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STERNS,HERBERT ~ WEINROTH A PROFESSIONAL CORPORATION COUNSELLORS AT LAW 132 W(ST STATE STREET JOEL N.ST£RNS TRENTON, NEW JERSEY 08608 I0 NASSAU STR¢ET PRINCETON, N.J. 08540 RICHARD K.WEINROTH {eO9) Jii-IlO0 (~09) 924-1108 HICHAE~ J. HERB£RT FRANK J. PETRINO SUITE eO0 WILLIAM J. BIGHAM IIBO S~ENT£ENTH STREW, N.W. JOHN H.DUMONT (~0~) ~9e-3431 JOHN N. OONNELLY ANN MARIE VAURfO Mr. J.C.B. Ehringhaus, Jr. Senior Vice President & Counsel ° The Tobacco Institute ~ 1776 K Street, N.W. Washington, D.C. 20006 Dear Mr. Ehringhaus: You have asked us to prepare an evaluation of the potential for an appeal from the Public HealthCouncil's restriction on smoking in public places. The following represents our thinking on the preliminary matters to be considered and the likelihood of success on the merits. We have not undertaken an exhaustive examination of the law governing this issue~ nor have we attempted to touch upon each issue raised by the adoption of the smoking regulations. Rather, this letter represents an attempt to raise the major issues that should be considered in deciding whether and how an appeal should be pressed. I. PROCEDURAL CONSIDERATIONS In making the decision on whether to appeal the Public Health Council's rule, the following procedural issues should be considered: RIGHT TO APPEAL N.J R 2:2-3(a) [2) provices for an appeal to the Superior '~ Court, Appellate Division as of right "to review final decisions or o ~ actions of any state administrative agency or officer . . . or to ~ review the validity of any rule promulgated by such agency or ~ officer. " .o~ TIME FOR APPEAL Since adoption of N.J.A.C. 8:15-1.1 et seq. by the Public Health Council wasprimarily an exercise of the agency's quasi-legislative authority, the 45-day time limit for appealing quasi-judicial determina- tions does not appear to be applicable. See Rules Governing the Courts of the State of New Jersey, Comment to.N.J.R. 2:4-i(b) at 247-48 (S. Pressler ed., 1978) "[the 45-day rule] is applic@ble to the ~[~gsi-

STERNS, HERBERT ~ WEINROTH Mr. J. C. B. Ehringhaus, Jr. April 25,, 1979 Page Two judicial actions and decision of state administrative agencies adjudicating the rights of particular individuals . . . but not to the review of the quasi-legislative actions of such agencies in promulgating rules governing future conduct generally." See also Monks v. New Jersey Parole Bd., 58 N.J. 238, 242 (1971). Neverthe- less, it would appear to be the better course to file any appeal within the 45-day period. In this way, an argument over timeliness could be avoided and the parties would be spared the burden of arguing the sometimes fine distinction between ~uasi-judicial and quasi-legislative acts. See e.g., Rutgers Council of the AAUP v. New Jersey Bd. of Hiqher Educ., 126 N.J. Super. 53, 62-65 (App. Div. 1973)• Furthermore, delay in the filing of an appeal would not appear to be to our benefit and might undercutan argument on the reasonableness of the regulations. PARTIES A~llants At this time, it appears that the restaurant association intends to appeal the regulations on its own behalf through independent counsel. That decision leaves the Institute with several options: i) rely upon the restaurant association to process the appeal; 2) assist the restaurant association by providing financial or legal aid; 3) explore with the restaurant association the possibility of the Tobacco Distributo~ joining as a party to the proposed appeal pursuant to N.J.R. 2:3-3; 4) pursue an independent appeal through the New Jerseyins for Free Choice; 5) explore the possibility of supporting an appeal by the Hotel-Motel Association; 6) appeal through the Tobacco Distributors; 7) any combination of the above. As any of the potential appellants would appear to have standing to appeal, see Crescent Park Tenants Ass'n. v. Realty Equities ~orp.., 58 N.J. 98, i00, 107-112 ~1971), the choice of the proper party need not turn on procedural considerations, but rather can be made on the basis of the most effective appellant. For an appeal such as this, the choice does not appear to be critical so long as the court is info~ne~ as to the parties supporting the appeal. Respondents It is suggested that the Public Health Council and its chair- person Jane Robinson and the Department of Health and its Commissioner Dr. Joanne Finley be named as Respondents. Additionally, considera- tion should be given to naming the Department of Community Affairs and its Commissioner Joseph LeFante, since the Public HealthCouncil has noted that it expects Community Affairs to enforce the ventilation section of its regulations. It is possible that Community Affairs may resist the Public Health Council's attempt, to add to its workload and thus add a weight to the argument of the

STERNS, HERBERT ~ WEINROTH Mr. J.C.B. Ehringhaus,'Jr. April 25,'1979 Page Three unenforceability of the regulations.* Intervenors/Amici It should be anticipated that GASP and other interested groups may move to intervene or to participate as amici curiae. II. ISSUES TO BE RAISED ON APPEAL The following outline represents our current thinking on issues that should be raised in any appeal: A. ULTRA VIRES i) Public Health Council lacks authority to adopt regulations under its enabling statute (N.J.S.A. 26:1A-I et seq.) since a sufficient showing that secondary smoke is a health hazard has not been made B. PRE-F~4PTION l) Provisions of new criminal code (N.J.S.A. 2C:33-13 effective 9/1/79) pre-empt the Public Health Council from adopting smgking ban a) Assemblyman Herman supports this view; letter to Oversight Committee b) Legislative Oversight Committee supports this view 2) S.1322, deleting "other lawful authority" from list of authorities that can pass a smoking ban pursuant to N.J.S.A. 2C:33-13 pre-empts P.ublic Health Council from adopting smoking ban -a) deletion of phrase "other lawful authority" is aimed at Public Health Council b) Deputy Attorney General Dygas' 4/9/79 opinion relies in part upon the phrase "other legal .authority" as indicative of the legislature's intent not to pre-empt * It should be noted that N.J.S.A. 26:1A-9 places responsibility for the enforcement of the Sanitary Code on local boards of health, local police and "other enforcement agencies."

STERNS, HERBERT ~:~ WEINROTH Mr. J.C.B. Ehringhaus, Jr. April 25,'1979 Page Four C. UNREASONABLE i) Ventilation requirements are unreasonable a) Reference to present and future BOCA Code unreasonable; should grandfather b) cost/benefit, etc. 2) La~k of standards/definitions a) Oversight Committee noted vague provisions and urged reform--Council generally ignored suggested changes b) "Major structual changes" remains undefined c) Enforcement responsibility unclear ~ 3) .No relationship between health and regulation a) No showing that a health hazard actually exists in restaurants or other public places; Oversight Committee report calls for this b) Hearing Examiner's findings-no health hazard 0 to healthy persons c) Regulation is "nuisance" regulation, not health regulation D. EQUAL PROTECTION i) Exclusion of restaurants with 50 or less Seats 2) Exclusion of others similarly situated such as casinos, bowling alleys, etc. E. PROCEDURAL DEFECTS i) Amendments not republished 2) Refused comment on amendments Iil. LIKELIHOOD OF SUCCESS Rules promulgated by administrative agencies in New Jersey are subject to challenge on various grounds, primarily that they are

5TERNS, HERBERT E:x WEINROTH Mr. J.C.B.. Ehringhaus, Jr. April 25, 1979 Page Five beyond the scope of the agency's statutory authority, or that they are unreasonable, unduly onerous or arbitrary. See e.g. Motyka v. McCorkle, 58 N.J. 165, 178-75 (1971); Consolidation Coal Co. v. Kandle, 105 N.J. Super. 104, 113-15, 118-19 (App. Div.) aff'd. 54 N.J. ii (1969). However, properly promulgated regulations are afforded a presumption of validity and the burden is upon the challenging party to demonstrate the invalidity of the regulation. See e.9. Cooper. River Convalescent Center v. Dougherty, 133 N.J. Super. 226, 232 (App. Div. 1975); In Re Promulgation of Rules of Practice, 132 N.J. Super. 45, 49 (App. Div. 1974), cert. denied, 67 N.J. 95 (1975). As the above demonstrates, any attack upon a properly adopted regulation presents significant difficulties. Essentially, to overcome the presumption of validity, an appellant must present a compellin argument of either lack of jurisdiction or lack of reasonableness. The primary strengths of our case are apparent. The pre-emption argum4nt -finds support in the activity of the Legislative Oversight Committee, Assemblyman Herman's letter to the Committee, the progress of S.1322 and Deputy Attorney General Dygas' apparent reliance on the "other lawful authority" language of N.J.S.A. 2C:33-13(b) as support for the conclusion that the new criminal code is not pre-emptive. See letter from Dorothy Ann Dygas to the Public Health Council, April 9, 1979. The unreasonableness argument finds its strength in the-Council's. refusal to grandfather existing establishments from present and future BOCA requirements, a refusal that appears to be facially unreasonable. This element i's, however, significantly tempered by the exemption for major structual changes. The cost/benefit factor should also carry some weight with the court when testing for reasonableness. Balanced against these factors is the impact of Judge Goldmann's finding that "the hearing developed at least a foundation for concluding that exposure to secondary tobacco smoke can be unpleasant and a discomfort to a majority of nonsmokers, and even more distressing to those in the general population who are genuinely sensitive to the smoke (certainly those who suffer from respiratory and vascular diseases)", and his ultimate conclusion that the Council has the authority to adopt the regulation. Hearer's Report and Recommendation at 18-19 (January 26, 1979). These conclusions reached by a retired Presiding Judge of the Appellate Division serving as hearing examiner in two extensive hearings will no doubt be quite persuasive. These findings, coupled with the aforementioned presumption and burden would appear to reduce the chances of success on the merits to less than even. "

STERNS, HERBERT ~ WEINROTH Mr. J.C.BI Ehringhaus, Jr. .April 25, 1979 ..Page Six If you have any further questions, or if we may be of any additional assistance, please do not hesitate.to contact me. - Sincerely, " JMD.:jc cc: Michael Kerrigan James Hedden Rick Scanlon Stanley L. Temko, Esquire David Shin/%, Esquire