“In But Not Of” (Or Just “Of”) is Dispositive of Clash Over COAH

In re Plan for the Abolition of the Council on Affordable Housing, 214 N.J. 444 (2013).  The Council on Affordable Housing (“COAH”) was established as part of the Legislature’s response to the Mount Laurel cases.  In those cases, the Supreme Court had announced that municipalities have a constitutional duty to make available a reasonable opportunity for the construction of low and moderate income housing.  In N.J.S.A. 52:27D-305(a), a part of the Fair Housing Act, the Legislature constituted COAH as an independent agency that was “in, but not of,” the Department of Community Affairs (“DCA”).  Article V, section 4 of the New Jersey Constitution requires that all state agencies be located within a “principal department.”  The ‘in, but not of” formulation satisfies that mandate while preserving a measure of independence for the agency. 

Governor Christie has not been happy with COAH.  Accordingly, he invoked the Executive Reorganization Act of 1969, N.J.S.A. 52:14C- 1 to -11 (“the Act”), to abolish COAH and transfer its powers and duties to the DCA.  The Act gave the Legislature the righ to object to that reorganization, but the Legislature chose not to object.  The reorganization thus went into effect. 

The Fair Share Housing Center, however, filed suit to challenge the reorganization.  The key to the case was the Center’s argument that the Act permits the Governor to reorganize only agencies that are “of the executive branch.”  N.J.S.A. 52:14C-3(a).  COAH, as an agency “in, but not of,” DCA, was not such an agency, the Center contended.  The Appellate Division agreed.  In re Plan for Abolition of Council on Affordable Housing, 424 N.J. Super. 410 (App. Div. 2012).  The Supreme Court granted the State’s petition for certification on this issue, and on a related appeal in which the Center sought relief in aid of litigants’ rights.  The litigants’ rights appeal had in the interim been resolved by the parties.  The Court substantially affirmed the Appellate Division on the reorganization issue by a 5-2 vote.  Chief Justice Rabner wrote the majority opinion.  Justice Patterson authored the dissent, in which Justice Hoens joined.

As was the case in DePascale v. New Jersey, 211 N.J. 40 (2012), the Judges’ Pension Case, in which the same two Justices dissented from the majority’s viewpoint, the difference between the result reached by the majority and that of the dissent arose largely out of which rules of statutory interpretation they invoked.  To oversimplify two excellent opinions that are well worth reading in full, Chief Justice Rabner relied primarily on the principle that where statutory language is plain, the inquiry is at an end.  The Act gave the Governor reorganization power as to agencies that are “of” the Executive Branch.  But COAH was “in, but not of,” and the Act therefore did not apply.  Justice Patterson, on the  other hand, observed that the Legislature was silent as to “in, but not of” agencies, and that had the Legislature wanted to deprive the Governor of power to do what Governor Christie did here, it could easily have done so.  To Justice Patterson, the majority required a single word, “of,” to bear far too much weight.

The majority concluded that the affirmative approval of the Legislature, as well as the will of the Governor, was necessary to take the proposed action regarding COAH.  Quoting Judge Carchman’s opinion for the Appellate Division, Chief Justice Rabner noted that “[r]ecent events have demonstrated that both the Legislature and the Governor are committed to charting another course [that is, a course without COAH] for the future of affordable housing in this State.”  Today’s decision holds only that “[t]he plain language of the Reorganization Act does not authorize the Chief Executive to abolish an independent agency like COAH.  If the Governor and the Legislature wish to abolish COAH, they must take another path.”  Thus, COAH is likely doomed.  The Court’s ruling, however, is an important one as to the power of the Governor vis-a-vis independent agencies.