An Act concerning awarding punitive damages and amending P.L.1995, c.142, P.L.1945, c.169, P.L.1986, c.105, and N.J.S.59:9-2.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 5 of P.L.1995, c.142 (C.2A:15-5.13) is amended to read as follows:

5. a. Any actions involving punitive damages shall, if requested by any defendant, be conducted in a bifurcated trial.

b. In the first stage of a bifurcated trial, the trier of fact shall determine liability for compensatory damages and the amount of compensatory damages or nominal damages. Evidence relevant only to the issues of punitive damages shall not be admissible in this stage.

c. Punitive damages may be awarded only if compensatory damages have been awarded in the first stage of the trial. An award of nominal damages cannot support an award of punitive damages.

d. In the second stage of a bifurcated trial, the trier of fact shall determine if a defendant is liable for punitive damages.

e. In any action in which there are two or more defendants, an award of punitive damages must be specific as to a defendant, and each defendant is liable only for the amount of the award made against that defendant.

f. No public entity is liable for punitive damages. No public employee acting within the scope of his employment is liable for punitive damages. For purposes of this section, "public entity" means a public entity as defined in N.J.S.59:1-3 and "public employee" means a public employee as defined in N.J.S.59:1-3.

(cf: P.L.1995, c.142, s.5)

2. Section 12 of P.L.1945, c.169 (C.10:5-13) is amended to read as follows:

12. Any person claiming to be aggrieved by an unlawful employment practice or an unlawful discrimination may, personally or by an attorney-at-law, make, sign and file with the division a verified complaint in writing which shall state the name and address of the person, employer, labor organization, employment agency, owner, lessee, proprietor, manager, superintendent, or agent alleged to have committed the unlawful employment practice or unlawful discrimination complained of and which shall set forth the particulars thereof and shall contain such other information as may be required by the division. Upon receipt of the complaint, the division shall notify the complainant on a form promulgated by the
director of the division and approved by the Attorney General of the complainant's rights under this act, including the right to file a complaint in the Superior Court to be heard before a jury; of the jurisdictional limitations of the division; and any other provisions of this act, without interpretation, that may apply to the complaint. The Commissioner of Labor and Workforce Development, the Attorney General, or the Commissioner of Education may, in like manner, make, sign and file such complaint. Any employer whose employees, or some of them, refuse or threaten to refuse to co-operate with the provisions of this act, may file with the division a verified complaint asking for assistance by conciliation or other remedial action.

Any complainant may initiate suit in Superior Court under this act without first filing a complaint with the division or any municipal office. Upon the application of any party, a jury trial shall be directed to try the validity of any claim under this act specified in the suit. All remedies available in common law tort actions shall be available to prevailing plaintiffs except that punitive damages shall not be awarded against public entities or public employees acting within the scope of their employment as provided in N.J.S.59:9-2. These remedies are in addition to any provided by this act or any other statute. Prosecution of such suit in Superior Court under this act shall bar the filing of a complaint with the division or any municipal office during the pendency of any such suit.

At any time after 180 days from the filing of a complaint with the division, a complainant may file a request with the division to present the action personally or through counsel to the Office of Administrative Law. Upon such request, the director of the division shall file the action with the Office of Administrative Law, provided that no action may be filed with the Office of Administrative Law where the director of the division has found that no probable cause exists to credit the allegations of the complaint or has otherwise dismissed the complaint.

A party to an action based upon a violation of this act shall mail a copy of the initial pleadings or claims, amended pleadings or claims, counterclaims, briefs, and legal memoranda to the division at the same time as filing such documents with the Office of Administrative Law or the court. Upon application to the Office of Administrative Law or to the court wherein the matter is pending, the division shall be permitted to intervene.

(cf: P.L.1990, c.12, s.2)

3. Section 5 of P.L.1986, c.105 (C.34:19-5) is amended to read as follows:

5. Upon a violation of any of the provisions of this act, an aggrieved employee or former employee may, within one year, institute a civil action in a court of competent jurisdiction. Upon the application of any party, a jury trial shall be directed to try the validity of any claim under this act specified in the suit. All remedies available in common law tort actions shall be available to prevailing plaintiffs except that punitive damages shall not be awarded against public entities or public employees acting within the scope of their employment as provided in N.J.S.59:9-2. These remedies are in addition to any legal or equitable relief provided by this act or any other statute. The court shall also order, where appropriate and to the fullest extent possible:

a. An injunction to restrain any violation of this act which is continuing at the time that the court issues its order;

b. The reinstatement of the employee to the same position held before the retaliatory action, or to an equivalent position;

c. The reinstatement of full fringe benefits and seniority rights;

d. The compensation for all lost wages, benefits and other remuneration; and

e. The payment by the employer of reasonable costs, and attorney's fees.

In addition, the court or jury may order: the assessment of a civil fine of not more than $10,000 for the first violation of the act and not more than $20,000 for each subsequent violation, which shall be paid to the State Treasurer for deposit in the General Fund; punitive damages except against public entities or public employees acting within the scope of their employment as provided in N.J.S.59:9-2; or both a civil fine and punitive damages. In determining the amount of punitive damages, the court or jury shall consider not only the amount of compensatory damages awarded to the employee, but also the amount of all damages caused to shareholders, investors, clients, patients, customers, employees, former employees, retirees or pensioners of the employer, or to the public or any governmental entity, by the activities, policies or practices of the employer which the employee disclosed, threatened to disclose, provided testimony regarding, objected to, or refused to participate in.

(cf: P.L.2005, c.329, s.2)

4. N.J.S.59:9-2 is amended to read as follows:

59:9-2. a. No interest shall accrue prior to the entry of judgment against a public entity or public employee.

b. No judgment shall be granted against a public entity or public employee on the basis of strict liability, implied warranty or products liability.

c. No punitive or exemplary damages shall be awarded against a public entity or public employee acting within the scope of his employment in any action regardless of the applicability of other remedies available in common law or pursuant to statutory law, including, but not limited to, any actions under the "Law Against Discrimination," P.L.1945, c.169 (C.10:5-1 et seq.) and the "Conscientious Employee Protection Act," P.L.1986, c.105 (C.34:19-1 et seq.).

d. No damages shall be awarded against a public entity or public employee for pain and suffering resulting from any injury; provided, however, that this limitation on the recovery of damages for pain and suffering shall not apply in cases of permanent loss of a bodily function, permanent disfigurement or dismemberment where the medical treatment expenses are in excess of $3,600.00. For purposes of this section medical treatment expenses are defined as the reasonable value of services rendered for necessary surgical, medical and dental treatment of the claimant for such injury, sickness or disease, including prosthetic devices and ambulance, hospital or professional nursing service.

e. If a claimant receives or is entitled to receive benefits for the injuries allegedly incurred from a policy or policies of insurance or any other source other than a joint tortfeasor, such benefits shall be disclosed to the court and the amount thereof which duplicates any benefit contained in the award shall be deducted from any award against a public entity or public employee recovered by such claimant; provided, however, that nothing in this provision shall be construed to limit the rights of a beneficiary under a life insurance policy. No insurer or other person shall be entitled to bring an action under a subrogation provision in an insurance contract against a public entity or public employee.

(cf: P.L.2000, c.126, s.32)

5. This act shall take effect immediately and shall apply to causes of action pending or filed on or after the effective date.

STATEMENT

This bill amends the "New Jersey Tort Claims Act," N.J.S.59:1-1 et seq., to clarify that the legislative intent of the prohibition against the awarding of punitive damages against either a public entity or public employee, acting within the scope of his employment, applies in every action, regardless of the applicability of other remedies available in common law or pursuant to other statutory law. The bill specifically mentions the "Law Against Discrimination," P.L.1945, c.169 (C.10:5-1 et seq.) (hereafter, LAD), and the "Conscientious Employee Protection Act," P.L.1986, c.105 (C.34:19-1 et seq.) (hereafter, CEPA), since a court decision previously held to the contrary regarding these two enactments. See Abbamont v. Piscataway Township Bd. of Educ., 138 N.J. 405 (1994).

The bill also amends section 5 of P.L.1995, c.142 (C:2A:15-5.13) concerning punitive damages generally, and the specific sections of the LAD and CEPA that provide prevailing plaintiffs in these statutory-based actions "all remedies [also] available in common law tort," to clarify that such remedies do not include punitive damages against public entities or public employees acting within the scope of their employment.

This bill would not permit the awarding of punitive damages on the grounds that, ultimately, it is the local taxpayer who will bear these litigation costs. The sponsor believes that the reasons for awarding punitive damages generally do not outweigh the public policy considerations of financially burdening citizens at large when a public entity or public employee, acting within the scope of his employment, is involved.