The American structure of government provides for the separation of power between the executive, legislative, and judicial branches and for a system of checks and balances among the branches. This structure delineates the power of any one branch of government and limits the possibilities for institutional overreaching. In New Jersey, as in the country as a whole, the tremendous growth of the executive branch agencies and their regulatory functions has generated the development of some separation of powers, and checks and balances, within the executive branch itself.
The State of New Jersey, a leader in this development, established and empowered the New Jersey Office of Administrative Law (OAL) in 1979 to act as an independent arbiter of certain disputes arising from agency actions, as well as an independent arbiter of agency compliance with rulemaking procedures, P.L. 1978, c. 67. The OAL is an executive branch agency located technically in, but not of, the Department of Treasury. It is independent of supervision or control by the Department of Treasury. The Director, who is also the Chief Administrative Law Judge, presides over the office and reports directly to the Governor.
The OAL implements the Administrative Procedure Act, N.J.S.A. 52:14B-1 et seq., advising executive branch agencies on how to make rules and requiring the agencies to follow statutorily prescribed steps in rulemaking. Further, it must ensure that the formulation of rules includes adequate opportunity for input by anyone interested and affected. In this capacity, the OAL is also responsible for the publication of the New Jersey Register and the New Jersey Administrative Code, which are the official publications of duly proposed and promulgated rules.
The OAL is also responsible for the administrative hearing functions of all but certain specifically exempted types of cases. The exempted cases include those from the State Board of Parole, the Public Employment Relations Commission, the Division of Workers' Compensation, and the Division of Tax Appeals. In addition, an agency head may decide to conduct a hearing rather than transmit the matter to the OAL. N.J.S.A. 52:14F-8.
Upon determining a matter to be a contested case, a state agency transmits the contested case to the OAL. Litigants do not apply directly to the OAL for a hearing. As a general rule, hearings are public, except special education and certain human services cases, where confidentiality is required by federal regulations. An administrative law judge (ALJ) presides over a contested case, which is conducted according to hearing rules established by statute and by the OAL. The ALJ provides a neutral forum where the evidence of all parties, often including the agency with subject matter jurisdiction over the case, is presented.
The ALJ, as a full time officer of the OAL, is not permitted to hold other employment. He or she is appointed by the Governor and confirmed by the New Jersey Senate for a one-year term. After this initial term, the Governor may reappoint the ALJ to a four-year term. Any subsequent reappointment is to a five-year term and requires Senate confirmation.
The ALJ prepares an initial decision that is sent to the agency head within the time frame set by statute for the particular substantive area of the case. The ALJ's initial decision may be affirmed, modified, or rejected by the agency head who is empowered to make a final decision in the matter. Any order or final decision rejecting or modifying the initial decision must specify in clear and sufficient detail the nature of the rejection or modification, the reasons for it, and the changes in result or disposition caused by the rejection or modification. If an agency head does not adopt, reject, or modify the initial decision within forty-five days, and unless the period is extended as provided by statute, the initial decision becomes the final decision. The ALJ issues a final decision in a special education matter that is not reviewed by the agency head.