The Rutgers-Rowan (Non-)Merger: An Avoidable Legal Debacle
A. Trying to Walk Before You Crawl
It will undoubtedly go down as one of the worst policy rollouts in recent Garden State history, likely eclipsing former Gov. Jon Corzine’s announcement that he wanted to privatize the Turnpike.[2] Rutgers – Camden, particularly its School of Law, has suffered considerable damage as a result—a class size over 50% smaller than the year prior, as well as untold reputational damage which may linger for years.[3] It all could easily have been avoided. How? By engaging in thorough research into the legal obstacles to the proposal, undertaken prior to the rollout. Such an analysis would have uncovered the proposal’s numerous existing legal impediments, thus largely eliminating the rather disjointed statewide legal and political skirmish that ensued. Though, perhaps the chaos was inevitable. Only two years prior, Gov. Chris Christie knowingly disregarded an important statutory legal barrier when he improperly used his executive power to alter higher education by abolishing the Commission on Higher Education.[4]
On January 25, 2012, the future of higher education in New Jersey was drastically altered by the release of the University of Medicine and Dentistry of New Jersey Advisory Committee Final Report (Report).[5] Among other recommendations, the report called for a merger between Rutgers, The State University – Camden and Rowan University in order to improve the quality of higher education offered in southern New Jersey.[6] Upon being made public, there was an immediate outcry from the Rutgers community, which was ostensibly taken by complete surprise by the recommendation.[7] Very quickly, confusion took center stage and the proposed merger found itself in a legal no-man’s land.
B. Executive Power, or Lack Thereof
Call it jumping the gun, putting the cart before the horse, or even counting your chickens before they hatch. No matter which idiom is chosen, it in all likelihood describes the opening months of the Rutgers-Rowan merger legal saga. Amidst the outcry, first came the jolting assertion by Governor Chris Christie that a university merger could be accomplished unilaterally by the issuance of an “executive reorganization plan.”[8] The governor of New Jersey possesses authority to unilaterally reorganize appendages of the Executive Branch by use of powers granted to him in 1969,[9] but that this power extends to public institutions of higher education such as Rutgers and Rowan was not clear enough to warrant Gov. Christie’s public statements to this effect.[10] In fact, it turns out that the relevant statutory schemes and case law on point put the institutions involved plainly outside the reach of the executive’s power of reorganization.
The Higher Education Restructuring Act of 1994 (the Act)[11] and a recent state judicial decision, In re Plan for Abolition of Council on Affordable Housing,[12] do not support unilateral gubernatorial control over New Jersey’s senior public colleges and universities. First, as a bit of important background, in 1994 the legislature abolished the Department of Higher Education as one component of the Act and released the public higher educational institutions from the confines of direct oversight by an executive branch department.[13] Largely, the state legislature, by its own declaration, sought to free the senior public institutions from the bonds of restrictive supervision and bureaucracy,[14] a process that it had begun in 1986.[15] Prior to this legislation, the senior state colleges and universities were stifled and underutilized because they were treated as state government agencies rather than independent educational institutions.[16]
It is in this context that the Act and its provisions are best understood. Still, a public disagreement unfolded between two local legal figures—former Public Advocate, now Rutgers School of Law – Newark Dean Ronald Chen and former gubernatorial counsel, now private attorney William Harla—over the meaning of the provision that is the most facially relevant, section 18A:3B-36.[17] Though before tackling this individual section—at the advice of the legal mainstay Making Your Case—it is paramount to “read the entire document, not just the particular provision at issue” prior to “coming to any conclusion about the meaning of the text.”[18] This principle leads to a prior section, 18A:3B-27, one troublingly absent from the discussion, but which is equally significant. Read together, the two sections verify that Rutgers and Rowan are exempt from executive reorganizations, vindicating Dean Chen’s position and sinking Mr. Harla’s.
Section 18A:3B-27, by its very language, transfers/reorganizes all of the public institutions from the Department of Higher Education[19] into the Department of State.[20] The provision reads:
[A]ny State institution of higher education which was allocated to the Department of Higher Education or other department of State government shall be allocated to the Department of State upon the effective date of this act.[21]
This allocation is necessary in order to conform to an important state constitutional mandate.[22] That transfer for allocation purposes makes it evident that publicly disputed section 18A:3B-36 does indeed concern Rutgers, Rowan and all of the other state institutions. It reads:
For the purposes of any reorganization or transfer after the effective date of this act, any commission, council, board or other body created pursuant to this act, and any public entity transferred or otherwise reorganized herein shall not be subject to the provisions of the “Executive Reorganization Act of 1969”, P.L.1969, c. 203 (C. 52:14C-1 et seq.), but shall require specific enabling legislation.[23]
Naturally, the only conceivable objection to this proposition is that the term “public entity” does not include the reorganized state colleges and universities. Resisting the temptation to plunge into a full-blown legal memorandum, the rationale proving that this contention is incorrect is confined to only the important points below.
First, 18A:3B-36 is the final section of the Act,[24] and as such, the statutorily undefined term “public entity” is a catch-all which encapsulates all of the entities existing prior to passage, including the public institutions of higher education which were reorganized in the previous sections.[25] Second, an early provision of the Act creates a scheme concerning the relation between an institution and the New Jersey Tort Claims Act (TCA), a scheme which expressly refers to the public institutions as “State entities.”[26] On this point, the final nail in the coffin is the long line of TCA case law dating to well before the passage of the Act. It explicitly holds that the public institutions like Rutgers and Rowan are each a “public entity” by definition under the TCA.[27] So although section 18A:3B-36 will not win any awards for “statute drafted most clearly,” it still conclusively keeps Rutgers and Rowan out of the reach of Governor Christie’s reorganizational power.
On top of the aforementioned legal bar, the Appellate Division’s holding in In re Plan for Abolition of Council on Affordable Housing confirms that there exist public entities which are “in” the executive branch, but are not “of” the executive branch, and thus outside the bounds of gubernatorial reorganization power.[28] It is true that the ruling came post-Report, but the case began in late 2011, alerting the Administration to a challenge of its executive power.[29] In any event, though the Act’s section 18A:3B-27 admittedly lacks the explicit phrase “in but not of,” the balance of the provision’s language is exceedingly indicative of such an independent public entity. It, in fact, closely mirrors language of the provision establishing the Civil Service Commission, a provision quoted verbatim by the Appellate Division as an example.[30] Therefore, it is more likely than not that this single provision places the institutions outside of the governor’s reorganizational powers as well.
And if any doubt remains, the New Jersey Supreme Court’s “Rutgers Rule” precludes the application of an executive reorganization to the university because such an action would highly frustrate the Rutgers Law which provides for a self-governing institution free from partisanship.[31] Reinforcing this conclusion is the “venerable principle that a law will not be interpreted to produce absurd results.”[32] Would not an absurd and frustrating result be produced if, with the stroke of a pen, the governor could completely circumvent the university management structure carefully crafted and by the Rutgers Law (contract)?[33] It is unfortunate that these legal dots were not connected prior to the Report’s release.
The non-partisan Office of Legislative Services, in a leaked opinion, concurred with the overall conclusion above, though reportedly leaning more heavily on the Appellate Division’s holding than any other rationale.[34] With executive action out of the picture, could a merger be legislated?
C. Legislative Action: The Specter of 1819
“I don’t have a clear answer on that one,” said Assemblywoman Celeste Riley, co-chair of the joint committee holding hearing on the merger.[35] To say that confusion on this point pervaded the legislative ranks is an understatement.[36] It’s forgivable in comparison, though, in light of the highly unique nature of the Rutgers Law, more appropriately described as a “legislative contract” or “legislative charter” between the State and the trustees of Rutgers.[37] Therefore, the one crucial question that remained was whether the merger could be legislated over the disapproval of the current Rutgers Board of Trustees, an action which would implicate the Contract Clause contained in the Constitution[38] and its counterpart in the state constitution.[39]
The answer, at least to this author, cannot be stated without absolute certainty. The answer is contingent on whether 1) the Camden property was in Rutgers’ possession as of August 31, 1956, and if it was, how Rutgers came into possession of the property;[40] or 2) the merger would substantially amend, alter or repeal any of the provisions of self-government within the Rutgers Law.[41] Because of the nature of the merger, at minimum, the answer to question two would almost certainly be, yes.[42] Though, if either were answered in the affirmative, then any legislation effectuating the merger would only become operable only upon the Trustees’ consent.[43] Absent consent, Rutgers’ corporate and contractual rights would be violated,[44] an occurrence which would create a modern-day, more complex Trustees of Dartmouth College v. Woodward minus an oration by the famed Daniel Webster.[45]
D. Going Forward, Look Before You Leap
In only few pages time, executive action has been taken off the table and so has legislative action without the Trustees’ consent. Given its enormity and the reaction that it was sure to arouse, could it be that little legal investigation was performed prior to the proposal’s January 25th rollout? The timeline of events suggests so. Sadly, this failure and the months of confusion came at a steep cost to Rutgers – Camden[46] while all along, it was Rutgers and only Rutgers that held the power.[47] The eventual compromise was the “New Jersey Medical and Health Sciences Education Restructuring Act,” effective upon consent by Rutgers, which may very well help Rutgers in the long-term.[48] But the same or better result could have occurred without the simultaneous increase in blood pressures around the Garden State.
Going forward, the commitment to institutional self-governance should by-and-large be sustained, with modifications that reflect the past and present pitfalls of institutional autonomy.[49] Should modification from outside of the institution be necessary, the full legislative process is more desirable because ideas are more capable of being more fully vetted by the institutions, their advocacy groups,[50] and of course, the students—a constituency which all too frequently is left out in the cold.
[1] Brian Block is a May 2014 J.D. Candidate and Staff Editor for the Rutgers Journal of Law & Public Policy. He can be reached by email at bmb134@scarletmail.rutgers.edu.
[2] Vinessa Ermino, Corzine Fails to Avoid Turnpike-sale Minefield, STAR-LEDGER, Jan. 10, 2007, http://blog.nj.com/ledgerarchives/2007/01/corzine_fails_to_avoid_turnpik.html.
[3] Tess Rosenberg, Merger Talks Continue to Affect Camden, DAILY TARGUM, Oct. 9, 2012, http://www.dailytargum.com/news/merger-talks-continue-to-affect-camden/article_a6b85ef6-11c4-11e2-baf2-0019bb30f31a.html; see also Leslie Brody & Patricia Alex, Camden Merger Plan Blamed for 27 Percent Drop in Applications to Rutgers Law School, THE RECORD, June 10, 2012, http://www.northjersey.com/news /158337045_Camden_merger_plan_blamed_for_27_percent_drop_in_applications_to_Rutgers_law _school.html?page=all.
[4] See Matt Katz, In New Jersey, Oversight of Higher Education is Up in the Air, PHILA. INQUIRER, Aug. 21, 2011, http://articles.philly.com/2011-08-21/news/29912003_1_christie-higher-education-commission (noting that the Commission on Higher Education is protected from executive reorganization, implicitly citing N.J. STAT. ANN. §§ 18A:3B-13, -36 (West 1994)).
[5] SOL. J. BARER ET AL., THE UNIVERSITY OF MEDICINE AND DENTISTRY ADVISORY COMMITTEE FINAL REPORT (2012), available at http://www.njit.edu/president/docs/2012/2012-01-25-umdnj-final-report.pdf.
[6] Id. at 23-25.
[7] Megan DeMarco, Christie Plans to Push Forward with Rowan-Rutgers Merger Despite Outcry, STAR-LEDGER, Mar. 20, 2012, http://www.nj.com/news/index.ssf/2012/03/christie_plans_to_push_forward.html.
[8] Jarrett Renshaw, Rutgers-Rowan Merger Plan Faces More Opposition, Questions Over Who Has Power To Authorize It, STAR-LEDGER, Mar. 20, 2012, http://www.nj.com/news/index.ssf/2012/03/rutgers_rowan _merger_ plan_come.html.
[9] Executive Reorganization Act of 1969, 52:14C-1 to -11 (West 2013); see also Michael S. Herman, Gubernatorial Executive Orders, 30 RUTGERS L.J. 987, 1002-03 (1999) (characterizing reorganization acts as a “not-so-distant cousin” of the executive order).
[10] Nic Corbett, Logistics of Executing Christie’s N.J. Higher Education Overhaul to be Decided, STAR-LEDGER, Feb. 22, 2012, http://www.nj.com/news/index.ssf/2012/02/logisitics_of_executing_christ.html.
[11] Higher Education Restructuring Act of 1994, 18A:3B-1 to -36 (West 2013).
[12] In re Plan for Abolition of Council on Affordable Housing, 38 A.3d 620 (N.J. Super. Ct. App. Div.), certif. granted, 48 A.3d 355 (N.J. 2012).
[13] N.J. STAT. ANN. § 18A:3B-4 (West 1994).
[14] § 18A:3B-2. The Act did not substantially “free” Rutgers because it was already more autonomous as a result of being governed by its own statutory scheme known affectionately by those who try and decipher it as the “Rutgers Law.” N.J. STAT. ANN. §§ 18A:65–1 to –93.
[15] See NEW JERSEY STATE COLLEGE/UNIVERSITY TRUSTEES’ REFERENCE GUIDE 5-6 (6th ed. 2006), for a brief history of the legislative transformation of New Jersey’s senior institutions, available at http://www.njascu.org/2006%20 Reference% 20Guide% 20Web% 20version.pdf.
[16] § 18A:3B-2.
[17] Mr. Harla responded in disagreement to Dean Chen who asserted in a February 21 op-ed that section 18A:3B-27 of the Act precludes the use of an executive reorganization to merge the schools. William Harla, Op-Ed, State Law Doesn’t Block University Merger Plan, COURIER-POST, Mar. 14, 2012, available at http://www.decotiislaw.com/news/ 2012/03/16/state-law-doesnt-block-university-merger. Respectfully, perhaps Mr. Harla felt compelled to defend the position he took when he advised Cooper Hospital on what would become Gov. Jon Corzine’s Reorganization Plan No. 002-2009 which used the same executive reorganization power to create Cooper Medical School at Rowan University—an action legally congruent to the proposal by Gov. Christie. See id. Though this article does not express any formal opinion on the legal propriety of the creation of Cooper Medical School, one need not perform mental gymnastics to jump to certain conclusions.
[18] ANTONIN SCALIA & BRYAN A. GARNER, MAKING YOUR CASE: THE ART OF PERSUADING JUDGES 44 (1st ed. 2008) (emphasis own).
[19] See, e.g., Bedminster, Branchburg, Bridgewater Concerned Citizens Coalition, Inc. v. UMDNJ, No. SOM-L-492-06, 2006 WL 1933647, at *1 (N.J. Super. Ct. Ch. Div. July 11, 2006) (stating that UMDNJ was located in the Department of Higher Education prior to its new home in the Department of State).
[20] § 18A:3B-27.
[21] Id.
[22] See id. The statutory provision cites N.J. CONST. art. V, § IV, ¶ 1 which mandates that all executive agencies and instrumentalities of the State government must be located within one of a maximum twenty principal departments.
[23] § 18A:3B-36 (emphasis added).
[24] Higher Education Restructuring Act of 1994 § 306 (final section when disregarding section 307 which solely repeals prior law and section 308 which is the effective date).
[25] For example, the Educational Opportunity Fund is another public entity transferred by the Act. § 18A:3B-19.
[26] § 18A:3B-6(h).
[27] N.J. STAT. ANN. § 59:1-3 (West 2006) (definition of a “public entity”), interpreted in Kovats v. Rutgers, The State Univ., 822 F.2d 1303, 1311 (3d Cir. 1987) (Rutgers is a public entity); O’Connell v. State, 795 A.2d 857, 865 (N.J. 2002) (same for Montclair State); Eze v. Rowan Univ., No. A-2659-07T2, 2009 WL 232181, at *1 (N.J. Super. Ct. App. Div. Feb. 3, 2009) (same for Rowan); Graber v. Richard Stockton Coll. of N.J., 713 A.2d 503, 507 (N.J. Super. Ct. App. Div. 1998) (same for Richard Stockton); Fuchilla v. Layman, 527 A.2d 652, 658 (N.J. 1988) (same for UMDNJ).
[28] In re Plan for Abolition, 38 A.3d at 628-29, 638.
[29] See Press Release, Fair Share Housing Center, Court Block’s Governor Christie’s Housing Rules (Oct. 20, 2011), available at http://fairsharehousing.org/pdf/FSHC_Press_Release_-_102011.pdf.
[30] See In re Plan for Abolition, 38 A.3d at 424-25; compare § 18A:3B-27 (invoking the N.J. CONST. art. V, § IV, ¶ 1 mandate and keeping the public institutions independent of any supervision or control of the Department of State), with N.J. STAT. ANN. § 11A:2-1 (West 2008) (invoking the N.J. CONST. art. V, § IV, ¶ 1 mandate and keeping the Commission independent of any supervision or control of the Department of Labor and Workforce Development).
[31] See Sussex Commons Assocs., LLC v. Rutgers, 46 A.3d 536, 544 (N.J. 2012) (citing In re Exec. Comm’n on Ethical Standards Re: Appearance of Rutgers Attorneys, 561 A.2d 542 (N.J. 1989)) (following the “Rutgers Rule” which determines a general statute’s application to Rutgers by examining the purposes of the statute versus the purposes of the Rutgers Law). See § 18A:65-27 (declaring a public policy which gives Rutgers a high degree of self-government free from partisanship).
[32] Strasenburgh v. Straubmuller, 683 A.2d 818, 825 (N.J. 1996) (citing K Mart Corp. v. Cartier, Inc., 486 U.S. 281, 325 n.2 (1988) (Scalia, J., concurring in part and dissenting in part)).
[33] Contractual nature of the Rutgers Law discussed infra Part C.
[34] Jarrett Renshaw, Christie’s College Merger Plan Must Go Through Legislature, Non-partisan Office Says, STAR-LEDGER, Mar. 26, 2012, http://www.nj.com/news/index.ssf/2012/03/christies_higher_education_mer.html.
[35] Renshaw, supra note 8.
[36] Id.
[37] Rutgers, State Univ. v. Piluso, 286 A.2d 697, 704-05 (N.J. 1972) (legislative contract); In re Exec. Comm’n On Ethical Standards, 561 A.2d at 545 (legislative charter).
[38] U.S. CONST. art. I, § 10, cl. 1.
[39] N.J. CONST. art. IV, § 7, ¶ 3. One alternative long-shot point of contention may be the State’s constitutional power to amend a corporate charter. Trustees of Rutgers Coll. in N. J. v. Richman, 125 A.2d 10, 21 (N.J. Super. Ct. Ch. Div. 1956) (noting that this power is reserved to the State in N.J. CONST. art. IV, § 7, ¶ 9 but did not apply to original1766 Rutgers’ charter at issue since the charter predated all of the State’s constitutions); see also 7A WILLIAM MEADE FLETCHER ET AL., FLETCHER CYCLOPEDIA OF THE LAW OF CORPORATIONS §§ 3658, 3670 (2012).
[40] See § 18A:65-26(2) (explaining that the Trustees control only certain property); see also Richman, 125 A.2d at 21.
[41] § 18A:65-27(4).
[42] AP: Rutgers Trustees May be Unable to Stop Merger, NORTHJERSEY.COM, June 5, 2012, http://www.northjersey.com/news/AP_Rutgers_trustees_may_be_unable_to_stop_merger.html?page=all (noting the dispute over ownership of the campus land). Unfortunately, yet again, it appears as though focus was on only one provision of the statute-contract—the provision which concerns question one—when another provision is relevant as well. See id.
[43] See § 18A:65-27 (explaining that the Trustees may rescind the use of its property for certain statute-contract violations); see also Richman, 125 A.2d at 21, 25 (outlining the history of Rutgers from its chartering in 1766 until 1956, as well as its current structure).
[44] Richman, 125 A.2d at 27 (citing Trustees of Dartmouth Coll. v. Woodward, 17 U.S. 518 (1819)).
[45] Woodward, 17 U.S. 518 (holding that New Hampshire could not alter Dartmouth’s charter without its trustees’ consent, as argued by Webster); see also Tara Nurin, Rutgers Trustees Retain High-Powered Counsel to Challenge Restructuring Plan, NJSPOTLIGHT.COM (June 18, 2012), http://www.njspotlight.com/stories/12/0617/1720/.
[46] Rosenberg, supra note 3; Brody & Alex, supra note 3.
[47] See supra Parts B, C.
[48] New Jersey Medical and Health Sciences Education Restructuring Act, 2012 N.J. Laws 45 (West).
[49] See STATE OF N.J. COMM’N OF INVESTIGATION, VULNERABLE TO ABUSE: THE IMPORTANCE OF RESTORING ACCOUNTABILITY, TRANSPARENCY, AND OVERSIGHT TO PUBLIC HIGHER EDUCATION GOVERNANCE (2007), available at http://www.state.nj.us/sci/pdf/HigherEdFinalReport.pdf.
[50] E.g., New Jersey Association of State Colleges and Universities, http://www.njascu.org/ (last visited Jan. 13, 2012).