On appeal from the Superior Court, Appellate Division whose opinion is reported at 376 N.J. Super. 231 (2005).
(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). Daniel Prado v. State of New Jersey, New Jersey Department of Labor, etc., et al. (A-33-05)
In this appeal, the Court articulates the standard that must inform the Attorney General's decision on whether to defend a state employee in a civil suit within the purview of the New Jersey Tort Claims Act. The Court also sets forth the manner of judicial review available when the Attorney General refuses to defend.
At a staff meeting in June of 2001, defendant Harry Pappas, Special Assistant to the Commissioner of the Department of Labor, addressed Department of Labor employees. Afterwards, a number of those present complained that Pappas made offensive or inappropriate remarks, particularly in describing Hispanic workers or women. The Department's affirmative action officer conducted an investigation. At the conclusion of the investigation, the Labor Commissioner determined that Pappas had made various offensive, discriminatory remarks and concluded that Pappas had violated both the letter and intent of the New Jersey State Policy Prohibiting Discrimination, Harassment or Hostile Environments in the Workplace.
Plaintiff Daniel Prado and three other Labor Department employees filed separate complaints against the State of New Jersey, the Department of Labor, Pappas, the Labor Commissioner and other high-ranking Department officials. Plaintiffs' lawsuits alleged that Pappas violated the Law Against Discrimination (LAD) and that Pappas and other officials retaliated against plaintiffs for complaining about Pappas' offensive conduct. Pappas then made a request that the Attorney General provide him with a defense and that the State indemnify him in the event of an adverse judgment. Approximately a year later, in July of 2003, an Assistant Attorney General wrote to Pappas that his request had been denied. In March of 2004, Pappas filed a motion in the Law Division to compel the Attorney General to provide him with a defense and to indemnify him. The trial court ordered the Attorney General to provide a defense, but declined to hold the State responsible for indemnification until all the facts were in.
On appeal, the Appellate Division affirmed the trial court's orders in a reported opinion. This Court granted the Attorney General's motion for leave to appeal.
HELD: The Attorney General must provide a defense to a state employee who requests representation pursuant to N.J.S.A. 59:10A-1 unless the Attorney General determines that it is more probable than not that one of the three exceptions set forth in N.J.S.A. 59:10A-2 applies; if the Attorney General denies the employee's request, he must give a written statement of reasons justifying the denial; an appellate court should not reverse the Attorney General's determination unless it is arbitrary, capricious or unreasonable or it is not supported by substantial credible evidence in the record as a whole.
1. An appeal from a final administrative decision of the Attorney General rests in the Appellate Division, barring a compelling policy reason to depart from the dictates of Rule 2:2-3(a). We have every confidence that the Appellate Division can speedily review and decide whether the Attorney General has abused his discretion in denying representation to a state employee. Of course early resolution of that issue requires the cooperation of not only the state employee, who must not delay in requesting representation, but also the Attorney General, who must render a prompt decision. (pp. 12-14)
2. There may be circumstances when the underlying action has been ongoing for a significant period by the time the issue of representation arises. In those circumstances, we leave to the sound discretion of the Appellate Division the authority to transfer jurisdiction to the Law Division if efficient judicial management calls for such action. (p.15)
3. The Attorney General's duty to defend is set forth in N.J.S.A 59:10A-1. Under that statutory scheme, an employee's right to counsel is triggered by his requesting that the Attorney General provide representation. The burden then is on the Attorney General to articulate reasons for not providing a defense. (pp. 17-18).
4. We hold that the Attorney General must provide a defense to a state employee who requests representation pursuant to N.J.S.A. 59:10A-1 unless the Attorney General determines that it is more probable than not that one of the three exceptions set forth in N.J.S.A 59:10A-2 applies; if the Attorney General denies the employee's request, he must give a written statement of reasons justifying the denial; an appellate court should not reverse the Attorney General's determination unless it is arbitrary, capricious or unreasonable or it is not supported by substantial credible evidence in the record as a whole. (pp. 19-20)
5. It is not acceptable for the Attorney General to take approximately one year to deny a state employee a defense after receipt of a timely request for counsel. In view of the substantial delay, it is understandable that the Appellate Division considered the trial court to be the proper forum to review the Attorney General's refusal-to-defend decision. As discussed earlier, however, an appeal of the Attorney General's decision must be taken to the Appellate Division. Once there, the appeal will be placed on an expedited track. The Appellate Division, however, has the authority to transfer the refusal-to-defend issue to the Law Division in those limited circumstances in which efficient judicial management calls for joining that issue with the underlying action. (pp. 21-22)
The judgment of the Appellate Division is REVERSED and the matter is REMANDED for further proceedings consistent with this opinion.
CHIEF JUSTICE PORITZ and JUSTICES LaVECCHIA, ZAZZALI, WALLACE, and RIVERASOTO join in JUSTICE ALBIN's opinion. JUSTICE LONG did not participate.
The opinion of the court was delivered by: Justice Albin
In this case, a state employee was sued by co-workers for, among other things, violating their rights under the Law Against Discrimination and the Conscientious Employee Protection Act.
In accordance with N.J.S.A. 59:10A-1, the employee requested that the Attorney General undertake his defense. Based on an internal investigation, the Attorney General declined to do so, claiming that the employee acted outside the scope of his employment and engaged in willful misconduct. In this appeal, we articulate the standard that must inform the Attorney General's decision whether to defend a state employee in a civil suit within the purview of the New Jersey ...