Court Opinion

ID: 9746820
Source: CourtListenerOpinion
Date Created: 2023-08-27 14:39:25.785396+00
Date Added: 2024-06-11T07:25:17.345766
License: Public Domain

PASHMAN and POLLOCK, JJ.,
dissenting.
We agree with the majority that hearings in contested unemployment insurance claims before the Board of Review are conducted by “the head of the agency” and thus are excluded from the jurisdiction of the Office of Administrative Law (OAL) under N.J.S.A. 52:14F-8(b). However, we disagree with the majority’s conclusion that this exemption also applies to claims *663heard by the appeal tribunal. Because the majority’s holding concerning the appeal tribunal disregards the plain language of the statute and substitutes a dangerously broad scheme of exemptions for the one expressly created by the Legislature, we dissent.
This departure from the statutory scheme is especially troubling because the OAL Act, so recently enacted, was designed “to improve the quality of justice with respect to administrative hearings.” Committee Statement to S. 766 — L. 1978, c. 67. We have no doubt that the majority approves of this goal. Yet in this Court’s very first opportunity to rule on the jurisdiction of the Office of Administrative Law, the majority has chosen to restrict that jurisdiction, a result attainable only by disregarding the terms of the act itself.
The majority’s narrow reading of the OAL Act is regrettable. The OAL Act is an important part of the salutary reform of administrative law and procedure which the Legislature has undertaken in recent years. The Administrative Procedure Act (APA), N.J.S.A. 52:14B-1 et seq., was enacted in 1969 with the purpose of assuring to interested parties notice and the opportunity to be heard in administrative proceedings. This reform was carried significantly further in 1978 with the passage of the OAL Act. The aim of the OAL Act was to provide impartiality and objectivity in agency hearings by greatly reducing the number of instances in which such hearings were conducted by hearing officers who were subordinate, and possibly subservient, to agency heads. It achieves this end by replacing hearing officers with independent administrative law judges.
So strongly did the Legislature perceive this need and the desirability of creating a uniform system of administrative adjudication throughout State agencies that the OAL Act creates only two classes of exemptions from the jurisdiction of the Office of Administrative Law. N.J.S.A. 52:14F-8. It provides that “[ujnless a specific request is made by the agency,” administrative law judges shall not be assigned to hear contested cases with respect to, first,
*664[t]he State Board of Parole, the Public Employment Relations Commission, the Division of Workers’ Compensation, the Division of Tax Appeals, or to any agency not within [N.J.S.A. 52:14B-2(a)]. [N.J.S.A. 52:14F-8(a)]
This exclusion plainly does not apply to contested unemployment insurance claims in the Division of Unemployment and Temporary Disability Insurance.1
The second statutory exclusion, relied upon by the majority in this case, is for
[a]ny matter where the head of the agency, a commissioner or several commissioners, are required to conduct, or determine to conduct the hearing directly-and individually. [N.J.S.A. 52:14F-8(b)]
The Board of Review is statutorily empowered “to act as a final appeals board” within its agency, the Division of Unemployment and Temporary Disability, “in cases of benefit disputes.” N.J. S.A. 43:21-10(d). In this regard it is “the head of the agency,” a term defined in the APÁ as “the individual or group of individuals constituting the highest authority within any agency authorized or required by law to render an adjudication in a contested case.”. N.J.S.A. 52:14B-2(d). Therefore, cases presently heard by the Board of Review are excluded from the jurisdiction of the OAL by the terms of the statute.
A similar conclusion with regard to an appeal tribunal cannot be squared with the plain terms of the exemptions adopted by the Legislature. Consequently, in order to support its holding, the majority is forced to rely on a number of untenable assumptions.
The assumption central to its argument is that the statutory exclusion provided in N.J.S.A. 52:14F-8(b) is intended to apply *665to agency adjudications where hearing and decisional functions have not been separated. Although this might have been a reasonable basis for excluding certain administrative matters from the jurisdiction of the OAL, it was not the basis chosen by the Legislature.
By the express terms of N.J.S.A. 52:14F-8(b) the Legislature excluded from the jurisdiction of the OAL only those administrative matters in which “the head of the agency,” i. e., the officer within the agency with the final authority on the subject, elects or is required to hear the matter. The exclusion does not apply when the matter is heard by a lower-level hearing officer within the agency who is not empowered to render a final decision.
The key. to the majority’s analysis is the definition of “agency.” This term is defined in the APA in pertinent part as
... each of the principal departments in the executive branch of the State Government, and all boards, divisions, commissions, agencies, departments, councils, authorities, offices or officers within any such departments now existing or hereafter established and authorized by statute to make, adopt or promulgate rules or adjudicate contested cases .... [N.J.S.A. 52:14B-2(a) (emphasis added)]
Does an appeal tribunal fall within this definition? The Commissioner concedes that the so-called “appeal tribunal” is actually “many separate tribunals each consisting of a single examiner.” Nonetheless, the majority concludes that each of these one-person tribunals is a separate “intermediate agency.” The majority concedes that the determinations of the appeal tribunal “may be appealed to a higher level.” Ante at 654. Nonetheless, the majority believes that the appeal tribunal is also a “head of agency” excluded from the OAL Act because a tribunal is “empowered to render a complete adjudication of the contested matters at its respective administrative tier.” “[A]t that level,” the majority says, an appeal tribunal constitutes “ ‘the highest authority ... authorized by law to render an adjudication in a contested case.’ N.J.S.A. 52:14B-2(d).” Ante at 659-660 (emphasis added). Yet even within its own “administrative tier” the appeal tribunal does not render “a complete *666adjudication,” because its decision, if not appealed within ten days, “shall be deemed to be the final decision of the board of review," N.J.S.A. 43:21-6(c) (emphasis added). Even where the contested case is not appealed to the Board of Review, the final decision is attributed to that higher authority rather than the appeal tribunal.
The majority’s analysis thus does violence to the meaning and intent of the statute. An appeal tribunal simply is not an “agency” or “the head of an agency,” either within the statutory definition of those terms or according to their common usage. The majority’s holding will exempt from the jurisdiction of the OAL Act every low-level administrative hearing officer empowered to hear cases and to make initial determinations and thereby will greatly abridge the scope of the OAL Act in a way which the Legislature could not have intended. Paradoxically, the majority recognizes that the “signal improvement” of the act was “the establishment of a corps of independent hearing officers, referred to as ‘administrative law judges.’ ” Ante at 649. But by its holding today — the first to construe the exclusionary provisions of the act — the majority engages in a tortuous exercise in statutory construction to reach a result unsupported by the statute which vastly reduces the role of administrative law judges in administrative decision-making in New Jersey.
It is not difficult either to understand or to rationalize the Legislature’s exclusionary scheme. It leads to the sensible result that when matters are heard and decided by the highest decision-making authority in the agency, the use of administrative law judges will not be required. In these cases, the Legislature believed that such high-level agency personnel could be expected to provide a fair and procedurally correct hearing and would, in addition, bring their expertise in the area of regulation to bear on the case. However, in matters previously heard by lower-level hearing officers, whose decisions were appealable to higher authority within the agency itself, the Legislature plausibly concluded that a fairer administrative *667process would result if those hearing officers, often part-time employees and often participating in investigative or prosecuto-rial functions as well as hearing adjudications, were replaced by members of a full-time corps of expert administrative law judges. In addition, the Legislature intended to establish, as far as practical, a uniform system of administrative adjudication among the many agencies within State government. It considered other exclusions from the OAL Act but decided against them. The majority now wishes to substitute its wisdom for the Legislature’s reasoning.
Our conclusion is further buttressed by the striking similarity of the relationship between an administrative law judge and the head of the agency, on the one hand, and that between the appeal tribunal and the Board of Review, on the other. The recommended decision of an administrative law judge is “deemed adopted as the final decision of the head of the agency” if the head of the agency does not modify or reject the decision within the statutory period. N.J.S.A. 52:14B-10(c). Similarly, as has been noted above, supra at 666, the decision of an appeal tribunal is “deemed to be the final decision of the board of review” unless further appeal is initiated by either of the parties or by the Board of Review. N.J.S.A. 43:21-6(c), (e). This parallelism not only lends support to the conclusion that the Legislature intended administrative law judges to take the place of the appeal tribunals, but also undermines any argument that some imagined differences between the two positions would make the substitution of administrative law judges for appeal tribunals infeasible.
We hasten to add that we recognize the practical difficulties which might result if the case load presently handled by the appeal tribunals were shifted to administrative law judges.2 It may well be that, all things considered, it would be better to *668leave the present system undisturbed. It may even be that the Legislature, if squarely faced with that question alone, would exempt contested unemployment insurance claims determined by the appeal tribunal from the jurisdiction of the Office of Administrative Law. But the decision belongs to the Legislature, not to this Court. The present statute does not admit the construction which has been given to it by the majority in this case — a construction which threatens to undermine the OAL Act in its infancy.
We dissent from the judgment of the majority and would hold that, under the terms of N.J.S.A. 52:14F-1 et seq., claims now heard by the appeal tribunal of the Division of Unemployment and Temporary Disability must be transferred to the jurisdiction of the Office of Administrative Law to be heard by administrative law judges.3
For affirmance — Justices SULLIVAN, CLIFFORD, SCHREIBER and HANDLER — 4.
For reversal — Justices PASHM AN and POLLOCK — 2.

It is certainly arguable that the rationale given for these specific exemptions, that the enumerated agencies “are specialized entities devoted solely to hearings in highly specialized areas," Committee Statement to S. 1811 (1976) at 3, applies as much to the Division of Unemployment and Temporary Disability Insurance as it does, say, to the Division of Workers’ Compensation. However, the Legislature declined to include the Division of Unemployment and Temporary Disability within the list of specifically exempted agencies of subsection (a) although it must certainly have been aware that it could have done so.

The Commissioner states that in 1979, 41,888 appeals were filed with the appeals tribunal and that 34,784 decisions were rendered.

In order to give the OAL an opportunity to prepare to handle this great increase in case load, and to provide the Commissioner with an opportunity to seek legislation exempting the appeal tribunals from the jurisdiction of the OAL, we would delay the effective date of such a decision for a reasonable period.