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Joint Petition of Boardwalk Regency Corporation v. New Jersey Casino Control Commission6/21/2002
ral constitution provides that "no state shall pass . . . any . . . law impairing the obligation of contracts." U.S. Const. art. I, § 10, cl. 1. The State Constitution has a similar provision. N.J. Const. art. IV, § 7, 3. Because of states' interests in safeguarding their residents, however, the prohibition against the impairment of contracts is not absolute; there is "wide discretion on the part of the legislature in determining what is and what is not necessary, )) a discretion which courts ordinarily will not interfere with." Manigault v. Springs, 199 U.S. 473, 480-81, 26 S. Ct. 127, 130, 50 L. Ed. 274, 279 (1905); In re Recycling & Salvage Corp., 246 N.J. Super. 79, 100-02 (App. Div. 1991). Accordingly, a statute infringes on the right to contract only when it 1) substantially impairs a contractual relationship; 2) lacks a significant and legitimate public purpose; and 3) is based on unreasonable conditions and is unrelated to appropriate government objectives. State Farm Mutual Auto. Ins. Co. v. State, 124 N.J. 31, 64 (1991) (citation omitted).
Here, by virtue of the Commission's ruling, DiBartolomeo will receive about $200,000 (including the $30,000 in health benefits), instead of the $750,000 payment proposed in the severance agreement. Given this, it may be concluded that the provision "substantially impairs" DiBartolomeo's right to contract. Nonetheless, the Act addresses legitimate and important State interests )) protecting the integrity of the casino industry and fostering public trust in that industry. N.J.S.A. 5:12-1b(6); Bally Mfg. Corp. v. New Jersey Casino Control Comm'n, 85 N.J. 325, appeal dismissed, 454 U.S. 804, 102 S. Ct. 77, 70 L. Ed. 2d 74 (1981). Regulating contracts to which casino licensees are a party is designed to contribute to the public confidence and trust in the efficacy and integrity of the regulatory process. The impairment of DiBartolomeo's contract rights is, in balance, substantially outweighed by the policies underlying the Act.
V.
We turn next to the question of whether the Commission retroactively abrogated DiBartolomeo's vested right to disability benefits. DiBartolomeo argues that because he had been diagnosed as a pathological gambler, and was admittedly disabled and unable to return to work as a result of that disability, he is entitled to disability benefits. Based on the language in his employment agreement that Caesars will provide him with "long term disability . . . retirement plans, . . . and the like, afforded in general to senior officers" of the casino, DiBartolomeo argues that he has a contractual entitlement to disability benefits. The Commission properly denied this claim. It explained:
Petitioners' attempt to characterize these requested payments as 'vested' contractual rights or deferred compensation for services rendered is totally unsupported by the record. On the contrary, the Employment Agreement expressly and unequivocally provides that the payment of a bonus is reserved to the discretion of the employer. Under such circumstances, it cannot reasonably be argued that the payment of a bonus is a vested contractual entitlement. Moreover, Petitioners also initially requested the approval of 'salary continuation payments.' Belatedly, they have relabeled these payments to be 'disability severance payments,' without any supporting documentation. We emphasize that DiBartolomeo's severance from the company was not occasioned by a disability, but rather was the direct result of our revocation action . . . . Benefits which had already accrued, such as salary and health benefits, were paid to DiBartolomeo.
In support of his position that the proposed payments are vested disability benefits, DiBartol
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