NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2871-09T22871-09T2

A-2996-09T2

A-2997-09T2

COMMUNICATIONS WORKERS OF

AMERICA, AFL-CIO; NEW JERSEY

PUBLIC EMPLOYEES COUNCIL 1 OF

THE AMERICAN FEDERATION OF

STATE, COUNTY AND MUNICIPAL

EMPLOYEES, AFL-CIO; THE

INTERNATIONAL FEDERATION OF

PROFESSIONAL AND TECHNICAL

EMPLOYEES, AFL-CIO, LOCAL 195;

and AMERICAN FEDERATION OF

TEACHERS, AFL-CIO-NEW JERSEY,

Appellants,

v.

CHRIS CHRISTIE, Governor of

the State of New Jersey,

Respondent.

___________________________________

NEW JERSEY EDUCATION ASSOCIATION,

Appellant,

v.

CHRIS CHRISTIE, Governor of

the State of New Jersey,

Respondent.

___________________________________

NEW JERSEY STATE POLICEMEN'S

BENEVOLENT ASSOCIATION,

Appellant,

v.

CHRIS CHRISTIE, Governor of

the State of New Jersey,

Respondent.

___________________________________

Argued April 8, 2010 - Decided

Judges Stern, Sabatino and J. N. Harris.

On appeal from Executive Order 7, January 20, 2010.

Steven P. Weissman argued the cause for appellant Communications Workers of America, AFL-CIO, in A-2871-09 (Weissman & Mintz, L.L.C., and Laurence E. Gold of the Washington, D.C. bar, admitted pro hac vice, attorneys; Mr. Gold, Mr. Weissman, Annmarie Pinarski and Meredith Richardson, on the joint brief).

Zazzalli, Fagella, Nowak, Kleinbaum & Friedman, attorneys for appellant New Jersey Public Employees, Council 1 of the American Federal of State, County and Municipal Employees, AFL-CIO in A-2871-09 (Sidney H. Lehmann, on the joint brief).

Oxfeld Cohen, P.C., attorneys for appellant The International Federation of Professional and Technical Employees, AFL-CIO, Local 195 in A-2871-09 (Arnold Shep Cohen, on the joint brief).

Leon B. Savetsky argued the cause for appellant American Federation of Teachers, AFL-CIO-New Jersey in A-2871-09 (Loccke, Correia, Schlager, Limsky & Bukosky, attorneys; Mr. Savetsky, on the joint brief).

Richard A. Friedman argued the cause for appellant New Jersey Education Association in A-2996-09 (Zazzali, Fagella, Nowak, Kleinbaum & Friedman, attorneys; Mr. Friedman, Robert A. Fagella, Edward M. Suarez, Jr., and Marissa A. McAleer, of counsel and on the brief).

Robert A. Fagella argued the cause for appellant New Jersey State Policemen's Benevolent Association in A-2997-09 (Zazzali, Fagella, Nowak, Kleinbaum & Friedman, attorneys; Mr. Fagella and Paul L. Kleinbaum, of counsel; Mr. Fagella, Mr. Kleinbaum, Edward M. Suarez, Jr., and Marissa A. McAleer, on the brief).

Stephen J. Edelstein argued the cause for respondent (Schwartz Simon Edelstein Celso & Zitomer, L.L.C., attorneys; Mr. Edelstein, of counsel and on the brief).

Law Offices of John W. Hartmann, attorneys for amicus curiae John W. Hartmann (Mr. Hartmann, on the brief).

PER CURIAM

On January 20, 2010, Governor Chris Christie issued Executive Order Number 7 ("EO 7" or "the executive order"), which attempts to extend to labor unions and labor organizations certain "pay-to-play" restrictions on political campaign contributions. The full text of EO 7 reads as follows:

WHEREAS, it is the clear and express intent of this Administration that all individuals who are elected to or otherwise hold public office shall adhere to the highest ethical standards; and

WHEREAS, prior actions of the New Jersey Legislature and existing Executive Orders have imposed stringent requirements on those individuals who hold public positions; and

WHEREAS, since 2004, there have been a series of legislative and executive actions which have imposed restrictions on the campaign contributions of those who contract with the State of New Jersey and other public entities, so as to avoid actual conflicts of interest or even the appearance of conflicts of interest in the public contracting process; and

WHEREAS, even though these "pay-to-play" restrictions have had a positive impact on the public contracting process, they have not extended their reach to all "business entities" which contract with the State of New Jersey and other public entities; and

WHEREAS, even though contributions in excess of the amount identified in legislation, Executive Orders, and regulations are restricted to many forms of political and campaign committees, these restrictions have not extended their reach to all such committees;

NOW, THEREFORE, I, CHRIS CHRISTIE, Governor of the State of New Jersey, by virtue of the authority vested in me by the Constitution and by the Statutes of this State do hereby ORDER, and DIRECT:

1. Prior Executive Orders implementing "pay-to-play" restrictions are hereby modified to include within the definition of the term "Business Entity" any Labor Union or Labor Organization which enters into contracts with the State of New Jersey and its instrumentalities or with other New Jersey public entities. The reference in this Executive Order to "labor unions" and "labor organizations" shall include any political committee formed by any such labor union or labor organization, one of the purposes of which political committee is to make political contributions. All Department and Agency heads are directed to revise current regulations to be consistent with this change.

2. Prior Executive Orders implementing "pay-to-play" restrictions are hereby modified to include Legislative Leadership Committees within the list of committees and depositories as to which the contribution restrictions are applicable. All Department and Agency heads are directed to revise current regulations to be consistent with this change.

3. This Order shall take effect immediately.

[ 42 N.J.R. 580(b).]

Appellants, six labor unions that are the duly-elected representatives of more than 300,000 public employees, have brought this consolidated emergent appeal, alleging that EO 7 is unconstitutional in numerous respects. In particular, appellants contend that EO 7 conflicts with the terms of existing legislation and thereby infringes upon principles of separation of powers, in violation of article III, paragraph 1, of the New Jersey Constitution. Appellants further argue that EO 7 transgresses their rights of free speech, political association, and equal protection under the Federal and State Constitutions. They seek immediate injunctive relief so that they can exercise their rights of political participation without fear of some form of debarment or disqualification.

The Governor maintains that EO 7 represents the lawful exercise of his constitutional powers. He asserts that EO 7 simply extends the provisions of pay-to-play executive orders that were issued by his two immediate predecessors in office, and that EO 7 serves legitimate public purposes that can be harmonized with existing statutes.

Because we conclude, for the reasons explained in this opinion, that paragraph 1 of EO 7 violates principles of separation of powers, we invalidate it to the extent that it is written or intended to be construed to cover labor unions and collective bargaining agreements. We do so without prejudice to the potential adoption of an appropriate statute that might enact pay-to-play reforms covering labor organizations, but in a manner consistent with existing statutes or which explicitly amends those existing laws.

I.

EO 7 follows a series of statutes and gubernatorial executive orders generated over the past six years, which have been focused upon restricting the actual or perceived impact of political campaign contributions upon governmental procurement decisions. As we noted in In re Earle Asphalt Co., 401 N.J. Super. 310, 321 (App. Div. 2008), aff'd o.b., 198 N.J. 143 (2009), there is a "strong governmental interest in limiting political contributions by businesses that contract with the State[.]" That strong governmental interest has been recognized by both the Legislative and Executive Branches of our State Government. See N.J.S.A. 19:44A-20.13; 36 N.J.R. 4562(b).

As N.J.S.A. 19:44A-20.13 declares, "[w]hen a person or business interest makes or solicits major contributions to obtain a contract awarded by a government agency or independent authority, this constitutes a violation of the public's trust in government and raises legitimate public concerns about whether the contract has been awarded on the basis of merit[.]" Ibid. "It is essential that the public have confidence that the selection of State contractors is based on merit and not on political contributions made by such contractors[.]" Ibid. Likewise, "it is essential that the public have trust in the processes by which taxpayer dollars are spent[.]" Ibid.

The concept of pay-to-play has been described as "the political practice of rewarding campaign contributors with no-bid government contracts." Paula A. Franzese & Daniel J. O'Hern, Sr., Restoring the Public Trust: An Agenda For Ethics Reform of State Government and a Proposed Model for New Jersey, 57 Rutgers L. Rev. 1175, 1222 (2005). The evil arises when prospective vendors "pay" contributions to candidates for public office, or to their affiliated political organizations, in order to "play" for (i.e., be awarded or favorably considered in the award of) government contracts when those candidates take or retain public office.

Even though various ethics laws, procurement laws, and criminal laws already forbid the making of political contributions as a quid pro quo for receiving a government contract, a frequent problem in establishing the violation of those laws is "proving the connection between the contributions and the contract." Ibid. Consequently, pay-to-play provisions (perhaps more accurately described as "anti-pay-to-play" provisions) typically "prohibit the participation in the public contracting field of campaign contributors whose donations exceed certain minimum levels." Ibid.

To address these concerns over pay-to-play practices, a succession of statutes and executive orders were promulgated in our State between 2004 and 2008, preceding the issuance of EO 7 in January 2010. Because EO 7, by its own terms, is couched as an effort to build upon those prior enactments, and because the historical context bears upon our analysis of the issues before us, we discuss those prior enactments in some detail.

A.

The first set of pay-to-play restrictions were enacted by the Legislature on June 10, 2004, and signed into law by former Governor McGreevey less than a week later on June 16, 2004. See L. 2004, c. 19. That statute, now commonly referred to as "Chapter 19," was entitled "An Act Concerning Certain Campaign Contributions By Certain Business Entities and County Political Party Committees[.]" Ibid.; see also Assemb. B. 2, 211th Leg. Sess. (2004) (utilizing that title); S.B. 2, 211th Leg. Sess. (2004) (same). The statute expressly indicated that it was "supplementing [L.] 1973, c. 83 [N.J.S.A. 19:44A-1 to -26], and amending [L.] 1973, c. 83 [N.J.S.A. 19:44A-1 to -26]." L. 2004, c. 19 (emphasis added).

The New Jersey Campaign Contributions and Expenditures Reporting Act, L. 1973, c. 83 ("Chapter 83"), N.J.S.A. 19:44A-1 to -26, which Chapter 19 literally "supplemented" and "amended," covers a wide scope of matters dealing with political campaign contributions, expenditures, and reporting. Chapter 83 includes several requirements that place ceilings upon political contributions that can be lawfully made by various enumerated categories of donors.

The donors that are subject to Chapter 83's contribution limits specifically include, among other categories, a "labor organization of any kind which exists or is constituted for the purpose, in whole or in part, of collective bargaining, or of dealing with employers concerning the grievances, terms or conditions of employment, or of other mutual aid or protection in connection with employment[.]" See N.J.S.A. 19:44A-11.3(a) (containing this reference to labor organizations); N.J.S.A. 19:44A-11.4(a), (b), & (c) (same). When the Legislature amended Chapter 83 in 2002 to impose further restrictions upon donations to certain political committees, it repeated the same explicit language encompassing labor organizations. See L. 2001, c. 384,