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Roman Check Cashing, Inc. v. New Jersey Dept. of Banking and Insurance

July 18, 2001


The opinion of the court was delivered by: Poritz, C.J.

Argued September 25, 2000

On appeal from the Superior Court, Appellate Division, whose opinion is reported at 324 N.J. Super. 58 (1999).

In the New Jersey Check Cashers Regulatory Act of 1993, N.J.S.A. 17:15A- 30 to -52 (the Act), the Legislature revised and expanded the regulatory framework for the business of cashing checks in this State. Assembly Financial Institutions Committee, Statement to Assembly Bill No. 1323, at 1 (May 17, 1993). The Act provides for the licensing of check cashing businesses by the Department of Banking and Insurance (Department) and sets maximum fees for check cashing services offered by licensees, as had its predecessor statute. See N.J.S.A. 17:15A-33, -43; see also The Check Cashing Law of 1951, N.J.S.A. 17:15A-1 to -29 (repealed by L. 1993, c. 383, § 24, effective April 11, 1994). Relevant to this appeal, a new limitation on such businesses appears in N.J.S.A. 17:15A-41(e), which states that an office for check cashing will not be licensed if it is "located within 2,500 feet of an existing office." Plaintiff, Roman Check Cashing, Inc., a New Jersey corporation located in the town of Dover, challenges this limitation on substantive due process, equal protection and commerce clause grounds under the United States and New Jersey Constitutions.*fn1


Plaintiff applied for a check cashing license from the Department on August 21, 1997 to conduct business on the premises of its supermarket in downtown Dover. The application, when complete in December 1997, met all of the Act's conditions and requirements except that its proposed location was 1,004 feet from an existing check cashing business. By April 1998, the Department had not rendered a licensing decision. Plaintiff then brought this lawsuit as a mandamus proceeding to compel the Department to take action on the license, and to obtain a ruling declaring the distance requirement unconstitutional. When the application was denied on May 19, 1998, solely because of location, the matter was removed to the Appellate Division as an appeal from a final agency decision under Rule 2:2-3(a)(2).

The Appellate Division held that the distance requirement constitutes a violation of substantive due process and is unconstitutional. Roman Check Cashing, Inc. v. New Jersey Dep't of Banking & Ins., 324 N.J. Super. 58, 65 (1999). The court could find "no rational basis for the regulation" and therefore concluded that because "it is indeed arbitrary, capricious and unreasonable . . . the regulation cannot stand." Ibid. The Department appealed as of right pursuant to Rule 2:2-1(a)(1) and sought a stay of judgment from this Court. When the stay was denied, plaintiff's application was approved pending the outcome of the appeal. In a letter to plaintiff dated October 13, 1999, the Department stated: "[W]e note that an appeal of the court ruling invalidating the distance requirement . . . is pending, and that its outcome may affect the validity of your license."

We granted amicus curiae status to the New Jersey Check Cashing Association, an industry lobbying group.


Plaintiff primarily argues that N.J.S.A. 17:15A-41(e) violates its substantive due process rights under both the federal and state constitutions. In cases raising substantive due process claims under our state constitution, this Court uses the "standards developed by the United States Supreme Court under the federal Constitution." State Farm Mut. Auto. Ins. Co. v. State, 124 N.J. 32, 46-47 (1991) (citing Hutton Park Gardens v. Town Council, 68 N.J. 543 (1975)). Thus, our analysis of plaintiff's claim is the same under both constitutions.

We begin with the fundamental principle that a presumption of validity attaches to every legislative enactment. Board of Educ. v. Caffiero, 86 N.J. 308, 318, appeal dismissed, 454 U.S. 1025, 102 S. Ct. 560, 70 L. Ed. 2d 470 (1981); Fried v. Kervick, 34 N.J. 68, 74 (1961). Particularly in the sphere of economic regulation, we have deferred to policy judgments of the Legislature. E.g., Friedman v. Rogers, 440 U.S. 1, 17, 99 S. Ct. 887, 898, 59 L. Ed. 2d 100, 114-15 (1979); In re PSE&G, 167 N.J. 377, 394-95 (2001); see also United States v. Lopez, 514 U.S. 549, 606, 115 S. Ct. 1624, 1653, 131 L. Ed. 2d 626, 668 (1995) (Souter, J. dissenting) (commenting that "deference to legislative policy judgments on commercial regulation became the powerful theme under both the Due Process and Commerce Clauses"). Judicial reluctance to interfere with the regulation of economic affairs by the legislative branch of government is longstanding, with the result that both the federal courts and our courts have invariably upheld economic regulation challenged on substantive due process grounds.

When the means chosen bear a rational relationship to a legitimate state objective and are not arbitrary, capricious, or unreasonable, courts will sustain a legislative enactment. Williamson v. Lee Optical, 348 U.S. 483, 487-88, 75 S. Ct. 461, 464, 99 L. Ed. 563, 571-72 (1955); Nebbia v. New York, 291 U.S. 502, 537, 54 S. Ct. 505, 516, 78 L. Ed. 940, 957 (1934); Brown v. City of Newark, 113 N.J. 565, 572 (1989); Joseph H. Reinfeld, Inc. v. Schieffelin & Co., 94 N.J. 400, 413 (1983); Board of Educ., supra, 86 N.J. at 318; Robson v. Rodriguez, 26 N.J. 517, 522 (1958). Moreover, in considering that relationship, courts will not invalidate economic regulation because they believe it to be unwise or bad policy. That principle is embedded in our law. As the United States Supreme Court said so clearly in 1955, "The day is gone when this Court uses the Due Process Clause of the Fourteenth Amendment to strike down state laws, regulatory of business and industrial conditions, because they may be unwise, improvident, or out of harmony with a particular school of thought." Williamson, supra, 348 U.S. at 488, 75 S. Ct. at 464, 99 L. Ed. at 572. Our Court has similarly stated, "We do not sit as a body reviewing the wisdom of legislative decisions. . . . If the statute does not violate the Constitution but is merely unwise or based on bad policy, then . . . it is for the Legislature rather than this Court to deliver a finishing blow to it." Board of Educ., supra, 86 N.J. at 318 (citations omitted).

Finally, the means chosen by the Legislature need not be precise, or even the best way to achieve the state objective. Williamson, supra, 348 U.S. at 487- 88, 75 S. Ct. at 464, 99 L. Ed. at 571-72. Our task is simply to ask whether the statute is rationally related to the public health, safety or welfare. Brown, supra, 113 N.J. at 571.

In sum, our Court will not second-guess the Legislature in such cases, nor will we substitute our judgment for that of its members. We will presume support for economic regulation unless presented with evidence "that preclude[s] the possibility that there could have been any set of facts known to the legislative body or which could reasonably be assumed to have been known which would rationally support a conclusion that the enactment is in the public interest." Hutton Park Gardens, supra, 68 N.J. at 565; see also In re C.V.S. Pharmacy Wayne, 116 ...

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