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In re Scioscia

Decided: March 23, 1987.

IN THE MATTER OF ANTHONY & KEARNEY SCIOSCIA, T/A HOME & INDUSTRIAL DISPOSAL SERVICE, INC., AND ANTHONY SCIOSCIA, INDIVIDUALLY


On appeal from New Jersey Board of Public Utilities.

Michels, O'Brien and Skillman. The opinion of the court was delivered by Skillman, J.A.D.

Skillman

This is an appeal from an order of the Board of Public Utilities (BPU) revoking the certificate of public convenience and necessity of appellant Home and Industrial Disposal Service (Home), prohibiting appellant Anthony Scioscia, who was the manager and half owner of Home, from participating in the solid waste business and imposing $500 penalties upon both appellants. We affirm.

The BPU's order was based upon appellants' participation in a complex conspiracy to rig bids on garbage collection contracts in northern New Jersey. The criminal charges arising out of this conspiracy have been the subject of three reported opinions.

State v. New Jersey Trade Ass'n, 96 N.J. 8 (1984); State v. Scioscia, 200 N.J. Super. 28 (App.Div.1985), certif. den. 101 N.J. 277 (1985); State v. N.J. Trade Waste Ass'n, 191 N.J. Super. 144 (Law Div.1983).

In State v. Scioscia, we affirmed appellants' criminal convictions for knowingly engaging in a combination and conspiracy in restraint of trade, in violation of N.J.S.A. 56:9-3.*fn1 Appellants' illegal activities which resulted in their criminal convictions and in the BPU order from which this appeal is taken are described as follows in Scioscia:

The charges and resulting convictions emanated out of defendants' participation in an unlawful customer allocation agreement. As part of the alleged conspiracy, members acquired exclusive "property rights" which permitted them to provide garbage collection service to different locations without competition. The agreement was designed to stifle "predatory" bidding practices which had been long dominant in the industry. The conspiracy was implemented through the formation of the New Jersey Trade Waste Association (TWA). In order to prevent competition between collectors, the TWA provided an "amnesty period" after which the "property rights" to service specific areas were assigned. Such rights were conferred upon the first Association member to serve a given location. Although competition in the industry was largely illusory, the appearance of legality was maintained through the utilization of collusive and complementary bids. Stated somewhat differently, the collectors and haulers would submit bids in accordance with a prearranged plan to insure that the Association member having the property rights to a particular area would ultimately be awarded the contract. [200 N.J. Super. at 32-33].

The evidence presented to the Administrative Law Judge (ALJ) assigned to hear the matter for the BPU was essentially limited to the judgments of conviction. Appellants chose to present no evidence. Our opinion affirming appellants' criminal convictions also was made part of the administrative record.

The ALJ concluded that appellants had violated both the Solid Waste Utility Control Act, N.J.S.A. 48:13A-1 et seq. (the Act) and an implementing regulation adopted by the BPU, N.J.A.C. 14:3-10.12. He recommended that Home's certificate of public

convenience and necessity be revoked. However, he concluded that only monetary penalties should be imposed against Scioscia.

The BPU agreed with the ALJ's conclusions that appellants had violated the Act and its implementing regulation and that Home's certificate of public convenience and necessity should be revoked. However, the BPU concluded that the public interest required that Scioscia also should be prohibited from participating in the solid waste business. It stated that "[t]his prohibition against the individual flows from our conclusion that he personally conspired to eliminate competition in violation of the Solid Waste Utility Control Act and the corresponding regulation and that these acts strike at the core of the legislation regulating this industry."

Following the filing of a notice of appeal, we granted a stay pending appeal of the part of the BPU's order which prohibits Scioscia from engaging in the solid waste business. Appellants' brief raises nine points, many of which are clearly lacking in merit or overlap with other points. There are four contentions which require discussion: (1) the judgments of conviction provided an insufficient basis upon which to conclude that appellants violated the Act; (2) the BPU lacked statutory authority to prohibit Scioscia from engaging in the solid waste business; (3) the part of the BPU's order prohibiting Scioscia from engaging in the solid waste business constituted improper de facto rulemaking; and (4) the BPU abused its discretion in prohibiting Scioscia from engaging in the solid waste business.

I.

Appellants were convicted of a conspiracy to restrain trade, in violation of N.J.S.A. 56:9-3, a section of the New Jersey Antitrust Act. The BPU relied upon the judgments of conviction of this crime to establish that appellants violated N.J.S.A. 48:13A-10a, which provides:

No person shall monopolize, or attempt to monopolize, or combine or conspire with any other person to monopolize, trade or commerce in any relevant market, located in whole or in part in this State, for the solid waste collection business or the solid waste disposal business.

Appellants argue that a conspiracy to restrain trade and an attempt or conspiracy to monopolize trade are fundamentally different offenses, constituting violations of different sections of the New Jersey Antitrust Act (compare N.J.S.A. 56:9-3 with N.J.S.A. 56:9-4), and that a conviction under N.J.S.A. 56:9-3 is therefore insufficient to prove a violation of N.J.S.A. 48:13A-10a.

To evaluate this argument, it is appropriate to review the legislative history of the Act. This legislation resulted from a report prepared by the State Commission of Investigation (SCI) which contained the following summary of problems in the solid waste industry:

To address these problems the SCI made the following recommendations:

(1) Enact legislation which will prohibit customer and territorial allocations in the garbage industry. This legislation should also prohibit price fixing arrangements and collusive bidding among waste collection contractors and make unlawful present trade association constitutions, by-laws and resolutions which ...


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