This matter comes before the court by way of an action in lieu of prerogative writs seeking to set aside resolution 85 of 1988, which was adopted by the City Council of Atlantic City on February 17, 1988. The resolution, subject to certain limits, authorizes the city to pay for a defense and indemnify Gene Dorn in connection with a defamation suit filed against him in Superior Court.
In May 1987 a group of Atlantic City residents came together to form the Citizens for Action Committee. The founders of the group, all of whom were black, were concerned with what they perceived as racism in the community, involving the local newspaper and the employment practices of the casinos. They felt that the existing local organizations were either not aggressive enough or were unable to address these problems.
After several meetings the organization began to take shape. A name was agreed upon and officers were selected. Gene Dorn, an Atlantic City councilman from the third ward, was selected as president. Dorn did not solicit the position. He was chosen for the leadership of the organization for reasons expressed by witnesses in the following manner: He was a councilman; he could enhance the group's position; he had "clout"; he could open doors; he could get things done. It is clear that Dorn was selected as president of the group because
of the benefits which the members believed would inure to the group by reason of his public status. He reluctantly accepted the position.
The activities of the group were directed to the staging of a July 4th rally which would focus public attention on the concerns for which the group was formed. The rally was to be called a "Black Unity" rally. On June 17, 1987, Dorn applied to the city for a parade permit. He listed the name of the organization applying as the "Citizens for Action Committee" and described it as a "civic" organization. The rally was to begin at Columbus Park, parade to the Boardwalk and then return to Columbus Park for a series of speeches. A permit approving the rally was issued the same day to "(Gene Dorn) Citizens for Action Committee." The permit for the rally was expedited past the normal channels and was approved personally by the mayor. The mayor told the city administrator that he wanted full cooperation to be given to those staging the rally. The city provided use of its "showmobile" (portable stage), free of charge. It should be noted that such was also done for other nongovernmental organizations as well. Public works department employees set up and took down the stage, and the police provided security at no charge to the committee.
Various steps were taken to promote the rally. A press release was prepared and issued by Clint Walden, the vice-president of the committee. Walden also prepared and distributed fliers which read as follows:
MISSOURI AND ARCTIC AVENUES
-- SHOW SOLIDARITY WITH THE COMMUNITY
-- PARTICIPATE! SHOW YOUR OPPOSITION TO:
-- LACK OF BLACKS IN KEY CASINO POSITIONS
-- MISTREATMENT OF BLACKS BY THE CASINOS
-- INSTITUTIONAL RACISM OF THE PRESS NEWSPAPER IN BOTH EDITORIAL AND EMPLOYMENT PRACTICES
-- RACIST CITY OFFICIALS WHO TAKE BLACK VOTES FOR GRANTED AND VOTE ONLY FOR ISSUES FOR THE 5th AND 6th WARDS
The initial draft of the flier was identical to the final draft with one exception. In the initial draft the word "white" in parenthesis was located under the words "5th and 6th Wards" on the bottom line. In addition, Dorn sent out a letter on his official stationery addressed to third ward residents. Dorn's constituency is primarily black. The letter read in part as follows:
-- Demonstrate to the casino industry our unhappiness at their treatment of Blacks in the casino industry and lack of advancement for Atlantic City Blacks in the high paying positions.
-- Show everyone that we will not accept any plan that dilutes the ability of you the voters to have a voice in their government.
-- Protest the treatment that Black officials and community groups receive by The Press newspaper and the lack of Blacks on the staff and management of The Press.
-- Oppose those city Councilmen that take your vote for granted and vote against Black people every chance they get while telling you they like you.
Although the committee decided who would speak at the rally, the decision was basically left up to Clint Walden. Virtually every black civic and governmental leader in the Atlantic City area was invited to speak and did so. The speakers included the mayor, a freeholder, four councilmen and various civic leaders. There was not a single white leader invited to speak or in any way participate in the rally. City council was not invited to designate a spokesperson or to act in any official way with respect to the rally or its purposes. The evidence revealed that five of the nine city councilmen were white. Only the black members of council were invited to the rally. Umar Salahuddin, one of the officers of the committee, explained this practice. He indicated that the committee wanted to concentrate
on raising support within the black community. They wanted to know how committed the black leaders of the community were. Thus, the invitations to participate and speak went only to blacks.
At the rally there were approximately a dozen speakers. Although he was reluctant to speak, Dorn did so as the last speaker of the day. He spoke for about two minutes. Approximately 10 to 15 minutes after the rally, Dorn was interviewed by John Froonjian, a reporter for the Atlantic City Press. In the interview Dorn made reference to Alfred Cade, a black executive with Caesars Hotel Casino, saying:
We feel Caesars represents the mentality of the majority of casinos. . . . They have Al Cade, who we feel is as racist as the most bigoted white man walking on the face of the earth.
This statement, which was acknowledged by Dorn in his testimony herein, was reported in the July 5, 1987 edition of the Atlantic City Press.
Thereafter, on September 9, 1987, a complaint was filed in the Superior Court by Alfred J. Cade against Gene Dorn, seeking compensatory and punitive damages for defamation.
On January 20, 1988, the city council of Atlantic City adopted resolution 45 of 1988, which authorized the mayor to execute a contract with Thomas R. Ashley for the purpose of providing a legal defense for Councilman Dorn against the defamation action. That resolution was challenged in a prior suit in lieu of prerogative writs brought by the same plaintiffs herein. Council's action was set aside by this court by reason of Councilman Dorn's conflict of interest in voting to support the resolution.
Council thereafter adopted resolution 85 of 1988 by a vote of four to three, with Councilman Dorn abstaining. That resolution, in pertinent part, provided:
NOW THEREFORE, BE IT RESOLVED by the City Council that the Mayor is hereby authorized to execute and City Clerk to attest a contract with Thomas R. Ashley, Esquire, to represent Councilman Gene Dorn in the above referenced litigation at the rate of one hundred ($100.00) per hour, not to exceed twenty thousand ($20,000.00) dollars; and
BE IT FURTHER RESOLVED that the City Council shall indemnify and pay on behalf of Councilman Dorn for any exemplary or punitive damages arising ...