April 7, 2009
STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT,
KEVIN LIPKA T/A SHE-KEV, INC., DEFENDANT-APPELLANT.
On appeal from Superior Court of New Jersey, Law Division, Morris County, Municipal Appeal No. 06-077.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted January 5, 2009
Before Judges Sapp-Peterson and Alvarez.
Defendant, Kevin Lipka, trading as She-Kev, Inc., appeals from a judgment finding him guilty of forty-one violations of the New Jersey Smoke-Free Air Act (Act), N.J.S.A. 26:3D-55 to -64, and imposing civil penalties of $39,750. Defendant was found guilty in the Roxbury Municipal Court on October 30, 2006, of thirty-five violations and was thereafter convicted of six additional violations on December 14, 2006. The judgment from which defendant now appeals is actually from the Law Division de novo trial on the record pursuant to Rule 3:23. We affirm.
The Act was adopted on January 15, 2006, but the effective date was delayed for ninety days until April 15, 2006. It prohibits smoking in indoor public places, such as Smiles II, the bar/restaurant operated by defendant at the premises where the violations occurred. N.J.S.A. 26:3D-58(a). The Act exempts from its purview any "cigar bar or cigar lounge," which is defined as a business earning "fifteen percent or more of its total annual gross income from the on-site sale of tobacco products and the rental of on-site humidors, not including any sales from vending machines." N.J.S.A. 26:3D-59(a).
In order to qualify for the cigar bar or cigar lounge exemption, a business must register with the board of health in the municipality in which it is located. Ibid. Additionally, a cigar bar or lounge within a bar or other establishment must be an enclosed area with "solid walls or windows" and a separate air ventilation system. N.J.S.A. 26:3D-57.
While we were not provided with copies of exhibits, the Law Division judge described in detail the relevant correspondence between defendant and the Township of Roxbury Health Department (Health Department). The Law Division judge also made detailed oral findings of fact.
On April 13, 2006, defendant wrote to the Health Department requesting that he be supplied with the forms necessary to apply for a cigar bar exemption. In that letter, defendant purported to register Smiles II as a cigar bar or lounge in compliance with the Act. On April 20, a Health Department official, Matthew Zachok, responded by certified letter: "At no point did this department receive the necessary documentation required for you to be considered for a cigar bar or cigar lounge exemption." The letter further stated that Smiles II was registered with the Health Department as a restaurant, and that the Health Department had already received several complaints about smoking on the premises since the Act went into effect. The letter cautioned that if smoking in the premises did not "cease and desist . . . immediately," a summons would issue.
The following day, Zachok wrote again to defendant, advising that he had visited Smiles II the previous day and explained to a Smiles II employee that the bar/restaurant was not exempt from the application of the Act. In the letter, Zachok mentioned that a sign on the premises indicated that smoking was permitted, and that he had left a "no smoking" sign, which was to be posted at the entrance, with an employee.
Zachok also noted that he had witnessed a bartender smoking behind the bar. He warned defendant that he would return on April 26 and issue summonses should any violations be found.
The April 26 reinspection found that signs indicating that smoking was permitted were still posted, a patron was smoking, and a humidor had been installed between the rear door and the bathrooms. On that date, an employee claiming to be the Smiles II manager reported that the owner of the business had told her that the premises were exempt from the Act.
On April 27, 2006, the first of forty-one separate summons was issued. A subsequent investigation conducted by the Health Department revealed that the incorrect signage continued to be displayed at Smiles II, while the correct signage had never been posted.
On May 4, 2006, the date of the annual fire inspection, a fire official noted the presence of ashtrays on the bar counter and in a downstairs dressing room lounge. He found ashes and smoking materials in a garbage can inside the premises. He reported that the manager told him that the "boss said we can smoke inside because we are a cigar bar and the rules don't apply here."
On August 1, 2006, an attorney wrote to the Health Department on behalf of defendant and requested the application forms for a cigar bar exemption under the Act. On August 3, the Health Department sent defendant the forms, which were actually available online, not just in hard copy from the municipality.
The Law Division specifically determined that defendant failed to demonstrate that Smiles II met the criteria for the exemption. Defendant could not prove that fifteen percent of the business's gross revenue in 2004, or at any time for that matter, came from the sales of tobacco products exclusive of the proceeds from cigarette vending machines. Defendant did not file an action in lieu of prerogative writs or otherwise take any bona fide affirmative action to pursue his stated belief that he was exempt from the law.
Accordingly, defendant was found to have willfully and knowingly violated the provisions of the Act on the dates stated on the forty-one summonses. Defendant was also found to be liable for civil penalties as mandated by the Act, a minimum of $250 for a first violation, $500 for a second, and $1000 for each subsequent violation. N.J.S.A. 26:3D:62(b).
The Law Division judge further noted that defendant not only failed to establish any proof whatsoever that fifteen percent of annual revenues were generated by tobacco sales, he also failed to establish that Smiles II had the structural features required by the Act when a cigar bar is located within another establishment. The Law Division judge cogently said:
So the defendant has two cease and desist notices. Is told to stop smoking immediately. Is told that there will be a reinspection no earlier than April 26, and yet, Smiles 2 continues to allow smoking. And based on the record before the Court, the employees were told by the owner that the establishment is exempt from the Smoke Free Air Act, because it's a cigar bar. So, the violations are flagrant.
What should they have done? Well, if they seriously want to comply it seems to this Court they should have stopped the smoking and complied with the Act. And the fact that the administrative regulations were still in flux doesn't mean that the statute is not effective. It became effective April 15, 2006. Once it was effective it had to be complied with.
And when they continued to flagrantly violate the Act additional summonses issued. The Court entertained the notion that 41 seems to be overdoing it. But the point is until there is compliance is it appropriate to tell the Township to stop issuing citations? And once they're issued they have to be dealt with. They were dealt with. The facts were stipulated, the Municipal Court Judge found that the penalty provisions were mandatory. And he imposed the penalty provisions as indicated in the statute.
While I recognize that some attempt was being made to comply with the exemption I'm fully satisfied here that the legislature intended the exemption to be very strictly enforced. And hence, that's why they used year end 2004, instead of year end 2005. That's why they imposed the 15 percent requirement, which seems particularly high to this Court. And finally that's why the definition of a cigar bar is particularly difficult to comply with in terms of a separate walled off area with a separate ventilation system. As indicated, there's no indication in this record that Smiles had in mind that it would do a separate walled off area.
So, under the circumstances, this Court really has no option but to uphold the ruling of the Municipal Court. I think it was entirely appropriate, and I say that recognizing that this is a de novo review. This Court does not have to look and see whether the Municipal Judge abused his discretion in any way, or did anything improper. To the contrary, I find the Municipal Court Judge acted appropriately. This matter was not rushed. There were at least three separate sessions with the Municipal Court. The first session, which was reasonably lengthy, dealt simply with the stipulated facts in the exhibits. And the request for briefing which was allowed and then the Municipal Court Judge decided the matter on October 30, with the same ruling in effect applying in December of 2006.
So, I deny any relief at this stage to the defendant and any further argument will have to be pursued at the Appellate level. I don't see any basis to set aside the fines that were imposed. And I don't see any basis to allow the defendant any leeway while the administrative regulations were being considered.
The Act went into effect, the violations were noted after appropriate cease and desist notices were issued. And the defendant knowingly violated the statute. It was done on a repeated basis over a series of days and months and it was only by the Fall of 2006 that the citations stopped. And when the defendant was found on October 30, to be in violation by a Municipal Court Judge, apparently the smoking ceased.
We concur with the Law Division judge's findings of fact and analysis of the law and affirm the entry of judgment essentially for the reasons articulated in his analysis. We add only the following brief comments.
The crux of defendant's claim of error is that some impropriety results from enforcement of the Act prior to the promulgation by the responsible agency, the Department of Health and Senior Services, of administrative rules and procedures to implement the Act. Defendant also contends that some unfairness results from enforcement of the law where two letters were written inquiring about obtaining exempt status, and forms were not immediately available for the exemption process to be initiated. We disagree with these contentions.
As the Law Division judge said, defendant did not even attempt to make an offer of proof that Smiles II would have qualified as a cigar bar or lounge, or that he intended to make necessary physical modifications to its structure. To this date, such status has not been sought.
Furthermore, defendant has not offered any law in support of the proposition that he was absolved from compliance until such time as Smiles II's application for exemption was reviewed. It is self-evident that defendant should have complied while simultaneously pursuing the exemption. The purported regulatory void did not authorize those subject to the law to act unreasonably. Cf. Harvester Chem. Corp. v. Aetna Cas. & Sur. Co., 277 N.J. Super. 421, 431, (App. Div. 1994), certif. denied, 139 N.J. 441 (1995) (holding that lack of regulations did not authorize insurer to terminate insured's policy mid-term without adequate and reasonable grounds).
An agency's rulemaking authority is limited to that granted by the Legislature. DiVigenze v. Chrysler Corp., 345 N.J. Super. 314, 327 (App. Div. 2001), certif. denied, 171 N.J. 442 (2002). Although substantial deference is given to an agency's interpretation of a statute that it is charged to enforce, administrative action cannot add substance not otherwise contained in the legislation itself. Serv. Armament Co. v. Hyland, 70 N.J. 550, 563 (1976). This statute did not defer the effective date until exemption forms were promulgated. Nor was the statute ambiguous and in need of clarification. See, e.g., Prestia Realty v. Hartz Mountain, 303 N.J. Super. 140, 144-45 (App. Div.), certif. denied, 152 N.J. 13 (1997).
We will not address defendant's remaining arguments as they are lacking in sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1).
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