IN RE N.J.A.C. 17:2-6.5 (PUBLIC EMPLOYEES' RETIREMENT SYSTEM)

New Jersey Superior Court Appellate Division·Decided June 21, 2021·No. A-2059-18·Published

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION

DOCKET NO. A-2059-18

APPROVED FOR PUBLICATION

IN RE N.J.A.C. 17:2-6.5. June 21, 2021 _____________________ APPELLATE DIVISION

Argued April 21, 2021 – Decided June 21, 2021 Before Judges Ostrer, Accurso and Vernoia.

On appeal from the adoption of amendments to N.J.A.C. 17:2-6.5 by the Board of Trustees, Public Employees' Retirement System.

Jason E. Sokolowski argued the cause for appellant New Jersey Education Association (Zazzali, Fagella, Nowak, Kleinbaum & Friedman, attorneys; Richard A.

Friedman, of counsel and on the briefs).

Robert E. Kelly, Deputy Attorney General, argued the cause for respondent Board of Trustees, Public Employees' Retirement System (Gurbir S. Grewal, Attorney General, attorney; Sookie Bae, Assistant Attorney General, of counsel; Robert E. Kelly, on the brief).

The opinion of the court was delivered by OSTRER, P.J.A.D.

To receive an accidental disability pension, a public employee must prove that his or her "disability was not the result of his [or her] willful negligence." N.J.S.A. 43:15A-43(a). For over fifty years, the Public

Employees' Retirement System (PERS) Board defined "[w]illful negligence" as "1. [a] [d]eliberate act or deliberate failure to act; or 2. [s]uch conduct as evidences reckless indifference to safety; or 3. [i]ntoxication, operating as the proximate cause of injury." N.J.A.C. 17:2-6.5(a) (2017); see N.J.A.C. 17:2 hist. n. (stating that these rules were adopted before September 1, 1969). In 2017, the Board amended the first alternative to read: "Deliberate act or deliberate failure to act that reflects an intentional or purposeful . . . deviation from the standard of care exercised by a reasonable person in similar circumstances." 50 N.J.R. 646(a) (Dec. 13, 2017) (adoption); see also 49 N.J.R. 2189(a) (July 17, 2017) (proposal). 1 On appeal, the New Jersey Education Association asks us to invalidate the amendment, arguing that the change extends the statute beyond its intended meaning, and thereby

1 The adopted rule mistakenly includes an extra "or" — that is, it defines "[w]illful negligence" as a "[d]eliberate act or deliberate failure to act that reflects an intentional or purposeful or deviation from the standard of care exercised by a reasonable person in similar circumstances." N.J.A.C. 17:2- 6.5(a)(1) (emphasis added). The words "intentional or purposeful" make sense only when they directly modify "deviation." Although the Board agreed on appeal that it inserted the second "or" by mistake, it has decided to await resolution of this case to correct the error (which it could do by formal amendment or by seeking technical correction through the Office of Administrative Law. See N.J.A.C. 1:30-2.7 (stating procedure for administrative correction of "obvious, easily recognizable, or apparent" error)). We interpret the regulation without reference to the extra "or."

A-2059-18

disqualifies public employees from receiving accidental disability benefits who are properly qualified for such benefits under the statute.

We agree and invalidate the Board's 2018 amended "willful negligence"

definition because it strays from the Legislature's intent, and because the Board's own reasoning supporting its rule is arbitrary and self-contradictory.

I.

We presume a regulation is valid, N.J. State League of Muns v. Dep't of Cmty. Affs, 158 N.J. 211, 222 (1999), and review it narrowly and deferenti- ally, In re N.J.A.C. 12:17-2.1, 450 N.J. Super. 152, 166 (App. Div. 2017). We defer to an agency's rule-making because we recognize that "certain subjects are within the [agency's] peculiar competence." In re Amend. of N.J.A.C. 8:31B-3.31 & N.J.A.C. 8:31B-3.51, 119 N.J. 531, 543 (1990). When a statute is "silent or ambiguous" about an issue, we may not replace an agency's "permissible" interpretation of that statute with our own view. Kasper v. Bd. of Trs. of the Tchrs.' Pension & Annuity Fund, 164 N.J. 564, 581 (2000) (quoting 2 Am. Jur. 2d Administrative Law § 525 (1994)).

But our deference has limits. We accord "less deference" to a newly minted agency interpretation, "which has not previously been subjected to judicial scrutiny or time-tested agency interpretation." See id. at 580 (quoting 2 Am. Jur. 2d Administrative Law § 524 (1994)). That is especially so when A-2059-18

the new interpretation departs from a prior, long-standing interpretation. See Safeway Trails, Inc. v. Furman, 41 N.J. 467, 484 (1964). In Safeway Trails, the Court reviewed an Attorney General's opinion that reversed a prior opinion. The Court stated that if an agency's statutory "construction is not uniform and consistent, it will be taken into account only to the extent that it is supported by valid reasons." Ibid. (quoting Burnet v. Chi. Portrait Co., 285 U.S. 1, 16 (1932)). Furthermore, we owe no deference at all to an agency's interpretation of judicial precedent. Bowser v. Bd. of Trs., Police & Firemen's Ret. Sys., 455 N.J. Super. 165, 171 (App. Div. 2018).

At bottom, an agency's rulemaking "must be reasonable and not arbitrary" and must further the Legislature's goals. Pascucci v. Vagott, 71 N.J. 40, 50 (1976). We shall set aside a regulation that is "unreasonable or irrational," Bergen Pines Cnty. Hosp. v. N.J. Dep't of Hum. Servs., 96 N.J. 456, 477 (1984), or that "violate[s] the enabling act's express or implied legislative policies," Williams v. N.J Dep't of Hum. Servs., 116 N.J. 102, 108 (1989); see also In re N.J. Individual Health Coverage Program's Readoption of N.J.A.C. 11:20-1, 179 N.J. 570, 579 (2004) (stating that "[a]dministrative regulations 'cannot alter the terms of a statute or frustrate the legislative policy'" (quoting Med. Soc'y of N.J. v. N.J. Dep't of L. & Pub. Safety, 120 N.J. 18, 25 (1990))); In re Amend. of N.J.A.C. 8:31B-3.31, 119 N.J. at 543-44 A-2059-18

(stating that appellate courts determine whether a rule "is arbitrary, capricious, unreasonable, or beyond the agency's delegated power"). Ultimately, "we are 'in no way bound by an agency's interpretation of a statute or its determination of a strictly legal issue.'" Russo v. Bd. of Trs., Police & Firemen's Ret. Sys., 206 N.J. 14, 27 (2011) (quoting Mayflower Sec. Co. v. Bureau of Sec., 65 N.J. 85, 93 (1973)).

II.

To determine if the Board's amendment conforms to the Legislature's express or implied policy, we turn first to the statute. The PERS statute withholds accidental-disability pensions from employees whose disability results from their "willful negligence," N.J.S.A. 43:15A–43(a) — but the statute does not define "willful negligence," let alone a "deliberate act or deliberate failure to act." Neither do the statutes for the Police and Firemen's Retirement System (PFRS), the Teachers' Pension & Annuity Fund (TPAF), and the State Police Retirement System (SPRS), which likewise deny accidental-disability pensions because of willful negligence. See N.J.S.A. 18A:66-39(c) (TPAF); N.J.S.A. 43:16A-7(a)(1) (PFRS); N.J.S.A. 53:5A-10(a) (SPRS).2 Because the PERS statute's plain meaning is unclear, we turn to

2 The "willful negligence" disqualifier has a long history. For example, we find it in the 1921 statute of the old State Employees' Retirement System. L.

A-2059-18

other sources, including related provisions of law, for interpretative help. See In re H.D., 241 N.J. 412, 418 (2020).

Free access — add to your briefcase to read the full text and ask questions with AI

IN RE N.J.A.C. 17:2-6.5 (PUBLIC EMPLOYEES' RETIREMENT SYSTEM), (N.J. Ct. App. 2021).

IN RE N.J.A.C. 17:2-6.5 (PUBLIC EMPLOYEES' RETIREMENT SYSTEM) (IN RE N.J.A.C. 17:2-6.5 (PUBLIC EMPLOYEES' RETIREMENT SYSTEM)) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

Related

Burnet v. Chicago Portrait Co.
285 U.S. 1 (Supreme Court, 1932)
Bergen Pines County Hospital v. New Jersey Department of Human Services
476 A.2d 784 (Supreme Court of New Jersey, 1984)
In Re the New Jersey Individual Health Coverage Program's Readoption
847 A.2d 552 (Supreme Court of New Jersey, 2004)
Malone v. Fender
402 A.2d 240 (Supreme Court of New Jersey, 1979)
Safeway Trails, Inc. v. Furman
197 A.2d 366 (Supreme Court of New Jersey, 1964)
Pascucci v. Vagott
362 A.2d 566 (Supreme Court of New Jersey, 1976)
Brewer v. Porch
249 A.2d 388 (Supreme Court of New Jersey, 1969)
Stelluti v. CASAPENN ENTERPRISES
975 A.2d 494 (New Jersey Superior Court App Division, 2009)
Medical Society v. New Jersey Department of Law & Public Safety
575 A.2d 1348 (Supreme Court of New Jersey, 1990)
In Re Amendment of N.J.A.C. 8:31B-3.31
575 A.2d 481 (Supreme Court of New Jersey, 1990)
Gerba v. BD. OF TRUSTEES, PUBLIC EMPLOYEES'RETIREM. SYS.
416 A.2d 314 (Supreme Court of New Jersey, 1980)
Kasper v. TEACHERS'PEN. & ANN. FUND
754 A.2d 525 (Supreme Court of New Jersey, 2000)
Roth v. BOARD OF TRUSTEES, ETC.
139 A.2d 761 (New Jersey Superior Court App Division, 1958)
Guico v. Excel Corp.
619 N.W.2d 470 (Nebraska Supreme Court, 2000)
Spaulding v. ALLIANT FOODSERVICE, INC.
689 N.W.2d 593 (Nebraska Court of Appeals, 2004)
Estate of Coe v. Willmes Trucking, L.L.C.
689 N.W.2d 318 (Nebraska Supreme Court, 2004)
Brooks v. Board of Trustees
40 A.3d 1166 (New Jersey Superior Court App Division, 2012)
Williams v. Department of Human Services
561 A.2d 244 (Supreme Court of New Jersey, 1989)
Parks v. Pep Boys
659 A.2d 471 (New Jersey Superior Court App Division, 1995)