The state Supreme Court has agreed to decide whether the New Jersey Civil Rights Act applies to defendants not acting under color of state law.

The case, Perez v. Zagami, A-36-12, tests an Appellate Division ruling that the act can be used in a suit against a business that had sued the plaintiff for defamation after he testified against its liquor license renewal application.

Luis Perez characterizes the original suit — by Zagami LLC, owner of the Landmark American Bar & Grill and Landmark Liquors in Glassboro — as a strategic lawsuit against public participation (SLAPP). The current case is a “SLAPP-back” suit.

In 2006, when Zagami applied for the renewal of its liquor license. Perez testified before the Glassboro Borough Council, saying the business violated local fire codes, state alcoholic-beverage control laws and criminal statutes.

The borough granted the renewal application, but Zagami sued Perez for defamation and tortious interference. That suit ultimately died as an Appellate Division panel held Perez’s comments — made before a quasi-judicial body — were protected by the litigation privilege.

Afterward, Perez sued Zagami, alleging malicious use of process and, in an amended complaint, violation of the Civil Rights Act, N.J.S.A. 10:6-1 to -2.

Gloucester County Superior Court Judge Richard Hoffman dismissed Perez’s suit, saying Zagami had a reasonable belief that it had a viable defamation claim. The CRA count could not stand, Hoffman said, because CRA claims are “limited to acts under color of law.”

Appellate Division Judges Philip Carchman, Linda Baxter and Susan Maven reversed. They said the CRA was meant to have broad remedial remedies. “Perez’s CRA count alleging that Zagami ‘deprived’ him of ‘his substantive due process right of free speech at public proceedings’ would not fail for lack of ‘a person acting under color of law,’ Perez’s CRA claim is not legally futile on its face,” the judges said.

Perez’s attorney, Wesley Hanna, of the law office of Sander Friedman in West Berlin, says the CRA was meant to be broadly construed.

“This is particularly true in the context of SLAPP suits,” he says. “The only purpose of the SLAPP suit is to punish the speaker through the imposition of defense costs. Without the Civil Rights Act’s expanded remedies and liberal construction, it is feasible that the business interests using SLAPP litigation as a weapon against the public will gear their defense to ensure that prosecuting the SLAPP-back case will cost enough to make it infeasible to pursue regardless of its merit.”

Zagami’s lawyer, Sean Kelly, of Pennsauken’s Marks, O’Neill, O’Brien, Doherty & Kelly, declines comment.