206 A.3d 375
N.J.2019Background
- The New Jersey Check Cashers Regulatory Act bars new check-cashing licenses within 2,500 feet of existing licensed locations but grandfathered businesses in operation when the Act passed may remain despite that restriction.
- A 1998 amendment (N.J.S.A. 17:15A-32.1) allows a person "conducting business as a check casher" who holds a continued license and is not subject to Commissioner action to sell the assets of the check-cashing business, and permits purchasers to continue at the same licensed location.
- Domenick Pucillo owned three check-cashing businesses (Rapid in Irvington; two Tri-State locations). He ceased operations at Rapid on Oct. 21, 2014, was arrested, and later sold the businesses’ assets in March 2015 to New Loan Co. Wm. S. Rich & Sons, Inc.
- New Loan applied for licenses; DOBI granted them. Garden State, which operates a location within 2,500 feet of Rapid, objected arguing Pucillo was not "conducting business as a check casher" at the time of sale, so the grandfathered exemption should not transfer.
- The Appellate Division reversed DOBI for the Irvington license, holding the seller was not conducting business at sale and thus could not transfer grandfathered status. The Supreme Court granted certification, reversed the Appellate Division, and reinstated DOBI’s license grant.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether "a person who is conducting business as a check casher" requires active, continuous operation at time of asset sale | Garden State: Seller must be actively conducting business when assets sold; absent that, grandfathered status cannot transfer | DOBI/New Loan: Phrase means a person holding a valid, continued license and not subject to Commissioner action; no separate operational requirement | Court: No operational/continuous-activity requirement; seller need only hold a valid license and not be subject to Commissioner action; asset sale valid and grandfathering transfers |
| Whether DOBI’s interpretation of the Amendment is entitled to deference | Garden State: Agency misread plain statutory language; should enforce active-operation requirement | DOBI/New Loan: Agency’s interpretation is reasonable and protects investment-backed expectations; deference appropriate | Court: Affords deference to DOBI’s interpretive reading but reviews statute de novo; upholds DOBI as reasonable interpretation |
| Whether non-revocation for 180-day inactivity affects transferability | Garden State: Inactivity should negate transfer even absent formal revocation | DOBI/New Loan: Commissioner’s failure to revoke indicates seller retained license rights to sell | Court: The statute allows revocation after 180 days but absence of revocation means seller may transfer; inactivity alone (without revocation) does not bar sale |
| Practical effects of construing grandfathering to run with location vs. individual | Garden State: Not emphasized | DOBI/New Loan: Running with location protects value and avoid absurd results from temporary cessations | Court: Adopts location-based approach to avoid absurd outcomes and protect saleability |
Key Cases Cited
- Hargrove v. Sleepy’s, LLC, 220 N.J. 289 (2015) (courts defer to agency interpretations within its authority but review legal questions de novo)
- DiProspero v. Penn, 183 N.J. 477 (2005) (statutory interpretation focuses on legislative intent and plain meaning)
- Roman Check Cashing, Inc. v. DOBI, 169 N.J. 105 (2001) (upholding constitutionality of the Act’s distance requirement)
- State v. Harper, 229 N.J. 228 (2017) (statutes should not be construed to yield absurd results)
- State v. Provenzano, 34 N.J. 318 (1961) (avoidance of absurd statutory interpretations)