An Unusual Power of the Governor

In re Veto of Minutes of New Jersey Racing Comm’n, 429 N.J. Super. 277 (App. Div. 2012).  This case, in which Judge Messano wrote the Appellate Division’s opinion, involved an unusual statutory scheme.  Under legislation that created the Atlantic City Tourism District, the New Jersey Racing Commission (“the Commission”) was empowered to designate an amount not more than $15 million, to be drawn from “savings effected by the reduction of fees paid by casino licensees,” that would be allocated to support New Jersey’s horse racing industry by augmenting purses.  But, in a different statute, the Legislature gave the Governor the power to veto such an action of the Commission. 

In June 2011, the Commission voted to allocate $15 million to various race courses.  None of that money was allocated to the thoroughbred breeding industry.  Governor Christie promptly vetoed the Commission’s decision because it contradicted the goal of “creating a self-sustaining course for the horse racing industry” with an emphasis on the private sector rather than public funding.  Moreover, the Governor found that the Commission’s allocation of the monies was not supported by the evidence and gave subsidies to groups that had not even requested them. 

The Thoroughbred Breeders Association of New Jersey (“TBA”) sued to reverse the veto and remand the matter to the Commission with instructions to reconsider how the funds were allocated.  TBA claimed that the Governor’s veto was unconstitutional or, if not unconstitutional, at least arbitrary and capricious.  TBA also contended that the Commission’s decision was arbitrary and capricious because it did not allocate any monies to the thoroughbred industry.  Judge Messano rejected all of those arguments.

The constitutional argument was based on the idea that the Governor’s veto “circumvented the Legislature’s delegation of power to the Commission” to allocate monies.  But Judge Messano observed that the Legislature had also expressly authorized the Governor to veto the Commission’s actions in this regard.  The statutory scheme thus expressly intended to allow such a veto.  The panel would not rewrite the plain language of the Legislature’s enactments.  The two statutes were not inconsistent, and one did not impliedly repeal the other. 

TBA also asserted that the gubernatorial veto provision was unconstitutional because the Legislature had not provided for a legislative override of the veto.  Judge Messano did not agree.  The Governor’s veto power here did not spring from any of the constitutional provisions under which the Legislature has the right to override a gubernatorial veto, but from legislation in which the Legislature itself authorized such a veto, “something accorded by the Legislature to the Governor in literally dozens of situations,” as Judge Messano detailed.      

Finally, TBA argued that only the Attorney General, not the Governor, could veto the Commission’s actions because the legislation creating the Commission placed it in the Department of Law and Public Safety, of which the Attorney General, a separate constitutional officer, is the head.  Judge Messano did not accept that argument either.  No statute “reflects an intention to imbue the Commission with some independence from control by the executive branch.”  On the contrary, the Legislature intended to give the Governor the veto power, as evidenced by the statute that authorized such a veto.  The Legislature was free to abridge the power of the Attorney General and give the Governor additional power instead.

Judge Messano went on to hold that the “arbitrary and capricious” or “substantial evidence” tests applicable to review of administrative agency actions would not apply in this context.  The Legislature did not evidence any intent to limit the Governor to non-arbitrary actioons.  Were the Appellate Division to review the reasonableness of the Governor’s actions, “we would tread dangerously close to the boundary line separating [the courts’] Constitutional power to review executive action, and the statutory and constitutional power accorded another co-equal branch of government.”  As a result, the question of whether the Governor’s veto was “factually sound or good policy” presented a non-justiciable political question. 

This case presented some interesting constitutional issues.  The Supreme Court might wish to weigh in on them if the TBA seeks further review.  But where the Legislature itself delegates broad power to the Governor, challenges to such delegations are an uphill battle.