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In the Matter of Thomas J. O'reilly


December 7, 2011


On appeal from the Board of Trustees of the Public Employees Retirement System, Docket No. PERS 2-10-216024.

Per curiam.


Argued May 18, 2011

Before Judges Fuentes, Nugent and Kestin.

In a prior appeal, In re O'Reilly, A-4275-06 (App. Div. June 9, 2008), in an unpublished opinion, we affirmed a determination by the Board of Trustees (Board) of the Public Employees' Retirement System (PERS) that petitioner, Thomas J. O'Reilly, was not eligible, as a matter of statutory interpretation, for inclusion among those claiming certain enhanced pension benefits under the Prosecutors Part of PERS, enacted in L. 2001, c. 366, with an effective date of January 7, 2002. N.J.S.A. 43:15A-155 to -161. The intricate background facts are set out in detail in that opinion. See In re O'Reilly, supra, slip op. at 2-10. We need not rehearse them here.

We held that "[p]petitioner did not meet the statutory definition of 'prosecutor' at the time [the statute] was adopted or at any time during which he submitted applications for early retirement." Id. at 14. We also stated:

We cannot, however, dispose of petitioner's case on the basis of statutory interpretation alone. There were too many intervening elements -- including the Board's adoption of an apparently valid regulation which remained in effect for several years and under which the Board determined petitioner's eligibility for the Prosecutors Part in three separate years. [Id. at 18.]

We rejected the Board's determination that petitioner could not invoke principles of equitable estoppel on the basis that he had not relied, to his detriment, on any Board action in his decisions postponing his retirement. See id. at 14-17. With an understanding that "[t]he doctrine is rarely invoked against a government entity," id. at 15, we viewed the evidence presented as apparently establishing the "most strictly limited" application of waiver or estoppel principles to government actions, id. at 16 (quoting Buonviaggio v. Hillsborough Twp. Comm., 122 N.J. 5, 17 (1991)). Citing Skulski v. Nolan, 68 N.J. 179, 200 (1975), for the standards governing "entitlement to [public] pension benefits in cases where estoppel may be applied[,]" In re O'Reilly, supra, slip op. at 16, we observed:

Here, it appears from all the evidence presented that petitioner relied on the opinion of Attorney General Harvey and his inclusion in Harvey's list of eligible employees; the language of N.J.A.C. 17:2-8.2 then-in-effect; and, most significantly, the Board's approval of his eligibility for Prosecutors Part benefits three times: on September 22, 2003; on July 21, 2004; and on December 21, 2005. The detriment to petitioner is that, had he retired under the existing regulation and approval in 2004, he would have collected Prosecutors Part benefits; he continued employment outside DCJ [the Division of Criminal Justice] in reliance on the Attorney General's opinion and the regulation, which provided that his DCJ-related job responsibilities made him eligible for the enhanced benefits. In our view this constitutes detrimental reliance.

In essence, the Board changed the rules mid-stream. Attorney General Harvey identified thirty individuals who would qualify for the enhanced benefits, even though their job titles were outside DCJ. We cannot determine from the record before us which, if any, of those thirty individuals have retired with Prosecutors Part benefits or whether they were similarly situated to petitioner.

The Board argues that petitioner failed to demonstrate detrimental reliance because he made his irrevocable decision to retire when he knew of Attorney General Farber's opinion that Attorneys General Sampson's and Harvey's opinions were "ultra vires" and that N.J.A.C. 17:2-8.2 was invalid. That argument ignores petitioner's representations that he only continued his employment at the behest of the Attorneys General in reliance on his already-approved eligibility for the enhanced benefits. At that point, he could not turn back the clock to 2004 when he had been approved and retire with full Prosecutors Part benefits. [Id. at 16-17.]

Notwithstanding these impressions, "[b]ecause the Board dispute[d] petitioner's reliance on these various factors," id. at 18, we deemed the matter suitable for a hearing before an administrative law judge to determine the questions of detrimental reliance and "whether petitioner was treated differently than any of the other thirty individuals on Attorney General Harvey's list who may have retired with Prosecutors Part benefits." Ibid. We remanded for such a hearing "and reconsideration by the Board in accordance with this opinion." Id. at 19.

Administrative Law Judge (ALJ) Masin presided over the twoday hearing held in October 2009. He heard testimony from three witnesses, all introduced by petitioner: an assistant director in the Division of Pensions and Benefits (DPB), petitioner himself, and his wife. The Board offered no witnesses of its own. The assistant director testified regarding the thirty- person list and the differential treatment issue, as well as the Board's and the DPB's procedures in dealing with the advice received from various attorneys general in administering the Prosecutors Part pension and identifying those who were covered by it. Petitioner and his wife testified about their actions and states of mind as the facts developed, and about the choices they made.

From the outset, in her opening statement, counsel for the Board contended that the heart of the Board's case on the detrimental reliance issue was that "[a]s Administrator of the Department of Law and Public Safety, Mr. O'Reilly held a unique position of influence and had unparalleled access to the Attorney[s] General[]." She stated:

The evidence will reflect that Mr. O'Reilly was not an innocent bystander relying on the advice of Attorney[s] General Samson [and] Har[v]ey to determine whether or not he may be entitled to enhance[d] benefits under Chapter 366. Rather, he intimately infiltrated himself into the decision making process and established the criteria that would ultimately be used to include non[D.]C.J. personnel like him into the definition of [the] statute. His influence over who and who should not be entitled to the Prosecutor Part PERS outside of the [D.]C.J. started early on with an underlying self-serving intent to make sure that his name would ultimately be one of those included on the list.

In his initial decision, Judge Masin posited the issues as framed in our opinion remanding the matter for a hearing. He analyzed the facts as established in the testimonial and documentary evidence, and made formal findings of fact on the reasonable reliance issue, under the heading "Good Faith Subjective Belief":

* [A]s he approached the July 1, 2004 retirement date, . . . O'Reilly knew that the Board of Trustees, the very Board that had to approve his retirement under Prosecutors Part, had adopted [Attorney General] Harvey's criteria under which he had been told he qualified, and had converted the opinion into a regulation that had the force of law. . . .

* [W]hen O'Reilly agreed to Harvey's request to stay on after July 1, 2004, he had every reason to subjectively believe that he qualified. Effectively, the adoption of the regulation completed the set of circumstances that gave O'Reilly the subjective reasons to firmly believe that he could remain in State service, forgo outside employment opportunities, continue to perform valuable and personally fulfilling work, and eventually reap the reward of the enhanced Prosecutors Part pension. . . .

* [I]n deciding to remain after July 1, 2004, he clearly relied upon Harvey's opinion, Harvey's assurance to him, Harvey's criteria, and most especially, the adoption of the regulation by the very Board that now opposes his receipt of those benefits. And thereafter, the Board's approval of his continued requests for Prosecutors Part retirement on three separate occasions only affirmed that this Board viewed him as an eligible person.

These findings, "[b]ased upon the facts and the credible testimony of Mr. O'Reilly," led Judge Masin to reach his formal conclusion on the reasonable reliance issue:

[O'Reilly] relied upon a subjective good faith belief that he was eligible for Prosecutors Part benefits and . . . his reliance was fortified and encouraged by the opinion and criteria of Attorney General Harvey and the Board of Trustees' actions in adopting the Harvey criteria into regulation and actually approving his retirement on three occasions. His reliance upon these factors in deciding to remain with the [Department of Law and Public Safety] was "reasonable and justifiable." Foley Mach. Co. v. Amland Contractors, Inc., 209 N.J. Super. 70, 75-76 (App. Div. 1986). As the opinion, criteria and regulation were ultimately found to be misstatements of the actual criteria for eligibility, they represented a misrepresentation of the qualifying criteria, a misrepresentation upon which O'Reilly undoubtedly relied. The fact that he might personally have held the legally mistaken notion that he qualified is less important than the fact that his belief in such qualification was fortified by these objective factors. Reasonable reliance exists when it is based on a duly adopted administrative regulation.

Treating "Detriment" as a separate issue, Judge Masin analyzed the record in that regard and articulated his findings:

* [O'Reilly's] decision to remain in State service . . . was highly influenced by his understanding that he was eligible for Prosecutors Part Benefits, [and] undoubtedly resulted in his losing considerable income from July 2004 forward. . . .

* [H]is reliance upon the misrepresentation of his eligibility for Prosecutors Part retirement caused him to change his position for the worse and suffer a detriment. Carlsen v. Master, Mates and Pilots Pension Plan Trust, 80 N.J. 334, 339 (1979).

Based upon his findings on the factual issues of reasonable reliance and detriment, Judge Masin concluded "that the Board is estopped from denying Mr. O'Reilly a Prosecutors Part pension." He ordered that the pension be provided "effective with Mr. O'Reilly's retirement date of October 2006."

On the remaining issue on remand before the ALJ, the difference-in-treatment question, counsel for the Board defined its position as follows:

Regarding the other 29 individuals on the list, the [B]oard treated Mr. O'Reilly the same as it treated the other individuals. Prior to the Farber opinion, seven individuals retired. That's true. The [B]oard had no choice but to approve the entitlement to [P]rosecutor [P]art benefits based on the Harvey criteria, which was heavily influenced by Mr. O'Reilly.

After the Farber opinion, however, like Mr. O'Reilly, the [B]oard audited the individual's files and denied benefits to both individuals it felt did not meet the definition of prosecutors defined by the statute, and as you know, your Honor, many of those have resulted in hearings and appeals, like the one before you.

Mr. O'Reilly is not the same as the other individuals on the list. The evidence will show that, whether intentional or not, Mr. O'Reilly had overarching influence into the establishment of the regulations, regulations that were later found to be ultra vires and invalid. That would include individuals who had no right to entitlement of [P]rosecutor [P]art benefits. He never sought to distance himself in the decision making process by forwarding information or requesting advice from a neutral [D]ivision of [L]aw.

Rather, ruled by an underlying self-interest, Mr. O'Reilly manipulated the system for his own benefit.

In respect of this issue, Judge Masin made no separate findings. He concluded, however, based on the facts as he understood them, that petitioner had not been "treated differently from similarly situated persons" i.e., those on the thirty-person list promulgated by Attorney General Harvey, "who retired after the [Attorney General] Farber opinion[.]" He held, nevertheless, that some difference of treatment could be discerned, as between petitioner and the eight already-retired persons on the list, to the extent a determination was made that the pension eligibility of those persons "should not be audited because of some 'equitable' consideration," and petitioner was deemed not "to have a similar equitable position." Judge Masin, at the end of his discussion of the difference-in-treatment issue, stated: "this decision affirms the Appellate Division's previous perception that indeed O'Reilly had deferred his retirement because of the assurances of the Board and therefore had an equitable argument in his favor."

In rendering its final administrative decision, see N.J.S.A. 52:14B-10(c), (d), the Board announced its "findings of fact and conclusions of law." It rejected the ALJ's initial decision that petitioner was "eligible to receive retirement benefits under the Prosecutors Part of the PERS." The Board referred to the standards of Cavalieri v. Board of Trustees of the Public Employees Retirement System, 368 N.J. Super. 527, 537 (App. Div. 2004), generally binding an agency to an ALJ's conclusions based on the ALJ's factual findings, especially those derived from "evaluating the credibility of lay witnesses," id. at 534, but, according to the Board, allowing for a rejection "when the ALJ's findings are arbitrary or are not based on sufficient credible evidence in the record[.]" The Board stated: "Judge Masin ignored the prevailing facts the parties presented . . . and arbitrarily dismissed the credible evidence presented by the respondent." According to the Board, "[t]he credible evidence of record makes clear . . . that O'Reilly could not have had a subjective good faith belief that he qualified for Chapter 366 benefits because the eligibility he relied upon was the very one he, himself, fashioned."

This ultimate conclusion of fact was based upon the Board's mediate findings of fact, including:

Between July 1, 2002 and July 1, 2003, O'Reilly began lobbying for personal entitlement to Prosecutor Part benefits. While O'Reilly alleges that he did so in his personal capacity, the extensive paper-trail reflects that his personal desire for entitlement to enhanced benefits molded the policy that was eventually adopted by the Board expanding coverage of the Prosecutor[s] Part pension.

O'Reilly began early on attempting to influence the ultimate decision makers regarding the criteria for entitlement to the Prosecutor[s] Part pension.

As Administrator of the Department of Law and Public Safety, his ultimate position after a career with the Department that had begun in 1978 as Assistant Director of the Division of Criminal Justice, petitioner's immediate supervisor was the Attorney General. Since 1985, when he was first appointed as Administrator of the Department, he had served eleven attorneys general in that capacity.

In making its findings, the Board focused on petitioner's communications with two successive attorneys general, Samson and Harvey, regarding the Prosecutors Part pension that had been enacted in 2002, and the determination of which members of the Department qualified for the enhanced benefits that pension plan conferred. The Board described petitioner's communications on this subject as "lobbying for [his own] entitlement." And, in a veiled suggestion -- as distinguished from a finding -- that petitioner and Attorney General Harvey, also a career employee of the Department, colluded with each other to gain coverage, the Board said:

O'Reilly testified that upon becoming Acting Attorney General, Harvey promised him that if he remained on as administrator, Attorney General Harvey would make certain that he included O'Reilly as someone entitled to receive a Prosecutor[s] Part pension. . . . True to his promise and just days after being sworn in as Acting Attorney General, on February 24, 2003 Acting Attorney General Harvey forwarded a memorandum to Frederick Beaver, then director of the Division of Pension and Benefits, with a copy to O'Reilly, listing O'Reilly as someone eligible to receive Prosecutor Part benefits. There is no evidence of record to suggest that Attorney General Harvey premised O'Reilly's entitlement to an enhanced benefit on any substantive belief that he actually qualified for those benefits, especially given that O'Reilly was the only individual of the OAG staff whom Attorney General Harvey listed as eligible to receive the enhanced benefit. . ..

While Acting Attorney General Harvey did not include his own name on his February 24, 2005 [sic]*fn1 list as eligible to receive a Prosecutor Part pension, he did not need to do so, because the next day . . . O'Reilly forwarded a letter to Director Beaver instructing him to qualify Attorney General Harvey as eligible to receive Prosecutor Part benefits . . . .

The Board also framed a related finding:

On August 8, 2003, Attorney General Harvey forwarded a memorandum to Director Beaver setting forth the criteria for the Board to utilize in determining eligibility for enrollment in the Prosecutor[s] Part pension for those individuals not assigned to the Division of Criminal Justice. . . . Borrowing heavily from O'Reilly's language set forth in his personal correspondence to the "appointing authorities" and further echoed in O'Reilly's February 2006 [sic]*fn2 memorandum to Attorney General Samson, Attorney General Harvey included in his August 8, 2003 memorandum that the Board should include those individuals who were detached from Criminal Justice to another division and that continued to perform the law enforcement functions on behalf of the Attorney General. Attached to the memorandum was a list of thirty individuals who were not assigned to Criminal Justice whom the Attorney General found qualified for Prosecutor[s] Part benefits. O'Reilly was included on that list.

Based on this analysis, the Board made some ultimate findings of fact:

The substantial credible evidence supports that O'Reilly established the test utilized to determine the list of thirty and was the threshold decision maker recommending whom should qualify for Prosecutor[s] Part benefits. Furthermore, there is no substantive evidence of record that his qualification for those enhanced benefits was based on anything other than a promise, therefore, O'Reilly did not have a subjective good faith belief that he qualified for those benefits. Accordingly, Judge Masin's findings on this issue are rejected.

The Board also rejected the ALJ's findings regarding "Detriment," emphasizing that when petitioner changed his retirement date to June 1, 2004, there was no guarantee that the Board would qualify him as eligible to receive Prosecutor[s] Part benefits. . . . Accordingly, while O'Reilly and then Attorney General Harvey had negotiated O'Reilly's entitlement to Prosecutor[s] Part benefits if he stayed on as administrator, the Board, as the ultimate decision-maker, had not rendered any determination regarding his entitlement to those benefits. O'Reilly, therefore, not only had no subjective good faith belief that he was entitled to receive enhanced benefits, he further could not have relied to his detriment that he was eligible to receive those benefits when he extended his retirement to July 1, 2004.

The final decision also states, independent of any support in the record, in respect of the Board's authority to "revisit" petitioner's "entitlement to receive enhanced benefits" each time he submitted an application for retirement, that "the Board had no idea the degree to which the qualifying criteria Attorney General Harvey submitted to the Board in August 2003, was [sic] influenced by O'Reilly's own motivation, whether purposeful or not, to qualify for Prosecutor[s] Part benefits." The decision does not provide any insight into the perceived significance of the Board's lack of knowledge in this regard.

The Board declared that the ALJ had "failed to issue any findings regarding whether O'Reilly's reliance foreclosed alternate opportunities for pension benefits." Characterizing this as petitioner's "fail[ure] to meet the third element necessary to benefit from this rarely invoked doctrine [of equitable estoppel,]" the Board went on to "find[] that O'Reilly's decision to retire, even though continued employment with the State would have allowed him to continue to accrue PERS credit in the same account, precludes an estoppel claim."

The Board also viewed Judge Masin's findings as including a determination "that O'Reilly was treated differently than the other thirty individuals on Attorney General Harvey's list who retired with Prosecutor[s] Part benefits[.]" The Board determined that the ALJ's findings regarding differences in treatment were "not supported by the sufficient credible evidence in the record." It noted Attorney General Farber's conclusion that N.J.A.C. 17:2-8.2, reflecting the Harvey view, was "ultra vires and invalid[;]" and it referred to her order to "the Board to rescind the regulation."

As part of the Board's disposition of the difference-in-treatment issue, it observed:

The ALJ analyzed that since the Board never audited the seven individuals on the list of thirty who retired receiving Prosecutor[s] Part benefits prior to the issuance of the Farber opinion, then, had O'Reilly retired, he too would have continued to receive Prosecutor[s] Part benefits. . . . This analysis ignores that, unlike the other seven individuals who retired prior to the Farber opinion, O'Reilly voluntarily chose to continue his employment with the State and forego retirement. He gave up receiving the ERIP [Early Retirement Incentive Program], an enhanced benefit, in 2004, even though he had nothing from the Board guaranteeing him a Prosecutor[s] Part pension, because he wished to continue doing the work he loved.

On this issue, the Board, in its final decision, stated that it had treated all of the individuals who retired after the Farber decision the same. The Board audited all of the individuals on the list of thirty who had not retired, including O'Reilly. O'Reilly was not singled out for denial of those benefits.

Rather, after its audit, the Board denied everyone on the list of thirty who submitted a retirement application for a Prosecutor[s] Part retirement.

The Board observed that our remand required, in addition to a consideration "whether O'Reilly was treated differently than any of the other individuals on the list of thirty," a determination "whether the other thirty individuals were similarly situated to O'Reilly." As to this question, the Board stated that "[t]he ALJ . . . rendered no findings[.]"

The Board concluded its final decision with extended observations in this regard and in respect of other issues:

Given the evidence of record, in rendering his findings, the ALJ should have carefully analyzed the extent that O'Reilly's self-interest in qualifying for a Prosecutor[s] Part pension, whether intentional or not, influenced his policy recommendations. O'Reilly was not similarly situated to anyone on the list of thirty. As administrator, as established by the evidence of record, O'Reilly acted as architect establishing the qualifying factors used to determine who would be entitled to receive the enhanced benefit of Chapter 366 retirement. The ALJ found that O'Reilly, "for all his authority, and for all the Board's efforts to make him out as the person who was responsible for the ultimately rejected criteria, was not an attorney and certainly not the Attorney General, and was in no position to make the criteria binding upon anyone." . . . . The ALJ's reasoning fails to acknowledge the evidence that O'Reilly's position as administrator gave him the singular most influence over the decision-making process and the decision makers. . . .

The ALJ dismissed respondent's argument that O'Reilly's actions may appear improper by stating, "[O'Reilly's] claim to equitable estoppel cannot be turned away simply because of some fear that some members of the public may not be satisfied with the outcome." This statement diminishes one of the most important characteristics of public office; that the public depends on the integrity of its public officers to recognize conflicts and yield their personal interests requiring the discharge of their duties with frankness and openness in the light of public scrutiny so that the public may know and be able to judge their conduct and work fairly. In this instance, there is no dispute that O'Reilly held unparalleled access to the Attorney General. As part of his duties as administrator, O'Reilly was responsible to determine which Department employees would be included in the Prosecutor[s] Part from those who would not. That O'Reilly recommended to the Attorney General that he and his brother should receive a Prosecutors Part benefit based on a criteria he developed, criteria that was later submitted by the Attorney General to the Board for adoption, cannot be ignored.

Any conduct for personal gain that casts aspersion on public office, whether that conduct was purposeful or not, is contrary to and inconsistent with the public interest and public policy. Equitable principles should not be applied where the very conduct that gave O'Reilly any basis to assert his "reliance" was initiated by his own actions that directly influenced the Attorney General, who was the public official responsible not only for the administrative operations of the Department of Law and Public Safety but also for the legal advice provided to the Board of Trustees related to the promulgation of the very regulation that the ALJ found made the reliance reasonable.

As a public figure with unquestionable influence over the chief law enforcement officer in the State, O'Reilly had a duty to distance himself from determining his own eligibility for Prosecutor[s] Part benefits. He failed to do so. And O'Reilly cannot now hide behind a cloak of anonymity claiming that he had no idea of the final outcome because it was an "eighth floor decision." . . . . This is especially true since every person who ultimately made the list of thirty, including O'Reilly himself, were individuals whom O'Reilly had previously recommended to the Attorney General as being eligible to receive Prosecutor[s] Part benefits.

Given his position as administrator, O'Reilly was not similarly situated to anyone on the list of thirty. Moreover, the overall inequity in granting O'Reilly the substantially enhanced Prosecutor[s] Part retirement for equitable reasons, when he is not legally entitled to the benefit, becomes even more offensive when examined against the potential list of employees in the Department of Law and Public Safety who also argued that they were eligible prosecutors but whose name O'Reilly did not include on the list of thirty. . . . Notwithstanding the absence of any purposeful self dealing, the public interest demands that taxpayer funded pension benefits not be permitted to be extended to individuals beyond that expressly granted by the Legislature because of their position of influence. Equity should not reward O'Reilly. The ALJ improperly weighed the fact that O'Reilly was not an attorney, when the evidence in the record reveals he was instrumental in formulating the criteria that formed the language of the regulation found ultra vires. Equity should not be used to reward those who use their positions of influence to include themselves in benefits, and exclude others, whether intentional or not. Accordingly, the Board voted to reject the ALJ's findings that O'Reilly is entitled to receive a Prosecutor[s] Part pension. (Alteration in original.)

On appeal, petitioner raises two issues for our consideration, arguing that the Board's final decision "was unreasonable, arbitrary and capricious"; and that he "was treated differently than others on the list of thirty who retired with Prosecutor[s] Part pensions."

Our analysis of the record discloses that the Board's rejection of the ALJ's findings as "ignor[ing] the prevailing facts . . . and arbitrarily dismiss[ing] the credible evidence presented by the respondent" was not in keeping with the standards established to govern agency-head review of an ALJ's findings of fact. See Cavalieri, supra, 368 N.J. Super. at 534- 37; see also Steven L. Lefelt, et al., 37 N. J. Practice, Administrative Law and Practice § 7.20 (2d ed. 2000 & Supp. 2011).

In this matter, ALJ Masin's findings regarding the focal issue, detrimental reliance, involved determinations primarily, if not entirely, regarding petitioner's state of mind. In purporting to reject those findings, the Board treated them categorically as a question of petitioner's "subjective good faith belief that he qualified for" the pension benefit at issue. The Board's rejection of the ALJ's findings that detrimental reliance had occurred was not based on any articulated sense that those findings "were arbitrary or not based upon sufficient credible evidence." Cavalieri, supra, 368 N.J. Super. at 537. Rather, the Board based its determination upon the separate fact that petitioner had engaged in self-serving conduct when he provided Attorneys General Samson and Harvey, at their requests, with advice regarding the eligibility for the Prosecutors Part pension program of certain staff persons of the Department who were not then currently assigned to the DCJ.

In his initial decision, Judge Masin presented the factual considerations under three category headings: "Good Faith Subjective Belief," "Treatment of Others on the List of 30," and "Detriment." Because the Board, in rejecting the findings, did not address them directly but, instead, articulated an independent and different basis for reaching a contrary conclusion in each category, the Board's rejection of the ALJ's findings must be seen as only pro forma, i.e., lacking the necessary "expla[nation] why they were arbitrary or not based upon sufficient credible evidence." Cavalieri, supra, 368 N.J. Super. at 537.

When such a record, involving lay witnesses, can support more than one factual finding, it is the ALJ's credibility findings that control, unless they are arbitrary or not based on sufficient credible evidence in the record as a whole. In this type of decision, the controlling choice is no longer the agency head's.

Just as we are bound by the factual findings of a trial court, so too is the Pension Board bound when reviewing an ALJ's factual findings of lay witness testimony.

To reverse such a finding, under the current APA [Administrative Procedure Act], the Pension Board must explain why the ALJ's findings are unsupportable by the record, not simply that they disagree with the judge or would have decided differently from the evidence that was presented. [Ibid. (citations omitted). Accord S.D. v. Division of Med. Assistance & Health Servs., 349 N.J. Super. 480, 485 (App. Div. 2002).]

Thus, Judge Masin's findings must be seen as controlling the factual grounding of the matter. Only if the Board's use of a different basis for decision can withstand scrutiny as an independent basis for the result it reached, can its final decision be seen to supersede the ALJ's initial decision.

Judge Masin's findings under the heading of "Good Faith Subjective Belief" led to an articulated conclusion in this category that followed logically and reasonably from the recited findings. As we have noted, the Board did not state a basis in the record for rejecting the findings that led to the ALJ's conclusion. Rather, the Board, in this category, focused on different facts to support its conclusion "that O'Reilly could not have had a subjective good faith belief that he qualified for Chapter 366 benefits because the eligibility he relied upon was the very one he, himself, fashioned." The position taken by the Board appears to be that petitioner's discharge of his employment duties at the behest of his superiors, two attorneys general, disqualified him from a pension benefit that he would have been entitled to receive if only he had not obeyed his superiors, and had, instead, declined to provide the requested assistance. Such a stance ignores fundamental principles governing the employment relationship and disserves the best interests of good government. In both the public and private sectors, "[u]nder the law, an employee is required to obey all reasonable orders of the employer." Wadman v. City of Omaha, 438 N.W.2d 749, 755 (Neb. 1989) (citations omitted). The refusal of a highly-placed public employee to carry out the directive of his superior is "insubordinate." Id. at 756.

The initial determination as to which non-DCJ employees were covered by the Prosecutors Part provisions was in every formal and factual sense made by Attorney General Harvey. That petitioner had become involved in furnishing background and recommendations on the question, first at the direction of Attorney General Samson and then at the bidding of the succeeding Attorney General, Harvey, cannot alter the reality that the ultimate departmental action determining the scope of Prosecutors Part coverage was that of the Attorney General, not petitioner. Cf. Education Law Ctr. v. Department of Education, 198 N.J. 274, 286 (2009) (discussing the policy behind the deliberative-process privilege against disclosure of public records (quoting Kaiser Aluminum & Chem. Corp. v. United States, 157 F. Supp. 939, 945-46 (Ct. Cl. 1958) ("Free and open comments on the advantages and disadvantages of a proposed course of governmental management would be adversely affected if the civil servant or executive assistant were compelled by publicity to bear the blame for errors or bad judgment properly chargeable to the responsible individual with power to decide and act."))). And, petitioner's role in the process was even further removed from the Board's own authoritative action promulgating N.J.A.C. 17:2-8.2, the regulation that embodied the views proposed by the Attorney General.

We take it as a given that, in both the public and private sectors, no head of as large and complex an organization as the Department of Law and Public Safety makes broad-based decisions without seeking the input of knowledgeable subordinates. To the extent the ultimate decision may mirror a recommendation received in the process, it is no less the action of the organization head than any other he might make. The result cannot be seen as foreordained until it becomes the act of the organization head. And, though that ultimate decision might reflect a recommendation that was made, the authority of the organization head is not diminished because he or she chose to adopt the advice of a subordinate. See Kaiser Aluminum, supra, 157 F. Supp. at 945-46; Education Law Ctr., supra, 198 N.J. at 286.

It would be impractical and unrealistic to posit a rule requiring a subordinate, automatically, to remove himself or herself from a decision-making process because he or she might benefit from the ultimate determination. Rather, the most that can reasonably be mandated in the cause of good organizational management and productivity, is that the subordinate employee whose input is sought should disclose any concealed conflicts or personal interests so that the organization head may decide whether that employee should participate in the process, and, if so, may have the benefit of weighing any recommendation the employee might make in the light of the underlying facts regarding any anticipated personal advantage he might derive. Here, petitioner's interest in being included among those deemed eligible for Prosecutors Part benefits was not only fully disclosed but was entirely evident to both Attorney General Samson in seeking his input, and to Attorney General Harvey in acting upon the recommendation made. To disvalue the ultimate decision made on the basis of petitioner's participation would be to demean the attorneys general involved as ciphers who did not make their own decisions, but merely rubber-stamped those of their subordinates. Governed by the highest regard due the administrative actions of all attorneys general, we decline to engage in such an exercise.

The position adopted by the Board in its final decision -- that petitioner could not reasonably rely upon the assurances of Attorney General Harvey and the Board itself -- assumes too much. It is based on the premise that petitioner's involvement in the process of determining Prosecutors Part eligibility, and his own inclusion, was definitive. Yet, we cannot discount the role of Attorney General Harvey in formally announcing his decision on Prosecutors Part inclusion when he proposed the adoption of an implementing regulation, and his request that petitioner defer his retirement on the understanding he would be included; as well as the request of the next Attorney General, Farber, too, that petitioner defer his retirement. Nor may we ignore the equivalently significant decisions of the Board itself in promulgating N.J.S.A. 17:2-8.2, adopting the criteria propounded by the Attorney General; and in its thrice-expressed determination that petitioner was eligible for inclusion in the Prosecutors Part pension plan.

There are other, related, determinations in the Board's articulated decisional basis that are not borne out by the established facts. For example, the Board stated in its final decision:

As a public figure with unquestionable influence over the chief law enforcement officer in the State, O'Reilly had a duty to distance himself from determining his own eligibility for Prosecutor[s] Part benefits. He failed to do so. And O'Reilly cannot now hide behind a cloak of anonymity claiming that he had no idea of the final outcome because it was an "eighth floor decision." . . . . This is especially true since every person who ultimately made the list of thirty, including O'Reilly himself, were individuals whom O'Reilly had previously recommended to the Attorney General as being eligible to receive Prosecutor[s] Part benefits.

The record discloses no support for the assertion that petitioner has claimed "he had no idea of the final outcome." As far as we are able to determine, petitioner never sought "anonymity" or pleaded it beyond asserting that the ultimate decision had been the Attorney General's to make. As we have noted, a view of the matter as one in which petitioner "determin[ed] his own eligibility for Prosecutor Part benefits[,]" wholly denigrates the Attorney General's role and his capacity to make independently-arrived-at decisions even after receiving the advice of subordinates.

Finally, we are compelled to note that, in equitable estoppel terms, there was nothing inherently more valid about Attorney General Farber's opinion that a more restrictive reading of Chapter 366 was required than had been propounded by the inclusion determinations reached, first tentatively by Attorney General Samson and then, finally, by Attorney General Harvey and by the Board in promulgating N.J.A.C. 17:2-8.2. To be sure, we, in our prior decision, held that the Farber reading was a more faithful interpretation of the statute and that "[p]petitioner did not meet the statutory definition of 'prosecutor' at the time N.J.S.A. 43:15A-155 was adopted or at any time during which he submitted applications for early retirement." In re O'Reilly, supra, slip op. at 14.

Accordingly, we concluded, petitioner "was not, therefore, eligible for the enhanced benefits." Ibid.

This determination notwithstanding, we then turned to the possibility that petitioner might nevertheless receive those very benefits by operation of principles of equitable estoppel based primarily on a different statutory interpretation, binding at the time however flawed it later turned out to be. We have now determined that our initial impressions in this regard were well justified by the record, and that the Board's disallowance of the ALJ's findings was unwarranted and beyond the scope of permissible review as established in Cavalieri, supra, 368 N.J. Super. at 537.

In remanding, we framed the critical issue as whether petitioner "only continued his employment at the behest of the Attorneys General in reliance on his already-approved eligibility for the enhanced benefits." In re O'Reilly, supra, slip op. at 17. And, we expressed disagreement with the Board's position that "continued employment could not be viewed as detrimental because petitioner continued to earn service credit." Id. at 15. We remanded "[b]ecause the Board dispute[d] petitioner's reliance on the[] factors" of continued employment and the different treatment others on the list of thirty had received; and we chose to afford the Board an opportunity to make a record in respect of its dispute regarding petitioner's reliance on these factors. Id. at 18. For the reasons stated above, we have now determined that the Board has failed to negate, by any adequate showing, the factual contentions at the root of petitioner's equitable estoppel argument. An attorney general may have the authority to nullify a decision of her predecessor, but she cannot change the facts that developed under that predecessor's administration, or the legal effects of those facts.

Petitioner having made his case in respect of detrimental reliance, we deem it unnecessary to address, also, the difference-in-treatment issue that was an alternate ground for the relief he sought.

The final administrative decision of the Board is reversed. The matter is remanded for such action by the Board as may be necessary to enroll petitioner in the Prosecutors Part pension as of the date of his retirement, October 1, 2006; and to provide for the payment of any difference between the pension benefits he has received under PERS general provisions in the interim and what he would have been entitled to receive under the Prosecutors Part since that date.

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