ESTHER MILSTED VS. LOCAL FINANCE BOARD (NEW JERSEY DEPARTMENT OF COMMUNITY AFFAIRS) ( 2018 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited . R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-2311-17T1
ESTHER MILSTED,
Petitioner-Appellant,
v.
LOCAL FINANCE BOARD,
Respondent-Respondent.
__________________________
Submitted December 4, 2018 – Decided December 28, 2018
Before Judges Geiger and Firko.
On appeal from the New Jersey Department of
Community Affairs, Complaint No. 17-013.
Esther Milsted, appellant pro se.
Gurbir S. Grewal, Attorney General, attorney for
respondent (Melissa H. Raksa, Assistant Attorney
General, of counsel; Cameryn J. Hinton, Deputy
Attorney General, on the brief).
PER CURIAM
Petitioner Esther Milsted, who served as the Chief Public Defender for the
City of Hoboken (the City) during 2016, appeals a final decision of the Local
Finance Board of the Department of Community Affairs (the Board), which
imposed a $100 fine for violating the Local Government Ethics Law (the Act),
N.J.S.A. 40A:9-22.1 to -22.25, by failing to file a 2016 Financial Disclosure
Statement. We affirm.
By way of background, "local government officers" are required to
annually file a "financial disclosure statement" by April 30th of each year.
N.J.S.A. 40A:9-22.6(a)-(b). The financial disclosure statement discloses
information about the local government official's sources of income, certain
business interests, and real estate holdings in New Jersey. If found guilty by the
Board of failure to file a financial disclosure statement, the local government
official "shall be fined not less than $100 nor more than $500." N.J.S.A. 40A:9-
22.10(a).
The term "local government officer" is defined as,
any person whether compensated or not, whether part-
time or full-time: (1) elected to any office of local
government agency; (2) serving on a local government
agency which has the authority to enact ordinances,
approve development applications or grant zoning
variances; (3) who is a member of an independent
municipal, county or regional authority; or (4) who is a
managerial executive employee of a local government
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agency, as defined in rules and regulations adopted by
the Director of the Division of Local Government
Services in the Department of Community Affairs
pursuant to the “Administrative Procedure Act,”
[N.J.S.A.52:14B-1 to -31], but shall not mean any
employee of a school district or member of a school
board[.]
[N.J.S.A. 40A:9-22.3(g).]
In turn, the term "local government agency" is defined as,
any agency, board, governing body, including the chief
executive officer, bureau, division, office, commission
or other instrumentality within a county or
municipality, and any independent local authority,
including any entity created by more than one county
or municipality, which performs functions other than of
a purely advisory nature, but shall not include a school
board[.]
[N.J.S.A. 40A: 9-22.3(e).]
Managerial executives of a local government agency are considered local
government officers. The Employer-Employee Relations Act defines
"managerial executives" as: "persons who formulate management policies and
practices, and persons who are charged with the responsibility of directing the
effectuation of such management policies and practices . . . ." N.J.S.A. 34:13A-
3(f).
N.J.A.C. 5:35-2.1(a) lists the positions that are considered managerial
executives under N.J.S.A. 40A:9-22.3. Although chief municipal public
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defenders are not specifically mentioned, department heads and municipal
prosecutors are listed. N.J.A.C. 5:35-2.1(a)(7), (20). However, the Attorney
General has determined municipal judges and municipal court personnel are not
local government officials for purposes of the Act. 1
Petitioner chose not to file a Financial Disclosure Statement for 2016. On
February 24, 2017, the Board issued a Notice of Violation to petitioner for
violating N.J.S.A. 40A:9-22.6. She was fined $100 and given thirty days to
appeal. Petitioner requested an administrative hearing, contending she was not
a local government officer within the purview of the Act. The appeal was
transferred to the Office of Administrative Law (OAL) as a contested matter and
assigned to an administrative law judge (ALJ).
Following a prehearing conference, petitioner and the Board cross-moved
for summary decision under N.J.A.C. 1:1-12.5. The ALJ framed the issue as
"[w]hether [p]etitioner is a Local Government Officer, as defined in N.J.S.A.
40A:9-22.3, and is therefore required to file an annual financial disclosure
statement pursuant to N.J.S.A. 40A:9-22.6."
1
Whether Municipal Court Judges and Municipal Court Personnel are subject
to Local Government Ethics Law, Op. Att'y Gen. 91-0096 (Sept. 20, 1991),
http://www.nj.gov/dca/divisions/dlgs/programs/ethics.html.
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After finding no material facts in dispute, the ALJ issued a written initial
summary decision, in which he made the following findings of fact. Petitioner
was hired by the City to serve as its chief public defender pursuant to a resolution
adopted on January 4, 2016. Petitioner accepted the position as chief public
defender and signed a Professional Service Agreement. Petitioner was an
independent contractor, not an employee of the City.
Petitioner was advised by the City Clerk's Office sometime in 2016 that
her position was listed by the Law Department as a local government official
and that she was required to file a financial disclosure statement. The City Clerk
filed a Local Government Officer – Roster with the Division of Local
Government Services listing petitioner as a local government officer. Petitioner
was listed as inactive as of March 22, 2017. The Local Government Officer –
Roster also listed Katy Theurer, who was hired by the City as municipal public
defender at the same time petitioner was hired as chief public defender. Ms.
Theurer was listed as inactive as of March 20, 2015. City Ordinance Chapter
29A-1 does not list the public defender or chief public defender as a public
official or municipal employee required to file financial disclosure statements.
Petitioner undertook her own review of the relevant law regarding the
filing of financial disclosure statements and determined that she was not
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required to do so. She did not file a financial disclosure statement for the year
2016.
The Local Finance Board issued Local Finance Notice 2016-07 and Local
Finance Notice 2017-08, which set forth the requirements of the local
government entity to maintain a roster of local government officers, and which
set forth the filing requirements for local government officers regarding a
financial disclosure statement, respectively. The Local Finance Board also
delivers email reminders to the local government entity and/or municipal clerk.
The ALJ engaged in the following analysis.
N.J.S.A. 2B:24-3 states:
. . . Any municipal court with two or more
municipal public defenders shall have a
"chief municipal public defender" who
shall be appointed by the governing body
of the municipality. The chief municipal
public defender of a joint municipal court
shall be appointed upon the concurrence of
the governing bodies of each municipality.
The chief municipal public defender shall
have authority over other municipal public
defenders serving that court with respect to
the performance of their duties. (emphasis
added).
Further, City of Hoboken ordinance §39-2[3]
describes the chief municipal public defender as
follows:
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There is hereby established within the
Department of Human Services the Office
[of] the Municipal Public Defender, the
head of which shall be the Chief Public
Defender.
There is no clear statutory, regulatory or case law
which mandates a chief public defender file a financial
disclosure statement. However, the local government
entity, the City of Hoboken, determined that the
position of chief municipal prosecutor is a local
government officer who is required to file a financial
disclosure statement. The City of Hoboken notified the
Local Finance Board of this by filing a Local
Government Officer – Roster, which included
Petitioner as a local government officer.
Petitioner was aware of the requirement to file a
financial disclosure statement and chose not to based
upon her determination she was not required to do so.
Petitioner had options to pursue other than filing. She
could have resigned. She could have requested she be
listed as inactive. She did not do so prior to receiving
the notice of violation.
Determining who is a local government officer is
a fact sensitive matter. A position by position analysis
is required. See Attorney General Opinions 91-0090,
91-0092 and 91-0134. While it is not clear from the
record what analysis The City of Hoboken used to
determine that Petitioner is a local government officer
required to file a financial disclosure form, it is clear
they did make that determination. Accordingly the city
notified the Local Finance Board. Based upon the
determination by the City of Hoboken that Petitioner
was a local government officer, and that she did not file
a financial disclosure statement[.] The Local Finance
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Board issued a notice of violation and assessed a fine
of $100.
Petitioner argued that while she was the chief
public defender she exercised no managerial authority.
Nonetheless, Petitioner clearly had managerial
authority pursuant to Hoboken City ordinance §39-
2[3], and N.J.S.A. 2B:24-3. This is confirmed by her
designation as a local government officer by the City of
Hoboken. That she did not exercise that authority does
not affect the designation as a local government officer.
[(Footnote omitted).]
The ALJ noted petitioner did request to be listed as inactive in December
2016, and was listed as inactive on the Local Government Officer – Roster as of
March 22, 2017.
The ALJ concluded petitioner was a local government officer in 2016 and
was therefore required to file a financial disclosure statement. The ALJ found
petitioner violated N.J.S.A. 40A:9-22.3, and affirmed the $100 fine imposed by
the Board. No exceptions were filed to the initial decision of the ALJ. The
Board adopted the initial decision of the ALJ with a corrective modification.2
This appeal followed.
2
The modification was limited to correcting the statutory citation to N.J.S.A.
40A:9-22.6.
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On appeal, petitioner argues that: (1) the issue whether a municipal chief
public defender is a Local Government Officer required to file a financial
disclosure statement is a legal issue (not raised below); (2) as an independent
contractor, a municipal public defender does not fall within the purview of the
Local Government Ethics Law; (3) the ALJ erred in finding that a person's
managerial authority is a sufficient basis to conclude she is a Local Government
Officer; (4) the City's change in designation of petitioner on its roster of Local
Government Officers from active to inactive for 2016 is controlling; (5) the
public defender position is not included in the City's ordinance setting forth the
officials required to file financial disclosure statements; and (6) public defenders
should be exempt for the same reasons as judges and court personnel.
We begin by noting our review of administrative agency action is limited.
In re Herrmann, 192 N.J. 19, 27 (2007). The standard for granting a motion for
summary decision under N.J.A.C. 1:1-12.5(b) is "substantially the same" as the
one governing a motion to a trial court for summary judgment under Rule 4:46-
2. Contini v. Bd. of Educ. of Newark, 286 N.J. Super. 106, 121 (App. Div.
1995). A summary decision can be granted "if the papers and discovery which
have been filed, together with the affidavits, if any, show that there is no genuine
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issue as to any material fact challenged and that the moving party is entitled to
prevail as a matter of law." N.J.A.C. 1:1-12.5(b).
While we review de novo an agency's determination that there are no
genuine issues of material fact, we "strive to 'give substantial deference to the
interpretation [the] agency gives to a statute that the agency is charged with
enforcing.'" In re Application of Virtua-West Jersey Hosp. Voorhees for a
Certificate of Need, 194 N.J. 413, 423 (2008) (quoting Saint Peter's Univ. Hosp.
v. Lacy, 185 N.J. 1, 15 (2005)). "An administrative agency's final quasi-judicial
decision will be sustained unless there is a clear showing that it is arbitrary,
capricious, or unreasonable, or that it lacks fair support in the record." Russo v.
Bd. of Trs., Police & Firemen's Ret. Sys., 206 N.J. 14, 27 (2011) (quoting
Herrmann, 192 N.J. at 27-28). Nonetheless, we are "in no way bound by the
agency's interpretation of a statute or its determination of a strictly legal issue."
Mayflower Sec. Co. v. Bureau of Sec., 64 N.J. 85, 93 (1973).
We affirm substantially for the reasons expressed in the initial decision
issued by the ALJ, which was adopted by the Board. We add the following brief
comments.
The City was required to appoint a chief municipal public defender having
"authority over other municipal public defenders serving that court with respect
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to the performance of their duties." N.J.S.A. 2B:24-3. The chief public defender
serves as the "head" of the Office of the Municipal Public Defender. City
Ordinance § 39-23. We conclude the chief municipal public defender is a
managerial executive within the meaning of N.J.S.A. 34:13A-3(f). Therefore,
petitioner was a local government officer under the Act. N.J.S.A. 40A:9-
22.3(g)(4). Accordingly, she was required to file a financial disclosure
statement for 2016. By choosing not to do so, she violated N.J.S.A. 40:9-
22.6(a), subjecting her to a fine of no less than $100, N.J.S.A. 40:9-22.10(a).
We conclude the Board's decision is supported by substantial evidence in
the record and is not arbitrary, capricious, or unreasonable.
To the extent we have not expressly addressed petitioner's remaining
arguments, we deem them without sufficient merit to warrant discussion in a
written opinion. R. 2:11-3(e)(1)(E).
Affirmed.
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