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Statutory Increase in Judges' Required Contribution to Their Pension Plans Held by NJ Supreme Court to be Unconstitutional

August 1, 2012 | Posted In Business Litigation |

The New Jersey Constitution of 1947 provides that the salary of Judges of this State “may not be diminished during the term of their appointment.” This provision, a carryover from the State’s 1844 Constitution, and the federal constitution of 1787, was designed to preclude the Governor and the Legislature from placing a chokehold on the the livelihood of judges who might oppose them, contrary to the Judiciary’s unique role as the guardians of the rights and liberties of the people.

The Pension and Health Care Benefits Act, L. 2011, chap. 78 requires a substantial increase to the percent of salary that state employees, including Judges, must pay for their medical insurance and pension contribution. Over the next seven years these increases will likely reach $17,000 or more yearly for Judges, effectively a 10%+ decrease in their net compensation. In the past, when increased contributions were required by statute, the Legislature granted a corresponding raise to the Judges to keep their net compensation from decreasing. This time there was no compensating raise.

Judge Paul DePascale filed a lawsuit against the State, seeking to rescind the increase in required contributions. The trial court agreed with him, and the case went directly to the State Supreme Court, which held, 3-2, on July 24, 2012, that Chapter 78 violated Art. VI, Sec. 6, Par. 6 of the New Jersey Constitution. The Majority reasoned that unlike an income tax increase, imposed on all citizens generally, Chap. 78 is targeted at state employees and judges. Though Chapter 78 serves a legitimate public policy goal, it attempts to do so by unconstitutional means. A Supreme Court that cannot protect its own independence will be too weak to fulfill its constitutional role of protecting the rights and liberties of the people against unlawful encroachments of the Governor and the Legislature.

The dissenting Justices expressed the opinion that 1) the Court incorrectly imposed on the State the burden of establishing the constitutionality of Chap. 78, 2) that the record of the 1947 provides extrinsic evidence that the term “salaries” was not intended encompass pension and health care benefits and 3) since Chapter 78 applies to all state employees, it was general enough in its application that it was not a legislative attack on judicial independence.

The Governor is a man who is used to having his way, and further developments are likely to be fiery.

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