Appeal from the United States District Court for the District of New Jersey D.C. Civil No. 82-2964. Argued In Banc May 5, 1986.
ALDISERT, Chief Judge, and SEITZ, ADAMS, GIBBONS, HUNTER, WEIS, GARTH, HIGGINBOTHAM, SLOVITER, BECKER, STAPLETON and MANSMANN, Circuit Judges.
Opinion ANNOUNCING THE JUDGMENT OF THE COURT, WITH WHOM JUDGES HUNTER, WEIS, AND HIGGINBOTHAM JOIN, AND WITH WHOM JUDGE BECKER JOINS EXCEPT FOR PART IV
The ultimate question for decision is whether New Jersey motor vehicles agents, chosen for their positions by a Democratic governor through the political patronage process, are insulated by the first amendment from being replaced by the governor's successor, a Republican. The district court held that they did not come within the protection of Elrod v. Burns, 427 U.S. 347, 49 L. Ed. 2d 547, 96 S. Ct. 2673 (1976), and Branti v. Finkel, 445 U.S. 507, 63 L. Ed. 2d 574, 100 S. Ct. 1287 (1980), because they were independent contractors and not "public employees," and granted appellees' motion for summary judgment.
This appeal requires us to determine whether the motor vehicle agents are employees or contractors and, if contractors, whether this distinction makes a difference under the teachings of Elrod and Branti. We hold that the district court properly determined that the agents are not within the first amendment's protection, Horn v. Kean, 593 F. Supp. 1298 (D.N.J. 1984), and affirm its judgment.
The agents brought suit against the Governor, the Attorney General, and the Director of Motor Vehicles of New Jersey alleging that their dismissals as motor vehicle agents were based on political party affiliation and violated the first, fifth, and fourteenth amendments to the United States Constitution.*fn1 These agents register motor vehicles, issue registration certificates, and license drivers. Unlike most public employees, they are not paid a fixed salary but receive a fee for every vehicle registered and license issued.*fn2 Appellants, all Democrats, appointed by a Democratic state administration, were relieved of their duties as motor vehicle agents after Thomas Kean, a Republican, began his term as Governor.
The record here reveals that New Jersey historically has not required prospective motor vehicle agents, as a condition of their employment, to terminate existing employment relationships or business endeavors. App. at 47. Of the five original named plaintiffs in this action, only one accurately could be classified as working as a motor vehicle agent on a full time basis; the remaining four all worked in other occupations. 593 F. Supp. at 1302. They operate relatively fee from state control or supervision and retain complete authority to establish the qualifications for employment in their agencies. They hire, fire, and promote employees in their agencies. App. at 47, 71, 89, 109, 118, 128, 129, 138, 148. Employees of the agents are paid by the agents, not by New Jersey. As employers, the agents make the usual deductions for withholding taxes, Social Security, and Workmen's Compensation.
The parties concede that no disputed issues of material fact exist. The court's determination that the agents' status as independent contractors precluded protection under Elrod and Branti is a question of law; our review is therefore plenary. Goodman v. Mead Johnson & Co., 534 F.2d 566, 573-74 (3d Cir. 1976), cert. denied, 429 U.S. 1038, 97 S. Ct. 732, 50 L. Ed. 2d 748 (1977).
Our analysis tracks two inquires. First, we must determine whether the district court properly classified appellants as independent contractors. Second, we address the constitutional issue of whether the district court properly limited Elrod-Branti protection from "patronage dismissal" to public employees, excluding from protection independent contractors.
We are assisted in determining the motor vehicle agents' status under New Jersey law by, coincidentally, an opinion written by Justice Brennan -- author of the plurality opinion in Elrod -- when he was a judge on the appellate division of the New Jersey Superior Court. In Carluccio v. Ferber, 18 N.J. Super. 473, 87 A.2d 439 (App. Div. 1952), a former motor vehicle inspection agent sought reinstatement to his position, arguing that as a veteran the state could not, under the Veterans' Tenure Act, discharge him at will. The New Jersey court, speaking through Judge Brennan, rejected this argument:
An agent designated under R.S. 39:3-3, N.J.S.A., is not a person "holding any employment, position or office under the government of this State" and "receiving a salary from such State" within the intendment of the Veterans' Tenure Act.
Id. at 476-77, 87 A.2d at 440 (citations omitted). See also In re Fitzgerald, 188 N.J. Super. 476, 482, 457 A.2d 1208, 1211 (App. Div. 1983) ("By their nature, motor vehicle agencies are independently run operations managed by independent contractors who are not subject to the benefits and protection of the State's pension and tenure statutes. . . ."). As a federal court we are bound by this formidable state authority, and, accordingly, find no error in the district court's ultimate fact determination that the appellants were independent contractors. We turn now to the merits of the appellants' constitutional argument.
For the purpose of this decision and by reason of the doctrine of stare decisis that requires inferior courts to follow decisions of a a superior court, we are required to respect and adhere to the precise decisions in Elrod and Branti. We do this unqualifiedly. We wish to emphasize that our decision should rise or fall on an interpretation of the Constitution, not as a referendum on whether political scientist reformers were absolutely correct in demanding elimination of patronage and installing virtually universal civil service in its stead. Suffice it to say, there is much room for debate. For every horror story in, to use the pejorative, the "spoils system" -- a litany that need not be repeated now -- a civil service misadventure probably can be cited. But insofar as the Constitution is concerned, these matters are irrelevant.
The analysis of the constitutional issue begins with the first amendment's mandate that "Congress shall make no law . . . abridging the freedom of speech, or of the press . . . ." Decades of Supreme Court case law make it clear that the free speech mandate is no longer limited to statutes enacted by Congress; it "is made obligatory on the States by the Fourteenth" amendment. Jacobellis v. Ohio, 378 U.S. 184, 195, 12 L. Ed. 2d 793, 84 S. Ct. 1676 (1964) (Black, J., concurring). The reasons for its incorporation into the fourteenth amendment are somewhat shrouded, and do not surface readily in Supreme Court opinions; perhaps a reasoned elaboration has never been set forth. For example, Gitlow v. New York, 268 U.S. 652, 69 L. Ed. 1138, 45 S. Ct. 625 (1925), often cited as the seminal case incorporating the free speech clause, substituted assumption for reason, and a conclusion for a point of beginning: "For present purposes we may and do assume that freedom of speech and of the press -- which are protected by the First Amendment from abridgment by Congress -- are among the fundamental personal rights and 'liberties' protected by the due process clause of the Fourteenth Amendment from impairment by the States." 268 U.S. at 666. Notwithstanding the scanty, if no evanescent, explanation, we do recognize and reiterate that such incorporation has taken place,*fn3 and enthusiastically agree that "this freedom is an inestimable privilege in a free government . . . ." Id. at 667.
Moreover, the Supreme Court instructs that for the first amendment to be implemented, some form of state action must exist.
It matters not that the [state] law has been applied in a civil action and that it is common law only, though supplemented by statute. . . . The test is not the form in which state power has been applied but, whatever the form, whether such power has in fact been exercised. See Ex parte Virginia, 100 U.S. 339, 346-47, 25 L. Ed. 676 ; American Federation of Labor v. Swing, 312 U.S. 321, 85 L. Ed. 855, 61 S. Ct. 568 .
New York Times Co. v. Sullivan, 376 U.S. 254, 265, 11 L. Ed. 2d 686, 84 S. Ct. 710 (1964).
Several reasons prompt our emphasis on these considerations at this time. First, there must be state action to trigger the prohibitions of the first amendment. New York Times v. Sullivan, 376 U.S. at 265. Second, its application to the states is bottomed on rights and liberties protected by the due process clause of the fourteenth amendment. Gitlow v. New York, 268 U.S. at 666. Third, the expansion of the naked, seemingly unambiguous text of "Congress shall make no law . . ." to the present full dress of first amendment applications has not been an incremental development, as is customary in the common law tradition, by judicial tribunals that the Constitution's Article III describes as "inferior courts." Rather, the development has been decreed on the highest level, by the Supreme Court itself, in quantum leaps, in cases such as Gitlow v. New York, New York Times v. Sullivan, and Elrod v. Burns. This consideration is central to our analysis of the first amendment issue presented here. It is critical because the pretentious first amendment limitation on the centuries' old practice of political patronage in a democratic society.*fn4 has been considered only in two Supreme Court cases since the first amendment's adoption in 1791.*fn5 If for no other reason, this circumstance signals that district courts and courts of appeals should be extremely chary in expanding the precise holdings of the Supreme Court in an extremely volatile area of historically established and traditionally accepted characteristics of government, be it on a municipal, county, state, or federal level.*fn6
In Elrod v. Burns, 427 U.S. 347, 49 L. Ed. 2d 547, 96 S. Ct. 2673 (1976), a sharply divided Supreme Court*fn7 held that a nonpolicymaking, nonconfidential government employee cannot be discharged or threatened with discharge upon the sole ground of political beliefs. Id. at 375 (Stewart, J., concurring). The plurality opinion by Justice Brennan announcing the judgment of the Court was joined by two other justices. Justice Brennan acknowledged the historically pervasive practice of political patronage and explicitly limited the opinion's focus: "Although political patronage comprises a broad range of activities, we are here concerned only with the constitutionality of dismissing public employees for partisan reasons." Id. at 353. The concurring opinion reinforced Elrod 's narrow focus: "This case does not require us to consider the broad contours of the so-called patronage system, with all its variations and ...