Opinion
DOCKET NO. A-1082-15T4
09-23-2016
PASQUALE FALCETTI, JR., Plaintiff-Respondent, v. WATERFRONT COMMISSION OF NEW YORK HARBOR, Defendant-Appellant.
Melissa A. Provost argued the cause for appellant (Drinker Biddle & Reath, LLP, attorneys; Ms. Provost, on the briefs). George T. Daggett argued the cause for respondent (Daggett & Kraemer, attorneys; Mr. Daggett and Joseph M. Corazza, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Hoffman, Leone and Whipple. On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-4916-14. Melissa A. Provost argued the cause for appellant (Drinker Biddle & Reath, LLP, attorneys; Ms. Provost, on the briefs). George T. Daggett argued the cause for respondent (Daggett & Kraemer, attorneys; Mr. Daggett and Joseph M. Corazza, on the brief). PER CURIAM
Defendant, the Waterfront Commission of New York Harbor (Commission), appeals the trial court's July 24, 2015 order requiring it to produce documents, and its September 18, 2015 order denying reconsideration. We vacate and remand.
I.
Plaintiff Pasquale Falcetti, Jr.'s complaint alleged as follows. Plaintiff is a member of the International Longshoreman's Association (ILA). A longshoreman cannot work on the waterfront in New York Harbor without being registered with the Commission. In April 2012, plaintiff applied for registration. Plaintiff alleged he had worked for Apexel LLC, a subsidiary of Maher Terminals LLC (collectively Apexel). However, the Apexel facility where he worked closed in 2012. Apexel's new facility was within the Commission's jurisdiction, and its employees had to apply to be registered. Apexel sponsored plaintiff's application.
In his application, plaintiff said he had knowingly associated with a person known or reputed to be a member or associate of an organized crime group. He identified his father, who was arrested in 2001 or 2002, "was away for 5 and a half years," and was now back and off parole. Plaintiff also answered "yes" that he had been named in an indictment, accusatory instrument, search warrant, or court-ordered electronic surveillance, explaining he had been questioned about "how I got the job of longshoreman" in a case against the ILA President. He added he had been fined for the crime or offense of leaving the scene of an accident.
Plaintiff appeared for fingerprinting and for two interviews. Plaintiff alleged in the twenty-seven months since his application, the Commission had "taken no action in connection with his application," had "given no reason for the delay in processing his application," and had failed to register him or tell him his application was denied.
In early July 2014, the Commission wrote plaintiff telling him that Apexel had withdrawn its sponsorship, resulting in the administrative withdrawal of his application. On July 14, 2014, plaintiff filed his complaint. He demanded the Commission immediately register him. He also sought punitive damages, counsel fees, costs, and lost wages from April 2012 onward.
Plaintiff served a notice to produce, demanding that the Commission produce the following documents in connection with his application: (1) its "[e]ntire investigative file," (2) all e-mails sent by Paul Babchik to any person, (3) any interoffice communications between Babchik and investigators, and (4) any correspondence to or from Apexel. Babchik is an attorney employed by the Commission.
The Commission served its response, raising numerous objections to plaintiff's request for documents, including that requests (1) through (3) sought documents protected by the law enforcement investigatory privilege and work product doctrine. Without waiving its objections, the Commission produced 606 pages of documents.
The Commission also served a privilege log identifying 196 documents it withheld based on the law enforcement investigatory privilege. Thirty-one of those documents were also withheld based on the work product doctrine. The privilege log identified the date, author, recipient, persons copied, description, and applicable privilege(s) for each document.
Plaintiff filed a motion to compel the Commission to produce documents. Plaintiff's counsel certified that, because plaintiff's father had been convicted of organized crime activity, the Commission deliberately delayed plaintiff's application, causing his employer to withdraw its sponsorship. Plaintiff's counsel cited four documents on the privilege log which he claimed related to plaintiff's father. Counsel's certification made no reference to the Commission's claims of privilege.
In opposition, the Commission's counsel certified as follows. The Commission's Police Division conducted an investigation in connection with plaintiff's application. Although Apexel's withdrawal of its sponsorship resulted in the administrative withdrawal of plaintiff's application, the investigation was considered open and ongoing because plaintiff could reapply at any time. The documents listed in the privilege log were protected by the law enforcement investigatory privilege. Further, starting on June 27, 2012, plaintiff's counsel threatened to sue the Commission, so the subsequent documents directly related to that threatened litigation were protected by the work product doctrine also.
On July 24, 2015, the trial court issued an order stating simply: "Defendants herein shall provide to Plaintiff the documents requested pursuant to discovery."
The Commission filed a motion for reconsideration dated August 12, 2015. Its Executive Director certified he was familiar with the investigation. He reiterated plaintiff's background investigation remained open because he could be sponsored again. He added: "[T]here is a related ongoing criminal investigation pertaining to unresolved potential violations of criminal statutes" by plaintiff. He certified:
The privilege log indicated the Executive Director was the sender or recipient of numerous e-mails about plaintiff's application and investigation beginning in 2012.
The Executive Director later certified he only learned of the criminal investigation on August 4, 2015, after the trial court granted the motion to compel.
10. The Waterfront Commission will suffer irreparable harm if it is required to disclose its investigative file, since it would be forced to disclose confidential information pertaining to an ongoing
criminal investigation and an open administrative investigation.
11. The Waterfront Commission's investigation in this matter has been jointly undertaken by a team consisting of senior and assistant counsels, police detectives and intelligence analysts. Indeed, the file contains detailed, comprehensive e[-]mails between the lead attorney in the investigation and members of the Waterfront Commission's Police Division, Intelligence Division and Law Division which specifically describe the agency's techniques and procedures in [plaintiff's] investigation. The file also contains the lead attorney's notes regarding the investigation, as well as confidential memoranda to other attorneys in the Law Division detailing the status of the investigation and setting forth future action items to be completed. Disclosure of the file would not only reveal the agency's investigation techniques and procedures, but it would also directly compromise ongoing criminal and administrative investigations.
12. The disclosure of the investigation file may also lead to the identification of witnesses and confidential informants, as well as other sources of information. Notably, [plaintiff's] father has been identified by numerous law enforcement agencies as a capo in the Genovese organized crime family. This poses a heightened and critical need for the Waterfront Commission to protect the confidentiality of witnesses and confidential informants in this matter.
13. Should the Waterfront Commission be compelled to turn over its investigative file, other potential witnesses and confidential informants will be unwilling to cooperate with the Police Division going forward in this and other matters, for fear
of retribution from their employers or from third parties.
On September 18, 2015, the trial court denied defendant's motion for reconsideration. We granted defendant's motion for leave to appeal. We stayed the trial court's order directing defendant to produce its entire investigation file.
II.
We must hew to our standard of review. "A trial court's resolution of a discovery issue is entitled to substantial deference and will not be overturned absent an abuse of discretion." State v. Stein, 225 N.J. 582, 593 (2016). We "need not defer, however, to a discovery order that is well 'wide of the mark,' or 'based on a mistaken understanding of the applicable law.'" State v. Hernandez, 225 N.J. 451, 461 (2016) (citations omitted). "[A] trial court's reconsideration decision will be left undisturbed unless it represents a clear abuse of discretion." Pitney Bowes Bank, Inc. v. ABC Caging Fulfillment, 440 N.J. Super. 378, 382 (App. Div. 2015).
III.
The Waterfront Commission was established by compact between the States of New Jersey and New York. Waterfront Comm'n of N.Y. Harbor v. Mercedes-Benz of N. Am., Inc., 99 N.J. 402, 409 (1985). "[T]he primary purpose of this bistate legislation was the elimination of corruption on the waterfront in the Port of New York Harbor." Ibid. "In accordance with its statutory mandate to eliminate the pervasive involvement of criminals in waterfront activity, the Waterfront Commission established by the [compact] proceeded to regulate employment practices in the Port of New York." Id. at 410.
No person can work as a longshoreman unless registered with the Commission. N.J.S.A. 32:23-27. The Commission may deny registration to a person "found by the commission on the basis of the facts and evidence before it, to constitute a danger to the public peace or safety." N.J.S.A. 32:23-29(c). In addition, the Commission may deny registration to a person for "[a]ssociation with a person who has been identified by a federal, State or local law enforcement agency as a member or associate of an organized crime group," or "convicted of a racketeering activity" if registration "would be inimical to the policies of this act." N.J.S.A. 32:23-92(6)-(7). Association "encompasses the ordinary meaning of the term:—to keep company, as a friend, companion or ally—and encompasses both social and economic relationships." In re Pontoriero, 439 N.J. Super. 24, 38 (App. Div. 2015).
The Commission has the power to conduct investigations, and its investigators are "vested with all the powers of a peace or police officer." N.J.S.A. 32:23-10(11), -86(4). The Commission may adopt rules and regulations, which become part of the compact. N.J.S.A. 32:23-10(7); State v. Murphy, 36 N.J. 172, 187-88 (1961). Those rules and regulations are set forth at N.J.A.C. Title 19, Subtitle AA, Rules 1.1 through 10.3. Rule 1.23(a) attempts to protect law enforcement investigatory records from disclosure:
The records of the commission shall be made available for public inspection and copying, except that access may be denied as to records or portions thereof which: . . . (5) are compiled for law enforcement or official investigatory purposes when their disclosure would interfere with law enforcement investigations or judicial, licensing, registration or disciplinary proceedings or hearings, or deprive a person of a right to a fair trial or hearing or impartial adjudication, or identify a confidential source or disclose confidential information relating to a criminal, licensing, registration or disciplinary investigation, or reveal criminal investigative techniques or procedures, except routine techniques and procedures[.]
Murphy ruled the Commission could not "by its own enactment relieve itself of the obligation to make disclosure in a criminal proceeding." Murphy, supra, 36 N.J. at 188. In deciding that "narrow question," Murphy did not address its effect in civil litigation. See ibid.
Other authorities similarly recognize the need to protect law enforcement investigations, law enforcement investigative techniques, confidential law enforcement sources, and licensure investigations from disclosure. Under New Jersey's Open Public Records Act (OPRA), N.J.S.A. 47:1A-1 to -13, "criminal investigatory record[s]" are deemed confidential, excluding from disclosure any "record which is not required by law to be made, maintained or kept on file that is held by a law enforcement agency which pertains to any criminal investigation or related civil enforcement proceeding." N.J.S.A. 47:1A-1.1. OPRA also excludes records "pertain[ing] to an investigation in progress by any public agency" from disclosure "if the inspection, copying or examination of such record or records shall be inimical to the public interest." N.J.S.A. 47:1A-3(a).
OPRA does not govern here because it does not "limit[] the common law right of access to a government record, including criminal investigatory records of a law enforcement agency." N.J.S.A. 47:1A-8. However, a court can still consider OPRA's exclusions "as expressions of legislative policy on the subject of confidentiality." Bergen Cty. Improvement Auth. v. N. Jersey Media Grp., Inc., 370 N.J. Super. 504, 520 (App. Div.), certif. denied, 182 N.J. 143 (2004).
Moreover, "[l]ong before the enactment of OPRA, the confidentiality of information law enforcement authorities receive regarding possible criminal activity was recognized in our caselaw." N. Jersey Media Grp. Inc. v. Bergen Cty. Prosecutor's Office, ___ N.J. Super. ___, ___ (App. Div. 2016) (slip op. at 24).
The receipt by appropriate law enforcement officials of information concerning the existence or occurrence of criminal activities is critical to the uncovering and
the prosecution of criminal offenses, and is thus crucial to effective law enforcement. In order that the flow of such information be not impeded or cut off, the law has long treated the information as confidential and privileged against disclosure, thereby protecting witness security, the State's relationship with its informants and witnesses, and other confidential relationships, among other things.
[State v. Marshall, 148 N.J. 89, 273 (quoting River Edge Sav. & Loan Ass'n v. Hyland, 165 N.J. Super. 540, 543-44 (App. Div.), certif. denied, 81 N.J. 58 (1979)), cert. denied, 522 U.S. 850, 118 S. Ct. 140, 139 L. Ed. 2d 88 (1997).]
"[A]ccess to investigatory material is premised upon the government's need to conduct such affairs with skill, with sensitivity to the privacy interests involved, and in an atmosphere of confidentiality that encourages the utmost candor." Loigman v. Kimmelman, 102 N.J. 98, 107 (1986). Therefore, courts must "balance the citizen's right of access to official information with the government's need for confidentiality in the conduct of law-enforcement investigations." Id. at 101; see id. at 113.
Similar considerations limit disclosure of background investigations by licensing agencies. Nero v. Hyland, 76 N.J. 213, 223-25 (1978). In Nero, our Supreme Court emphasized that
the main reason for the effectiveness of such investigations is that the individuals who are questioned can be assured anonymity. It is extremely unlikely that persons who
are questioned pursuant to one of these checks would ever be forthright in responding if their anonymity could not be guaranteed. This undesirable "chilling effect" would be especially pernicious with respect to persons who might otherwise provide information relevant to the [applicant's] unsuitability[.]
[Id. at 224.]
The Court added in Nero that "[c]onfidentiality is vital not only because it serves to protect government sources of information, but also because it enhances the effectiveness of investigative techniques and procedures." Id. at 225 (citations omitted). "'[E]ven inactive investigatory files may have to be kept confidential in order to convince citizens that they may safely confide in law enforcement officials.'" Ibid. (citations omitted). Applying these principles, the Court held "that the public interest in maintaining confidentiality outweighs [a prospective appointee]'s interest in disclosure," even though the Governor told the press that the Attorney General had not recommended appointment because of concern raised by information revealed by the "four-way" background check. Id. at 217, 226-27 (finding the public interest "far more compelling").
We have since reaffirmed that the principles expounded in Nero guide the release of information from such background investigations. Piniero v. N.J. Div. of State Police, 404 N.J. Super. 194, 205 (App. Div. 2008). We stressed that "parties' discovery rights are not unlimited. They may obtain discovery 'regarding any matter not privileged.'" Id. at 204 (quoting R. 4:10-2(a)). We ruled courts "must balance plaintiffs' right to discovery against the 'common-law qualified privilege[,] variously referred to as the "official information," "governmental," or "executive" privilege,' which, in New Jersey, finds expression in both the statutes and the evidence rules." Ibid. (quoting Loigman, supra, 102 N.J. at 107).
"No person shall disclose official information of this State . . . if the judge finds that disclosure of the information in the action will be harmful to the interests of the public." N.J.S.A. 2A:84A-27, reprinted in N.J.R.E. 515.
We added in Piniero that in "civil cases in which disclosure is sought not to aid in the defense of criminal charges, but for the purpose of asserting claims for money damages, the interests of the State in maintaining . . . confidentiality . . . are entitled to a greater degree of respect." Id. at 205 (quoting Cashen v. Spann, 66 N.J. 541, 556, cert. denied, 423 U.S. 829, 96 S. Ct. 48, 46 L. Ed. 2d 46 (1975)). We stressed that "[i]ndividuals provide confidential information in reliance upon their identities not being disclosed." Id. at 211. "The disclosure of the investigation report would have a chilling effect, preventing persons with knowledge of the appointee's unsuitability for office from coming forward." Ibid. (citing Nero, supra, 76 N.J. at 224).
Those concerns are similarly reflected in New Jersey's statues and evidence rules, which create
a privilege to refuse to disclose the identity of a person who has furnished information purporting to disclose a violation of a provision of the laws of this State or of the United States to a representative of the State or the United States or a governmental division thereof, charged with the duty of enforcing that provision, and evidence thereof is inadmissible, unless the judge finds that (a) the identity of the person furnishing the information has already been otherwise disclosed or (b) disclosure of his identity is essential to assure a fair determination of the issues.
[N.J.S.A. 2A:84A-28, reprinted in N.J.R.E. 516.]
In Piniero, we held that a trial "court should balance, in each case, the individual's right to the information against the public interest in the confidentiality of the information." Id. at 206. "Determining the appropriate balance of public and private interests requires the trial judge to conduct an '"exquisite weighing process."'" Id. at 205 (quoting Loigman, supra, 102 N.J. at 108). "The balancing process must be concretely focused upon the relative interests of the parties in relation to the specific materials requested." Id. at 206-07. We "directed the court to review the documents under the balancing test enunciated in Nero; and, if the court determined that the four-way investigation report should be released, to redact the identities of confidential sources of information to the extent possible without destroying the utility of the report." Id. at 203, 211 (finding the plaintiffs' interest outweighed by "the potential adverse effects that disclosure could have upon persons who provide confidential information"). Nero and Piniero must be applied here to the documents the Commission claims are privileged.
Because New Jersey law provides sufficient guidance to resolve this appeal, we need not consider the Commission's argument that we should adopt a law enforcement investigatory privilege based on federal case law. See, e.g., In re City of N.Y., 607 F.3d 923, 940-50 (2d Cir. 2010); In re U.S. Dep't of Homeland Sec., 459 F.3d 565, 568-71 (5th Cir. 2006); Dellwood Farms, Inc. v. Cargill, Inc., 128 F.3d 1122, 1124-26 (7th Cir. 1997); In re Sealed Case, 856 F.2d 268, 271-72 (D.C. Cir. 1988).
In addition, the Commission claimed the work-product doctrine protected thirty-one documents. Under the work-product doctrine, a party may not obtain discovery of documents "prepared in anticipation of litigation" absent "a showing that the party seeking discovery has substantial need of the materials in the preparation of the case and is unable without undue hardship to obtain the substantial equivalent of the materials by other means." R. 4:10-2(c). Even if the party makes that showing, "the court shall protect against disclosure of the mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party concerning the litigation." Ibid.
To address claims of privilege, such as the privileges discussed above, "courts have fashioned a set of procedures that require the agencies making the claim to preliminarily classify, describe, and, in some cases, index the materials" in a privilege log. Loigman, supra, 102 N.J. at 109.
[A]fter evaluating the detailed description of the material furnished to it by the [agency], and balancing the asserted need for confidentiality gleaned therefrom against the public interest alleged by the plaintiff as well as the substantiality of his need for the materials to vindicate that public interest, the court shall decide whether an in camera inspection is appropriate.
[Id. at 112-13.]
"If the court deems it necessary to view the materials in camera, it will thereafter make a final determination as to whether, by further excision or deletion of privileged and confidential materials, it can appropriately order the materials released." Id. at 113. "The trial court must examine each document individually, and explain as to each document . . . why it has so ruled." Seacoast Builders Corp. v. Rutgers, 358 N.J. Super. 524, 542 (App. Div. 2003).
IV.
We now examine whether the trial court properly performed its balancing function. Unfortunately, the court's orders give us little to no indication that it considered the privilege log or the documents and conducted the requisite balancing.
The trial court's orders were unaccompanied by "findings of fact and conclusions of law explaining its disposition of the motion," whether "written or oral." R. 1:6-2(f). Under Rule 1:6-2(f), "[i]f no such findings have been made, the court shall append to the order a statement of reasons for its disposition if it concludes that explanation is either necessary or appropriate." The rule directs courts to provide some statement of reasons "where explanation is required by reason of the nature of the matter." Pressler & Verniero, Current N.J. Court Rules, comment 7 on R. 1:6-2 (2016).
Here, an explanation was required by the nature of the matter. The Commission asserted that 196 documents were protected by the investigatory privilege and that thirty-one were also protected by the work-product doctrine. It provided a privilege log and a certification. However, the July 24, 2015 order gave no explanation for disclosing the Commission's entire investigatory file despite its claims of privilege.
The September 18, 2015 order denying reconsideration added only: "Defendants have not satisfied their burden to show material is privileged. Plaintiffs have demonstrated a compelling need for material." This explanation was inadequate because it failed to explain how the court reached those conclusions, which appear unsupported by the record. See O'Brien v. O'Brien, 259 N.J. Super. 402, 406 (App. Div. 1992).
First, the Commission's privilege log showed almost all the withheld documents were related to plaintiff's application and the ensuing investigation, including subpoenas and "[c]onfidential reports from the Police Division." The log also noted that many of the documents were addressed to or from the Commission attorney Babchik, that some concerned the lawsuit, and that thirty-one documents were sent after plaintiff threatened litigation. The Commission's three certifications explained why the documents were privileged and why disclosure would be harmful. Those explanations reflected privileges recognized under New Jersey law. As it does not appear the court examined the documents in camera, the current record does not support the court's conclusion that the Commission did not carry its prima facie burden to show privilege.
Second, the certification by plaintiff's counsel mentioned only four of the seventy documents on the Commission's privilege log. The current record provides no apparent basis for the trial court's conclusion that plaintiff demonstrated a compelling need for the entire investigatory file.
Accordingly, the trial court mistakenly exercised its discretion in its orders granting plaintiff's contested motion to compel and in denying the motion to reconsider. See Cardell, Inc. v. Piscatelli, 277 N.J. Super. 149, 155 (App. Div. 1994). We vacate those orders and remand for further proceedings consistent with this opinion. In these circumstances, those proceedings should include consideration of all certifications that have been submitted by the parties, review of the documents in camera, and issuance of a statement of reasons explaining why each document or category of documents should or should not be disclosed. See Payton v. N.J. Tpk. Auth., 148 N.J. 524, 555 (1997). We do not retain jurisdiction.
Plaintiff also argues the Commission's assertion of privilege is a ruse. To support that argument, plaintiff moved to supplement the record with the transcript of the deposition of Maher's general counsel. The motion panel left that decision to the merits panel. We grant the motion. However, we reject plaintiff's argument, which has no support in that transcript or in the rest of the record. --------
Vacated and remanded. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION