65 Years Since In re Plainfield-Union Water Co.

On this date in 1954, the Supreme Court decided In re Plainfield-Union Water Co., 14 N.J. 296 (1954).  Along with Handlon v. Town of Belleville, 4 N.J. 99 (1950), discussed here, Plainfield-Union is one of the foundation stones of administrative law principles in New Jersey.  That opinion, like Handlon, was written by Justice Heher.

This case involved a resolution adopted by the Water Policy and Supply Council that had approved the water company’s plans for securing an additional subsurface water supply.  In an appeal from that ruling, reported at 11 N.J. 382 (1953), the Supreme Court had found that the Council’s procedures were deficient (evidence had come in without an oath, and there was no opportunity for cross-examination and rebuttal) and its findings were insufficient.  The Court remanded the matter “for further proceedings conformably to the principles of this opinion.”

On remand, the Council conducted a new public hearing.  The Borough of Mountainside objected to that, asserting that the Court’s mandate did not “‘require, authorize, order, or permit, any further public hearing,’ but rather limits further proceedings ‘to a full consideration of all legal proofs offered upon hearings concluded, the making of finding of facts and a final determination based thereon,’ and thus ‘there exists no authority or jurisdiction for the conduct of the proposed hearing.”

The Council rejected that argument, held the hearing (offering Mountainside’s counsel the chance to cross-examine and otherwise participate, which he largely declined to do, and ultimately ruled that the public need supported the water company’s plan.  The Council adopted findings of fact backing up that decision.

Mountainside appealed to the Appellate Division, and the Supreme Court certified the case for direct review before the Appellate Division could rule.  The Court then affirmed the action of the Council.

Justice Heher noted that the jurisdiction of a court on remand “is Ex necessitate conditioned by the terms of the judgment on appeal; and so the Council here was bound by the judgment of this court and under a peremptory duty to carry it into execution according to the mandate.”  He went on to emphasize at length, seemingly for the first time in modern New Jersey jurisprudence, that the mandate of a higher court is binding and must be obeyed, a principle invoked since in numerous cases of all types, including the somewhat bizarre (and, for that reason, somewhat entertaining) case of Tomaino v. Burman, 364 N.J. Super. 224 (App. Div. 2003)).

Here, the original hearing had denied due process.  Thus, “[t]he corrective mechanism was necessarily a rehearing and redetermination conforming to the fundamentals of a judicial hearing delineated in this court’s opinion; and there was no injunction, express or implied, against the taking of evidence pertinent to the inquiry.”

The Council was always free to hold a new hearing, Justice Heher said.  “Administrative determinations are subject to reconsideration and revision by the agency itself, and a rehearing and the taking of new evidence to that end, so long as it retains control of the proceeding and rights have not vested.  This is an inherent power, an incident of the administrative jurisdiction for the furtherance of its essential authority, but a function that in its very nature calls for sound judgment and discretion.”  This principle of administrative law too has been followed repeatedly in the years after Plainfield-Union.

The Supreme Court’s mandate did not preclude a new hearing.  Justice Heher emphasized that “there was no review of the Council’s action on the merits, but rather a remand of the cause for the correction of the error and the making of new evidence under the sanctions inherent in due process, and determination accordingly.  The remand was made for ‘further proceedings’ ‘consistent’ with the opinion of this court; and this plainly means a rehearing of the issues as if the former hearing had not been had.”

The idea that the mandate of a higher court must be obeyed, and that an administrative agency has broad power to conduct a new or additional hearing in the course of a case, seem obvious now.  But Plainfield-Union was the case that underlies what we see today as settled law.