations of State government. Such is the case in this 

appeal. 
6 A-3274-10T3

Plaintiffs, who represent state and local public employees 

in collective negotiations with public employers, challenge the 

constitutionality of three laws: L. 2010, c. 1 (Chapter 1), 

which made changes to State-administered retirement systems; L.

2010, c. 2 (Chapter 2), which made changes to eligibility 

requirements for and benefits provided through the State Health 

Benefits Program (SHBP) and School Employees' Health Benefits 

Program (SEHBP); and L. 2010, c. 3 (Chapter 3), which made 

changes to other public employee benefits. The trial court 

dismissed plaintiffs' consolidated complaints for failure to 

state a claim. 

In these consolidated appeals, plaintiffs argue that the 

trial court misapplied the standard for evaluating a motion to 

dismiss a complaint under Rule 4:6-2(e) for failure to state a 

claim upon which relief can be granted. Plaintiffs also argue 

that the trial court erred when it concluded that Chapters 1, 2, 

and 3 did not violate either the State or Federal Constitution. 

Having considered plaintiffs' arguments in light of the record 

and controlling law, we conclude that the trial court properly 

construed and applied Rule 4:6-2(e) when it dismissed 

plaintiffs' complaints. We further conclude that plaintiffs 

have not carried their heavy burden of demonstrating that the 

laws are unconstitutional. Accordingly, we affirm. 
7 A-3274-10T3

I.

The plaintiffs in these consolidated appeals are Teamsters 

Local 97 (Teamsters); the Professional Firefighters Association 

of New Jersey (PFANJ); the New Jersey State Firefighters' Mutual 

Benevolent Association (FMBA) and affiliated locals; the New Jersey 

State Policeman's Benevolent Association (PBA) and affiliated

locals; and the New Jersey Education Association (NJEA). New 

Jersey Fraternal Order of Police, Kearny Firemen's Mutual 

Benevolent Association, and Belleville Firemen's Mutual Benevolent 

Association Local Nos. 29 and 229, parties to the actions that 

were consolidated in the trial court, have not filed separate 

appeals. Defendants are the State of New Jersey, Governor 

Christopher J. Christie, the New Jersey Department of the Treasury 

and State Treasurer Andrew P. Sidamon-Eristoff, the State Health 

Benefits Commission (SHBC), and the School Employees Health 

Benefits Commission (SEHBC) (collectively, the Executive 

Defendants); the State Senate and its President, Stephen M. 

Sweeney, and the State General Assembly and its Speaker, Sheila 

Y. Oliver (collectively, the Legislative Defendants). 

Plaintiffs seek to have Chapters 1, 2, and 3 declared void 

as unconstitutional. Because courts assessing constitutional 

challenges to state legislation must consider, among other 

factors, the governmental interests furthered by the 
8 A-3274-10T3

legislation, we begin our analysis with the legislative history 

of Chapters 1, 2, and 3. We also review the legislative history 

of L. 2011, c. 78, which has superseded certain sections of 

Chapter 2. 

On February 8, 2010, the Legislature introduced Senate Bill 

Numbers 2, 3, and 4. S. 2, 214th Leg. (N.J. 2010); S. 3, 214th 

Leg. (N.J. 2010); S. 4, 214th Leg. (N.J. 2010). The legislation 

was "designed to improve the fiscal strength of State and local 

governments, reduce taxpayer burdens, and ensure the health and 

pension systems remain viable for current and future employees." 

Commc'ns Workers of Am. v. State of N.J., Dept. of Treasury,

421 N.J. Super. 75, 83 (Law Div. 2011).

The three Senate bills implemented some of the 

recommendations of a Special Session Joint Legislative Committee 

on Public Employee Benefits Reform (Special Joint Committee),

while leaving other recommendations to collective negotiations. 

See Special Session Joint Legislative Comm. on Pub. Emp. 

Benefits Reform, Final Report (2006), available at http://

www.njleg.state.nj.us/propertyTaxSession/JCPE_final_report.pdf. 

The Special Joint Committee was created pursuant to a Concurrent 

Resolution that declared "[t]his State's high property taxes are 

a matter of great concern to the people of New Jersey." Assemb. 

Con. Res. 3, 212th Leg. (N.J. 2006). The resolution created 

four legislative committees, including one on public employee 
9 A-3274-10T3

benefits, tasked with developing proposals to reduce property 

taxes. N.J. Ass'n of Sch. Adm'rs v. Schundler, 211 N.J. 535, 

540 (2012). The Special Joint Committee was specifically 

"charged with identifying proposals that will terminate abuses 

of the pension systems and control the cost of providing public 

employee retirement health care and other benefits." Final 

Report, supra, at 1. 

In its final report, the Special Joint Committee found that 

New Jersey's retirement systems had an $18 billion unfunded 

liability. Ibid. SHBP expenditures, which then totaled $3.6 

billion annually, had risen by over 150% in the previous five 

years and were expected to double by 2010. Ibid. "State and 

local governments will soon have to recognize the long-term 

implications of these employee health care benefits on their 

financial statements . . . ." Ibid. The Special Joint 

Committee found that for the benefit of taxpayers, public 

employees, retirees, and employers, measures to ensure the 

fiscal stability of the retirement system, and measures to 

control health care costs, needed to be implemented. Id. at 2. 

The Special Joint Committee recommended forty-one reforms 

to public employee pensions, health care benefits, and other 

employee benefits. Id. at 2-5. The recommendations identified 

"long term savings through wide-ranging reforms while 

maintaining the essential components of a competitive system of 
10 A-3274-10T3

pensions and benefits[.]" Id. at 2. With regard to health care 

costs, the Special Joint Committee's investigation of 

health benefits issues revealed a system 

plagued by the skyrocketing costs of health 

care that have dramatically increased the 

cost of health benefits for both current and 

retired public employees. The investigation 

also found that New Jersey public employees 

contribute less toward their health benefit 

costs than public employees of other states. 

The Joint Committee recommends that all 

employees share in the cost of their health 

benefits at some level and that local 

governments be accorded increased 

flexibility when negotiating cost sharing 

with local employees.

[Id. at 57.]

The Special Joint Committee suggested, under 

Recommendations 22 and 23, that the Legislature require all active 

public employees and future retirees "to pay some portion of the 

cost of health care insurance premiums," id. at 4, but deferred 

to the various public employers and employee 

representatives to determine the appropriate 

level of premium sharing through collective 

bargaining.

. . . The Benefits Review Task Force 

suggested that employees carry a share of 5% 

to 10%. In order to recognize differences 

in ability to pay and to provide appropriate 

flexibility in negotiations, this could be 

achieved by mandating a certain overall 

percentage employee share, with the 

distribution of that share among income 

groups to be subject to collective 

bargaining.

[Id. at 115.]
11 A-3274-10T3

Recommendation 25 suggested that the Legislature "[r]equire

that SHBP benefits changes negotiated by State be applied to

local governments."1 Id. at 4. The Special Joint Committee

recommend[ed] that legislation be enacted to 

ensure that basic changes made in the 

provisions of SHBP benefits to State 

employees, such as the amount of copayments 

for office visits and prescription drugs, be 

applicable at the same time to all 

individuals covered by SHBP.

The Joint Committee believes that it is 

important that SHBP benefits changes 

negotiated by the State with its employees 

be applicable to employees of local 

employers not only to reduce administrative 

expenses for all through conformity but also 

to extend to those local employers the same 

cost savings enjoyed by the State. The 

. . . Committee believes that it is 

important to ensure consistency in health 

benefit coverage and cost for all public 

employees.

[Id. at 121-22.]

With regard to other benefits, Recommendation 36 suggested that 

the Legislature "[l]imit sick leave compensation payable upon 

retirement to $15,000," and Recommendation 37 suggested a 

limitation on the accumulation of vacation leave. Id. at 5. 

On March 22, 2010, Senate Bill Numbers 2, 3, and 4 were 

signed into law (Chapters 1, 2, and 3). They became effective 

on May 21, 2010. Chapter 1 made reforms to pension systems, 

 

1 SHBP is a multiple-option program that offers health benefits 

coverage through a variety of plans and managed care programs. 

Final Report, supra, at 121. 
12 A-3274-10T3

Chapter 2 made reforms to health benefits programs, and Chapter 

3 made reforms to payments for employee benefits, including 

accumulated sick leave and vacation time. 

The following sections of Chapters 1, 2, and 3 are central 

to this appeal. Chapter 1, Section 22 (codified at N.J.S.A.

43:16A-1) changed the definition of "final compensation" used in 

calculating retirement benefits for persons who became members 

of the Police and Fireman's Retirement System (PFRS) after the 

law's effective date. Instead of defining "final compensation" 

for such new members as compensation received in the last twelve 

months of creditable service – the definition for members as of 

the effective date – the law changed the meaning of "final 

compensation" for such new members to "the average annual 

compensation for service for which contributions are made during 

any three fiscal years of membership providing the largest 

possible benefit to the member or the member's beneficiary." 

The Department of the Treasury estimated that Chapter 1 would 

reduce the required contribution to the State-administered 

retirement systems for State and local employers "by $13.2 

million in State FY 2013, $25.3 million in FY 2014 and $40.9 

million in FY 2015." Fiscal Note to S. 2 (June 3, 2010). FMBA 

is the only plaintiff who has argued on appeal that those 

provisions of Chapter 1 are unconstitutional, though other 

plaintiffs have joined in FMBA's argument. 
13 A-3274-10T3

Chapter 2 made changes to the SHBP, as well as to the 

SEHBP, concerning eligibility, cost sharing, choice of plan, 

application of benefit changes, waiver of coverage, and multiple 

coverage. Section 1 (codified in relevant part at N.J.S.A.

52:14-17.28b(c)(2)) required participating SHBP employees to 

contribute toward the cost of health benefits coverage: 

Commencing on the effective date of 

P.L.2010, c. 2 and upon the expiration of 

any applicable binding collective 

negotiations agreement in force on that 

effective date, the amount of the 

contribution required pursuant to paragraph 

(1) of this subsection by State employees 

and employees of an independent State 

authority, board, commission, corporation, 

agency, or organization for whom there is a 

majority representative for collective 

negotiations purposes shall be 1.5% of base 

salary, notwithstanding any other amount 

that may be required additionally pursuant 

to this paragraph by means of a binding 

collective negotiations agreement.

Section 1 (codified in relevant part at N.J.S.A. 52:14-

17.28b(d)) also required retirees to contribute an amount equal 

to "1.5% of the retiree's monthly retirement allowance," if the 

retirees became "a member of a State or locally-administered 

retirement system on or after the effective date of P.L.2010, c.

2[.]" Section 6 (codified in relevant part at N.J.S.A. 52:14-

17.46.9(b)) required the same contribution of SEHBP employees, 

"[c]ommencing on the effective date of P.L.2010, c. 2 and upon 
14 A-3274-10T3

the expiration of any applicable binding collective negotiations 

agreement in force on that effective date[.]" 

The State Department of the Treasury, Division of Pensions 

and Benefits (DPB) estimated that contributions by active and 

retired public employees (the 1.5% contribution) under Chapter 2

toward the cost of health care benefits would "result in a 

savings to those entities and boards of $314 million in State 

Fiscal Year 2011, $324 million in Fiscal Year 2012, and $333 

million in Fiscal Year 2013." Fiscal Note to S. 3 (March 1, 

2010). 

Chapter 2, Section 8 (amending N.J.S.A. 52:14-17.36(b)) 

(the Section 8 Applicability Provision), made those changes in 

health care benefits included in collective negotiations 

agreements between the State and its employees applicable to 

other public employers and employees: 

All changes in the provision of health care 

benefits through the program that are 

included in collective negotiations 

agreements between the State and its 

employees entered into on or after the 

effective date of P.L.2010, c. 2 shall be 

made applicable by the commission to 

participating employers and their employees 

at the same time and in the same manner as 

to State employees. This subsection shall 

be applicable to the [SHBP] . . . and to the 

[SEHBP] . . . to the extent not inconsistent

with the provisions of . . . P.L.2007, c.

103 (C.52:14-17.46.1 et seq.).

 
15 A-3274-10T3

Chapter 2, Section 11 (amending N.J.S.A. 52:14-17.31a(c)),

provides that in consideration for a waiver of health insurance, 

an employer may pay to the employee an amount not to exceed 25% 

of the cost saved by the employer, or $5000, whichever is less. 

To aid public employers in interpreting Chapter 2, the DPB 

issued a document entitled "Frequently Asked Questions Regarding 

Chapter 2, P.L.2010 and Changes to Public Employee Health 

Benefits" (DPB's FAQs). The questions and answers included the 

following: 

2. Q. Is the 1.5% of base pay contribution 

in addition to previously negotiated premium 

contributions?

 A. No. The 1.5% contribution is 

intended to be a floor, or minimum, 

contribution that an employee will make 

toward medical and/or prescription drug plan 

coverage. If another contribution 

arrangement has been negotiated, the higher 

of the two will prevail. All employees must 

contribute an amount equivalent to at least 

1.5% of the employee's base pay. . . .

 . . . .

4. Q. On what salary is the calculation of 

the 1.5% contribution based?

 A. The calculation is based on the 

employee's base contractual salary. In most 

instances, that means the salary on which 

pension contributions are based. However, 

for employees hired after July of 2007 for 

whom pensionable salary is limited to the 

salary on which Social Security 

contributions are based, the employee's 

total base salary would be used. As an 

employee receives salary increases during 
16 A-3274-10T3

the year, the amount of contribution would 

need to be adjusted accordingly.

 . . . .

6. Q. Our union contract expired last year 

and has not been settled. Will these 

employees be required to contribute the 1.5% 

contribution after May 21st [2010]?

 A. If the contract is not ratified by 

May 21st, those employees will be required 

to pay the 1.5% contribution for health 

coverage. If the contract is ratified 

before May 21st, those employees will not be 

required to pay the 1.5% contribution until 

the expiration of the contract.

 . . . .

10. Q. Will non-SHBP/SEHBP participating 

employers be required to follow the 1.5% 

minimum contribution?

 A. Yes. Chapter 2 stipulates that 

employees of non-participating employers 

must pay a minimum of 1.5% of annual base 

salary as a health benefits contribution.

 . . . .

17. Q. Will employees who waive coverage 

still have to pay 1.5% towards health 

benefit costs as all local employees and 

then receive waiver incentive based on the 

reduced employer cost?

 A. No. An employee who waives coverage 

is not required to pay the 1.5% 

contribution.

On May 18, 2010, the Department of Community Affairs, 

Division of Local Government Services (DLGS), issued Local 

Finance Notice 2010-12 (LFN 2010-12), based on the materials 
17 A-3274-10T3

issued by the DPB, which also provided guidance for complying

with Chapter 2 for both SHBP and non-SHBP local units, and 

included answers to "Frequently Asked Questions."

Plaintiffs assert that the foregoing provisions of Chapter 

2, particularly those that require the 1.5% contribution and 

those that bind local employees to changes in health care 

benefits negotiated by State employees, violate various rights 

guaranteed by the State and Federal Constitutions. 

Chapter 3 made 

various changes concerning payments to 

public employees for unused sick leave, sick 

leave for injury while in State service, and 

accidental and ordinary disability 

retirement for members of the Public 

Employees’ Retirement System (PERS) and the 

Teachers Pension and Annuity Fund (TPAF). 

The bill also limits to one year the amount 

of vacation leave that certain local 

government and school district officers and 

employees would be permitted to carry 

forward, under most circumstances.

[S. State Gov't Wagering, Tourism & 

Historical Preservation Comm., Statement to 

S. 4 (Feb. 18, 2010).] 

FMBA challenges as unconstitutional the provisions of 

Chapter 3, Sections 1 and 2 (codified at N.J.S.A. 11A:6-19.2 and 

N.J.S.A. 40A:9-10.4), that prohibit the State's political 

subdivisions, agencies, and authorities from paying supplemental 

compensation to officers or employees for accumulated unused 

sick leave in an amount in excess of $15,000. FMBA also 
18 A-3274-10T3

challenges the provisions of Section 4 (codified at N.J.S.A.

40A:9-10.5) that prohibit officers and employees "of a political 

subdivision of the State, or an agency, authority, or 

instrumentality thereof, that has not adopted the provisions of 

Title 11A of the New Jersey statutes," from carrying over 

accrued vacation leave beyond the next succeeding year.

On June 28, 2011, after the trial court dismissed 

plaintiffs' complaints, the Legislature enacted the Pension and 

Health Care Benefits Act, L. 2011, c. 78 (Chapter 78) (codified 

in relevant part at N.J.S.A. 52:14-17.28c to -17.28d, N.J.S.A.

18A:16-17.1, and N.J.S.A. 40A:10-21.1), which requires all 

public employees to pay a sliding scale percentage of the cost 

of health benefits for themselves and their dependents, but 

maintains a "floor" for employee contributions of 1.5% of base 

salary. S. Budget & Appropriations Comm., Statement to S. 2937

(June 16, 2011). See DePascale v. State, 211 N.J. 40, 45 (2012)

(addressing challenge to Chapter 78 as applicable to justices 

and judges). 

Section 45 (codified in relevant part at N.J.S.A. 52:14-

17.27(b)) established the SHBP Design Committee and vested it 

with

the responsibility for and authority over 

the various plans and components of those 

plans, including for medical benefits, 

prescription benefits, dental, vision, and 

any other healthcare benefits, offered and 
19 A-3274-10T3

administered by the program. The committee 

shall have the authority to create, modify, 

or terminate any plan or component, at its 

sole discretion. Any reference in law to 

the State Health Benefits Commission in the 

context of the creation, modification, or 

termination of a plan or plan component 

shall be deemed to apply to the committee.

Similarly, Section 46 (codified in relevant part at 

N.J.S.A. 52:14-17.46.3(e)) established a SEHBP Design Committee 

and vested it with

the responsibility for and authority over 

the various plans and components of those 

plans, including for medical benefits, 

prescription benefits, dental, vision, and 

any other healthcare benefits, offered and 

administered by the program. The committee 

shall have the authority to create, modify, 

or terminate any plan or component, at its 

sole discretion. Any reference in law to 

the School Employees' Health Benefits 

Commission in the context of the creation, 

modification, or termination of a plan or 

plan component shall be deemed to apply to 

the committee. 

Section 47 (codified in relevant part at N.J.S.A. 52:14-

17.29(J)) provides that "[n]otwithstanding any other provision 

of law to the contrary the [SHBP Design Committee] shall have 

the sole discretion to set the amounts for maximums, co-pays, 

deductibles, and other such participant costs for all plans in 

the program." Section 49 (codified in relevant part at N.J.S.A.

52:14-17.46.7) provides the SEHBP Design Committee with 

identical discretion.
20 A-3274-10T3

The State argues that Chapter 78 supersedes and renders 

moot plaintiffs' constitutional challenges to the Section 8 

Applicability Provision. 

As noted previously, the Governor signed Chapters 1, 2, and 

3 into law on March 22, 2010. The following month, plaintiffs 

filed complaints seeking injunctive relief and judgments 

declaring the laws unconstitutional and unenforceable. Several

plaintiffs later amended their complaints. Judge Linda R. 

Feinberg denied plaintiffs' motions for injunctive relief and 

also denied motions by the Senate and Assembly to dismiss the 

complaints against them. 

Thereafter, defendants moved to dismiss the consolidated 

complaints for failure to state a claim upon which relief can be 

granted. FMBA cross-moved for summary judgment. Following 

argument, Judge Feinberg issued a comprehensive written opinion 

granting defendants' motions and dismissing the complaints. 

This appeal followed. 

II.

We first address plaintiffs' contentions that the court 

misapplied the standard of review for dismissing a complaint for 

failure to state a claim upon which relief can be granted. 

Plaintiffs argue that the court misapplied the applicable 

standard by improperly considering material outside of the 

pleadings. According to plaintiffs, because the court 
21 A-3274-10T3

considered external materials, it should have treated the 

motions as summary judgment motions and given the parties an 

opportunity to take discovery. Plaintiffs also argue that 

instead of evaluating the complaints to determine whether they 

suggested a cause of action, the court made factual or 

substantive determinations. 

The standard a trial court must apply when considering a 

Rule 4:6-2(e) motion to dismiss a complaint for failure to state 

a claim upon which relief can be granted is "whether a cause of 

action is 'suggested' by the facts." Printing Mart-Morristown 

v. Sharp Elecs. Corp., 116 N.J. 739, 746 (1989). "In evaluating 

motions to dismiss, courts consider 'allegations in the 

complaint, exhibits attached to the complaint, matters of public 

record, and documents that form the basis of a claim.'"

Banco Popular N. Am. v. Gandi, 184 N.J. 161, 183 (2005) (quoting 

Lum v. Bank of Am., 361 F.3d 217, 221 n.3 (3d Cir.), cert. 

denied, 543 U.S. 918, 125 S. Ct. 271, 160 L. Ed. 2d 203 (2004)). 

Our Supreme Court has explained that "[i]t is the existence of 

the fundament of a cause of action in those documents that is 

pivotal[.]" Ibid. 

A motion to dismiss a complaint for failure to state a 

claim "may not be denied based on the possibility that discovery 

may establish the requisite claim; rather, the legal requisites 

for plaintiffs' claim must be apparent from the complaint 
22 A-3274-10T3

itself." Edwards v. Prudential Prop. & Cas. Co., 357 N.J. 

Super. 196, 202 (App. Div.), certif. denied, 176 N.J. 278 

(2003). For that reason, our courts have not hesitated to 

dismiss complaints with prejudice when a constitutional 

challenge fails to state a claim. See J.D. ex rel. ScipioDerrick v. Davy, 415 N.J. Super. 375, 397 (App. Div. 2010).

When we review a trial court's decision to dismiss a 

complaint under Rule 4:6-2(e), we apply the same standard but 

our review is de novo. Frederick v. Smith, 416 N.J. Super. 594, 

597 (App. Div. 2010), certif. denied, 205 N.J. 317 (2011). We 

conclude from our de novo review of the record on appeal that 

the trial court correctly stated and applied the standard of 

review for evaluating a Rule 4:6-2(e) motion. Contrary to 

plaintiffs' arguments, the court did not engage in factfinding 

and did not improperly consider materials outside of the 

pleadings. Plaintiffs' arguments are, for the most part, 

unsupported by the record. Their arguments also overlook our 

Supreme Court's pronouncement about what materials a trial court 

may consider when evaluating a motion to dismiss a complaint for 

failure to state a claim. 

In her opinion, Judge Feinberg stated explicitly that she 

had considered "the pleadings, the relevant statutes, 

regulations and cases cited by the parties." She noted that 

FMBA had included in its "application for injunctive relief . . . 
23 A-3274-10T3

a large notebook consisting of approximately four hundred 

pages." The judge also noted that FMBA and PBA had submitted 

certifications. Acknowledging that she had "reviewed the 

certifications in reaching a decision whether to grant 

injunctive relief," Judge Feinberg stated that "neither the 

certifications nor material in the notebook has been considered 

in deciding the motion to dismiss." 

Plaintiffs identify only three sources of information they 

claim the judge improperly considered: the Special Joint 

Committee's final report, the DPB FAQs, and a DPB website. But 

FMBA and PBA referred at length in their complaints to the 

Special Joint Committee's final report and to DPB's FAQs, and no 

plaintiff has alleged that the DPB website contained any 

materials that were both relied upon by the trial court and 

significantly different in content from the content of the 

Special Joint Committee report and DPB FAQs. Because FMBA and 

PBA referred to the Special Joint Committee report and DPB FAQs 

in their complaint, the court properly considered them under 

Rule 4:6-2(e). See In re Burlington Coat Factory Sec. Litig., 

114 F.3d 1410, 1426 (3d. Cir. 1997); E. Dickerson & Son, Inc. v. 

Ernst & Young, LLP, 361 N.J. Super. 362, 365 n.1 (App. Div. 

2003), aff'd, 179 N.J. 500 (2004); N.J. Sports Prods., Inc. v. 

Bobby Bostick Promotions, LLC, 405 N.J. Super. 173, 178 (Ch. 

Div. 2007).
24 A-3274-10T3

Aside from FMBA's and PBA's discussions in their complaints 

of materials they now suggest the court should not have 

considered, no plaintiff disputes that the Special Joint 

Committee report and DPB FAQs are matters of public record. See

Hall v. Virginia, 385 F.3d 421, 424 n.3 (4th Cir. 2004) (noting 

that the court can consider publicly available statistics on 

Virginia Division of Legislative Services' official website), 

cert. denied, 544 U.S. 961, 125 S. Ct. 1725, 161 L. Ed. 2d 602

(2005). Plaintiffs' arguments overlook our Supreme Court's 

explicit statement that courts evaluating motions to dismiss 

under Rule 4:6-2(e) may consider, in addition to the complaint 

and its attachments, matters of public record. Banco Popular N. 

Am., supra, 184 N.J. at 183. Accordingly, we reject plaintiffs' 

argument that the trial court misapplied the applicable standard 

when it granted defendants' Rule 4:6-2(e) motions. 

III.

Plaintiffs next argue that defendants' motions should have 

been denied, and FMBA's cross-motion for summary judgment 

granted, because Chapters 1, 2, and 3 are unconstitutional, and 

their complaints so stated. While addressing those arguments, 

we bear in mind the following fundamental principles. Statutes 

are presumed to be constitutional. DePascale, supra, 211 N.J.

at 63. This is because 
25 A-3274-10T3

[i]n our tripartite form of government 

[judicial review of legislation] has always 

been exercised with extreme self-restraint, 

and with a deep awareness that the 

challenged enactment represents the 

considered action of a body composed of 

popularly elected representatives. As a 

result, judicial decisions from the time of 

Chief Justice Marshall reveal an unswerving 

acceptance of the principle that every 

possible presumption favors the validity of 

an act of the Legislature. . . . [A]ll the 

relevant New Jersey cases display faithful 

judicial deference to the will of the 

lawmakers whenever reasonable men might 

differ as to whether the means devised by 

the Legislature to serve a public purpose 

conform to the Constitution.

[N.J. Sports & Exposition Auth. v. McCrane, 

61 N.J. 1, 8 (citation omitted), appeal 

dismissed sub nom., Borough of E. Rutherford 

v. N.J. Sports & Exposition Auth., 409 U.S.

943, 93 S. Ct. 270, 34 L. Ed. 2d 215 

(1972).]

For those reasons, a statute "will not be declared void 

unless it is clearly repugnant to the Constitution." Trautmann

ex rel. Trautmann v. Christie, 211 N.J. 300, 307 (2012) (quoting 

Newark Superior Officers Ass'n v. City of Newark, 98 N.J. 212, 

222 (1985)). A party seeking to rebut "[t]he strong presumption 

of constitutionality that attaches to a statute . . . [must] 

show[] that the statute's 'repugnancy to the Constitution is 

clear beyond a reasonable doubt.'" Hamilton Amusement Ctr. v. 

Verniero, 156 N.J. 254, 285 (1998) (quoting Harvey v. Bd. of 

Chosen Freeholders, 30 N.J. 381, 388 (1959)), cert. denied, 527 
26 A-3274-10T3

U.S. 1021, 119 S. Ct. 2365, 155 L. Ed. 2d 770 (1999). 

Plaintiffs have failed to carry that heavy burden. 

A.

Plaintiffs first contend that the court erred in dismissing

the counts in their complaints alleging that Chapter 2 violates 

Article I, Paragraph 19 of the New Jersey Constitution. That 

provision states as to public employees: "Persons in public 

employment shall have the right to organize, present to and make 

known to the State, or any of its political subdivisions or 

agencies, their grievances and proposals through representatives 

of their own choosing." 

Plaintiffs chiefly challenge the 1.5% contribution required 

by Chapter 2, and the Section 8 Applicability Provision. In 

addition, FMBA argues that Chapter 3, Sections 1, 2, and 4, 

violate Article I, Paragraph 19. Plaintiffs contend that the 

trial court erred by dismissing these claims under Rule 4:6-

2(e).

The State Executive Defendants assert that Chapter 2 

respects the rights guaranteed to public employees by Article I, 

Paragraph 19 of the State Constitution, and that the trial court 

did not err by dismissing plaintiffs' challenges to Chapter 2 

under Rule 4:6-2(e) because their challenges presented legal, 

not factual, issues. The State Executive Defendants also 

contend that plaintiffs' argument that Chapter 2 violates 
27 A-3274-10T3

Article I, Paragraph 19 of the State Constitution is moot 

because it has been superseded by Chapter 78. Further, the 

State Executive Defendants contend that all of plaintiffs' 

arguments that the Section 8 Applicability Provision violates 

various federal and state constitutional protections are moot 

because the Section 8 Applicability Provision has been 

superseded by Chapter 78. 

We agree with the State Executive Defendants that Chapter 

78 renders plaintiffs' challenges to the Section 8 Applicability 

Provision moot. With the enactment of Chapter 78, the 

Legislature has vested the Design Committees with the "sole 

discretion" to create, modify, or terminate any plan or 

component, as well as to set amounts for maximums, co-pays, 

deductibles, and other participant costs for all plans offered. 

The "sole discretion" of the Design Committees to create, 

modify, or terminate any plan includes plans for "medical 

benefits, prescription benefits, dental, vision, and any other 

healthcare benefits." L. 2011, c. 78, §§ 45 and 46.

In view of the Legislature's vesting in the Design 

Committees the sole discretion to make changes in the respective 

healthcare plans, such changes are no longer effectuated through 

collective negotiations between the State and its employees. 

The provisions of Chapter 78 have superseded the Section 8 

Applicability Provision. "[C]ourts should not reach 
28 A-3274-10T3

constitutional questions unless necessary to the disposition of 

the litigation." O'Keefe v. Passaic Valley Water Comm'n, 132 

N.J. 234, 240 (1993). Because they are moot, we decline to 

address plaintiffs' challenges to the Section 8 Applicability 

Provision. 

We turn to plaintiffs' arguments that the provisions of 

Chapter 2 requiring the 1.5% contribution, as well as the 

provisions of Chapter 3 limiting both supplemental compensation 

for accumulated sick time and the carrying-forward of vacation 

time, violate the constitutional right of public employees to 

organize and to present their grievances and proposals through 

their chosen representatives. We are unpersuaded by plaintiffs' 

arguments. 

To implement the constitutional right of public employees 

to organize and present grievances and proposals, the 

Legislature enacted the New Jersey Employer-Employee Relations 

Act (EERA), N.J.S.A. 34:13A-1 to -43. The EERA defines the 

scope of public employees' rights of collective negotiation. In 

re Local 195, IFPTE, AFL-CIO, 88 N.J. 393, 401 (1982). N.J.S.A.

34:13A-5.3 provides in part that

Representatives designated or selected by 

public employees for the purposes of 

collective negotiation by the majority of 

the employees in a unit . . . shall be the 

exclusive representatives for collective 

negotiation concerning the terms and 
29 A-3274-10T3

conditions of employment of the employees in 

such unit. . . . 

The scope of collective negotiations by public sector 

employees concerning "the terms and conditions of employment" is 

not, however, unlimited. See Lullo v. Int'l Ass'n of Fire 

Fighters, 55 N.J. 409, 440 (1970).

[A] subject is negotiable between public 

employers and employees when (1) the item 

intimately and directly affects the work and 

welfare of public employees; (2) the subject 

has not been fully or partially preempted by 

statute or regulation; and (3) a negotiated 

agreement would not significantly interfere 

with the determination of governmental 

policy. To decide whether a negotiated 

agreement would significantly interfere with 

the determination of governmental policy, it 

is necessary to balance the interests of the 

public employees and the public 

employer. When the dominant concern is the 

government's managerial prerogative to 

determine policy, a subject may not be 

included in collective negotiations even 

though it may intimately affect employees' 

working conditions. 

[In re Local 195, supra, 88 N.J. at 404-05.]

We agree with Judge Feinberg that although health care 

benefits are a negotiable term or condition of employment under 

the EERA, the Legislature has preempted negotiation of the 1.5% 

contribution. "As a general rule, an otherwise negotiable topic 

cannot be the subject of a negotiated agreement if it is 

preempted by legislation." Bethlehem Twp. Bd. of Educ. v. 

Bethlehem Twp. Educ. Ass'n., 91 N.J. 38, 44 (1982). A topic is 
30 A-3274-10T3

preempted if a "regulation fixes a term and condition of 

employment 'expressly, specifically and comprehensively.'" 

Ibid. (quoting Council of N.J. State College Locals v. State 

Bd. of Higher Educ., 91 N.J. 18, 30 (1982)). The Legislature 

has fixed the 1.5% contribution "expressly, specifically and 

comprehensively."2

PBA does not dispute that the Legislature may preempt 

negotiations on a term or condition of employment, but argues 

that the implementation of Chapter 2 to certain matters being 

arbitrated under the Police and Fire Public Interest Arbitration 

Reform Act (Reform Act), N.J.S.A. 34:13A-14 to -21, violates the 

constitutional right of public employees to present grievances 

through their chosen representatives. Specifically, PBA argues 

that in interest arbitrations where "the arbitral records were 

closed prior to the new laws' effective date," representatives 

were effectively "precluded from submitting evidence over the 

impact of new law to the interest arbitrator." We disagree.

To begin with, Article 1, Paragraph 19 guarantees to public 

employees the right to present their grievances and proposals to 

"the State, or any of its political subdivisions or agencies." 

The Supreme Court has interpreted this paragraph's language 

 

2 The contribution amount was changed in Chapter 78. Chapter 78, 

Section 39 requires health-care contributions based on 

employees' earning levels. See N.J.S.A. 52:14-17.28c.
31 A-3274-10T3

concerning public employees "to impose on the employer in the 

public sector only the duty to meet with its employees or their 

chosen representatives and to consider in good faith any 

grievance or proposals presented on their behalf." Lullo, 

supra, 55 N.J. at 416. Interest arbitrators are not employers. 

Rather, interest arbitrators conduct an "essentially 

adversarial" process, "a statutory method of resolving 

collective-negotiation disputes." Hillsdale PBA Local 207 v. 

Borough of Hillsdale, 137 N.J. 71, 80, 82 (1994).3 

Additionally, arbitrators rendering a decision in 

compulsory interest arbitration cases must apply the relevant 

law. Paterson Police PBA Local 1 v. City of Paterson, ___ N.J. 

Super. ___, ___ (App. Div. 2013) (slip op. at 17). See also

Kearny PBA Local # 21 v. Town of Kearny, 81 N.J. 208, 217 

(1979). They must "decide the dispute based on a reasonable 

determination of the issues, giving due weight to those factors 

listed [in N.J.S.A. 34:13A-16(g)(1)-(9)]." N.J.S.A. 34:13A16(g). If an arbitrator requires additional evidence as to any 

factor, the arbitrator "may request the parties to supplement 

their presentations," PBA Local 207, supra, 137 N.J. at 83-84, 

 

3 PBA Local 207 involved certain interest arbitration procedures 

that were later eliminated from the Reform Act. In re City of 

Camden, 429 N.J. Super. 309, 328 n.7 (App. Div.), certif. 

denied, 215 N.J. 485 (2013). Nevertheless, "the principles set 

forth in [PBA Local 207] remain controlling." Ibid. 
32 A-3274-10T3

but "the arbitrator need not require the production of evidence 

on each factor." Id. at 84. 

Arbitrators are vested with significant discretion in the 

manner in which they conduct hearings. For example, an 

arbitrator may "conduct hearings, and require the attendance of 

such witnesses and the production of such books, papers, 

contracts, agreements, and documents as the arbitrator may deem 

material to a just determination of the issues in dispute," 

N.J.A.C. 19:16-5.7(e); grant adjournments, N.J.A.C. 19:16-

5.7(j); permit the parties to submit post-hearing briefs and 

grant the parties special permission to introduce new factual 

material in the post-hearing briefs. N.J.A.C. 19:16-5.7(l). 

PBA has cited no authority suggesting that in those limited 

instances where a new law has been enacted after parties have 

presented evidence in interest arbitration proceedings but 

before the arbitrators have rendered decisions, and the new law 

might affect pending issues, arbitrators cannot exercise their 

discretion to have the parties submit supplemental briefs or new 

evidence. We discern no reason for prohibiting arbitrators from 

so exercising their discretion in such limited circumstances. 

Nor do we discern any reason why the parties should be 

prohibited from requesting permission from arbitrators to 

supplement their presentations in such limited circumstances. 
33 A-3274-10T3

Of course, arbitrators may reject such requests if the 

arbitrators deem supplemental submissions unnecessary.

Neither the language of the State Constitution, nor our 

Supreme Court's decisions concerning the obligations Article I, 

Paragraph 19 imposes on public employers, supports PBA's 

argument that Chapter 2 violates this constitutional provision. 

In view of those considerations, PBA has not demonstrated either 

that Chapter 2 violates Article I, Paragraph 19 of the State 

Constitution, or that Judge Feinberg erred when she dismissed 

plaintiffs' complaints for failure to state a claim. 

B.

We turn to plaintiffs' contentions that the provisions of 

Chapter 2 requiring public employees and retirees to make the 

1.5% contribution violate the equal protection guarantees of the 

Federal and State Constitutions. We are unpersuaded.

The Fourteenth Amendment to the United States Constitution 

provides that "[n]o State shall make or enforce any law which 

shall . . . deny to any person within its jurisdiction the equal 

protection of the laws." "The Equal Protection Clause directs 

that 'all persons similarly circumstanced shall be treated 

alike.'" Plyler v. Doe, 457 U.S. 202, 216, 102 S. Ct. 2382, 

2394, 72 L. Ed. 2d 786, 798 (1982) (quoting F. S. Royster Guano 

Co. v. Virginia, 253 U.S. 412, 415, 40 S. Ct. 560, 562, 64 L. 

Ed. 989, 991 (1920)). However, the "legislature must have 
34 A-3274-10T3

substantial latitude to establish classifications that roughly 

approximate the nature of the problem perceived, that 

accommodate competing concerns both public and private, and that 

account for limitations on the practical ability of the State to 

remedy every ill." Id. at 216, 102 S. Ct. at 2394, 72 L. Ed. 2d 

at 798-99. Thus, "[i]f a statutory distinction has some 

reasonable basis, 'a State does not violate the Equal Protection 

Clause merely because the classifications made by its laws are 

imperfect.'" Whitaker v. Devilla, 147 N.J. 341, 358 (1997) 

(quoting Dandridge v. Williams, 397 U.S. 471, 485, 90 S. Ct. 

1153, 1161, 25 L. Ed. 2d 491, 501 (1970)). Accord Caviglia v. 

Royal Tours of Am., 178 N.J. 460, 480 (2004). "Under the 

federal equal protection clause, absent an impact on a 

fundamental right or targeting of a suspect class, a statute 

must be upheld 'so long as it bears a rational relation to some 

legitimate end.'" Trautmann, supra, 211 N.J. at 304 (quoting 

Romer v. Evans, 517 U.S. 620, 631, 116 S. Ct. 1620, 1627, 134 L. 

Ed. 2d 855, 865 (1996)). 

Our State Constitution does not contain an equal protection 

clause. State v. Chun, 194 N.J. 54, 101, cert. denied, 555 U.S.

825, 129 S. Ct. 158, 172 L. Ed. 2d 41 (2008). Yet, the concept 

of equal protection is implicit in Article I, Paragraph 

1. McKenney v. Byrne, 82 N.J. 304, 316 (1980); Guaman v. Velez 

(Guaman I), 421 N.J. Super. 239, 267 (App. Div. 2011). In 
35 A-3274-10T3

analyzing equal protection challenges under the State 

Constitution, courts apply "a more flexible balancing test that 

considers three factors: '(1) the nature of the right asserted; 

(2) the extent to which the statute intrudes upon that right; 

and (3) the public need for the intrusion.'" Guaman I, supra, 

421 N.J. Super. at 267 (quoting State v. O'Hagen, 189 N.J. 140, 

164 (2007)). Although this analysis differs from the "federal 

tiered approach, the tests weigh the same factors and often 

produce the same result." Sojourner A. v. N.J. Dep't of Human 

Servs., 177 N.J. 318, 333 (2003).

Plaintiffs contend the sections of Chapter 2 that require 

the 1.5% contribution violate the federal and state equal 

protection guarantees because they create arbitrary 

classifications among employees. For example, NJEA asserts that 

the 1.5% contribution "applies to all public employees 

regardless of the type or level of coverage applicable to the 

individual employee, or the actual cost of coverage to the 

employer." According to NJEA, under that scheme, an employee 

opting for single coverage would pay the same "mandatory minimum 

contribution as an employee opting for family coverage." NJEA 

also asserts that the 1.5% contribution will have a 

disproportionate impact on public employees "at the lower end of 

the income spectrum." Teamsters add that public employees who 

receive benefits "from a private insurer or from a union benefit 
36 A-3274-10T3

fund" are required to pay the 1.5% contribution to offset 

employer health care costs even though they receive no benefits 

from the employer plans.

Chapter 2 does not, however, affect a fundamental right or 

target a suspect class.4 The law does, on the other hand, bear a 

rational relation to legitimate State interests. Those 

interests include controlling the cost of providing health care 

benefits to public employees; reducing administrative expenses; 

and ensuring consistency in health benefit coverage and costs 

for public employees. Moreover, the changes in Chapter 2 are 

part of legislation enacted to improve the fiscal strength of 

State and local governments; reduce taxpayer burdens; and ensure 

that the health and pension systems remain viable for current 

and future employees. 

Moreover, the provisions of Chapter 2 are rationally 

related to those State interests, as is evident from the DPB 

estimates that the required contributions will result in savings 

of hundreds of millions of dollars. Though perhaps an imperfect 

scheme because imposing the 1.5% contribution may have different 

 

4 NJEA asserts that the Section 8 Applicability Provision 

violates equal protection guarantees because it infringes upon 

public employees' fundamental right, under Article I, Paragraph 

19 of the State Constitution, to present grievances to their 

employers through their chosen representatives. We have 

previously explained that plaintiffs' challenges to the Section 

8 Applicability Provision are moot. We will not address those 

claims again.
37 A-3274-10T3

consequences for some classes of employees, perfection is not 

required. Chapter 2 falls well within the legislative "latitude 

to establish classifications that roughly approximate the nature 

of the problem perceived, that accommodate competing concerns 

both public and private, and that account for limitations on the 

practical ability of the State to remedy every ill." Plyler, 

supra, 457 U.S. at 216, 102 S. Ct. at 2394, 72 L. Ed. 2d at 798-

99. 

Similarly, Chapter 2 satisfies Article 1, Paragraph 1 of 

the New Jersey Constitution. "There is, in this case, an 

'appropriate governmental interest suitably furthered by the 

differential treatment involved.'" Trautmann, supra, 211 N.J.

at 305 (quoting Barone v. Dep't of Human Servs., 107 N.J. 355, 

368 (1987)). As we have stated, the State has a legitimate

interest in controlling the cost of health care benefits,

ensuring consistency in health benefit coverage, and further 

ensuring that the programs that make health care coverage 

available to public employees remain viable for both current and 

future employees. The State has a further interest in 

minimizing taxpayer burdens. 

For the reasons we have previously explained, the State's 

interests are furthered considerably by the 1.5% contribution 

requirement. And considering the need to ensure that health 

care programs remain viable for future as well as current public 
38 A-3274-10T3

employees and retirees, the intrusion on the interest of current 

employees and retirees not to make a minimum 1.5% contribution -

- for any reason -- is itself minimal.5 

For substantially the same reasons, we reject FMBA's 

argument that Chapter 1, which changes the definition of "final 

compensation" used to calculate retirement benefits, violates 

the equal protection guarantees of the Federal and State 

Constitutions because it results in arbitrary classifications 

among employees.

Chapter 1, Section 22 (codified in relevant part at 

N.J.S.A. 43:16A-1(28)(a)-(b)), provides that for employees who 

become members of PFRS after May 21, 2010, "final compensation" 

means the average annual compensation for any three fiscal 

 

5 Plaintiffs have not clearly defined the specific interests they 

claim are impacted by the 1.5% contribution. NJEA asserts that 

Chapter 2 disproportionately impacts lower-income State 

employees by requiring they contribute the same percentage of 

their salaries as other employees. We note that the provisions 

of Chapter 2 concerning the 1.5% contribution have been 

partially superseded by the provisions of Chapter 78 requiring 

health care contributions based on employees' earning levels, 

with a minimum, or floor, of 1.5% base salary. See L. 2011, c.

78, § 39 (codified at N.J.S.A. 52:14-17.28c); L. 2011, c. 78, § 

40 (codified at N.J.S.A. 52:14-17.28d) (employees participating 

in SHBP and SEHBP); L. 2011, c. 78, § 41 (codified at N.J.S.A.

18A:16-17.1) (employees of boards of education); L. 2011, c. 78, 

§ 42 (codified at N.J.S.A. 40A:10-21.1) (employees of a local 

unit or agency thereof). These provisions of Chapter 78 also 

require different contributions for individual and family 

coverage. L. 2011, c. 78, § 39 (codified at N.J.S.A. 52:14-

17.28c).
39 A-3274-10T3

years of membership.6 For employees who became members before 

that date, final compensation "means the compensation received 

by the member in the last 12 months of creditable service 

preceding his retirement or death." N.J.S.A. 43:16A-1(28)(a).

 We agree with Judge Feinberg that the classification 

between current and new enrollees is rationally related to 

legitimate State goals including cost savings, ensuring the 

fiscal stability of the plan, and administrative 

efficiency. See Brown v. State, 356 N.J. Super. 71, 82 (App. 

Div. 2002) (explaining that the Legislature may limit benefits 

it confers in the interest of preserving State's economic 

resources). The law fully comports with the federal and state 

equal protection guarantees.

C.

FMBA and Teamsters next argue that the judge erred by

dismissing their claim that the 1.5% contribution requirement of 

Chapter 2 violates the Contract Clauses of the Federal and State 

Constitutions because the laws impaired existing and pending 

CNAs.

 

6 Chapter 1, Section 20 (amending N.J.S.A. 18A:66-2) and Chapter 

1, Section 21 (amending N.J.S.A. 43:15A-6), change the 

definition of final compensation for new enrollees in TPAF and 

PERS from the average compensation for the three years prior to 

retirement, to the average of five years.
40 A-3274-10T3

The federal and state constitutions prohibit the passage of 

any "law impairing the obligation of contracts." U.S. Const.

art. I, § 10, cl. 1; N.J. Const. art. IV, § 7, ¶ 3. "The two 

clauses are applied coextensively and provide the same 

protection." N.J. Educ. Ass'n v. State, 412 N.J. Super. 192, 

205 (App. Div.) (internal quotation marks omitted), certif. 

denied, 202 N.J. 347 (2010). In addressing a claim for 

violation of the Contract Clause, the threshold inquiry is 

whether the law "operated as a substantial impairment of a 

contractual relationship." Allied Structural Steel Co. v. 

Spannaus, 438 U.S. 234, 244, 98 S. Ct. 2716, 2722, 57 L. Ed. 2d 

727, 736 (1978). In making that determination courts inquire 

whether: 1) "there is a contractual relationship"; 2) the 

"change in law impairs that contractual relationship"; and 3) 

"the impairment is substantial." Gen. Motors Corp. v. Romein, 

503 U.S. 181, 186, 112 S. Ct. 1105, 1109, 117 L. Ed. 2d 328, 337 

(1992). If the state law constitutes a substantial impairment, 

it may nonetheless "be constitutional if it is reasonable and 

necessary to serve an important public purpose." U.S. Trust Co. 

v. New Jersey, 431 U.S. 1, 25, 97 S. Ct. 1505, 1519, 52 L. Ed.

2d 92, 112 (1977). 

We affirm, substantially for the reasons explained by Judge 

Feinberg. We add only the following comments. FMBA and 

Teamsters base their arguments primarily on the premise that 
41 A-3274-10T3

their CNAs do not expire on their expiration dates, but rather 

continue, either under a theory of implied contract or by 

statute. The statute FMBA relies on is N.J.S.A. 34:13A-21, 

which states in part that "[d]uring the pendency of proceedings 

before the [interest] arbitrator, existing wages, hours and 

other conditions of employment shall not be changed by action of 

either party without the consent of the other[.]" Teamsters 

rely on N.J.S.A. 34:13A-5.3, which states in part that 

"[p]roposed new rules or modifications of existing rules 

governing working conditions shall be negotiated with the 

majority representative before they are established." This 

statutory rule, "known as the prescription against unilateral 

change of the status quo, prohibit[s] an employer from 

unilaterally altering the status quo concerning mandatory 

bargaining topics, whether established by expired contract or by 

past practice, without first bargaining to impasse." Bd. of 

Educ. of Neptune v. Neptune Twp. Educ. Ass'n, 144 N.J. 16, 22 

(1996) (alteration in original) (internal quotation marks 

omitted).

Chapter 2 does not require public employees to make the 

1.5% contribution until after existing CNAs expire. Contrary to 

plaintiffs' arguments, N.J.S.A. 34:13A-21 and N.J.S.A. 34:13A5.3 create statutory, not contractual, prohibitions against a 

party changing the terms and conditions of employment during the 
42 A-3274-10T3

pendency of interest arbitration proceedings or during the 

negotiation of a new CNA. As we have previously explained, the 

statutes apply to the parties to the expired CNA, not to the 

Legislature. And because the Legislature created the 

prohibitions against such changes, the Legislature can modify 

them by statute. Further, even if the terms of an expired CNA 

are deemed to be implied in fact until new terms are negotiated, 

public employees have neither a contractual right nor a 

reasonable expectation that terms implied in fact under such 

circumstances will survive superseding terms imposed by 

preemptory legislation. 

D.

We reject plaintiffs' remaining contentions substantially 

for the reasons that Judge Feinberg rejected them in her wellreasoned decision. Those contentions include the following 

arguments: the 1.5% contribution is an invalid tax on income 

that did not originate in the General Assembly; the sections of 

Chapter 2 imposing the 1.5% contribution are void for vagueness; 

Chapters 1, 2, and 3 violate plaintiffs' rights to procedural 

and substantive due process, and constitute a taking; and 

Chapter 2 is a special law that decreases the emoluments of 

public employees and also regulates the internal affairs of 

municipalities, all in violation of the State Constitution. 
43 A-3274-10T3

These and plaintiffs' other remaining arguments do not warrant 

further discussion in a written opinion. R. 2:11-3(e)(1)(E).

IV.

The Legislative Defendants argue, as an alternative reason 

for affirming the trial court’s judgment, that they are immune 

from suit because an action against the State Senate and 

Assembly challenging the constitutionality of a law violates the 

separation of powers and the Speech or Debate Clause of the New 

Jersey Constitution; and that Judge Feinberg erred by ruling to 

the contrary. 

The doctrine of separation of powers is set forth in 

Article III, Paragraph 1 of the New Jersey Constitution, which 

provides that "[t]he powers of the government shall be divided 

among three distinct branches, the legislative, executive, and 

judicial. No person or persons belonging to or constituting one 

branch shall exercise any of the powers properly belonging to 

either of the others, except as expressly provided in this 

Constitution." The Speech or Debate Clause, set forth in 

Article IV, Section IV, Paragraph 9 of the New Jersey 

Constitution, provides that: 

Members of the Senate and General Assembly 

shall, in all cases except treason and high 

misdemeanor, be privileged from arrest 

during their attendance at the sitting of 

their respective houses, and in going to and 

returning from the same; and for any 

statement, speech or debate in either house 
44 A-3274-10T3

or at any meeting of a legislative 

committee, they shall not be questioned in 

any other place.

Preliminarily, we note that the record on appeal is not 

clear as to whether Judge Feinberg dismissed the claims against 

the President of the Senate and Speaker of the Assembly. She 

thought she had dismissed those claims. The Legislative 

Defendants believe that the judge was mistaken and did not 

dismiss those claims. Regardless, it does not appear from the 

record on appeal that any plaintiff seriously opposed the 

Legislative Defendants' application in the trial court to 

dismiss the claims against the President of the Senate and 

Speaker of the Assembly. Those claims should never have been 

filed. There was no basis, in law or in fact, for making them. 

Legislative immunity guaranteed by the Speech or Debate 

Clause assures that the speech and conduct of legislators acting 

within the sphere of legitimate legislative activity will not be 

made the basis for a civil judgment. Gilbert v. Gladden, 87 

N.J. 275, 292-93 (1981). Moreover, in a case where the sole 

relief sought is a judicial declaration that a statute is 

unconstitutional, naming individual legislators is a meaningless 

exercise. They are unnecessary parties because the relief 

sought can be obtained without them, and nothing can be obtained 

from them. Naming individual legislators in cases where such 
45 A-3274-10T3

limited relief is sought accomplishes nothing other than 

distraction, wasted time, and perhaps wasted money.

Those and other reasons could arguably lead to the same 

conclusion as to the Senate and the Assembly. Interpreting the 

Speech or Debate Clause to apply to those institutions would 

certainly serve several salient purposes. And as a general 

proposition, a plaintiff can obtain a judgment declaring that a 

statute is unconstitutional by naming only the State as a 

defendant. See DePascale, supra, 211 N.J. at 47. We conclude, 

however, that the prudent course is not to decide the issue in 

this case. 

We have previously noted that "courts should not reach 

constitutional questions unless necessary to the disposition of 

the litigation." O'Keefe, supra, 132 N.J. at 240. Here, 

deciding this constitutional issue is unnecessary. We have 

already upheld Chapters 1, 2, and 3. Additionally, the 

Legislative Defendants have not filed a cross-appeal, but have 

advanced their constitutional argument only as an alternative 

reason for affirming the trial court's judgment. This 

alternative reason is unnecessary in view of our rejection of 

plaintiffs' claims. This action may be, as the Legislative 

Defendants say, one in which plaintiffs seek only a declaratory 

judgment that Chapters 1, 2, and 3 are unconstitutional, but 

plaintiffs initially sought injunctive relief and Judge Feinberg 
46 A-3274-10T3

issued a comprehensive opinion as to that claim. The parties 

have not briefed whether the Legislative Defendants were 

indispensable parties to the claim for injunctive relief. 

For all those reasons, we decline to address the 

Legislative Defendants' alternative constitutional argument.

V.

We end where we began. We recognize that Chapters 1, 2, 

and 3 affect the disposable income of the State's active and 

retired public employees. But the Legislature enacted these 

laws to ensure that the State's pension and health care systems 

remain fiscally sound and that the State's taxpayers are not 

unduly burdened. The legislation furthers legitimate State 

interests and violates neither the New Jersey Constitution nor 

the United States Constitution. 

Affirmed.