IN THE MATTER OF THAKUR PERSAUD

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

IN THE MATTER OF THAKUR

PERSAUD, HEALTH OFFICER

(M0040N), PATERSON.

_____________________________

Argued April 8, 2014 Decided May 2, 2014

Before Judges Fisher, Espinosa and Koblitz.

On appeal from the State of New Jersey Civil Service Commission, Docket No. 2012-227.

John J. Segreto argued the cause for appellant Thakur Persaud (Segreto, Segreto & Segreto, attorneys; Mr. Segreto, of counsel and on the briefs).

Charles C. Festa, III, Assistant Corporation Counsel, argued the cause for respondent City of Paterson (Domenick Stampone, Acting Corporation Counsel, attorney; Mr. Festa, on the brief).

John J. Hoffman, Acting Attorney General, attorney for respondent New Jersey Civil Service Commission (Todd A. Wigder, Deputy Attorney General, on the statement in lieu of brief).

PER CURIAM

Dr. Thakur Persaud appeals from the November 8, 2012 decision of the Civil Service Commission, which denied his second appeal of his non-appointment from the eligible list for the position of Health Officer in the City of Paterson. We reverse and remand to the Commission to determine whether Thakur, as the only resident of Paterson on the approved list, was improperly passed over.

This is the second appeal filed by Persaud in a short period of time, both seeking the same position. We incorporate the facts and procedural history set forth in our prior decision. In re Thakur Persaud, Docket No. A-5339-10 (App. Div. January 16, 2013) (slip op. at 3-6). A combined list was made up of three separate lists: a list of Paterson residents; a list of Passaic residents; and a list of residents of Bergen, Essex, Morris and Sussex Counties. Persaud, a Paterson resident, was number one on the combined list. Trevor Weigle, the fourth-ranking candidate, moved up to number two on the combined list because one candidate was disqualified and another was not interested in the position. Weigle is not a resident of Paterson or even of Passaic County. He had been appointed provisionally and then was permanently appointed as the Health Officer.

Our role in reviewing the decision of an administrative agency is limited. In re Stallworth, 208 N.J. 182, 194 (2011). We will affirm an agency decision so long as it is supported by the evidence, even if we may question the wisdom of the decision or would have reached a different result. Ibid.

A "strong presumption of reasonableness attaches" to an agency decision. In re Carroll, 339 N.J. Super. 429, 437 (App. Div.) (citation omitted), certif. denied, 170 N.J. 85 (2001). With respect to factual findings, agency findings "'are considered binding on appeal when supported by adequate, substantial and credible evidence[.]'" In re Taylor, 158 N.J. 644, 656-57 (1999) (quoting Rova Farms Resort Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974)).

We will reverse an agency's judgment if we find that the agency's decision is "'arbitrary, capricious, or unreasonable, or [] not supported by substantial credible evidence in the record as a whole.'" Stallworth, supra, 208 N.J. at 194 (alteration in original) (quoting Henry v. Rahway State Prison, 81 N.J. 571, 579 (1980)).

In determining whether an agency's action is arbitrary, capricious or unreasonable, we must examine:

(1) whether [it] violates express or implied legislative policies, that is, did the agency follow the law; (2) whether the record contains substantial evidence to support the findings on which the agency based its action; and (3) whether in applying the legislative policies to the facts, the agency clearly erred in reaching a conclusion that could not reasonably have been made on a showing of the relevant factors.

[Ibid. (quoting In re Carter, 191 N.J. 474, 482-83 (2007)).]

The burden of proving that an agency action is arbitrary, capricious, or unreasonable is on the challenger. Bueno v. Bd. of Trs., 422 N.J. Super. 227, 234 (App. Div. 2011).

We "should give considerable weight to an agency's interpretation of a statute the agency is charged with enforcing." G.S. v. Dep't of Human Servs., 157 N.J. 161, 170 (1999). This court, however, is "not bound by an agency interpretation of a strictly legal issue . . . when that interpretation is inaccurate or contrary to legislative objectives." Ibid.

Pursuant to N.J.S.A. 26:3A2-14, "[e]very local health agency shall be administered by a full-time health officer[,]" and appointed in accordance with the Civil Service Act, N.J.S.A. 11A:1-1 to 12-6. The Code of the City of Paterson (Code), 5-11(A)(1) requires that "all officers and employees of the City . . . are hereby required as a condition of their continued employment to have their place of abode in the City and to be a bona fide resident therein." Exceptions exist to the City's residency requirement. "[F]or good cause shown," a director may appoint a non-resident with "[s]pecial talent or expertise [that] is necessary for the operation of government which is not available among Paterson residents," id. at 5-11(A)(2)(c), or may do so when "State or federal law preempts municipal residency requirements," id. at 5-11(A)(2)(d).1

The Commission possesses a duty to "review and enforce residence requirements relating to appointment and continued employment." N.J.A.C. 4A:4-2.11(f). The City contends that there was no residency requirement for the Commission to enforce because N.J.S.A. 40A:9-11 preempts the residency requirement of 5-11(A)(1). We disagree. The State law provides: "A nonresident of any municipality may hold office as . . . health officer . . . of such municipality and no such office shall be deemed vacated by a change of residence of any such person." N.J.S.A. 40A:9-11.

The statute and the City's residency provision are not expressly in conflict, nor does State policy conflict with local policy. N.J.S.A. 40A:9-11 permits but does not require that non-residents hold the position of municipality's health officer, stating that a non-resident "may hold office as . . . health officer[.]" The Legislature left up to the municipality whether to require that the health officer be a local resident. The City made its choice. In a large city such as Paterson,2 there may well be an expectation that the City's employees will reside in Paterson. There is no evidence the Legislature intended for N.J.S.A. 40A:9-11 to preempt local residency requirements. See, e.g., N.J.S.A. 40A:14-122.1 (expressly prohibiting all municipalities from adopting a residency requirement for police officer positions).

On appeal, the City also contends that an exception in the Code enabling the appointment of non-residents with "[s]pecial talent or expertise . . . necessary for the operation of government which is not available among Paterson residents," justified the Weigle appointment. 5-11(A)(2)(c). The Code requires that the appointing authority "submit documentation as to the nature of the special talent or expertise required and of the efforts made to recruit persons of such special talent or expertise within the City[.]" 5-11(A)(3)(b).

The City frames this argument with a discussion of the "rule of three," N.J.A.C. 4A:4-4.8(a)(3), which was addressed by the Commission in its determination. In essence, the rule of three "permits an appointing authority to select one of the three highest scoring candidates." In re Foglio, 207 N.J. 38, 45 (2011) (quoting Local 518, N.J. State Motor Vehicle Emps. Union v. Div. of Motor Vehicles, 262 N.J. Super. 598, 603 (App. Div. 1993)). The rule both "recognizes employment discretion and seeks to ensure that such discretion is not exercised in a way inconsistent with 'merit' considerations." Terry v. Mercer Cnty. Bd. of Chosen Freeholders, 86 N.J. 141, 149-50 (1981). "The purpose of the [r]ule of [t]hree is to limit, but not to eliminate, discretion in hiring," and, consistent with this purpose, "does not stand as 'an immutable or total bar to the application of other important criteria' by a government employer," Foglio, supra, 207 N.J. at 46 (quoting Terry, supra, 86 N.J. at 150).

The rule of three provision was amended effective May 7, 2012. See 44 N.J.R. 1333(b); L. 2008, c. 29. That amendment eliminated N.J.A.C. 4:4-4.8(b)(4), which required an appointing authority who "bypass[ed] a candidate who ranked higher on a competitive examination" for someone ranked lower on the certified list to "report to the Department of Personnel (DOP) why it did so." Foglio, supra, 207 N.J. at 40. The purpose of this report was "to assure that the appointing power was not exercised arbitrarily and to provide a basis for review." Ibid. This requirement was still in place during the City's appointment process now at issue.

The only explanation for why the City bypassed Persaud in favor of Weigle came in response to a deficiency notice demanding the City provide a "statement of reasons for selecting" Weigle, accompanied by "specific statement(s)" justifying his appointment. The City's response claimed that the City "bypass[ed] other eligibles in the best interests of the City" and stressed that "Weigle has demonstrated highly qualified experience and knowledge of the position" while serving as the provisional appointee.

Weigle has been in the position since January 2009. It is this experience that the City highlights on appeal as "special expertise" not available among Paterson residents, thus excusing its appointment of a non-resident. See Code of the City of Paterson, 5-11(A)(2)(c). The Commission found Weigle's experience sufficient reason to bypass Persaud, noting that seeking to appoint a provisional appointee through the rule of three, if possible, is generally reasonable and desirable. For the City to escape its own residency requirement simply by provisionally appointing a non-resident to the post eviscerates the residency provision.

The City acknowledged Persaud's "impressive" resume and interview, and the Commission admitted that "[n]otwithstanding" the fact that it is generally desirable to hire a provisional appointee when possible, "the appellant . . . presented unrefuted arguments that his qualifications exceed Weigle's." Yet, these extensive qualifications, including a medical degree, Master's degree, a Health Officer license, and twenty-five years of healthcare experience, came in second, in the eyes of the City, to the fact that Weigle was temporarily assigned to the post. We note that although Weigle has experience as Health Officer, appellant also possesses City-employee experience as the full-time Disease Prevention and Control Program manager since 2004. See Foglio, supra, 207 N.J. at 46 (the purpose of the statement of reasons is to "guard 'against favoritism and arbitrary actions by an appointing authority and facilitate[] administrative review by the DOP.'" (quoting Local 518, supra, 262 N.J. Super. at 605)). The Commission did not address the issue of State preemption or Weigle's "special expertise" exception to the residency requirement in its decision, although Persaud raised the residency issue before the Commission. We remand to the Commission to consider Persaud's appeal in light of the Paterson residency requirement, met by Persaud but not by the City's appointee. Although the City did not respond to Persaud's appeal before the Commission, counsel assures us the City will participate in the remand hearing.

Reversed and remanded. We do not retain jurisdiction.

1 Other exceptions exist to Paterson's residency requirement, but they are not relevant to this appeal.

2 The United States Census lists Paterson's population in 2012 as 145,219. Paterson (city) Quick Facts from the U.S. Census Bureau, http://quickfacts.census.gov/qfd/states/34/3457000.html (last visited, April 23, 2014).