On appeal from the Division of Pensions, New Jersey Department of the Treasury.
Approved for Publication March 14, 1997.
Before Judges Shebell, Baime and P.g. Levy. The opinion of the court was delivered by Shebell, P.j.a.d.
The opinion of the court was delivered by: Shebell
The opinion of the court was delivered bySHEBELL, P.J.A.D.
Plaintiffs, five employees of Rutgers University and their collective bargaining agent, Rutgers Council of AAUP Chapters, appeal the Division of Pensions' denial of health insurance coverage to the employees' same-sex domestic partners. Denial of coverage was based on the failure of the parties to satisfy the statutory definition of "dependents"--that is, they were not "spouses" under New Jersey law.
On appeal plaintiffs makes four points: (1) the language of the State Health Benefits Plan ("SHBP") Act, regulations, case law, and public policy mandate liberal construal of the term "dependents" to protect state employees' families, including their domestic partners; (2) the denial of health benefits to plaintiffs' domestic partners violates the New Jersey Law Against Discrimination ("LAD") by discriminating on the basis of sexual orientation and marital status; and (3) the denial of health benefits to the domestic partners of gay and lesbian state employees violates the employees' rights to equal protection under the New Jersey Constitution; and (4) the SHBP Act must be interpreted in a manner consistent with Executive Order No. 39, which prohibits discrimination in the executive branch on the basis of sexual orientation.
Amici curiae, Lambda Legal Defense and Education Fund, Inc., and the New Jersey Lesbian & Gay Law Association, argue that the denial of benefits violates the LAD prohibition against discrimination on the basis of marital status. As support for their argument, they have provided data on private companies and municipalities that have extended health benefits to their employees' domestic partners, which amici contend demonstrates that neither the cost to employers, nor the administrative burdens of such coverage, are prohibitive.
In April and July 1992 the individual plaintiffs sought to enroll their same-sex domestic partners as dependents in the SHBP. On September 30, 1992, the Director of the Division of Pensions, refused to enroll them on the advice of the Attorney General's office. Plaintiffs Mayo, Derbyshire, and the AAUP, filed a grievance against Rutgers, alleging discriminatory denial of health benefits coverage. On July 29, 1993, the grievance was denied by Rutgers' Vice President for Administration.
On November 15, 1993, plaintiffs filed a complaint in the Law Division against Rutgers and the State defendants. They alleged violations of the LAD (counts one and two), violation of Executive Order No. 39 (count three), a violation of Rutgers policy (count four), violations of the New Jersey Constitution (counts five and six), and breach of the collective negotiating agreement (count seven). On January 19, 1994, Rutgers filed an answer, and the State defendants answered on February 1, 1994. On November 15, 1994, the State defendants moved to dismiss the complaint. On February 3, 1995, the motion Judge ruled that the Director's decision was properly reviewable by the Appellate Division and entered an order transferring the action against the State defendants to this court, pursuant to R. 2:2-3(a)(2), and, stayed the action against Rutgers pending Disposition by this court. The Judge also granted plaintiffs' motion to file an amended complaint. Plaintiffs' subsequent motion to the Judge seeking reconsideration of the order transferring the case to this court was denied. On June 28, 1995, plaintiffs additionally filed a Notice of Appeal. Our careful review of the entire record, together with the arguments raised on appeal and pertinent law, satisfies us that relief from this court cannot be afforded.
The five individual plaintiffs are or were professors at Rutgers who, as state employees, qualify for benefits under the SHBP. Each had lived in a long-term, committed relationship with a same-sex domestic partner for between fourteen to twenty-one years, sharing joint ownership of real and personal property and other indicia of financial interrelationship, and in one case raising a child together.
All plaintiffs, except Anderson, who is also a dean, are represented by the AAUP. The collective negotiating agreement between the AAUP and Rutgers prohibits discrimination on the basis of sexual orientation and marital status, as does Rutgers' internal policy.
In April 1992, plaintiffs Mayo, Derbyshire, Crew, and Anderson applied to enroll their domestic partners in the SHBP. Rutgers sent the applications to the Division of Pensions, asking whether it would extend coverage to them. In August 1992, Rutgers also sent the Division the application of plaintiff Schurman, a newly hired faculty member. The Division referred the matter to the Attorney General's Office for an opinion on whether the term "spouse" covers same-sex domestic partners for the purposes of the SHBP. On September 14, 1992, a Deputy Attorney General rendered an opinion that a same-sex domestic partner cannot be considered an eligible dependent under the SHBP "because he/she is not a spouse under New Jersey law." On September 30, 1992, the Division's Director denied coverage.
On March 3, 1993, Rutgers once again wrote to the Director enclosing information regarding the implementation of the University of Iowa's health benefits plan, which covers same-sex domestic partners. The Director replied that "none of the rules and regulations of the State Health Benefits Program have changed" and that the "answers provided in previous correspondence still stand." Plaintiffs Mayo, Derbyshire, and the AAUP filed a grievance against Rutgers on behalf of themselves and all others similarly situated. The grievance was denied on the ground that the Division administers the SHBP and its interpretation of "dependents" is controlling.
It is plaintiffs' position that the statutory term "dependents" should be read to include domestic partners who are the functional equivalent of spouses in order to effectuate the remedial purpose behind the SHBP act. N.J.S.A. 52:14-17.26(d) defines "dependents" as:
an employee's spouse and the employee's unmarried children under the age of 23 years who live with the employee in a regular parent-child relationship.
The implementing regulations define "dependents" the same way. See N.J.A.C. 17:9-3.1(a). The goal of the SHBP "is to provide comprehensive health benefits for eligible public employees and their families at tolerable cost," and this court has concomitantly recognized the Legislative goal of providing coverage to employees and their dependents on a broad and equal basis. Heaton v. State Health Ben. Comm'n, 264 N.J. Super. 141, 151-52, 624 A.2d 69 (App. Div. 1993); G.B. v. State Health Ben. Comm'n, 222 N.J. Super. 83, 90, 535 A.2d 1010 (App. Div. 1988).
When the SHBP law was enacted in 1961, the meaning of the term "spouse" was so clear that Legislative intent is found by merely reading the plain language of the act. It dictates that health coverage may be extended only to legal spouses of state employees or their dependent children under the age of 23 years. N.J.S.A. 52:14-17.26(d). We recognize that in recent years, in a variety of contexts, our courts have considered the changing notions of "family" when deciding whether cohabitants, both heterosexual and homosexual, should be treated as dependents or family. See Adoption of Two Children by H.N.R., 285 N.J. Super. 1, 666 A.2d 535 (App. Div. 1995) (same-sex domestic partner of a child's biological mother may adopt child); see also Dunphy v. Gregor, 136 N.J. 99, 642 A.2d 372 (1994) (common law doctrine expanded to allow bystander recovery by a woman who was engaged to and cohabiting with the victim of an auto accident); Parkinson v. J. & S. Tool Co., 64 N.J. 159, 313 A.2d 609 (1974) (divorced wife qualified as a de facto spouse of decedent because she had resumed cohabiting and asked a priest to remarry them, who refused); Dawson v. Hatfield Wire & Cable Co., 59 N.J. 190, 280 A.2d 173 (1971) ("dependent" in the Workers' Compensation statute, N.J.S.A. 34-15-13(f), expanded to include a de facto wife).
However, in dealing with statutory and contract interpretation, we have not been disposed to expanding plain language to fit more contemporary views of family and intimate relationships. For example, in Lopez v. Santiago, 125 N.J. Super. 268, 310 A.2d 500 (App. Div. 1973), we declined to find that an automobile accident victim was the "spouse" of the driver, even though they had four children, lived together and she had taken his name. Id. at 269-70. Similarly, we declined to find that another automobile accident victim was a "relative" of the insured. Handler v. State Farm Ins., 253 N.J. Super. 641, 646-47, 602 A.2d 796 (App. Div. 1992). In that case, the victim was both the former and future father-in-law of the insured, as she used to be married to his son and was engaged to be married to another son. Id. at 643. Finally, our recent decision in Shuman v. Market Transition Facility, 294 N.J. Super. 193, 682 A.2d 1225 (App. Div. 1996) is consistent with earlier cases, as we again refused to expand the traditional notions of family for contract purposes. Shuman, (supra) , involved an application for automobile insurance coverage for the insured's unmarried co-habitant. Id. at 194. Because we found that the insured unmarried co-habitant was not a "family member," we affirmed the denial of coverage. Id. at 195-96.
Plaintiffs acknowledge the plain language definitions under the SHBP Act, but nonetheless contend that by refusing to extend health benefits, a form of compensation, to their domestic partners, defendants violate LAD's prohibition against discrimination on the basis of marital status and sexual orientation. The LAD prohibits an employer from discriminating against an employee "in compensation or in terms, conditions or privileges of employment" because of marital status or sexual orientation. N.J.S.A. 10:5-12. Our courts have held that health insurance and pension benefits are compensatory in nature. Gauer v. Essex County Div. of Welfare, 108 N.J. 140, 149, 528 A.2d 1 (1987); Weiner v. County of Essex, 262 N.J. Super. 270, 286, 620 A.2d 1071 (Law Div. 1993).
The LAD, however, provides several exceptions limiting its scope, one of which covers state employee benefit programs:
Nothing contained in this act . . . shall be construed . . . to interfere with the operation of the terms or conditions and administration of any bona fide retirement, pension, employee benefit or insurance plan or program, including any State or locally administered public retirement system, provided that the provisions of ...