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State v. Xyz Corp.

Decided: April 21, 1989.

STATE OF NEW JERSEY, RESPONDENT-RESPONDENT,
v.
XYZ CORPORATION (A FICTICIOUS NAME), PETITIONER-APPELLANT



On appeal from the Superior Court of New Jersey, Law Division, Middlesex County.

Antell, Dreier and Havey. The opinion of the Court was delivered by Havey, J.A.D.

Havey

The principal question raised by this appeal is whether a corporation is a "person" qualified to petition for expungement pursuant to N.J.S.A. 2C:52-1, et seq. The trial court concluded that only "natural" persons qualify under the statute, and therefore dismissed XYZ Corporation's*fn1 petition to expunge an indictment returned against it which had been dismissed. We reverse. We conclude that the Legislature intended to afford the expungement remedy to all "persons," whether corporate or natural.

In December 1983, XYZ, and four of its principals were charged under State Grand Jury Indictment No. SGJ102-82-2 with purposely, knowingly and recklessly discharging a harmful substance, contrary to N.J.S.A. 2C:17-2a and c; complicity to release the substances, contrary to N.J.S.A. 2C:2-6; conspiracy, contrary to N.J.S.A. 2C:5-2, and criminal mischief, contrary to N.J.S.A. 2C:17-3a(1). These charges related to allegations that XYZ had discharged a substance known as "FM-2 HEELS" into sewerage systems operated by the Middlesex County Utilities Authority (MCUA) and Old Bridge Township Sewerage Authority (OBTSA).

On June 6, 1986, XYZ and three of its principals were charged under State Grand Jury Indictment No. SHJ102-82-2(2) with conspiracy to tamper with physical evidence, public records and a witness, and complicity contrary to N.J.S.A. 2C:5-2, N.J.S.A. 2C:2-6; N.J.S.A. 2C:28-5 through N.J.S.A. 2C:28-8. The State charged that defendants had injected water into monitoring wells installed on XYZ's property during the pendency of consolidated civil proceedings initiated in 1977, entitled City of Perth Amboy v. Madison Industries, Inc., et als., Docket No. L-28115-76 and State of New Jersey, Department of Environmental Protection v. [XYZ Corp.], et als., Docket No. C-4474-76.

The procedural history of these consolidated civil proceedings is pertinent. On October 10, 1981 a final judgment was entered requiring XYZ to install a groundwater recovery system, and to monitor the groundwater recovery through monitoring wells. An amended final judgment was entered on June 14, 1983 after a remand by the Appellate Division. Thereafter, XYZ moved for an amendment to the judgment to permit development of an alternative groundwater recovery program.

XYZ's motion in the civil proceeding was pending when, on September 17, 1986, the State reached an agreement with XYZ and its principals in the present criminal action. The State agreed to dismiss both indictments and, for its part, XYZ agreed to establish a $250,000 trust for the purpose of cleaning and maintaining the sewer connection lines of the MCUA to the OBTSA. The MCUA agreed to assign XYZ its right of action against any other entities who had disposed of materials or substances into the sewer lines in question. The trust document was executed on October 30, 1986, and the indictments were dismissed on the same date.

XYZ and the individual defendants thereupon moved to expunge the records of the two indictments. After an expungement hearing, the trial court granted the motion in favor of the individual defendants, but denied XYZ's petition. In its February

2, 1988 opinion, the trial court concluded that a corporation is not a "person" within the meaning of the expungement statute, N.J.S.A. 2C:52-1, et seq. It also concluded that even if the petition were cognizable, it should be denied because the indictments sought to be expunged were the subject matter of Perth Amboy's and the DEP's civil litigation against XYZ. See N.J.S.A. 2C:52-14d. The court also reasoned that the petition should be denied because the need for the availability of the records outweighed the desirability of expungement. See N.J.S.A. 2C:52-14b. After XYZ filed its notice of appeal from the denial of its expungement petition, the Law Division entered an "Amended Final Order" on April 27, 1988 concluding the civil proceeding involving Perth Amboy, the DEP and XYZ.

We disagree with the trial court's determination that corporations are not "persons" entitled to expungement of arrest records. The pertinent statute is N.J.S.A. 2C:52-6, entitled "Arrests Not Resulting in Conviction." It provides that:

[i]n all cases, except as herein provided, wherein a person has been arrested or held to answer for a crime . . . and against whom proceedings were dismissed, or who was acquitted . . . may at any time following the disposition of proceedings, present a duly verified petition . . . praying that records of such arrest ...


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