New Jersey Superior Court Reports
NEW JERSEY STATE BAR ASS’N v. STATE, 382 N.J. Super. 284 (2005) 888 A.2d 526 NEW JERSEY STATE BAR ASSOCIATION, A NOT-FOR-PROFIT CORPORATION, AND PEGGY SHEAHAN KNEE, INDIVIDUALLY PLAINTIFFS, v. STATE OF NEW JERSEY, JOHN E. MCCORMAC, IN HIS OFFICIAL CAPACITY AS TREASURER OF THE STATE OF NEW JERSEY; HOLLY C. BAKKE, IN HER OFFICIAL CAPACITY AS COMMISSIONER OF THE DEPARTMENT OF BANKING AND INSURANCE; AND FRED M. JACOBS, M.D., IN HIS OFFICIAL CAPACITY AS ACTING COMMISSIONER OF THE DEPARTMENT OF HEALTH AND SENIOR SERVICES, DEFENDANTS. No. UNN-C-1-05. Superior Court of New Jersey, Chancery Division. Decided June 15, 2005 Page 285
Edwin J. McCreedy, (McCreedy & Cox), attorney for
plaintiffs (Sharon A. Balsamo, James Condon, Charles J.
Hollenbeck, on the brief).
Peter C. Harvey, Attorney General, attorney for defendants
(Patrick DeAlmeida, Assistant Attorney General, of counsel
and on the brief, Marlene G. Brown, on the brief).
LYONS, P.J.Ch.
This action is before the court on cross-motions for
summary judgment. The issues are:
A) Should the State be permanently enjoined from collecting
the assessment prescribed in § 27(b)(6) of the New
Jersey Medical Care Access and Responsibility and Patients
First Act (“the Act”) because the section violates Federal
and State equal protection guarantees, violates the
substantive due process clauses of the Federal and State
constitutions, violates state constitutional prohibitions
on using public monies for a private purpose and violates
the state constitutional prohibition on special
legislation?
B) Do any of §§ 5 through 8 of the Act
violate the state constitution’s separation of powers
doctrine? and
C) If individual provisions of the Act are found
unconstitutional, should the entire Act be declared
unconstitutional because the individual provisions are not
severable?
I. Procedural Posture
This action was initiated by way of an order to show
cause. Oral argument was heard on February 18, 2005, and
the plaintiffs’ request for preliminary injunctive relief
was denied. The parties Page 298 engaged in limited
discovery and are before the court on cross-motions for
summary judgment.
II. Facts
The facts are unchanged from those found by the court on
the order to show cause and are undisputed.
A. Legislative History
On December 9, 2002, a bill designated the “Patients First
Act of 2002” was introduced in the State Assembly. An
identical bill was introduced in the State Senate on
December 16, 2002. In March of 2003, various related bills
that had been pending in the Legislature as early as May
and June of 2002 were merged or substituted. The bills were
renamed the “New Jersey Medical Care Access and
Responsibility and Patients First Act.”
The New Jersey Legislature held a series of hearings in
2002 and 2003 to address concerns and hear recommendations
for improving health care quality and enhancing patient
safety. The legislators were concerned with “A crisis,
particularly in the area of OB/GYN because the
reimbursements have gone down and the insurance has gone
up,”[fn1] “a health-care emergency,”[fn2] and, “I don’t
know if disaster is the right word — but a very
serious patient-access risk to women in the State of New
Jersey.”[fn3] Testimony at the hearings came from
physicians, representatives of consumer groups and
attorneys including hospital executives,[fn4] Page 299
personal injury lawyers,[fn5] representatives of lawyers’
organizations,[fn6] and representatives of the
Administrative Office of the Courts, who appeared at the
request of the committees.[fn7] As the legislators tried to
understand a number of concerns, the agenda was broad:
What we do understand from our meetings individually with
physicians and insurance companies is that for the last 15
or 20 years, there has been stability in the medical
malpractice insurance market and that only over the last
year has there been a problem in spiking of premiums,
particularly for those involved in obstetrics and
gynecology and those in high-risk surgery, where their
premiums have skyrocketed pretty high. . . . We’re looking
for as much information as necessary to see what we need
to do immediately and what needs to be some type of
long-term cure, if any, that may be needed.
[Testimony concerning the affordability and availability of
medical malpractice insurance for physicians practicing in
New Jersey: Joint Hearing of the Assembly Health and Human
Services and Banking and Insurance Committees; 210th Leg.
Sess. [hereinafter June 2002 Hearing] (NJ June 2002)
(comments of Assemblyman Cohen)].
The overarching concern that came out of the hearings and
the problem the bill aimed to solve (as noted in the
legislative purpose) as succinctly stated by Assemblyman
Thompson was, “The reality of the situation that we’re
facing today is that, as a Page 300 consequence of the
cost of medical malpractice insurance, many physicians feel
they cannot afford to practice medicine, and, therefore the
medical services needed will not be available to our
citizens.” August 2002 Hearing (comments of Assemblyman
Edwards). This statement was a reflection of the testimony
that had come before the Legislature:
By now, we more fully understand the scope of this
developing problem, especially as it pertains to
specialties such as OB/GYN, emergency medicine, and
surgery, and the surgical subspecialties. Even more
disconcerting is the evidence that physicians in other
specialties report high double-digit premium increases and
fewer companies willing to write coverage. As the problem
has grown, physicians and the entire New Jersey medical
community have entered into a full-fledged state of
crisis. When that happens, patients are in crisis.
[June 2002 Hearing (testimony of Bernard Saccaro, M.D., on
behalf of the Medical Society of New Jersey)].
Physicians testified to problems that contributed to their
high malpractice insurance premiums including being named
in malpractice claims with which they had no involvement or
in frivolous claims. Assemblyman D’Amato related that
“[s]ome physicians . . . complained about the fact that
they’re dragged through litigation that can last two to
three years, and at the end of that litigation, the case is
dismissed against them.” August 2002 Hearing (comments of
Assemblyman D’Amato). Assemblyman Cohen stated in the
August 2002 hearing,
I’d like the Bar to think about . . . those procedures
that we can maybe come up with presuit, prefiling
procedures, where we can sort out so that we’re not going
to have to file 12 John Doe, Jane Doe nurse and 12 John
Doe, Jane Doe physicians, which you have to file just to
protect your client and yourself. . . . prefiling
procedures that can cut down on costs and try to bring
cases to a quicker resolution.
A year later, responding to a doctor who testified to being
named in suits in which she had never met the patient,
Assemblywoman Weinberg assured the doctor that the
legislation would provide a mechanism for getting out of a
lawsuit early in such situations. Testimony on a proposal
to provide medical malpractice insurance premium assistance
for New Jersey physicians; Joint Hearing of the Assembly
Health and Human Services and Banking and Insurance
Committees; 210th Leg. Sess. (NJ May 2003) Page 301
[hereinafter May 2003 Hearing] (comments of Assemblywoman
Weinberg).
Of particular concern was the number of doctors,
particularly obstetrician/gynecologists, who discontinued
parts of their practice or retired altogether due to the
inability to afford their liability coverage. “I figured
out, in order for me to afford these huge premiums, I’d
have to double or triple my volume, resulting in loss of
quality care to my patients and also loss of quality of
life for myself, and so I didn’t have any other choice
except to stop the obstetrics portion of my practice.” May
2003 Hearing (testimony of Delores Williams, M.D.). “We
need to try to address something immediately, because [a
physician practicing today] might not be a practicing
OB/GYN come August.” August 2002 Hearing (comments of
Assemblyman Cohen).
Also present at the hearings were members of the Bar who
testified that medical malpractice reform could be achieved
by better policing of doctors or staying the statute of
limitations during a special full disclosure discovery
phase. They implored the committee members, “Please don’t
forget the victims of medical malpractice when you
undertake your difficult responsibility.” May 2003 Hearing
(testimony of Ronald Goldfaden, Esq.). “Rather than talking
about patient safety and curing the malpractice problem,
we’re talking about rates and caps and further restricting
patients who are already restricted by the injuries that
they’ve suffered.” June 2002 Hearing (testimony of Michael
Berger, Esq. on behalf of the Association of Trial Lawyers
of America — New Jersey). The New Jersey State Bar
Association testified in support of creating a task force
to study the issues further, and while it opposed an
assessment, “if there is going to be some type of a fund,
it should be a fund that’s designed for premium relief
rather than trying to pay for settlements or verdicts.” May
2003 Hearing (testimony of Edwin McCreedy, Esq.).
As the legislation developed, two issues over which there
was strong disagreement were direct medical malpractice
liability premiums Page 302 assistance and caps on damage
awards for non-economic losses, which was a part of the
then-current Senate version of the bill. S.B. 2174 §
34 (as adopted March 17, 2003), 210th Leg. Sess. (NJ 2003).
According to the Newark Star-Ledger, a “legislative
stalemate” developed in 2003 over the Senate’s version of
the bill “that limited how much negligent physicians or
their insurers would have to pay for a patient’s pain and
suffering.” Robert Schwaneberg, Bill Offers Insurance
Relief Fund to Doctors: Malpractice Reform Heads to
Governor, Newark Star-Ledger, May 25, 2004.
The bills were reintroduced in the subsequent legislative
session (the 211th Leg. Sess., 2004-2005). Throughout March
of 2004, the bills were debated and amended. On March 29,
2004, and May 24, 2004, the final bill passed the Senate
and Assembly, respectively. On the day the final bill
passed the Assembly, there had been an attempt to amend the
bill to include a $250,000 limit on jury awards for pain
and suffering; however, the bill passed without amendment.
Robert Schwaneberg, Bill Offers Insurance Relief Fund to
Doctors: Malpractice Reform Heads to Governor, Newark
Star-Ledger, May 25, 2004.
The goals of the final legislation, were to “reform the
State’s ailing medical malpractice insurance system to
provide insurance relief for doctors and ensure that
patients in New Jersey” will be able to get the treatment
they seek. Press Release, Office of Senators Vitale and
Lesniak (March 22, 2004). Senator Vitale said, “By all
accounts, the current crisis in medical malpractice
liability insurance is driving good doctors out of the
state.” Ibid. The legislation was described by Assemblyman
Roberts as providing “a comprehensive package of more than
20 tort law, health-care system and insurance regulatory
reforms.” Press Release, Office of Assemblyman Joseph
Roberts (March 11, 2004).
The Act was signed into law on June 7, 2004, as P.L. 2004,
c. 17. The final bill, addressing medical professional
liability, insurance reform and patient protection,
contained legislative findings that, Page 303
a. One of the most vital interests of the State is to
ensure that high-quality health care continues to be
available in this State and that the residents of this
State continue to have access to a full spectrum of health
care providers, including highly trained physicians in all
specialties;
b. The State’s health care system and its residents’
access to health care providers are threatened by a
dramatic escalation in medical malpractice liability
insurance premiums, which is creating a crisis of
affordability in the purchase of necessary liability
coverage for our health care providers;
c. One particularly alarming result of rising premiums is
that there are increasing reports of doctors retiring or
moving to other states where insurance premiums are lower,
dropping high risk patients and procedures, and practicing
defensive medicine in a manner that may significantly
increase the cost of health care for all our citizens;
d. The reasons for the steep increases in the cost of
medical malpractice liability insurance are complex and
involve issues related to: the State’s tort liability
system; the State’s health care system, which includes
issues related to patient safety and medical error
reporting; and the State’s regulation and requirements
concerning medical malpractice liability insurers.
e. It is necessary and appropriate for the State to take
meaningful and prompt action to address the various
interrelated aspects of these issues. . . .
[P.L. 2004, c. 17 § 2.]
Governor McGreevey’s statement upon signing the bill noted,
“Our overriding priority is to ensure that patients have
access to doctors and quality health care and this bill
meets that objective. . . .” Press Release, Office of
Governor James E. McGreevey (June 7, 2004). The Act is
described as “the best compromise to get something done
without burdening one group over another,” and to “help
doctors without unduly hurting someone else.” Id.
(statements of Senator Vitale).
B. Overview of the Act
The Act “provides for a set of reforms of the state’s tort
liability system, health care system and medical
malpractice liability insurance carriers to ensure that
health care services continue to be available and
accessible to residents of the State and to enhance patient
safety at health care facilities.” P.L. 2004, c. 17,
§ 2(f).
Section 27 of the Act establishes a Medical Malpractice
Liability Insurance Premium Assistance Fund with revenue
coming from a number of annual assessments running for
three years, including a Page 304 $75 annual fee payable
by each person licensed to practice law in the State. The
assessment
does not apply to attorneys who: are constitutionally or
statutorily barred from the practice of law; can show that
they do not maintain a bona fide office for the practice
of law in this State; are completely retired from the
practice of law; are on full-time duty with the armed
forces, VISTA or the Peace Corps and not engaged in
practice; are ineligible to practice law because they have
not made their New Jersey Lawyers’ Fund for Client
Protection payment; or have not practiced law for at least
one year.
[P.L. 2004, c. 17, § 27(b)(6).]
Additional revenue will come from an annual charge of $3
per employee for all employers who are subject to New
Jersey’s unemployment compensation law and a $75 annual
charge on physicians and podiatrists, chiropractors,
dentists, and optometrists, with some exceptions. P.L.
2004, c. 17, § 27(b)(1)-(5).
The State Treasurer is required to deposit all revenue
collected pursuant to § 27 into the Medical
Malpractice Liability Insurance Premium Assistance Fund.
All revenue in the fund is to be used exclusively for
purposes specified in the Act including relief of medical
malpractice liability premiums, health care subsidies to
hospitals, and student loan expense reimbursement for
obstetrician/gynecologists. P.L. 2004, c. 17, §
27(e).
The Act also makes changes to medical malpractice court
actions. The Act provides a mechanism for a judge presiding
over a medical malpractice action to refer the matter to
complementary dispute resolution pursuant to R. 1:40 if it
might encourage early disposition or settlement of the
action. P.L. 2004, c. 17, § 5.
Under § 6 of the Act, a health care provider named
as a defendant in a medical malpractice action may have the
action against him or her dismissed upon filing an
affidavit of noninvolvement with the court, setting forth
the particular facts that demonstrate the provider was
misidentified or otherwise not involved in the care or
treatment of the claimant, was not obligated to provide
care or treatment and could not have caused the alleged
malpractice. P.L. 2004, c. 17, § 6(a). The
provider’s affidavit can be challenged by motion filed with
an affidavit contradicting the Page 305 assertions in the
provider’s affidavit of noninvolvement. If the court
determines the affidavit was falsely filed or contained
false or inaccurate statements, the court, upon motion or
its own initiative, shall reinstate the claim against the
provider. P.L. 2004, c. 17, § 6(c). The court may
also impose sanctions against a plaintiff who falsely
objected to a provider’s affidavit of noninvolvement or
knowingly provided an inaccurate statement regarding the
provider’s affidavit.
Section 7 of the Act specifies qualifications that must be
met by persons giving expert testimony such as being a
specialist or subspecialist recognized by the American
Board of Medical Specialties or the American Osteopathic
Association in the same specialty or subspecialty at issue
in the action, or meeting requirements for active clinical
practice or instruction of students in an accredited
medical school. Similar requirements must be met by a
person filing an affidavit that there exists a reasonable
probability that the care, skill or knowledge exercised or
exhibited in the treatment, practice or work that is the
subject of the complaint fell outside acceptable
professional or occupational standards or treatment
practices, pursuant to § 8 of the Act.
C. Constitutional Challenge
Plaintiffs filed this action on January 3, 2005, seeking,
pursuant to N.J.S.A. 2A-16-50, a declaratory judgment that
the Act denies New Jersey attorneys due process and equal
protection of the law in violation of the Fifth and
Fourteenth Amendments of the United States Constitution and
N.J. Const. art. I, §§ 1 and 5; a declaration
that the Act directs the use of public money for a private
purpose in violation of N.J. Const. art. VIII, § 3,
§ 3; a declaration that the Act constitutes special
legislation in violation of N.J. Const. art. IV, §
7, §§ 7, 8 and 9; a declaration that the Act
unfairly impinges upon the ability of attorneys and clients
to pursue meritorious claims through the judicial system by
violating the exclusive rule-making authority of the
Supreme Court of New Page 306 Jersey established by N.J.
Const. art. VI, § 2, § 3 and the separation
of powers doctrine.
Collection of the annual fee is executed by the Department
of the Treasury’s Division of Taxation. In November of
2004, the Division of Taxation began sending bills to
attorneys in the State, requiring payment within 30 days of
receipt. By the end of 2004, 30,000 notices to attorneys
licensed to practice law in the State had been issued.
Certification of Arthur Guenther, Jr., Division of Taxation
§§ 3-4. Not all attorneys who are liable for
the annual fee have been noticed. Certification of Arthur
Guenther § 4. As of January 24, 2005, 20,300
attorneys had paid the fee; 397 claimed they were exempt;
and 200 of the payments were made “under protest.”
Certification of Arthur Guenther §§ 5-6.
In the present application, plaintiffs ask the court to
permanently enjoin defendants, their agents, employees and
attorneys, and those in active concert or participation
with defendants who receive actual notice of the court’s
order, from enforcing or attempting to enforce § 27
of the Act or collecting or attempting to collect the fees
imposed by § 27 of the Act.
III. Summary Judgment
A motion for summary judgment shall be granted if the
evidence demonstrates that there is no genuine issue of
material fact challenged and that the moving party is
entitled to a judgment or order as a matter of law. R.
4:46-2(c); see also Brill v. Guardian Life Ins. Co. of
America, 142 N.J. 520, 539-540, 666 A.2d 146 (1995).
Under R. 4:46-2 a motion for summary judgment should be
granted if pleadings, depositions, answers to
interrogatories and admissions on file, together with
affidavits, reveal that there is no genuine issue as to any
material fact. In Brill, supra, the New Jersey Supreme
Court set forth the standards by which questions of
material fact are to be examined. The Court stated,
A determination whether there exists a “genuine issue” of
material fact that precludes summary judgment requires the
motion judge to consider whether the Page 307 competent
evidential materials presented, when viewed in a light
most favorable to the non-moving party, are sufficient to
permit a rational fact finder to resolve the alleged
disputed issue in favor of a non-moving party. . . . The
import of our holding is that when the evidence is “so
one-sided that one party must prevail as a matter of law”
the trial court should not hesitate to grant summary
judgment.
[Id. at 540, 666 A.2d 146 (citations omitted).]
Here, the facts are drawn from the Act itself and the
legislative history. They are not in dispute. The
determination of the legislative enactment’s
constitutionality is appropriately resolved by way of a
motion for summary judgment.
IV. Equal Protection and Due Process
Plaintiffs argue that the Act is unconstitutional under
both the New Jersey State and Federal Constitutions.
Plaintiffs maintain that the Legislature has failed to show
a rational basis for imposing a $75 fee on attorneys; that
the assessment here is not justified because the Act
irrationally applies to some attorneys and not others and
is devoid of any findings that either would tie attorneys
to the faults in the medical malpractice or tort systems or
would show that attorneys derive any financial benefit from
a stable medical malpractice insurance market. Thus,
plaintiffs conclude that the assessment lacks a fair and
rational relation to the object of the legislation and
summary judgment is appropriate. Defendants, on the other
hand, maintain that the Legislature has articulated a
rational basis for including attorneys in the class of
individuals to be taxed, and because plaintiffs have not
met their burden of overcoming the presumed
constitutionality of the statute, summary judgment in favor
of the State is appropriate.
Since an analysis of the State and Federal Constitutions
is implicated by the parties’ claims, a brief survey of
the constitutional standards at issue is warranted.
A. State Equal Protection Standard
The parties agree that no fundamental right is at issue.
Therefore, under equal protection analysis, since a
fundamental right is not burdened, the statute will satisfy
the requirement of Page 308 equal protection if it
rationally furthers some legitimate, articulated state
purpose and therefore does not constitute an invidious
discrimination. Bd. of Educ. of Piscataway Tp. v. Caffiero,
86 N.J. 308, 324, 431 A.2d 799 (1981).
Legislatures have wide discretion in passing laws that
have the inevitable effect of treating some people
differently from others, and legislative classifications
are valid unless they bear no rational relationship to a
permissible state objective. A legislative classification
will be upheld unless the varying treatment of different
groups or persons is so unrelated to the achievement of
any combination of legitimate purposes that we can only
conclude that the legislature’s actions were irrational. .
. . [A] state may undertake resolution of problems one
step at a time, addressing itself to the part of the
problem that seems most acute. A statute does not violate
equal protection simply because it is underinclusive or
could have been drawn more precisely to accomplish the
governmental objectives.
[Bd. of Educ. of Piscataway Tp., supra, 86 N.J. at 324,
431 A.2d 799 (emphasis added).]
B. State Due Process Standard
The guarantee of due process provides that as long as the
means chosen by the Legislature have a rational relation to
obtaining the objective sought, the statute will not be in
violation of due process of law as an arbitrary or
capricious enactment. Robson v. Rodriquez, 26 N.J. 517,
522, 141 A.2d 1 (1958).
Substantive due process does not protect against all
governmental actions that infringe on an individual’s
liberty interests or injure property rights. Rather, [it]
is reserved for the most egregious governmental abuses, .
. . abuses that shock the conscience or otherwise offend .
. . judicial notions of fairness. . . . [A] presumption of
validity attaches to . . . statutes and this presumption
is particularly daunting when [the] statute attempts to
protect the public health, safety or welfare. The burden
on a proponent of such a statute’s invalidity is a heavy
one.
[In re Certificate of Need Granted to the Harborage, 300
N.J.Super. 363, 386, 693 A.2d 133 (App.Div. 1997).]
C. Federal Equal Protection Clause Standard
The parties agree that no fundamental right, or suspect or
semi-suspect class is at issue. Thus, the rational relation
test applies, under which, “the Equal Protection Clause is
offended only if the statute’s classification `rests on
grounds wholly irrelevant to the achievement of the State’s
objective.'” N.J. State Bar Ass’n v. Berman, 259 N.J.Super
137, 146, 611 A.2d 1119 (App.Div. Page 309 1992). Where
social or economic legislation is at issue, “`[w]e will not
overturn such a statute unless the varying treatment of
different groups or persons is so unrelated to the
achievement of any combination of legitimate purposes that
we can only conclude that the legislature’s actions were
irrational.'” N.J. State Bar Ass’n v. Berman, 11 N.J. Tax
433, 441 (1991) (quoting Kadrmas v. Dickinson Pub. Schs.,
487 U.S. 450, 462-463, 108 S.Ct. 2481, 2490, 101 L.Ed.2d
399, 412 (1988)).
D. Federal Due Process Standard
Due Process analysis calls for a determination of whether
the state legislative purpose and means employed are
constitutionally permissible. The legislation must bear a
rational relationship to a constitutionally permissible
objective. Permissibility of the state legislation rests
upon the state’s police power. The state may, in the
exercise of its police power, take such action as in its
judgment is appropriate to promote and protect the public
health, safety and welfare. This is a broad power.
[Chamber of Commerce of the U.S. v. State, 89 N.J. 131,
155, 445 A.2d 353 (1982).]
To pass constitutional muster, then, the Act must further
some legitimate state interest; the means used must be
reasonable as opposed to arbitrary and capricious; and
§ 27 of the Act must bear a rational relation to the
legislative objective sought to be obtained.
The presumption is that the Legislature intended to act
constitutionally when it enacted the statute; that it
acted wholly within its allotted sphere; and from adequate
factual support. The presumption is not overcome and a
legislative enactment will not be declared void unless its
repugnancy to the Constitution is so manifest as to leave
no room for reasonable doubt, or the statute plainly
exceeds the constitutional power of the Legislature.
[N.J. Ass’n of Health Plans v. Farmer, 342 N.J.Super.
536, 551, 777 A.2d 385 (Ch.Div. 2000) (internal citations
omitted).]
Further, where taxation is at issue, a state legislature
is accorded “the widest possible latitude within the limits
of the Constitution.” Carmichael v. So. Coal Co., 301 U.S.
495, 510, 57 S.Ct. 868, 872, 81 L.Ed. 1245, 1253 (1937).
See also Lehnhausen v. Lake Shore Auto Parts Co., 410 U.S.
356, 93 S.Ct. 1001, 35 L.Ed.2d 351 (1973); Madden v. Ky.,
309 U.S. 83, 60 S.Ct. 406, 84 L.Ed. 590 (1940). Page 310
E. Equal Protection and Due Process Analysis
Here, the governmental objective of the Act is clear. The
Legislature believes that access to a `healthy’ healthcare
system is one of the most vital interests of the State.
See, P.L. 2004, c. 17 § 2(a). But as already stated
the Legislature believes that the system is in crisis and
patients’ access to the system is in jeopardy. See, P.L.
2004, c. 17 § 2(b). The title, legislative findings
and declarations of the Act make clear that the legitimate
governmental objective is to ensure that high quality
health care continues in New Jersey. Indeed, plaintiffs
concede that the Act addresses a valid public purpose. (Br.
in Support of Pl.’s Mot. for Summ. J. at 23).
Plaintiffs, however, continue to argue that there is no
rational relationship between the government’s objective,
to prevent a crisis in health care, and attorneys because
attorneys as a class did not create the situation to be
remedied and do not derive a benefit from this statute. In
response, the court examined whether there is any natural
relationship between attorneys and the statute and whether
the Legislature may impose a taxation scheme only upon
those who will derive a benefit from the tax or who caused
the crisis sought to be cured. This court has listed
numerous ways in which attorneys interact with and derive
benefit from a stable health care system through general
healthcare business counseling and through representation
of acute-care hospitals, physicians and dentists, physician
groups . . . and all manner of healthcare employers whether
it be in a corporate capacity, litigation capacity or
regulatory capacity. See New Jersey State Bar Association
v. State of New Jersey, No. C-1-05 (Ch.Div. February 18,
2005) at 34-36 for complete discussion (hereinafter
referred to as “slip op.”). Plaintiffs nonetheless maintain
that the court has stretched what they regard as tangential
interactions between the Bar and the healthcare system into
a constitutional argument for validating the Act.
Plaintiffs argue that if the Legislature can tax attorneys
for problems in the healthcare Page 311 system then what
is to stop it from taxing hairdressers whose customers are
doctors or drycleaners who clean suits for doctors or real
estate brokers who sell houses to doctors. Plaintiffs
conclude that attorneys are no more and no less related to
the healthcare industry than any of these other
occupational groups. In other words, the relationship
between doctors and attorneys is only as rational as the
relationship between doctors and any other service provider
that a doctor might encounter during his lifetime.
Plaintiffs’ argument necessarily raises the issue of what
constitutes a “rational” relationship. The case law tells us
that it is any relationship that is not arbitrary and
capricious. Robson v. Rodriquez, supra, 26 N.J. at 522, 141
A.2d 1. Dictionaries define the word “rational” as (1)
having reason or understanding and (2) relating to, based
on, or guided by reason, principle, fairness, logic, a
legitimate state interest, or a consideration of fact.
Merriam Webster’s Dictionary of Law 405 (1996). Synonyms
for the adjective “rational” are: agreeable to reason,
analytical, balanced, cerebral, clearheaded, logical,
plausible, reasonable, sane, sensible, sound, well
grounded, tenable. Burton’s Legal Thesaurus 446 (3d ed.
1998).
In this case, we must determine whether the Legislature had
any logical, plausible, reasonable basis for concluding
that attorneys have a rational relationship to the health
care industry in general and medical malpractice relief
specifically such that attorneys should pay the fee at
issue.
A review of the competent evidential materials presented
indicates three reasonable bases for the Legislature to
have assessed attorneys: (1) there is a strong
interrelationship between the legal needs of the medical
community and the practice of law as articulated in the
court’s prior opinion in this case (slip op. at 34); (2)
the legal profession’s representatives have shown a keen
interest in the issues raised in this legislation and have
lobbied vigorously to advance its positions, including
testifying at the Page 312 hearings;[fn8] and (3) given
the Legislature’s findings that the State’s tort liability
system is one of the causes of the current Page 313
crisis and that some groups sought to substantially change
aspects of that system, specifically by imposing a cap on
non-economic damage awards, which the organized Bar
strenuously opposed and defeated, it would appear logical
and reasonable for the Legislature to conclude that
attorneys should become a part of the legislative solution.
Thus, it was not irrational for the Legislature to conclude
that if the State’s tort liability system is a cause of the
current problem and attorneys are desirous of preserving
that system as well as playing a role in the reformation of
the medical malpractice system then it is reasonable that
they be called upon to help pay for it.[fn9] Page 314
[EDITORS’ NOTE: THIS PAGE CONTAINED FOOTNOTES.] Page 315
Having reviewed the legislative committee hearings, it is
clear that the Legislature enacted a compromise based on
input from different groups representing conflicting
interests including physicians and attorneys.
Plaintiffs’ steadfast position that there is no rational
relationship between the Act and attorneys is particularly
untenable in light of the Bar Association’s actions. The
voluntary testimony of two leaders of the State’s legal
community, and other attorneys, testifying about their
representation of all attorneys and their activism on this
critical issue do not support a finding that the
Legislature was arbitrary, capricious and irrational in
concluding that the New Jersey Bar has an interest in the
future of the healthcare system and in reforming the
medical malpractice situation in particular. The Latin
maxim facta non verba — actions speak louder than
words — comes to mind here after an examination of
the Act’s history and the Bar’s role in it.
If plaintiffs are now arguing that a large majority of
members have no interest in this field, then plaintiffs’
position raises questions as to why the Bar Association has
taken such a prominent role in this issue; why are they
lobbying for a cause that most of them care nothing about;
and why should the Legislature look beyond the strong NJSBA
showing of interest and conclude that most attorneys in New
Jersey have nothing to do with and derive no benefit from a
stable healthcare system.
Plaintiffs may be ultimately correct in their conclusion
that there is no healthcare “crisis” in New Jersey and,
thus, the fund is not warranted. However, it is not within
the purview of the courts to second-guess the findings of
the Legislature as long as Page 316 the Legislature acts
within constitutional limits. This court’s role is not to
grant a judicial imprimatur as to the wisdom of the Act but
to assess its constitutionality. “It is well recognized
that the courts do not act as a super-legislature.” Newark
Superior Officers Ass’n v. City of Newark, 98 N.J. 212,
222, 486 A.2d 305 (1985).
Having cited a number of logical and plausible connections
between lawyers and the health care system, the court does
not find that the Legislature’s decision to tax attorneys
was wholly irrational or arbitrary. In fact, in light of
the interest that plaintiffs showed during passage of the
Act, the court finds that the Legislature made a logical
assumption that attorneys have an interest in the future
stability of the health care system that is greater than
the interest shown by other groups who made no appearance.
Finally, plaintiffs argue that the Legislature’s
classification excluding attorneys who do not have offices
within the State, is constitutionally defective although
plaintiffs do concede that perfection is not required and
failure to include in a class some persons who share
characteristics of the class is not fatal so long as there
is a rational reason for doing so. (Br. in Support of Pl.’s
Mot. for Summ. J. at 25, 26). See also Vance v. Bradley,
440 U.S. 93, 108, 99 S.Ct. 939, 948, 59 L.Ed.2d 171, 183
(1979) (even if the classification is both underinclusive
and overinclusive, perfection is not required to satisfy
equal protection standards; such imperfection can be
rationally related to the secondary objective of
legislative convenience); Schweiker v. Wilson, 450 U.S.
221, 235, 101 S.Ct. 1074, 1083, 67 L.Ed.2d 186, 198 (1981)
(as long as the classification is reasonable, we must
disregard the existence of other methods of allocation that
we, as individuals, perhaps would have preferred); Drew
Assoc. v. Travisano, 122 N.J. 249, 262, 584 A.2d 807 (1991)
(remedial legislation need not be all or nothing, and the
Legislature can decide that to start somewhere is better
than to start nowhere).
This court must give wide latitude to the Legislature’s
classification. The Legislature may have decided not to tax
New Jersey licensed attorneys with out-of-state offices for
many reasons Page 317 including administrative
convenience or that the revenue that will be derived from
in-state attorneys is sufficient for the state’s present
purpose. Or, as the State points out, since out-of-state
attorneys (without a bona fide New Jersey office) were not
permitted to practice law in New Jersey on a regular basis
prior to January 2004 and the problems causing the crises
arose prior to that time, the Legislature might have
concluded that they cannot reasonably be held accountable
for the problem. Under the standards cited above, that is
all that this court is required to conclude — that
the Legislature conceivably had a basis for making the
distinctions within the classification that it did. Having
just articulated such a basis, the court finds that there
is no constitutional defect in the Legislature’s
distinction between in-state and out-of-state attorneys.
Thus, plaintiffs have not met their burden of putting
forth evidence to create a “genuine” issue of material fact
as to their due process and equal protection claims. Under
both the federal and state constitutional standards, the
rational basis test requires only that the Act further a
legitimate governmental objective. The means used must be,
by any conceivable set of facts, rationally related to the
objective. Here, the Legislature conducted hearings and
concluded that the state’s health care system is in
trouble. Various attorneys voiced their concern on the
impact of some proposals on the Bar and the public. The
financial interdependence between the Bar and a stable
health care system is apparent. The Act that resulted
provides a revenue stream for the State to address some of
the more pressing problems, and creates a task force, on
which the Bar will have a voice, to further study the
long-term issues. The plaintiffs have, therefore, not met
their substantial burden of showing that “the
classification is wholly irrelevant or unrelated to the
achievement of the objective, that the classification is an
explicit demonstration of hostile and oppressive
discrimination, and has not negated every conceivable basis
which may support the classification.” Berman, supra, 11
N.J. Tax at 449. Thus, the court finds that as to the due
process Page 318 and equal protection claims the State is
entitled to judgment as a matter of law.
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