Title: County of Camden v. Board of Trustees of the Public Employees Retirement System
Citation: N/A
Docket Number: a-86-00
State: new-jersey
Issuer: new-jersey Supreme Court
Date: February 20, 2002

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized). LaVECCHIA, J., writing for a unanimous Court. This appeal concerns Camden County's standing to participate in an administrative proceeding before the Board of Trustees of the Public Employees Retirement System (PERS), in which the County sought to contest the award of ordinary disability benefits to William J. Simon, the former Camden County Sheriff. In 1979, William Simon was elected to his first of several three-year terms as Sheriff of Camden County. In December 1984, Simon's foot was partially amputated. Simon was reelected as Sheriff three times after his foot was amputated, serving for a total of fifteen consecutive years. There was no evidence that Simon's physical condition worsened after his surgery, or that there was any aggravation to his condition during his period in office. He was able to perform his job until he lost his bid for reelection in 1994. Almost immediately after Simon lost his bid for reelection, he applied to the Division of Pensions, Department of the Treasury, for ordinary disability retirement benefits to be effective January 1, 1995, the day his term as Sheriff would expire. Thereafter, on January 5, 1995, the Medical Review Board for the PERS Board, acting pursuant to N.J.S.A. 43:15A-17 and N.J.A.C. 17:4.37(b), concluded that Simon was totally and permanently disabled from performing his job as Sheriff due to the partial amputation of his foot, rendering him unable to stand for a prolonged period of time. Several days later, the PERS Board granted Simon's application for ordinary disability benefits. The PERS Board's determination that held Simon eligible for an ordinary disability pension obligated the County to pay ninety percent of the former Sheriff's medical insurance premiums and to provide prescription drug benefits at an average monthly cost of $226.16. After two reaffirmances by the Board, the County sought and was granted a contested case hearing to challenge the Board's decision to award Simon ordinary disability benefits. The Board referred the matter to the Office of Administrative Law (AOL), which determined that the County did not have standing to request a hearing. Specifically, the Administrative Law Judge (ALJ) held that the PERS Board, not the employer, was statutorily charged with protecting the fiscal integrity of the pension fund, and that no statutory or constitutional authority entitled the County to demand a hearing. The Board adopted the ALJ's decision. Several more remands and reaffirmances ensued, with the Appellate Division ultimately agreeing with the ALJ's determination finding that the County lacked standing to challenge Simon's disability determination. In its reported decision, the Appellate Division noted that although the County had something to lose by the Board's determination, that potential loss did not make the County's interest adverse to the PERS Board. In dismissing the County's appeal, however, the Appellate Division expressed some reservations about the Board's decision, and particularly about a public employee's right to seek a disability pension based on a condition that existed either before he took office or before he sought reelection to an office which was held when the condition developed sufficiently to obtain the disability pension. The Supreme Court granted Camden County's petition for certification to review whether the County should have been granted standing to contest the disability pension award. HELD: Camden County is entitled to standing to in an administrative hearing where a full record may be developed before the Public Employees Retirement System Board renders a final determination on former County Sheriff William Simon's application for ordinary disability benefits pursuant to N.J.S.A. 43:15A-42. 1. Standing to seek judicial review of an administrative agency's final action or decision is available to the direct parties to that administrative action as well as to anyone who is affected or aggrieved in fact by that decision. (pp. 9-10) 2. Despite a broad standing policy, the County's interest in preventing pension fraud, though laudable, is insufficient to confer standing in a controversy when another governmental body has specific statutory authority that encompasses the responsibility for protecting the public interest. (pp. 10-11) 3. Although the mere assertion of a public interest - even by a governing body - ordinarily is not sufficient to acquire standing to seek judicial review of an administrative agency decision, the existence of a financial interest that is affected directly by the agency action will confer standing on a governing body. (pp. 11-12) 4. New Jersey's approach to standing to seek review of administrative actions is liberal and less rigorous than the federal standing requirements. Thus, in the administrative law context, the right to seek judicial review inheres in both direct parties to the proceeding and in all other parties directly affected or aggrieved by the administrative action. (pp. 12-14) 5. Under the pension statutes, a public employer is not made a party to an action concerning an employee's eligibility for an ordinary disability pension because the public employer ordinarily has no financial interest in the award of a disability pension. Here, however, the County does have a direct financial interest in the award to Simon arising out of its statutorily-authorized contractual obligation to provide for a substantial portion of the cost of health benefits for employees who become disabled and are incapacitated for the performance of their required duties. Thus, the County is entitled to standing to obtain review of the Board's decision to award Simon ordinary disability benefits. (pp. 14-17) Judgment of the Appellate Division is REVERSED and the matter is REMANDED for further proceedings consistent with this opinion. CHIEF JUSTICE PORITZ and JUSTICES STEIN, COLEMAN, LONG, VERNIERO, and ZAZZALI join in JUSTICE LaVECCHIA's opinion. IN THE MATTER OF CAMDEN COUNTY, A BODY POLITIC OF THE STATE OF NEW JERSEY _____________________________ COUNTY OF CAMDEN, Appellant-Appellant, v. BOARD OF TRUSTEES OF THE PUBLIC EMPLOYEES RETIREMENT SYSTEM (PERS), Respondent-Respondent, and WILLIAM J. SIMON, Petitioner-Respondent. ______________________________ Argued November 5, 2001 -- Decided February 20, 2002 On certification to the Superior Court, Appellate Division, whose opinion is reported at 334 N.J. Super. 624 (2000). Donna M. Whiteside, Assistant County Counsel, argued the cause for appellant (Robert G. Millenky, Camden County Counsel, attorney). David Dembe, Deputy Attorney General, argued the cause for respondent Board of Trustees of the Public Employees' Retirement System (PERS) (John J. Farmer, Jr., Attorney General of New Jersey, attorney; Kimberly A. Sked, Deputy Attorney General, on the letter in lieu of brief). Ellis I. Medoway argued the cause for respondent William J. Simon (Archer &amp; Greiner, attorneys; Mr. Medoway and Patrick M. Flynn, on the brief). The opinion of the Court was delivered by LaVECCHIA, J. This appeal arose from an administrative proceeding before the Board of Trustees of the Public Employees Retirement System (PERS Board), in which the County of Camden sought to contest the award of ordinary disability benefits to respondent William J. Simon, the former Camden County Sheriff. Simon applied for disability benefits immediately after failing in his bid for reelection to office in 1994 notwithstanding that he had been serving as Sheriff for the prior fifteen years. The County claimed standing based on its financial obligation to pay a portion of the cost of health benefits for each of its disabled employees. Alternatively, the County asserted its public interest in preventing the fraudulent procurement of pension benefits. An administrative law judge and the PERS Board each concluded that the statutory scheme governing entitlement to an ordinary disability pension did not authorize a public employer to be a party in a hearing on an employee's application for such benefits. The Appellate Division affirmed, In Re Camden County, 334 N.J. Super. 624 (2000), and we granted the County's petition for certification, 167 N.J. 636 (2001), to review whether the County should have been granted standing to contest the disability pension award. The right of judicial review to protect against improper official action is constitutionally secure and available as of right. N.J. Const. art. VI, 5, 4; Elizabeth Federal, supra, 24 N.J. at 501 (citing Ward v. Keenan, 3 N.J. 298, 302-09 (1949)). Despite a broad standing policy, our courts require that some real and direct interest be present before granting third party standing to seek judicial review of agency action. County or local governing bodies generally lack standing to challenge actions of government agencies merely because they represent the public. County of Bergen v. Port of New York Authority, 32 N.J. 303, 314-15 (1960). Protecting public interests is important, but it does not take precedence over the need to prevent one governmental body from interfering with the actions of another public body. Township of Stafford v. Zoning Bd. of Adjustment, 154 N.J. 62, 77 (1998). Thus, to the extent that the County rests its standing argument on its interest generally in preventing fraud on the pension system, we find that perceived interest to be too generalized to confer standing. The interest in preventing pension fraud is laudable; nonetheless, it is insufficient to confer standing in a controversy when another governmental body has specific statutory authority that encompasses the responsibility for protecting the public interest. Although the mere assertion of a public interest -- even by a governing body -- ordinarily is not sufficient to acquire standing to seek judicial review of an administrative agency decision, the existence of a financial interest that is affected directly by the agency action will confer standing on a governing body. In Essex County Welfare Bd. v. Dept. of Inst. and Agencies, 75 N.J. 232 (1978), cert. denied, 437 U.S. 910, 98 S. Ct. 3103, 57 L. Ed. 2d 1141 (1978), this Court considered the right of a local welfare board to appeal a fair hearing decision of the State Division of Public Welfare that modified or reversed one of the local board's rulings. In dismissing the appeal based on a lack of standing, the Court observed that even though the local welfare board did not have standing in that case, the right of the governing body of a County to appeal a fair hearing decision in an appropriate case remains[,] because the county provided a substantial portion (12.5%) of the AFDC grant money. Id. at 238. See also Foreign Auto Preparation Serv. v. New Jersey Econ. Dev. Auth., 201 N.J. Super. 428, 431-32 (App. Div. 1985) (citing Essex County to support finding that New Jersey Economic Development Authority (NJEDA) had standing to contest decision by Commissioner of Department of Community Affairs, stating that NJEDA has a proprietary interest in the outcome of the case because it has been directed to pay a substantial sum in relocation assistance. ). In summary, a liberal approach to standing to seek review of administrative actions applies in this state, an approach that is less rigorous than the federal standing requirements. See Crescent Park Tenants Ass'n v. Realty Equities Corp. of New York, 58 N.J. 98, 107-08 (1971) ( Unlike the Federal Constitution, there is no express language in New Jersey's Constitution [confining] our judicial power to actual cases and controversies. Nevertheless, we will not render advisory opinions or function in the abstract nor will we entertain . . . plaintiffs who are 'mere intermeddlers,' or are merely interlopers or strangers to the dispute. (citations omitted)); New Jersey Practice, supra 7.4 at 359. To possess standing in a case, a party must present a sufficient stake in the outcome of the litigation, a real adverseness with respect to the subject matter, and a substantial likelihood that the party will suffer harm in the event of an unfavorable decision. Chamber of Commerce, supra, 82 N.J. at 67- 69. Judge Lefelt aptly summarized standing in the administrative law context as follows: In New Jersey, our courts seek to separate, in a common sense manner, intermeddlers from persons with discernible interests. The right to seek judicial review inheres in both direct parties to the proceeding and in all other parties directly affected or aggrieved by the administrative action. Normal standing rules require sufficient stake and adverseness in the subject matter of the litigation and a substantial likelihood that some harm will fall upon the party seeking standing in the event of an unfavorable decision. Thus, when an agency enforces its regulations against a respondent or considers an application for benefits, the respondent and applicant clearly have standing. In addition, other persons who have experienced a less immediate harm from the challenged agency action may also have standing. NO. A-86 IN THE MATTER OF CAMDEN COUNTY, A BODY POLITIC OF THE STATE OF NEW JERSEY _________________________________ COUNTY OF CAMDEN, Appellant-Appellant, v. BOARD OF TRUSTEES OF THE PUBLIC EMPLOYEES RETIREMENT SYSTEM (PERS), Respondent-Respondent, and WILLIAM J. SIMON, Petitioner-Respondent. DECIDED February 20, 2002 Chief Justice Poritz