TROY POWELL v. STATE OF NEW JERSEY

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

TROY POWELL, KEVIN SIMPSON,

and CHRISTOPHER LUKENDA,

Plaintiffs-Appellants,

and

STEPHANIE HENNESSEY, ELLEN

CRIBBIN, GAVIN CUMMINGS, and

ELIZABETH SUTULA,

Plaintiffs,

v.

STATE OF NEW JERSEY, NEW JERSEY

DEPARTMENT OF THE TREASURY, NEW

JERSEY STATE HEALTH BENEFITS

COMMISSION, ANDREW P. SIDAMON-

ERISTOF, TREASURER, STATE OF NEW

JERSEY individually and officially,

NEW JERSEY STATE SENATE, as a body

politic of the State of New Jersey,

and NEW JERSEY STATE GENERAL

ASSEMBLY, as a body politic of the

State of New Jersey,

Defendants-Respondents.

_______________________________________

August 15, 2014

Argued May 19, 2014 Decided

Before Judges Harris, Kennedy and Sumners.

On appeal from Superior Court of New Jersey, Law Division, Burlington County, Docket No. L-3308-11.

Craig S. Gumpell argued the cause for appellants (Fox and Fox, LLP, attorneys; David I. Fox, of counsel and on the brief; Bassel Bakhos, on the brief).

Jean P. Reilly, Deputy Attorney General, argued the cause for respondents State of New Jersey, New Jersey Department of Treasury, New Jersey State Health Benefits Commission and Andrew Sidamon-Eristoff, Treasurer (John J. Hoffman, Acting Attorney General, attorney; Robert Lougy, Assistant Attorney General, of counsel; Ms. Reilly, on the brief).

Leon J. Sokol argued the cause for respondents New Jersey State Senate and New Jersey State Assembly (Sokol, Behot & Fiorenzo, attorneys; Mr. Sokol, of counsel; Steven Siegel, on the brief).

PER CURIAM

Appellants, municipal firefighters who are also members of the New Jersey State Health Benefits Program, argue that the Law Division erred in dismissing their complaint challenging the constitutionality of L. 2011, c. 78, 39 to 44 (hereinafter referred to as Chapter 78). They argue, among other things, that Chapter 78 impairs contractual obligations protected by the contract clauses of the United States and New Jersey Constitutions; impairs their right to organize under Art. 1, 19 of the New Jersey Constitution and the New Jersey Employer-Employee Relations Act, N.J.S.A. 34:13A-1 to -29; and infringes their "substantive due process" and "equal protection" rights. They further assert that the Law Division erred in denying their motion for summary judgment. We disagree and affirm.

I.

The Background.

Chapter 78 has been addressed at length in a number of recent opinions and, consequently, we have no need to review its history and provisions in detail. We simply note that on June 28, 2011, the Legislature enacted the Pension and Health Care Benefits Act, L. 2011, c. 78, which, among other things, requires public employees to pay a sliding scale percentage of the cost of health benefits for themselves and their dependents, but establishes a floor for employee contribution of 1.5% of base salary. See DePascale v. State, 211 N.J. 40, 45 (2012); Teamsters Local 97 v. State, 434 N.J. Super. 393, 407-25 (App. Div. 2014). The sliding scale is based upon employee earning levels. See L. 2011, c. 78, 39 (codified at N.J.S.A. 52:14-17.28c).

L. 2011, c. 78, 40, codified at N.J.S.A. 52:14-17.28d, requires the increased contributions from employees participating in the State Health Benefits Program or the School Employees' Health Benefits Program. L. 2011, c. 78, 41, codified at N.J.S.A. 18A:16-17.1, requires the contributions from employees of boards of education, and L. 2011, c. 78, 42, codified at N.J.S.A. 40A:10-21.1, concerns employees of a local unit or agency. L. 2011, c. 78, 43 and 44, codified at N.J.S.A. 52:14-17.34a and N.J.S.A. 40A:5-11.1, require the increased contributions from employees of independent State authorities and "local authorit[ies]," respectively. These provisions of Chapter 78 also require different contributions for individual and family coverage. L. 2011, c. 78, 39 (codified at N.J.S.A. 52:14-17.28c).

The mandated contributions begin either upon the effective date of the legislation, or upon the expiration of an applicable collective negotiations agreement, whichever is later. Id. at 40. The contribution requirement expires four years after its implementation. Id. at 40(c).

The complaint challenging the legislation named as defendants, the New Jersey General Assembly and the New Jersey Senate (State Legislative Defendants), as well as the State of New Jersey, the New Jersey Department of the Treasury, the New Jersey State Health Benefits Commission and Andrew Sidamon-Eristoff, Treasurer of the State of New Jersey (State Executive Defendants). The Law Division judge dismissed the complaint as to the State Legislative Defendants on August 24, 2012, and as to the State Executive Defendants on March 12, 2013.

This appeal followed.

II.

Analysis.

We have already addressed in Teamsters Local 97, supra, 434 N.J. Super. 393, the arguments raised by appellants. Although that matter concerned challenges to L. 2010, c. 1 to 3, which made reforms to State pension systems and State health benefit programs, and revised payments for certain employee benefits, appellants here have recycled the arguments the plaintiffs raised there. We rejected the arguments raised, explaining in great detail the basis for our holding, and, consequently, we adopt our reasoning in Teamsters 97 in affirming the Law Division here. See also, Berg v. Christie, ____ N.J. Super. ____ (App. Div. 2014) (dealing with challenges to the provisions of L. 2011, c. 78, pertaining to the suspension of cost of living increases to current and future retirees receiving pensions from the State's public pension funds.)

To summarize, however, we hold that the challenged legislation does not contravene Art. I, Paragraph 19 of the New Jersey Constitution or the Employee Employer Relations Act, N.J.S.A. 34:13A-1 to -29. Our constitution does not grant public employees the right to collectively bargain over the terms and conditions of their employment, see Lullo v. Int'l Ass'n of Fire Fighters, 55 N.J. 409, 416 (1970), and while public employees have a limited statutory right to negotiate terms and conditions of their employment, N.J.S.A. 34:13A-5.3, that right may later be modified by the legislature. Thus, where the Legislature "establishes a specific term or condition of employment that leaves no room for discretionary action, then negotiation on that term is fully preempted[.]" In re Local 195, IFPTE v. State, 88 N.J. 393, 403 (1982). The Legislature having established in the statute a floor for employee contributions to health benefits, that provision may not be "contravened by negotiated agreement." State v. State Supervisory Employees Ass'n, 78 N.J. 54, 80 (1978).

Moreover, the legislation does not impair any contractual obligation and thus does not contravene the federal Contract Clause, U.S. Const. art. I, X, cl. 1 or its counterpart in the New Jersey Constitution, N.J. Const., art. IV, 7, 3. The legislation explicitly provides that it shall only take effect "after the expiration of an applicable binding collective negotiations agreement in force" on the effective date of the statute.

Further, the legislation does not contravene any "substantive due process rights" of appellants because they have no legally cognizable property right in health care benefits outside of statute. See Greenberg v. Kimmelman, 99 N.J. 552, 563 (1985). Likewise, the legislation has a clear rational basis and promotes legitimate State interests, thereby obviating any equal protection challenge. See Barone v. Dep't of Human Servs., 107 N.J. 355, 368 (1987).

Appellants' other arguments are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).

Affirmed.