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Neshaminy Constructors Inc. v. Krause

Decided: May 21, 1981.

NESHAMINY CONSTRUCTORS, INC., DAVID A. ROBINSON AND ANTHONY CANUSO, PLAINTIFFS,
v.
DONALD KRAUSE, WILFRED SMITH AND ARTHUR FORBES, DEFENDANTS



Dreier, J.s.c.

Dreier

This case presents for review the constitutionality of N.J.S.A. 34:9-2, enacted in 1931, governing construction contracts awarded by the state or any other public body. The act requires that "preference in employment thereon shall be given to citizens of the state of New Jersey who have resided and maintained domiciles within the state for a period of not less than one year immediately prior to such employment,"*fn1 adding only that non-New Jersey citizens may be employed when local citizens are unavailable. The statute goes on to require the inclusion in all such contracts of a provision that noncompliance shall render the contract voidable at the instance of the public body and it makes a violation of the act by a contractor punishable as a disorderly persons offense.

Ewing-Lawrence Sewerage Authority, (ELSA), intervenor- amicus curiae here, has begun a multi-million dollar systems improvement and expansion project largely funded by the Federal Government. On this project plaintiff Neshaminy Constructors, Inc., a Pennsylvania corporation, is a principal contractor. Defendants Donald Krause, Wilfred Smith and Arthur Forbes, all New Jersey citizens, sought employment with Neshaminy for the project but were not hired. They brought suit against plaintiff in Lawrence Township Municipal Court alleging that out-of-state residents had been hired in their stead, in

violation of N.J.S.A. 34:9-2.*fn2 Neshaminy has admitted hiring out-of-state residents and, in this court, challenges the statute. Neshaminy has moved today essentially for summary judgment, seeking a declaration of unconstitutionality. ELSA has made the identical motion.*fn3 The State of New Jersey, granted the right to intervene as a party under R. 4:28-4(d), has filed a cross-motion for summary judgment upholding the statute. Defendants Krause, Smith and Forbes contend the matter is not in an appropriate posture for summary judgment, there being what defendants assert is a factual issue as to the purposes of the legislation under attack, but contend also that should the court reach the merits, the statute should be upheld.

We will reach the merits. It is conceded by all parties that there is no recorded legislative history regarding this statute. The terms of the statute are unambiguous. There is no dispute that available New Jersey residents were passed over in favor of nonresidents. The question is therefore squarely presented whether, as a matter of law, plaintiff is bound by the provisions of N.J.S.A. 34:9-2.

The major thrust of the challenge to this statute is made under the privileges and immunities clause of the United States Constitution, Art. IV, ยง 2, which states: "The citizens of each state shall be entitled to all privileges and immunities of citizens in the several states." The clause has been construed by the United States Supreme Court as establishing "a norm of comity," Austin v. New Hampshire , 420 U.S. 656, 660, 95 S. Ct. 1191, 1194,

43 L. Ed. 2d 530 (1975), that is to prevail among the states with respect to their treatment of each other residents.

The purpose is more fully described in Paul v. Virginia , 8 Wall. 168, 19 L. Ed. 357 (1869):

The leading modern exposition of the limitations the clause places on a state's power to weight employment opportunities in favor of its own residents is Toomer v. Witsell , 334 U.S. 385, 68 S. Ct. 1156, 92 L. Ed. 1460 (1948), where the court held the clause bars "discrimination against citizens of other States where there is no substantial reason for the discrimination beyond the mere fact that they are citizens of other States." 334 U.S. at 396, 68 S. Ct. at 1162. A "substantial reason for the discrimination" would not exist, the court explained, "unless there is something to indicate that non-citizens constitute a peculiar source of the evil at which the [discriminatory] statute is aimed." 334 U.S. at 398, 68 S. Ct. at 1163. Moreover, even where the presence or activity of nonresidents causes or exacerbates the problem the State seeks to remedy, there must be a "reasonable relationship between the danger represented by non-citizens, as a class, and the . . . discrimination practiced upon them." 334 U.S. at 399, 68 S. Ct. at 1164.

Following the standards established in Toomer , the Supreme Court has recently handed down a decision, Hicklin v. Orbeck , 437 U.S. 518, 98 S. Ct. 2482, 57 L. Ed. 2d 397 (1978), which this court finds dispositive of the issue of whether N.J.S.A. 34:9-2 ...


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