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Lockley v. State

August 11, 2003

ROBERT L. LOCKLEY, JR., PLAINTIFF-APPELLANT,
v.
STATE OF NEW JERSEY, DEPARTMENT OF CORRECTIONS, DEFENDANT-RESPONDENT, AND POLICE BENEVOLENT ASSOCIATION, LOCAL 105, AND INDIVIDUALLY, AND IN THEIR OFFICIAL CAPACITIES, COMMISSIONER WILLIAM H. FAUVER, RONDA TURNER AND JACQUELINE JONES, DEFENDANTS.



On certification to the Superior Court, Appellate Division, whose opinion is reported at 344 N.J. Super. 1 (2001). Linda Wong argued the cause for appellant (Wong Fleming, attorneys; Ms. Wong and Daniel C. Fleming, of counsel; Ms. Wong, James K. Haney and Robert G. Feldman, on the briefs).

SYLLABUS BY THE COURT

(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).

PORITZ, C.J., writing for the Court.

This Court has held that a plaintiff who seeks punitive damages based on an alleged violation of the Law Against Discrimination (LAD) by a public or private entity must prove that upper level management acted in such a manner as to warrant the imposition of those damages. This case presents two questions: whether the trial court's instructions (1) sufficiently informed the jury in respect of the upper level management determination, and (2) properly described the consideration relevant to the calculation of a punitive damages award against a public entity.

This case arises out of a series of interactions between Robert Lockley and Ronda Turner, who worked as corrections officers in Mid-State Correctional Facility. Lockley and Turner worked on the same shift but in different areas of the prison. In about 1988, Turner began making flirtatious comments to Lockley, who never indicated he found the comments offensive. Beginning in 1990, however, Turner began to be more aggressive. Eventually, Turner's comments escalated to harassment and abuse. She and others spoke in graphic language about the inadequacies of Lockley's anatomy and used vulgar terms to describe his alleged sexual orientation and lack of sexual prowess. Turner also interfered repeatedly with Lockley's ability to perform his job. In 1992, Lockley reported Turner's conduct to his supervisors who responded by suggesting that he should agree to a sexual relationship with Turner.

In July 1993, Lockley filed a formal sexual harassment complaint with the DOC against Turner. An employee in the DOC's equal opportunity/affirmative action office investigated the allegations and concluded there was probable cause to believe they had merit. This employee prepared a probable cause letter, signed by William H. Fauver, the former Commissioner of the DOC, recommending that the matter proceed to consideration of the appropriate discipline for Turner.

The DOC charged Turner with, among other things, violations of the Civil Service laws and the corrections officers' collective bargaining agreement. Turner was assigned to a different shift against her wishes, where she remained for several months. However, Turner was permitted to transfer back to Lockley's shift after she prevailed on a grievance claim. Turner's disciplinary hearing took place six months after the DOC issued its letter. At the hearing, the officer assigned to present the case on behalf of the DOC failed to produce any witnesses. As a result, the hearing officer dismissed all charges against Turner.

Lockley instituted this litigation in 1994, asserting claims that included sexual harassment, retaliation, and aiding and abetting under the LAD. He sought compensatory and punitive damages. Prior to trial, Lockley settled with all defendants except the DOC and Commissioner Fauver.

The case was tried to a jury in May 1999. Because Lockley was seeking punitive damages, the trial court bifurcated the proceedings, deferring determination of the damage amount, if any, to a separate proceeding. The jury returned a verdict exonerating Fauver, but found the DOC responsible for sexual harassment and unlawful retaliation. It awarded Lockley $750,000 in compensatory damages, and determined he was entitled to punitive damages. The trial court prohibited testimony in the damages portion of the trial in respect of DOC's ability to pay punitive damages. The trial court instructed the jury that it was pure speculation as to whether an award of punitive damages would affect taxes, and that the jury could not consider how the amount of an award might affect taxes or anything of that nature. The jury returned a verdict of $3 million in punitive damages against the DOC.

The Appellate Division found the trial court's instructions to the jury on punitive damages fatally flawed and reversed the punitive damages verdict, remanding for further proceedings. The Appellate Division explained that the trial court did not ask the jury to assess whether the harassment and retaliation were perpetrated by upper management. In addition, it held that the trial court did not sufficiently appreciate or explain to the jury the complexity of assessing punitive damages against a governmental entity.

The Supreme Court granted Lockley's petition for certification.

HELD The trial court's jury instructions failed to explain and expound on the term "upper management." The instructions also did not explain the appropriate standards by which punitive damages should be calculated and assessed in an LAD case against a public entity.

1. Public sector employers may be held liable for punitive damages only in the event of actual participation by upper management or willful indifference. In Cavuoti v. New Jersey Transit Corporation, 161 N.J. 107 (1999), decided

after the jury trial in this case, this Court suggested the factors to be considered when deciding whether certain individuals are part of an organization's upper management. The trial court's instructions here gave no guidance to the jury as to the scope of its inquiry. The matter must be remanded for retrial in respect of the conduct of upper management within the framework established in Cavuoti. (pp. 14-18)

2. The Punitive Damages Act (PDA), N.J.S.A. 2A:15-5.9 to -5.17, established the calculus to be employed in the assessment of a punitive damage award. In Baker v. National State Bank, The opinion of the court was delivered by: Poritz, C.J.

JUSTICES VERNIERO, LaVECCHIA and ALBIN have filed a separate, concurring opinion, expressing the view that if the issue squarely had been raised, they would have been inclined to address whether Cavuoti erroneously interpreted the LAD to permit punitive damages against public entities.

JUSTICES COLEMAN and LONG, join in CHIEF JUSTICE PORITZ's opinion. JUSTICES VERNIERO, LaVECCHIA, and ALBIN have filed a separate, concurring opinion. JUSTICE ZAZZALI did not participate.

Argued January 6, 2003

This Court has held that a plaintiff who seeks punitive damages based on an alleged violation of the Law Against Discrimination (LAD), N.J.S.A. 10:5-1 to -49, by a public or private entity must prove that upper level management acted in such manner as to warrant the imposition of those damages. This case presents two questions: whether the trial court's instructions (1) sufficiently informed the jury in respect of the upper level management determination, and (2) properly described the considerations relevant to the calculation of a punitive damages award against a public entity.

I.

A. Facts

Plaintiff Robert L. Lockley is employed as a Senior Corrections Officer by the Department of Corrections of the State of New Jersey (DOC) at the Mid-State Correctional Facility (Mid-State) in Wrightstown, New Jersey. Mid-State is a medium security prison housing about 600 inmates, all of them male.

Although the majority of the staff at Mid-State is also male, there are a small number of female officers, including defendants Ronda Turner and Jacqueline Jones.

This case arises primarily out of a series of interactions between Lockley and Turner that began in 1990. At that time, the two officers worked on the same shift at Mid-State, but in different areas of the prison, Lockley in a perimeter tower and Turner in Mid-State's "Center Control" room. In about 1988, Turner began making flirtatious comments to Lockley who never indicated that he found those comments offensive. Beginning in 1990, however, Turner became more aggressive. She began to express an interest in having a sexual relationship with Lockley, an interest she communicated to him directly and also broadcast to fellow employees at Mid-State. Lockley rejected her overtures.

Eventually, Turner's comments to Lockley escalated to harassment and abuse. She and others spoke in graphic language about the inadequacies of his anatomy and used vulgar terms to describe his alleged sexual orientation and lack of sexual prowess. Turner also interfered repeatedly with Lockley's ability to perform his job by making him wait before she opened security gates for him and by refusing to record security related phone calls that he made from the tower to Center Control. In 1992, when the situation intensified, Lockley reported Turner's conduct to his supervisors who responded by suggesting that he should agree to a sexual relationship with Turner.

In July 1993, Lockley filed a formal sexual harassment complaint with the DOC against Turner. Susie Belmont, who worked in the DOC's equal opportunity/affirmative action office, investigated Lockley's allegations and concluded that there was probable cause to believe that they had merit. Belmont prepared a probable cause letter, signed by William H. Fauver, the former Commissioner of the DOC, recommending that the matter immediately proceed to consideration of the appropriate discipline for Turner.

The DOC charged Turner with violations of the Civil Service laws and the corrections officers' collective bargaining agreement, including conduct unbecoming an employee, among other charges. Turner was assigned to a different shift against her wishes, where she remained for several months. When a position opened on Lockley's shift, however, Turner sought a transfer back. Although her application was initially denied, she later prevailed on a grievance claim under the collective bargaining agreement and was sent back to her prior shift based on her seniority. Turner's co-workers celebrated her return to the shift by holding a party.

Turner's disciplinary hearing was adjourned several times and did not take place until six months after the DOC issued its letter. At the hearing, Captain Powell Johnson, who was assigned to present the case on behalf of the DOC, failed to produce any witnesses to support the written probable cause finding and, as a result, the hearing officer dismissed all charges against Turner. Johnson later testified that he was instructed by his superiors to do no more in support of the charges against Turner than submit the probable cause letter. Others testified that Johnson was instructed to put on witnesses and present a proper case for the DOC. In any event, Johnson was later disciplined for his failure to put in live testimony. After the dismissal of charges, Turner's friends held another public party to celebrate.

B. Litigation History

Lockley instituted this litigation in 1994, asserting claims of sexual harassment, unlawful retaliation, and aiding and abetting under the LAD, and common law claims of assault and battery, intentional infliction of emotional distress, intentional interference with contractual relations, and defamation. He sought compensatory and punitive damages and named as defendants the DOC; Commissioner Fauver; the Police Benevolent Association (PBA), Local 105; and Corrections Officers Ronda Turner and Jacqueline Jones. Prior to trial, Lockley entered into a settlement agreement with the PBA and the two female officers.

In May 1999, Lockley's LAD claims against the DOC and Commissioner Fauver were submitted and tried to a jury. Because plaintiff was seeking punitive damages, the trial court bifurcated the proceedings, deferring a determination of the damages amount, if any, to a separate proceeding. During the initial phase of the trial, those defendants' liability under the LAD and the question of compensatory damages were considered by the jury. At the close of Lockley's case, however, defendants moved to dismiss both the claims against Fauver and the punitive damages claim against the DOC. The trial court denied the motion in respect of the LAD claims against the Commissioner, but dismissed the punitive damages claim against him, finding that Fauver was at most negligent. The punitive damages claim against the DOC, however, remained in the case. When the first trial concluded, the court dismissed Lockley's compensatory damages claim for lost overtime wages as unsupported by the evidence. Despite a lack of expert testimony regarding Lockley's alleged emotional distress, the trial court permitted this claim to go to the jury.

On May 28, 1999, the jury returned a verdict exonerating Fauver. It found that the DOC was responsible for sexual harassment and unlawful retaliation, awarded Lockley $750,000 in compensatory damages, and determined that he was entitled to punitive damages. That same afternoon the trial proceeded to the punitive damages phase. The court denied a request by the DOC for a ninety-minute recess to allow an Assistant Attorney General familiar with the State appropriations process to provide information concerning the DOC's budget and finances for use by the jury in deciding the amount of punitive damages to be awarded. In so doing, the trial judge stated that

the only legal issue here is what instruction, if any, should be given to the jury with respect to the financial capacity of the State... to pay punitive damages....

[T]here are probably many different ways this could be handled. I don't believe there's any case law on it. There's no statute on it. There's no rule on it, that I'm aware of. It's... not a matter of constitutional dimensions.

Ultimately, the trial court prohibited testimony in respect of DOC's ability to pay punitive damages and gave the following instruction to the jury:

In determining the amount of punitive damages, you must consider all of the circumstances in this case, including: the nature of the wrongdoing; the extent of the injury or harm inflicted by the wrongdoing; the intent of the party committing the wrongdoing; the financial condition or wealth of the defendant;... the defendant's ability to pay any award of punitive damages; [and] the effect the judgment will have on the defendant and others.

You may also consider any mitigating circumstances which you find may justify a reduction of the amount of damages, including any punishment the defendant has received or will receive from other sources for the same misconduct.

Finally, you should be sure that there is a reasonable relationship between the actual injury ...


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