supreme court of new jersey docket. no. 74,612 flicker ...procedural history the pro se...
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SUPREME COURT OF NEW JERSEYDocket. No. 74,612
___________________________________Richard W. Berg, Robert J. Brass, :Thomas Canavo, Melaine B. Campbell, :Larry Robert Etzweiller, Kathy : Flicker, Arnold Golden, Charles : Civil Action Grinell, Toni A. Hendricksen, Harold :Krasselman, Susan Lothian, Stephen :Monson, Martin C. Mooney, Sr., Brian : Mulholland, Charles Ouslander, Anne : C. Paskow, Sharyn Peiffer, Samuel : On Certification From Reale, Jr., Gregory J. Sakowicz, : The Superior Court of Susan W. Sciacca, William H. Schmidt : New Jersey, AppellateFred Schwanwede, John J. Smith, : DivisionDebra Stone, Sheri Tanne, : Jack L. Weinberg, :
Appellant-Respondent : (Charles Ouslander) : Sat Below:
: Hon. Susan Reisner, P.J.A.D. New Jersey Education : Hon. Carmen Alvarez, J.A.D.Association, et. al., : Hon. Harry Carroll, J.A.D.
Plaintiff-Intervenors, :(Respondents) :
:V. :
:Hon. Christopher J. Christie, Hon. :Kim Guadagno, Secretary of State of :the State of New Jersey; Director, :Division of Pensions; Board of :Trustees, Public Employees :Retirement System; Treasurer, State :of New Jersey; State of New Jersey; :
Cross-Appellants-Respondents :_________________________________________________________________
PRO SE APPELLANT’S BRIEF IN OPPOSITION TO STATE’S MERITS BRIEF _________________________________________________________________
CHARLES OUSLANDER, ESQ.P.O. BOX 39 125 BROEMEL PLACEPENNINGTON, NEW JERSEY 08534(609) [email protected] Attorney I.D.# 000101990
TABLE OF CONTENTS
PAGE
PROCEDURAL HISTORY . . . . . . . . . . . . . . . . . . . . . . 1
STATEMENT OF FACTS. . . . . . . . . . . . . . . . . . . . . . .1
LEGAL ARGUMENT
POINT I
EXQUISITELY CLEAR STATUTORY LANGUAGE, DISPOSITIVELEGISLATIVE HISTORY AND THE APPELLATE DIVISION’S EXACTING REVIEW BELOW FLATLY BELIE THE STATE’S UNTENABLE CONTENTION THAT COLAS CAN BE RETROACTIVELYREDUCED OR ELIMINATED . . . . . . . . . . . . . . . . . 1
POINT II
THE APPELLATE COURT’S ANALOGY TO FEDERAL PENSION LAW(ERISA) AND ITS USE BY THE LEGISLATIVE SPONSOR OF THEBILL, WHICH ULTIMATELY BECAME N.J.S.A. 43:3C-9.5, ISRELEVANT AND INSIGHTFUL BASED ON THE STATE’S PROVENFAILURE TO COMPLY WITH FEDERAL TAX LAW . . . . . . . . .11
POINT III
COLAS ARE AN INDIVISIBLE COMPONENT OF PENSION BENEFITSBY ADJUSTING THE EARNED BENEFITS TO ACCOUNT FOR THEEFFECTS OF INFLATION. . . . . . . . . . . . . . . . . . 16
POINT IV
THE STATE’S CONTINUED RELIANCE ON THE DEBT LIMITATIONAND APPROPRIATION CLAUSES OF THE STATE CONSTITUTION TODEFEAT THE PROTECTION OF COLAS, PURSUANT TO THE NON-FORFEITABLE RIGHT, IS WHOLLY ERRONEOUS BECAUSE THE MONIESIN THE PENSION SYSTEM ARE TRUST FUNDS NOT SUBJECT TOTHOSE CONSTITUTIONAL PROVISIONS . . . . . . . . . . . . 18
CONCLUSION . . . . . . . . . . . . . . . . . . . . . . .20
TABLE OF AUTHORITIES
NEW JERSEY CASES
Abbott v. Burke, 100 N.J. 269 (1985). . . . . . . . . . . . . . 8
Alan J. Cornblatt, P.A. v. Barow, 153 N.J. 218 (1998). . . . 4,8
Berg v. Christie, 436 N.J. Super. 220 (2014 ) . . . . . . . . . . . . . 3, 9, 10, 13, 16, 17, 18, 19
Brown v. Township of Old Bridge, 319 N.J. Super. 476 (App. Div.1999).. . . . . . . . . . . . . . . . . . . . . . . . . . 9, 17
Burgos v. State, 222 N.J. 175 (2015). . . . . . . . . . . 19, 20
Chiarello v. Board of Trustees, Public Employees’ RetirementSystem, 429 N.J. Super. 194 (App. Div. 2010). . . . . . . 4, 10
DiProspero v. Penn, 183 N.J. 477 (2005).. . . . . . . . . . . . 4
Doe v. Poritz, 142 N.J. 1(1995).. . . . . . . . . . . . . . . . 8
Eyers v. Board of Trustees, Public Employees’ Retirement System,91 N.J. 51 (1982).. . . . . . . . . . . . . . . . . . . . . . 6
Fiola v. Dept. of the Treasury, 193 N.J. Super. 340 (App. Div.1984).. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Geller v. Department of the Treasury, 53 N.J. 591 (1969). . . 11
Hayden v. Hayden, 284 N.J. Super. 418 (App. Div. 1995). . . 9, 17
L.A. v. Board of Education of Trenton, 221 N.J. 192 (2015). . 5,8
Micheletti v. State Health Benefits Commission, 389 N.J. Super.510 (App. Div. 2007). . . . . . . . . . . . . . . . . . . . . 7
Morristown Association. V. Grant Oil, 220 N.J. 360 (2105).. 4, 8
New Jersey Education Association (NJEA) v. State, 412 N.J. Super.192 (App. Div. 2010). . . . . . . . . . . . . . . . . . . 4, 19
Panzino v. Continental Can Company, 71 N.J. 298 (1976). . . . 13
Spina v. Consolidated Police and Fireman’s Pension Fund, 41 N.J.391 (1964). . . . . . . . . . . . . . . . . . . . . . . . . . 7
i
State v. Jersey Central Power and Light Company, 133 N.J. Super.375 (App. Div. 1975). . . . . . . . . . . . . . . . . . . . 12
FEDERAL CASES
Bonovich v. Knights of Columbus, 963 F. Supp. 143 (D. Conn. 1997) aff’d F. 3d 57 (2d Cir. 1998).. . . . . . . 15
STATE STATUTES
N.J.S.A. 1:1-5. . . . . . . . . . . . . . . . . . . . . . . . 10
N.J.S.A. 43:3B-1. . . . . . . . . . . . . . . . . . . . . . . . 8
N.J.S.A. 43:3B-4.3. . . . . . . . . . . . . . . . . . . . . . . 3
N.J.S.A. 43:3C-9.1. . . . . . . . . . . . . . . . . . . . . . 18
N.J.S.A. 43:3C-9.5. . . . . . . . . . . . . . . . . . . . 1, 2, 9
N.J.S.A. 43:3C-9.5(a).. . . . . . . . . . . . . . 2, 6, 7, 15, 16
N.J.S.A. 43:3C-9.5(e).. . . . . . . . . . . . . . . . . . . . . 4
N.J.S.A. 43:15A-42. . . . . . . . . . . . . . . . . . . . . . . 3
N.J.S.A. 43:15A-43. . . . . . . . . . . . . . . . . . . . . . . 3
N.J.S.A. 43:15A-158.. . . . . . . . . . . . . . . . . . . . . . 3
N.J.S.A. 43:15A-159.. . . . . . . . . . . . . . . . . . . . . . 3
N.J.S.A. 43:15A-160.. . . . . . . . . . . . . . . . . . . . . . 3
N.J.S.A. 52:14-17.25. . . . . . . . . . . . . . . . . . . . . . 7
FEDERAL STATUTES
26 U.S.C. 401(a)(2).. . . . . . . . . . . . . . . . . . . . . 18
29 U.S.C. 1053(a).. . . . . . . . . . . . . . . . . . . . . . 15
OTHER SOURCES CITED
Attorney General’s Legal Opinion,dated August 24, 2006 . . . . . . . . . . . . . . . . . . 4,15,17
Black’s Law Dictionary, 10th Edition (2014) . . . . . . . . . . 6
ii
Office of Legislative Services Legal Opinion,dated August 21, 2006 . . . . . . . . . . . . . . . . . . . . 11
Plaintiff-Intervenors Supplemental Letter-Brief and Appendix,dated February 11, 2014, . . . . . . . . . . . . . . . . . . . 13
State’s Response in Opposition to Application for Amicus ForLeave to Appear, dated October 22, 2015.. . . . . . . . . . . . 9
Webster’s New World Compact Desk Dictionary,2nd Edition (2010). . . . . . . . . . . . . . . . . . . . . . . 5
iii
PROCEDURAL HISTORY
The pro se plaintiff-appellant relies upon the procedural
history set forth in his petition and supplemental brief to this
Court dated August 7, 2014 and October 14, 2015, respectively.
STATEMENT OF FACTS
The pro se plaintiff-appellant relies upon the statement of
facts set forth in his petition and supplemental brief to this
Court dated August 7, 2014 and October 14, 2015, respectively.
LEGAL ARGUMENT
POINT I
EXQUISITELY CLEAR STATUTORY LANGUAGE, DISPOSITIVELEGISLATIVE HISTORY AND THE APPELLATE DIVISION’S EXACTING REVIEW BELOW FLATLY BELIE THE STATE’S UNTENABLE CONTENTION THAT COLAS CAN BE RETROACTIVELYREDUCED OR ELIMINATED.
The non-forfeitable right statute, codified in N.J.S.A.
43:3C-9.5, clearly encompasses and protects both base pension and
COLAs benefits earned by each pension member who retired before
the effective date of P.L. 2011, c.78., Sec. 25, on June 28,
2011. The State’s obstinate unwillingness to read the statute in
accordance with well established rules of statutory construction,
especially in light of the law and public policy supporting the
protection of public employees’ rights, is a testament to its
effort to divert attention from the State’s unrelenting refusal
to properly fund the pension system. The issue before this Court
is simply to interpret the Legislature’s intent from the statute
1
and enforce this law in accordance with its plain language.
Notwithstanding the clear dictates of the statute and the
“benefits program” it protects, the State repeatedly elides any
attempt on its part to properly construe this dispositive phrase.
Given the arguments advanced by the State, a succinct
summary of appellant’s core argument is appropriate. Appellant’s
position, below and on appeal, is straightforward and premised on
the most rudimentary and long-standing principles of statutory
construction. Specifically, appellant maintains that the term
“benefits program” defined in N.J.S.A. 43:3C-9.5 includes COLAs.
Moreover, because COLAs are subject to the same contractual
protections as base pension benefits under N.J.S.A. 43:3C-9.5,
any retroactive diminution of COLAs intrinsically violates not
only the aforementioned provision, but also the respective
contract clauses of the New Jersey and federal constitutions.
Initially, the State’s arguments that COLAs are not
protected pension benefits is a conceit premised on a brazen
disregard of the most fundamental principles of statutory
construction. More particularly, the State simply refuses to
reasonably interpret the phrase “benefits program”. However, the
plain language of the statute encompasses all pension benefits as
protected by the right, except post-retirement medical benefits.
N.J.S.A. 43:3C-9.5(a). The express language used by the
Legislature specifically protects the “benefits program” from
2
being reduced. Tellingly, the State does not, and presumably
cannot, set forth any argument – beyond a naked assertion – as to
why COLAs are not subsumed within the meaning of the term
“benefits program”.1
Indeed, by the State’s logic, the non-forfeitable right
(i.e. “benefits program”) does not apply to service retirements,
N.J.S.A. 43:15A-158, special retirements, N.J.S.A. 43:15A-159,
deferred retirements, N.J.S.A. 43:15A-160, ordinary disability
retirements, N.J.S.A. 43:15A-42, accidental disability
retirements, N.J.S.A. 43:15A-43, COLAs, N.J.S.A. 43:3B-4.3, or
any other form of pension benefits, since none of the foregoing
are specifically referenced by the statute. It is clear, however,
that because the statute includes all pension “benefits” within
the statutory scheme or plan (i.e. “program”) “as provided under
the laws governing the retirement system...”, it is a
deliberately broadly inclusive provision.2
1 Curiously, the State was previously unable or unwillingto interpret the precise meaning of these words before theAppellate Division. “Whatever the precise nature of the right thestatute grants,...” State’s Appellate Brief, dated June 24, 2013,at p.8, Berg v. Christie, 436 N.J. Super. 220 (App. Div. 2014).
2 Oddly, the State’s first sentence in its supplementalbrief is “No one disputes that the retirees in these consolidatedcases have a non-forfeitable right to their base pensions.” TheState never explains how it arrived at this assertion of factbased on the plain language of the statute itself. The words“base pension” or “base” do not appear in the statute. In fact,when the State conceded before the Appellate Division, in theNJEA case, that pensioners do have a contractual right to theirpension benefits, the Court stated, “The essence of the right,
3
When interpreting a statute, words will be assigned their
"ordinary and well-understood meanings", unless the legislature
has indicated otherwise. Alan J. Cornblatt, P.A. v. Barow, 153
N.J. 218, 231(1998); DiProspero v. Penn, 183 N.J. 477, 492 (2005)
(Courts "ascribe to the statutory words their ordinary meaning
and significance."); Morristown Association. V. Grant Oil, 220
N.J. 360, 381 (2105)(“Statutory language should be interpreted in
accordance with common sense in order to effectuate the
legislative purpose.”) The State, however, stubbornly, and
therefore tellingly, refuses to acknowledge the ordinary and
well-understood meaning of the phrase “benefits program” 3 as it
applies to those retirement benefits which are subject to the
non-forfeitable right statute. Yet, it is clear from the statute
that the non-forfeitable right encompasses all pension benefits
“under the laws governing the retirement system”, which
necessarily includes COLAs. The specificity of the benefits
acknowledged by the Attorney General, is the receipt of promisedfunds upon retirement, presumably at the rate fixed by law whensuch benefits were conferred.” New Jersey Education Association(NJEA) v. State, 412 N.J. Super. 192, 215 (App. Div. 2010)(emphasis added). See also, Chiarello v. Board of Trustees,Public Employees’ Retirement System, 429 N.J. Super. 194, 201(App. Div. 2010)(“due process principles and simple fairness”require a retirement to be governed by the law in effect when thepension benefit is granted.)
3 In its legal opinion, the Attorney General found thereservation of rights language in N.J.S.A. 43:3C-9.5(e) did notlimit the non-forfeitable right or the “benefits package” thatwas protected by it.(emphasis added) Attorney General’s LegalOpinion, dated August 24, 2006, p. 8.
4
subject to protection includes COLAs because they are but one of
many pension benefits under the “benefits program”. Since the
Legislature excluded post-retirement medical benefits, but
referenced all other pension benefits as being included, the
State’s claim the non-foreitable right lacks specific terms that
are contractually protected is simply wrong.
The State’s claim that, “The Legislature has not spoken
‘with clarity’ or ‘used terminology that plainly expressed its
intent to create contractual rights’ to COLAs ”(Db28,34,60) is
based on its contrived rejection of any reasonable definition of
the statutory language which demonstrates pensioners have a
contractual right to COLAs.4 The word “benefit”, as defined by
the Webster’s New World Compact Desk Dictionary, 2nd Edition
(2010), means: 1) “any thing contributing to improvement;
advantage” or 2) [often pl.] “payments made by an insurance
company, public agency, etc. as during sickness or retirement, or
for death.” 5 The word “benefit”, as defined by Black’s Law
4 In a recent case cited by the State, this Courtreiterated the long-standing primary rule of statutoryconstruction that a reviewing court, “must consider the statutesand attempt to ‘divine and effectuate the Legislature's intent.’" L.A. v. Board of Education of Trenton, 221 N.J. 192, 201 (2015).In order to understand that intent, the court must examine"’[t]he plain language of [each] statute’ and ‘apply to thestatutory terms the generally accepted meaning of the words usedby the Legislature.’" L.A., supra, at 201. (emphasis added).
5 In its over-length brief, the State claims theLegislature failed to provide “clarity” regarding the meaning ofthe non-forfeitable right’s coverage. (Db28,34) At one point, the
5
Dictionary, means “The advantage or privilege something gives;
the helpful or useful effect something has.” Black’s Law
Dictionary, 10th Edition (2014). Since the non-forfeitable right
statute expressly references “benefits”, it refers to those
advantages or privileges in the plural. Lastly, the online
version of the Merriam-Webster Collegiate Dictionary 6 defines
the relevant meaning of the word “benefit” as follows: 1)
“something that promotes well-being”, 2) “financial help in time
of sickness, old age, or unemployment”, and 3) ”a payment or
service provided for under an annuity, pension plan, or insurance
policy.” That same dictionary defines the meaning of the word
“program” as “a plan or system under which action may be taken
toward a goal”.7
In addition, the use of the word “program” also appears in
both statutory enactments and case law in our State when
referring to a number or series of statutes related to the same
subject matter. Eyers v. Board of Trustees, Public Employees’
State references a dictionary to obtain “clarity” regarding theLegislature’s meaning when using the word “reduce” as it is usedin the sentence, a "non-forfeitable right to receive benefitsmeans that the benefits program, for any employee for whom theright has attached, cannot be reduced." N.J.S.A. 43:3C-9.5(a).Presumably, the dictionary used by the State also includeddefinitions for the same words they now claim the Legislaturefailed to adequately explain, specifically the meaning of thewords “benefits” and “program”.
6 http://www.merriam-webster.com/dictionary/benefit
7 http://www.merriam-webster.com/dictionary/program
6
Retirement System, 91 N.J. 51, 57 (1982)(In determining
survivorship benefits and potential forfeiture of retirement, the
court addressed multiple statutes governing pension benefits “in
order fully to effectuate the competing objectives that the
Legislature seeks through its public pension program.”)(emphasis
added); Micheletti v. State Health Benefits Commission, 389 N.J.
Super. 510 (App. Div. 2007)(In seeking medical coverage for a
dependant, the court reviewed and interpreted the many statutes
which comprised the State Health Benefits Program,(emphasis
added), N.J.S.A. 52:14-17.25 to .45, including inter-related
regulations promulgated in furtherance of the statutory
scheme.)8; Spina v. Consol. Police & Fireman’s Pension Fund, 41
N.J. 391, 402-403 (1964)(Discussing judicial decisions and laws
“which so characterize the pension program in the absence of
constitutional prescription.”)(emphasis added).
When describing programs under the law, our courts have also
8 The Legislature excluded post-retirement healthcare inthe non-forfeitable right statute by stating that,“The provisionsof this section shall not apply to post-retirement medicalbenefits which are provided pursuant to law.” N.J.S.A. 43:3C-9.5(a). Since the statute protects the “benefits program” frombeing reduced, the Legislature understood that medical benefitsmight be included given the expansive breadth of the term (i.e.State Health Benefits Program - N.J.S.A. 52:14-17.25 to .45; Seealso, N.J.S.A. 52:14-17.25. Short title, This act shall be knownand may be cited as the "New Jersey State Health Benefits ProgramAct.") Because the Legislature intended to contractually protectpension benefits, but not necessarily medical benefits, theexemption of such post-retirement healthcare benefits furtherstrengthens pro se appellant’s interpretation of the words“benefits program” as protecting all pension benefits.
7
referenced and described a number of statutes affecting one
subject area as comprising a “statutory scheme”.9 Cornblatt,
supra, at 234.("[i]n discerning [the Legislature's] intent we
consider not only the particular statute in question, but also
the entire legislative scheme of which it is a part,"); Doe v.
Poritz, 142 N.J. 1,112-113,116 (1995)(Court interpreted the
numerous statutes implementing the “statutory scheme” known as
Megan’s Law); Abbott v. Burke, 100 N.J. 269, 280-283 (1985)(Court
interpreted the various legislative acts constituting the public
school financing statutory scheme); Morristown Association,
supra, at 381.(“... when discerning legislative purpose and
intent, the Court can consider the entire legislative scheme of
which a particular provision is but a part.”). See also, L.A.,
supra, at 201,(In other words, in addition to "`ascrib[ing] to
the statutory words their ordinary meaning and significance[,]'"
the court must "’read them in context with related provisions so
as to give sense to the legislation as a whole.'").
The State further claims that simply because the Pension
Adjustment Act, N.J.S.A. 43:3B-1, et. seq., is located in a
separate statutory citation under our pension laws, it is not
9 The definition of these words, according to the Merriam-Webster Collegiate Dictionary are as follows: 1) Statutory means- “enacted, created, or regulated by statute” and 2) Scheme means- “a systematic or organized configuration”. http://www.merriam-webster.com/dictionary/statutoryhttp://www.merriam-webster.com/dictionary/scheme
8
part of the “benefits as provided under the laws governing the
retirement system or fund.” (Db21) The Appellate Division’s
extensive and analytical evaluation of the Pension Adjustment Act
fully demonstrates that COLAs are indeed a completely integrated
part of the pension benefit. Berg, supra, 255 (“The history of
the pension statutes, including amendments to the Pension
Adjustment Act, convinces us that COLAs are such an integral part
of the pension system that the Legislature must have intended
that they be included as part of the non-forfeitable right,
N.J.S.A. 43:3C-9.5, guaranteed in 1997.”) See also, Hayden v.
Hayden, 284 N.J. Super. 418, 423 (App. Div. 1995) and Brown v.
Township of Old Bridge, 319 N.J. Super. 476, 511-512 (App. Div.
1999).10
From both a logical and public policy standpoint therefore,
one cannot receive a COLA without first receiving a pension
benefit. Since the COLA protects the pension benefit, it too must
be part of that non-forfeitable right, otherwise its existence
would be irrelevant. The very purpose of the COLA is to maintain
the retirement benefit throughout the duration of the pensioner
10 The State now implicitly acknowledges that there areclasses of retirees who are lawfully entitled to COLA paymentsbecause of when they commenced employed and when they retired.State’s Response in Opposition to Application for Amicus ForLeave to Appear, dated October 22, 2015, p. 4. Pro se appellanthas consistently argued that all pensioners who retired beforechapter 78 became effective have legally protected rights toCOLAs based on equitable principles and the non-forfeitable rightstatute.
9
receiving it.11 The State’s bizarre and unpersuasive claim that
the pension adjustment statutes are not part of “the laws
governing the retirement system” is erroneously based on the
placement, numbering and statutory citation of the law, as
opposed to its substantive legal effect over a specific subject.
As the Appellate Division in Chiarello v. Board of Trustees,
Public Employees’ Retirement System, 429 N.J. Super. 194, 200-201
(App. Div. 2010) correctly notes,
[T]he Legislature has directed, as a general matter,that the particular arrangement of statutes is "forthe purpose of convenience, reference and orderlyarrangement," and that "no implication or presumptionof a legislative construction" should be drawn fromthe arrangement. N.J.S.A. 1:1-5; (citations omitted)
Accordingly, as a matter of law and established legislative
policy, the numbering and compiling of statutes for placement in
our body of laws does not demonstrate legislative intent. The
substantive statutes themselves and the manner in which they
address specific subject areas is the best indicator of such
intent, in addition to reliable extrinsic aids such as
legislative history and an organized statutory scheme.
Moreover, the State’s ongoing failure to even acknowledge,
let alone address, the extensive body of decisional authority
requiring that pension statutes be liberally construed for the
person intended to be benefitted in this context is simply
11 Berg, supra, at 256 (Fn.16).
10
bewildering. Geller v. Department of the Treasury, 53 N.J. 591,
597-598 (1969); Fiola v. Dept. of the Treasury, 193 N.J. Super.
340, 347-48 (App. Div. 1984).12 The State dismisses over 40 years
of established case law by claiming that the inclusion of COLAs
in the non-forfeitable right should not result in a portion of a
statute being declared invalid. The overarching goal of this
Court in interpreting the non-forfeitable right is to effectuate
the intent of the Legislature - period. If that interpretation
results in a conflict with another statute, this Court must
resolve that conflict by determining which law has priority - in
this case a statutory right to COLA benefits protected by the
State and federal contract clauses and also protected by the
doctrines of equitable estoppel, fundamental fairness and
manifest injustice.
POINT II
THE APPELLATE COURT’S ANALOGY TO FEDERAL PENSION LAW(ERISA) AND ITS USE BY THE LEGISLATIVE SPONSOR OF THEBILL, WHICH ULTIMATELY BECAME N.J.S.A. 43:3C-9.5, ISRELEVANT AND INSIGHTFUL BASED ON THE STATE’S PROVENFAILURE TO COMPLY WITH FEDERAL TAX LAW.
Beyond the foregoing discussion, which appellant
respectfully submits, compels the affirmance of the Appellate
Division’s central holding, there is another significant factor
that further supports affirmance. Namely, the relationship that
12 Compare the legal opinion of the Office of LegislativeServices, dated August 21, 2006, p.1.
11
exists between New Jersey’s statutory scheme and its federal
counterpart, the Employee Retirement Security Act (ERISA) of
1974. Legislative history, like all extrinsic aids used in
statutory interpretation, is regularly used by courts to identify
legislative intent. In this case, that history illuminates and
resolves any alleged confusion or misperception the State claims
exists regarding the inclusion of COLAs with the non-forfeitable
right.
The use of legislative history as an interpretive, extrinsic
aid is well established and encouraged in understanding
legislative intent. State v. Jersey Central Power and Light Co.,
133 N.J. Super. 375, 387 (App. Div. 1975)("Courts may, of course,
freely refer to legislative history and contemporaneous
construction for whatever aid they may furnish in ascertaining
the true intent of the legislation.")(emphasis added). Contrary
to the State’s claims, this Court has held that statements of a
sponsor of legislation are recognized as particularly insightful,
Of the various materials that may reveal legislativeintent, one of the most instructive is a statement bythe sponsor of the act.
[T]he expressions of the sponsor of the bill normallyreveal a legislative intent more significant thanthat revealed by those of a more casual legislativeadherent. In this context, the significantlegislative intent may well be the actual intent ofthe former. [Dickerson, The Interpretation andApplication of Statutes 73 (1975)]
In the course of deliberations on a bill, legislatorslook to its sponsor as well as to the representatives
12
of the committee having charge of it, as one who isexpected to be particularly well informed about itspurpose, meaning, and intended effect. In recognitionof this reality of legislative practice, courts giveconsideration to statements made by a bill's sponsoron grounds similar to those relied on to support theuse of statements made by the committeeman in chargeof the bill. [2A Sutherland, Statutes and StatutoryConstruction § 48.15, at 221-22 (4th ed. 1973)]Panzino v. Continental Can Company, 71 N.J. 298, 302(1976).(emphasis added).
The committee hearing before Senator Peter Inverso,
regarding the bill that ultimately became the non-forfeitable
right, specifically dealt with safeguarding earned pension
benefits and it was the Senator himself who raised the analogy of
ERISA and its legal protections for private sector pension
benefits. Berg, supra, at 253,
I feel strongly that the same protections and rightsthat are accorded . . . under an ERISA [EmployeeRetirement Income Security Act] standard to people inthe private sector, should be accorded to people inthe public sector, the governmental sector; that oncethey have their pensions established as at a point intime with regard to vesting it, that you cannot goback retroactively and change what has been earned,what has been accrued, what has been vested in.(emphasis added)
The bill which originally began as a means to insure our pension
statutes complied with federal tax law13 was subsequently amended
13 The original purpose of the bill was to insure the Stateadministered pension system remained a qualified pension planunder federal tax law and received favorable tax treatment. Thesechanges were being made as part of the State’s settlement withthe Internal Revenue Service regarding the State’s improperdiversion of monies from the pension funds. Berg, supra, 237,252; Plaintiff-Intervenors Supplemental Letter-Brief andAppendix, dated February 11, 2014, pages 9-12.
13
to also provide the non-forfeitable right, which is the subject
of this appeal. The conclusion of the appellate court that the
primary legislative sponsor, and by extension that portion of the
bill containing the non-forfeitable right, sought to protect both
base pension benefits and COLAs, using ERISA as a guide, is
therefore well supported in the legislative history.
The State’s assertion that the Appellate Division
misconstrued Senator Inverso’s statements, the legislative
history of the non-forfeitable right and the circumstances in
which it was created is both strained and disingenuous. The State
claims that both of the legal opinions authored by the Office of
Legislative Services and the Attorney General’s Office “are
irrelevant to the issue before this Court.” (Db46). In the
Attorney General’s legal opinion, written in August of 2006, by
Assistant Attorney General, John P. Bender, Esq.,14 the State
specifically opines on the nature and scope of the non-
forfeitable right by express reference to the law construing
ERISA:
The scope of the right to a private pension protectedunder ERISA is more circumscribed than the rightsaccorded under c. 113. Federal case law hasdetermined that the “non-forfeitable” provisions ofERISA assure that an employee’s claim to theprotected benefit is legally enforceable but not theparticular amount or method of calculating the
14 Presumably the same Assistant Attorney General whocontributed to the State’s supplemental brief and whose nameappears as “also on the brief.”
14
benefit. Bonovich v. Knights of Columbus, 963 F.Supp. 143, 146 (D. Conn. 1997) aff’d F. 3d 57 (2dCir. 1998). This ruling was rendered on March 21,1997 at a time when the Legislature was activelyconsidering c. 113 (Committee amendments adding the“non-forfeitable” language were added on April17,1997). Chapter 113, in contrast, specifies thatthe “benefits program” cannot be reduced and theyhave a right to receive those benefits. AttorneyGeneral’s Legal Opinion, dated August 24, 2006, p.6(emphasis added)
In fact, the State goes to great lengths to note that ERISA is
generally inapplicable to public pensions and, therefore, could
not be used as a guide or basis to interpret the non-forfeitable
right under New Jersey law. However, given the legislative
sponsor’s explicit statements to provide the “same protections
and rights that are accorded . . . under an ERISA standard. . .”
to public employees, the State’s claim that ERISA is irrelevant
in interpreting the non-forfeitable right is wholly specious.
Moreover, it was Assistant Attorney General Bender’s
detailed legal opinion, written on behalf of the Attorney
General’s Office itself, which clearly found that the non-
forfeitable right actually provided greater protections than
ERISA precisely because it protected a pension member’s entire
“benefits program”.15 Since federal law includes COLAs as part of
the pension benefits subject to protection under its version of
15 In his opinion, AAG Bender specifically relied uponfederal decisional authority that compared and contrasted the“non-forfeitable” right under ERISA (29 U.S.C. 1053(a)) with the“non-forfeitable” right under N.J.S.A. 43:3C-9.5(a).
15
the non-forfeitable right, it was entirely appropriate and lawful
for the Appellate Division to use federal law as a guideline in
interpreting the nature of the benefits our Legislature sought to
protect under N.J.S.A. 43:3C-9.5(a). Berg, supra, at 258-259.
This was especially so in light of the legislative sponsor’s
stated goal to provide the same protections to public employees
as are provided under federal law.
POINT III
COLAS ARE AN INDIVISIBLE COMPONENT OF PENSION BENEFITSBY ADJUSTING THE EARNED BENEFITS TO ACCOUNT FOR THEEFFECTS OF INFLATION.
The State’s claims that COLAs are not earned benefits and
are therefore not within the protected coverage of the non-
forfeitable right are also - individually and collectively -
demonstrably incorrect. To arrive at this patently erroneous
conclusion, the State - yet again - simply disregards applicable,
binding law and legislative history in our State. This body of
law demonstrates beyond a scintilla of doubt that COLAs are an
indivisible component of a retiree’s earned pension benefit.
Because COLAs adjust that earned benefit to ameliorate the
corrosive effects of inflation, it could hardly be argued
otherwise. In addition, both employers and employees make
required monetary contributions toward the COLAs, as well as the
pension itself. Because COLAs are an inseparable part of the
total pension benefit, they are fully protected by the non-
16
forfeitable right statute.
Notably, the State’s only proposed legal source for the
claim that COLAs are not earned pension benefits are out of state
case law from jurisdictions with pension statutes and systems
that are significantly different from our own.16 The decisional
authority of the courts in New Jersey have already addressed and
interpreted the nature of COLAs and determined they are, in fact,
part of the initial pension benefit. Curiously, the State, once
again, fails to provide this Court with binding, precedential
legal authority that is both on point and dispositive. Hayden v.
Hayden, 284 N.J. Super. 418, 423 (App. Div. 1995) (“Post-
retirement increases (COLAs) are as much a part of a pension as
the amounts initially established by the pension system on
retirement and merely adjust the pension payments for the current
real value of the dollar.” (emphasis added), See also Brown v.
Township of Old Bridge, 319 N.J. Super. 476, 511-512 (App. Div.
1999)(quoting with approval from Hayden); Berg v. Christie, 436
N.J. Super. 220, 256 (Fn.16) (App. Div. 2014).
16 In discussing possible legal challenges to the non-forfeitable right, the State explored case law in otherjurisdictions and further opined: “The persuasive value of decisions such as those above,coming as they do from other jurisdictions, is difficult togauge. The opinions must also be read with a specific caveat:none of the decisions construe a statute comparable to Chapter113 in its identification of particular plan provisions as non-forfeitable rights.” Attorney General’s Legal Opinion, datedAugust 24, 2006, p. 11. (emphasis added).
17
POINT IV
THE STATE’S CONTINUED RELIANCE ON THE DEBT LIMITATIONAND APPROPRIATION CLAUSES OF THE STATE CONSTITUTION TODEFEAT THE PROTECTION OF COLAS, PURSUANT TO THE NON-FORFEITABLE RIGHT, IS WHOLLY ERRONEOUS BECAUSE THEMONIES IN THE PENSION SYSTEM ARE TRUST FUNDS NOT SUBJECTTO THOSE CONSTITUTIONAL PROVISIONS.
Despite the Appellate Division’s clear, comprehensive and
correct legal analysis that the Debt Limitation and
Appropriations clauses in our State Constitution are simply
inapplicable to the disbursement of monies from State pension
funds, the State unreasonably continues to rely on these
provisions. The monies in the pension funds do not belong to the
State, but are held in trust, by the Division of Pension and
Benefits, through the Board of Trustees, “for the exclusive use
of the members or their beneficiaries.” N.J.S.A. 43:3C-9.1. Berg,
supra, at 232; 26 U.S.C. 401(a)(2). None of the appellants before
this Court requests an order compelling the State to make any
payments into the various pension funds or incur debt for that
same purpose. Instead, what pro se appellant in this case seeks
from this Court is an order compelling the Division of Pension
and Benefits and the PERS Board of Trustees to disburse trust
monies from the pension funds in accordance with both federal and
state law.
The Appellate Division correctly analyzed this precise issue
when it held, “Hence, COLAs can be paid currently without the
need for any legislative appropriation. Consequently, neither the
18
Appropriations Clause nor the Debt Limitation Clause is currently
implicated here, where the issue is payment to retirees from the
pension funds rather than payment by the Legislature into the
funds.” Berg, supra at 246.17
The State disfigures beyond recognition this Court’s holding
in Burgos v. State, 222 N.J. 175 (2015), by arguing that “in
order to preserve base pensions for active employees, the State
would be compelled to appropriate money to cover COLAs.”(Db67).18
Yet the monies in the pension funds are held, in trust, for the
exclusive use of its members and beneficiaries in accordance with
law.
What the State is actually arguing is that because of its
steadfast, repeated and ongoing failure to properly fund the
pension system for the last twenty years, it has resorted to
holding onto earned pension benefits, which should be disbursed,
in the hopes of extending the solvency of the pension funds. The
17 “It may be argued that if the pension funds are notrestored to fiscal health, at some point the money will runout and an appropriation will be needed to restore the funds'solvency. A lawsuit aimed at requiring such an appropriationwould implicate both the Appropriations Clause and the DebtLimitation Clause. See N.J. Educ. Ass'n, supra, 412 N.J. Super.at 216, 989 A.2d 282. However, we conclude that in this lawsuit,such a potential eventuality does not trigger either clause.”(emphasis added). Berg, supra, at 246.
18 The State also argues that, “Any interpretation of thenon-forfeitable right statute that includes COLAs would create‘an impermissible legally enforceable obligation binding theState and compelling the appropriation of monies in futureyears.’” (Db67).
19
answer to the State’s actual problem, and not the one it hides
behind its diaphanous legal claims, is to regularly fund the
pension system in strict accordance with valid and generally
accepted actuarial principles. The issues of funding the pension
system, however, are not before this Court in this appeal and
were, in fact, addressed by this Court in the Burgos case last
term. The State’s claim that reinstatement of COLAs would
adversely affect the funding or solvency of the pension system is
solely the independent obligation of the State as all pension
members, active or retired, are making or have already made their
required, lawful contributions in order to obtain their complete
pension benefits.
CONCLUSION
For all of the above reasons, and those previously set forth
in pro se appellant’s petition and supplemental brief, appellant
urges this Court to affirm the Appellate Division’s decision and
order the immediate payment of cost of living adjustments to all
pensioners who retired before June 28, 2011, in accordance with
law, as it existed when those pensioners retired.
Respectfully submitted,
Charles Ouslander, Esq.Pro Se Appellant
Dated: November 13, 2015
20