Horn v. Kean

796 F.2d 668, 1 I.E.R. Cas. (BNA) 693
Court of Appeals for the Third Circuit·Decided July 16, 1986·No. No. 84-5729·Published·Cited by 57 cases

Opinions

ALDISERT, Chief Judge.

The ultimate question for decision is whether New Jersey motor vehicle agents, chosen for their positions by a Democratic governor through the political patronage process, are insulated by the first amendment from being replaced by the governor’s successor, a Republican. The district court held that they did not come within the protection of Elrod v. Burns, 427 U.S. 347, 96 S.Ct. 2673, 49 L.Ed.2d 547 (1976), and Branti v. Finkel, 445 U.S. 507, 100 S.Ct. 1287, 63 L.Ed.2d 574 (1980), because they were independent contractors and not “public employees,” and granted appellees’ motion for summary judgment.

This appeal requires us to determine whether the motor vehicle agents are employees or contractors and, if contractors, whether this distinction makes a difference under the teachings of Elrod and Branti. We hold that the district court properly determined that the agents are not within the first amendment’s protection, Horn v. Kean, 593 F.Supp. 1298 (D.N.J.1984), and affirm its judgment.

I.

The agents brought suit against the Governor, the Attorney General, and the Director of Motor Vehicles of New Jersey alleging that their dismissals as motor vehicle agents were based on political party affiliation and violated the first, fifth, and fourteenth amendments to the United States Constitution.1 These agents reg[670] ister motor vehicles, issue registration certificates, and license drivers. Unlike most public employees, they are not paid a fixed salary but receive a fee for every vehicle registered and license issued.2 Appellants, all Democrats, appointed by a Democratic state administration, were relieved of their duties as motor vehicle agents after Thomas Kean, a Republican, began his term as Governor.

The record here reveals that New Jersey historically has not required prospective motor vehicle agents, as a condition of their employment, to terminate existing employment relationships or business endeavors. App. at 47. Of the five original named plaintiffs in this action, only one accurately could be classified as working as a motor vehicle agent on a full time basis; the remaining four all worked in other occupations. 593 F.Supp. at 1302. They operate relatively free from state control or supervision and retain complete authority to establish the qualifications for employment in their agencies. They hire, fire, and promote employees in their agencies. App. at 47, 71, 89, 109, 118, 128, 129, 138, 148. Employees of the agents are paid by the agents, not by New Jersey. As employers, the agents make the usual deductions for withholding taxes, Social Security, and Workmen’s Compensation.

The parties concede that no disputed issues of material fact exist. The court’s determination that the agents’ status as independent contractors precluded protection under Elrod and Branti is a question of law; our review is therefore plenary. Goodman v. Mead Johnson & Co., 534 F.2d 566, 573-74 (3d Cir.1976), cert. denied, 429 U.S. 1038, 97 S.Ct. 732, 50 L.Ed.2d 748 (1977).

shall designate at least 1 person in each county for each 300,000 inhabitants or fraction thereof to be his agent for the registering of motor vehicles, issuing registration certificates and licensing of drivers, subject to the requirements of this subtitle and to any rules and regulations the director imposes. The agent shall so act until his authority is revoked by the director. All moneys received by such agents for registrations and licenses granted under the provisions of this chapter shall forthwith be deposited as received with the State Treasurer. The fee allowed the agent for registration certificates issued by him and for every license granted by him shall be fixed by the director on the basis of the registration or license fees collected by the agent. The director may limit the fee so paid to a maximum. Such fee shall be paid to the agent by the State Treasurer upon the voucher of the director in the same manner as other State expenses are paid.

Our analysis tracks two inquiries. First, we must determine whether the district court properly classified appellants as independent contractors. Second, we address the constitutional issue of whether the district court properly limited the Elrod-Branti protection from “patronage dismissals” to public employees, excluding from protection independent contractors.

II.

We are assisted in determining the motor vehicle agents’ status under New Jersey law by, coincidentally, an opinion written by Justice Brennan — author of the plurality opinion in Elrod —when he was a judge on the appellate division of the New Jersey Superior Court. In Carluccio v. Ferber, 18 N.J.Super. 473, 87 A.2d 439 (App.Div.1952), a former motor vehicle inspection agent sought reinstatement to his position, arguing that as a veteran the state could not, under the Veterans’ Tenure Act, discharge him at will. The New Jersey court, speaking through Judge Brennan, rejected this argument:

[A]n agent designated under R.S. 39:3-3, N.J.S.A., is not a person “holding any employment, position or office under the government of this State” and “receiving a salary from such State” within the intendment of the Veterans’ Tenure Act.
... [T]he agent designated under R.S. 39:3-3, N.J.S.A. may act only “until his authority is revoked” by the Director, [671] and his compensation is based upon registration certificates issued by him and for every license granted by him, and the Director has authority to limit the fee so paid to a maximum. The Legislature obviously intended to, and did, place in the hands of the Director large and unusual determinative powers, including the designation and removal, and the fixing of the number and the compensation of such agents. Plainly the agent is not within the class of persons in public service contemplated by the Legislature to be limited to persons holding “employment, position or office” and “receiving a salary from such state”____ The legislative intention was to give the Director full rein to control the tenure of his agents and to appoint and remove at his pleasure.

Id. at 476-77, 87 A.2d at 440 (citations omitted). See also In re Fitzgerald, 188 N.J.Super. 476, 482, 457 A.2d 1208, 1211 (App.Div.1983) (“By their nature, motor vehicle agencies are independently run operations managed by independent contractors who are not subject to the benefits and protection of the State’s pension and tenure statutes____”). As a federal court we are bound by this formidable state authority, and, accordingly, find no error in the district court’s ultimate fact determination that the appellants were independent contractors. We turn now to the merits of the appellants’ constitutional argument.

III.

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