In Re Determination of Executive Commission on Ethical Standards

561 A.2d 542, 116 N.J. 216, 1989 N.J. LEXIS 102

• Court: Supreme Court of New Jersey
• Decided: August 2, 1989
• Status: Published

Opinions

The opinion of the Court was delivered by

O’HERN, J.

The question in this case is whether a Rutgers law professor conducting a clinical teaching program is to be regarded as a “State employee” for purposes of the New Jersey Conflicts of Interest Law, N.J.S.A. 52:13D-12 to -27. Specifically, the question is whether the clinical teaching program is prohibited from carrying out its legal mission before a State administrative agency, in this case, the Council on Affordable Housing (COAH). A clinical teaching program at a privately-chartered institution of legal education undoubtedly would be able to appear before State courts and State agencies. We do not believe that the Legislature ever would have intended to disable a clinical education program at our State University. Accordingly, we reverse the judgment of the Appellate Division holding that representation of clients before such State agencies by the clinical legal program and the teaching supervisor is a violation of the New Jersey Conflicts of Interest Law.

I

Clinical training is one of the most significant developments in legal education. Generations of law students, trained on the case method, were believed to be skilled in analysis but unskilled in serving client needs. The response has been for law schools to afford students “hands-on” experience in representing clients. That means participating in client interviews, investigations, preparation of pleadings, and, in permitted circumstances, appearing in court. We have changed our Court Rules to permit the supervised practice of law by third-year law students and recent graduates who are not yet admitted to the bar while participating in approved programs. See R. l:21-3(b).

As noted, the Rule permits students, under the supervision of a member of the bar, to represent clients in need of legal services. For example, the Rutgers Environmental Law Clinic’s mission is to provide students with an introduction to the nature of environmental law practice. To do so, it must interact with the Department of Environmental Protection as well as other State administrative agencies. In order to accept the Commission’s ruling, we would have to assume that an environmental-law clinic at a State University (unlike one at a privately-funded university) would not be able to interact with any of the agencies essential to such practice. Nor would the Women’s Rights Litigation Clinic of Rutgers University be able to represent women subjected to sexual harassment in related employment hearings or to act in child-advocacy issues before the Division of Youth and Family Services, the State agency that provides protective services for children. Nor would the Urban Legal Clinic at Rutgers be able to handle its clients’ housing, employment, and income-assistance claims when they must go before the operative State agencies. Nor, finally, would the Rutgers University School of Law Constitutional Litigation Clinic (Clinic) be able to appear before COAH. We cannot attribute such an intention to the Legislature.

II

We gather this insight from considering the purposes of the conflicts law. In 1969, the Legislature was concerned with the practice of its members and other public officials appearing before the agencies of government that were under regulation. In 1971, after substantial debate, the Legislature enacted the present conflicts law, declaring that

[i]n our representative form of government, it is essential that the conduct of public officials and employees shall hold the respect and confidence of the people. Public officials must, therefore, avoid conduct which is in violation of their public trust or which creates a justifiable impression among the public that such trust is being violated. [N.J.S.A. 52:13D-12(a).]

Governor Cahill, on signing the bill, stated that

the State will benefit by the removal, to a large degree, of situations of conflicts of interests on the part of members of the Legislature and State officers and employees. Equally as important, this bill will remove the appearance of an opportunity for the exertion of undue influence.

While in many instances no actual conflict of interest or undue influence does exist, the appearance of the same is most harmful to our public image. By removing situations of conflict of interest, opportunities for conflict of interest, and the appearance of conflict of interest and undue influence, the respect of our citizens for public officials will be renewed. [Remarks in Connection with the Signing of S-825 (2nd OCR) at 4 (June 2, 1971) (hereinafter Remarks of Governor Cahill).]

The particular evil that occasioned the passage of the conflicts law was the appearance of impropriety by members of the official family of State Government representing interests before agencies of the very government with which they were associated. There is a familiar concern at both state and national levels of trading this influence in the public sphere to the disadvantage or to the apparent disadvantage of the public.

The section of the conflicts law currently at issue provides, in relevant part that

[n]o State officer or employee * * * shall represent, appear for, or negotiate on behalf of, or agree to represent, appear for, or negotiate on behalf of, any person or party other than the State in connection with any cause, proceeding, application or other matter pending before any State agency * * *. [N.J.S.A. 52:13D-16(b)J

Section 16(c) of the conflicts law exempts certain agencies from the foregoing provision, but the COAH is not listed among them. Further, the statute broadly defines “State officer or employee” as, in relevant part, “any person * * * holding an office or employment in a State agency * * N.J.S.A. 52:13D-13(b). “State agency” similarly is defined broadly as

any of the principal departments in the Executive Branch of the State Government, and any division, board, bureau, office, commission or other instrumentality within or created by such department, the legislature of the State and any office, board, bureau or commission within or created by the Legislative Branch, * * * and any independent State authority, commission, instrumentality or agency. A county or municipality shall not be deemed an agency or instrumentality of the State. [N.J.S.A. 52:13D-13(a).]

Ill

We come now to the position of a professor at a State University and must try to assimilate that position within the framework of the statute. Obviously, the professor is not an employee of any of the “principal departments in the Executive Branch of the State Government,” but the language of the statute might be interpreted to extend to Rutgers. It holds a legislative charter. Does that make it a State “instrumentality” for purposes of the State’s conflicts law? Heretofore, our courts have resolved the question of whether general state statutes apply to Rutgers by considering both the purposes of the general program and the purposes of the Rutgers legislative charter. See Rutgers, The State University v. Pituso, 60 N.J. 142 (1972). Our task is to have the law make sense: “it is a venerable principle that a law will not be interpreted to produce absurd results.” K Mart Corp. v. Cartier, Inc., 486 U.S. 281, - n. 2, 108 S.Ct. 1811, 1816 n. 2, 100 L.Ed.2d 313, 345 n. 2 (1988) (Scalia, J., concurring in part and dissenting in part).¹ We must ask whether the teaching role of a Rutgers University professor evokes any of those concerns that prompted the Legislature to enact conflict-of-interest provisions regulating the conduct of New Jersey public officials, and whether application of the law would frustrate the purposes of the Rutgers charter.

We begin by noting the entirely coincidental circumstance that occasions the presence of the putative “State employee,” the university professor, before the State agency. It is a circumstance that contradicts any suggestion of an “appearance of an opportunity for the exertion of undue influence.” Remarks of Governor Cahill, supra, at 4. Rather, this situation arises from the unique circumstances of the enactment of the Fair Housing Act of 1985, N.J.S.A. 52:27D-301 to -329. For some years prior to the act, the Rutgers Clinic had been representing the Civic League, a nonprofit organization representing the interests of low- and moderate-income persons, in certain claims before the Superior Court. At no time was the representation by the University or its teaching clinic ever questioned as presenting any appearance of impropriety. Following the enactment of the Fair Housing Act, and in accordance with its provisions, litigation was transferred to the COAH for exhaustion of its administrative procedures. See generally Hills Dev. Co. v. Township of Bernards, 103 N.J. 1 (1986) (upholding and explaining the Fair Housing Act, and concluding that on the facts before it none of the cases satisfied the “manifest injustice” standard required to avoid transfer to the COAH).

That this happenstance would create a conflict of interest could hardly have been the intention of the Legislature. Given the correlative relationship between the agency process and the judicial process under the Act, we would have to assume that the Legislature intended that a public-interest client would be expected to change representation as it went in and out of COAH.

In addition, we note the unique status of Rutgers, The State University. For some 190 years, it had occupied an essentially independent status. See generally Trustees of Rutgers College v. Rickman, 41 N.J.Super. 259, 265-82 (Ch.Div.1956) (outlining the history of the University from its chartering as Queen’s-College in 1766 until 1956). Accordingly, the absorption of Rutgers University within the framework of State-supported education has been marked by an overriding concern for the academic freedom of one of the nation’s oldest and greatest universities. The fact that there is State involvement in education should never be a disadvantage. The Governor of the State of New Jersey is trustee, ex officio, of Princeton University. There is no loss of academic freedom in that. The reorganization of Rutgers as the State University in 1956 was accompanied by a declaration that

the corporation and the university shall be and continue to be given a high degree of self-government and that the government and conduct of the corporation and the university shall be free of partisanship. [N.J.S.A. 18A:65 — 27(I)(a).]

The reorganization statute also provides that “the powers granted to the corporation or the boards [of trustees] or reasonably implied, may be exercised without recourse or reference to any department or agency of the state, except as otherwise expressly provided by this chapter or other applicable statutes.” N.J.S.A. 18A:65-28. It has been said that Rutgers is a unique body within our State government:

[W]e find here created a hybrid institution — at one and the same time private and public, with the State being granted a major voice in management, and the designation “State University”; and the institution being granted private autonomy and control of physical properties and assets. [Rickman, supra, 41 N.J.Super. at 289-90.]

We have previously recognized the Legislature’s intent “that the growth and development of Rutgers, as a public university for the benefit of all the people of the state, was not to be thwarted or restricted * * Rutgers, The State University v. Piluso, supra, 60 N.J. at 158.

While it has to some extent been regarded as a State agency for the purpose of immunity from local land-use regulations, ibid., and from property taxation, Rutgers, The State University v. Piscataway Township, 1 N.J.Tax 164 (Tax Ct.1980), in other circumstances it has not been viewed as synonymous with the State. It is capable of being sued and has the power to sue, and therefore it is not considered part of the State in regard to the New Jersey Contractual Liability Act, N.J.S.A. 59:13-1 to -10. Frank Briscoe Co. v. Rutgers, The State University, 130 N.J.Super. 493 (Law Div.1974). Nor is it considered an arm of the State entitled to eleventh-amendment immunity from suit. Kovats v. Rutgers, The State University, 822 F.2d 1303 (3d Cir.1987). Finally, in our most recent examination of the issue in Fuchilla v. Layman, 109 N.J. 319 cert. denied, — U.S. -, 109 S.Ct. 75, 102 L.Ed.2d 51 (1988), it was not considered an alter-ego of the State but rather a “person” subject to liability for purposes of a federal action under 42 U.S.C.A. § 1983.

All of this independence accords with the idea of a university as “guilds of scholars * * * responsible only to themselves.” Snitow v. Rutgers University, 103 N.J. 116, 122 (1986) (quoting NLRB v. Yeshiva University, 444 U.S. 672, 680, 100 S.Ct. 856, 861, 63 L.Ed.2d 115, 124 (1980)). In Snitow we recognized the fundamental importance of academic freedom in our society:

The concept of “[a]cademic freedom, though not a specifically enumerated constitutional right, long has been viewed as a special concern of the First Amendment.” Regents of the University of California v. Bakke, 438 U.S. 265, 312, 98 S.Ct. 2733, 2760, 57 L.Ed.2d 750, 785 (1978) (Powell, J., announcing Court’s judgment and expressing his views of case). “ ‘[T]he four essential freedoms’ of a university” have been said to include the freedom “to determine for itself on academic grounds who may teach, what may be taught, how it shall be taught, and who may be admitted to study.” Sweezy v. New Hampshire, 354 U.S. 234, 263, 77 S.Ct. 1203, 1218, 1 L.Ed.2d 1311, 1332 (1957) (Frankfurter, J., concurring) (citation omitted). [Ibid.]

To characterize one of these scholars, for all purposes, as the equivalent of a “State employee” is to misperceive history and to traduce legislative purpose.

In Democratic Party of New Jersey, Inc. v. Collins, 109 N.J. 521, 522 (1987), we recognized that it was not clear that members of the State Legislature who were tenured faculty members of State universities held a “position of profit” within the Executive Branch of Government. Accordingly, we remanded that case for further factual findings on the actual appearances or possible appearances of impropriety in the relationships of the parties. Ibid. If anything, there is much less potential for the appearance of impropriety in the relationship of a Rutgers University professor appearing before State agencies. There is simply no budgetary or fiscal relationship between the parties. At oral argument, we specifically requested the Attorney General to illustrate the instances in which an “appearance of impropriety” would be present to a well-informed observer. See Higgins v. Advisory Comm. on Professional Ethics, 73 N.J. 123, 128 (1977) (upholding an opinion by the Advisory Committee on Professional Ethics, a committee concerned with attorney ethics, finding it an unethical practice for an attorney to represent a criminal defendant indicted in the county in which the attorney is a freeholder insofar as such practice “can create not only the appearance of impropriety but also a real danger or risk of undue influence.”). The Attorney General, conceding that there was no actual impropriety, asserted that a perception may arise that there could be an advantage in having such representation.

But the appearance of impropriety in Higgins is real. The prosecutor’s office depends for its fiscal resources on the attorney-freeholder. Ibid. We have no sense of that here. “[T]he evil sought to be remedied” by the statute, Oxford Consumer Discount Co. of N. Philadelphia v. Stefanelli, 102 N.J.Super. 549, 565 (App.Div.1968), was any conduct by officials of the executive and legislative branch “which is in violation of their public trust or which creates a justifiable impression among the public that such trust is being violated.” N.J.S. A. 52:13D-12(a).

Moreover, there is no risk of undue influence or appearance of undue influence posed by a university professor conducting a teaching program whose mission extends to such a State agency. As Governor Cahill emphasized, the statutory section at issue in this appeal, N.J.S.A. 52:13D-16, was primarily enacted to meet the ethical issues that arise in connection with the off-hours or “moonlighting” activities of legislators and other State officers and employees who exert undue influence by trading on their prestige or contacts. See Remarks of Governor Cahill, supra, at 2 (“Members of the Legislature and all State officers and employees must now abide by a comprehensive set of guidelines which delineate just what they are permit-, ted to do and what they are prohibited from doing in the area of private enterprise.” (Emphasis added)). This portion of the statute “was designed to regulate the outside or unofficial conduct of state officers and employees and members of the Legislature in order to avoid activities which create an impression that their public trust is being violated.” De Rose v. Byrne, 135 N.J.Super. 273, 282 (Ch.Div.1975) (emphasis added).

IV

Nor do the particulars of this case present any special appearance of impropriety or trading on influence. As noted, the case arises from the statutory transfer of the case from the court system to the agency. In June 1986, a staff attorney with the clinic requested an advisory opinion from the Executive Commission on Ethical Standards (Commission) determining whether the professors could continue their representation of the Civic League before the COAH. On January 21, 1987, the Commission ruled that such representation would violate the conflicts law, and recommended that the clinic should seek a legislative change in the law. On February 18, 1987, the Commission refused to stay its ruling pending appeal.

On February 27, 1987, the clinic, on behalf of the Civic League, filed with the Appellate Division a notice of motion for accelerated review of the administrative determination below and for a stay of that determination pending appeal. On March 27, 1987, the Appellate Division denied the motion. On February 3, 1988, the Appellate Division upheld the Commission’s determination, holding that “the Commission correctly determined that the Rutgers’ employees in the clinic are subject to the Conflicts Law, and that they cannot represent the League before COAH without violating that law.” 222 N.J.Super. 482, 501 (1988). We granted certification. 113 N.J. 356 (1988).

We are simply unable to agree that in any sense this representation is within the contemplation of the legislative purposes of the conflict of interest law. It is almost a cliche to say that the purpose of courts in statutory construction is to seek to enforce the legislative will. E.g., AMN, Inc. v. Township of S. Brunswick Rent Leveling Bd., 93 N.J. 518, 525 (1983); Safeway Trails, Inc. v. Furman, 41 N.J. 467, 477 cert. denied, 379 U.S. 14, 85 S.Ct. 144, 13 L.Ed.2d 84 (1964). We will enforce the legislative will even when the language of the statute is in conflict therewith. New Jersey Builders, Owners and Managers Ass’n v. Blair, 60 N.J. 330, 338 (1972) (“Where a literal rendering will lead to a result not in accord with the essential purpose and design of the act, the spirit of the law will control the letter.”). As we have seen, it has never been the law that for all purposes Rutgers is to be regarded as an alter-ego of the State. See Fuchilla v. Layman, supra, 109 N.J. 319. It is equally not true that its teaching faculty members are employees of the State for all purposes.

We are not convinced that the faculty handbook cited by our dissenting members, post at 231, and the Appellate Division, supra, 222 N.J.Super. at 492, disposes of the issue. Although the handbook concludes that Rutgers professors are bound by the conflicts law, its interpretation of the law limits its scope to prohibition of appearances before the agency or instrumentality with which the employee is associated.² As such, the handbook’s interpretation would not prohibit the representation in this case.

It is difficult to conceive how the well-informed member of the public might conclude that such a person would be able to exert improper influence on the agency. They are not members of the “official family” of State Government (a principle that has always influenced our own decisions with respect to appearances of impropriety), nor do they possess any ability to influence the agency by control of its budget or its personnel in any way. See Higgins, supra, 73 N.J. at 125 (quoting Advisory Committee on Professional Ethics Advisory Opinion No. 291, 97 N.J.L.J. 801 (1974)).

The previous rulings of the Executive Commission on Ethical Standards in Advisory Opinion No. 4 and Advisory Opinion No. 38 do not conflict with our result. The former held that a hearing officer paid by Rutgers should be considered a “state employee” under the Conflicts of Interest Law, but did not indicate what effect this would have. We agree that accepting gifts or favors given in exchange for influence, N.J.S.A. 52:13D-14, or post-employment representation on a matter dealt with during State service, N.J.S.A. 52:13D-17, would be improper. The latter ruling, No. 38, recognized that Rutgers faculty could represent parties in court even when the State is or might be an adverse party, subject, however, to any specific conflict that might otherwise be involved. Given the educational purposes of the clinic, and that the State University would be academically and educationally disadvantaged by the contrary interpretation, we hold that a Rutgers University professor in a teaching clinic of this type is not to be regarded as a State employee for purposes of the conflicts-of-interest law.

V

In so holding, we do no more than resolve the question before us. We draw the line at the outer boundaries of legislative intent. We do not hold that a State university professor who personally seeks or receives fees in the course of legal representation before State agencies of government would or would not be a State employee. There might be circumstances in which an appearance of impropriety would be present. However, for the most part such representation will be by attorneys-at-law, who would be constrained by ethical restrictions on their conduct. See Higgins, supra, 73 N.J. 123. All that we hold is that the representation here does not evoke any of the concerns that prompted the legislative action.

Nor do we hold that were the Legislature to confirm the holding of the Appellate Division, it would so clearly be an infringement on protected interests that it would be invalid. Nonetheless we are certain that the Legislature would place the highest premium on academic freedom, as it has done invariably in the past, and would carefully balance the State and academic interests in the process. We hold here only that it was undoubtedly not within the contemplation or intent of the Legislature that the phrase, “State employee,” under the New Jersey Conflicts of Interest Law, N.J.S.A. 52:13D-16(b), apply to a university professor supervising a constitutional law clinic when the clinic is occasioned to represent clients whose matters must go before the COAH for resolution of a constitutional claim.

The judgment of the Appellate Division is reversed.

1 The common sense of man approves the judgment mentioned by Puffendorf, that the Bolognian law which enacted 'that whoever drew blood in the streets should be punished with the utmost severity,’ did not extend to the surgeon who opened the vein of a person that fell down in the street in a fit. The same common sense accepts the ruling, cited by Plowden, that the statute of 1st Edward II, which enacts that a prisoner who breaks prison shall be guilty of felony, does not extend to a prisoner who breaks out when the prison is on fire — 'for he is not to be hanged because he would not stay to be burnt.’ [K Mart Corp. v. Cartier, Inc., supra, 486 U.S. at - n. 2, 108 S.Ct. at 1816 n. 2, 100 L.Ed.2d at 345 n. 2 (Scalia, J., concurring in part and dissenting in part) (quoting United States v. Kirby, 7 Wall 482, 487, 19 L.Ed. 278 (1869)).]

2 The handbook states, in relevant part:

[F]aculty and other employees of the University are bound by the New Jersey Conflict of Interest Statute [N.J.S.A. 52:13D-12 et seq.]. This statute is quite comprehensive in prohibiting an employee of an agency or instrumentality of the State, among other activities, from accepting bribes; representing or negotiating for, any party other than the State before the agency [or instrumentality] of the State with which he or she is associated; representing any agency or instrumentality of the State in a transaction with a business in which he or she has a pecuniary interest [except that ownership or control of 10% or less of the stock of a corporation is not deemed to be an "interest” within the meaning of the law].

(Emphasis added; bracketed portions in original.)