Alan Schorr’s Employment Case of The Week ending January 18, 2013

Creange v. Borough of Bogota, 2013 WL 194620 (January 18, 2013) (From Bergen County) (not approved for publication).

This week, the New Jersey Appellate Division released a new opinion on collateral estoppel that creates even more confusion on the issues of collateral estoppel in the wake of Winters v. North Hudson Regional Fire and Rescue, 212 N.J. 67 (2012) (read blog article here). This case is the exact opposite procedural pattern as Winters, with the question being whether a jury verdict has an “offensive collateral estoppel” effect on the identical issue being subsequently heard administratively. And the Court ruled that when a defendant seeks a second bite at the apple, the rules of collateral estoppel are different than when a plaintiff seeks a second bite at the apple. The Court referred to the difference as collateral estoppel vs. “offensive collateral estoppel”.

Daniel Creange is a police officer with the Borough of Bogota. While off-duty, he alleged that he was assaulted by three individuals. The individuals were arrested, and while in custody, Officer Creange allegedly made threats to them and confronted some of his fellow officers whom Crange believed were being too friendly with the perpetrators. On June 17, 2005, the Bogota Police Department issued a formal notice of disciplinary charges against plaintiff, alleging six infractions arising from the verbal exchanges in the police station: (1) conduct unbecoming an officer; (2) treatment of prisoners; (3) conduct toward the public; (4) rules of conduct; (5) public contacts; and (6) obedience to laws and regulations. Plaintiff pleaded not guilty to the charges and requested a disciplinary hearing.

Between March 2006 and May 2006, there were a series of disciplinary hearings which found Creange guilty on all counts, resulting in an eight week unpaid suspension, a required fitness for duty exam, and anger management. On June 30, 2006, the Plaintiff filed a three Count Superior Court complaint appealing, as a prerogative writ, the disciplinary hearing and alleging that he was the victim of whistle-blowing on the police department’s policies and practices, and that he was being retaliated against because of his party affiliation. He then twice amended the Complaint to add eight more Counts, including Constitutional claims, CEPA, and other tort claims. The Plaintiff did not bring a claim under the New Jersey Civil Rights Acts. The Superior Court subsequently bifurcated the first three prerogative writ claims from the “tort claims”, and the parties settled the first three claims with an agreement that the Plaintiff would receive a new disciplinary hearing with a neutral and disinterested party.

The second disciplinary hearing began September 18, 2008 before a retired Superior Court Judge and apparently went on for a long period of time over non-sequential days. The Judge found Creange guilty of all six charges, and the Borough, on April 16, 2009, adopted the findings and sanctions. Creange then filed a new prerogative writ Complaint appealing the disciplinary action. While the prerogative writ action was pending, the Plaintiff’s remaining Counts from the first lawsuit were tried before a jury. The Appellate opinion does not explain which Counts remained, but it appears that the CEPA claim had been dismissed for statute of limitations, and therefore the jury heard the New Jersey Constitutional claim for retaliatory discipline in violation of Creange’s right to Free Association.

The jury found in Creange’s favor, finding specifically that the former Mayor and one of the former Councilmen “retaliated against Plaintiff by subjecting him to a disciplinary process and by disciplining him in violation of Plaintiff’s right to Free Speech.” The jury awarded $15,000.00. Creange then moved for summary judgment on his prerogative writs lawsuit appealing the discipline. He argued that the jury’s finding that the discipline was imposed for a retaliatory reason was res judicata and “offensive collateral estoppel”, and therefore the sanctions should be reversed. The trial court denied the motion and upheld the convictions. The Appellate Division affirmed.

Essentially, the Appellate Division held that Creange had settled the first lawsuit by submitting the matter to a neutral party for a new hearing, and the fact that a jury found that the charges were politically motivated for a retaliatory reason did not create any preclusive effect. Nor did the fact that there was an entire jury trial on the issue of whether the discipline was warranted. So how is this different from the Winters case, which the Appellate Division completely ignored? Because, the Appellate Division reasons, this is “offensive collateral estoppel”, which is different than regular collateral estoppel, because here, it is the Defendant seeking a second bite at the apple, and therefore the Court needs to be much more liberal and indulgent.

Primarily disregarding New Jersey law and the line of Winters cases, the Court instead relied on Parklane Hosiery Co. v. Shore, 439 U.S. 322 (1979) . The Court, quoting Parklane Hosiery stated, “The general rule should be that in cases where a plaintiff could easily have joined in the earlier action or where … the application of offensive estoppel would be unfair to a defendant, a trial judge should not allow the use of offensive collateral estoppel.” The Appellate Division reasoned that since the Plaintiff settled the first lawsuit with an agreement to have the matter resolved by a second disciplinary, the Plaintiff could not use “offensive” collateral estoppel, even though a jury subsequently found the discipline to have been brought for retaliatory reasons in violations of the New Jersey Constitution.

So the law in New Jersey is now, if you have any kind of disciplinary hearing in which the plaintiff did or did not raise the issue of retaliation, the plaintiff is barred from bringing a Superior Court lawsuit. But, if the plaintiff wins a Superior Court lawsuit, but the defendant still wants to have an administrative hearing to punish the plaintiff even though the jury already found the discipline to be retaliatory, there is no collateral estoppel because the standards for “offensive collateral estoppel” are more liberal.

Offensive indeed.

It is important to note that the result here may have been very different had there been a Civil Rights Act claim brought, had the CEPA claim been brought in a timely manner, and if the plaintiff had not made a settlement which included a re-hearing. But the legal issue, collateral estoppel as it pertains to disciplinary hearings is now murkier and more dangerous than ever.

Appellant Plaintiff’s counsel: Catherine M. Elston, C. Elston & Associates, LLC

Respondent Defendant’s counsel: Joseph G. Monaghan

Appellate Division Judges: Fuentes and Graves.