Opinion
DOCKET NO. A-1700-12T4
08-05-2014
IN THE MATTER OF DARREN NANCE, CITY OF NEWARK
Forman, Cardonsky, Lawrence & Antonucci, attorneys for appellant Darren Nance (Mark C.G. Lawrence, on the brief). Anna P. Pereira, Corporation Counsel, attorney for respondent City of Newark (Michael A. Oppici, Assistant Corporation Counsel, on the brief). John J. Hoffman, Acting Attorney General, attorney for respondent New Jersey Civil Service Commission (Pamela N. Ullman, Deputy Attorney General, on the statement in lieu of brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Reisner, Alvarez and Ostrer. On appeal from the New Jersey Civil Service Commission, Docket No. 1997-485. Forman, Cardonsky, Lawrence & Antonucci, attorneys for appellant Darren Nance (Mark C.G. Lawrence, on the brief). Anna P. Pereira, Corporation Counsel, attorney for respondent City of Newark (Michael A. Oppici, Assistant Corporation Counsel, on the brief). John J. Hoffman, Acting Attorney General, attorney for respondent New Jersey Civil Service Commission (Pamela N. Ullman, Deputy Attorney General, on the statement in lieu of brief). PER CURIAM
Darren Nance was terminated from his employment as a police officer with the City of Newark (City) on September 3, 1996. Years of litigation followed, initially in the Office of Administrative Law (OAL), then in federal court, and finally back to the OAL leading to the Civil Service Commission (CSC). Ultimately, Nance was denied reinstatement in both the state and federal forums. He appeals the CSC's final decision, and we affirm.
On December 18, 1997, Nance filed a complaint in the United States District of the District of New Jersey, under 42 U.S.C. § 1983 as well as the New Jersey Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -42, seeking compensatory and punitive damages, as well as reinstatement. His complaint asserted that he had exhausted his administrative remedies. In actuality, as a result of the filing in federal court, counsel agreed to inactivate Nance's pending administrative appeal of eight disciplinary charges and his termination in the OAL after approximately seventeen days of hearings.
A total of forty-five disciplinary charges were filed against Nance during his employment with the Newark Police Department, and he was suspended a total of 231 days. He had taken 134 days of sick leave to the date of termination and been without a weapon for three years and nine months.
The OAL trial commenced in 1997 and extended into 1998. We cannot discern if the matter was inactivated by consent after the record closed, or while the proceedings were ongoing. The inactivation order was entered June 14, 1999.
For reasons not explained in the record, the federal trial did not begin until 2010. On June 24 that year, a jury awarded Nance $350,000 in compensatory damages and $250,000 in punitive damages. After the verdict, on July 20, 2010, Nance filed an unsuccessful motion for reinstatement. Nance v. City of Newark, No. 97-6184 (D.N.J. Oct. 19, 2010) (slip op. at 1, 5). On February 3, 2011, he filed an equally unsuccessful motion for reconsideration of the denial of reinstatement. See Nance v. City of Newark, Nos. 11-1593 and 11-2251 (3d Cir. Oct. 15, 2012) (slip op. at 3) ("Nance filed a motion for reconsideration, which the District Court denied . . . ."). He appealed the District Court decisions, which were affirmed on October 15, 2012. Id. at 9.
In its decision, the Court of Appeals relied upon the District Court's reasons for denying Nance reinstatement: that he had "been deemed psychologically unfit for duty and that, given the unique nature of police work, his reinstatement might pose a risk to public safety." Id. at 6. Additionally, Nance's fourteen-year absence from the police force made his return impracticable because of changes in protocols within the Newark Police Department (Department) "that would [have] require[d] complete retraining at a time when the Department ha[d] had to lay off qualified officers for budgetary reasons." Ibid. The final reason was the District Court's conclusion that the extent of animosity between Nance and the Department made reinstatement "a recipe for disaster." Ibid. (internal quotation marks omitted). Accordingly, the Court of Appeals determined that Nance did not demonstrate that denying him reinstatement was an abuse of discretion on the part of the District Court.
On October 21, 2010, after Nance's motion for reinstatement was denied but before his application for reconsideration or the appeal that followed, Nance's attorney notified the OAL that a verdict had been rendered in his favor and that the matter should therefore be returned to the active list. Nance applied for summary decision in the OAL on the issue of reinstatement based on the federal jury's verdict, and the City cross-moved for summary decision that the District Court's ruling on reinstatement was dispositive.
The Administrative Law Judge (ALJ) who presided over the motions for summary decision was, not surprisingly, a different person than the one who conducted the hearing. The ALJ who decided the motions found that, since Nance's LAD claim was successful in federal court, the City was collaterally estopped from disputing Nance's entitlement to reinstatement because the elements for success in the federal court on the LAD claim were the same as those required for Nance to prevail in the administrative proceeding. Although she concluded that the City was collaterally estopped from disputing the wrongfulness of its conduct in terminating Nance, she found that the federal court's denial did not have preclusive effect on the reinstatement issue. While acknowledging that the Civil Service rules did not expressly mandate reinstatement in the event of wrongful termination, the ALJ determined that to construe the Civil Service law otherwise was illogical. Therefore, she ordered Nance reinstated, subject to establishing his physical and psychological fitness to serve as a police officer and successfully completing the police academy, as would be required of a new recruit.
On November 7, 2012, the CSC declined to adopt the ALJ's recommendations. Instead, the CSC found that the standard for res judicata was met and denied reinstatement based on the federal court's denial. Having chosen the forum in which to pursue his cause of action, Nance needed to "accept the remedies given to him by that forum." If dissatisfied with the outcome, he should have appealed to the United States Supreme Court and not returned to the original venue. The only relief the CSC granted, which Nance did not request and, in fact, also appeals, was the amendment of his personnel record to "reflect his resignation" as opposed to termination.
The points of error Nance raises have at their core the contention that collateral estoppel did not bar reinstatement in the administrative forum because a distinctly different legal analysis resulted in the denial in the federal system. In the administrative forum, the burden is on the appointing authority to prove the conduct warranting termination, and the LAD is available to the employee as a defense. In the federal system, on the other hand, reinstatement is a decision within the judge's discretion even if the employee prevails on the LAD claim. Nance also contends that it was entirely proper for him to pursue the same remedy in both forums and that his age should not be a factor under N.J.S.A. 40A:14-127.1 because his resumption of employment is not a new appointment. He also seeks attorney's fees.
Nance was born September 1964. "Except as otherwise herein provided, no person shall be appointed as a member or officer of the police department or force in any municipality who is under 21 or over 35 years of age." N.J.S.A. 40A:14-127.
I.
"An appellate tribunal is [] in no way bound by [an] agency's interpretation of a statute or its determination of a strictly legal issue." Mayflower Sec. Co. v. Bureau of Sec, 64 N.J. 85, 93 (1973). "We review [an] agency's legal conclusions de novo." DiNapoli v. Bd. of Educ., 434 N.J. Super. 233, 236 (App. Div.), certif. denied, 217 N.J. 589 (2014). In this case, the agency's decision was essentially a legal one, i.e., that, as a matter of law, the City was entitled to summary decision. The issue is whether the CSC can grant reinstatement, an administrative remedy, when Nance was denied relief from the federal courts, in other words, whether the CSC had "jurisdiction to reverse th[ose] rulings."
N.J.A.C. 1:1-12.5(a) permits a party to an administrative proceeding to "move for summary decision upon all or any of the substantive issues in a contested case." Summary "decision [] may be rendered if the papers and discovery which have been filed, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to prevail as a matter of law." N.J.A.C. 1:1-12.5(b).
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We conclude that N.J.S.A. 10:5-27, the LAD's exclusivity provision, bars a return to the administrative process where relief was previously denied after complete judicial review in another forum. Further, even if the statute did not bar reconsideration of the issue, the doctrines of collateral estoppel and res judicata would have the same effect.
II.
The LAD's exclusivity provision reads:
The provisions of this act shall be construed fairly and justly with due regard to the interests of all parties. Nothing contained in this act shall be deemed to repeal any other law of this State relating to discrimination . . . except that, as to practices and acts declared unlawful by section 11 of this act, the procedure herein provided shall, while pending, be exclusive; and the final determination therein shall
exclude any other action, civil or criminal, based on the same grievance of the individual concerned.
[N.J.S.A. 10:5-27 (footnotes omitted).]
Nance relies on Scouler v. City of Camden, 332 N.J. Super. 69 (App. Div. 2000), asserting that the case supports his position. We do not agree.
In Scouler, which involved the Conscientious Employee Protection Act (CEPA), N.J.S.A. 34:19-1 to -8, the parallel exclusivity language, found at N.J.S.A. 34:19-8, states: "the institution of an action [under CEPA] shall be deemed a waiver of the rights and remedies available under any other contract, collective bargaining agreement, state law, rule or regulation or under the common law." There, the City of Camden filed "a preliminary notice of disciplinary action for insubordination, neglect of duty, and misuse of public property" against the plaintiff, a construction official who was a career civil service employee. Scouler, supra, 332 N.J. Super. at 72. The charge of misuse of public property was dismissed, but Scouler was found to have committed acts of insubordination and neglect of duty, and he was suspended for thirty days. Ibid. When Scouler's appeal was transferred to the OAL, the ALJ dismissed the proceedings because Scouler had filed a CEPA action in Superior Court against his employer after initiation of the disciplinary action while the proceedings were pending. Id. at 73.
We reinstated the appeal in the OAL because reliance on CEPA was merely available as a defense, "which the employee has no burden to prove in order to be exonerated." See id. at 75. The "waiver provision d[id] not preclude a career civil service employee who ha[d] filed a CEPA action from [administratively] appealing a disciplinary charge . . . simply because the employee allege[d] that the charge was instituted for the same retaliatory reasons alleged in the CEPA action." Ibid. Additionally, the evidence of retaliation could be presented in the disciplinary hearing; to rule otherwise "could result in the exclusion of evidence critical to a fair and reliable evaluation of the credibility of witnesses testifying in support of the charge." Ibid. The sole purpose of CEPA's waiver section was to "prevent an employee from pursuing both statutory and common-law retaliatory discharge causes of action." Id. at 76 (internal quotation marks omitted).
In Young v. Schering Corp., 141 N.J. 16, 28-29 (1995), the Supreme Court had stated years prior: "[T]he Legislature intended for the [N.J.S.A. 34:19-8 statutory] waiver to mean that a former employee forfeits his or her common-law retaliatory discharge cause of action when he or she 'institutes' a CEPA cause of action." The waiver statute, however, "d[id] not apply to those causes of action that [we]re substantially independent of the CEPA claim." Id. at 29.
Unlike Scouler and Young, in this case Nance seeks the same remedy for the same reasons as was denied in the federal proceedings, after a complete and full hearing on his LAD claims, and after a jury award compensating him for the City's wrongful conduct. Indeed, reinstatement was one of the forms of relief he sought by way of the federal complaint.
It is mere sophistry to argue that Nance's OAL motion for summary decision using the LAD defensively, as he contends, seeking reinstatement was anything but a renewed request for the same remedy previously denied in his initial application to the District Court, his motion for reconsideration, and his subsequent appeal. To compel a second forum to consider relief already denied would give him the proverbial "two bites at the apple."
The real issue is not whether the exclusivity provision automatically bars the administrative proceeding, or whether raising the LAD affirmatively or defensively is a meaningful difference, but whether the remedy sought is duplicative of the LAD relief previously obtained. See Dale v. Boy Scouts of Am., 160 N.J. 562, 604-05 (1999), rev'd on other grounds, 530 U.S. 640, 120 S. Ct. 2446, 147 L. Ed. 2d 554 (2000).
The LAD was "intended to increase the choice of remedies for victims of discrimination." Wilson v. Wal-Mart Stores, 158 N.J. 263, 270-71 (1999). On the other hand, N.J.S.A. 10:5-27, the exclusivity provision, "basically seeks to prevent parties from having a second bite at the apple by pursuing the alternative route to relief." Wilson, supra, 158 N.J. at 271. "It seeks to prevent duplication of efforts and forum shopping." Ibid.
Wilson is illustrative. In that case, the plaintiff first filed in the Division of Civil Rights (DCR), which took no action other than docketing her complaint. Id. at 268. She then filed an action based on the same allegedly discriminatory conduct in Superior Court shortly before the statute of limitations would have barred suit. See id. at 266-69, 274-75. A couple of months later, she withdrew her DCR complaint. Id. at 268. Defendants filed motions for summary judgment alleging that the LAD's exclusivity provision required dismissal. Ibid. The Court found that where the DCR did not even begin an investigation, the legislative purpose behind the exclusivity provision would not be "thwarted" by allowing the litigation to continue unimpeded. Id. at 271. The defendants had "not expended additional resources or conducted discovery and, more importantly, would not [have] be[en] unfairly disadvantaged by being required to litigate th[e] matter in Superior Court." Id. at 271. Thus, the exclusivity provision did not bar plaintiff's cause of action. Ibid. Had it been construed otherwise, she would have been deprived of "a single bite at the apple." Ibid.
The exclusivity provision has also been found to be inapplicable where a plaintiff received an unfavorable decision from the EEOC regarding termination by his employer. Hernandez v. Region Nine Hous. Corp., 146 N.J. 645, 654-55 (1996). Unlike with New Jersey's DCR/LAD scheme, a ruling issued by the EEOC is not preclusive nor is it directly appealable; in fact, EEOC complainants must be notified that they have the right to file a federal action if not satisfied with the outcome but must act within ninety days. Id. at 652-55. This is in contrast with an unfavorable ruling from the DCR, which does preclude an action in Superior Court for the same relief. Id. at 656. The "remedy choices are complementary, but mutually exclusive." Id. at 652 (citation and internal quotation marks omitted). It is the finality of the outcome in the chosen forum that "raises the bar." Id. at 658 (internal quotation marks omitted). Therefore, Hernandez was able to pursue his cause of action under the LAD in Superior Court. Id. at 660-61.
In this case, however, after a lengthy trial, the jury compensated plaintiff for his wrongful termination. The same judge who presided over the trial, who heard the witnesses, and had the opportunity to review the evidence, ruled on Nance's motion for reinstatement. He decided that reinstatement would be improper, in light of plaintiff's prior testing as psychologically unfit, the years between termination and the application for reinstatement, and the irreconcilable animosity between employee and appointing authority. Clearly, the judge's decision constituted a final outcome that raised the bar.
There can be no doubt that Nance has received a full, fair, and final hearing on the issues related to his resumption of employment. He cannot embrace the jury's verdict and contend that it prevents the City from denying him reinstatement while rejecting the judge's decision that it was not a feasible outcome.
We therefore conclude that the exclusivity provision applies. Nance obtained a final determination in the federal system that he now seeks to overturn through a parallel administrative process. To allow him to pursue that remedy in the face of the exclusivity statute would violate the literal meaning of the provision and the legislative policy that it embodies.
III.
We also conclude that under the doctrine of collateral estoppel plaintiff is barred from pursing his claim for reinstatement. Our Supreme Court has formulated the doctrine as foreclosing relitigation of an issue where:
(1) the issue to be precluded is identical to the issue decided in the prior proceeding; (2) the issue was actually litigated in the prior proceeding; (3) the court in the prior proceeding issued a final judgment on the merits; (4) the determination of the issue was essential to the prior judgment; and (5) the party against whom the doctrine is asserted was a party to or in privity with a party to the earlier proceeding.
[In re Estate of Dawson, 136 N.J. 1, 20 (1994) (citations omitted).]
In this case, all five elements of our Supreme Court's test for collateral estoppel were met. In Nance's federal trial, the verdict sheet posed the question: were the City's discriminatory actions the "predominant, substantial and motivating factor in the City['s] . . . decision to terminate his employment." This phrasing was similar to language contained in the jury instruction. It raises the identical issue Nance sought to address by way of summary decision.
If in the OAL case, Nance were permitted to defensively raise violations of LAD as a result of the federal jury's verdict, for the sole purpose of seeking the same remedy he sought in federal court, he would once again be contending that the City's unlawful and discriminatory actions motivated his termination and entitle him to reinstatement. This satisfies the first element of the Court's test. See ibid. A federal jury decided that the City's conduct violated the LAD, and the same judge who presided over the trial decided the motion for reinstatement. Thus, "the issue was actually litigated" and there was "a final judgment on the merits." See ibid. Reinstatement was the sole issue considered post-judgment. See ibid. Lastly, the parties are the same. See ibid. This situation readily satisfies the Dawson factors.
We must balance the interests of, on the one hand, not depriving Nance of his day in court, and, on the other hand, preventing "repetitious litigation of what is essentially the same dispute." Reinstatement (Second) of Judgments § 27 comment c (1982). But, Nance has had his day in court. It would defeat the purpose of the doctrine to allow him to pursue reinstatement because of procedural differences between Nance's suit in federal court, grounded in LAD, and the manner in which an LAD violation can be used defensively in an administrative proceeding. It would squarely reiterate "the same dispute."
In addition to satisfying the elements necessary for application of the collateral estoppel doctrine, we also ask whether it would be "unfair" to apply it to Nance's administrative appeal. Pace v. Kuchinsky, 347 N.J. Super. 202, 215 (App. Div. 2002). Balancing the equities here fortifies our conclusion that preclusive application of the doctrine is fair.
Additional equitable considerations bolster the correctness of the CSC's decision given the District Court judge's compelling reasons. Nance's motion for reinstatement had to be denied because he was "deemed psychologically unfit to perform" police duties and had not served as a police officer for over a decade, which would require retraining at a time of substantial budgetary shortfalls. Additionally, there was "irreparable animosity" between the parties. These same concerns are relevant equitable considerations attendant to whether Nance should be collaterally estopped from re-litigating reinstatement. See Pace, supra, 347 N.J. Super. at 215 (commenting that equitable estoppel "has its roots in equity"). Nance's reinstatement as a police officer has potentially weighty ramifications vis-à-vis the public's safety and government coffers.
Therefore, we find that the CSC's decision on the issue of preclusion is correct as a matter of law. Nance had an adequate and full opportunity to litigate his employment termination and was compensated for the improprieties committed by the City in the course of terminating him. He was collaterally estopped from returning to the OAL.
IV.
Nance also argues that N.J.A.C. 4A:2-2.10 mandates reinstatement for an employee who succeeds in the administrative appeal of the discharge, thereby side-stepping collateral estoppel. The provision states: "Where a disciplinary penalty has been reversed, the Commission shall award back pay, benefits, seniority or restitution of a fine." N.J.A.C. 4A:2-2.10(a).
Giving effect to the plain meaning of the regulation, the word "or" indicates that, upon a discharged employee's successful administrative appeal, the CSC has discretion to choose among the four remedies. See US Bank v. Hough, 210 N.J. 187, 199 (2012) (stating that the Court "interpret[s] a regulation in the same manner that [it] would interpret a statute," which entails "constru[ing] the regulation as written" and not "engag[ing] in conjecture that w[ould] subvert its plain meaning"). If, however, the word "or" was "and," then, as Nance contends, the regulation would necessitate reinstatement since mandatory restoration of seniority would strongly suggest the remedy. The CSC had the discretion to choose a remedy other than reinstatement and the regulation vests that discretion in the agency.
Additionally, the sentence which follows the quoted language from N.J.A.C. 4A:2-2.10(a) reads: "Such items may be awarded when a disciplinary penalty is modified." (Emphasis added). The language confirms our conclusion that the regulation is intended to offer the CSC alternatives with which to make the employee whole.
V.
We do not agree that the CSC should not have amended Nance's record to show that he resigned, as opposed to being terminated, because it was improper "'rulemaking.'" We find that the plain language of N.J.S.A. 11A:2-19 vests in the CSC the power to increase or decrease penalties imposed by appointing authorities. The statute simply says that the CSC "may increase or decrease the penalty imposed by the appointing authority." Nance cites to In re Hearn, 417 N.J. Super. 289, 307 (App. Div. 2010), to support his argument but the case stands for the proposition that "[a]n agency determination can be regarded as a rule when it effects a material change in existing law." Id. at 307 (internal quotation marks omitted). The alteration of Nance's record did not materially change "existing law." The CSC's decision merely recognized that Nance's employment record, given the federal jury's award of compensation, in fairness, should be modified to indicate that his separation from the Department was neutral. The change was a proper exercise of the CSC's powers and authority under N.J.S.A. 11A:2-19.
VI.
Lastly, we do not agree that Nance is entitled to counsel fees. Such fees are awarded, pursuant to N.J.A.C. 4A:2-2.12(a), only "where an employee has prevailed on all or substantially all of the primary issues before the Commission." That is not the case here. The primary relief that Nance sought was reinstatement and on that score he did not prevail.
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION