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New Jersey Business & Industry Association v. State

Decided: April 1, 1991.

NEW JERSEY BUSINESS & INDUSTRY ASSOCIATION, NEW JERSEY STATE CHAMBER OF COMMERCE & INDUSTRY ASSOCIATION OF NEW JERSEY, NEW JERSEY FOOD COUNCIL, NEW JERSEY RETAIL MERCHANTS ASSOCIATION, FALSTROM COMPANY, INC., FIFTH DIMENSION, INC. & THE MILTON CAN CO., INC., PLAINTIFFS,
v.
STATE OF NEW JERSEY, ROBERT J. DEL TUFO, ATTORNEY GENERAL OF NEW JERSEY & CLIFFORD GREGORY STEWART, DIRECTOR OF THE NEW JERSEY DIVISION ON CIVIL RIGHTS, DEFENDANTS



Brennan, J.s.c.

Brennan

CIVIL ACTION

This matter is before the court on cross-motions for summary judgment. There are no factual issues in dispute and the action is appropriate for summary adjudication. The sole legal issue to be decided is whether the provisions of the Federal Employee Retirement Income Security Act (ERISA), 29 U.S.C.A. ยง 1001 et seq. (1974), as amended, preempt and bar enforcement of section 8(a) of the Family Leave Act (FLA) N.J.S.A. 34:11B-1 et seq., recently enacted in New Jersey. The cited section of the FLA provides that an employer subject thereto must continue in effect an existing health benefit plan for an absent employee during an authorized period of family leave.

Plaintiffs, who are both private employers and trade association whose members are employers subject to the FLA, filed their complaint seeking declaratory judgment that section 8(a) of the FLA is an unconstitutional State exercise of control over subject matter exclusively regulated by the federal government, thereby contravening the Supremacy Clause, U. S. Const., Art. VI cl. 2. Plaintiffs also seek an order permanently enjoining enforcement by the State of section 8(a) of the FLA.

Defendants, the State and officials charged with enforcing the FLA, filed an answer disputing, as a matter of law, that section 8(a) is unconstitutional. The New Jersey Education Association was granted leave to file an amicus curiae brief with respect to the effect, if any, of a decision in this action on employee health benefit plans maintained by government entities subject to the FLA.

Defendants do not challenge the standing to sue of the trade associations. Our courts, on other occasions have recognized the standing of a trade association to maintain litigation on behalf of its membership even though the trade association, as a distinct entity, would not be harmed by claims against its constituent members. See Crescent Park Tenants Ass'n. v. Realty Eq. Corp. of N. Y., 58 N.J. 98 (1971). In the present case, plaintiff trade associations have a sufficient stake and adverseness to defendants to maintain this action.

The Supremacy Clause of the United States Constitution provides: "This Constitution and the Laws of the United States which shall be made in Pursuance thereof, and all Treaties made, or which shall be made, under the Authority of the United States, shall be the Supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding." Art. VI cl 2. Because of this constitutional imperative, State law must not conflict or interfere with federal legislation and when it does federal law prevails and the State law deemed preempted. The determining factor as to whether a prohibited conflict or interference exists is always whether Congress intended to preempt the subject matter of the State legislation. See Malone v. White Motor Corp., 435 U.S. 497,504 55 L. Ed. 2d 443 (1978).

The judicial function in analyzing claims of federal preemption was stated in U.S.A. Chamber of Commerce v. State, 89 N.J. 131, 142 (1982) as follows:

"Preemption analysis begins with identifying the subject matter of the state law and determining whether there is a federal law operative in that field. Hines v.

Davidowitz, 312 U.S. 52, 64-68 61 S. Ct. 399, 402-404, 85 L. Ed. 581, 587 (1941). The focus then shifts to the federal regulation. The Supreme Court has developed some general guidelines that are useful in uncovering Congressional intent. Does the federal statute expressly or by necessary implication indicate exclusivity? See Gibbons v. Ogden, 22 U.S. (9 Wheat) 1, 6 L. Ed. 23 (1824). Is the federal scheme so pervasive that it precludes coexistence of state regulation? See San Diego Bldg. Trades v. Garmon, 359 U.S. 236, 246 79 S. Ct. 773, 780, 3 L. Ed. 2d 775, 784 (1959). Does the state program stand "as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress"? See Hines v. Davidowitz, supra. 312 U.S. at 67-68, 61 S. Ct. at 404, 85 L. Ed. at 587. An affirmative answer to any one of these questions would establish preemption and the state policy must yield insofar as it frustrates or blocks federal policy. Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132, 142, 883 S. Ct. 1210, 1217, 10 L. Ed.. 2d 248, 256-57 (1963).

Courts faced with potentially conflicting state and federal statutes must attempt to harmonize them whenever possible. Preemption of State law by federal statute is not favored in the absence of persuasive reasons //--- either the nature of the regulated subject matter permits no other conclusion, or that Congress has unmistakenly so ordained. It is not a question of whether the purposes of the two laws are parallel or divergent, but rather a court must determine whether both regulations can be enforced without impairing federal superintendence of the field. Exxon Corp. v. Hunt, 97 N.J. 526, 533 (1984); Florida LIme & Avocado Growers, supra.

Accordingly, in determining the proper construction of allegedly conflicting statutes, courts must perform "essentially a two-step process of first ascertaining the construction of the two statutes and then determining the constitutional question whether they are in conflict." Chicago & N. W. Trans. Co. v. Kalo Brick & Tile Co., 450 U.S. 311, 317 67 L. Ed. 2d 258, 265 (1981), ...


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