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State, Dept. of Law & Public Safety v. Gonzalez

December 5, 1995


On appeal from the Superior Court, Appellate Division, whose opinions are reported at 273 N.J. Super. 239 (1994).

The opinion of the Court was delivered by Coleman, J. Chief Justice Wilentz and Justices Handler, Pollock, O'hern, Garibaldi and Stein join in Justice COLEMAN's opinion.

The opinion of the court was delivered by: Coleman


(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).


Argued September 12, 1995, -- Decided December 5, 1995

COLEMAN, J., writing for a unanimous Court.

The issue on appeal is whether in an employee license revocation hearing, the Casino Control Commission (Commission) should be permitted to relitigate the facts underlying the employee's prior criminal convictions.

There is a two-tiered regulatory system in the New Jersey casino industry. The Commission is the quasi-judicial licensing body and the Division of Gaming Enforcement (Division) is the investigatory and prosecutorial body. The Commission issued Adriel Gonzalez a casino-employee license pursuant to the Casino Control Act (Act). That license permitted him to be employed by the Sands Hotel and Casino as a security officer. While holding that license, Gonzalez, on October 22, 1990, Gonzalez entered pleas of guilty to conspiracy to distribute marijuana and possession of marijuana with intent to distribute within 1,000 feet of a school in Hammonton Township. Gonzalez was sentenced on November 30, 1990 to a term of probation and, as a condition of probation, he was required to serve thirty days in the Atlantic County Jail.

Based on the judgment of conviction, the Division filed a complaint with the Commission on September 17, 1991, seeking revocation of Gonzalez's casino employee license. A hearing was conducted in April 1992 before one of the Commissioners sitting as a hearing examiner. At the hearing, Gonzalez testified under oath that, despite his entry of the guilty pleas, he did not commit the offenses charged.

In June 1992, the hearing examiner issued an initial decision revoking Gonzalez's license. The full Commission remanded the case to the hearing examiner for further proceedings. During that second hearing, conducted in September 1992, Gonzalez again was permitted to testify, over the Division's objections, that he was not guilty of the offenses. The examiner concluded that: Gonzalez's denial was credible; he had been rehabilitated pursuant to section 90(h) of the Act (section 90h); and he possessed the "good character, honesty and integrity" required under the Act to retain his casino employee license. The Commission, Chairman Perskie Dissenting, adopted the hearing officer's determination.

The Appellate Division reversed the decision of the Commission based on the doctrines of issue preclusion and judicial estoppel. One member of the panel Dissented, stating that because issue preclusion is an equitable doctrine, the Commission should have discretion in determining whether to give preclusive effect to a prior judicial determination absent a contrary legislative intent. The Commission moved for leave to appeal as of right based on the Dissent in the Appellate Division.

HELD: Because of the strong public policy of maintaining integrity in the casino industry, a casino-employee who is the subject of a casino-employee license revocation proceeding, may not present evidence contradicting his or her criminal convictions. The casino employee may present evidence to support a claim of rehabilitation, but that evidence must not be inconsistent with the elements of the criminal offenses to which guilty pleas have been entered.

1. A valid casino employee license may be revoked if the employee is convicted of a disqualifying offense and has not been rehabilitated, pursuant to section 90h. The Legislature did not articulate the types of evidence that are relevant to rehabilitation under section 90h. Thus, the Court's review of the Commission's decision is restricted to whether it's action violates the Act's express or implied legislative policies. (pp. 6-9)

2. The cornerstone of the legislative plan to regulate casino gambling in Atlantic City, and the very heart of the public policy embraced by the Act, is "the public confidence and trust in the credibility and integrity of the regulatory process by the State and casino operations. The regulatory process is designed to extend strict State regulation to all persons, locations, practices and associations related to the operation of licensing casino enterprises. The most effective way of maintaining the integrity of the casino industry in Atlantic City is to prevent criminals from participating in the industry, including casino operators and employees. The Commission does have legislatively defined discretion in implementing the Act; however, this discretion may not be exercised in a way that violates the Act's public policy. (pp. 9-10)

3. The Commission's procedure in this case undermines the Act's underlying policy: to maintain integrity within the casino industry. The doctrine of issue preclusion does not prevent the pleading party in the trial of a tort or contract case from contesting the admitted facts, including a guilty plea. However, to apply the same rationale to a casino employee revocation proceeding and permit repudiation of the facts underlying criminal convictions based on guilty pleas would be inimical to the policies that underlie the Act. (pp. 10-11)

4. Gonzalez entered his guilty pleas under oath; there was a sufficient factual basis for the pleas, the pleas were made voluntarily; and Gonzales understood the nature of the charges and the consequences of his pleas. Moreover, he never sought to vacate his guilty pleas. Because a guilty plea leading to a conviction has the force of an admission of guilt on the charge based on a defendant's sworn factual statement, the Act, when considered as a whole, does not permit a casino-licensee to repudiate his or her guilty plea in an attempt to establish rehabilitation. The Legislature did not intend that judgments of conviction be treated differently depending on whether they resulted from guilty pleas or trials. (pp. 11-12)

5. The Commission's decision to allow repudiation of guilty pleas in an effort to establish rehabilitation will reasonably lead to a loss of public confidence in casino gambling and the judiciary. Under the Act, a casino employee convicted of a disqualifying offense based on a guilty plea has a right to testify in a revocation hearing to support a claim of rehabilitation, pursuant to section 90(h). However, the employee's right to testify does not extend to testifying falsely or repudiating the underlying criminal charges. (pp. 12-13)

6. In an attorney disciplinary proceeding, like a casino employee license revocation hearing, the underlying purpose is to protect the public. Moreover, a criminal conviction is conclusive proof of guilt. The underlying facts of the conviction may be examined in respect of mitigation of penalty, but the facts of guilt will not be retried. In view of the common goals shared by casino employee revocation proceedings and attorney disciplinary proceedings, the effect of a guilty plea should be the same for both. (p. 14)

7. The doctrine of judicial estoppel bars a party to a legal proceeding from arguing a position inconsistent with one previously asserted. Here, judicial estoppel protects the integrity of both the judicial process and the casino industry when the Commission acts in a quasi-judicial capacity. (pp. 14-15)

8. It was the Legislature's purpose to prevent criminals from the casino industry. Therefore, there is no reason why the Legislature would intend to permit relitigation of the elements of a criminal conviction for any purpose under the Act. Thus, a judgment of conviction may not be collaterally attacked at an employee-license revocation proceeding. The Legislature intended to give preclusive effect to judgments of conviction to achieve the Act's underlying intent. No distinction under the Act is to be made between convictions based on guilty pleas and those based on litigated verdicts. Convictions that have not been vacated by a court of competent jurisdiction stand as conclusive evidence of guilt for all purposes under the Act. However, facts that relate to the surrounding circumstances of the ...

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