Bunk v. The Port Authority of New York and New Jersey
Case Date: 05/22/1996
Docket No: SYLLABUS
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(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for
the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please
note that, in the interests of brevity, portions of any opinion may not have been summarized).
Argued January 2, 1996 -- Decided May 22, 1996
O'HERN, J., writing for a unanimous Court.
John Bunk is employed by the Port Authority of New York and New Jersey (the Port Authority).
Bunk lives in New Jersey. On September 6, 1988, he was driving a Port Authority truck in New York City
when the brakes failed and the truck struck a wall and several other vehicles, causing serious injuries to
Bunk. Because of those injuries, Bunk was unable to resume his regular duties with the Port Authority.
Bunk applied for an received Social Security disability benefits. He also applied for and received a disability
retirement pension from the Port Authority. (The Port Authority funds its public employees' retirement
through the New York State and Local Employees Retirement System.)
Bunk also sought compensation for his injuries under the New Jersey Workers' Compensation Act
(Act). A Judge of Compensation, believing she was bound by N.J.S.A. 34:15-43 (Section 43) of the Act,
denied any award for the permanent disability related to the accident. At the time, Section 43 provided that
a former employee who had been retired on pension by reason of injury or disability was not entitled to
compensation benefits for such injury or disability.
Bunk appealed the decision of the Judge of Compensation. The Appellate Division reversed,
concluding that Hess v. Port Authority Trans-Hudson Corp. (Hess) had diminished the precedential value of
Wright v. Port Authority of New York and New Jersey (Wright), which had applied Section 43 to Port
Authority employees. The Hess court held that the Port Authority was not, for purposes of Eleventh
Amendment immunity, a public body of the State.
The Supreme Court granted the Port Authority's petition for certification. The Attorney General
intervenes on behalf of the Second Injury Fund because the combination of this injury and other occupational
diseases may have left Bunk totally and permanently disabled.
HELD: N.J.S.A. 34:15-43 of the Workers' Compensation Act (Section 43), which limits workers'
compensation benefits of public employees receiving a disability pension for the same injury, is
applicable to an employee of the bi-state agency, Port Authority of New York and New Jersey. 1. In 1931, Section 43 was amended to prevent New Jersey state employees from simultaneously obtaining accidental disability pension benefits and workers' compensation benefits for the same injury. In 1951, New York and New Jersey agreed to waive the Port Authority's sovereign immunity and consented to suits, including workers' compensation suits, against the Port Authority. In 1971, the New Jersey Legislature amended various State retirement programs, the general effect of which was to allow New Jersey state employees to receive both workers' compensation and disability retirement benefits, with worker's compensation being offset against the retirement benefits. Against this backdrop, the Court looks to whether the Legislature intended that Section 43 apply to employees of the Port Authority. The Court also
determines whether the application of section 43 to the Port Authority impermissibly infringes on the
independence of that bi-state agency. (pp. 5-7)
2. The Port Authority is a public corporate instrumentality of New Jersey and New York. Neither New
York nor New Jersey may unilaterally impose additional duties, powers, or responsibilities on the Port
Authority. However, the Port Authority may be subject to complementary or parallel state legislation. (pp.
7-8)
3. There is evidence in the record that the provisions between the states are somewhat similar. The
provisions in New York, like New Jersey, reflect a plan to coordinate disability benefits under public
employee retirement and workers' compensation systems. Although a New Jersey state employee may have
the advantage of being able to elect the greater of the benefits (retirement versus workers' compensation)
Bunk may seek workers' compensation benefits under New York law. That opportunity for the exercise of
parallel regulation suggests that each state's laws may be appropriately invoked. (pp. 8-9)
4. Bunk's reliance on Hess is misplaced. Whether the Port Authority enjoys Eleventh Amendment
immunity is different from the question of whether the Port Authority exercises governmental functions as a
state agency and whether Port Authority employees are covered by Section 43. A public body may be
considered a hybrid institution; an agency of the state for some purposes but not for others. (pp. 9-11)
5. One of the central themes of the recent legislation is that there should not be double recovery from two
sources for the same injury; that policy dominates the interpretation of Section 43. Given the mutual
concerns of New York and New Jersey, the Court is satisfied that the Legislature would intend that the
workers' compensation benefits afforded to Port Authority employees under New Jersey law should, at a
minimum, be integrated with the disability retirement benefits afforded to the employee for the same injury.
The injured worker should be able to receive the more advantageous of the benefits payable under the
respective statutory provisions. The only way to integrate the statutory provisions is to apply Section 43 to
this case. (pp. 12-17)
6. The recent amendments to Section 43 reaffirm the Legislature's intention to integrate workers'
compensation and retirement-disability benefits. Because New Jersey cannot effectively control the New
York retirement allowances granted to Port Authority employees, the practical method of integration of
benefits is to reduce dollar-for-dollar the Jersey workers' compensation awards for Port Authority employees
by the amount of the New York disability retirement allowances for the same injury. (pp. 17-19)
7. Because the Legislature intended the 1996 amendment apply to claims pending at the time of its
enactment, Bunk is to continue the pending proceedings. He has the obligation to obtain the certified
statement of benefits under New York law as a condition of any obligation for payment of workers'
compensation benefits under New Jersey law. Those disability-retirement benefits shall be deducted from
the workers' compensation award. (pp. 19-21)
The judgment of the Appellate Division is REVERSED. The matter is REMANDED to the Division
of Workers' Compensation for further proceedings in accordance with this opinion.
CHIEF JUSTICE WILENTZ and JUSTICES HANDLER, POLLOCK, GARIBALDI, STEIN, and
COLEMAN join in JUSTICE O'HERN's opinion.
JOHN R. BUNK,
Petitioner-Respondent,
v.
THE PORT AUTHORITY OF NEW YORK
Respondent-Appellant,
and
SECOND INJURY FUND,
Respondent-Appellant.
Argued January 2, 1996 -- Decided May 22, 1996
On certification to the Superior Court,
Appellate Division, whose opinion is reported
at
279 N.J. Super. 613 (1995).
Michael D. Driscoll, New Jersey Solicitor,
argued the cause for appellant The Port
Authority of New York and New Jersey (Hugh H.
Welsh, Deputy General Counsel, attorney; Mr.
Welsh, of counsel; Christopher J. Neumann and
George P. Cook, on the briefs).
Bertram P. Goltz, Jr., Deputy Attorney
General, argued the cause for appellant
Second Injury Fund (Deborah T. Poritz,
Attorney General of New Jersey, attorney;
Joseph L. Yannotti, Assistant Attorney
General, of counsel).
Alfred G. Osterweil argued the cause for
respondent (Cynthia A. Rollenhagen, attorney;
Mr. Osterweil and D. John McAusland, on the
briefs).
Plaintiff, John Bunk, is an employee of the Port Authority of New York and New Jersey (the Port Authority or PA). We may also refer to him as he would be known in the compensation proceedings, as the "petitioner." Bunk is a resident of the State of New Jersey. On September 6, 1988, he was driving a Port Authority truck in New York City. The brakes of the truck failed. The truck struck a wall and several other vehicles, causing serious injuries to Mr. Bunk. The injuries left him unable to resume his regular employment with the Port Authority. Bunk applied for and received Social Security disability benefits. He also applied for and received a disability retirement pension from the Port Authority. (The Port Authority has elected to fund its public employees' retirement system through the New York State and Local Employees Retirement
System.) The petitioner has also sought compensation for his
injuries under the New Jersey workers' compensation system,
N.J.S.A. 34:15-1 to -128. As a resident of New Jersey, Bunk can
bring his action in New Jersey. See Parks v. Johnson Motor
Lines,
156 N.J. Super. 177, 181 (App. Div. 1978). The
Compensation Judge would have awarded any necessary medical
expenses for the petitioner but, believing that she was bound by
Section 43, denied any award for the permanent disability related
to the accident. When these proceedings commenced, Section 43
provided, in relevant part:
Nothing herein contained shall be construed as affecting or changing in any way the provisions of any statute providing for
sick, disability, vacation or other leave for
public employees or any provision of any
retirement or pension fund provided by law.
On appeal, the Appellate Division reversed. It concluded
that Hess v. Port Authority Trans-Hudson Corp., ___ U.S. ___,
115 S. Ct. 394,
130 L. Ed.2d 245 (1994), had diminished the
precedential value of Wright v. Port Authority of New York and
New Jersey,
263 N.J. Super. 6 (App. Div.), certif. denied,
133 N.J. 442 (1993), which had applied Section 43 to PA employees.
Hess held that the PA was not, for purposes of Eleventh Amendment
immunity, a public body of the State. We granted the Port
Authority's petition for certification,
141 N.J. 99 (1995). The
Attorney General has intervened on behalf of the Second Injury
Fund because the combination of this injury and other
occupational diseases may have left Bunk totally and permanently
disabled.
We draw upon the history set forth in the petitioner's briefs to place the issues in this case in perspective. This review is not intended as a digest of pension or workers' compensation law but only to provide a general background to the issues before us. 1911 - New Jersey passed its Workers' Compensation Law.
L. 1911, c. 95.
any retirement or pension fund now or
hereafter provided by law.
No intent may be ascribed to the 1931 Legislature because
the PA's employees were not yet covered by workers' compensation.
The issues posed for decision against this background are:
(1) whether the Legislature intends that the provisions of
Section 43 that bar state employees from simultaneously obtaining
accidental disability pension benefits and workers' compensation
benefits apply to employees of the Port Authority, and (2) would
the application of that state law to the bi-state agency
impermissibly infringe on the independence of the bi-state
agency.
The principles of decision are familiar, involving statutory construction and an understanding of the law dealing with bi-state agencies. We deal with the latter issue first. The Port Authority is not the agency of a single state but rather a public corporate instrumentality of New Jersey and New York. It follows that neither creator state may unilaterally impose additional duties, powers, or responsibility upon the Authority. Nardi v. Delaware River Port Auth., 490 A.2d 949, 950 (Pa. Commw. 1985) (citing C.T. Hellmuth & Associates, Inc. v. Washington Metro. Area Transit Auth., 414 F. Supp. 408 (D.Md. 1976)). The corollary of the proposition that neither state may unilaterally impose its legislative will on the bi-state agency is that the agency may be subject to complementary or parallel state legislation. Cf. Delaware River Joint Toll Bridge Comm'n v. Colburn, 310 U.S. 419, 60 S. Ct. 1039, 84 L. Ed. 1287 (1940) (where compact prescribed procedure for land acquisition in each
state, no unilateral departure could be made by agency). The
illustration of parallelism that we gave in Eastern Paralyzed
Veterans Ass'n v. City of Camden,
111 N.J. 389 (1988) (deciding
whether complementary provisions for providing handicapped access
existed in both states), was that employees of the Delaware River
Port Authority must observe stop lights in New Jersey because
Pennsylvania and New Jersey have similar legislation in this
regard. See Nardi, supra, 490 A.
2d at 951-52 (stating that if
disability pay enactments of New Jersey and Pennsylvania were
substantially similar, court could find agreement by states
concerning extent of disability pay).
disability pension installments by the amount of any concurrent
New York workers' compensation award. N.Y. Retire. & Soc. Sec.
Law § 364 (McKinney 1995). An accidental disability benefit is
75 per cent of final average salary. Bunk's ordinary disability
pension of 33-1/3 per cent of final average salary is not,
however, subject to a statutory setoff for workers' compensation
benefits for the same disability.
immunity because its operations do not expose either of the
compact states to financial liability. Hess, supra, ___ U.S.
___, 115 S. Ct. at 406, 130 L. Ed.
2d at 263. Whether the Port
Authority enjoys Eleventh Amendment immunity, however, is
different from the question of whether the Port Authority
exercises governmental functions as an agency of the State of New
Jersey and whether the PA employees are covered by Section 43.
taxation. See Port of New York Auth. v. City of Newark,
20 N.J. 386 (1956). The Port Authority, like Rutgers, may thus be viewed
as a "hybrid institution," Trustees of Rutgers College v.
Richman,
41 N.J. Super. 259, 289 (Ch. Div. 1956) -- at one and
the same time an agency of the State and not an agency of the
State.
employees, to the Section 43 bar to simultaneous recovery of
disability retirement benefits and workers' compensation
benefits. There is, however, this difference. In Wright the
worker was receiving an accidental disability pension benefit of
75 per cent of final compensation, whereas in this case Bunk is
receiving an ordinary disability pension of approximately 33-1/3
per cent of final compensation.
receive the maximum possible award while still protecting the
State Treasury against employees receiving both awards in full.
[In re Smith, supra, 57 N.J. at 375.]
Thus, petitioner argues that this Court recognized in Smith that
Section 43 was meant to apply only to those persons participating
in New Jersey pension plans. See also Conklin, supra, 73 N.J. at
204 (holding that Section 43's ban on recovery of workers'
compensation following receipt of disability pension benefits was
so closely intertwined with the State pension system that the
Legislature's modification of the pension system by implication
also modified Section 43).
benefits payable under the respective statutory provisions,"
ibid. (emphasis added), and thus perhaps not both benefits.
the statute organizations such as the Palisades Interstate Park
Commission while it has made no mention of the PA. That the Port
Authority did not exist when Section 43 was enacted does not
necessarily mean that the PA is not covered by the Section.
[Events] that were unforeseen at the time of
initial legislative action, have [often]
required the reinterpretation and fresh
application of relevant statutory law in
order to avoid the inadvertent and unintended
creation of a statutory anomaly or hiatus and
to preserve for such legislation a sensible
place in the contemporary scene.
[Renz v. Penn Central Corp., 87 N.J.
And that the Legislature has since made specific reference only
to the Palisades Interstate Park Commission (PIPC) in Section 43
is not expressive of an intention to exclude the Port
Authority.See footnote 3 Canons of construction, such as inclusio unius est
exclusio alterius, the inclusion of one is the exclusion of
another, must yield to the paramount canon -- that of legislative
intent.
[AMN, Inc. v. South Brunswick Township Rent
The point has been made that our Legislature would not be
concerned about the fiscal well-being of the Port Authority. As
the Appellate Division noted below, the Port Authority has
elected to join the New York pension system and "New Jersey bears
absolutely no financial or administrative responsibility [for the
Port Authority] at all." Bunk, supra, 279 N.J. Super. at 619.
But the Port Authority is a vital partner in the economic well
being of New Jersey. The Newark International Airport, the Port
Authority Trans-Hudson Corporation (PATH), and the Journal Square
Transportation Center are signs of that commitment in New Jersey.
New Jersey citizens undoubtedly pay a significant share of the
bridge and tunnel tolls that sustain the Authority. New Jersey
legislators are hard pressed to avoid the controversy when those
tolls are raised. The governors of each state have veto power
over the minutes of the agency. N.J.S.A. 32:2-6. Elected
officials in both states often seek oversight of the fiscal
practices of the Port Authority. See Neil MacFarguhar, City is
to Study Port Unit, N.Y. Times, Jan. 24, 1996, at B5 (Mayor of
New York City seeks review of Port Authority expenditures).
Given the mutual concerns of the two founder states, we are
satisfied that our Legislature would intend that the workers'
compensation benefits afforded to PA employees under New Jersey
law should, at a minimum, be integrated with the disability
retirement benefits afforded to the public employee for the same
injury. We would hesitate to hold the Section 43 bar applicable
were it not possible for petitioner to resume the processing of
his workers' compensation claim in New York. Workers'
compensation laws are to be liberally construed. Panzino v.
Continental Can Co.,
71 N.J. 298, 303 (1976). However, the
dominant theme that appears from our legislation and case law is
that the injured worker should be able to receive "the more
advantageous of the benefits payable under the respective
statutory provisions." Conklin, supra, 73 N.J. at 73. In this
case we believe that the Legislature would intend that the
statutory provisions be integrated. The only way to integrate
the provisions in this case is to apply Section 43.
Whatever doubt that we may have had about the proper integration of the two forms of benefits has been further clarified by the recent amendment to Section 43. As noted, section five of Law 1995, chapter 369 replaces the flat ban on recovery of workers' compensation benefits by a retiree on a disability pension with what amounts to a dollar-for-dollar
setoff from the retirement allowance.See footnote 4 These amendments appear
to be a recognition of the gradual developments in case law that
permitted employees to select the more advantageous of the
benefits. We asked the parties to furnish us with supplemental
briefs concerning the effect of the changes.
For consistency with court decisions and the
pension systems' offset provisions, the
amendments delete from the workers'
compensation law a sentence which prohibits
altogether the receipt of workers'
compensation benefits by a retirant receiving
a disability retirement allowance.
[Assembly Appropriations Committee, Statement
to A-1977 (December 8, 1994).]
We agree that the recent amendments reaffirm the
Legislature's intention to integrate workers' compensation and
retirement-disability benefits. Because New Jersey cannot
effectively control the New York retirement allowances granted to
Port Authority employees, the practical method of integration of
benefits is to reduce dollar-for-dollar the New Jersey workers'
compensation awards for PA employees by the amount of the New
York disability retirement allowance for the same injury. As a
condition of the obligation of the PA to make workers'
compensation payments, the worker shall procure a certified
statement from the New York pension authorities setting forth the
disability retirement benefits paid to the worker.
application, the second question is whether retroactive
application of the statute results in an unconstitutional
interference with vested rights or a manifest injustice. Ibid.
(citing State, Dep't of Envtl. Protection v. Ventron Corp.,
94 N.J. 473, 498-99 (1983)).
enactment. Rather than require petitioner to initiate new
proceedings in New York to recover workers' compensation benefits
to which he is entitled, the simpler solution is to continue the
pending proceedings. Petitioner has undoubtedly retained expert
witnesses in New Jersey and the matter can be quite readily
resolved. Petitioner has the obligation to obtain the certified
statement of benefits under New York law as a condition of any
obligation for payment of workers' compensation benefits under
New Jersey law. Those disability-retirement benefits shall be
deducted from the workers' compensation award.
The judgment of the Appellate Division is reversed. The
matter is remanded to the Division of Workers' Compensation for
further proceedings in accordance with this opinion. CHIEF JUSTICE WILENTZ and JUSTICES HANDLER, POLLOCK, GARIBALDI, STEIN, and COLEMAN join in JUSTICE O'HERN's opinion.
NO. A-53/54 SEPTEMBER TERM 1995
JOHN R. BUNK,
Petitioner-Respondent,
v.
THE PORT AUTHORITY OF NEW YORK
Respondent-Appellant,
and
SECOND INJURY FUND,
Respondent-Appellant.
DECIDED May 22, 1996
Footnote: 1By an amendment dated January 5, 1996, the Legislature
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