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Knight v. City of Margate

Decided: June 25, 1981.

EDWARD R. KNIGHT, DONALD M. KAPLAN, MARVIN Z. WALLEN AND ATLANTIC COUNTY MUNICIPAL COURT JUDGES' ASSOCIATION, PLAINTIFFS-RESPONDENTS,
v.
CITY OF MARGATE, CITY OF VENTNOR, FOLSOM BOROUGH, CITY OF ABSECON, DEFENDANTS, AND JOHN J. DEGNAN, ATTORNEY GENERAL OF THE STATE OF NEW JERSEY, DEFENDANT-APPELLANT



On certification to the Superior Court, Law Division.

For reversal -- Chief Justice Wilentz, and Justices Sullivan, Pashman, Clifford, Schreiber, Handler and Pollock. For affirmance -- None. The opinion of the Court was delivered by Handler, J.

Handler

[86 NJ Page 377] In 1980 the Legislature amended the New Jersey Conflicts of Interest Law, N.J.S.A. 52:13D-12 et seq., to prohibit certain public officials and employees, including members of the judiciary, from dealings with casinos. L. 1980, c. 79; N.J.S.A.

52:13D-16, 17.1. The prohibition against such dealings was to apply also to persons with whom such officials and employees are associated and extends for a two-year period following the termination of public office or employment. This case contests the application of the prohibition to municipal court judges and challenges its constitutionality as applied to the judiciary.

I

The action was brought by several attorneys, who were formerly part-time municipal court judges in Atlantic County and the Atlantic County Municipal Court Judges' Association. It was asserted by plaintiffs that in their capacity as attorneys they have had, and expect to continue to have, dealings with casinos and casino interests. They contended that the statute as written did not apply to municipal court judges but only to full-time judges of the various State courts and therefore did not bar municipal court judges from engaging in these casino-related activities. Alternatively, it was contended that the statute would be unconstitutional if construed to apply to any member of the judiciary including municipal court judges. The complaint, which was brought against the Attorney General as the officer charged with enforcing the New Jersey Conflicts of Interest Law and several municipalities in which plaintiffs served as magistrates, further alleged that the individual plaintiffs have resigned their positions as municipal court judges in order to avoid any sanctions under or any appearance of violation of chapter 79.*fn1

On cross-motions for summary judgment, the trial court determined that the statute, as properly construed, applied to municipal court judges, but that it was unconstitutional because judges of the municipal court are members of the judiciary and

therefore the statutory regulation impinged upon the Supreme Court's exclusive authority over the courts and judges in this State. The trial judge also dismissed the cause of action against the defendant municipalities. The Attorney General filed a notice of appeal which this Court certified directly.

Following the oral argument of the appeal before this Court there was enacted into law on May 14, 1981, Senate Bill No. 3041, L. 1981, c. 142, which amended both N.J.S.A. 5:12-102 and 5:12-117.1 of the Casino Control Act, N.J.S.A. 5:12-1 et seq., and the New Jersey Conflicts of Interest Law, superseding L. 1980, c. 79, the subject of this litigation. The earlier legislation had included within the definition of the public officials subject to its prohibitions "any member of the . . . Judiciary." L. 1980, c. 79, § 2(a); N.J.S.A. 52:13D-17.1(a). The most current enactment changes the coverage of the ethical prohibitions of the Conflicts of Interest Law by including within its restrictions only full-time members of the judiciary and municipal judges in Atlantic City. N.J.S.A. 52:13D-17.2. Since the new legislation still purports to regulate the activity of judges, it does not moot the current appeal although the statutory shift in focus necessarily requires a reformulation of the issues now to be resolved. These issues are (1) whether members of the judiciary, and, specifically, municipal court judges, are subject to the New Jersey Conflicts of Interest Law; (2) if the statute is construed as covering members of the judicial branch of government, whether it is unconstitutional as being in conflict with the Supreme Court's constitutional authority to regulate the judiciary and the practice of law; and (3) if the statute as now written does not cover all members of the judiciary, the wisdom of extending ethical restrictions against casino activities, comparable to those in the statute, to such judges who do not fall within the provisions of the Conflicts of Interest Law.

II

The ethical restrictions of which plaintiffs complain, as originally imposed by L. 1980, c. 79, and continued by L. 1981, c.

142, relate to dealings or relationships with casino entities.*fn2 These strictures, to be fully understood, must be addressed in the constitutional and statutory framework within which legalized casino gaming operates in this State.

Until very recently casino gaming was outlawed. Such gaming, a form of gambling, was prohibited by the Constitution. N.J.Const. (1947), Art. 4, § 7, par. 2. An attempt to legalize casino gaming through constitutional amendment failed in 1974 when a public question to authorize casinos was rejected by a majority of the voters at the general election in November of that year. Two years later, however, in November 1976, a majority of the voters approved casino gambling by voting in favor of an amendment to the Constitution which provided in part:

It shall be lawful for the Legislature to authorize by law the establishment and operation, under regulation and control by the State, of gambling houses or casinos within the boundaries . . . of the city of Atlantic City, county of Atlantic . . . .

Pursuant to this constitutional mandate, the Casino Control Act was enacted by the Legislature in 1977 (L. 1977, c. 110, N.J.S.A. 5:12-1 to 152) to authorize casino gaming and establish the regulatory framework for the casino industry. The statutory and administrative controls over casino operations established

by the Act are extraordinary pervasive and intensive. Cf. Bally Mfg. Corp. v. N.J. Casino Control Comm'n, 85 N.J. 325 (1981). Over 11 statutory articles and almost 200 separate provisions cover virtually every facet of casino gambling and its potential impact upon the public. The regulatory scheme is both comprehensive and minutely elaborate.

The Legislature took considerable pains to determine and expound the State's public policy involving casino gambling. The declaration in the Casino Control Act appropriately emphasized the importance of the tourist, resort, recreational and convention industry of the State, the need to restore, rehabilitate and redevelop Atlantic City and the potential contribution of this new industry to the economic structure, general welfare, health and prosperity of the State and its inhabitants. N.J.S.A. 5:12-1(b)(1)-(5). The Legislature underscored the uniqueness of the new gambling industry by recognizing that the public, which has a "vital interest in casino operations . . . established an exception to the general policy of the State" against private gambling, and therefore determined casino gambling to be a revocable, highly regulated and conditioned privilege. N.J.S.A. 5:12-1(b)(8).

At the very heart of the public policy embraced by the new law is "the public confidence and trust in the credibility and integrity of the regulatory process and of casino operations." N.J.S.A. 5:12-1(b)(6). Related directly to this purpose, the Legislature stated that "the regulatory provisions . . . are designed to extend strict State regulation to all persons . . . practices and associations related to" casinos and that "comprehensive law-enforcement supervision . . . is further designed to contribute to the public confidence and trust in the efficacy and integrity of the regulatory process." Id. Because of the need for integrity, public confidence and trust, it was stressed that not only persons with criminal backgrounds and associations but also persons "deficient in business probity" should be excluded

from casino gaming operations. N.J.S.A. 5:12-1(b)(7). In this vein, because casino operations "are especially sensitive and in need of public control and supervision," the statute dictates that "the regulatory and investigatory powers and duties shall be exercised to the fullest extent consistent with law to avoid the entry" into casino operations, directly or indirectly, of persons whose economic or occupational pursuits are violative of the "criminal or civil public policies of this State." N.J.S.A. 5:12-1(b)(9). These public policy objectives were augmented by later amendments which declared that even though "[c]ontinuity and stability in casino gaming operations" were important, these could not be achieved by allowing persons with "unacceptable backgrounds and records of behavior" to control casinos. N.J.S.A. 5:12-1(b)(15); L. 1978, c. 7, § 1.

An entire section of the Act, Article 3, imposed stringent ethical restrictions upon members and employees of the agencies established to regulate casino operations, the New Jersey Casino Control Commission and the Division of Gaming Enforcement. N.J.S.A. 5:12-58 to N.J.S.A. 5:12-62. In addition to specific prohibitions, the New Jersey Conflicts of Interest Law was made applicable. N.J.S.A. 5:12-59. Article 3 also directed the Casino Control Commission to adopt a Code of Ethics modeled upon the judicial code of ethics of the New Jersey Supreme Court. N.J.S.A. 5:12-59(b).

In 1980 the Legislature extended the ethical restrictions applicable to casino operations to persons other than commission and division members and employees.*fn3 This enactment amended the Conflicts of Interest Law and imposed limitations upon dealings between high level government officials and casino licensees or

applicants. L. 1980, c. 79.*fn4 Specifically, Section 2(a) of the statute covered the following individuals:

Under this provision, for the first time, the Conflicts of Interest Law was applied to "any member of the . . . Judiciary." Chapter 79 was replaced by L. 1981, c. 142, on May 14, 1981. Under the terms of the most recent amendment the application of the conflicts law to the judiciary is limited to "any . . . full time member of the Judiciary" and to "the municipal judge . . . of a municipality wherein a casino is located."

The initial issue, then, in this appeal involves the meaning of the term "judiciary" as used in the New Jersey Conflicts of Interest Law as most recently amended and, more specifically, whether the legislative reference to the "judiciary" encompasses municipal court judges. Plaintiffs have argued that the term "judiciary" under the New Jersey Conflicts of Interest Law, as originally provided by L. 1980, c. 79, did not include municipal court judges. Their argument on this point is still relevant even though the current statute, L. 1981, c. 142, ...


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