Court Opinion

ID: 9941311
Source: CourtListenerOpinion
Date Created: 2024-02-16 15:15:55.4839+00
Date Added: 2024-06-11T13:46:46.543449
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
              APPROVAL OF THE APPELLATE DIVISION

                                 SUPERIOR COURT OF NEW JERSEY
                                 APPELLATE DIVISION
                                 DOCKET NO. A-1500-21
                                            A-1710-21

STATE SHORTHAND
REPORTING SERVICES,
                                       APPROVED FOR PUBLICATION
     Petitioner-Appellant,                   AS REDACTED
                                             February 12, 2024
v.                                        APPELLATE DIVISION

NEW JERSEY DEPARTMENT
OF LABOR AND WORKFORCE
DEVELOPMENT,

     Respondent-Respondent.
_______________________________

JERSEY SHORE REPORTING,
LLC,

     Petitioner-Appellant,

v.

NEW JERSEY DEPARTMENT
OF LABOR AND WORKFORCE
DEVELOPMENT,

     Respondent-Respondent.
_______________________________

           Submitted (A-1500-21) and Argued (A-1710-21)
           January 16, 2024 — Decided February 12, 2024

           Before Judges Mawla, Marczyk, and Chase.
           On appeal from the New Jersey Department of Labor
           and Workforce Development, Docket Nos. 14-001 and
           14-003.

           Martin Melody, LLC, attorneys for appellant State
           Shorthand Reporting Services, Inc. in A-1500-21
           (Eugene J. Melody, of counsel; Nancy S. Martin, on the
           briefs).

           James Prusinowski argued the cause for appellant
           Jersey Shore Reporting, LLC in A-1710-21 (Trimboli
           & Prusinowski, LLC, attorneys; James Prusinowski and
           Brittany Rose Naimoli, on the briefs).

           Ryne Anthony Spengler, Deputy Attorney General,
           argued the cause for respondent Department of Labor
           and Workforce Development (Matthew J. Platkin,
           Attorney General, attorney; Donna Sue Arons,
           Assistant Attorney General, of counsel; Kendall James
           Collins, Deputy Attorney General, on the briefs).

           Einhorn, Barbarito, Frost & Botwinick, PC, attorneys
           for amicus curiae Certified Court Reporters
           Association of New Jersey in A-1710-21 (Andrew Seth
           Berns, of counsel and on the brief; Matheu D. Nunn, on
           the brief).

     The opinion of the court was delivered by

MARCZYK, J.A.D.

     In this appeal, as an issue of first impression, we are asked to consider

whether N.J.S.A. 43:21-19(i)(10)—from the time of its enactment in 2010—

provides an exemption for court reporters under the Unemployment

Compensation Law ("UCL"), N.J.S.A. 43:21-1 to -71, or whether court reporters

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                                     2
must still establish a Federal Unemployment Tax Act ("FUTA") exemption

pursuant to N.J.S.A. 43:21-19(i)(1)(G). For the reasons set forth below, we have

determined N.J.S.A. 43:21-19(i)(10) does provide such an exemption and there

is no requirement for court reporters to establish a FUTA exemption.

      We consolidate these two appeals for the purpose of issuing a single

opinion.   Petitioner Jersey Shore Reporting, LLC ("JSR") appeals from a

December 31, 2021 final administrative action of the Commissioner of the

Department of Labor and Workforce Development ("DOL") finding JSR liab le

for contributions under the UCL. Petitioner State Shorthand Reporting Services

("SSRS") also appeals from the Commissioner's December 31, 2021 final

administrative action finding SSRS responsible for contributions under the

UCL. Although we conclude SSRS and JSR are entitled to an exemption under

N.J.S.A. 43:21-19(i)(10), the DOL audited SSRS and JSR for time periods both

before and after that statute's January 16, 2010 effective date. We conclude the

exemption applies to the audit dates after January 16, 2010.

      Regarding the audit periods prior to January 16, 2010, we address in the

unpublished portion of this opinion whether JSR and SSRS satisfied N.J.S.A.

43:21-19(i)(6)(A) to (C) ("the ABC test") for the purpose of establishing that

the reporters were independent contractors during that time period.          We

determine the Commissioner did not act in an arbitrary or capricious manner in

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                                       3
finding petitioners failed to satisfy the ABC test. Accordingly, we reverse in

part, affirm in part, and remand for the Commissioner to recalculate the

assessments owed by petitioners consistent with this opinion.

                                        I.

                                        A.

      We derive the following from the record as it pertains to JSR. JSR is a

registered court reporting agency that provides legal transcription services to

attorneys, courts, and public agencies. The owners of JSR are not court reporters

and therefore only handle administrative matters and brokering the services of

court reporters. JSR fills numerous court reporting jobs each day and solicits

reporters with a mass email based on reporters' preference concerning the

location of the job and days and hours they are available. Generally, the first

reporter to respond gets the assignment. Reporters are not forced to take an

assignment and do not suffer any consequences for not agreeing to take a job.

If JSR cannot fill a slot, it reaches out to other agencies. Reporters are provided

the time and location of an assignment, but no specific instructions.

      Once an event is completed, the reporter will inform JSR as to how many

transcripts have been requested, and JSR prints, delivers, and bills for the

services. Reporters can be compensated for an appearance, or an hourly rate

when no transcript is ordered, or on a per-page rate. Reporters who work with

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                                        4
JSR also work with other agencies.          The reporters provide their own

stenographic machines. JSR does not: have policies or procedures for reporters;

require reporters to work a certain number of hours; provide supplies; proofread

reporters' work; or pay for supplies or continuing education.

      In August 2013, following an audit, the DOL assessed JSR for $39,236.06

in unpaid contributions to the DOL's unemployment and disability benefit funds

as a result of an audit from 2008-2010.1 In January 2015, JSR moved for

summary decision, asserting it was not liable for the contributions.        The

administrative law judge ("ALJ") determined there were genuine issues of

material fact regarding whether the ABC test was met that necessitated a hearing

regarding JSR's liability for 2008 and 2009. The ALJ granted JSR's motion for

summary decision for the 2010 time period, finding N.J.S.A. 43:21-19(i)(10)

"amended the UCL . . . to specifically exempt services performed by legal

transcribers or court reporters irrespective of a parallel exemption under" the

FUTA.

      On April 23, 2018, the DOL requested the Commissioner review the ALJ's

initial decision. On July 19, 2018, the Commissioner issued a deci sion and

1
   The parties unsuccessfully attempted to mediate. In May 2014, JSR moved
for leave to appeal because the Office of Administrative Law ("OAL") failed to
transfer the contested case for a hearing. In May 2014, we ordered the case
transferred to the OAL for a hearing as a contested case.
                                                                         A-1500-21
                                       5
accepted the ALJ's denial of summary decision for the audit years of 2008 and

2009 but rejected the ALJ's summary decision for the audit year of 2010 based

on N.J.S.A. 43:21-19(i)(10). The Commissioner instead relied on N.J.S.A.

43:21-19(i)(1)(G), which states:

            Notwithstanding any other provision of this subsection,
            service in this State with respect to which the taxes
            required to be paid under any federal law imposing a
            tax against which credit may be taken for contributions
            required to be paid into a state unemployment fund or
            which as a condition for full tax credit against the tax
            imposed by the [FUTA] is required to be covered under
            the [UCL] . . . .

According to the Commissioner, N.J.S.A. 43:21-19(i)(1)(G) provides the mere

existence of a state exemption under N.J.S.A. 43:21-19(i)(10) is not enough, and

there must also be a parallel FUTA exemption to be relieved of the obligation

to pay unemployment taxes.

                                      B.

      SSRS is also a court reporting agency that provides transcription services

to various entities. It notes court reporters are "strictly regulated" and are

licensed through the Department of Consumer Affairs. They must pass a test

administered through a national court reporting association to become licensed

in New Jersey. The owner and operator of SSRS testified:

            She maintains a list of certified court reporters and
            assigns jobs to cover a court reporting project on an as
            needed basis. Most of the court reporters may work for
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                                       6
             several different court reporting agencies at any given
             time and do not work exclusively for [SSRS]. In
             addition, they may accept or reject any assignment that
             [SSRS] offers them. Once a reporter accepts a job, they
             are given the date, time[,] and location of the job. The
             reporters are responsible for their own equipment,
             travel[,] and other job-related expenses. Once a
             reporter transcribes a proceeding, he or she emails it to
             [SSRS] for delivery to the client. [SSRS] handles all
             the billing.

      SSRS maintains it does not control or provide instructions for cou rt

reporters.   It asserts the reporters operate independently, are free to work

whenever they want, and set their own work schedule.

      In August 2013, the DOL assessed SSRS for unpaid contributions to

unemployment and disability funds for the periods of 2006-2008 and 2011-2014.

Based on an audit of those time periods, SSRS had unpaid contributions of

$104,116.45—$38,340.44 for 2006-2008 and $65,776.01 for 2011-2014. SSRS

appealed, and the matter was transferred to the OAL for a hearing before an ALJ

as a contested case.        The ALJ ultimately determined, based on the

Commissioner's prior decision in the JSR matter, the exemption under N.J.S.A.

43:21-19(i)(10) requires a parallel FUTA exemption.

                                        II.

                                        A.

      JSR and SSRS argue they meet the exemption under N.J.S.A. 43:21-

19(i)(10) and therefore are not liable. They argue the statutory language is clear
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                                        7
and unambiguous and that services provided by certified court reporters should

not be considered employment subject to the UCL. Moreover, the legislative

history of N.J.S.A. 43:21-19(i)(10) supports this interpretation.

      JSR contends the Commissioner erred in finding N.J.S.A. 43:21-

19(i)(1)(G) applies to N.J.S.A. 43:21-19(i)(10), thus requiring court reporters to

establish a FUTA exemption. It argues the statute's context and relationship to

surrounding provisions shows N.J.S.A. 43:21-19(i)(1)(G) does not apply to

every provision in N.J.S.A. 43:21-19(i).       According to JSR, the statute's

hierarchy shows N.J.S.A. 43:21-19(i)(1)(G), a sub-sub-section, is contained in

and applies only to the provisions in subsection N.J.S.A. 43:21-19(i)(1). That

is, the provision states it applies "[n]otwithstanding any other provision of this

subsection," but JSR contends that it is meant to apply to the actual subsection

of N.J.S.A. 43:21-19(i)(1), not the entire section of N.J.S.A. 43:21-19(i).

      JSR argues the Legislature intended to amend the statute to remove the

FUTA exemption from N.J.S.A. 43:21-19(i)(10) requirements.            If N.J.S.A.

43:21-19(i)(1)(G) imposed the FUTA exemption on all of N.J.S.A. 43:21-19(i),

JSR argues there would have been no modification to the statute. A FUTA

exemption was required prior to the 2010 amendment, so it follows the

Legislature amended the statute to exempt court reporters. Requiring reporters

to prove a FUTA exemption would render the 2010 amendment meaningless.

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                                        8
      JSR argues if the Legislature wanted to require a FUTA exemption on all

categories under the statute, it would have clearly articulated the requirement.

For example, N.J.S.A. 43:21-19(i)(7), which provides for twenty-seven

exemptions, qualifies the exemptions, noting they are available "[p]rovided that

such services are also exempt under the [FUTA] . . . ." JSR notes that if N.J.S.A.

43:21-19(i)(1)(G) applied to the entire statute, N.J.S.A. 43:21-19(i)(7) would be

redundant as it refers to the same tax credits and FUTA. As such, JSR and SSRS

assert the language of N.J.S.A. 43:21-19(i)(10) is clear and unambiguous, and

court reporting services are statutorily exempt from unemployment tax es.

      Amicus curiae Certified Court Reporters Association of New Jersey

("CCRA") also contends N.J.S.A. 43:21-19(i)(10) is clear on its face, and the

legislative history explains that court reporters are now considered independent

contractors. Moreover, there is no basis to continue to require a corresponding

FUTA exemption under N.J.S.A. 43:21-19(i)(1)(G) given the enactment of

N.J.S.A. 43:21-19(i)(10).     Furthermore, the Commissioner's interpretation

would render the amendment superfluous, and if the Legislature intended for the

FUTA exemption to still apply, there would have been no need to amend the

statute.

                                       B.

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                                        9
      Although we review administrative decisions with a deferential standard

of review, "a reviewing court is 'in no way bound by [an] agency's interpretation

of a statute or its determination of a strictly legal issue.'" Allstars Auto Grp.,

Inc. v. N.J. Motor Vehicle Comm'n, 234 N.J. 150, 158 (2018) (alteration in

original) (quoting Dep't of Children & Fams. v. T.B., 207 N.J. 294, 302 (2011)).

"[If] an agency's determination . . . is a legal determination, the appellate court's

review is de novo." K.K. v. Div. of Med. Assistance and Health Servs., 453 N.J.

Super. 157, 161 (App. Div. 2018) (alteration in original) (quoting L.A. v. Bd. of

Educ. of Trenton, Mercer Cnty., 221 N.J. 192, 204 (2015)).

      "The overriding goal" of statutory interpretation "is to determine . . . the

intent of the Legislature, and to give effect to that intent." State v. Hudson, 209

N.J. 513, 529 (2012). We begin with the understanding "the language of the

statute, and the words chosen by the Legislature should be accorded their

ordinary and accustomed meaning." Ibid. "Where the plain language of a statute

is clear, we enforce the statute as written." Correa v. Grossi, 458 N.J. Super.

571, 579 (App. Div. 2019) (citing DiProspero v. Penn, 183 N.J. 477, 492

(2005)).

      Moreover, "[i]f the language leads to a clearly understood result, the

judicial inquiry ends without any need to resort to extrinsic sources." Hudson,

209 N.J. at 529. "[E]xtrinsic aids may not be used to create ambiguity when the

                                                                              A-1500-21
                                         10
plain language of the statute itself answers the interpretative question; however,

when the statutory language results in more than one reasonable interpretation,

then resort may be had to other construction tools . . . in the analysis." Id. at

529-30 (citing State v. Shelley, 205 N.J. 320, 323-24 (2011)). These may

"includ[e] legislative history, committee reports, and contemporaneous

construction." DiProspero, 183 N.J. at 492-93 (quoting Cherry Hill Manor

Assocs. v. Faugno, 182 N.J. 64, 75 (2004)).

      N.J.S.A. 43:21-19(i)(10) in pertinent part provides:

            Services performed by a legal transcriber, or certified
            court reporter certified pursuant to P.L.1940, c.175
            [(N.J.S.A. 45:15B-1 to -14)], shall not be deemed to be
            employment subject to the [UCL], [N.J.S.A. 43:21-1 to
            -71], if those services are provided to a third party by
            the transcriber or reporter who is referred to the third
            party pursuant to an agreement with another legal
            transcriber or legal transcription service, or certified
            court reporter or court reporting service, on a freelance
            basis, compensation for which is based upon a fee per
            transcript page, flat attendance fee, or other flat
            minimum fee, or combination thereof, set forth in the
            agreement.

            [(Emphasis added).]

      The express language of N.J.S.A. 43:21-19(i)(10) provides that services

performed by court reporters "shall not be deemed to be employment subject to"

the UCL. This provision is not qualified by reference to any FUTA exemption.

Prior to 2010, under N.J.S.A. 43:21-19(i)(7)(Y), court reporters were also

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                                       11
exempt, provided they were "also exempt under . . . FUTA . . . ." N.J.S.A. 43:21-

19(i)(7)(Y) (2002). We presume the Legislature understood the implications of

removing court reporters from N.J.S.A. 43:21-19(i)(7)(Y) and the corresponding

FUTA mandate and placing the amendment in a different section, specifically

indicating that court reporting services are not to be considered employment

under the UCL. This amendment was designed so that court reporters would no

longer be required to establish a FUTA exemption pursuant to N.J.S.A. 43:21 -

19(i)(7) and were, by the specific terms of the amendment, not to be considered

employees, but rather independent contractors.              The Commissioner's

interpretation is at odds with the plain language of the statute.

      The DOL asserted before the Commissioner that the Legislature may have

been "well intentioned" in adopting N.J.S.A. 43:21-19(i)(10) and attempting to

grant an exemption to court reporters, but the Legislature was unsuccessful

because N.J.S.A. 43:21-19(i)(1)(G) still requires that petitioners establish a

FUTA exemption. At oral argument, the DOL claimed the amendment set forth

in N.J.S.A. 43:21-19(i)(10) was effectively meaningless.

      It is a "well-established canon of statutory interpretation" that the

Legislature is presumed to know the "judicial construction of its enactments."

Johnson v. Scaccetti, 192 N.J. 256, 276 (2007) (quoting DiProspero, 183 N.J. at

494), abrogated on other grounds, Cuevas v. Wentworth Grp., 226 N.J. 480, 506

                                                                          A-1500-21
                                        12
(2016). Moreover, "[t]he Legislature is presumed to be familiar with its existing

enactments and is presumed to intend that its newer enactments be harmonized

with the existing ones, in light of the Legislature's purpose." Correa, 458 N.J.

Super. at 580. In attempting to harmonize more recent amendments in the

context of existing statutory provisions, as always "[w]e will 'strive for an

interpretation that gives effect to all of the statutory provisions and does not

render any language inoperative, superfluous, void[,] or insignificant.'" Sanchez

v. Fitness Factory Edgewater, LLC, 242 N.J. 252, 261 (2020) (second alteration

in original) (quoting G.S. v. Dep't of Hum. Servs., 157 N.J. 161, 172 (1999)).

      The Commissioner's interpretation of N.J.S.A. 43:21-19(i)(10) indicates

the Legislature failed to recognize the requirement under N.J.S.A. 43:21-

19(i)(1)(G) for an employer to still establish a FUTA exemption. The DOL

asserted there are no scenarios in which the new statute, N.J.S.A. 43:21-

19(i)(10), would apply to court reporters that was distinct from the operation of

the prior exemption under N.J.S.A. 43:21-19(i)(7)(Y).        We reject such an

interpretation, which would render N.J.S.A. 43:21-19(i)(10) meaningless.

N.J.S.A. 43:21-19(i)(10) must be read in harmony with N.J.S.A. 43:21-

19(i)(7)(Y). The Legislature was fully aware of the prior requirement for court

reporters to establish a FUTA exemption under N.J.S.A. 43:21-19(i)(7)(Y),

which is why it amended the statute to remove the requirement for a FUTA

                                                                          A-1500-21
                                       13
exemption under N.J.S.A. 43:21-19(i)(10). The Legislature placed N.J.S.A.

43:21-19(i)(10) in a separate section, presumably to remove it from N.J.S.A.

43:21-19(i)(7), which requires a corresponding FUTA exemption. Moreover,

we agree with JSR that the requirement to establish a FUTA exemption under

N.J.S.A. 43:21-19(i)(1)(G) only applies to that specific subsection.

      Although we agree a sensible reading of N.J.S.A. 43:21-19(i)(10)

provides an exemption for court reporters, to the extent the statutory language

results in more than one reasonable interpretation, the legislative history

unequivocally establishes the Legislature intended to dispense with the

requirement to establish a FUTA exemption. The Senate Labor Committee

statement provided:

            [T]he bill makes an individual who is a legal transcriber
            and who works on a freelance basis, compensation for
            which is based upon a fee per transcript page, flat
            attendance fee, or other flat minimum fee, or
            combination thereof, ineligible for unemployment
            insurance (UI) benefits and thus not subject to UI taxes.
            The bill provides the exemption to all such individuals
            categorically without requiring a demonstration that
            particular individuals are self-employed under the
            standards provided by either the State UI statute or
            federal tax rules.

                  ....

            The amendments also remove the requirement that the
            exemption applies only if there is a parallel exemption
            under federal UI law or if the individuals are found to
            be self-employed by the IRS under its tax rules.
                                                                        A-1500-21
                                       14
            [S. Labor Comm. Statement to S. 825 (May 4, 2009)
            (emphasis added).] 2

The legislative history is unambiguous regarding the elimination of the

requirement for a FUTA exemption and bolsters our interpretation of the statute.

Accordingly, we reverse the Commissioner's holding with respect to the

applicability of N.J.S.A. 43:21-19(i)(10) and conclude petitioners are exempt

from the time of the enactment of the statute in 2010. We remand for the

Commissioner to calculate the assessment regarding those audit periods after the

enactment of N.J.S.A. 43:21-19(i)(10).

                                      III.

            [At the direction of the court, the published version
            of this opinion omits Part III. R. 1:36-3.]

2
   The Assembly Labor Committee statement closely mirrors the Senate's
legislative history. See A. Labor Comm. Statement to A. 3770 (Jan. 4, 2010).
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