Petition for Writ of Certiorari — PDX North, Inc., Petitioner v. Robert Asaro-Angelo, Commissioner, New Jersey Department of Labor and Workforce Development
Supreme Court briefMar 19, 2021
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APPENDIX
i
APPENDIX
TABLE OF CONTENTS
Appendix A Opinion of the Court in the United
States Court of Appeals for the Third
Circuit
(October 22, 2020) . . . . . . . . . . . . . App. 1
Appendix B Judgment in the United States Court
of Appeals for the Third Circuit
(October 22, 2020) . . . . . . . . . . . . App. 27
Appendix C Opinion in the United States District
Court for the District of New Jersey
(July 29, 2019) . . . . . . . . . . . . . . App. 29
Appendix D Order in the United States District
Court for the District of New Jersey
(July 29, 2019) . . . . . . . . . . . . . . App. 51
Appendix E Statutory Provisions Involved . . . App. 53
App. 1
APPENDIX A
PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
Nos. 19-2968 and 19-2993
[Filed: October 22, 2020]
__________________________________________
PDX NORTH, INC.;
)
)
SLS DELIVERY SERVICES, INC.
)
(Intervenor in District Court)
)
)
v.
)
)
COMMISSIONER NEW JERSEY
)
DEPARTMENT OF LABOR AND
)
WORKFORCE DEVELOPMENT
)
)
PDX North, Inc.,
)
Appellant in No. 19-2968
)
)
SLS Delivery Services, Inc.,
)
Appellant in No. 19-2993
)
__________________________________________)
On Appeal from the United States District Court
for the District of New Jersey
(D.C. Civil No. 3-15-cv-07011)
District Judge: Honorable Brian R. Martinotti
App. 2
Argued: April 15, 2020
Before: CHAGARES, SCIRICA, and ROTH, Circuit
Judges
(Filed: October 22, 2020)
Allison L. Hollows
Fox Rothschild
101 Park Avenue
17th Floor
New York, NY 10178
Jack L. Kolpen
Corinne L. McCann Trainor [ARGUED]
Ian D. Meklinsky
Fox Rothschild
997 Lenox Drive
Princeton Pike Corporate Center, Building 3
Lawrenceville, NJ 08648
Counsel for Appellant in No. 19-2968
Vafa Sarmasti [ARGUED]
271 Route 46 West
Suite A205
Fairfield, NJ 07004
Counsel for Appellant in No. 19-2993
Emily M. Bisnauth, Esq. [ARGUED]
Christopher W. Weber
Office of Attorney General of New Jersey
Department of Law & Public Safety
Division of Law
App. 3
Richard J. Hughes Justice Complex
25 Market Street, P.O. Box 112
Trenton, NJ 08625
Counsel for Appellee
_________________
OPINION OF THE COURT
_________________
SCIRICA, Circuit Judge
This case involves a dispute over the employment
classification of delivery drivers, either as independent
contractors or as employees. The precipitating event in
this litigation is the State of New Jersey’s assertion of
non-payment of unemployment compensation taxes
because of the employers’ misclassification. To resolve
a part of this dispute, we must apply the abstention
doctrine of Younger v. Harris, 401 U.S. 37 (1971).
PDX North, Inc., a last-mile shipper, long classified
its delivery drivers as independent contractors. After
audits by the New Jersey Department of Labor and
Workforce Development (the “Department”), PDX was
told that its drivers were misclassified. Because they
were employees, the Department asserted PDX owed
unemployment compensation taxes. PDX challenged
this determination before the New Jersey Office of
Administrative Law (the “New Jersey OAL”) on
February 19, 2015.
On September 22, 2015, PDX filed this suit in
federal court against the Department’s Commissioner
contending New Jersey’s statutory scheme for
classifying workers was preempted by the Federal
App. 4
Aviation Administration Authorization Act of 1994 (the
“FAAAA”) and was unconstitutional under the
Interstate Commerce Clause.
On February 29, 2016, the New Jersey OAL action
was stayed at PDX’s request and with the consent of
the Department. Since then, this stay has been
renewed every six months and remains in effect.
Meanwhile, SLS Delivery Services, Inc., also a lastmile shipper, was audited by the Department. Because
SLS classified its drivers as independent contractors,
it moved to intervene in PDX’s action against the
Commissioner on December 1, 2017. Intervention was
granted on July 27, 2018 and SLS filed a complaint
alleging nearly identical claims to PDX. The
Department’s audit against SLS is still pending.
The Commissioner filed a motion for judgment on
the pleadings in the federal action on October 7, 2018,
contending the case was barred by the Younger
abstention doctrine. The trial court agreed and
dismissed the entire case. We hold that the trial court
correctly dismissed PDX, but it erred in dismissing
SLS. Accordingly, we will affirm in part, reverse in
part, and remand this matter for further proceedings.1
1
The trial court possessed subject-matter jurisdiction under 28
U.S.C. § 1331, assuming that the Tax Injunction Act does not
withdraw that jurisdiction. See Tenet v. Doe, 544 U.S. 1, 6 n.4
(2005) (noting that the Younger abstention doctrine “represents
the sort of ‘threshold question’ [that] may be resolved before
addressing jurisdiction”). We exercise jurisdiction under 28 U.S.C.
§ 1291 over the trial court’s Younger abstention decision.
App. 5
I.
PDX is a last-mile shipper of wholesale auto parts
in New Jersey and other states along the Eastern
Seaboard. Last-mile shippers, also known as same-day
shippers, are companies providing domestic
transportation of shipments within a 24-hour period,
often on a same-day basis with geographic coverage
generally limited to a single metropolitan area.
Depending on the volume and timing of its customers’
shipping needs, PDX hires “independent owneroperators” on an “as-needed” basis. PDX long classified
these drivers as independent contractors.
In May 2012, after completing an audit of PDX for
2006 through 2009, the Department determined that
PDX had misclassified its drivers, finding they were
employees, not independent contractors. The
Department reached the same conclusion in two
subsequent audits examining 2010 through 2015. The
parties do not provide the factual basis for this
determination, nor do they provide the Department’s
reasoning.
Under N.J. Stat. Ann. § 43:21-19(i)(6) (the
“Independent Contractor Test”), New Jersey presumes
workers are employees unless three statutory elements
are met. Those elements generally require the business
to show the worker is “free from [its] control or
direction,” the worker provides a service “outside the
usual course of business,” and the worker is
“customarily engaged in an independently established
trade.” N.J. Stat. Ann. § 43:21-19(i)(6)(A)–(C). Some
working relationships, however, are exempt from the
Independent Contractor Test. One exemption, the
App. 6
Large Motor Carrier Exemption, may apply if, among
other things, the drivers’ vehicles weigh 18,000 pounds
or more, the vehicles are used for the “highway
movement of motor freight,” and the driver receives “a
percentage of the gross revenue generated.” N.J. Stat.
Ann. § 43:21-19(i)(7)(X) (the “Large Motor Carrier
Exemption”). If the Large Motor Carrier Exemption
applies, the elements of the Independent Contractor
Test do not need to be satisfied for the worker to
qualify as an independent contractor. Id.
Because the Department determined PDX had
misclassified its drivers and did not qualify for the
Large Motor Carrier Exemption, it concluded the
drivers were employees for which PDX had not
withheld unemployment compensation taxes. The
Department assessed PDX for the amount owed,
including principal, interest, and penalties, totaling
$1,831,291.83 and filed administrative judgments for
those assessments in 2015 and 2018.2 As noted, PDX
sought review of the assessment amounts before the
New Jersey OAL on February 19, 2015 and that action
is currently stayed by PDX’s motion (and without
objection by the Department or Commissioner).
As noted, after filing its challenges with the New
Jersey OAL, PDX brought an action for declaratory and
2
After PDX’s Amended Complaint was filed in July 2018, the
Department filed an administrative judgment in New Jersey state
court. In addition to the amount owed alleged in PDX’s Amended
Complaint, the judgment reveals $498,134.86 in interest,
$81,540.00 in penalties, and $680.30 as an administrative cost
assessment. As of September 2018, it appears PDX owed at least
$2,411,645.91.
App. 7
injunctive relief in federal court on September 22, 2015.
PDX accepts, for purposes of this suit, that it can
neither satisfy the elements of the Independent
Contractor Test nor the requirements for the Large
Motor Carrier Exemption. As a result, its drivers must
be classified as employees. In addition to the state and
federal tax burdens, PDX complains of the additional
costs and obligations of employment. It asserts that
classifying these drivers as employees would require
additional administrative and human resources costs,
the outlay of capital to buy and maintain a fleet of
trucks, and a larger payroll to ensure it can always
meet peak demand. If it must classify its drivers as
employees, PDX alleges, “it will be driven out of
business.”
PDX contends the Independent Contractor Test and
the Large Trucker Exemption are preempted by the
FAAAA because they are “related to a price, route, or
service” of an interstate motor carrier. 49 U.S.C.
§ 14501(c)(1). Moreover, PDX asserts these provisions
violate the Interstate Commerce Clause, U.S. Const.
art. I, § 8, cl. 3, because of the “undue burdens” they
impose on its business. It requested the trial court to
find the Independent Contractor Test and the Large
Motor Carrier Exemption preempted by the FAAAA
and unconstitutional under the Interstate Commerce
Clause. It also requested the trial court to enjoin the
enforcement of the administrative judgments and the
performance of future audits.
In a motion to dismiss for failure to state a claim
and for lack of jurisdiction under Rule 12(b) filed on
October 30, 2015, the Commissioner contended PDX’s
App. 8
case should be dismissed on three separate abstention
grounds. The Commissioner did not raise the Younger
abstention doctrine. The trial court determined none of
the cited abstention grounds were applicable, explicitly
noting it did not rule on Younger abstention because no
party had briefed the issue.
The case was reassigned to another judge and
proceeded to discovery. As noted, SLS moved to
intervene in the action on December 1, 2017 because it
operated under a similar business model and was being
audited by the Department. Intervention was granted
on July 27, 2018, PDX submitted an amended
complaint, and SLS submitted a complaint containing
nearly identical allegations to PDX’s amended
complaint. After responding to the complaints, the
Commissioner filed a motion for judgment on the
pleadings under Rule 12(c) on October 7, 2018,
contending for the first time that Younger abstention
required dismissal.
The trial court granted the Rule 12(c) motion on
Younger abstention grounds, dismissing the case in its
entirety. It reasoned the Younger abstention doctrine
applied because the proceeding was quasi-criminal in
nature as to both PDX and SLS. The trial court then
considered the applicable Middlesex factors3 for both
3
In Middlesex, the Supreme Court announced three factors for
courts to consider when determining whether Younger abstention
is appropriate: (1) whether there is an ongoing judicial proceeding,
(2) whether an important state interest is implicated in the state
proceeding, and (3) whether the state proceedings provide an
App. 9
PDX and SLS and concluded each factor favored
abstention. Importantly, the trial court held the
Department’s audit of SLS was an ongoing state
judicial proceeding. In the alternative, the trial court
noted SLS may have waived its argument that it was
not subject to an ongoing state proceeding. The trial
court also raised the Tax Injunction Act (“TIA”), sua
sponte, and stated it had “significant doubts that the
TIA would permit this action to go forward” because
this was “an action to enjoin the collection of New
Jersey unemployment compensation contributions.”
But the trial court never ruled on the application of the
Tax Injunction Act.
PDX and SLS timely appealed, focusing on two
main issues.4 First, they contend either Federal Rule of
Civil Procedure 12 or judicial estoppel prevented the
invocation of the Younger abstention doctrine. Second,
they contend the trial court incorrectly applied Younger
abstention.
adequate opportunity to present constitutional arguments.
Middlesex Cnty. Ethics Comm. v. Garden State Bar Ass’n, 457 U.S.
423, 432 (1982).
4
On appeal, the parties briefed and argued whether the TIA bars
this action. Because the trial court never made any findings nor
ruled on this issue, we decline to address it in the first instance.
See Forestal Guarani S.A. v. Daros Int’l, Inc., 613 F.3d 395, 401 (3d
Cir. 2010) (“We ordinarily decline to consider issues not decided by
a district court, choosing instead to allow that court to consider
them in the first instance.”) (citations omitted). On remand, we
direct the trial court to address the application of the Tax
Injunction Act as to SLS.
App. 10
II.5
First, we will consider whether Federal Rule of Civil
Procedure 12 prohibited the trial court from
considering Younger abstention. PDX and SLS contend
the trial court should not have considered the Rule
12(c) motion because it was filed after extensive
discovery was completed. They also contend the trial
court should not have considered the Younger
abstention argument, because the Commissioner
consented to federal jurisdiction by not arguing it in
the first motion to dismiss or by consenting to a stay in
PDX’s state action. We conclude it was not an abuse of
discretion for the trial court to consider the
Commissioner’s 12(c) motion or to consider the Younger
abstention arguments.
A.
PDX and SLS’s first contention is that the
Commissioner’s Rule 12(c) motion could not be
considered because it was filed too late. They argue
because “PDX ha[d] already submitted all of its
discovery” it was inappropriate for the trial court to
consider the Rule 12(c) motion. Appellants’ Br. 21. We
disagree.6
5
PDX and SLS couch these alleged Rule 12 violations as equitable
issues but fail to specify which equitable doctrines were violated.
As such, we will consider these issues under Rule 12, not under
equitable doctrines.
6
Generally, “matters of docket control,” like whether to consider
a motion, “are committed to the sound discretion of the district
court.” In re Fine Paper Antitrust Litig., 685 F.2d 810, 817 (3d Cir.
1982) (citations omitted). We review for abuse of discretion and
App. 11
Rule 12(c) states that such motions must be filed
“[a]fter the pleadings are closed—but early enough not
to delay trial.” The pleadings in this case closed on
October 5, 2018, only after SLS was permitted to
intervene. The Commissioner’s Rule 12(c) motion was
filed on October 7, 2018. The motion therefore satisfies
the first requirement of Rule 12(c). It also satisfies the
second requirement because no trial date had been
set—and therefore no trial date could have been
delayed by its filing.7 The trial court did not abuse its
discretion in considering the Commissioner’s Rule 12(c)
motion.
“will not interfere with a trial court’s control of its docket ‘except
upon the clearest showing that the procedures have resulted in
actual and substantial prejudice to the complaining litigant.’” Id.
at 817 (quoting Eli Lilly & Co. v. Generix Drug Sales, Inc., 460
F.2d 1096, 1105 (5th Cir. 1972)).
7
PDX and SLS cite three cases contending the Rule 12(c) motion
was too late. But they are distinguishable because they confronted
the appropriateness of ruling on a Rule 12(c) motion
notwithstanding factual disputes on the merits, not considerations
of the timeliness of abstention. See Grajales v. P.R. Ports Auth.,
682 F.3d 40, 45–46 (1st Cir. 2012) (considering “the question of
whether it is appropriate to apply the plausibility standard after
substantial pretrial discovery has taken place”); Ideal Steel Supply
Corp. v. Anza, 652 F.3d 310, 325 (2d Cir. 2011) (discussing
appropriateness of Rule 12(c) because “evidence that had already
been produced during discovery would fill the perceived gaps in the
Complaint”); Ion Wave Techs., Inc. v. SciQuest, Inc., 21 F. Supp. 3d
376, 380 (D. Del. 2014) (finding disposition of a claim involved
“material factual disputes” and declining to decide its merits on a
Rule 12(c) motion).
App. 12
B.
PDX and SLS’s second contention is that the
Commissioner consented to federal jurisdiction over
these matters. PDX and SLS point to the
Commissioner’s agreement to stay PDX’s state court
matter pending the outcome of the federal case and
their failure to raise Younger abstention in their first
motion to dismiss.8 The Commissioner asserts he has
never formally consented to federal court jurisdiction or
waived his Younger abstention argument.
Consent to a stay of the state court proceeding in
this case was not a waiver of Younger abstention, nor
is it consent to federal jurisdiction. See Ohio Civil
Rights Comm’n v. Dayton Christian Sch., 477 U.S. 619,
626 (1986) (holding there was no waiver or consent
because the state had not requested the federal court
to adjudicate the merits); Addiction Specialists, Inc. v.
Twp. of Hampton, 411 F.3d 399, 409 (3d Cir. 2005)
(concluding state’s consent to stay of state action is
irrelevant to Younger abstention analysis and does not
constitute consent or waiver). The trial court did not
err in considering the Commissioner’s Younger
abstention argument.
8
PDX and SLS have not argued Younger abstention was waived
under Rule 12. Although it appears to be without merit, we will not
consider whether a failure to raise Younger abstention in a 12(b)
motion would have prohibited the Commissioner from raising it in
a 12(c) motion. See Leyse v. Bank of Am. Nat’l Ass’n, 804 F.3d 316,
322, 322 n.5 (3d Cir. 2015) (stating Rule 12 permits filing a Rule
12(c) motion on grounds that were available, but not previously
raised, in a Rule 12(b)(6) motion).
App. 13
III.
Second, we will consider whether the Commissioner
is judicially estopped from asserting Younger
abstention.9 PDX and SLS argue the Commissioner
was estopped from asserting the Younger abstention
doctrine based on inconsistent litigation positions:
consenting to a stay of PDX’s state court action and
asserting Younger abstention in federal court. Judicial
estoppel “applies to preclude a party from assuming a
position in a legal proceeding inconsistent with one
previously asserted.” Oneida Motor Freight, Inc. v.
United Jersey Bank, 848 F.2d 414, 419 (3d Cir. 1988).
As stated previously, the Commissioner’s position is
not inconsistent. Addiction Specialists, Inc., 411 F.3d
at 409 (concluding state’s consent to stay of state action
is irrelevant to Younger abstention analysis).
Accordingly, judicial estoppel did not preclude the trial
court from considering Younger abstention.10
9
We review the invocation of judicial estoppel for abuse of
discretion. Montrose Med. Grp. Participating Sav. Plan v. Bulger,
243 F.3d 773, 780 (3d Cir. 2001). A court “abuses its discretion
when its ruling is founded on an error of law or a misapplication
of law to the facts.” Id. (quoting In re O’Brien, 188 F.3d 116, 122
(3d Cir. 1999)).
10
PDX and SLS also contend the law-of-the-case doctrine
foreclosed the trial court from deciding whether there was an
“ongoing judicial proceeding” for Younger purposes. “Courts apply
the law of the case doctrine when their prior decisions in an
ongoing case either expressly resolved an issue or necessarily
resolved it by implication.” United Artists Theatre Cir. v. Twp. of
Warrington, 316 F.3d 392, 397–98 (3d Cir. 2003) (emphasis
omitted) (quoting Aramony v. United Way of Am., 254 F.3d 403,
410 (2d Cir. 2001)). Whether the law-of-the- case doctrine applies
App. 14
IV.
Third, we determine whether the trial court erred
in dismissing PDX and SLS’s cases under Younger
abstention.11
is subject to plenary review. Coca-Cola Bottling Co. of Shreveport
v. Coca-Cola Co., 988 F.2d 414, 429 (3d Cir. 1993). Reviewing the
previous trial court opinion, we conclude no issue relating to
Younger abstention was either explicitly or implicitly decided.
11
“We exercise plenary review over a trial court’s . . .
determination of whether Younger abstention is proper.” Hamilton
v. Bromley, 862 F.3d 329, 333 (3d Cir. 2017) (citation omitted). At
an earlier time, we reviewed the decision to abstain—after
ensuring the legal requirements had been met—for abuse of
discretion. See, e.g., Addiction Specialists, Inc., 411 F.3d at 408
(“Once we determine that the requirements have been met, we
review a district court’s decision to abstain under Younger
abstention principles for abuse of discretion.” (quoting Gwynedd
Props., Inc. v. Lower Gwynedd Twp., 970 F.2d 1195, 1199 (3d Cir.
1995)) (citations omitted)). But the Supreme Court in Sprint
Communications, Inc. v. Jacobs, 571 U.S. 69, 72 (2013) stated
“Younger exemplifies one class of cases in which federal-court
abstention is required . . . .” And since then we have applied a de
novo standard.
This practice is not uniform throughout the circuits, but
several have found the same. Compare Sirva Relocation, LLC v.
Richie, 794 F.3d 185, 191 (1st Cir. 2015) (applying de novo
standard of review to Younger abstention), Trump v. Vance, 941
F.3d 631, 636 (2d Cir. 2019) (same), Aaron v. O’Connor, 914 F.3d
1010, 1015 (6th Cir. 2019) (same), Mulholland v. Marion Cnty.
Election Bd., 746 F.3d 811, 816 (7th Cir. 2014) (same), Rynearson
v. Ferguson, 903 F.3d 920, 924 (9th Cir. 2018) (same), and Elna
Sefcovic, LLC v. TEP Rocky Mt., LLC, 953 F.3d 660, 669 (10th Cir.
2020) (same), with Golphin v. Thomas, 855 F.3d 278, 286 (4th Cir.
2017) (applying abuse of discretion standard of review to Younger
abstention), Gates v. Strain, 885 F.3d 874, 879 (5th Cir. 2018)
App. 15
The trial court correctly dismissed PDX’s case but
erred in dismissing SLS’s case because, for SLS, there
was no ongoing judicial proceeding.
Generally, “a federal court’s ‘obligation’ to hear and
decide a case is ‘virtually unflagging.’” Sprint
Commc’ns., Inc. v. Jacobs, 571 U.S. 69, 77 (2013)
(quoting Colo. River Water Conservation Dist. v. United
States, 424 U.S. 800, 817 (1976)). Younger abstention
is an exception to that rule that applies when certain
types of state proceedings are ongoing at the time a
federal case is commenced. Id. Abstention serves a
dual-purpose in these situations: (1) to promote comity,
“a proper respect for state functions,” by restricting
federal courts from interfering with ongoing state
judicial proceedings and (2) to restrain equity
(applying de novo standard of review for legal determinations and
abuse of discretion standard of review for decision to abstain to
Younger abstention), Oglala Sioux Tribe v. Fleming, 904 F.3d 603,
609–10 (8th Cir. 2018) (same), Tokyo Gwinnett, LLC v. Gwinnett
Cnty., 940 F.3d 1254, 1266 (11th Cir. 2019) (applying abuse of
discretion standard of review to Younger abstention), and Handy
v. Shaw, Bransford, Veilleux & Roth, 325 F.3d 346, 349 (D.C. Cir.
2003) (applying de novo standard of review for legal
determinations and abuse of discretion standard of review for
decision to abstain to Younger abstention).
When we review a district court’s judgment on a Rule 12(c)
motion for judgment on the pleadings, we must “view the facts
presented in the pleadings and the inferences to be drawn
therefrom in the light most favorable to the nonmoving party,” and
we may not affirm the grant of such a motion “unless the movant
clearly establishes that no material issue of fact remains to be
resolved and that he is entitled to judgment as a matter of law.”
Wolfington v. Reconstructive Orthopaedic Assocs. II PC, 935 F.3d
187, 195 (3d Cir. 2019) (quotation marks omitted).
App. 16
jurisdiction from operating when state courts provide
adequate legal remedies for constitutional claims and
there is no risk of irreparable harm. Id.
Younger abstention is only appropriate in three
types of underlying state cases: (1) criminal
prosecutions, (2) civil enforcement proceedings, and
(3) “civil proceedings involving orders in furtherance of
the state courts’ judicial function.” ACRA Turf Club,
LLC v. Zanzuccki, 748 F.3d 127, 138 (3d Cir. 2014)
(citing Sprint Commc’ns., Inc., 571 U.S. at 78). In this
case, the parties agree that Younger abstention is only
proper if we determine the underlying state
proceedings are civil enforcement proceedings that are
quasi-criminal in nature.
To assess whether underlying proceedings are
quasi-criminal in nature, we consider whether:
(1) the action was commenced by the State in its
sovereign capacity, (2) the proceeding was
initiated to sanction the federal plaintiff for
some wrongful act, and (3) there are other
similarities to criminal actions, such as a
preliminary investigation that culminated with
the filing of formal charges. . . . We also consider
whether the State could have alternatively
sought to enforce a parallel criminal statute.
ACRA Turf Club, LLC, 748 F.3d at 138 (citing Sprint
Commc’ns., Inc., 571 U.S. at 79–80).
If we conclude the civil proceeding here was quasicriminal in nature, we must then consider the
Middlesex factors: (1) whether there are “ongoing
judicial proceeding[s]”; (2) whether those “proceedings
App. 17
implicate important state interests”; and (3) whether
there is “an adequate opportunity in the state
proceeding to raise constitutional challenges.”
Middlesex Cnty. Ethics Comm., 457 U.S. at 432.
A.
We will consider three factors described in Sprint to
determine whether PDX and SLS are subject to civil
enforcement actions that are quasi-criminal in
nature.12 As described below, each factor supports a
finding that the underlying proceedings are civil
enforcement actions that are quasi-criminal in nature.
1.
First, we consider whether the underlying action
was commenced by New Jersey in its sovereign
capacity. PDX contends it initiated the challenge to the
assessment, not New Jersey. We disagree. The state
administrative action was commenced by New Jersey
in its sovereign capacity as to PDX. Unlike in ACRA
Turf Club, LLC, where “no state actor conducted an
investigation or filed any type of formal complaint,”
here the Commissioner performed multiple audits of
PDX and issued multiple formal assessments after the
culmination of those audits. ACRA Turf Club, LLC, 748
F.3d at 138. The New Jersey OAL action only occurred
12
We will not evaluate whether there are “other similarities to
criminal actions,” as it is sufficiently clear from the other factors
that this is a civil enforcement action that is quasi-criminal in
nature.
App. 18
because of the Commissioner’s actions.13 As the trial
court explained, “[t]he fact that PDX is technically the
party seeking review before the [New Jersey OAL] is a
mere function of New Jersey administrative
procedure.” As to PDX, the New Jersey OAL action
was, for Younger purposes, commenced by New Jersey
in its sovereign capacity.
2.
Second, we consider whether the proceeding
sanctions wrongful conduct. PDX and SLS contend the
proceeding does not because the only remedies
available are civil in nature. The Commissioner
disagrees, pointing out that misclassification of
workers and failure to withhold unemployment
compensation taxes is wrongful and can result in
penalties, fines, and imprisonment. See N.J. Stat. Ann.
§ 43:21-14 (describing civil penalties for failing to
report or withhold unemployment compensation taxes);
N.J. Stat. Ann. § 43:21-16(e) (describing criminal fine
and term of imprisonment for intentionally false or
fraudulent report). As to both PDX and SLS,
assessment may result in sanctions for a wrongful act.
“Sanctions are retributive in nature and are
typically imposed to punish the sanctioned party ‘for
some wrongful act.’” ACRA Turf Club, LLC, 748 F.3d at
140 (quoting Sprint Commc’ns., Inc., 571 U.S. at 79).
Misclassification of workers that results in the nonpayment of state taxes is “wrongful conduct.”
13
The Supreme Court does not require the state to commence the
judicial proceedings, as PDX seems to suggest, but only notes it is
often the case. See Sprint Commc’ns., Inc., 571 U.S. at 79.
App. 19
Further, the Commissioner has imposed over
$30,000 in penalties on PDX—in addition to the back
taxes and interest allegedly owed—and could penalize
SLS similarly. See N.J. Stat. Ann. § 43:21-14
(describing civil penalties for failing to report or
withhold unemployment compensation taxes).
Penalties are, by their very nature, retributive: a
sanction for wrongful conduct. See Gonzalez v.
Waterfront Comm’n of N.Y. Harbor, 755 F.3d 176, 182
(3d Cir. 2014) (concluding a “disciplinary hearing” and
possible termination of employment were sanctions for
wrongful conduct, making false statements).
Accordingly, we find this second factor favors finding
this is a civil enforcement action that is quasi-criminal
in nature.
3.
Third, we consider whether there is also a criminal
analog to this action. PDX and SLS contend there is no
criminal analog because they have not been criminally
charged. But the question is not whether the current
action is criminal or whether criminal charges are
warranted. To hold as PDX and SLS contend would
erase the quasi-criminal category of abstention, as it
would require criminal charges to be brought for a
quasi-criminal action to exist.
The question is whether there is a criminal analog.
See Gonzalez, 755 F.3d at 182 (holding this factor
satisfied because “New Jersey could have vindicated
similar interests by enforcing its criminal perjury
statute”). Under New Jersey law, employers who do not
pay or withhold contributions as lawfully required may
face a $1,000 fine and a sentence of imprisonment of up
App. 20
to ninety days. N.J. Stat. Ann. § 43:21-16(e). PDX and
SLS acknowledge the risk of New Jersey criminally
charging them in their pleadings, stating they fear
criminal consequences. There is a criminal analog here.
This third factor favors finding this civil enforcement
action is quasi-criminal in nature. Considering these
factors together, we hold this is a civil enforcement
action that is quasi-criminal in nature.
B.
Because we have determined this is a civil
enforcement action that is quasi-criminal in nature, we
will consider the Middlesex factors as to PDX and SLS.
The trial court did not err in finding the Middlesex
factors favored Younger abstention as to PDX’s case.
PDX’s New Jersey OAL action is an ongoing judicial
proceeding in which New Jersey has a strong interest
and PDX may raise any constitutional claims. But the
trial court erred in finding there was an ongoing
judicial proceeding as to SLS and in dismissing SLS’s
case on Younger abstention grounds, because SLS is
not subject to an ongoing state judicial proceeding.
Because the analyses diverge, we will discuss PDX and
SLS separately.
1.
First, we consider whether PDX is involved in
ongoing judicial proceedings. PDX contends it is not
subject to an ongoing state judicial proceeding because
the New Jersey OAL matter is stayed.14 But “state
14
PDX does not disagree that the New Jersey OAL matter is
judicial in nature. We note proceedings presided over by an
App. 21
proceedings are ‘ongoing’ for Younger abstention
purposes, notwithstanding [a] state court’s stay of
proceedings” if the state proceeding “was pending at
the time [the plaintiff] filed its initial complaint in
federal court.” Addiction Specialists, Inc., 411 F.3d at
408–09. The New Jersey OAL action was ongoing at
the time PDX brought its federal action. This
Middlesex factor favors Younger abstention as to PDX.
Second, we consider whether these proceedings
implicate an important state interest. PDX sidesteps
this issue by pointing to the merits of its federal case
and arguing federal preemption supersedes any state
interest to the contrary. Even assuming PDX is correct
about the merits of its claims, we do not consider the
merits “when we inquire into the substantiality of the
State’s interest in its proceedings.” O’Neill v. City of
Phila., 32 F.3d 785, 791–92 (3d Cir. 1994) (quoting New
Orleans Pub. Serv., Inc. v. Council of City of New
Orleans, 491 U.S. 350, 364–65 (1989)). “Rather, what
we look to is the importance of the generic proceedings
to the State.” Id. New Jersey has an interest in the
collection of unemployment compensation taxes
through proper enforcement actions in the New Jersey
OAL and its courts. PDX provides nothing to rebut this
fact. The state administrative proceedings implicate
important state interests.
Administrative Law Judge at the New Jersey OAL are judicial for
purposes of Younger abstention. See, e.g., Zahl v. Harper, 282 F.3d
204, 209 (3d Cir. 2002) (discussing a New Jersey OAL action
presided over by an ALJ and concluding “[s]tate administrative
proceedings such as this have long been recognized as judicial in
nature”).
App. 22
Finally, we consider whether there is an adequate
opportunity in the state proceedings for PDX to present
its constitutional claims. PDX is currently subject to a
New Jersey OAL action. PDX argues the New Jersey
OAL lacks the authority to consider their constitutional
claims because the New Jersey OAL may only consider
constitutional issues that are necessary to the issue
presented. They narrowly define the issue presented to
the New Jersey OAL to include only whether the
workers were properly classified. But PDX admits that
constitutional questions may be reserved for the
judicial review process, after the administrative
process is complete.
“The Supreme Court has held that this third
element is satisfied in the context of a state
administrative proceeding when the federal claimant
can assert his constitutional claims during state-court
judicial review of the administrative determination.”
O’Neill, 32 F.3d at 792 (citing Dayton Christian Sch.,
477 U.S. at 629; Middlesex Cnty. Ethics Comm., 457
U.S. at 436). As noted, PDX admits its claims may be
heard at the judicial review phase. Our review of New
Jersey law confirms that these constitutional claims
may be raised in this state judicial proceeding. PDX
has an adequate opportunity to present those claims.
Balancing these factors, we will affirm the trial
court’s conclusion that it should abstain as to PDX. All
the Middlesex factors point towards abstention and the
trial court did not err in dismissing PDX’s case on
Younger abstention grounds.
App. 23
2.
The trial court erred in dismissing SLS’s case on
Younger abstention grounds. We first consider whether
there was an ongoing judicial proceeding. The first
Middlesex factor does not favor Younger abstention as
to SLS because it is still at the audit stage. The
Commissioner urges us not to reach the issue, offering
three points in rebuttal: (1) SLS waived this argument
in the trial court; (2) SLS concedes a state action is
imminent; and (3) SLS is stonewalling the
Commissioner, thwarting its ability to conclude the
audit and issue an assessment. We disagree with each
contention.
We see no waiver. The trial court erred because
“failures to raise [an] issue in the District Court . . . are
. . . more properly characterized as forfeitures rather
than as waivers.” Barna v. Bd. of Sch. Dirs. of Panther
Valley Sch. Dist., 877 F.3d 136, 148 (3d Cir. 2017).
Moreover, SLS twice pointed out in its opposition brief
that Younger abstention does not apply because there
is no pending state proceeding. While this contention
may have benefitted from further factual and legal
development, it was neither waived nor forfeited.
The Commissioner’s final two contentions are
inapposite. If a judicial proceeding is only imminent,
Younger abstention is inappropriate because that
proceeding is not pending or ongoing. See Malhan v.
Sec’y U.S. Dep’t of State, 938 F.3d 453, 463–64 (3d Cir.
2019) (“That Malhan’s garnishment proceeding is
merely threatened . . . makes abstention ‘clearly
erroneous.’” (quoting Miller v. Mitchell, 598 F.3d 139,
146 (3d Cir. 2010))). The Commissioner’s assertion that
App. 24
SLS is stonewalling cannot be considered under our
standard of review: we must draw all reasonable
inferences in favor of SLS based on the allegations in
its complaint. It is also unsupported by the evidence of
record.
Accordingly, we consider whether SLS’s audit is an
“ongoing judicial proceeding.” The Commissioner’s
position seems to be that once the Department initiates
a formal audit, an “ongoing judicial proceeding” exists
for Younger purposes. SLS’s position is that a
proceeding is only ongoing once it becomes judicial in
nature. On these facts, we find the initiation of an
audit is insufficient to serve as an ongoing judicial
proceeding for Younger purposes.
The trial court—and the Commissioner—rely on two
cases that involved the issuance of a search warrant
and a grand jury subpoena.15 Both cases are inapposite
because they (1) are criminal Younger cases, (2) rely on
New York state law as to the definition of “criminal
proceeding,” and (3) involve judicial oversight not part
of the Department’s audit process. Nick v. Abrams, 717
F. Supp. 1053, 1056 (S.D.N.Y. 1989) (search warrant);
Notey v. Hynes, 418 F. Supp. 1320, 1326 (E.D.N.Y.
1976) (grand jury subpoena). These cases do not inform
our decision here.
15
The trial court also cited one of our precedential cases, but that
involved a child support order that subjected an individual to an
ongoing obligation, even though he was not then obligated to
attend a judicial hearing. Anthony v. Council, 316 F.3d 412,
418–21 (3d Cir. 2003). There is no such judicial order here.
App. 25
On the relevant facts in this case, the Department’s
audit did not involve judicial oversight and cannot be
considered an ongoing judicial proceeding for Younger
abstention purposes. We believe our colleagues on the
First, Fourth, Fifth, Seventh, and Eleventh Circuits
would agree. See Google, Inc. v. Hood, 822 F.3d 212,
224 (5th Cir. 2016) (holding “that the issuance of a nonself-executing administrative subpoena does not,
without more, mandate Younger abstention”);
Mulholland v. Marion Cnty. Election Bd., 746 F.3d 811,
813 (7th Cir. 2014) (holding an ongoing election board
investigation was “too preliminary a proceeding to
warrant Younger abstention”); Guillemard-Ginorio v.
Contreras-Gomez, 585 F.3d 508, 519 (1st Cir. 2009)
(holding an “agency’s investigation . . . was at too
preliminary a stage to constitute a ‘proceeding’
triggering Younger abstention”); Telco Commc’ns., Inc.
v. Carbaugh, 885 F.2d 1225, 1229 (4th Cir. 1989) (“We
decline to hold that Younger abstention is required
whenever a state bureaucracy has initiated contact
with a putative federal plaintiff. Where no formal
enforcement action has been undertaken, any
disruption of state process will be slight.”); Major
League Baseball v. Butterworth, 181 F. Supp. 2d 1316,
1321 n.2 (N.D. Fla. 2001), aff’d sub nom. Major League
Baseball v. Crist, 331 F.3d 1177 (11th Cir. 2003)
(holding Younger abstention inappropriate when
Florida’s attorney general served civil investigative
demands).
The first Middlesex factor does not favor Younger
abstention as to SLS. Because SLS is not subject to an
ongoing state proceeding, there is no state interest in
those proceedings and SLS does not have the
App. 26
opportunity to present its constitutional claims.
Accordingly, we will reverse the trial court’s dismissal
of SLS’s case because it erred by invoking the Younger
abstention doctrine. We will remand this matter to the
trial court to allow SLS to pursue its legal and
constitutional challenges.16
V.
For the reasons expressed, we will affirm in part,
reverse in part, and remand this matter to the trial
court for further proceedings.
16
The trial court did not address the merits of the action. The
Commissioner contends we may still consider the merits of the
action and should affirm the trial court’s dismissal of the case,
even if we conclude Younger abstention is inapplicable. While we
may affirm on any grounds apparent from the record, we decline
to address the merits here. Khazin v. TD Ameritrade H2olding
Corp., 773 F.3d 488, 491 (3d Cir. 2014).
App. 27
APPENDIX B
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
Nos. 19-2968 and 19-2993
[Filed: October 22, 2020]
__________________________________________
PDX NORTH, INC.;
)
)
SLS DELIVERY SERVICES, INC.
)
(Intervenor in District Court)
)
)
v.
)
)
COMMISSIONER NEW JERSEY
)
DEPARTMENT OF LABOR AND
)
WORKFORCE DEVELOPMENT
)
)
PDX North, Inc.,
)
Appellant in No. 19-2968
)
)
SLS Delivery Services, Inc.,
)
Appellant in No. 19-2993
)
__________________________________________)
On Appeal from the United States District Court
for the District of New Jersey
(D.C. Civil No. 3-15-cv-07011)
District Judge: Honorable Brian R. Martinotti
Argued: April 15, 2020
App. 28
Before: CHAGARES, SCIRICA, and ROTH, Circuit
Judges
________________
JUDGMENT
________________
This cause came to be heard on the record from the
United States District Court for the District of New
Jersey and was argued on April 15, 2020. On
consideration whereof, it is now hereby
ORDERED and ADJUDGED by this Court that the
order of the District Court entered July 29, 2019, be,
and the same is hereby AFFIRMED in part,
REVERSED in part and REMANDED. No costs will be
taxed. All the above in accordance with the opinion of
this Court.
ATTEST:
s/ Patricia S. Dodszuweit
Clerk
DATED: October 22, 2020
App. 29
APPENDIX C
NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
Case No.: 3:15-cv-7011-BRM-TJB
[Filed: July 29, 2019]
__________________________________________
PDX NORTH, INC.
)
)
Plaintiff,
)
)
and
)
)
SLS DELIVERY SERVICES, INC.
)
)
Plaintiff-Intervenor, )
)
v.
)
)
ROBERT ASARO-ANGELO, in his capacity )
as Commissioner of the New Jersey
)
Department of Labor and Workforce
)
Development
)
)
Defendant.
)
__________________________________________)
OPINION
App. 30
MARTINOTTI, DISTRICT JUDGE
Before this Court are Defendant Robert AsaroAngelo’s Motion for Judgment on the Pleadings or for
a Stay of Proceedings (ECF No. 63) and Plaintiff PDX
North, Inc.’s (“PDX”) Cross-Motion for Summary
Judgment (ECF No. 69). Both motions are opposed
(ECF Nos. 70, 74, & 78). Having reviewed all parties’
submissions filed in connection with the motion and
having declined to hear oral argument pursuant to
Federal Rule of Civil Procedure 78(b), for the reasons
set forth below and for good cause having been shown,
the Defendant’s Motion for Judgment on the Pleadings
is GRANTED, and PDX’s Cross-Motion for Summary
Judgment is ADMINISTRATIVELY TERMINATED.
I.
FACTUAL AND PROCEDURAL BACKGROUND1
A. N e w
Jersey’s
Compensation Law
Unemployment
Robert Asaro-Angelo (the “Commissioner”) is New
Jersey’s Commissioner of Labor and Industry and leads
the state’s Department of Labor and Workforce
Development. See N.J. Stat. Ann. § 34:1A-2. The
Commissioner enforces New Jersey’s unemployment
compensation law. See id. § 43:21-7f. The
unemployment compensation law requires employers
to pay into the state’s unemployment compensation
1
When reviewing a motion for judgment on the pleadings, “[t]he
court will accept the complaint’s well-pleaded allegations as true,
and construe the complaint in the light most favorable to the
nonmoving party, but will not accept unsupported conclusory
statements.” DiCarlo v. St. Mary Hosp., 530 F.3d 255, 262-63 (3d
Cir. 2008).
App. 31
fund an amount in proportion to the wages each
employer pays to its employees. See id. § 43:21-7. The
statutory calculation exempts payments both to
independent contractors and to certain commercial
freight truck drivers. See id. § 43:21-19(i)(6), (i)(7)(X).
B. PDX North, Inc.
“PDX is a company that facilitates, brokers, and
provides distribution and transportation services of
wholesale auto parts to auto dealers and third-party
auto suppliers throughout New Jersey, Pennsylvania,
New York, Connecticut, Rhode Island, Massachusetts,
and Vermont.” (PDX’s Am. Compl. ¶ 11.) The company
specializes in providing its customers with these auto
parts on demand, often on short notice. (Id. ¶ 20.)
Given the nature of its business model, PDX’s
“shipments are often time-sensitive and unscheduled.”
(Id.) To meet customers’ needs, the company contracts
with drivers to perform deliveries. (Id.)
PDX characterizes its drivers as an independent
contractors. (Id.) However, the company fears that its
drivers will not meet the statutory exemption in
§ 43:21-19(i)(6) or (i)(7)(X). (Id. ¶ 6.) The company
alleges that if it were forced to treat its drivers as
employees for purposes of the unemployment
compensation law, the company would incur additional
costs so great that its current business model would no
longer be viable. (Id. ¶ 5.)
The Commissioner audited PDX three times in
connection with the company’s obligations under the
unemployment compensation law, covering the years
2006-09 (first audit), 2010-12 (second audit), and 2013-
App. 32
15 (third audit). (Id. ¶¶ 22-25.) Following the audits,
the Commissioner determined PDX owed a total of
approximately $1.83 million in unpaid contributions to
the unemployment compensation fund, interest on
those unpaid contributions, and financial penalties.
(Id.) PDX appealed the Commissioner’s decision to the
New Jersey Office of Administrative Law. See PDX N.,
Inc. v. N.J. Dep’t of Labor & Workforce Dev., OAL Dkt.
No. LID 02451-2015 S (filed Feb. 19, 2015). PDX also
brought this action seeking declaratory and injunctive
relief against the Commissioner, alleging that the
Federal Aviation Administration Authorization Act of
1994 (“FAAAA”), 49 U.S.C. § 14501(c)(1), preempts
New Jersey’s unemployment compensation law, and
the Dormant Commerce Clause, see U.S. Const., art. I,
§ 8, bars the enforcement of New Jersey’s
unemployment compensation law. (ECF No. 52 ¶¶ 5067.)
The Court previously denied the Commissioner’s
motion to dismiss, holding that neither sovereign
immunity nor the the Rooker-Feldman,2 Colorado
River,3 or Burford4 doctrines barred the Court from
hearing this case on the merits, and PDX stated a valid
claim for relief under Federal Rule of Civil Procedure
12(b)(6). (ECF No. 22, at 6-10.) The Court also denied
PDX’s motion for summary judgment. (ECF No. 22, at
2
D.C. Court of Appeals v. Feldman, 460 U.S. 462, 482-87 (1983);
Rooker v. Fidelity Trust Co., 263 U.S. 413, 415-17 (1923).
3
4
Burford v. Sun Oil Co., 319 U.S. 315, 331-34 (1943).
Colo. River Water Consv’n Dist. v. United States, 424 U.S. 800,
817-20 (1976).
App. 33
12.) The Commissioner subsequently moved for
judgment on the pleadings, while PDX moved again for
summary judgment.
C. SLS Delivery Services, Inc.
“SLS is a motor carrier that facilitates and provides
interstate distribution, delivery[,] and transportation
services of packages as a contractor to national and
international carriers between and within the States of
New Jersey and New York.” (SLS’s Compl. ¶ 11.) The
company’s business model is to transport packages ondemand and as-needed between shipping companies—
for instance, between the U.S. Postal Service and
private shipper DHL. (Id. ¶¶ 24-25.) These intercarrier “shipments are often time-sensitive and asneeded.” (Id. ¶ 26.) SLS contracts with drivers to
shuttle packages between shipping companies. (Id.)
SLS also characterizes its drivers as independent
contractors. (Id. at ¶ 25.) However, the company alleges
that its drivers will not meet the statutory exemption
in § 43:21-19(i)(6). (Id. ¶ 6.) SLS alleges that if it were
forced to treat its drivers as employees for purposes of
the unemployment compensation law, the company
would incur additional costs so great that its current
business model would no longer be viable. (Id. ¶ 5.)
The Commissioner initiated an audit of SLS for the
years 2013 to the present, in an effort to determine
whether SLS improperly characterized its drivers as
independent contractors and therefore underpaid its
obligations to New Jersey’s unemployment
compensation fund. (Id. ¶ 28.) Although the audit is not
yet complete, SLS expects that the audit will determine
App. 34
that SLS improperly characterized its drivers as
independent contractors because the Commissioner
“audited a substantially smaller entity affiliated with
SLS with the same business model as SLS,” and found
that the smaller entity should not have characterized
its drivers as independent contractors. (Id. ¶ 31.)
The Court granted SLS’s motion to intervene as a
plaintiff on July 27, 2018. (ECF No. 50.) The company
filed its own complaint seeking declaratory and
injunctive relief, arguing that the FAAAA preempts
New Jersey’s unemployment compensation law and
that the Dormant Commerce Clause bars the
enforcement of New Jersey’s unemployment
compensation law.
II.
LEGAL STANDARD
“After the pleadings are closed—but early enough
not to delay trial—a party may move for judgment on
the pleadings.” Fed. R. Civ. P. 12(c). When reviewing a
motion for judgment on the pleadings, the Court may
not review matters outside the pleadings without
converting the motion into a motion for summary
judgment. Fed. R. Civ. P. 12(d).
“A court will grant a motion for judgment on the
pleadings if the movant establishes that ‘there are no
issues of material fact, and that he is entitled to
judgment as a matter of law.’” Allstate Prop. & Cas.
Ins. Co. v. Squires, 667 F.3d 388, 390 (3d Cir. 2012)
(quoting Sikirica v. Nationwide Ins. Co., 416 F.3d 214,
220 (3d Cir. 2005)). “In considering the motion for
judgment on the pleadings, [this] Court [is] required to
accept all of the [non-movants’] allegations as true and
App. 35
draw all reasonable inferences in their favor.” Sherzer
v. Homestar Mortg. Servs., 707 F.3d 255, 257 (3d Cir.
2013).
A motion for judgment on the pleadings is an
appropriate vehicle to address an argument for
abstention. See Disability Rights N.Y. v. New York, 916
F.3d 129, 131 (2d Cir. 2019).
III.
YOUNGER ABSTENTION
The Commissioner argues that this Court should
abstain from exercising jurisdiction over the plaintiff’s
and plaintiff-intervenor’s claims. See Younger v.
Harris, 401 U.S. 37, 44-45 (1971). The Court agrees.
The Younger abstention doctrine provides that
federal courts should generally abstain from exercising
jurisdiction over cases that seek to interfere with
certain types of pending state litigation, when “the
State’s interests in the proceeding are so important
that exercise of the federal judicial power would
disregard the comity between the States and the
National Government.” Pennzoil Co. v. Texaco, Inc.,
481 U.S. 1, 11 (1987). One qualifying type of state
litigation is “civil enforcement proceedings.” New
Orleans Pub. Serv., Inc. v. Council of the City of New
Orleans (“NOPSI”), 491 U.S. 350, 368 (1989).
A qualifying “civil enforcement proceeding” has
certain characteristics. Traditionally, courts looked to
three so-called Middlesex factors: (1) whether there was
an ongoing state proceeding that was judicial in nature,
(2) whether the state proceeding implicated important
state interests, and (3) whether the state proceeding
offered an adequate opportunity for the federal plaintiff
App. 36
to litigate federal constitutional challenges. Middlesex
Cty. Ethics Comm. v. Garden State Bar Ass’n, 457 U.S.
423, 432 (1982). However, recent decisions caution that
“these three factors [are not] the alpha and omega of
the abstention inquiry,” and “were never intended to be
independently dispositive.” Gonzalez v. Waterfront
Comm’n of N.Y. Harbor, 755 F.3d 176, 182 (3d Cir.
2014); see also Hamilton v. Bromley, 862 F.3d 329, 337
(3d Cir. 2017). Before analyzing the Middlesex factors,
courts must first determine whether the state
proceedings possess a quasi-criminal character. Sprint
Commc’ns, Inc. v. Jacobs, 571 U.S. 69, 81 (2013).
A. Quasi-Criminal Proceedings
“[Q]uasi-criminal proceedings of this ilk share
several distinguishing features.” Gonzalez, 755 F.3d at
181. For instance, the proceeding will
“characteristically [be] initiated to sanction the federal
plaintiff, i.e., the party challenging the state action, for
some wrongful act.” Sprint Commc’ns, 571 U.S. at 79.
This is more than mere “negative consequences.” ACRA
Turf Club, LLC v. Zanzuccki, 748 F.3d 127, 140 (3d Cir.
2014). “Sanctions are retributive in nature and are
typically imposed to punish the sanctioned party ‘for
some wrongful act.’” Id. (quoting Sprint Commc’ns, 571
U.S. at 79). Sanctions must be more than the mere
“cost of doing business, with the choice of whether to
make such payment resting entirely with Plaintiffs.”
Id.
Additionally, “a state actor [will] routinely [be] a
party to the state proceeding and often initiates the
action.” Sprint Commc’ns, 571 U.S. at 79. “To be sure,
the Supreme Court has not directly held that Younger
App. 37
applies only when a state actor files a complaint or
formal charges.” ACRA Turf Club, 748 F.3d at 140.
However, “the state’s ‘initiation’ procedure must
proceed with greater formality than merely sending a
targeted advisory notice to a class of people that may
be affected by new legislation.” Id.
Often, “the proceeding [will be] both in aid of and
closely related to criminal statutes.” Huffman v.
Pursue, Ltd., 420 U.S. 592, 604 (1975). A proceeding is
more likely to be quasi-criminal if “the State could have
alternatively sought to enforce a parallel criminal
statute” that “vindicates similar interests.” ACRA Turf
Club, 748 F.3d at 138; see also Trainor v. Hernandez,
431 U.S. 434, 444 (1977); Gonzalez, 755 F.3d at 182.
For that reason, “[i]nvestigations are commonly
involved, often culminating in the filing of a formal
complaint or charges.” Sprint Commc’ns, 571 U.S. at
79-80; see also Gonzalez, 755 F.3d at 182.
While quasi-criminal proceedings may share many
attributes with actual criminal prosecutions, they will
differ in one key respect: unlike a criminal prosecution,
a quasi-criminal proceeding need not occur before the
state’s judiciary. To the contrary, abstention will apply
“to state administrative proceedings in which
important state interests are vindicated, so long as in
the course of those proceedings the federal plaintiff
would have a full and fair opportunity to litigate his
constitutional claim.” Ohio Civil Rights Comm’n v.
Dayton Christian Schs., Inc., 477 U.S. 619, 627 (1986);
see also Gonzalez, 755 F.3d at 182 (describing a state
administrative proceeding as “a textbook example of a
quasi-criminal action”).
App. 38
The administrative proceedings in this case—which
seek to recover unpaid unemployment compensation
payments—constitute quasi-criminal proceedings
because they meet all5 of these elements. First, New
Jersey’s unemployment compensation law provides for
sanctions against employers who are delinquent in
their payment of unemployment compensation
contributions. However, not all the remedies available
to the Commissioner constitute sanctions. For instance,
the Commissioner can institute a civil action to collect
the unpaid contributions. N.J. Stat. Ann. § 43:21-14(b).
Likewise, the Commissioner may collect interest on
those unpaid contributions. Id. § 43:21-14(a). The
statute authorizes the Commissioner to issue a
certificate detailing an employer’s liability for unpaid
unemployment compensation contributions, and
provides that the certificate “shall have the same force
and effect as a judgment obtained in the Superior
Court of New Jersey.” Id. § 43:21-14(e).
The unemployment compensation law empowers the
Commissioner with punitive remedies, as well. The
Commissioner may fine an employer “who makes a
5
PDX argues a state proceeding necessarily lacks a quasi-criminal
character if the proceeding is missing even a single one of the
above attributes. This argument misunderstands the nature of the
inquiry. These factors are not a mandatory checklist for quasicriminal proceedings; instead, a court determining a state
proceeding’s quasi-criminal character weighs the factors above; no
single factor is dispositive. See Sprint Commc’ns, 571 U.S. at 79-81
(noting that quasi-criminal proceedings “characteristically” exist
to sanction the federal plaintiff, “commonly” following an
investigation by a state actor who “routinely” is a party and “often”
initiates the proceeding, “often” by the filing of formal charges).
App. 39
false statement or representation, knowing it to be
false, or who knowingly fails to disclose a material fact,
. . . [in order] to avoid or reduce any contribution or
other payment required” under the unemployment
compensation law. Id. § 43:21-16(b)(1). “Any penalties
imposed by this paragraph shall be in addition to those
otherwise prescribed” by the unemployment
compensation law. Id. The statutory scheme intends
these fines to be punitive: the statute is itself entitled
“Penalties; investigative staff.” Id. Because these fines
are more than the mere cost of doing business, they
constitute sanctions as contemplated by the Younger
abstention framework.
Second, a state actor—the Commissioner—is a
party to administrative proceedings. See N.J. Stat.
Ann. § 34:1A-1 (establishing6 the Department of Labor
and Workforce Development); id. § 34:1A-2 (creating a
“Commissioner of Labor and Industry” to head the
department). No party contests that the Commissioner
is a state actor.
Third, the state in its sovereign capacity initiated
the administrative proceedings with sufficient
formality. After conducting multiple audits, the
Commissioner gave PDX formal notice of its liability
for unpaid unemployment compensation contributions,
interest, and penalties—including the exact amounts
6
The New Jersey Legislature created the “Department of Labor
and Industry” in 1948. See N.J. Stat. Ann. § 34:1A-1. A statute
renamed the department to the “Department of Labor” in 1981.
See id. § 34:1A-1.1. The department obtained its current name,
“Department of Labor and Workforce Development,” following a
2004 enactment. See id. § 34:1A-1.2.
App. 40
owed in each category. The Commissioner also filed
certificates concerning PDX’s liability—certificates
with the force and effect of court judgments. See id.
§ 43:21-14(e). Because there are few, if any, legal
documents with more formality than a court judgment,
the filing of certificates with the force and effect of
court judgments constitutes sufficiently formal notice
from the Commissioner that it sought to initiate
proceedings against PDX for unpaid unemployment
compensation contributions.
PDX and SLS focus their argument not on the
formality of the notice, but on the identity of the party
who initiated the administrative proceedings. They
characterize PDX—not the Commissioner—as the
initiating party because PDX filed an administrative
appeal of the Commissioner’s liability determination.
This argument places form over function. The
Commissioner, not PDX, initiated an investigation and
audit of PDX’s unemployment compensation
contribution payments. The Commissioner, not PDX,
filed the certificates concerning PDX’s unemployment
compensation liability—certificates with the force and
effect of court judgments. The fact that PDX is
technically the party seeking review before the Office
of Administrative Law is a mere function of New Jersey
administrative procedure.7 PDX’s request for review
7
Generally speaking, administrative proceedings begin “in the
State agency with appropriate subject matter jurisdiction.” N.J.
Admin. Code § 1:1-3.1(a). The agency then transmits these cases
to the Office of Administrative Law. See id. However, the agency
may issue a rule or regulation assigning to the private party the
obligation of seeking review in the Office of Administrative Law.
See N.J. Stat. Ann. § 52:14B-9(g). The Commissioner has issued
App. 41
before the Office of Administrative Law merely
continues the ongoing legal process initiated in
substance by the state when the Commissioner began
auditing PDX. Because the proceedings are, in
substance, initiated by the state in its sovereign
capacity, this factor weighs in favor of finding that the
state administrative proceedings possess a quasicriminal character.
Fourth, the administrative provisions to recover
unpaid unemployment compensation contributions are
in aid of, and are closely related to, criminal statutes.
The criminal provisions are so closely related that they
fall within the same statutory section as the civil
enforcement language. See N.J. Stat. Ann. § 43:21-16.
The criminal and civil enforcement provisions vindicate
similar interests: namely, encouraging the prompt, full
payment of unemployment compensation contributions
and the recovery of unpaid payments. Compare id.
§ 43:21-16(e)(1) (criminal provisions), with id. § 43:2116(b) (civil enforcement provisions). The investigation
of civil non-payment violations in this case may lead to
a potential criminal fraud prosecution. Accordingly, the
close relationship between the administrative and
criminal proceedings suggests that the administrative
proceedings constitute quasi-criminal proceedings.
Because every factor weighs in this direction, the
administrative proceedings at issue here possess a
quasi-criminal character. The next step in the Younger
analysis is to consider the Middlesex factors. See
Gonzalez, 755 F.3d at 182.
such a rule. See N.J. Admin. Code § 12:16-22.2(a).
App. 42
B. Middlesex Factors
Middlesex outlines three factors weighing in favor
of abstention. See id. First, a court determines whether
there was an ongoing state proceedings that is judicial
in nature. See NOPSI, 491 U.S. at 370. This is not to
say the proceedings must occur before the state’s
judiciary: administrative proceedings suffice, if they
“command the respect due court proceedings.” Dayton
Christian Schs., 477 U.S. at 627 (quoting Gibson v.
Berryhill, 411 U.S. 564, 576-77 (1973)). Courts consider
whether the state proceeding shares the hallmarks of
court litigation: the “present[ation] of facts and
evidence in an open hearing;” a decision-maker
“empowered to make factual determinations with
respect to the charges filed” against the federal
plaintiff; whether the state proceeding provides the
federal plaintiff “with an opportunity to be heard, the
right to be represented by counsel, and the right to
present evidence and witnesses on [the federal
plaintiff’s] behalf;” and whether the state courts have
jurisdiction over any appeal of the “ultimate decision.”
Gonzalez, 755 F.3d at 183.
Second, a court considers whether the proceeding
implicates important state interests. See Middlesex
Cty. Ethics Comm., 457 U.S. at 432. This inquiry
focuses “narrowly [on the state’s] interest in the
outcome of the particular case—which could arguably
be offset by a substantial federal interest in the
opposite outcome. Rather, what [courts] look to is the
importance of the generic proceedings to the State.”
NOPSI, 491 U.S. at 365.
App. 43
Finally, a court inquires into whether the federal
plaintiff has an adequate opportunity to raise federal
constitutional claims in the state proceeding. See
Dayton Christian Schs., 477 U.S. at 627. Federal
plaintiffs “need be accorded only an opportunity to
fairly pursue their constitutional claims in the ongoing
state proceedings, and their failure to avail themselves
of such opportunities does not mean that the state
procedures were inadequate.” Juidice v. Vail, 430 U.S.
327, 337 (1977) (citing Berryhill, 411 U.S. at 577).
Where the decision-maker in the state proceeding is an
attorney (not a lay-person), or is a body made up
primarily of attorneys (rather than lay-persons`),
courts assume that the decision-maker will entertain
federal constitutional claims in the state proceeding.
Middlesex Cty. Ethics Comm., 457 U.S. at 435. The
right to appeal the proceeding’s result in a state court
also demonstrates that a federal plaintiff will receive a
hearing on any federal constitutional claims. See
Dayton Christian Schs., 477 U.S. at 629 (citing
Middlesex Cty. Ethics Comm., 457 U.S. at 436);
Gonzalez, 755 F.3d at 184. Generally speaking, courts
will assume the existence of an adequate opportunity
to raise federal constitutional claims in the state
proceeding unless state law explicitly prohibits the
state decision-maker from considering them. See
Pennzoil, 481 U.S. at 14; Moore v. Sims, 442 U.S. 415,
425-26 (1979); Gonzalez, 755 F.3d at 184.
All three Middlesex factors weigh in favor of
abstention. First, the administrative proceedings at
issue in this case are ongoing and judicial in nature.
New Jersey’s Administrative Procedure Act (“APA”),
N.J. Stat. Ann. § 52:14B-1 et seq., governs these
App. 44
administrative proceedings. See N.J. Admin. Code
§ 12:16-22.4. Courts routinely find that administrative
proceedings governed by New Jersey’s APA are
“judicial in nature.” See Howard v. N.J. Div. of Youth
& Fam. Servs., 398 F. App’x 807, 811 (3d Cir. 2010);
Zahl v. Harper, 282 F.3d 204, 209 (3d Cir. 2002);
Getson v. New Jersey, Civ. No. 07-3509, 2008 WL
11161698, at *6 (D.N.J. July 31, 2008).
The nature of APA proceedings demonstrates why.
An administrative law judge presides over the hearing.
See N.J. Stat. Ann. § 52:14B-10(c) (emphasis added).
The proceeding must allow “all parties to respond,
appear and present evidence and argument on all
issues involved.” Id. § 52:14B-9(c). This includes the
introduction of documentary evidence and the
presentation of witnesses, including the right to crossexamination. See id. § 52:14B-10(a). New Jersey’s APA
generally requires that proceedings remain open to the
public. See N.J. Admin. Code § 1:1-14.1(a). The state
APA also entitles the parties to representation by
counsel. See id. § 1:1-5.1. Following the close of
evidence and argument, the administrative law judge
makes findings of fact and conclusions of law. See N.J.
Stat. Ann. § 52:14B-10(c); N.J. Admin. Code § 1:1-18.1.
The Commissioner issues a final decision. See N.J.
Stat. Ann. § 52:14B-10(d); N.J. Admin Code § 12:1622.6(a). The state judiciary has jurisdiction over any
appeal from the Commissioner’s decision. See N.J.
Court Rule 2:2-3(a)(2); N.J. Admin. Code § 12:1622.6(b). Given these features, the administrative
proceeding at issue here qualifies as judicial in nature.
See Zahl, 282 F.3d at 209; Getson, 2008 WL 11161698,
at *6.
App. 45
Second, the proceedings below implicate an
important state interest—namely, the timely and
prompt collection of unemployment compensation
payments. Cf. Ardan v. Bd. of Rev., 177 A.3d 768, at
774-75 (N.J. 2018) (noting, outside the context of
Younger abstention, that “[t]he Legislature enacted the
Unemployment Compensation Law to further an
important public policy”). This Court agrees with its
sister courts that a state’s “interest in the
administration of its unemployment compensation
system is a sufficiently important state interest to
bring the case within the ambit of the Younger
doctrine.” Kelly v. Lopeman, 680 F. Supp. 1101, 1108
(S.D. Ohio 1987); see also Bridgeforth v. U.S. Dep’t of
Labor, Civ. No. 13-120, 2013 WL 1914313, at *4 (D.
Del. May 7, 2013); Lorah v. Delaware, 2010 WL
2132059, at *3 (D. Del. May 25, 2010); cf. Moore v.
Ross, 502 F. Supp. 543, 550 (S.D.N.Y. 1980) (finding
that “the administration of unemployment insurance
programs arguably constitutes a significant state
interest” but declining to abstain under Younger
because “there is presently no on-going proceeding”).
Finally, the federal plaintiffs will have an adequate
opportunity to raise any federal constitutional
challenges in the state proceeding in light of their right
to appeal any adverse administrative determination to
the New Jersey judiciary. See N.J. R. Ct. 2:2-3(a)(2);
N.J. Admin. Code § 12:16-22.6(b). The right to “appeal
to the New Jersey Superior Court, Appellate Division”
satisfies the requirement that the federal plaintiff have
an adequate opportunity to raise constitutional claims
in the state proceeding. Gonzalez, 755 F.3d at 184.
App. 46
Because this quasi-criminal proceeding satisfies all
three Middlesex factors, the Court will abstain from
exercising jurisdiction over this case. As a result, PDX’s
complaint is dismissed. Berryhill, 411 U.S. at 577. PDX
remains free to present its federal claims in the state
proceedings. Id.
C. “Pending” Proceedings
SLS argues that even if Younger requires this Court
to abstain from deciding PDX’s action, Younger does
not apply to SLS because unlike PDX, SLS is not a
party to any “pending” state “proceedings.” The Court
disagrees in light of the broad scope of the phrase
“pending proceeding” under Younger.8
The Supreme Court has issued dicta stating that
Younger applies to federal actions that seek “to restrain
an already-pending or an about-to-be-pending state
criminal action, or civil action involving important
state interests.” Morales v. TWA, Inc., 504 U.S. 374,
381 n.1 (1992) (emphasis added). For example, the
Third Circuit held that federal plaintiffs subject to
state child support obligations were parties to an
8
Additionally, the Court finds that SLS has waived its argument
that SLS is not party to any pending proceeding. “[C]asual mention
of an issue in a brief is cursory treatment insufficient to preserve
the issue” for review. Kost v. Kozakiewicz, 1 F.3d 176, 182 (3d Cir.
1993); see also Vente v. Gonzales, 415 F.3d 296, 299 n.3 (3d Cir.
2005). “[A]n argument consisting of no more than a conclusory
assertion such as the one made here (without even a citation to the
record) will be deemed waived.” Reynolds v. Wagner, 128 F.3d 166,
178 (3d Cir. 1997). SLS’s brief makes only a passing reference to
Younger’s “pending proceeding” requirement, without citing any
authority. (ECF No. 74, at 16.)
App. 47
“ongoing proceeding” for Younger purposes, even
though the plaintiffs were “not currently appearing or
scheduled to appear in any particular child support
hearing.” Anthony v. Council, 316 F.3d 412, 419 (3d
Cir. 2003). “For purposes of Younger,” the Third Circuit
explained, “such a comprehensive and fluid system
designed to address the ever-present and ever-changing
realities of child support orders must be viewed as a
whole, rather than as individual, discrete hearings,”
especially in light of the fact that the plaintiffs could
expect to “be subject to future ongoing contempt
proceedings.” Anthony, 316 F.3d at 420-21. In the
criminal context, courts have determined that the
issuance of a grand jury subpoena and the issuance of
a search warrant each constitute a “pending
proceeding” under Younger, irrespective of whether any
indictment was yet pending. See Nick v. Abrams, 717
F. Supp. 1053, 1056 (S.D.N.Y. 1989) (search warrants);
Notey v. Hynes, 418 F. Supp. 1320, 1326 (E.D.N.Y.
1976) (grand jury subpoena).
SLS finds itself in a similar situation: the
Commissioner has audited SLS for multiple tax years,
and an assessment and subsequent administrative
challenge are imminent. On these facts, the
Commissioner’s audit is part of a “pending proceeding”
under Younger, even though SLS has not yet formally
requested review before the Office of Administrative
Law.
Because the Court previously considered and
rejected all other arguments against Younger
App. 48
abstention,9 see parts III.A. & III.B., supra, abstention
is appropriate. Accordingly, SLS’s complaint is
dismissed. See Berryhill, 411 U.S. at 577. SLS remains
free to submit its federal claims in the state
proceedings. See id.
IV.
TAX INJUNCTION ACT
No party briefed whether the Tax Injunction Act
(“TIA”), 28 U.S.C. § 1341, deprives this Court of
jurisdiction over this case. Even so, a district court is
generally “required to raise the issue on [its] own
motion, as a determination that the [TIA] precludes a
suit deprives the federal courts of subject matter
jurisdiction over that action, and a state cannot waive
the [TIA]’s protection” by failing to raise the issue. In
re Hechinger Inv. Co. of Del., 335 F.3d 243, 247 n.1 (3d
Cir. 2003). While the general rule requires sua sponte
consideration of the TIA, the general rule yields when
there are multiple threshold issues which preclude a
court from considering a case’s merits. See, e.g., Tenet
v. Doe, 544 U.S. 1, 6 n.4 (2005) (noting that a court may
choose to dismiss a case on abstention before
addressing jurisdiction). Because the parties briefed
the abstention issue but not the application of the TIA,
9
SLS also adopts PDX’s Younger arguments by reference and
incorporates them into its brief. This Court generally permits this
practice. See, e.g., Polanco v. Omnicell, Inc., 988 F. Supp. 2d 451,
466 n.15 (D.N.J. 2013); cf. Fed. R. App. P. 28(i). Therefore, SLS has
not waived any of the Younger arguments that PDX briefed and
argued. However, PDX did not address the existence of a “pending
proceeding.” Accordingly, SLS’s adoption and incorporatation of
PDX’s arguments does not save SLS from waiver of any “pending
proceeding” argument.
App. 49
judicial economy weighs in favor of deciding this case
on the basis of abstention.
Nonetheless, the Court has significant doubts that
the TIA would permit this action to go forward, even if
abstention did not compel the same result. The TIA
provides, “The district courts shall not enjoin, suspend
or restrain the assessment, levy or collection of any tax
under State law where a plain, speedy and efficient
remedy may be had in the courts of such State.” 28
U.S.C. § 1341. This action to enjoin the collection of
New Jersey unemployment compensation contributions
would appear to qualify. See Sipe v. Amerada Hess
Corp., 689 F.2d 396, 402-03 (3d Cir. 1982) (holding that
“it cannot be seriously disputed that the unemployment
compensation and disability benefits contributions
mandated by New Jersey law are ‘taxes’ within the
meaning of the” TIA and that the TIA’s prohibition
against judicial interference with any “essential
administrative mechanism for the orderly collection of
taxes” likewise applies to state unenemployment
compensation statutes).
V.
CONCLUSION
For the reasons set forth above, the Commissioner’s
Motion for Judgment on the Pleadings is GRANTED,
and PDX’s Cross-Motion for Summary Judgment is
ADMINISTRATIVELY TERMINATED. An
appropriate order will follow.
App. 50
Dated: July 29, 2019
/s/ Brian R. Martinotti
HON. BRIAN R. MARTINOTTI
UNITED STATES DISTRICT JUDGE
App. 51
APPENDIX D
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
Case No.: 3:15-cv-7011-BRM-TJB
[Filed July 29, 2019]
_______________________________________
PDX NORTH, INC.
)
)
Plaintiff,
)
)
and
)
)
SLS DELIVERY SERVICES, INC.
)
)
Plaintiff-Intervenor, )
)
v.
)
)
ROBERT ASARO-ANGELO, in his
)
capacity as Commissioner of the New
)
Jersey Department of Labor and
)
Worforce Development
)
)
Respondent.
)
_______________________________________)
ORDER
THIS MATTER is before the Court on on
Defendant Robert Asaro-Angelo’s (“Defendant”) Motion
App. 52
for Judgment on the Pleadings or for a Stay of
Proceedings (ECF No. 63) and Plaintiff PDX North,
Inc.’s (“Plaintiff”) Cross-Motion for Summary Judgment
(ECF No. 69). Having reviewed all parties’ submissions
filed in connection with the motions and having
declined to hear oral argument pursuant to Federal
Rule of Civil Procedure 78(b), for the reasons set forth
for the reasons set forth in the accompanying Opinion,
and for good cause shown,
IT IS on this 29th day of July, 2019,
ORDERED that the Defendant’s Motion of
Judgment on the Pleadings (ECF No. 63) is
GRANTED; and it is further
ORDERED that the Plaintiff’s Cross-Motion for
Summary Judgment (ECF No. 69) is
ADMINISTRATIVELY TERMINATED; and it is
further
ORDERED that this case is DISMISSED; and it
is further
ORDERED that the matter shall be marked
CLOSED.
/s/ Brian R. Martinotti
HON. BRIAN R. MARTINOTTI
UNITED STATES DISTRICT JUDGE
App. 53
APPENDIX E
STATUTORY PROVISIONS INVOLVED
N.J.S.A. 43:21-14
43:21-14. Collection of contributions
Effective: November 9, 2015
Currentness
(a)(1) In addition to such reports as may be required
under the provisions of subsection (g) of R.S.43:21-11,
every employer shall file with the controller periodic
contribution reports on such forms and at such times as
the controller shall prescribe, to disclose the employer’s
liability for contributions under the provisions of this
chapter (R.S.43:21-1 et seq.), and at the time of filing
each contribution report shall pay the contributions
required by this chapter (R.S.43:21-1 et seq.), for the
period covered by such report. The controller may
require that such reports shall be under oath of the
employer. Any employer who shall fail to file any
report, required by the controller, on or before the last
day for the filing thereof shall pay a penalty of $10.00
for each day of delinquency until and including the fifth
day following such last day and for any period of
delinquency after such fifth day, a penalty of $10.00 a
day or 25% of the amount of the contributions due and
payable by the employer for the period covered by the
report, whichever is the lesser; if there be no liability
for contributions for the period covered by any
contribution report or in the case of any report other
App. 54
than a contribution report, the employer or employing
unit shall pay a penalty of $10.00 a day for each day of
delinquency in filing or $50.00, whichever is the lesser;
provided, however, that when it is shown to the
satisfaction of the controller that the failure to file any
such report was not the result of fraud or an
intentional disregard of this chapter (R.S.43:21-1 et
seq.), or the regulations promulgated hereunder, the
controller, in his discretion, may remit or abate any
unpaid penalties heretofore or hereafter imposed under
this section. On or before October 1 of each year, the
controller shall submit to the Commissioner of Labor
and Workforce Development a report covering the
12-month period ending on the preceding June 30, and
showing the names and addresses of all employers for
whom the controller remitted or abated any penalties,
or ratified any remission or abatement of penalties, and
the amount of such penalties with respect to each
employer. Any employer who shall fail to pay the
contributions due for any period, on or before the date
they are required by the controller to be paid, shall pay
interest on the amount thereof from such date until the
date of payment thereof, at the rate of 1% a month
through June 30, 1981 and at the rate of 1 1/4% a
month after June 30, 1981. Upon the written request of
any employer or employing unit, filed with the
controller on or before the due date of any report or
contribution payment, the controller, for good cause
shown, may grant, in writing, an extension of time for
the filing of such report or the paying of such
contribution, with interest at the applicable rate;
provided no such extension shall exceed 30 days and
that no such extension shall postpone payment of any
contribution for any period beyond the day preceding
App. 55
the last day for filing tax returns under Title IX of the
federal Social Security Act1 for the year in which said
period occurs.
(2)(A) For the calendar quarter commencing July 1,
1984 and each successive quarter thereafter, each
employer shall file a report with the controller within
30 days after the end of each quarter in a form and
manner prescribed by the controller, listing the name,
social security number and wages paid to each
employee and the number of base weeks (as defined in
subsection (t) of R.S.43:21-19) worked by the employee
during the calendar quarter. (B) Any employer who
fails without reasonable cause to comply with the
reporting requirements of this paragraph (2) shall be
liable for a penalty in the following amount for each
employee with respect to whom the employer is
required to file a report but who is not included in the
report or for whom the required information is not
accurately reported for each employee required to be
included, whether or not the employee is included:
(i) For the first failure for one quarter in any eight
consecutive quarters, $5.00 for each employee;
(ii) For the second failure for any quarter in any eight
consecutive quarters, $10.00 for each employee; and
(iii) For the third failure for any quarter in any eight
consecutive quarters, and for any failure in any eight
consecutive quarters, which failure is subsequent to the
third failure, $25.00 for each employee.
1
See 42 U.S.C.A. § 1101 et seq.
App. 56
(C) Information reported by employers as requested by
this paragraph (2) shall be used by the Department of
Labor and Workforce Development for the purpose of
determining eligibility for benefits of individuals in
accordance with the provisions of R.S.43:21-1 et seq.
Notwithstanding the provisions of subsection (g) of
R.S.43:21-11, the Department of Labor and Workforce
Development is hereby authorized to provide the
Department of Human Services and the Higher
Education Student Assistance Authority with
information reported by employers as required by this
paragraph (2). For each fiscal year, the Director of the
Division of Budget and Accounting of the Department
of the Treasury shall charge the appropriate account of
the Department of Human Services and the Higher
Education Student Assistance Authority in amounts
sufficient to reimburse the Department of Labor and
Workforce Development for the cost of providing
information under this subparagraph (C).
(D) (Deleted by amendment, P.L.2015, c. 135)
(b) The contributions, penalties, and interest due from
any employer under the provisions of this chapter
(R.S.43:21-1 et seq.), from the time they shall be due,
shall be a personal debt of the employer to the State of
New Jersey, recoverable in any court of competent
jurisdiction in a civil action in the name of the State of
New Jersey; provided, however, that except in the
event of fraud, no employer shall be liable for
contributions or penalties unless contribution reports
have been filed or assessments have been made in
accordance with subsection (c) or (d) of this section
before four years have elapsed from the last day of the
App. 57
calendar year with respect to which any contributions
become payable under this chapter (R.S.43:21-1 et
seq.), nor shall any employer be required to pay
interest on any such contribution unless contribution
reports were filed or assessments made within such
four-year period; provided further that if such
contribution reports were filed or assessments made
within the four-year period, no civil action shall be
instituted, nor shall any certificate be issued to the
Clerk of the Superior Court under subsection (e) of this
section, except in the event of fraud, after six years
have elapsed from the last day of the calendar year
with respect to which any contributions become
payable under this chapter (R.S.43:21-1 et seq.), or July
1, 1958, whichever is later. Payments received from an
employer on account of any debt incurred under the
provisions of this chapter (R.S.43:21-1 et seq.) may be
applied by the controller on account of the contribution
liability of the employer and then to interest and
penalties, and any balance remaining shall be
recoverable by the controller from the employer. Upon
application therefor, the controller shall furnish
interested persons and entities certificates of
indebtedness covering employers, employing units and
others for contributions, penalties and interest, for
each of which certificates the controller shall charge
and collect a fee of $2.00 per name; no such certificate
to be issued, however, for a fee of less than $10.00. All
fees so collected shall be paid into the unemployment
compensation administration fund.
(c) If any employer shall fail to make any report as
required by the rules and regulations of the division
pursuant to the provisions of this chapter (R.S.43:21-1
App. 58
et seq.), the controller may make an estimate of the
liability of such employer from any information it may
obtain, and, according to such estimate so made, assess
such employer for the contributions, penalties, and
interest due the State from him, give notice of such
assessment to the employer, and make demand upon
him for payment.
(d) After a report is filed under the provisions of this
chapter (R.S.43:21-1 et seq.) and the rules and
regulations thereof, the controller shall cause the
report to be examined and shall make such further
audit and investigation as it may deem necessary, and
if therefrom there shall be determined that there is a
deficiency with respect to the payment of the
contributions due from such employer, the controller
shall assess the additional contributions, penalties, and
interest due the State from such employer, give notice
of such assessment to the employer, and make demand
upon him for payment.
(e) As an additional remedy, the controller may issue to
the Clerk of the Superior Court of New Jersey a
certificate stating the amount of the employer’s
indebtedness under this chapter (R.S.43:21-1 et seq.)
and describing the liability, and thereupon the clerk
shall immediately enter upon his record of docketed
judgments such certificate or an abstract thereof and
duly index the same. Any such certificate or abstract,
heretofore or hereafter docketed, from the time of
docketing shall have the same force and effect as a
judgment obtained in the Superior Court of New
Jersey, and the controller shall have all the remedies
and may take all the proceedings for the collection
App. 59
thereof which may be had or taken upon the recovery
of such a judgment in a civil action upon contract in
said court. Such debt, from the time of docketing
thereof, shall be a lien on and bind the lands,
tenements and hereditaments of the debtor.
The Clerk of the Superior Court shall be entitled to
receive for docketing such certificate, $0.50, and for a
certified transcript of such docket, $0.50. If the amount
set forth in said certificate as a debt shall be modified
or reversed upon review, as hereinafter provided, the
Clerk of the Superior Court shall, when an order of
modification or reversal is filed, enter in the margin of
the docket opposite the entry of the judgment, the word
“modified” or “reversed,” as the case may be, and the
date of such modification or reversal.
The employer, or any other party having an interest in
the property upon which the debt is a lien, may deposit
the amount claimed in the certificate with the Clerk of
the Superior Court of New Jersey, together with an
additional 10% of the amount thereof, or $100.00,
whichever amount is the greater, to cover interest and
the costs of court, or in lieu of depositing the amount in
cash, may give a bond to the State of New Jersey in
double the amount claimed in the certificate, and file
the same with the Clerk of the Superior Court. Said
bond shall have such surety and shall be approved in
the manner required by the Rules Governing the
Courts of the State of New Jersey.
After the deposit of said money or the filing of said
bond, the employer, or any other party having an
interest in the said property, may, after exhausting all
administrative remedies, secure judicial review of the
App. 60
legality or validity of the indebtedness or the amount
thereof, and the said deposit of cash shall be as security
for, and the bond shall be conditioned to prosecute, the
judicial review with effect.
Upon the deposit of said money or the filing of the said
bond with the Clerk of the Superior Court, all
proceedings on such judgment shall be stayed until the
final determination of the cause, and the moneys so
deposited shall be subject to the lien of the
indebtedness and costs and interest thereon, and the
lands, tenements, and hereditaments of said debtor
shall forthwith be discharged from the lien of the State
of New Jersey and no execution shall issue against the
same by virtue of said judgment.
Notwithstanding the provisions of subsections (a)
through (c) of this section, the Department of Labor
and Workforce Development may, with the concurrence
of the State Treasurer, when all reasonable efforts to
collect amounts owed have been exhausted, or to avoid
litigation, reduce any liability for contributions,
penalties and interest, provided no portion of those
amounts represents contributions made by an
employee pursuant to subsection (d) of R.S.43:21-7.
(f) If, not later than two years after the calendar year
in which any moneys were erroneously paid to or
collected by the controller, whether such payments
were voluntarily or involuntarily made or made under
mistake of law or of fact, an employer, employing unit,
or employee who has paid such moneys shall make
application for an adjustment thereof, the said moneys
shall, upon order of the controller, be either credited or
refunded, without interest, from the appropriate fund.
App. 61
For like cause and within the same period, credit or
refund may be so made on the initiative of the
controller.
(g) All interest and penalties collected pursuant to this
section shall be paid into a special fund to be known as
the unemployment compensation auxiliary fund; all
moneys in this special fund shall be deposited,
administered and disbursed in the same manner and
under the same conditions and requirements as is
provided by law for other special funds in the State
Treasury, and shall be expended, under legislative
appropriation, for the purpose of aiding in defraying
the cost of the administration of this chapter
(R.S.43:21-1 et seq.); for the repayment of any interest
bearing advances made from the federal unemployment
account pursuant to the provisions of section 1202(b) of
the Social Security Act, 42 U.S.C. s.1322; and for
essential and necessary expenditures in connection
with programs designed to stimulate employment, as
determined by the Commissioner of Labor and
Workforce Development, except that any moneys in
this special fund shall be first applied to aiding in the
defraying of necessary costs of the administration of
this chapter (R.S.43:21-1 et seq.) as determined by the
Commissioner of Labor and Workforce Development.
The Treasurer of the State shall be ex officio the
treasurer and custodian of this special fund and,
subject to legislative appropriation, shall administer
the fund in accordance with the directions of the
controller. Any balances in this fund shall not lapse at
any time, but shall be continuously available, subject to
legislative appropriation, to the controller for
expenditure. The State Treasurer shall give a separate
App. 62
and additional bond conditioned upon the faithful
performance of his duties in connection with the
unemployment compensation auxiliary fund, in an
amount to be fixed by the division, the premiums for
such bond to be paid from the moneys in the said
special fund.
(h) All disputes under R.S.43:21-1 et seq. unless
specifically indicated otherwise, shall be resolved in
accordance with the “Administrative Procedure Act,”
P.L.1968, c. 410 (C.52:14B-1 et seq.).
(i) Notwithstanding any of the provisions of this
section, or any other law, to the contrary, all functions,
powers and duties of the controller and the
Commissioner of Labor and Workforce Development
relating to receiving reports, receiving billings,
receiving correspondence, remittance processing, data
entry and imaging required pursuant to this section
shall be performed by the Division of Revenue in the
Department of the Treasury.
App. 63
N.J.S.A. 43:21-16
43:21-16. Penalties; investigating staff
Effective: January 17, 2014
Currentness
(a)(1) Whoever makes a false statement or
representation, knowing it to be false, or knowingly
fails to disclose a material fact, to obtain or increase or
attempts to obtain or increase any benefit or other
payment under this chapter (R.S.43:21-1 et seq.), or
under an employment security law of any other state or
of the federal government, either for himself or for any
other person, shall be liable to a fine of 25% of the
amount fraudulently obtained, to be recovered in an
action at law in the name of the Division of
Unemployment and Temporary Disability Insurance of
the Department of Labor and Workforce Development
of the State of New Jersey or as provided in subsection
(e) of R.S.43:21-14, said fine when recovered shall be
immediately deposited in the following manner: 10
percent of the amount fraudulently obtained deposited
into the unemployment compensation auxiliary fund
for the use of said fund, and 15 percent of the amount
fraudulently obtained deposited into the
unemployment compensation fund; and each such false
statement or representation or failure to disclose a
material fact shall constitute a separate offense. Any
penalties imposed by this subsection shall be in
addition to those otherwise prescribed in this chapter
(R.S.43:21-1 et seq.).
(2) For purposes of any unemployment compensation
program of the United States, if the department
App. 64
determines that any benefit amount is obtained by an
individual due to fraud committed by the individual,
the department shall assess a fine on the individual
and deposit the recovered fine in the same manner as
provided in paragraph (1) of subsection (a) of this
section. As used in this paragraph, “unemployment
compensation program of the United States” means:
(A) Unemployment compensation for federal civilian
employees pursuant to 5 U.S.C. 8501 et seq.;
(B) Unemployment compensation for ex-service
members pursuant to 5 U.S.C. 8521 et seq.;
(C) Trade readjustment allowances pursuant to 19
U.S.C. 2291-2294;
(D) Disaster unemployment assistance pursuant to 42
U.S.C. 5177(a);
(E) Any federal temporary extension of unemployment
compensation;
(F) Any federal program that increases the weekly
amount of unemployment compensation payable to
individuals; and
(G) Any other federal program providing for the
payment of unemployment compensation.
(b)(1) An employing unit or any officer or agent of an
employing unit or any other person who makes a false
statement or representation, knowing it to be false, or
who knowingly fails to disclose a material fact, to
prevent or reduce the payment of benefits to any
individual entitled thereto or to avoid becoming or
remaining subject hereto or to avoid or reduce any
App. 65
contribution or other payment required from an
employing unit under this chapter (R.S.43:21-1 et seq.),
or under an employment security law of any other state
or of the federal government, or who willfully fails or
refuses to furnish any reports required hereunder
(except for such reports as may be required under
subsection (b) of R.S.43:21-6) or to produce or permit
the inspection or copying of records, as required
hereunder, shall be liable to a fine of $100.00, or 25%
of the amount fraudulently withheld, whichever is
greater, to be recovered in an action at law in the name
of the Division of Unemployment and Temporary
Disability Insurance of the Department of Labor and
Workforce Development of the State of New Jersey or
as provided in subsection (e) of R.S.43:21-14, said fine
when recovered to be paid to the unemployment
compensation auxiliary fund for the use of said fund;
and each such false statement or representation or
failure to disclose a material fact, and each day of such
failure or refusal shall constitute a separate offense.
Any penalties imposed by this paragraph shall be in
addition to those otherwise prescribed in this chapter
(R.S.43:21-1 et seq.).
(2) Any employing unit or any officer or agent of an
employing unit or any other person who fails to submit
any report required under subsection (b) of R.S.43:21-6
shall be subject to a penalty of $25.00 for the first
report not submitted within 10 days after the mailing
of a request for such report, and an additional $25.00
penalty may be assessed for the next 10-day period,
which may elapse after the end of the initial 10-day
period and before the report is filed; provided that
when such report or reports are not filed within the
App. 66
prescribed time but it is shown to the satisfaction of the
director that the failure was due to a reasonable cause,
no such penalty shall be imposed. Any penalties
imposed by this paragraph shall be recovered as
provided in subsection (e) of R.S.43:21-14, and when
recovered shall be paid to the unemployment
compensation auxiliary fund for the use of said fund.
(3) Any employing unit, officer or agent of the
employing unit, or any other person, determined by the
controller to have knowingly violated, or attempted to
violate, or advised another person to violate the
transfer of employment experience provisions found at
R.S.43:21-7 (c)(7), or who otherwise knowingly
attempts to obtain a lower rate of contributions by
failing to disclose material information, or by making
a false statement, or by a misrepresentation of fact,
shall be subject to a fine of $5,000 or 25% of the
contributions under-reported or attempted to be
under-reported, whichever is greater, to be recovered
as provided in subsection (e) of R.S.43:21-14, and when
recovered to be paid to the unemployment
compensation auxiliary fund for the use of said fund.
For the purposes of this subsection, “knowingly” means
having actual knowledge of, or acting with deliberate
ignorance or reckless disregard for the prohibition
involved.
(c) Any person who shall willfully violate any provision
of this chapter (R.S.43:21-1 et seq.) or any rule or
regulation thereunder, the violation of which is made
unlawful or the observance of which is required under
the terms of this chapter (R.S.43:21-1 et seq.), and for
which a penalty is neither prescribed herein nor
App. 67
provided by any other applicable statute, shall be liable
to a fine of $50.00, to be recovered in an action at law
in the name of the Division of Unemployment and
Temporary Disability Insurance of the Department of
Labor and Workforce Development of the State of New
Jersey or as provided in subsection (e) of R.S.43:21-14,
said fine when recovered to be paid to the
unemployment compensation auxiliary fund for the use
of said fund; and each day such violation continues
shall be deemed to be a separate offense.
(d)(1) When it is determined by a representative or
representatives designated by the Director of the
Division of Unemployment and Temporary Disability
Insurance of the Department of Labor and Workforce
Development of the State of New Jersey that any
person, whether (I) by reason of the nondisclosure or
misrepresentation by him or by another of a material
fact (whether or not such nondisclosure or
misrepresentation was known or fraudulent), or (ii) for
any other reason, has received any sum as benefits
under this chapter (R.S.43:21-1 et seq.) while any
conditions for the receipt of benefits imposed by this
chapter (R.S.43:21-1 et seq.) were not fulfilled in his
case, or while he was disqualified from receiving
benefits, or while otherwise not entitled to receive such
sum as benefits, such person, unless the director (with
the concurrence of the controller) directs otherwise by
regulation, shall be liable to repay those benefits in
full. The employer’s account shall not be charged for
the amount of an overpayment of benefits if the
overpayment was caused by an error of the division and
not by any error of the employer. The sum shall be
deducted from any future benefits payable to the
App. 68
individual under this chapter (R.S.43:21-1 et seq.) or
shall be paid by the individual to the division for the
unemployment compensation fund, and such sum shall
be collectible in the manner provided for by law,
including, but not limited to, the filing of a certificate
of debt with the Clerk of the Superior Court of New
Jersey; provided, however, that, except in the event of
fraud, no person shall be liable for any such refunds or
deductions against future benefits unless so notified
before four years have elapsed from the time the
benefits in question were paid. Such person shall be
promptly notified of the determination and the reasons
therefor. The determination shall be final unless the
person files an appeal of the determination within
seven calendar days after the delivery of the
determination, or within 10 calendar days after such
notification was mailed to his last-known address, for
any determination made on or before December 1,
2010, and any initial determination made pursuant to
paragraph (1) of subsection (b) of R.S.43:21-6 after
December 1, 2010, or within 20 calendar days after the
delivery of such determination, or within 20 calendar
days after such notification was mailed to his lastknown address, for any determination other than an
initial determination made after December 1, 2010.
(2) Interstate and cross-offset of state and federal
unemployment benefits. To the extent permissible
under the laws and Constitution of the United States,
the commissioner is authorized to enter into or
cooperate in arrangements or reciprocal agreements
with appropriate and duly authorized agencies of other
states or the United States Secretary of Labor, or both,
whereby:
App. 69
(A) Overpayments of unemployment benefits as
determined under subsection (d) of R.S.43:21-16 shall
be recovered by offset from unemployment benefits
otherwise payable under the unemployment
compensation law of another state, and overpayments
of unemployment benefits as determined under the
unemployment compensation law of another state shall
be recovered by offset from unemployment benefits
otherwise payable under R.S.43:21-1 et seq.; and
(B) Overpayments of unemployment benefits as
determined under applicable federal law, with respect
to benefits or allowances for unemployment provided
under a federal program administered by this State
under an agreement with the United States Secretary
of Labor, shall be recovered by offset from
unemployment benefits otherwise payable under
R.S.43:21-1 et seq., or any federal program
administered by this State, or under the
unemployment compensation law of another state or
any federal unemployment benefit or allowance
program administered by another state under an
agreement with the United States Secretary of Labor,
if the other state has in effect a reciprocal agreement
with the United States Secretary of Labor as
authorized by subsection (g) of 42 U.S.C.s.503, and if
the United States agrees, as provided in the reciprocal
agreement with this State entered into under
subsection (g) of 42 U.S.C.s.503, that overpayments of
unemployment benefits as determined under
subsection (d) of R.S.43:21-16 and overpayments as
determined under the unemployment compensation
law of another state which has in effect a reciprocal
agreement with the United States Secretary of Labor
App. 70
as authorized by subsection (g) of 42 U.S.C.s.503, shall
be recovered by offset from benefits or allowances
otherwise payable under a federal program
administered by this State or another state under an
agreement with the United States Secretary of Labor.
(e)(1) Any employing unit, or any officer or agent of an
employing unit, which officer or agent is directly or
indirectly responsible for collecting, truthfully
accounting for, remitting when payable any
contribution, or filing or causing to be filed any report
or statement required by this chapter, or employer, or
person failing to remit, when payable, any employer
contributions, or worker contributions (if withheld or
deducted), or the amount of such worker contributions
(if not withheld or deducted), or filing or causing to be
filed with the controller or the Division of
Unemployment and Temporary Disability Insurance of
the Department of Labor and Workforce Development
of the State of New Jersey, any false or fraudulent
report or statement, and any person who aids or abets
an employing unit, employer, or any person in the
preparation or filing of any false or fraudulent report or
statement with intent to defraud the State of New
Jersey or an employment security agency of any other
state or of the federal government, or with intent to
evade the payment of any contributions, interest or
penalties, or any part thereof, which shall be due under
the provisions of this chapter (R. S.43:21-1 et seq.),
shall be liable for each offense upon conviction before
any Superior Court or municipal court, to a fine not to
exceed $1,000.00 or by imprisonment for a term not to
exceed 90 days, or both, at the discretion of the court.
The fine upon conviction shall be payable to the
App. 71
unemployment compensation auxiliary fund. Any
penalties imposed by this subsection shall be in
addition to those otherwise prescribed in this chapter
(R.S.43:21-1 et seq.).
(2) Any employing unit, officer or agent of the
employing unit, or any other person, who knowingly
violates, or attempts to violate, or advise another
person to violate the transfer of employment experience
provisions found at R.S.43:21-7 (c)(7) shall be, upon
conviction before any Superior Court or municipal
court, guilty of a crime of the fourth degree. For the
purposes of this subsection, “knowingly” means having
actual knowledge of, or acting with deliberate
ignorance or reckless disregard for the prohibition
involved.
(f) Any employing unit or any officer or agent of an
employing unit or any other person who aids and abets
any person to obtain any sum of benefits under this
chapter to which he is not entitled, or a larger amount
as benefits than that to which he is justly entitled,
shall be liable for each offense upon conviction before
any Superior Court or municipal court, to a fine not to
exceed $1,000.00 or by imprisonment for a term not to
exceed 90 days, or both, at the discretion of the court.
The fine upon conviction shall be payable to the
unemployment compensation auxiliary fund. Any
penalties imposed by this subsection shall be in
addition to those otherwise prescribed in this chapter
(R.S.43:21-1 et seq.).
(g) There shall be created in the Division of
Unemployment and Temporary Disability Insurance of
the Department of Labor and Workforce Development
App. 72
of the State of New Jersey an investigative staff for the
purpose of investigating violations referred to in this
section and enforcing the provisions thereof.
(h) An employing unit or any officer or agent of an
employing unit who makes a false statement or
representation, knowing it to be false, or who
knowingly fails to disclose a material fact, to reduce
benefit charges to the employing unit pursuant to
paragraph (1) of subsection (c) of R.S.43:21-7, shall be
liable to a fine of $1,000, to be recovered in an action at
law in the name of the Division of Unemployment and
Temporary Disability Insurance of the Department of
Labor and Workforce Development of the State of New
Jersey or as provided in subsection (e) of R.S.43:21-14.
The fine when recovered shall be paid to the
unemployment compensation auxiliary fund for the use
of the fund. Each false statement or representation or
failure to disclose a material fact, and each day of that
failure or refusal shall constitute a separate offense.
Any penalties imposed by this subsection shall be in
addition to those otherwise prescribed in R.S.43:21-1 et
seq.
(i) The Department of Labor and Workforce
Development shall arrange for the electronic receipt of
death record notifications from the New Jersey
Electronic Death Registration System, pursuant to
section 16 of P.L.2003, c. 221 (C.26:8-24.1), and
establish a verification system to confirm that benefits
paid pursuant to the “Temporary Disability Benefits
Law,” P.L.1948, c. 110 (C.43:21-25 et al.), and the
“unemployment compensation law,” R.S.43:21-1 et seq.,
are not being paid to deceased individuals.
App. 73
(j) The Department of Labor and Workforce
Development shall arrange for the electronic receipt of
identifying information from the Department of
Corrections, pursuant to section 6 of P.L.1976, c. 98
(C.30:1B-6), and from the Administrative Office of the
Courts and any county which does not provide county
inmate incarceration information to the Administrative
Office of the Courts, and establish a verification system
to confirm that benefits paid pursuant to the
“unemployment compensation law,” R.S.43:21-1 et seq.,
are not being paid to individuals who are incarcerated.
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.