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Camden Bd. of Ed. v. McGreevey et al.
APRIL 2005

II
IN THIS ISSUE

Camden
Bd.of Ed. v. Alexander, et al.

SUPERIOR COURT APPELLATE DIVISION

The Camden Board of Education found itself fighting for its own survival in the cases of Camden City Bd. of Ed. v. McGreevey, Dkt No. MER-L- 2334-02, and Camden City Bd. of Ed. v. McGreevey, 369 N.J. Super. 592 (App. Div. 2004). The Municipal Rehabilitation and Economic Recovery Act (MRERA) provided for significant State intervention in the governance of a “qualified” financially distressed municipality’s school district. N.J.S.A. 52:27BBB-1 et seq. While it struggled to maintain control over district operations, the Camden Board found itself facing the full authority of both the New Jersey Legislature and the Governor. The Board could only turn to the judiciary for protection.
    The MRERA provided for increased State control over local governance and finances and special financial assistance, in “qualified” municipalities (i.e., those municipalities that, according to designated criteria, suffered from “a continuing state of financial distress which endures despite … a series of measures” by the State.) The MRERA required that the Governor appoint three school board members to replace the three members that would normally be elected during the annual school elections, thereby foreclosing a school board election that year. These gubernatorial appointees would serve a three-year term, at the pleasure of the Governor. The mayor of the qualified municipality would appoint three additional board members the second year following the municipality’s designation as a qualified municipality, thereby foreclosing a second year of school board elections. The third year after designation as a qualified municipality, regular school board elections would be held. This cycle of appointments and tertiary elections would continue for ten years after designation. Additionally, the MRERA granted the Governor veto power over every board action.
    Initially, the Camden Board successfully challenged the enforcement of the MREA, asserting it was unconstitutional special legislation enacted in violation of Article IV, §7, ¶9 of the State Constitution. That clause provides,
The Legislature shall not pass any private, special or local laws: (7) Providing for the management and control of free public schools
   In an unreported decision, the Superior Court agreed with Camden that the MRERA was special legislation because it only applied to Camden and excluded other districts without a rational basis.
    After the Camden Board’s victory the Legislature immediately took steps that it believed would rectify the MRERA’s constitutional infirmities by adopting an amended MRERA. However, the Camden Board did not believe that the infirmities had been rectified. It then filed a second lawsuit, maintaining that the MRERA in its amended form continued to be special legislation because Camden was the only municipality that ever would qualify. It also argued that the gubernatorial veto authority failed to comply with the Open Public Meetings Act. The State argued that it was not special legislation as it eliminated criteria factors that were unrelated to municipal distress or poor government such as the form of local government and the size of the school board.
    In March 2003, the Superior Court upheld the amended MRERA as a valid legislative function which did not violate the special legislation clause of the State Constitution. The Court determined that the new criteria for determining a qualified municipality were reasonably related to assisting distressed municipalities and dismissed the board’s argument that no other municipality would ever qualify, as purely conjectural.
    On appeal to the Appellate Division, the board renewed its special legislation argument. The New Jersey School Boards Association added its voice as amicus curiae at the request of the Camden Board, asserting that there was no rational connection between the recovery of a distressed municipality and the takeover of that municipality’s school governance, because the State failed to show that such a takeover would further the stated legislative goal of ameliorating the problems of the distressed municipality. Additionally, NJSBA argued that the existing statutory scheme of state-takeover was the appropriate method to provide for additional state involvement and provided due process protections to the local board.
    The Appellate Division found that the Amendatory MRERA passed constitutional muster. It noted that “(t)he test for whether an enactment constitutes prohibited “special legislation” focuses on what it excludes, and the appropriateness of the exclusion in terms of the legislative purpose.” 369 N.J. Super 592, 604-605. The Court also noted that an enactment is “general” rather than “special” if the classification created is distinguished by marked characteristics and if it encompasses all of the subjects which reasonably belong within the classification, and does not exclude any which naturally belong therein.” Also, there must be a reasonable basis for making the classification that is relevant to the purpose of the law. The Court ruled that this was not special legislation, because municipalities other than Camden may qualify. It also held that the existence of another law that already provided for takeover of a distressed school district should not preclude the Legislature from adopting a different or complementary response to the problem of troubled schools. The Court found unavailing NJSBA’s argument that the MRERA was unconstitutional due to the absence of a rational relation between school system dysfunction and general municipal dysfunction. The Court gave great deference to the Legislature’s perception of the relationship between the needs of a qualifying municipality and the needs of a school district that is already subject to [state] monitoring, particularly at a time when the state is committing significant resources to improving municipal and school district governance. Id. at 608. Finally, the Court concluded that case law only requires that the legislative response to a perceived problem represent “in any degree a ‘conceivable rational basis’ for the challenged provisions.” Id. at 609.