Opinion ID: 1464928
Heading Depth: 2
Heading Rank: 1

Heading: The Scope of the Regulatory Power Delegated By the Act

Text: The Director concurs in the Guild's observation that the Committee regulations go substantially beyond mere regulation of the competency of the dispensers and the safety and effectiveness of the hearing aids they sell. The abuses which some of the challenged regulations were intended to correct were described by the Director at the public hearing: They prohibit the use of terms calculated to connote non-existent medical competency. [ N.J.A.C. 13:35-8.24(f)(3)] They require an itemized receipt, in conformity with the trend in consumerism, to provide an individual with full knowledge of the product he is buying in advance of sale, which receipt will assist the Division in the enforcement of the Act by requiring full disclosure of the charges assessed for various phases of the dispensing procedure and the actual cost of the hearing aid. [ N.J.A.C. 13:35-8.24(g), (h)(4), and (k)(1) and (2)] Further, the rules prohibit unsolicited home visits as a means of avoiding the fast talking, high pressure of the unethical practitioner. [ N.J.A.C. 13:35-8.24(j)] And, in addition, they take a giant step forward by reallocating the burden in price gouging cases so that the onus is not on the consumer to show unfairness but on the dispenser to show that no overreaching occurred and that the price charged was not unconscionable. [ N.J.A.C. 13:35-8.24(k)(4)] In response to the Guild's assertions that these regulations are ultra vires, the Director urges that the challenged regulations are well within the statutory authority of the Committee, and in many cases are pursuant to specific statutory mandates. The seminal case concerning the standards applicable to judicial review of the validity of regulations promulgated by an administrative agency is Consolidation Coal Co. v. Kandle, 105 N.J. Super. 104 (App. Div. 1969), aff'd o.b. 54 N.J. 11 (1969). Judge Goldmann, writing for the court, there held that quasi-legislative administrative rulemaking does not require specific findings of fact based on evidence adduced at the public hearing in support of each regulatory provision subsequently adopted and further that the existence of such supporting factual bases would be presumed until rebutted by the party attacking the administrative action. 105 N.J. Super. at 113-120; see also In re Promulgation of Rules of Practice, 132 N.J. Super. 45, 49 (App. Div. 1974) certif. den. 67 N.J. 95 (1975). Kandle also established that administrative regulations must be accorded a presumption of reasonableness and placed the burden on the attacking party to demonstrate that they are arbitrary, capricious, unduly onerous or otherwise unreasonable. 105 N.J. Super. at 118; see also In re Matter of Public Hearings, 142 N.J. Super. 136, 156 (App. Div. 1976); City Consumer Services v. Dept. of Banking, 134 N.J. Super. 588, 594 (App. Div.) certif. den. 69 N.J. 73 (1975). Earlier decisions of this Court had established that [a]dministrative rules and regulations have in their support the rebuttable presumption of validity if they come within the ambit of delegated authority, and that unless such regulations are clearly ultra vires on their face, the party contesting them has the burden of proving their invalidity. In re Regulation F-22, Office of Milk Industry, 32 N.J. 258, 261-262 (1960); In re Weston, 36 N.J. 258, 263 (1961); see also Cole Nat. Corp. v. State Bd. of Examiners, 57 N.J. 227, 231 (1970). The Weston court also held that the reviewing court is not confined to consideration of the statutory authority for a particular regulation cited by the administrative agency but may consider the entire enabling legislation in order to ascertain if there is in fact sufficient underlying authority. 36 N.J. at 263. As a result of this customary rebuttable presumption of validity and regularity afforded to administrative regulations generally, Motyka v. McCorkle, 58 N.J. 165, 181 (1971), an ultra vires finding is disfavored: An administrative regulation, purporting to effectuate a statute, will not be set aside on the ground that it transgresses the statute unless the transgression is plain; the presumption is in favor of validity. [ Lane v. Holderman 40 N.J. Super. 329, 335 (App. Div. 1956) aff'd 23 N.J. 304 (1956)] An administrative regulation must be within the fair contemplation of the delegation of the enabling statute. So. Jersey Airways v. Nat. Bk. of Secaucus, 108 N.J. Super. 369, 383 (App. Div. 1970). The authority possessed by an administrative agency    consists of the powers expressly granted which in turn are attended by those incidental powers which are reasonably necessary or appropriate to effectuate the specific delegation. In re Regulation F-22, Office of Milk Industry, supra, 32 N.J. at 261 (citation omitted); Cammarata v. Essex County Park Comm'n, 26 N.J. 404, 411 (1958). This Court has held that the grant of authority to an administrative agency is to be liberally construed in order to enable the agency to accomplish its statutory responsibilities and that the courts should readily imply such incidental powers as are necessary to effectuate fully the legislative intent. See In re Suspension of Heller, 73 N.J. 292, 303 (1977); Cammarata v. Essex County Park Comm'n, supra, 26 N.J. at 411; Lane v. Holderman, supra, 23 N.J. at 315. In Heller, Chief Justice Hughes stated: Where, as here, the task of the regulatory agency is to protect the health and welfare of members of the public by assuring that all licensed practitioners are qualified, competent and honest, the grant of implied powers is particularly important. [73 N.J. at 303-304 (citation omitted)] In determining whether a particular administrative act enjoys statutory authorization, the reviewing court may look beyond the specific terms of the enabling act to the statutory policy sought to be achieved by examining the entire statute in light of its surroundings and objectives. Id. at 303 and cases there cited. The purpose of this inquiry is to ascertain whether the requisite authority may be said to be implicitly supplied, as [t]hat which is implied is as much a part of the law as that which is expressed. Id.; In re Gastman, 147 N.J. Super. 101, 109 (App. Div. 1977). Another basic tenet of judicial review is that the courts are not free to substitute their judgment as to the wisdom of a particular administrative action for that of the agency so long as that action is statutorily authorized and not otherwise defective because arbitrary or unreasonable:    If there is any fair argument in support of the course taken [by the agency] or any reasonable ground for difference of opinion among intelligent and conscientious officials, the decision is conclusively legislative, and will not be disturbed unless patently corrupt, arbitrary or illegal. Doubts held by the court as to the wisdom of the administrator's decision do not alter the case   . [ Flanagan v. Civil Service Dept., 29 N.J. 1, 12 (1959) (citations omitted); see also City of Elizabeth v. Sullivan, 125 N.J. Super. 569, 574 (App. Div. 1973)] Application of the foregoing principles to the Guild's challenge to the Committee regulations on ultra vires grounds confirms the correctness of the Appellate Division's conclusion that the regulations do not exceed the authority delegated to the Committee by the Act. The Guild's contention that the Act did not contemplate regulation of the business aspects of hearing aid dispensing is without foundation and indeed would amount to an interpretation of the Act in a manner contrary to its manifest purpose. The extremely circumscribed interpretation of the Act's purposes proffered by the Guild hardly comports with the liberal construction mandated for regulatory enactments in the field of public welfare. Furthermore, the Guild can point to nothing on the face of any of the regulations warranting a conclusion of ultra vires so as to deprive them of the presumption of validity ordinarily accorded administrative regulations. Our evaluation of the Act and its legislative history convinces us that the Committee has been delegated substantially plenary authority over the entire field of hearing aid dispensing, including the business practices of dispensers. Its regulations do not exceed the scope of that broad delegation and are fully consistent with the underlying legislative goals of correcting abuses and promoting professionalism in the sale of hearing aids. The challenged regulations constitute permissible administrative selections of the appropriate means of accomplishing the salutary objectives of the Act; as such, further judicial inquiry into their wisdom and the possible existence of more desirable regulatory alternatives is foreclosed.