SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1557-17T4

JAMES LONG and HOMER

WALKER,

Petitioners-Appellants,

v.

NEW JERSEY TURNPIKE 

AUTHORITY,

Respondent-Respondent.

______________________________

Argued February 4, 2019 – Decided March 8, 2019

Before Judges Messano, Fasciale and Gooden Brown.

On appeal from the New Jersey Turnpike Authority.

Matthew Faranda-Diedrich argued the cause for 

appellants (Royer Cooper Cohen Braunfeld LLC, 

attorneys; Matthew Faranda-Diedrich, of counsel and 

on the briefs; Alexander J. Nassar, on the briefs).

Christopher R. Paldino argued the cause for respondent 

(Chiesa Shahinian & Giantomasi, PC, attorneys; 

Ronald L. Israel, Christopher R. Paldino, and Ryan P. 

O'Connor, on the brief).

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the 

internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
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PER CURIAM 

James Long and Homer Walker (petitioners), two E-ZPass toll violators, 

filed a petition for rulemaking with the New Jersey Turnpike Authority (NJTA). 

They had argued that a $50 administrative fee, which N.J.A.C. 19:9-9.2(b) (the 

regulation) permitted, was excessive and violated N.J.S.A. 27:23-34.3(a) (the 

authorizing statute). Petitioners now appeal from an October 18, 2017 final 

decision by the NJTA, which denied their petition for a rule change and related 

relief.

We reject petitioners' contention that NJTA violated the Administrative 

Procedures Act (APA), N.J.S.A. 52:14B-4, or notions of due process or 

fundamental fairness, when it initially promulgated the regulation in 2011, and 

in 2017, when it considered the petition, but we remand for further proceedings 

consistent with this opinion.

We therefore affirm in part and remand in part. 

I.

In May 2017, approximately six years after NJTA raised the fee from $25 

to $50, and almost two years after petitioners had paid their respective fees, they 
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filed their petition.1 The petition, entitled "Petition for Rule Change, 

Refund/Disgorgement and Cause of Action for Unjust Enrichment," challenged 

the regulation on two grounds. Petitioners' first and primary objection is that 

NJTA used the fee to generate revenue for its operating fund and that the fee 

was unrelated to the actual costs of enforcement. They therefore contend that 

the fee was unreasonable and contravened the authorizing statute. Second, 

petitioners challenge the use of a fifteen-day notice provision to avoid 

incarceration and other penalties, which they asserted had violated the 

authorizing statute. NJTA has since ceased employing this provision.

On appeal, petitioners argue six points, which we have renumbered: 

POINT [I]

THE $50 ADMINISTRATIVE FEE SHOULD BE SET 

ASIDE BECAUSE THE 2011 RULEMAKING 

PROCESS VIOLATED THE REQUIREMENTS OF 

THE ADMINISTRATIVE PROCEDURES ACT, AND 

OTHERWISE LACKED BASIC TENETS OF DUE 

PROCESS AND FAIRNESS.

 

1

 NJTA's counsel, not counsel for petitioners, pointed out that in December 

2017, petitioners filed their Notice of Appeal and petitioners' counsel filed a 

proposed class action lawsuit in the United States District Court for the District 

of New Jersey. That lawsuit challenges the reasonableness of the administrative 

fee and asserts claims for violating the Excessive Fines Clause of the Eighth

Amendment of the United States Constitution, violating the Fair Debt Collection 

Practices Act, unjust enrichment/disgorgement, and rescission of E-ZPass 

contracts. The federal court stayed that matter pending the outcome of this 

appeal.
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1. NJTA's Lack Of Candor To The Public 

During The Rulemaking Process.

2. The Truth – Profoundly Different Than 

What NJTA Disclosed To The Public.

3. NJTA's Lack of Candor During The 

Rulemaking Process Violated: (i) The 

APA, (ii) Basic Tenets of Due Process And 

(iii) Fundamental Principles Of Fairness.

POINT [II]

ALTERNATIVELY, THE $50 ADMINISTRATIVE 

FEE SHOULD BE SET ASIDE BECAUSE (i) IT 

VIOLATED THE AUTHORIZING STATUTE WHEN 

IMPLEMENTED IN 2011, (ii) IT WAS OTHERWISE 

AN ABUSE OF NJTA'S RULEMAKING POWER, 

AND (iii) NJTA HAS CONSISTENTLY APPLIED 

THE REGULATION IN A WAY THAT CLEARLY 

VIOLATES THE AUTHORIZING STATUTE.

1. The 2003 Version Of The Authorizing 

Statute Set Two Guiderails On NJTA's 

Discretionary Setting Of The Fee –

Reasonableness and Actual Cost.

2. A $50 Fee Is Not "Reasonable" Because 

It Is Grossly Disproportionate To Identical 

Fees Charged By Other Tolling 

Authorities.

3. As Admitted By NJTA, When The 

Regulation Was Enacted, Expected 

Revenues From The $50 Fee Far Exceeded 

NJTA's Actual Cost of Collecting and 

Processing Violations.
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4. NJTA's Enforcement Scheme For 

Collecting Fees Has Consistently Violated 

The Authorizing Statute. 

POINT [III]

THE $50 ADMINISTRATIVE FEE SHOULD BE SET 

ASIDE BECAUSE NJTA HAS FAILED TO ADAPT 

IT TO CHANGING CONDITIONS AT ANY TIME 

SINCE 2011, IN VIOLATION OF THE 

AUTHORIZING STATUTE.

POINT [IV]

THE $50 ADMINISTRATIVE FEE SHOULD BE SET 

ASIDE BECAUSE NJTA'S 2017 NOTICE OF 

ACTION VIOLATED THE REQUIREMENTS OF 

THE ADMINISTRATIVE PROCEDURES ACT, AND 

OTHERWISE LACKED BASIC TENETS OF DUE 

PROCESS, AND WAS OTHERWISE DEFECTIVE.

1. The 2017 Final Action Constituted A 

Rule Under The APA, Particularly Because 

No Other Rulemaking Had Previously 

Been Validly Accomplished.

2. The 2017 Final Action Was Improperly 

Issued Without Compliance With The 

APA, And Was Otherwise Invalid.

3. Even If Not A Rule, The Figures And 

Explanations Offered In The 2017 Final 

Action Violate The Authorizing Statute 

And Otherwise Are An Abuse Of 

Discretion.
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POINT [V]

THE $50 ADMINISTRATIVE FEE SHOULD BE SET 

ASIDE BECAUSE IT IS BASED ON A NONUNIFORM AND IRRATIONAL APPLICATION OF 

THE AUTHORIZING STATUTE.

POINT [VI]

THIS COURT SHOULD INVALIDATE THE 

REGULATION AND ORDER A DISGORGEMENT, 

OR AT A MINIMUM THIS COURT SHOULD 

REMAND FOR FURTHER PROCEEDINGS 

CONSISTENT WITH THE APA'S REQUIREMENTS.

II.

The doctrine of laches bars petitioners from attacking NJTA's 2011 

rulemaking under the APA. More than six years elapsed between the 

promulgation of the regulation and the filing of the petition in 2017. The 

conditions that existed during that timeframe have changed significantly, and it 

would be inequitable to allow a 2011 APA challenge after this substantial 

passage of time. 

"Laches is an equitable defense that may be interposed in the absence of 

the statute of limitations, and has been defined as an inexcusable delay in 

asserting a right." Nw. Covenant Med. Ctr. v. Fishman, 167 N.J. 123, 140 (2001) 

(citations and quotation marks omitted). It "involves more than mere delay, 

mere lapse of time. There must be delay for a length of time which, unexplained 
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and unexcused, is unreasonable under the circumstances and has been 

prejudicial to the other party." Ibid. "Factors considered in determining whether 

to apply laches include '[t]he length of delay, reasons for delay, and changing 

conditions of either or both parties during the delay.'" Id. at 141 (alteration in 

original) (quoting Lavin v. Bd. of Educ. of Hackensack, 90 N.J. 145, 152

(1982)). "The primary factor to consider when deciding whether to apply laches 

is whether there has been a general change in condition during the passage of 

time that has made it inequitable to allow the claim to proceed." Ibid. 

Between 2011 and 2017, a number of important rulemaking 

considerations have substantially changed. The contract supporting the E-ZPass 

system, pricing under that contract, and the responsibilities and costs for which 

NJTA bears direct accountability have changed. Moreover, evaluation of the 

2011 rulemaking is extremely difficult since the pricing parameters for 

collection of E-ZPass toll violations are different, expenses from external to 

internal NJTA budget items have shifted, and because of the general evolution 

associated with toll collection costs for NJTA roadways. Therefore, laches bars 

a challenge to the 2011 rulemaking, particularly when – in our view – the 

primary focus of petitioners' appeal from the denial of their 2017 petition is on 
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NJTA's refusal to make a new rule and its determination that the $50 

administrative fee should remain unchanged. 

Notwithstanding the application of this equitable doctrine, on the merits, 

we conclude petitioners' arguments – that in 2011, NJTA violated the APA, due 

process, and fundamental fairness – are without sufficient merit to warrant 

further attention in this opinion. R. 2:11-3(e)(1)(E). We add these brief 

remarks.

NJTA complied with N.J.A.C. 19:9-6.5 (governing NJTA's rulemaking 

requirements) and N.J.S.A. 52:14B-4 (imposing additional requirements under 

the APA). The NJTA published the proper notice in the New Jersey Register of 

the rulemaking in 2011, which contained a sufficient explanation of the basis 

for the regulation. NJTA afforded all interested persons the proper period for 

public comment. The NJTA received no comments about the proposed fee

increase or requests for a hearing. Four months after publishing the notice, 

NJTA published the adoption of the fee increase from $25 to $50 in the New 

Jersey Register. 

III.

As to the 2017 final action by NJTA, we see no APA violations. 

Petitioners certainly have the right to petition NJTA to adopt a new rule, or 
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amend an existing rule. N.J.A.C. 19:9-6.2 and N.J.S.A. 52:14B-4(f) permit that 

right and provide procedural safeguards applicable to such petitions. Here, 

NJTA met those requirements. Moreover, NJTA satisfied N.J.A.C. 19:9-6.3(c) 

by timely deliberating and issuing its written decision. 

NJTA denied the petition and gave a written statement of reasons, which 

it had the right to do. According to that decision, NJTA concluded the $50 fee 

"continues to be reasonably related to the actual cost of processing and 

collecting toll violations." 49 N.J.R. 3623(b) (Nov. 20, 2017). In fact, NJTA 

explained that the costs associated with its toll collection system "well exceed 

$50[] per violation." Ibid. In support of those assertions, and others in its 

written decision, NJTA prepared a "2017 Toll Collection Budget Chart," which 

it contends estimates that the 2017 costs per violation is $80, not $50. Ibid. 

Petitioners, however, disputed the NJTA's calculations and analysis.

We are constrained to conclude this record is insufficient to support the 

calculation of the $50 fee as matching "the actual cost of processing and 

collecting the violation" mandated by N.J.S.A.27:23-34.3(a). Accordingly, a 

remand is required. Just because the administrative fee significantly exceeds 

the toll, does not mean that it is automatically unreasonable. Presumably, the 

need for a sophisticated system to capture toll violators exceeds the 
10 A-1557-17T4

comparatively modest cost of any given toll. Prudently, the Legislature decided 

taxpayers should not bear this burden and shifted the expense to those who 

commit toll violations and fail to address their lapse. If the cost of collection is 

$50, the sum does not shock the court's sense of fairness. Nevertheless, although 

NJTA abided by the proper procedures necessary to increase the administrative 

fee, we conclude the record remains unclear as to the reasonableness of the fee 

itself.

We owe no deference to a regulation that runs contrary to its authorizing 

statute. In re Regulation of Operator Serv. Providers, 343 N.J. Super. 282, 327 

(App. Div. 2001). The fee imposed must properly be based on the average cost 

of processing and collection of unpaid tolls and may not be an arbitrary 

estimation. The basis for the fee must substantiate the need to mitigate the cost 

of collection, and not to assess a disguised fine. Compare Fee, Black's Law 

Dictionary (9th ed. 2009) (defining fee as "a charge for labor or services"), with

Fine, Black's Law Dictionary (9th ed. 2009) (defining fine as "a pecuniary 

criminal punishment or civil penalty").

We recognize that "[a] regulation adopted by a state agency is presumed 

to be reasonable and valid." In re Repeal of N.J.A.C. 6:28, 204 N.J. Super. 158, 

160 (App. Div. 1985). "If procedurally regular, it may be set aside only if it is 
11 A-1557-17T4

proved to be arbitrary or capricious or if it plainly transgresses the statute it 

purports to effectuate, or if it alters the terms of the statute or frustrates the 

policy embodied in it." Id. at 160-61 (citations omitted). Here, the regulation 

needed to meet two requirements; it had to be (1) "reasonable" and (2) "based 

upon the actual cost of processing and collecting the violation." N.J.S.A. 27:23-

34.3(a).

To be sure, we accord an initial presumption of constitutionality to the 

authorizing statute and the regulation. N.J. Sports & Exposition Auth. v. 

McCrane, 61 N.J. 1, 8, appeal dismissed sub nom, Borough of E. Rutherford v. 

N.J. Sports & Exposition Auth., 409 U.S. 943 (1972). Even so, the existing 

record furnished to us on this appeal is patently insufficient for a reviewing court 

to make a definitive evidentially grounded assessment of these difficult and 

important issues surrounding whether continuing the $50 fee permitted by the 

regulation contravenes the authorizing statute.

For these many reasons, a full evidentiary hearing is vital to explore the 

foundation for NJTA's assertion that the $50 fee is a "reasonable administrative 

fee considering all of the actual costs associated with the system of collecting 

tolls from violators." 49 N.J.R. 3623(b). That is, whether the $50 fee is "based 

upon the actual cost of processing and collecting the violation," under the 
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authorizing statute. Such a hearing ideally should encompass expert testimony, 

cross-examination, and neutral judicial inquiry. At such a hearing, there should 

be ample findings of fact, including findings of credibility, and conclusions of 

law. That amplified record will enable a reviewing court to set forth a more 

informed ultimate resolution of the competing interests at stake. 

The question then becomes what forum is best suited to develop such an 

evidentiary record. NJTA does not appear readily equipped to conduct such 

full-blown evidentiary hearings. Nor is the Office of Administrative Law the 

best suited venue, where discovery rights are limited, see N.J.A.C. 1:1-10.1 to -

10.6, and the rules of evidence are relaxed, see N.J.S.A. 52:14B-10(a). We 

instead conclude that the exceptional circumstances of this wide-spreading 

litigation warrant referral of the necessary evidentiary hearing and fact-finding 

to a trial court, pursuant to the supplementation procedures set forth in Rule 2:5-

5(b).

To the extent that we have not dealt with the remaining issues raised by 

petitioners, we conclude that they are without sufficient merit to warrant further 

attention in this opinion. R. 2:11-3(e)(1)(E). We add, however, these brief 

comments.
13 A-1557-17T4

Under the facts as we know them, there is no basis to include, as part of 

the petition for rulemaking, a claim for damages, refunds, disgorgement, or 

unjust enrichment. N.J.A.C. 19:9-6.1 to -6.7 governs petitions by members of 

the public seeking rulemaking, and does not provide for such ancillary causes 

of action. Petitioners seek damages on behalf of all motorists similarly situated 

to them, but no court has certified such individuals as a class.2 And NJTA's 

counsel points out that in the federal lawsuit, petitioners' counsel did not identify 

petitioners as putative class representatives. Nevertheless, any dispositive 

ruling on petitioners' claim for damages is premature. Although we have serious 

doubts about the propriety of such damages under these facts (because in part, 

petitioners apparently paid the toll violations, failed to make a timely protest, 

and then delayed filing the petition for almost two years), the record is 

incomplete and must be more fully developed before a ruling is made. On 

remand, therefore, the parties may address all issues related to petitioners' claim 

for damages.

 

2

 Although we are not squarely addressing the issue, we question whether class 

certification is appropriate given that the facts surrounding each motorist appear 

to be different (including places of residence, whether fees were paid, the total 

assessed, the roadway used, etc.). 
14 A-1557-17T4

In accordance with Rule 2:5-5(b), we therefore remand for 

supplementation of the administrative record. We direct the Middlesex County 

assignment judge to designate a particular judge in Middlesex County to handle 

the remand proceedings. 

Affirmed in part; and remanded in part for further proceedings consistent 

with this opinion. We retain jurisdiction.