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RUDOLPH v. ADAMAR OF NEW JERSEY

July 31, 2001

JOHN D. RUDOLPH, ON BEHALF OF HIMSELF AND ALL SIMILARLY SITUATED PERSONS, PLAINTIFFS,
v.
ADAMAR OF NEW JERSEY, INC., D/B/A TROPICANA CASINO AND RESORT,DEFENDANT, THIRD-PARTY PLAINTIFF, V. THE STATE OF NEW JERSEY, DONALD T. DIFRANCESCO, ACTING GOVERNOR OF THE STATE OF NEW JERSEY, JOHN J. FARMER, JR., ATTORNEY GENERAL OF THE STATE OF NEW JERSEY, JAMES R. HURLEY, CHAIRPERSON OF THE NEW JERSEY CASINO CONTROL COMMISSION, THIRD PARTY DEFENDANTS.



The opinion of the court was delivered by: Hon. Stephen M. Orlofsky, Unites States District Court Judge.

  OPINION

I. INTRODUCTION

The pending motions before this Court require the consideration and resolution of several novel questions of law. First, the Court must decide whether the Defendant/Third-party Plaintiff, Adamar of New Jersey, d/b/a Tropicana Casino and Resort ("Tropicana"), has a right, either under federal common law or by statute, specifically, 42 U.S.C. § 1988, to seek contribution and indemnification from the State of New Jersey for any attorneys' fees ultimately awarded to the Plaintiff against the Defendant/Third-Party Plaintiff. Second, this Court must decide whether the Eleventh Amendment bars the Plaintiff's and Third-Party Plaintiff's claims, asserted under the New Jersey Law Against Discrimination ("NJLAD") against the State of New Jersey, to the extent that these claims are alleged against the State not in its capacity as an employer, for which it has clearly waived its sovereign immunity under the NJLAD, but in its legislative and executive capacities. Finally, this Court must determine whether the New Jersey Casino Control Commission is the alter-ego of the State of New Jersey and is therefore entitled to Eleventh Amendment immunity.

For the reasons set forth in this Opinion, I conclude that Tropicana has neither a statutory, nor a common-law right to seek contribution or indemnification from the State for Plaintiff's attorneys' fees. I further conclude that while the State of New Jersey has waived its sovereign immunity to be sued under the NJLAD, it has done so only in its capacity as an employer. Accordingly, I conclude that the State of New Jersey enjoys Eleventh Amendment immunity against suit in federal court under the NJLAD when the State is sued in its legislative and executive capacities. Finally, I conclude that the New Jersey Casino Control Commission is an alter ego of the State of New Jersey and is therefore entitled to Eleventh Amendment immunity.

II. PROCEDURAL HISTORY

On January 12, 2000, Plaintiff, John D. Rudolph ("Rudolph"), filed a Complaint with this Court against his former employer, Adamar of New Jersey, Inc., which does business as Tropicana Casino and Resort ("Tropicana"). Rudolph, who is a white male, alleges that Tropicana, through the implementation of its Equal Employment and Business Opportunity Plan ("EEBOP")*fn1, discriminated against him and all similarly situated individuals on the basis of race and sex, in violation of 42 U.S.C. § 1981 (Count I) and the NJLAD. (Count II). In addition to these class claims, Rudolph, who is fifty years old, alleges an individual claim for discrimination on the basis of age, in violation of the Age Discrimination in Employment Act ("ADEA"), 29 U.S.C. § 621 et seq. (Count III) and the NJLAD (Count IV).

On February 25, 2000, Tropicana filed a Third-Party Complaint against the State of New Jersey, the Governor of the State of New Jersey, now Acting Governor Donald T. DiFrancesco ("the Governor"), and John J. Farmer, Jr., the Attorney General of the State of New Jersey ("the Attorney General") (together, "the State Defendants"). Both the Governor and the Attorney General were named in their official capacities. Tropicana also named as a Third-Party Defendant James R. Hurley ("Hurley"), in his official capacity as Chairperson of the New Jersey Casino Control Commission ("CCC"). The CCC was created pursuant to the New Jersey Casino Control Act ("the Act"), N.J.S.A. § 5:12-1 et seq. The Act, which took effect on June 2, 1977, legalized casino gambling in Atlantic City, New Jersey. Id. The Commission has promulgated regulations which, inter alia, require each casino licensee to adopt an approved affirmative action plan, the EEBOP. N.J.A.C. § 19:53-6.1.

On March 15, 2000, Plaintiff filed claims against the Third-Party Defendants pursuant to Federal Rule of Civil Procedure 14(a).*fn2 Plaintiff's Rule 14(a) Complaint alleges that Tropicana's state-mandated EEBOP caused the alleged violations of Plaintiff's rights under 42 U.S.C. § 1981 (Count I), § 1983 (Count II), the NJLAD (Count III), and the New Jersey Constitution (Count IV). Plaintiff seeks declaratory and injunctive relief, compensatory and punitive damages, and costs and fees.

Two motions are now before the Court. First, the State Defendants have moved to dismiss all claims against them pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6), except the Plaintiff's and Third-Party Plaintiff's claims against the Governor and the Attorney General which seek prospective, injunctive relief under federal law. Second, Commissioner Hurley has moved to dismiss all claims brought against him in his official capacity on the ground that the NJCCC is an arm of the State of New Jersey and is therefore entitled to Eleventh Amendment immunity.

I shall grant the State Defendants' unopposed motion to dismiss all claims against the State of New Jersey on the grounds of Eleventh Amendment immunity. Additionally, for the reason set forth below, I shall grant the State Defendants' motion to dismiss Tropicana's claims for contribution, indemnification, or statutory entitlement pursuant to 42 U.S.C. § 1988, for Plaintiff's attorneys' fees which may be assessed against Tropicana if Plaintiff prevails against Tropicana in the underlying litigation. Furthermore, I shall grant the State Defendants' motion to dismiss Plaintiff's and Tropicana's claims against the State Defendants for damages under the NJLAD.

With respect to Commissioner Hurley's motion, I shall grant his motion to dismiss the claims against him, with the exception of the claims for prospective, injunctive relief under federal law.

III. JURISDICTION

This Court has jurisdiction pursuant to 28 U.S.C. § 1331*fn3 and 1367(a).*fn4

IV. LEGAL STANDARDS GOVERNING MOTIONS TO DISMISS

Federal Rule of Civil Procedure 12(b)(1) governs a district court's ability to dismiss a claim for lack of subject matter jurisdiction. Kehr Packages, Inc. v. Fudelcor, Inc., 926 F.2d 1406, 1408-09 (3d Cir. 1991), cert. denied, 501 U.S. 1222 (1991). "When the subject matter jurisdiction of the court is challenged, the party that invokes the court's jurisdiction bears the burden of persuasion." Lumbermans Mutual Casualty Co. v. Fishman, 1999 WL 744016 at *3 (E.D.Pa. 1999) (citing Kehr Packages, Inc., 926 F.2d at 1409).

Federal Rule of Civil Procedure 12(b)(6) governs motions to dismiss for failure to state a claim upon which relief may be granted. "In considering a Rule 12(b)(6) motion, the Court may dismiss a complaint if it appears certain the plaintiff cannot prove any set of facts in support of its claims which would entitle it to relief." Mruz v. Caring, Inc., 39 F. Supp.2d 495, 500 (D.N.J. 1999) (Orlofsky J.) (citing Rasom v. Marrazzo, 848 F.2d 398, 401 (3d Cir. 1988)). "While all well-pled allegations are accepted as true and reasonable inferences are drawn in the plaintiff's favor, the Court may dismiss a complaint where, under any set of facts which could be shown to be consistent with a complaint, the plaintiff is not entitled to relief." Id. (citing Gomez v. Toledo, 446 U.S. 635, 636 (1980); Schrob v. Catterson, 948 F.2d 1402, 1405 (3d Cir. 1991); Markowitz v. Northeast Land Co., 906 F.2d 100, 103 (3d Cir. 1990)); see also Conley v. Gibson, 355 U.S. 41, 45-46 (1957). Finally, Rule 12(b)(6) authorizes a court to dismiss a claim on a dispositive issue of law. Mruz, 39 F. Supp.2d at 500 (citing Neitzke v. Williams, 490 U.S. 319, 326-2 (1989)).

With these legal standards in mind, I shall examine first the State Defendants' motion to dismiss, and then Commissioner Hurley's motion.

V. CLAIMS AGAINST THE STATE DEFENDANTS

A. Eleventh Amendment Immunity

The Eleventh Amendment provides that "[t]he Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State." U.S. Const., Amdt. XI. The Eleventh Amendment operates as a limitation on the subject matter jurisdiction which may be exercised by federal courts. See Pennhurst State School & Hosp. v. Halderman, 465 U.S. 89, 119-20 (1984). Specifically, the Eleventh Amendment has been interpreted to bar suits against any state in federal court by that state's own citizens as well as suits by citizens of other states. See Edelman v. Jordan, 415 U.S. 651 (1974); Hans v. Louisiana, 134 U.S. 1, 15 (1890).

The Supreme Court addressed the application of Eleventh Amendment immunity to suits brought against state officials under 42 U.S.C. § 1983 in Will v. Michigan Dep't of State Police, 491 U.S. 58 (1989). In Will, the Court held that "neither a State nor its officials acting in their official capacities are `persons' under § 1983," and that therefore, such defendants are immune from suit under § 1983. Will, 492 U.S. at 71. The Supreme Court, however, recognized an exception to its holding in Will: "Of course a state official in his or her official capacity, when sued for injunctive relief, would be a person under § 1983 because `official-capacity actions for prospective relief are not treated as actions against the State.'" Id. at n. 10 (citing, inter alia, Ex Parte Young, 209 U.S. 123, 159-60 (1908)). Citing Will, the Third Circuit has explained this distinction as follows:

When state officials are sued in their official capacities for damages, that suit is treated as one against the state and the official is not considered to be a "person." Hence, § 1983 cannot be invoked . . . . A suit for damages must be contrasted with a suit for equitable relief. The Supreme Court has held that a state official sued for injunctive relief is a "person" under § 1983, because an action for prospective relief is not treated as an action against the state.

Powell v. Ridge, 189 F.3d 387, 401 (3d Cir. 1999), cert. denied sub nom., 528 U.S. 1046 (1999).

Both the Plaintiff and the Third-Party Plaintiff have asserted claims based on federal and New Jersey state law against the State Defendants. With respect to the claims asserted by both parties, the State Defendants argue that they are entitled to Eleventh Amendment immunity and therefore to the dismissal of all claims against them, with the exception of the federal claims brought against the Governor and the Attorney General, in their official capacities, for prospective injunctive relief.*fn5

Because the State Defendants' motion to dismiss all federal claims brought by Tropicana and the Plaintiff against the State of New Jersey is effectively unopposed, I shall grant this part of the State Defendants' motion. Accordingly, Counts I and II of the Third-Party Complaint, and Counts I and II of the Plaintiff's Rule 14(a) claim, shall be dismissed with respect to the State of New Jersey.

The State Defendants have not moved to dismiss Tropicana's claims against the Governor and Attorney General for prospective injunctive relief under federal law. See Notice of Motion, May 26, 2000. Furthermore, the Plaintiff has cured, through the filing of an amended complaint and affidavit, the standing defect upon which the State Defendants based their motion to dismiss Plaintiff's request for prospective, injunctive relief. See Second Amd. Compl., Rudolph Aff. Accordingly, both the Plaintiff and Tropicana are entitled to proceed with the portions of Counts I and II of their respect complaints, which request prospective, injunctive relief under federal law.

The State Defendants do not contest Tropicana's right to seek reasonable attorneys' fees, pursuant to 42. U.S.C. § 1988, in the event Tropicana succeeds on its claim for prospective, injunctive relief against the State Defendants. State Defs.' Reply Br. at 7. Accordingly, Tropicana may also proceed with Counts I and II of the Third Party Complaint as to an award of reasonable attorneys' fees, should Tropicana prevail in its suit against the State Defendants, pursuant to 42 U.S.C. § 1988.

Finally, I note that the State Defendants argue that they are entitled to qualified immunity against Tropicana's and the Plaintiff's claims for damages. Qualified immunity, however, is a defense which may be properly asserted only by a state official sued in his or her personal or individual, as opposed to official, capacity. In a case in which it observed that the distinction between personal-and official-capacity action suits "apparently continues to confuse lawyers and confound lower courts," the Supreme Court explained the distinction as follows:

When it comes to defenses to liability, an official in a personal capacity action may, depending on his position, be able to assert personal immunity defenses, such as objective reasonable reliance on existing law. See Imbler v. Pachtman, 424 U.S. 409 (1976) (absolute immunity); Pierson v. Ray, 386 U.S. 547 (1967) (same), Harlow v. Fitzgerald, 457 U.S. 800 (1982) (qualified immunity), Wood v. Strickland, 420 U.S. 308 (1980) (same).[] The only immunities that can be claimed in an official-capacity action are forms of sovereign immunity that the entity, qua entity, may possess, such as the Eleventh Amendment. While not exhaustive, this list illustrates the basic distinction between personal — and official — capacity actions.

Kentucky v. Graham, 473 U.S. 159, 166-67 (1985). Both the Plaintiff and the Third-Party Plaintiff in this case brought their complaints against the Governor, now Acting Governor Donald T. DiFrancesco, and the Attorney General, John J. Farmer, Jr., Esq., in their official capacities only. See Third Party Complaint (naming as defendants "Christine Todd Whitman, in her official capacity of Governor of the State of New Jersey; John J. Farmer, Jr., in his official capacity as Attorney General of the State of New Jersey"); Plaintiff's Rule 14(a) Complaint (same). Based upon the Supreme Court's holding in Kentucky v. Graham, then, the only applicable immunity which must be addressed by this Court is the availability of Eleventh Amendment immunity. The question of whether the Defendants are entitled to assert qualified immunity is not presented and need not be addressed by this Court.

To summarize, there are two questions this Court must address to resolve the State Defendants' pending motion. The first is whether Tropicana, to the extent that it seeks to recover Plaintiff's attorneys' fees awarded against it, under either ยง 1988 or common law, has failed to state a claim upon which relief may be granted pursuant to Fed.R.Civ.P. 12(b)(6). The second is whether this Court has subject matter jurisdiction over Tropicana's and the ...


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