Vivian Sanks-King, whom the University of Medicine and Dentistry of New Jersey ousted as general counsel in 2005 to avoid a criminal prosecution, has no viable discrimination claim, a state appeals court says.

Her forced resignation was a condition of a deferred-prosecution agreement with the U.S. Attorney's Office, which amounted to a "legitimate, nondiscriminatory reason," the Appellate Division held Thursday in Sanks-King v. UMDNJ, A-3050-11.

The panel affirmed an Essex County judge's dismissal of her racial and sexual bias claims on summary judgment.

UMDNJ's defense was based on statements made at a meeting on Dec. 22, 2005, two days after then-U.S. Attorney Chris Christie told UMDNJ's board of trustees that the university could either accept the deal or face criminal prosecution for Medicaid double billing.

At the meeting were Christie, acting Gov. Richard Codey, his chief counsel Paul Fader and UMDNJ's outside attorney, Walter Timpone, of McElroy Deutsch Mulvaney & Carpenter.

Christie conditioned the deal on the departure of Sanks-King and three other employees: attorney Andrea Walker-Modu and compliance officers Deirdre Henry-Taylor and Marykate Noonan, according to Fader and Timpone, who said they then relayed it to John Petillo, UMDNJ's president.

Petillo certified they told him that resignation would suffice and had to be accomplished by close of business. He called Sanks-King, who resigned that day as vice president and general counsel, positions she had held since 1993.

The agreement, subsequently approved by the board, said the U.S. Attorney's Office intended to file a criminal complaint against UMDNJ but would recommend that the court defer prosecution for 24 to 36 months. It required UMDNJ to retain an independent monitor to oversee remedial measures — among them, looking for a new general counsel.

Petillo certified he acted solely to avoid criminal charges. Timpone and Fader certified they saw no indication that UMDNJ had any other motivation.

Sanks-King, UMDNJ's first female and black vice president, admitted she had no facts to support age, race or gender bias by Petillo or that anyone at UMDNJ had any reason other than Christie's demand to get rid of her.

She conceded that if Christie had gone forward with charges, UMDNJ would have been financially devastated and forced to close.

Her discrimination claims were predicated on allegedly disparate treatment. She and the three others terminated were women and two besides herself were black. In addition, she did not receive a severance package, even though other terminated senior executives allegedly did, and all of her personal legal expenses were not covered, in contrast to certain white male employees involved in the billing issue who she claimed were fully reimbursed.

A crucial ruling was Superior Court Judge Rachel Davidson's decision to allow Timpone, Fader and Petillo's testimony about Christie's demand, over Sanks-King's hearsay objection.

On Thursday, appeals judges Marie Lihotz and Mitchel Ostrer agreed it was admissible because it was not offered for its truth but to show that the demand was made and induced Petillo to act.

They rejected the added contention that the evidence should have been kept out because it was unverifiable or unreliable and thus its probative value was outweighed by the risk of prejudice.

They found UMDNJ's position that it acted on Christie's demand was bolstered by evidence that Christie criticized Sanks-King at his meeting with the trustees and by the reference in the deferred prosecution agreement to replacing her.

The appeals judges were unpersuaded that "cat's paw" liability — for employment action taken at the behest of someone known to have a discriminatory motive — applied to Sanks-King's claims, because she had no evidence that Christie acted out of bias or that if he did, UMDNJ was aware of it.

Henry-Taylor, who also sued over her termination, used the hearsay argument to convince a different Essex Superior Court judge, Michael Casale, to keep out evidence of Christie's role and deny UMDNJ's request for summary judgment.

In his July 15, 2010, opinion, Casale found that the evidence could only go to Petillo's state of mind if he believed Fader and Timpone and that Petillo could not have acted in good faith by "blindly relying" on their statements.

Casale said there was nothing to show that Fader or Timpone provided Petillo with any legal advice on the consequences of terminating an employee without first doing an internal investigation. If, as Petillo claimed, he did not know Henry-Taylor, it should have been disconcerting to have Christie single her out as one of four employees so involved in the fraud that they had to go. Further, neither the trustees' minutes nor the agreement mentioned the condition.

Henry-Taylor, who had been assigned to a UMDNJ task force looking into the billing improprieties, subsequently settled her whistleblower claim on confidential terms. Her attorney, Charles Sciarra of Sciarra & Catrambone in Clifton, declines to comment.

Westmont solo F. Michael Daily Jr., who represents Sanks-King, says he provided Davidson with a copy of Casale's opinion but she disagreed.

Daily says the decision in Sanks-King's case allows any state agency to immunize itself from a discrimination claim by saying it got a call from someone like the governor saying it had to fire the plaintiff. "How do we prove that conversation didn't take place?" he asks.

Daily notes that Sanks-King was replaced by white men paid considerably more than she. Sanks-King, now an Orange solo, could not be reached.

UMDNJ's lawyer, Agnes Rymer of Saiber in Florham Park, said she would refer a request for comment to Rutgers, which did not respond by press time.

No criminal case was brought against UMDNJ and Sanks-King was never called to testify before a grand jury, questioned by Christie's office or charged with a crime.

In June 2008, Christie informed Sanks-King that she was not a subject or target of investigation. Her lawyer at the time, Paul Fishman, said: "In my judgment she did nothing that was remotely criminal, and the cloud of suspicion that hung over her was unjustified."

Fishman succeeded Christie as U.S. attorney in 2009, the same year Christie was elected governor.