By:  Francine Foner, Esq. and Ty Hyderally, Esq.

Last year we wrote about a notable, albeit unpublished, decision of the New Jersey Appellate Division, which reinforced a jury’s broad discretion to award substantial punitive damages to employees in cases under the New Jersey Law Against Discrimination (“LAD”). Pritchett v. State, 2020 N.J. Super. Unpub. LEXIS 754 (https://www.employmentlit.com/ 2020/05/03/nj-court-awards-significant-punitive-damages-in-failure-to-accommodate-case/). On August 12, 2021, the New Jersey Supreme Court affirmed, with some modification, the Appellate Division’s decision. Pritchett v. N.J., 2021 N.J. LEXIS 795, 2021 WL 3556892.

Pritchett involved Shelly Pritchett, a senior corrections officer for the Juvenile Justice Commission (“JJC”), who sued the State of New Jersey for violating the LAD when it failed to accommodate her request for a three-month leave of absence due to her diagnosis of multiple sclerosis (“MS”). After a lengthy trial, the jury agreed with Pritchett and awarded her approximately $1.8 million in emotional distress and economic compensatory damages and $10 million in punitive damages. The Appellate Division affirmed, but remanded for reconsideration of the punitive damages award, directing the trial court to: (1) take into account the various factors discussed in Baker v. National State Bank, 161 N.J. 220 (1999), and BMW of North America, Inc. v. Gore, 517 U.S. 559 (1996); and (2) “ensure that the measure of punishment is both reasonable and proportionate to the amount of harm to the plaintiff and to the general damages recovered,” Id. at *2-3. (See also discussion of Appellate Division decision at https://www.employmentlit.com/2020/05/03/nj-court awards-significant-punitive-damages-in-failure-to-accommodate-case/).

The New Jersey Supreme Court agreed with the Appellate Division’s discussion of the factors to be considered in awarding punitive damage awards by the jury, which are: “‘the degree of reprehensibility of the [wrongful conduct,] the disparity between the harm or potential harm [suffered by the plaintiff] and the plaintiff’s punitive damages award[,] and the difference between this remedy and the civil penalties authorized or imposed in comparable cases,’” or whether the award reflects prejudice, passion, or mistake warranting a new trial on the amount of punitive damages.”  Pritchett, 2020 N.J. Super. Unpub. LEXIS 754 at *81, citing Baker v. Nat’l State Bank, 161 N.J. 220, 231 (1999), quoting BMW v. Gore, 517 U.S. 559, 575 (NJ, 1996). The New Jersey Supreme Court further opined that the most important of those factors to take into consideration is the “reprehensibility of the conduct.” Pritchett, 2021 N.J. LEXIS at *47.

However, the Supreme Court modified the Appellate Division’s instructions to the trial court, as well as all trial courts, to add that when reviewing an award of punitive damages against a public entity, the punitive damages award is further subjected to a heightened scrutiny test. Id. at *3, citing Lockley v. Dep’t of Corr., 177 N.J. 413, 8 (2003) and Green v. Jersey City Bd. of Educ., 177 N.J. 434, 828 (2003).  The basis for the additional scrutiny is that “public monies are the source of the award.”  Pritchett, 2021 N.J. LEXIS at *39-40.

Although punitive damages awards against public entities are subject to enhanced review, the New Jersey Supreme Court reiterated that “there can be no doubt that punitive damages awards under the LAD are available against public sector defendants.” Id. at *41.  Further, the Court acknowledged that “Indeed, the Supreme Court has intimated that there might be awards that “exceed[] a single-digit ratio between punitive and compensatory damages, to a significant degree, [that] will [still] satisfy due process.” Id. at 425. Id. at *48.

Thus, the Supreme Court’s ruling, while modifying the Appellate Division’s decision to include a specific instruction to apply heightened scrutiny when the defendant is a public entity, nonetheless clearly affirmed that a jury has broad discretion to award substantial punitive damages to employees of private or public employers in cases under the LAD.

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