police-car Photo: Shutterstock.com)

If a NYPD police officer commits an act of misconduct so aggravated that the jury awards punitive damages, by law the punitive damages run against the officer personally rather than against the City. City of Newport v. Fact Concerts, 453 U.S. 247 (1981). However, it is by now well established that the NYC Law Department authorizes indemnification for punitive damages in all cases in which it represents the police officer. Officers who have behaved so badly that a jury awards punitive damages do not have to pay a penny out of their own pockets. The person who is supposed to be punished by punitive damages is not punished. The only people punished are the taxpayers who must foot the bill.

Most civil rights cases do not go to trial, but in settlement negotiations the City’s Law Department and the Comptroller’s Office (which must approve all settlements, City Charter §394(c)), necessarily take into account the City’s potential punitive damages exposure. The prospect of the officer’s aggravated misconduct costing the City large punitive damages awards is still an important factor in settlement negotiations. Again, when such settlements are reached the officers do not have to pay a penny out of their own pockets.

Worse yet, such officers are virtually never disciplined by the NYPD. They avoid not only any payment for the consequences of the lawsuit, but also any fines, any suspension without pay, and any loss of wages or vacation days.

Law Department Policy

In 1992, while I was serving on the Law Department’s Executive Staff, I was asked by a Tort Division supervisor to authorize indemnification of $100,000 in punitive damages awarded against a police officer by a Bronx Supreme Court jury. Hess v. The City of New York, 186 A.D.2d 398 (1st Dept. 1992). I was told that this was a routine formality—that although the relevant statute provides that the duty to indemnify “shall not arise” where there was “intentional wrongdoing or recklessness” (General Municipal Law §50-k (3)), in reality someone on the Executive Staff always authorizes indemnification of punitive damages, i.e., that the words “shall not arise” do not constitute an absolute prohibition, that the Law Department has discretion to authorize indemnification of punitive damages against police officers and invariably exercises that discretion in favor of indemnification. I authorized indemnification.

Two years later the issue of routine indemnification of punitive damages awards was brought under scrutiny by one of my Executive Staff colleagues who supervised the entire Tort Division, Chief Litigating Assistant Lawrence Kahn. He had reviewed a particularly aggravated case of police brutality that had resulted in an award of $1 million in punitive damages—$200,000 against each of five police officers. Papa & Rampersant, 194 A.D.2d 527 (2d Dept. 1993), leave to appeal denied, 82 N.Y.2d 918 (1994). Kahn reviewed the record, concluded that the jury’s verdict was justified, and recommended that the Corporation Counsel deny indemnification. The two badly injured plaintiffs would have collected less money, but they had already received very substantial sums in compensatory damages.

Underlying Kahn’s recommendation was a Law Department policy, dating back to at least 1985, that in a police misconduct case the Law Department’s principal obligation is to the City rather than the individual officers. That year Corporation Counsel Frederick A.O. Schwartz Jr. had commissioned a study of the subject by former NYS Chief Judge Charles Breitel. Judge Breitel found no ethical problem in taking sides against a rogue officer—e.g., reporting the officer’s misconduct and any incriminating statements of the officer that had come to light during the Law Department’s representation of the officer—because all officers represented by the Law Department waive confidentiality in return for free representation.

In the Papa and Rampersant cases Corporation Counsel Paul Crotty rejected Kahn’s recommendation and opined in writing that once the Law Department has represented an officer at trial and on appeal it has an obligation to exercise its discretion in favor of indemnification.

That remains the City’s policy to this day. The taxpayers pay. The Law Department stands by the officers who it represented, right or wrong.

Hiding the Policy

I left the Law Department in 1996 and entered private practice, representing both commercial and civil rights clients. In one of my first trials the jury awarded $1,500 in punitive damages against a police officer who had used excessive force against two men during a dispute over an alleged parking violation. Austin/Stass, 98 CV 349 (WHP) (1999). The City indemnified the officer and took no disciplinary action against him. (The Austin/Stass case had also cost the City $19,500 in compensatory damages and another $90,000 in attorney fees. Needless to say, none of that came out of the officer’s pocket either.)

Shortly thereafter I tried a false arrest case against officers assigned to a 2003 anti-war demonstration. Scherer v. City of New York, 03 CV 8445 (RWS) and Linardakis v. The City of New York, 04 CV 2713 (RWS). Judge Sweet initially granted plaintiffs’ request to charge the jury that the City has the authority to indemnify officers for punitive damages awards. But then a senior Special Federal Litigation Division supervisor argued at a charging conference that the City “is never liable for punitive damages,” citing General Municipal Law §50-k (3). She requested an instruction that if punitive damages were awarded the jury must take into account the officer’s ability to pay those damages. Judge Sweet reversed himself and included that instruction to the jury. The jury ultimately awarded punitive damages, but only in the sum of $1,000—a sum that the City promptly indemnified.

In my next SDNY case in which punitive damages would be an issue, Gyasi v. The City of New York, 05 CV 9453 (SAS), I asked Judge Scheindlin to allow discovery on the subject—pointing out that a charging conference at trial was way too late in the proceedings to address the issue, and that even charging the jury that punitives run only against the officer and not the City, while technically true, would be grossly misleading. The City objected vehemently, but Judge Scheindlin agreed and stated on the record:

If in fact discovery were to show that 99 out of 100 times when there has been a punitive damage award, in reality, the city has always indemnified, then that’s the reality. That’s the reality, and I am not charging something that’s not true … . I will not mischarge the jury.

Transcript of proceedings of June 29, 2006 in Gyasi, pp. 5-6.

The City’s Gyasi interrogatory response revealed that in every case during the preceding 10 years in which the City had represented a NYPD police officer and punitive damages had been assessed, the City had in fact indemnified the officer. Many of the indemnifications were for very large awards, such as in Papa/Rampersant and Hart. Several more recent ones in the Southern District were relatively small, suggesting that in those cases the jurors had been misled to believe that the officers would have to pay themselves.

In one case the court had required affidavits detailing the defendants’ “individual incomes, assets and liabilities.” Gonzalez v. Bratton, 147 F. Supp. 2d 180, 209 n.4 (SDNY 2001) (97 CV 2264) (VM). It did so because the City’s lawyers had expressly “represented to the Court [that] the City of New York does not authorize indemnification” for punitive damages. Id. at 210. Yet the Gyasi interrogatory responses confessed that, even there—in direct contradiction of the representation of the City’s lawyers to Judge Marrero—the City had in fact indemnified the punitive damages awarded against three different officers for a total of $110,000.

In Gyasi the City faced significant punitive damages, since the officers had arrested my client for forgery simply because he had presented a photocopy of the certificate of title for his newly-purchased vehicle rather than the original, which he had left at home for safekeeping. Gyasi had been arrested only a few blocks from his Bronx home, but the officers had refused to accompany him there to view the original. He was forced to spend a night in jail and make another trip to court before the ridiculous forgery charge was dismissed. Rather than proceeding to a trial and facing punitive damages exposure, the City settled the case for $80,000.

However, the officers who had arrested Gyasi did not have to pay a penny, and they were never disciplined over making such a nonsensical arrest.

In my first false arrest/malicious prosecution case to come before Judge Scheindlin after Gyasi in which the City had punitive damages exposure, the City settled for $180,000 in August 2009. Gordon v. The City of New York, 08 CV 8354 (SAS) (DF). The plaintiff in Gordon had been illegally arrested and charged with misdemeanor assault upon her landlord when in fact she was severely incapacitated and physically incapable of assaulting anybody, and there was evidence that the arresting detective had a close relationship with the landlord’s company. The City settled for $180,000.

Nonetheless, the detective who wrongfully arrested the disabled Alice Gordon and cost the City $180,000 was never disciplined for his misbehavior.

The following year the Second Circuit held that in any false arrest and malicious prosecution case the plaintiff is entitled to a punitive damages instruction to the jury. Cameron v. City of New York, 598 F.3d 50, 69 (2d Cir. 2010). In Cameron the Court of Appeals reversed due to the refusal of Judge Crotty—the former Corporation Counsel responsible for indemnification in Pappa & Rampersant—to provide a punitive damages instruction to the jury. The court explicitly held that lack of probable cause to arrest and prosecute gives rise to an inference of malice. On remand the jury awarded $80,000 in punitive damages—and the City indemnified.

Shortly thereafter UCLA Law Professor Johanna Schwartz began a survey of indemnification practices of all jurisdictions, including indemnification of punitive damages. She discovered numerous more recent indemnifications of punitive damages awards against NYPD officers, including one for $2.7 million in state court (Ferguson) and another for $75,000 in a Southern District federal civil rights case affirmed by the Second Circuit (Manganiello). Police Indemnification, 89 N.Y.U. Law Rev. 885, 983 (Appendix I) (2014)). The article leaves no doubt that the City has an ironclad policy of indemnifying all punitive damages judgments against all NYPD officers it has represented at trial. Professor Schwartz also discovered that in post-trial settlements the City sometimes even indemnifies officers it did not represent at trial.

Other Solutions

The notion that miscreant police officers should face severe economic penalties is not limited to making them pay punitive damages. Forty-five years ago the Knapp Commission recommended increasing NYPD disciplinary penalties to include suspension without pay for a year and monetary fines of up to $25,000. The Knapp Commission Report stated (p. 219) that the absence of sufficiently strong disciplinary penalties was “the most troublesome issue in the disciplining of policemen.” In 1994 the Mollen Commission Report (pp. 143-44) advocated the same reform. That year Mayor Giuliani had a bill introduced in the City Council to implement the measure. (It requires only amendment of NYC Administrative Code §14-115; no state legislation is necessary.) In 1996 Mayor Giuliani’s Commission to Combat Police Corruption again recommended it. Yet for 45 years City Council leaders have been afraid to enact it, fearing the wrath of the police unions. At present if an officer is not terminated the most severe penalty is suspension without pay for 30 days and one year of dismissal probation. The police unions are happy to keep it that way.

Conclusion

Two things should be clear from this history:

(1) Any officer who is sued and represented by the NYC Law Department need not fear having to pay a punitive damages judgment, or a settlement the size of which is influenced by punitive damages exposure, out of his or her own pocket.

(2) In addition to being indemnified, the officer need not fear any NYPD departmental discipline. The NYPD does not discipline officers who cost the City large sums in punitive damages judgments or settlements influenced by punitive damages exposure. In the rare case where disciplinary proceedings occur, the officer typically will lose no more than a few vacation days and may have to make a small contribution to the City’s payment.

Recently the NYS Court of Appeals upheld a decision by Nassau County denying indemnification in a particularly pernicious incident of police misconduct. Matter of Lemma, 31 N.Y.3d 523 (2018). It would be refreshing if New York City were to follow Nassau County’s lead.

How can the NYPD turn its back on incidents so horrible that a jury awards punitive damages, taking no action whatsoever against the officers? The officers suffer no consequences and are free to repeat their misconduct against others in the future

Many of my colleagues in civil rights litigation generally like the City’s policy of indemnifying punitive damages, because the City’s potential punitive damages exposure promotes larger settlements and hence larger fees. But I for one would gladly forgo such riches in return for a system in which bad officers are severely punished monetarily by non-indemnification of punitive damages.

The punishment of punitive damages should fall squarely upon the individuals who are supposed to be punished. Yet in New York City it doesn’t. The rogue officer is left unscathed. Only the taxpayers are punished.

Joel Berger, of counsel to Sonnenfeld & Richman, is a veteran civil rights attorney. Prior to entering private practice, he served on the Executive Staff of the New York City Law Department (the Office of the Corporation Counsel).