VOL. CLXXXV– NO.10 – INDEX 906
SEPTEMBER 4, 2006
ESTABLISHED 1878
SUPREME COURT
Defecting Experts
Court considers adversaries’ access to opposing expert witnesses
By Rosemary Alito
here were no headline-grabbing
opinions in employment law this
term, but lots of practical guidance for litigators and Law Division
judges
facing
Law
Against
Discrimination
(LAD)
and
Conscientious Employee Protection
Act (CEPA) trials.
The Court’s LAD decisions this
term focused on procedural and litigation issues. In Fitzgerald v. Stanley
Roberts, Inc., 186 N.J. 286 (2006), the
Court addressed four major trial issues:
(1) whether plaintiff’s expert should
have been permitted to testify for the
defense; (2) whether the trial court
erred in refusing to permit testimony
about plaintiff’s truthfulness; (3)
whether the trial court erred in allowing testimony about “gossip” of voluntary sex acts in the office; and (4)
whether the trial court erred in allowing testimony from other employees
that they were harassed by the individual defendant.
The expert witness question is perhaps one of the most broadly applicable rulings in an employment case this
term. The expert in question, a psychiatrist originally retained by plaintiff,
had modified his initial diagnosis after
reviewing additional materials in
preparation for his deposition. In what
was described as a “preemptive” move
before trial, plaintiff stated she was not
T
declaring that an expert witness will be
produced at trial and providing the
Alito is a partner at Kirkpatrick &
Lockhart Nicholson Graham of
Newark and is the author of New
Jersey Employment Law (2nd. ed.)
and Employment Law for New
Jersey Businesses, both published by New Jersey Law Books.
She is also the chair o f the New
Jersey Law Journal Editorial
Board. Lisa Yennella-Granese, an
associate at the firm, assisted
with the article.
certain whether she would call this witness at trial and that defendant should
be barred from calling him if she did
not. The trial court agreed, based on the
Supreme Court’s prior opinion in
Graham v. Gielchinsky, 126 N.J. 361
(1991), that a consulting expert is prohibited from testifying for an adversary
at trial absent the same “exceptional
circumstances” that would have
allowed discovery of the expert’s opinion under R. 4:10-2(d)(3). A majority
of the Supreme Court reversed, holding
that Graham is limited to consulting
experts who are not identified as potential testifying experts at trial. “By
expert’s identity and opinion to another
party…the original proponent has
waived his claim that the information is
privileged. Thus, we hold that access to
the testifying expert is allowed and the
adversary may produce a willing
expert at trial.” The party who calls the
turncoat expert, however, may not elicit testimony about the original retention unless the original attorney opens
the door.
The Supreme Court unanimously
reversed the trial court’s exclusion of
opinion testimony as to plaintiff’s reputation for truthfulness. The trial court
had correctly held that specific inci-
This article is reprinted with permission from the SEPTEMBER 4, 2006 issue of the New Jersey Law Journal. ©2006 ALM Properties, Inc. Further duplication without permission is prohibited. All rights reserved.
NEW JERSEY LAW JOURNAL, SEPTEMBER 4, 2006
2
dents of untruthfulness were inadmissible under N.J.R.E. 608, but erred in
concluding that an opinion based on
such incidents should also be barred.
The Supreme Court explained the distinction concisely:
Thus, a lay opinion regarding a
prior witness’ bad character for
truthfulness will be admissible
if it is founded upon the character witness’ perceptions of the
prior witness and will assist the
jury in determining the fact in
issue… What is required is sufficient familiarity with the subject to form an opinion… As
under the federal rule, under
N.J.R.E. 608 ‘a trait of character cannot be proved by specific instances of conduct.’
Accordingly, at trial, the proponent of a character witness is
not permitted to inquire
whether the witness knows
about any specific instances of
conduct to prove the trait in
issue.
Reputation testimony, in contrast,
requires “establishment of the relationship of both the subject and the witness
to the relevant community and the existence of an expressed community opinion regarding a trait of the subject’s
character.” Upon satisfaction of those
foundational requirements, the Court
concluded, the defendant should have
been permitted to present both opinion
and reputation evidence of plaintiff’s
character.
With respect to the admissibility of
“gossip” about supposed voluntary sexual activities of the individually named
defendant, the Court found such testimony admissible for a limited purpose
of establishing the general character of
the office. But since there was no proper limiting instruction and counsel
seemed to argue in summation that the
gossip was fact, there was error capable
of producing an unjust result.
Finally, the Court reached a similar
conclusion regarding evidence of
alleged other harassment. Although
inadmissible “to prove the defendant’s
propensity to harass women or as evidence of his general bad character,” it
could be relevant to the creation of a
hostile work environment if the plaintiff
personally witnessed it. The trial court
had given a limiting instruction in the
first trial and, in the retrial, “a detailed
instruction regarding the jury’s permitted and non-permitted uses of it should
be given upon defendant’s request.”
Justice John Wallace Jr. issued a
concurring opinion to express his disagreement with the majority rule on the
expert witness issue. He would have
affirmed the trial court’s prohibition of
the turncoat expert, applying an “exceptional circumstances” test in this context too.
In Potente v. County of Hudson,
187 N.J. 103 (2006), the Court considered two issues under the LAD: (1)
whether a directed verdict had been
entered properly on plaintiff’s failure to
accommodate claim; and (2) whether
pre-judgment interest is an available
remedy.
The Court’s answer to the first
question — that fact questions about the
extent to which the County had attempted to accommodate plaintiff should
have precluded a directed verdict —
breaks no new ground. The County had
alleged that it tried to schedule a meeting with plaintiff to discuss accommodation and that plaintiff refused to
attend. Plaintiff denied that any such
meeting had ever been scheduled.
Because “an employee cannot refuse to
cooperate with an employer’s efforts to
accommodate his disability and then
claim failure to accommodate,” the
Court held that the directed verdict had
been improperly granted and that the
jury should decide whether the meeting
had in fact been scheduled.
The Court’s answer to the second
question — that pre-judgment interest is
available under the LAD, even against
public entities — resolved an open
question contrary to federal decisions.
The County did not dispute that prejudgment interest is generally available
185 N.J.L.J. 906
to private employers, and the Court had
little difficulty reaching the same conclusion. Prior to 1972, pre-judgment
interest was available in common law
tort actions only where the amount in
dispute was liquidated. In 1972, Rule
4:42-11(b) was adopted, eliminating the
distinction between liquidated and
unliquidated claims and making prejudgment interest generally available in
common law tort actions. In 1990, the
legislature amended the LAD to provide
that “[a]ll remedies available in common law tort actions shall be available
to prevailing plaintiffs.” N.J.S.A. 10:513. Since pre-judgment interest was by
that time available in common law tort
actions under R. 4:42-11(b), the Court
concluded, it was included as an available remedy under the amendment.
Whether pre-judgment interest is
available against public entities presented a more difficult issue. The court
again started with the language of R.
4:42-11(b), which provides in pertinent
part that, “Except where provided by
law with respect to a public entity or
employee, and except as otherwise provided by law, the court shall, in tort
actions…include in the judgment [prejudgment interest].” (emphasis in original). In Coleman v. Kaye, 87 F.3d 1491,
1511-12 (3d Cir. 1996), and Hurley v.
Atlantic City Police Department, 174
F.3d 95, 130 (3d Cir. 2000), the Third
Circuit interpreted R. 4:42-11(b) as
requiring that pre-judgment interest
against public entities be denied except
where it is specifically authorized by
statute. The Supreme Court rejected
those opinions, finding that they got the
language of the Rule reversed. “The
notion expressed in Hurley and
Coleman that ‘pre-judgment interest
will not be awarded against a public
entity ‘except where provided by
statute,’ is simply wrong. What the rule
actually says is that pre-judgment interest shall be awarded against all defendants unless it is prohibited by applicable law.” As an example, the Court
pointed to the Tort Claims Act, which
specifically provides that no interest
shall accrue prior to the entry of judg-
185 N.J.L.J. 906
NEW JERSEY LAW JOURNAL, SEPTEMBER 4, 2006
ment against a public entity or public
employee. Since the LAD contains no
parallel limitation, and LAD claims are
to subject to the Tort Claims Act, the
Court concluded that pre-judgment
interest is an available remedy against
public defendants under the LAD.
The Supreme Court also addressed
procedural issues in Notte v. Merchants
Mutual Insurance Company, 185 N.J.
490 (2006), deciding one issue in
accordance with lower-court precedent
and remanding another more troublesome issue to the Appellate Division.
One of the two plaintiffs in Notte
had originally filed a complaint alleging that he had been discharged in
retaliation for his protests of the
harassment of a co-employee, in violation of CEPA. After defendants moved
to dismiss the CEPA claim as timebarred, plaintiff sought leave to file
two amended complaints, ultimately
asserting both a common law claim for
wrongful discharge and a retaliation
claim under the LAD. Analyzing Rule
4:9-1, regarding amendments, and
Rule 4:9-3, regarding relation back of
amendments, the Court reiterated the
well-settled principle that amendments
to pleadings must be granted freely.
Proposed amendments will be denied
only if (1) the opposing party would be
prejudiced, or (2) the proposed amendment would be futile (i.e., a motion to
dismiss would be granted). Amended
pleadings will relate back if they
“arose out of the conduct, transaction
or occurrence set forth or attempted to
be set forth in the original pleading.”
The Supreme Court thus agreed with
the Appellate Division in Notte that
plaintiff’s common law wrongful discharge and LAD claims would relate
back because the underlying conduct
and the subject of controversy
remained the same. It rejected the
defendants’ argument that because the
original complaint was time-barred,
there was nothing to relate back to.
Because the statute of limitations is not
self-executing, a claim filed after the
deadline is valid until dismissed.
Moreover, since the defendants were
on notice of the claim, relation back to
the date of filing the defective claim
does not offend the underlying policy
of the statute of limitations and accomplishes substantial justice.
More difficult was the question
whether the amendment should have
been denied as futile. That depended
on whether, under CEPA’s waiver provision, filing of the time-barred CEPA
retaliation claim constituted a waiver
of all other claims based on retaliatory
conduct. Section 8 of CEPA has had
more than its share of litigation. It provides that “the institution of an action
in accordance with this act shall be
deemed a waiver of the rights and
remedies available under any other
contract, collective bargaining agreement, State law, rule or regulation or
under the common law.” Ever since an
early Supreme Court opinion casually
suggested that “institution of an
action” might not have its common
meaning, the question of when the
CEPA waiver becomes applicable has
been the subject of continuing dispute.
Here, the Supreme Court declined to
decide whether plaintiff’s filing of a
time-barred CEPA claim triggered the
waiver provision, but rather remanded
to the Appellate Division to decide the
issue in light of its opinion in Ballinger
v. Delaware River Port Auth., 172 N.J.
586, 602 (2002), that filing a CEPA
claim against the Port Authority did
not effect a waiver because the statute
was constitutionally inapplicable to
that agency, as well as the Appellate
Division’s opinion in Crusco v.
Oakland Care Center, Inc., 305 N.J.
Super. 605, 613 (App. Div. 1997),
where the Court held that “an employee who is barred from making a CEPA
claim has no remedy under the Act and
cannot, therefore, be seen to have any
options from which to elect.”
Another opinion likely to spawn
follow-up litigation is Maimone v. City
of Atlantic City, A59-05 (N.J. July 20,
2006). Plaintiff John Maimone was an
Atlantic City detective who claimed
that he was retaliated against for complaining about what he perceived to be
3
an unwillingness to enforce laws related to prostitution and the location of
sexually-oriented businesses. He
alleged that his protests had resulted in
his transfer from detective to patrolman, with a 3 percent loss of pay. The
trial court granted defendants’ motion
for summary judgment, holding that
although plaintiff had engaged in whistle-blowing, suffered a detriment and
created a fact question as to a causal
relationship between the two, he had
failed to show a reasonable belief that
Atlantic City’s alleged decision to
cease enforcement of the statutes in
question violated a clear mandate of
public policy. Rather, the trial court
saw his complaint as “simply a disagreement with a discretionary decision of supervisory police officials
regarding the allocation of police personnel and resources.” The Appellate
Division reversed in an unpublished
opinion and the Supreme Court
affirmed in a 5-1 opinion by Judge
Stephen
Skillman,
temporarily
assigned. Justice Roberto Rivera-Soto
filed a dissenting opinion and Justice
Wallace did not participate.
In finding that plaintiff presented
sufficient facts from which a jury could
conclude that he had an objectively
reasonable belief that Atlantic City’s
actions were incompatible with a law
impacting the public welfare, the Court
focused on the fact that plaintiff’s allegation was not simply that his recommendations for enforcement were
ignored, but that a decision had been
made not to enforce the statute at all.
As such, the Court concluded, “a trier
of fact could find that plaintiff had an
objectively reasonable belief that
defendants made a policy decision that
was incompatible with a clear mandate
of public policy concerning the public
health, safety and welfare.”
Unfortunately, in describing the
plaintiff’s burden in this respect in a
claim under CEPA section 3c(3), the
majority employed broad and unclear
language (already attacked by the dissent) that is likely to be the subject of
continuing litigation for years to come.
4
NEW JERSEY LAW JOURNAL, SEPTEMBER 4, 2006
The majority opinion states “[p]laintiff
only has to show that he had an ‘objectively reasonable belief’ in the existence of such a violation or incompatibility… Plaintiff may carry this burden
by demonstrating that ‘there is a substantial nexus between the complained-of conduct’ — the cessation of
the investigations of promotion of
prostitution and failure to enforce laws
relating to the location of sexually-orientated business — and ‘[the] law or
public policy identified by. . .plaintiff’
— in this case the provisions of the
Code proscribing such criminal conduct.” Of course, the majority could
not have meant that mere proof of a
“nexus” will always satisfy this burden
because in some cases the “nexus”
might demonstrate that any objection
to the conduct was objectively unreasonable. Precisely what the majority
did mean, however, will await further
explication.
The majority also rejected defendants’ contention that the 3 percent
wage reduction plaintiff suffered did
not constitute retaliatory action under
CEPA because he had not suffered a
loss of rank along with it. The majority reached the common sense conclusion that a loss of wages and resultant
loss of pension accruals constituted an
“adverse employment action taken
against an employee in the terms and
conditions of employment” within the
meaning of N.J.S.A. 34:19-2(e).
Finally, the majority concluded
that plaintiff had made a sufficient
showing of causation to proceed to a
jury. His transfer followed shortly after
his numerous complaints of nonenforcement of the prostitution statutes
and the reason given for the transfer —
his attendance at the wedding of the
daughter of an alleged mobster several
years earlier — was found to be
implausible. It did not matter that
plaintiff lacked direct proof that the
decision-maker knew of his whistleblowing; circumstantial evidence (e.g.,
his request that one of his written complaints be passed on to the decisionmaker) was enough.
In a brief dissent, Justice RiveraSoto agreed with the trial court that
plaintiff’s complaint was in reality just
a question of how limited municipal
resources should be allocated.
“Highlighting the patent absurdity that
results from allowing a rank-and-file
police officer to determine law
enforcement policy for an entire
department, the trial court narrowed
the inquiry to the decision-making discretion vested in the police officer on
patrol and made the common sense
observation that ‘[i]t is self-evident
that no police officer can, without prioritizing, effectively prosecute every
violation of the law that comes to his or
her attention.’ The trial court further
noted that ‘[o]ne may reasonably conclude that a police officer should have
the discretion to determine that there
are legitimate priorities that would preclude the investment of the same level
of resources in the enforcement of
every provision of law.”
Justice Rivera-Soto also objected
to the majority’s description of plaintiff’s burden of proof, quoted above,
finding that “a municipality now must
be governed by its lowest common
denominator or risk the imposition of
liability.” It flips the nature of the
employer/employee relationship by
suggesting that to avoid CEPA liability
an employer must explain to its
employees the basis of “every discretionary decision to the satisfaction of
every line employee.” That, Justice
Rivera-Soto concluded, “was never
CEPA’s purpose or intendment.”
In Feldman v. Hunterdon
Radiological Associates, 187 N.J. 228
(2006), a unanimous Court adopted a
common sense and fact-sensitive standard to determine who is an employee
within the intendment of CEPA in
accordance with both the statutory language and the legislative intent.
Plaintiff Ruth Feldman was a doctor
and a shareholder-director of the
defendant Hunterdon Radiological
Associates (HRA). She claimed,
among other things, that she had been
constructively discharged for com-
185 N.J.L.J. 906
plaining about the incompetence of
another shareholder. In determining
whether Feldman was an “employee”
under CEPA, the Court held that neither titles nor the mere existence of an
ownership interest controlled. Instead,
the Court followed the United States
Supreme
Court’s
opinion
in
Clackamas
Gastroenterology
Associates v. Wells, 538 U.S. 440
(2003), which addressed the question
of employee status under the
Americans with Disabilities Act. That
“inquiry is fact-intensive, focusing on
the professional association’s direction
and control over the shareholder-director and the true power and vulnerability of the shareholder-director within
the association.”
Plaintiff Ruth Feldman was one of
several shareholders-directors who
shared in profits and losses and had an
equal vote. She had an employment
and stock purchase agreement with
HRA that required her to work as a
physician, performing duties as directed by the board of directors such as
recordkeeping, promoting the firm and
rendering quality medical care. The
agreement required her to devote herself full time to the business of HRA
and to treat those patients assigned to
her by the corporation. It set forth the
manner in which the relationship could
be terminated by HRA and by
Feldman, and included a post-termination restrictive covenant.
According to Feldman, her problems with HRA began when, as chair
of imaging, she tried to address quality
issues about another physician’s xrays. When re-education efforts proved
unsuccessful, Feldman wanted to take
stronger action, but the majority of the
shareholders did not agree. After that
disagreement, she claimed, she was
marginalized, excluded and eventually
constructively discharged.
In considering whether Feldman
was an employee under CEPA, the
court began with a statement of the
statute’s purpose: “to provide ‘broad
protections
against
employer
retaliat[ion’ for workers whose whis-
185 N.J.L.J. 906
NEW JERSEY LAW JOURNAL, SEPTEMBER 4, 2006
tle-blowing actions benefit the health,
safety and welfare of the public.” The
Court then turned to the statute’s definition of an “employee” as “any individual who performs services for and
under the control and direction of an
employer for wages or other remuneration.” Since it was undisputed Feldman
performed work as a radiologist in
return for remuneration, the issue was
whether she did so “under the control
and direction of an employer.” In
resolving that question, the Court
noted, it is important to focus on the
goals underlying CEPA, particularly
the protection of individuals who are
otherwise vulnerable to the improper
exercise of authority. Cf. Casamasino
v. City of Jersey City, 304 N.J. Super.
226 (App. Div. 1997), rev’d on other
grounds, 158 N.J. 333 (1999) (tax
assessor who could be removed only
by Director of Taxation or in court
action not protected by CEPA).
To make that determination with
regard to physician/shareholders, the
Court borrowed the six-factor test utilized by the U.S. Supreme Court in
Clackamas:
1) Whether the organization can
hire or fire the individual or set the
rules and regulations of the individual’s work;
2) Whether and, if so, to what
extent the organization supervises the
individual’s work;
3) Whether the individual reports
to someone higher in the organization;
4) Whether and, if so, to what
extent the individual is able to influence the organization;
5) Whether the parities intended
that the individual be an employee, as
expressed in written agreements or
contracts;
6) Whether the individual shares in
the profits, losses, and liabilities of the
organization.
Although noting the “holistic”
nature of the Clackamas test, the Court
emphasized the critical importance of
the fourth factor. “[C]ourts should ask
whether, because of a shareholderdirector’s inability to influence an
organization, he or she is within the
class of people the statute was
designed to protect… Conversely,
where there is no factual dispute over
whether a shareholder-director has all
the tools within [h]er control to root
out wrongdoing, and consequently has
no need to blow the whistle at all, she
is not an employee for CEPA purposes.” Applying that standard to the facts
before it, the Court easily found the
Feldman was not an employee. She
had shared in the management and
control of the firm for many years; she
5
had an equal vote on all matters including hiring and compensation; and even
headed a department. As the Court
noted, it was not until she was unable
to convince her fellow shareholdersdirectors to adopt her recommendations about an underperforming colleague that she claimed to have a status
change from owner to employee. In
these circumstances, the Court concluded, no reasonable juror could conclude that Feldman was an employee
the legislature intended to protect
under CEPA.
Finally, in Olivieri v. Y.M.F.
Carpet, Inc., 186 N.J. 511 (2006), the
Court put to rest an issue that has
plagued employer and employee-side
lawyers alike, holding that determinations in unemployment compensation
(UC) proceedings do not have collateral estoppel effect in LAD and other
civil litigation. By following the
majority of jurisdictions in declining to
give UC determinations estoppel
effect, the Court has relieved litigants
from the burden of investing inordinate
time and effort in UC proceedings,
solely in anticipation of the use of UC
determination in a subsequent suit. The
Court’s elimination of that possibility
is another of the practical problem
solvers we have grown accustomed to
from the Poritz Court. ■