In a term punctuated by cases where citizens challenged various aspects of governmental actions, the Supreme Court vindicated citizens’ rights and curtailed government control. From the right to the sanctity of the polling places to the right to speak out at a public meeting, from the right to review confidential governmental settlements of litigation to the right to challenge local legislation through referendum, from the right to challenge governmental takings years after the governmental action had been initiated to preventing the abuse of expenditures from campaign funds, the Supreme Court sided unanimously with the citizens’ position. Finally, in keeping with the Court’s general relaxation of conflicts of interests for attorneys undertaking public sector work, the Court allowed an attorney to represent private taxpayers in tax appeals against a former public sector client.
Citizens 6: Government 0
At the beginning of the 2010 term, in In re: Attorney General’s “Directive on Exit Polling: Media and Non-Partisan Public Interest Groups ,” 200 N.J. 283 (2009), the Supreme Court interpreted New Jersey election laws to bar exit polling, the dissemination of voting rights materials, and other expressive activities within 100 feet of a polling site. The regulation of these activities emerged from a series of Attorney General directives. First, in 1972, the Attorney General advised county election officials that so-called “exit polling” within 100 feet of a polling place was prohibited as a violation of New Jersey’s election laws. In 2006, the Attorney General reversed direction and initially circulated a “draft” directive that permitted exit polling and distribution of voting rights cards within 100 feet outside the entrance to a polling place. The Attorney General sought comments on that draft directive and as a result of those comments, in 2007 issued a revised directive which, while continuing to permit exit polling by both media and nonpartisan entities within 100 feet of a polling place, required that representatives of the media or public interest groups submit a letter to the Board of Elections at least two weeks prior to the election, identifying the polling place where the exit polling was going to be conducted. The county Board of Elections would then provide an authorization letter to the requesting entities. The final 2007 directive, however, prohibited the distribution of materials to voters within that 100-foot zone.
The ACLU sought clarification of the 2007 Directive on such matters as to whether exit polling could include questions about voters’ experience at the polls, whether voting rights cards could be distributed and whether leaflets for events that were not clearly electioneering could take place within the 100-foot zone. The Attorney General clarified that while questions could be raised to the voters regarding their voting experience, the distribution of pamphlets, even those that set forth the rights of voters, would not be permitted. Dissatisfied with the limitations, the American Civil Liberties Union (“ACLU”) filed a Notice of Appeal to the Appellate Division. The Appellate Division sustained the Attorney General’s 2007 Directive. The ACLU’s petition for certification was granted by the Court.
Initially, the ACLU claimed that the 2007 Directive constituted a prior restraint in violation of the First Amendment because of the two weeks’ advance notice requirement, arguing that even this minor ministerial action substantially and impermissibly burdened expression. Furthermore, they contended that once the Attorney General “carved out” a constitutional exception from the statute’s absolute ban on expressive activity, it converted the statute from a content neutral statute into a content based one that now required a further constitutional exception to allow for the distribution of voter rights cards within the prohibited area. Unfortunately, the ACLU failed to consider the downside of their position, i.e., that the exception carved out by the Attorney General could be incorrect and therefore that the prohibition on any activity within the 100-foot area should be strictly enforced. Indeed, when the matter came before the Supreme Court, it framed the issue before them from that different perspective:
In our view, the true issue is whether all expressive activities — electioneering and non-electioneering — are banned within 100 feet of a polling place under New Jersey’s election laws and, if so, whether such a ban, as it applies to exit polling and the distribution of voting-rights cards, conforms to the First Amendment of the United States Constitution.
Thus, the Supreme Court did not focus on the complained of ministerial act of providing the County Board of Elections with advance notification and receiving an authorization, but instead questioned whether the statute should be strictly enforced on its face, i.e., prohibiting any form of such activity within 100 feet of a polling area. While the ACLU ignored the potential downside of its position, the attorney general attempted to walk the fine line that she created, a position that perhaps is the least persuasive. With regard to the prenotification, she argued that the purpose was “‘not to exclude communication of a particular content, but to coordinate multiple uses of limited space, to assure preservation of [forum] facilities, [and] prevent uses that are . . . unlawful, or impermissible.’” As to the allowance of exit polling within that sacred area, the attorney general argued that the same does not transform the regulation into a content-based discriminatory one. The line proved too fine for the Supreme Court to walk with the attorney general.
Justice Albin, writing for a unanimous Supreme Court, conducted an exhaustive analysis of the three sections of the statutory scheme implicated by these issues, N.J.S.A. 19:34-6, -7 and -15. Applying traditional statutory construction and reviewing the history of those laws, he found that their purpose and intent was “. . . to make the prohibitions on expressive activity within the 100-foot zone all encompassing.”
The central objective of the statutes protecting the area around a polling site is to secure the franchise, to ensure that every citizen is encouraged to cast a vote on Election Day . . . [and] to ensure a minimum level of order and decorum and to reduce the potential for fraud, coercion, and confusion outside polling precincts on Election Day. . . [in order to maintain] the integrity of the electoral process
The Court then divined the Legislature’s intention with regard to the statutory election scheme:
the Legislature intended that voters would have a 100-foot free unobstructed passage to the polling place, without interference from any person, whether that person is conducting an exit polling or handing out voter rights cards. The ban applies to all expressive activities within that zone, however seemingly laudable or ignoble.
Justice Albin continued:
By the broad language of our election laws, the Legislature did not intend that, in the last 100 feet leading to the polling place, a voter would have to run, or walk, a gauntlet of hawkers, hustlers, and protesters, or even pollsters shooting questions and voting-rights advocates handing out cards…..We thus conclude that N.J.S.A. 19:34-6, 07, and -15 bar both exit polling and the handing out of voting-rights cards within 100 feet of a polling site.
The Court then turned its attention to the question of whether those statutes conflict with First Amendment rights guaranteed under the United States Constitution. Finding the statutes to be content neutral, the Court articulated a three-step test to gauge the constitutionality of this complete ban on expressive activity within 100 feet of a polling site on Election Day, examining whether such activity: (1) is “justified without reference to the content of the regulated speech,” (2) is “narrowly tailored to serve a significant governmental interest,” and (3) “leave[s] open ample alternative channels for communication of the information.”
First, the Court found that New Jersey election laws as above referenced are completely content neutral, proscribing all expressive speech. Second, the Court found that the election laws in question were indeed narrowly tailored to serve the governmental interest of promoting the constitutional right to vote and ensuring “. . . the reliability and integrity of the electoral process by establishing a limited obstacle-free zone for all citizens casting their votes.” Finally, the Court found that there were sufficient alternate channels for communication of the information attempting to be elicited from the voters through exit polling or providing voters with their rights. Obviously, pollsters and voting rights advocates could take such actions at a distance beyond 100 feet from the outside entrance of the polling place. Acknowledging that such pollsters and voting rights advocates “. . . might have to work harder to achieve their ends,” the Court found that such difficulty was not insurmountable. Drawing from the United States Supreme Court seminal decision in Burson v. Freeman, 504 U.S. at 193, 112 S.Ct at 1848, 119 L.Ed. 2d at 11 (1966), this Court found that the New Jersey statutory scheme was a reasonable regulation of the conduct in and around the polling place in order to maintain peace, order and decorum. The New Jersey Supreme Court rejected the Attorney General’s position that certain activity was permitted in order to maintain the constitutionality of New Jersey’s absolute ban on activity within the 100-foot zone:
We do not agree with the Attorney General’s position that the Constitution confers on exit polling some exalted status that sets it apart from all other forms of expressive activity. Although exit polling is accorded constitutional protection as an expressive activity and plays an important role in providing societal and demographic information to the public, it is not entitled to preferential treatment under the First Amendment.
Indeed, Justice Albin observed the law of unintended consequences at work: “The inexorable logic of the argument of the ACLU and Public Advocate leads to the substitution of the 100-foot zone for a no-man’s land of pollsters, protesters, and peddlers on Election Day.”
The Supreme Court found that this conundrum created by a selective analysis could be resolved with a simple solution: “exit polling, the dissemination of voting-rights materials, and other expressive activities are forbidden in the 100-foot zone. The last 100 feet leading to a polling place belong to the voters on Election Day.”
Ironically, rather than relaxing the requirements for limited activity within the sacred zone, the ACLU and Public Advocate lost the right to conduct that limited activity. Defeat snatched from the jaws of victory.
While the Supreme Court found that voters should not be harassed in any way in a polling place, it found that those public officials holding elective office did not enjoy that same protective veil at a public meeting. In Besler v. Board of Education of West Windsor-Plainsboro Regional School District, et al., 201 N.J. 544 (2010), the Supreme Court found that a parent’s right of free speech was violated when he was gaveled down at the public portion of a school board meeting. However, the Supreme Court found that in order to be entitled to compensatory damages, the plaintiff must have suffered actual injury and, finding that the award appeared excessive, the Court remanded the matter to the trial court for a remittitur hearing with regard to the $100,000.00 awarded to the plaintiff.
The case involves the clash of a concerned parent with a school board that had previously listened to the parent almost a dozen times dealing with the same topic. It illustrates the need of a public body to display infinite patience and to make decisions which are clearly content neutral in terms of controlling the public during the course of a public meeting.
In the spring of 1996, plaintiff Philip A. Besler began attending meetings of the school board as a concerned citizen and speaking about holding coaches accountable for inappropriate and unsportsmanlike conduct. The activities that concerned the plaintiff involved his daughter, Jennifer, then a senior in high school and a member of the girls’ varsity basketball team. She claimed that her basketball coach verbally abused her and other team members and that she was singled out for particularly harsh treatment which took a physical and emotional toll on her, causing an eating disorder and a condition known as amenorrhea, a disruption of her menstrual cycle.
Plaintiff’s crusade ran from April 1996 through January 1997. At the January 28, 1997, meeting at which at least 100 people were in attendance, the public comment period of the meeting began with a statement by the school board’s president, Dr. Lester Bynum, that the public comment period would last no longer than 30 minutes and that no speaker would have more than 5 minutes of comment time. The first member of the public spoke for approximately 7.5 minutes and then, when plaintiff was recognized, the board president, anticipating the subject matter that plaintiff was likely to discuss, admonished the public that the meeting was not intended for personnel discussions on individuals or insinuations about staff behavior or staff performance. After plaintiff gave his name and address and after having spoken for no more than 30 seconds, the board president gaveled him down and advised him that the board would accept his written comments, but it was not going to entertain any verbal comments relating to that subject matter. A year later, in January 1998, plaintiff, his wife and his daughter filed a 12-count complaint naming the board, the girl’s high school basketball coach, the district superintendent, the high school principal and others as defendants. Only one of the 12 counts dealt with plaintiff’s federal civil rights, claiming a violation of 42 U.S.C.A. Section 1983, alleging that the board violated his First Amendment free speech rights. The remaining 11 counts addressed Jennifer’s claim. After a lengthy jury trial, Jennifer was awarded $3.0 million, but the same was reduced by 51 percent due to Jennifer’s failure to mitigate her damages. The jury entered a verdict against the board of education on plaintiff’s count alleging a First Amendment violation and awarded him $100,000 in damages for pain and suffering. The trial judge granted defendant’s motion for a directed verdict on all of Jennifer’s claims and dismissed those counts, but denied a motion for judgment notwithstanding the verdict and a new trial with regard to the plaintiff’s First Amendment claims. The Appellate Division affirmed the dismissal of Jennifer’s claims and the award to plaintiff.
The Supreme Court addressed four issues raised by the board’s cross-petition for certification. The first two related to whether under the United States Supreme Court case, Monell v. Department of Social Services , 436 U.S. 658, 98 S. Ct. 2018, 56 L. Ed. 2d 611 (1978), liability of the board could be derived from the isolated act of one of its board members, an issue that was not directly addressed at the trial. In fact, the Supreme Court pointed out that the parties apparently accepted that the actions of the president of the school board were sufficient to bind the board for liability purposes under Section 1983, perhaps under the theory that the actions of a final policy maker may bind a public entity for a constitutional infringement under the United States Supreme Court case, Penbaur v. City of Cincinnati, 475 U.S. 469, 480; 106 S. Ct. 1292, 1298; 89 L. Ed. 2d 452, 463 (1986). Despite the fact that the board may have waived any right to challenge the verdict on that basis, the New Jersey Supreme Court decided to address the merits of the claim. Justice Albin, writing for the majority, reminded us that in Monell, a public entity is not vicariously liable for the conduct of one of its agents or employees solely through the doctrine of respondeat superior. Instead, only if the government’s authorized decision makers embark upon a particular cause of action that ultimately violates one’s civil rights can that action be considered an official governmental act. As set forth in Stomel v. City of Camden , 192 N.J. 137, 146, a municipality can be held liable for the acts of an official who is “responsible for establishing final government policy respecting [the questioned] activity.” The Supreme Court framed this issue as” whether the Board’s practice, custom, or policy, or the action of its final policymaker, is the moving force that causes a violation of a constitutional right.”
In analyzing whether the actions in gaveling down the plaintiff was the board’s practice, custom or policy or the action of its final policymaker, Justice Albin found telling that not only did both parties and the lower court apparently consider the school board president as being the final policymaker when presiding over board proceedings, he noted that none of the remaining board members questioned Dr. Bynum’s decision and therefore by their silence ratified the same, effectively acquiescing in the proposition that his decision was one made by a person with “final policymaking authority.” Accordingly, the Court found first that Dr. Bynum was the final policymaker for the board of education and, second that his actions could indeed be imputed to the board.
The third issue examined by the Court was whether plaintiff presented sufficient evidence to support a violation of his right of free speech under the First Amendment. In examining that issue, the question became whether the school board president’s motives in terminating plaintiff’s right to address the board was content based or content neutral. After establishing the important rights protected by the First Amendment and the heightened protection given to speech in public forums, Justice Albin acknowledged that:
the right to free speech is not absolute and is subject to reasonable limitations. A governmental entity may impose reasonable time, place, and manner restrictions on speech in a public forum so long as ‘the restrictions are justified without reference to the content of the regulated speech, that they are narrowly tailored to serve a significant governmental interest, and that they leave open ample alternative channels for communication of the information.
Furthermore, the Court found that a public body may stop a speaker who is disruptive or fails to keep the subject matter on the agenda. A public body can also stop a speaker whose speech becomes irrelevant or repetitious. In applying those principles to the jury verdict that plaintiff’s First Amendment rights were violated, the Supreme Court noted that the standard for addressing the judgment notwithstanding the verdict under R. 4:40-2 was applicable. Thus, the Court had to accept as true all the evidence supporting the position of the party defending against the motion and had to accord that party all of the benefit of the legitimate inferences that could be deduced from the evidence presented. Here, the Court found that the jury heard both sides of the story, and was properly charged on the law. Viewing the evidence in the light most favorable to the plaintiff, the Supreme Court found that the school board president gaveled down the plaintiff at the meeting “. . . because he was attempting to expose the hypocrisy between words and reality, between the Board’s strategic plan, which did ‘not tolerate behavior which diminishes the dignity, self-worth, or safety of any individual,’ and the Board’s condoning foul-mouthed, abusive coaches who belittled and demeaned student-athletes.”
The Supreme Court held that the jury was permitted to find that plaintiff, even if going over similar grounds, was touching on a new subject — the strategic plan — and that the board was merely attempting to avoid the airing of a topic it did not want to be aired in a room filled with 100 people. In a most direct and candid manner, Justice Albin recognized the frustration of a public body when hearing the same criticism repeatedly, but found that such frustration did not justify the abridgement of one’s free speech rights:
Clearly, Besler was not a cheerleader of the Board; he was a critic of its policies and actions. Dr. Bynum and other board members may have considered Besler’s remarks grating and tiresome, but the public comment period was a time for citizens, including Besler, ‘to make known their opinions to their representatives, and to petition for redress of grievances.’ For public officials, particularly those who may be subject to ‘vehement, caustic, and sometimes unpleasantly sharp attacks,’ (citations omitted) free speech is not for the fainthearted. Such officials must be thick-skinned enough to tolerate the uninhibited and robust debate on public issues that the First Amendment demands.
In reviewing the evidence, the Court held that the jury could have found that Dr. Bynum’s motivation in gaveling down plaintiff was not content-neutral and did not relate to the conduct and orderly and efficient meeting. The Court was not prepared to overturn a jury verdict that could be sustained based upon the evidence submitted and accordingly found that the trial court did not improperly deny the board’s motion for judgment notwithstanding the verdict.
The fourth and final issue addressed by the Supreme Court was whether the evidence supported the jury’s award of the $100,000 for plaintiff’s pain and suffering. The Court noted that one must suffer actual injury before recovering compensatory damages for a constitutional violation. After reviewing the standards to be applied in remittitur jurisprudence, the Supreme Court examined the facts before it to determine whether the evidence supported the jury’s award of $100,000 for plaintiff’s pain and suffering. Noting that the vast majority of the more than 55 witnesses at the three-month-long trial spoke almost exclusively about Jennifer’s case, including the “intemperate behavior” of the coach and Jennifer’s eating disorder and temporary loss of her menstrual cycle, the Court looked to the evidence of plaintiff Besler’s damages. The Court stated: “The jury awarded Besler $100,000 in pain-and-suffering damages based on testimony that, after he was gaveled down at the January 28 Board meeting, he was ‘completely embarrassed,’ ‘shocked,’ ‘bewildered,’ ‘sick to [his] stomach,’ and felt like a leper. That was largely the testimony describing the injury Besler suffered as a result of the violation of his First Amendment rights.”
The Supreme Court then synthesized the holdings of various cases dealing with this type of damage:
We discern from these cases that compensatory damages for emotional distress, in the amount awarded here, must be based on more than de minimis mental anguish, or fleeting embarrassment, or mere shock and bewilderment. Clearly, Besler was deeply upset and humiliated because he was not accorded the right to complete his statement to the Board. We also recognize that some jurisdictions may pay less deference than we do to a jury’s damages award. Nevertheless, viewing the record in the light most favorable to Besler, we conclude that the $100,000 damages award is so clearly excessive that it constitutes ‘a miscarriage of justice. We are convinced that the evidential spillover from Jennifer’s case infected the jury’s consideration of damages.
The Court therefore remanded the matter to the trial court for a remittitur of the damages award. In an unusual dissent that was actually longer than the majority opinion, Justice Rivera-Soto, joined by Justice Hoens, found that although the board President’s actions represented those of a final policymaker and therefore could be imputed to the board, that there was insufficient credible evidence in the record to sustain the verdict in plaintiff’s favor with regard to damages:
At its core, Besler and, by accepting his claim, the majority confuse the fundamental difference between liberty and license. Although our constitutional provisions safeguard our citizens’ liberty to speak freely, that does not mean that citizens have the license to speak as, when and where they choose. The exercise of a right carries with it the obligation to exercise it responsibly. And the prohibitions against curtailing freedom of speech cannot be so trivialized to protect every single expression in a one-man personal vendetta. Confronted with Besler, who continually sought to impose his personal animosities and acrimonious views on the Board — and its countervailing obligations to the public, the Board was placed squarely in a quandary: whether to allow Besler selfishly to impose his personal agenda — time and again — on all others, those who both attend and staff those evening meetings. That is a Hobson’s choice, no choice at all; ‘for the presiding officer of a public meeting to allow a speaker to try to hijack the proceedings, or to filibuster them, would impinge on the First Amendment rights of other would-be participants.
Justice Rivera-Soto went on to find that there was clearly insufficient competent proof of injury: “Assuming Besler somehow were to vault the proof obstacles that lie in the way to fixing liability on the Board, his proofs of damages were so insignificant as to be no proof at all. Therefore, even if one were to conclude that Besler has presented a cognizable and actional violation of his constitutional right to free speech, his failure to present competent proof of injury dooms his cause of action.”
Without missing a beat, Justice Rivera-Soto opined:”Lacking evidence of anything other than an uncorroborated belly-ache or that he sustained an actual injury as a result of the alleged deprivation of his constitutional rights on January 28, 1997, Besler’s damages claim must fail in its entirety.”
While in the end it may well be found that the plaintiff did not suffer significant compensatory damages and therefore that the award was in fact excessive, the fact remains that this litigation took over 10 years to wind its way to the courts, costing the public body likely hundreds of thousands of dollars in legal fees, all of which could have been avoided by simply allowing plaintiff to voice his opinions at the public portion of the meeting. The fact that some persons were allowed to speak several minutes beyond the time limit established and Besler was gaveled down within 30 seconds, is the type of action that, no matter how explained, raises suspicious motives. Public bodies are routinely subjected to unfavorable and at times outrageous comments regarding their actions or policies and procedures. As Justice Albohn observed, public service today is not for the faint hearted and elected officials must have a thick skin to take the unflattering and sometimes vociferous criticism of its actions or policies. While that does not mean that individuals should be permitted to hijack a meeting or deviate from the agenda, it does mean that an incredible amount of tolerance must be shown to members of the public who want to voice their opinion, particularly if those opinions challenge the position of the public body or certain of its members. The history of this country redounds with acts of civil disobedience and harsh and critical comments made about government. While no one enjoys being the focus of such comments, in the end, it is the price that elected officials pay for the privilege of serving the public. The public is not only those who agree with the actions taken, but, perhaps even more important, those who disagree with the actions taken. Complete tolerance of opposing views must be the cornerstone of governmental operations.
The validity of the common practice of entering into confidential settlements by governmental entities, particularly with regard to employment claims was squarely addressed by the Supreme Court this term. In Asbury Park Press v. County of Monmouth, et al., 201 N.J. 5 (2010), the Supreme Court found that a public agency cannot withhold public disclosure of its agreement with an employee to settle her sexual harassment and discrimination lawsuit. In doing so, the Court not only read the exceptions to disclosure under the Open Public Records Act (“OPRA”) in an extremely narrow fashion, it also eliminated any ability of a public agency and an employee to maintain confidentiality of these sensitive matters.
The facts were simple. In April 2005, Carol Melnick filed a lawsuit against the Monmouth County Board of Chosen Freeholders and five individually named past and present employees, alleging sexual discrimination, sexual harassment, retaliation and hostile work environment. During the course of discovery, a protective order was entered to maintain the confidentiality of certain information exchanged in discovery. In June or July 2007, the lawsuit settled and contained a confidentiality provision. The settlement was not filed with the Court, but instead, the case was dismissed on August 6, 2007, when the parties jointly filed a one-sentence Stipulation of Dismissal.
In July 2007, two separate requests were made under OPRA for records relating to the settlement. The county declined to provide the documents. Each of the requestors filed individual complaints in the law division to compel the disclosure. The trial court, after ordering that the plaintiff employee be joined as a party defendant in the litigation and consolidating the two cases, ruled after a summary trial that the settlement agreement should not be disclosed. The trial court concluded that OPRA’s definition of governmental records specifically excluded information generated in connection with a sexual harassment complaint and that Melnick’s privacy interests and the Court’s policies favoring settlement of lawsuits outweighed the public interest in disclosing the terms of the sexual harassment settlement. The Appellate Division reversed, finding that the intent and purpose of OPRA was to ensure that government records be readily accessible for inspection, copying or examination, with only certain exceptions. The Appellate Division dismissed the argument that the settlement agreement was exempt from disclosure under N.J.S.A. 47:1A-1.1 which provides that a government record shall not include:
Information generated by or on behalf of public employers or public employees in connection with any sexual harassment complaint filed with a public employer or with any grievance filed by or against an individual or in connection with collective negotiations, including documents and statements of strategy or negotiating position.
The Appellate Division found that the complaint in question was not filed “. . . with a public employer,” but instead was filed with the Superior Court, Law Division, and thus opined that the exemption from disclosure under this section did not apply. The Appellate Division found that the Legislature gave alleged victims of this type of conduct different forums within which to bring their complaint. It could be brought to the public employer in which public access could properly be denied under the sexual harassment exemption under OPRA. Alternatively, the complaint could be filed in the Superior Court with the full knowledge understanding, however, that judicial affairs are open to the public and that a victim who brings such a lawsuit should understand that litigation is done in a public forum. With respect to the confidentiality provision in the settlement agreement, the Appellate Division simply found that the parties’ agreement cannot override the public’s right to access under OPRA.
In a per curiam opinion, the Supreme Court affirmed the judgment of the Appellate Division substantially for the reasons expressed in that opinion. The Court found that OPRA requires the disclosure of the settlement agreement between the County of Monmouth and an employee who filed such a lawsuit. Further, the Court found that the plaintiffs were entitled to reasonable attorney’s fees to be determined at a separate proceeding. The Supreme Court addressed a new argument made before it that the Settlement Agreement should not be disclosed in light of the ruling in Burnett v. County of Bergen , 198 N.J. 408 (2009). The Supreme Court strongly disagreed that the Burnett case supported the nondisclosure of the Agreement. They noted that the Burnett case involved the disclosure of over eight million pages of documents which could expose an untold number of individuals to an increased risk of identity theft, but determined that the documents could still be disclosed if the Social Security numbers were redacted.
The Supreme Court then addressed the claim that the privacy clause of OPRA prevented the disclosure of the settlement agreement. That privacy clause requires that public agencies safeguard from public access “. . . a citizen’s personal information with which it has been entrusted when disclosure thereof would violate the citizen’s reasonable expectation of privacy.” N.J.S.A. 47:1A-1. The Court found that disclosure of the settlement agreement would not violate any reasonableexpectation of privacy because the public employee chose to bring a public action by filing a complaint in the Law Division, noting that had the matter not been settled, the events would have unfolded in a public trial. “To expect privacy in the outcome of a lawsuit against the county, then, is hardly reasonable and runs counter to OPRA’s core concern of transparency in government. A governmental entity cannot enter into a voluntary agreement at the end of a public lawsuit to keep a settlement confidential, and then claim a ‘reasonable expectation of privacy’ in the amount of that settlement.”
The decision in this case raises a number of troubling issues. First, the Appellate Division placed much weight in the fact that the government record exclusion for sexual harassment complaints involved “. . . any sexual harassment complaint filed with a public employer . . . .” The Appellate Division then went on to construct a dichotomous framework for the filing of sexual harassment complaints: If the complaint were filed only with the public employer, all of the details thereof are non-disclosable. On the other hand, if that same complaint is the subject of litigation, all of that information becomes public knowledge, subject to whatever protective orders could be entered. The Appellate Division created that dichotomous structure without a single underlying source. The Court cited no legislative history or other material that would support the creation of this dichotomous procedure based solely on the forum in which the case was filed.
Second, attributing such surgical precision to the Legislature is likely misplaced. The Legislature is a forum of compromise and political expediency. To suggest that the privacy protection of individuals under OPRA was intended by the Legislature to be different depending upon the forum selected, credits the Legislature with much more contemplative selection that is deserved. The subject matter of OPRA was the disclosure of public documents in the possession of a public entity. The purpose of the carve-out was to exempt those documents from OPRA disclosure, period. The fact that those documents became part of the county records through litigation does not diminish the need to protect the individual’s right to privacy, which brings us to the next issue.
Both the reported Appellate Division decision and the Supreme Court case gave no indication of the position of the employee in the litigation as to the disclosure of the settlement agreement. It would appear that the Court would have been more transparent in relating the employee’s position, particularly during the course of the analysis of the reasonable expectation of privacy. There was no mention in the opinion whether the employee did expect that these matters would be private before determining the reasonableness of such expectation. One can speculate that the employee intended that the matter be kept private since she agreed to the confidentiality provision. While, to some extent, the disclosure of portions of the settlement agreement may have been detrimental to the county, other portions may have been detrimental to the employee. Does not an employee (and employer) have a right to rely upon the protective order entered by the trial court and, more importantly, the confidentiality provision in the settlement agreement? Finally, it is unfortunate that the Court did not make its ruling prospective. Confidentiality provisions in these types of settlements are routine and honored by the parties and heretofore recognized by the Court. To now allow access to those agreements which were intended to be confidential unfairly affects the litigants in those cases. In fairness to the Appellate Division and the Supreme Court, Footnote 3 of the Appellate Division decision indicates that the county had not asserted any grounds for the redaction of information from the Settlement Agreement in accordance with the provisions of OPRA.
The Supreme Court continued to broadly read statutes dealing with direct participatory democracy by the electorate. More specifically, the Supreme Court found in favor of a public referendum which challenged the sale of a portion of the City of Trenton’s water system which exclusively served users outside of the City of Trenton. In In re Petition for Referendum on City of Trenton Ordinance 09-02 , 201 N.J. 349 (2010), the Supreme Court found that the exemption from referendum set forth in the Municipal Utilities Law and applicable to such sales was not intended to obviate the rights of the electorate under the Faulkner Act to challenge by referendum an ordinance adopted by the municipality. (See Lewis Goldshore, Environmental Law, 201 N.J.L.J. 781.)
The City of Trenton is a Faulkner Act municipality and operated a water transmission system consisting of two parts: an Inside Water Utility System (“IWUS”), serving residents within the city, and the Outside Water Utility System (“OWUS”), which served residents in surrounding municipalities. After receiving and reviewing consulting reports, the city decided that the OWUS could be separated from the IWUS and sold to a third party. In 2005, the city negotiated an agreement with the New Jersey-American Water Company (“NJAW”), a privately owned public utility, and submitted a petition to the Board of Public Utilities (“BPU”) for approval under N.J.S.A. 40:62-3.1. That section provides for the transfer of a water utility system serving less than 5 percent of the population by ordinance after review by the BPU. On February 3, 2009, the City of Trenton adopted Ordinance 09-02, authorizing the sale of OWUS to NJAW. The BPU adopted the recommendations of the Administrative Law Judge, finding the agreement acceptable between Trenton and NJAW. Thereafter, a group of Trenton citizens filed a petition for referendum pursuant to the Faulkner Act, N.J.S.A. 40:69A-185. The city challenged that referendum petition in a complaint seeking a declaration that the petition was null and void based upon the so-called “exemption language” in N.J.S.A. 40:62-3.1 which provided, in pertinent part, that a municipality finding it in the public interest to transfer water utilities serving less than 5 percent of the municipal population can transfer the same without prior voter approval that would ordinarily be required under N.J.S.A. 40:62-5. The ordinance is only subject to review by the BPU in accordance with the statutory provisions.
Both the trial court and Appellate Division found in favor of the City of Trenton. The Appellate Division found that the specific provisions in the Municipal Utility Law related to when referenda should be held effectively superseded the general Faulkner Act provisions for referendum based upon precise language in the Faulkner Act referendum section which carved out of any Faulkner Act referendum any ordinance which by its terms or by law could not become effective unless submitted to the voters, or where by its terms authorizes a referendum in the municipality concerning the subject matter. The Supreme Court granted certification on the sole issue as to whether N.J.S.A. 40:62-3.1 negates the public’s rights to a referendum under the Faulkner Act and in a per curiam opinion reversed the determinations of the trial court and Appellate Division, finding that the ordinance in question was indeed subject to referendum under the Faulkner Act.
The Supreme Court framed the issue as a purely legal one concerning “. . . the intersection of the Faulkner Act and the MUL . . . .” After citing the typical tenets of statutory interpretation, the Supreme Court first looked to the purposes of what it termed the “protest referendum of the Faulkner Act.” The Court observed that the two exceptions to the general referendum provision:
are entirely pragmatic provisions which recognize that where voter approval is otherwise required, Faulkner Act review would be unnecessary and duplicative. In other words, the Faulkner Act operates in cases in which the citizens are not otherwise provided with a right to protest an ordinance by referendum.
The Court then turned for guidance to its most recent decision in this field, In re Ordinance 04-75 , 192 N.J. 446, 451 (2007). There, the Supreme Court found that only where the Legislature has made clear its intention to carve out what it termed the “democratic processes provided in the Faulkner Act,” a particular type of ordinance will a Court find that the ordinance is exempt from a Faulkner Act challenge. In its 2007 opinion, the Court noted, however, that unless the carve-out was precise and unambiguous, “. . . an intention to immunize an ordinance from Faulkner Act challenge will not be found,” and placed the burden on the party seeking to defeat the Faulkner Act to establish the existence of a clear carve-out.
With that explanation, the Supreme Court looked to the precise language of the MUL and noted that while ordinarily under the statute the transfer of a water utility cannot become effective without prior voter approval; an exception was established in N.J.S.A. 40:62-3.1 related to the disposition of a municipal water utility serving less than 5 percent of the population:
If the governing body of any municipality shall deem it advisable in the interests of public health and safety to transfer a municipal water utility system serving less than 5% of the population of that municipality, to any person or another municipality or any authority, commission or other public body, the transfer shall be authorized by ordinance and may be made upon such terms as the ordinance shall provide, and the provisions of R.S. 40:62-4 and R.S. 40:62-5 shall not apply thereto.
Thus, the transfer of such a water utility may be effectuated by ordinance without prior voter approval which would otherwise be required under N.J.S.A. 40:62-4 and -5. Focusing on the precise language, the Supreme Court first found that N.J.S.A. 40:62-3.1 does not state that such a sale may take place without any referendum nor does it say that such a sale “shall not be subject to referendum.” The Supreme Court found the absence of such language critical in its analysis: “Indeed, there is simply nothing in the words the Legislature chose in section 3.1 that would suggest, even obliquely, an intention to take away the right of citizens, plainly embodied in section 3, to protest an ordinance under the Faulkner Act.”
Continuing, the Court found this distinction was overlooked by both the trial court and the Appellate Division, noting: “Our reading of the words of N.J.S.A. 40:62-3.1 simply does not square with the City’s suggestion that it was intended to eliminate a Faulkner Act petition. In our view, the only effect of the precise language in section 3.1 which eliminates compulsory voter approval is to create a parallel structure to section 3 and return such a sale to the volitional protest provisions of the Faulkner Act.”
After reviewing the legislative history of the MUL, the Court found no further elucidation of the provisions but, on the other hand, found nothing that reflected an intention “. . . to eviscerate the provisions of the Faulkner Act.” The Court made short shrift of the city’s argument that the BPU approval was an effective substitute for a Faulkner Act referendum, noting that there is a significant difference between the two processes. The Court pointed out that the BPU analysis required an evaluation of the impact of the acquisition on competition, on the rates of ratepayers affected by the acquisition, on the employees of the utility, and on the provision of safe and adequate utility service at just and reasonable rates. On the other hand, it viewed the Faulkner Act protest referendum as challenging the wisdom of the ordinance and whether the same makes good political sense or is a wise choice. The Supreme Court maintained that while a sale of the utility may not affect rates or services, it might be “antithetical to the political interests of the voters,” and found that this case is precisely illustrative of that difference. Here, the voters were challenging the concept of the sale as being an unwise single item budget fix and not in the best long-term interests of the city. The BPU had no interest in that issue and therefore the Supreme Court found that the citizens should have a right to challenge the good sense of the ordinance under the Faulkner Act. The essence of the Court’s opinion is found in its final sentence: “Because the democratic processes reserved to the people by the Faulkner Act referendum provision cannot be abridged except with express legislative approval, which we find absent here, the judgment of the Appellate Division is reversed.”
Again, the Supreme Court has expressed a preference for active voter participation in the legislative process of municipalities that adopted the Faulkner Act forms of government, participatory democracy at its finest. Elected officials in Faulkner Act municipalities should take heed of this decision and be prepared to deal with the wrath of the electorate when enacting controversial legislative mandates.
The Supreme Court took on the thorny area of inverse condemnation in a case where the property owner waited almost 43 years to assert its claim. Despite an almost insurmountable Statute of Limitations bar, in Klumpp v. Borough of Avalon , WL 2483495 (2010), given the unique facts established in the case, the Supreme Court relaxed the statute of limitations for plaintiffs to bring an inverse condemnation claim and recover compensation from the Borough of Avalon for a taking that had taken place almost 43 years earlier. Although the facts demonstrate both the lack of diligence by plaintiffs in protecting their property rights and the lack of candor by the borough in not taking affirmative steps in notifying plaintiffs of the taking (or, at one point, asserting that no taking had taken place), in the end, the Supreme Court was of the view that fairness and justice demanded that the Court afford the Plaintiffs an opportunity to assert their claims for just compensation (See Lewis Goldshore, Environmental Law, 201 N.J.L.J. 780.)
Justice LaVecchia, writing for a unanimous Supreme Court, explained the basic constitutional protection against taking of private property without compensation in both the federal and state Constitutions.The Court noted that to accomplish a physical taking, the government may either enter the land without authorization or exercise its powers of eminent domain through a condemnation proceeding. If the government does not bring a condemnation proceeding to seek title to the property, “. . . the burden shifts to the individual to bring an action to compel condemnation, known as ‘inverse condemnation.’ The concept of inverse condemnation recognizes that the landowner may initiate the action to compel compensation from government; one need not wait in vain for government compensation.”
Nevertheless, the right to bring an inverse condemnation claim does not last forever. The Supreme Court noted that the applicable statute of limitations is the six-year period set forth in N.J.S.A. 2A:14-1. The Supreme Court found that it is appropriate that an inverse condemnation action be brought within the six-year period of the statute of limitations under N.J.S.A. 2A:14-1 which does not explicitly utilize the terms “inverse condemnation,” but instead expresses narratively language which “. . . fits comfortably within the statute’s purview.”
After finding that the six-year statute of limitation applies to inverse condemnation matters, the Supreme Court concluded that the same does not satisfactorily resolve the case as it did in Raab v. Borough of Avalon , 392 N.J. Super. 499 (App. Div.), certif. denied 192 N.J. 475 (2007). In distinguishing the facts in this case from those set forth in Raab , the Court found that there was no evidence to indicate that the borough had informed plaintiffs of the property exchange program that it had initiated and which was utilized in the Raab case. Furthermore, the Court found that the borough did not directly notify plaintiffs in any other way that it was utilizing their property under the legislatively granted emergency powers after the 1962 nor’easter. In fact, as abovementioned, the borough never admitted that a taking occurred until it asserted that position in 2005, 43 years after the taking had occurred. Making matters worse, after asserting that position in 2005, it also claimed that it was vested with title to the property by way of adverse possession, having notoriously, adversely, exclusively and continuously occupied the property in excess of 40 years.
Justice LaVecchia was critical of the borough’s various assertions and attempts to circumvent its obligation to pay just compensation:
After finally conceding, in 2005, that a taking occurred forty-three years earlier, the Borough now attempts to hide behind the six-year statute of limitations to claim that plaintiffs have no right to an inverse condemnation action. In light of these circumstances and in the interest of ‘justice and fairness, plaintiffs must be afforded a remedy for the appropriation of their property to public use.
The case should have ended there with a sentence or two stating that the Court will relax the six-year statute of limitations under the unique facts of this case and allow the plaintiffs to pursue their claim for inverse condemnation. Instead, the Court then went on to regurgitate the facts in the case and provide extraneous comment that will only serve to not put the issue to rest prospectively but instead encourage further litigation. For example, the Court attempts to balance the lack of diligence of the plaintiffs against the shifting positions of the borough and in doing so, implicitly creates obligations on both sides that attorneys will grasp onto if they will advance their position. The Court notes that as part of the dune project, the borough not only placed fences to limit public access to the property from the beach and the street, but also constructed a pathway over portions of plaintiffs’ property for public access to the beach. Discounting the fact that the borough did not officially advance the position that it had “taken” the property until after litigation commenced, the Court noted that a physical taking of the property did in fact occur. That finding would normally activate the running of the six-year statute of limitations which would have precluded the inverse condemnation action by plaintiffs sometime after the early 1970s, 40 years ago. Since that was not the result the Supreme Court sought, it arguably engrafted a further requirement on the entity undertaking the “physical invasion: government should also provide some other form of notice to affected property owners before and surely after, a physical taking. It should go without saying that turning such square corners is minimally what citizens should be able to expect from their government when such drastic actions is visited on property owners.”
Thus, it would appear that a clear physical taking of the property by the public entity will not activate the running of the statute of limitations for the bringing of an inverse condemnation suit unless the public entity takes some further affirmative notification action. It is unknown what doors the Supreme Court has opened for inverse condemnation claims being brought against public entities who failed to provide some other type of notice other than the physical taking and/or invasion of the property. Respectfully, the Court should have relied upon the borough’s inconsistent positions when inquiries were raised and the borough’s continual sending of tax bills and accepting of tax payments from the Klumpp’s for the 43 years as the basis for its decision. In short, the Court should have focused not on what the borough failed to do, i.e., provide some additional notice to plaintiffs, but instead what the borough did do, which was to deliberately or inadvertently mislead the property owners into thinking that there was no taking and that the property owners continued to own the property by sending tax bills, accepting payment for those taxes, and noting that the property was privately on the official municipal map. Thus, while the Supreme Court came to the right conclusion, given the unique facts of the case, unfortunately, it articulated a need for the municipality to take some other ambiguous, affirmative action before a property owner can be held to possess knowledge of the taking. Only time will tell whether the floodgates (pardon the pun), have been opened to property owners who clearly recognize that their property was being “invaded” but received no formal notification of the same from the municipality.
In spite of the colorful history of New Jersey politics, the Supreme Court was not swayed with the argument that an ordinary and necessary expense of public office involves paying legal fees in defense of a criminal complaint. In a case that displays absolute arrogance and disdain for the sanctity of holding public office, former Senator Wayne R. Bryant challenged a determination of the New Jersey Election Law Enforcement Commission (“ELEC”) that payments in defense of federal criminal corruption charges are not “ordinary and necessary expenses of holding public office” and therefore could not be charged against his campaign fund. To think that an elected public official would have the audacity to even make a request of the ELEC for an advisory opinion on the subject matter would be comical, if it were not so serious. Worse, after receiving a negative opinion from the ELEC, Senator Bryant proceeded to challenge the determination, both at the Appellate Division level and in the Supreme Court, making the absurd claim that the defense against such criminal charges represents an ordinary and necessary expense of holding public office. The position is not only an affront to the ELEC and the judiciary that had to hear the case, but more so to the elected public servants in the Senate and Assembly who do go about their jobs in a way that comports with all laws.
Not surprisingly, the Supreme Court in In re Election Law Enforcement Commission Advisory Opinion No. 01-2008 , 201 N.J. 254 (2010), found that criminal defense expenditures for legal fees were not ordinary and necessary expenses of holding public office which could be charged to a campaign fund and therefore affirmed the Appellate Division decision which had affirmed the ELEC’s determination.
The facts are undisputed. Senator Bryant’s single candidate campaign committee had retained $640,221 in campaign deposits for his primary election campaign in 2007. In March 2007, a federal grand jury indicted Senator Bryant, charging him with crimes of corruption and fraud. Bryant was found guilty of the charges in November 2008. However, in December 2007, representatives of his campaign committee sought an advisory opinion from the ELEC to allow it to pay the legal costs defending against said criminal charges, arguing that those costs were “ordinary and necessary expenses of holding public office” under N.J.S.A. 19:44A-11.2(a)(6).
The ELEC found that expenses related to the defense of such a criminal indictment were neither ordinary nor normally incurred by an office holder and therefore the proposed expenditure did not meet the regulatory definition. The Appellate Division affirmed. The Supreme Court granted Bryant’s Petition for Certification.
Justice Albin, writing for a unanimous court, reviewed the standards to be applied when reviewing an administrative decision of the ELEC. Citing black letter law, Justice Albin observed that the Court should grant “. . . considerable weight to a state agency’s interpretation of a statutory scheme that the Legislature has entrusted to the agency to administer.” He noted that unless the agency’s interpretation is “plainly unreasonable,” the Court must defer to the agency’s interpretation of both a statute and its implementing regulation. In order to determine whether the agency’s determination is “plainly unreasonable,” the Court turned to a review of the Campaign Contributions Act, N.J.S.A. 19:44A-11. The act specifies six categories of expenditures for which campaign contributions can be utilized. The last, and the one utilized by Bryant’s campaign committee is “. . . payment of ordinary and necessary expenses of holding public office.” N.J.S.A. 19:44A-11.2(a).
The Court’s attempt to look for a definition of the word “ordinary” in the statute, proved futile. Instead, the Court turned to the dictionary definition which is “customary[,] usual[,] normal” and as “[o]ccurring in the regular course of events.” ELEC’s regulations define the entire phrase as meaning “. . . any expense that reasonably promotes or carries out the responsibilities of a person holding elective public office.” N.J.A.C. 19:25-6.7(a). At this point, exercising incredible restraint, Justice Albin took note of the scarred reputation of various politicians and of the political profession in general:
Despite blaring headlines that announce the most recent prosecution and conviction of a public official, we have yet to reach the point when it can be said that defending against a federal or state criminal indictment alleging corrupt practices is an ‘ordinary’ expense of holding public office. A grand jury indictment is not a customary, or usual, or normal incident of holding public office, nor does it occur in the regular course of events. The vast majority of elected public officials carry out their duties honestly and honorably and will not, in the course of their long careers, be the target of a criminal prosecution.
Based upon that proposition, Justice Albin found that the expense of defending against such a criminal indictment was not an “expense that reasonably promotes or carries out the responsibilities of a person holding elective public office, N.J.A.C. 19:25-6.7(a).”
The Court then went on to view the issue from the perspective of the contributor, finding that it is difficult to contemplate that a contributor would expect that his donation would be utilized to underwrite a potential criminal defense fund.
After perusing the regulations implementing the act, the Court could not find a scintilla of language in the regulations that would support the expenditure of campaign funds in defending against criminal corruption charges. Thus, the Court affirmed the Appellate Division decisions and ELEC’s determination that campaign funds could not be utilized to defray the costs of defending against a federal indictment.
Subsequent to ELEC’s advisory opinion, N.J.A.C. 19:25-6.10(b) was amended to specifically prohibit the use of campaign funds to pay “legal fees and expenses for defense of a candidate or office holder, who is the subject of a criminal inquiry or criminal investigation, or defense of a criminal indictment or other criminal proceeding.” That regulation was made effective May 18, 2009, prior to the Supreme Court’s determination. However, the Court merely took judicial notice of that activity, but properly so, did not utilize the same as a basis for its decision.
Government 1: Commercial Taxpayers 0
The commercial tenant did not fare well in the redevelopment area and more specifically, notice of a blight designation. In Iron Mountain Information Management, Inc. v. The City of Newark , WL 2015288 ( 2010), the Supreme Court affirmed the decision of the Appellate Division that neither the United States nor New Jersey Constitution affords a commercial tenant a right to individual notice at the blight designation stage of a redevelopment process. The Court found that the Legislature intended to limit the right to actual notice of blight designation to owners of record and those whose names are listed on the tax assessor’s records.
The facts were uncomplicated. Iron Mountain held a long-term commercial lease with the Berkowitz Company for premises located in the City of Newark. After the Municipal Council of the City of Newark adopted a resolution authorizing the planning board to investigate whether a group of properties within a 24-acre zone qualified as blighted pursuant to the Local Redevelopment & Housing Law (“LRHL”), N.J.S.A. 40A:12A-1 to -49, and after publication of the notice of hearing and proper and sufficient service of that notice to the building owner, the planning board held a public hearing and subsequently adopted a resolution recommending that the targeted area be designated as blighted. On June 28, 2004, the planning board adopted a resolution recommending that the city council designate the target area, including the property which plaintiff leased, as blighted. On July 14, 2004, the city adopted a resolution approving the planning board’s recommendation and directed that a redevelopment plan be drafted. On Aug. 16, 2004, the planning board held another public hearing to consider the proposed plan and on Aug. 25, 2004, adopted a resolution approving the recommended redevelopment plan. The city concurred in such designation on Oct. 6, 2004, by passing an ordinance approving the redevelopment plan and separately approving a resolution appointing the Housing Authority to serve as the redevelopment agency.
On Nov. 22, 2004, Iron Mountain filed a complaint challenging both the initial blight determination by the planning board and the subsequent approval of the redevelopment Plan. The trial court dismissed plaintiff’s complaint in its entirety. The Appellate Division affirmed the dismissal, concluding that neither the United States Constitution nor the New Jersey Constitution afforded Iron Mountain the right to individual notice at the blight designation stage. The Supreme Court affirmed the decision of the Appellate Division essentially for the reasoning set forth by Judge Baxter who, after weighing the requisite due process considerations as set forth therein, found that individual notice was not required at the blight designation stage. The Supreme Court found, consistent with the Appellate Division’s decision, that the Legislature intended to limit the right to actual notice to owners of property and those names that are listed on the tax assessor’s records in the context of a blight designation determination. Since in this case, the property owner was in fact notified (but plaintiff commercial tenant was not), the Supreme Court found that theplaintiff tenant was not deprived of any due process protections afforded by the New Jersey or Federal Constitution and that such reasoning disposed of the appeal in its entirety.
Although the Supreme Court did not make any landmark decisions during this term, it continued to follow a path set years ago that in general when an individual citizen is pitted against the government, deference should be given to the citizen. With a clear message of transparency and participatory government, the Supreme Court opened the door to disclosure of confidential settlements and allowed citizens to challenge governmental actions through the ballot box, through verbal confrontations and through inverse condemnation claims years after the taking took place. In short, when it is an individual versus the government, the individual typically prevails. However, when that individual becomes corporate America, governmental action is more easily sustainable.
Buzak is the founding member of The Buzak Law Group in Montville and is the former president of the New Jersey Institute of Local Government Attorneys and serves on its Municipal Land Use Law Technical Drafting Committee.