By: Ty Hyderally, Esq., Jennifer Vorih, Esq., and Maya Patel

Shelley Pritchett (“Pritchett”) began her employment with New Jersey’s Juvenile Justice Center (“JJC”) in 2006 as a corrections officer. By 2011, Pritchett held the title of Senior Corrections Officer. Her duties included intervening in inmate violence at the facility. After sustaining injuries during a fight between inmates in June 2011, Pritchett sought medical attention. After an MRI in September 2011, her physician suspected that she had multiple sclerosis (“MS”), unrelated to her workplace injuries. Her doctor recommended that Pritchett take additional leave for diagnosis and treatment.

Even though JJC’s Human Resources (“HR”) initially planned to approve Pritchett’s leave, the Acting Director of the JJC, Captain Kelly Gibson (“Gibson”) opposed it. HR sought support from Pritchett’s supervisor, Lisa Quinto, who suggested granting Pritchett leave until November 2011, to strengthen the case for removing Pritchett if she could not return. Ultimately, JJC granted Pritchett leave until November 1, 2011, but warned her that further requests wouldn’t be approved. Pritchett was diagnosed with MS on October 19, 2011, and requested leave until February 29, 2012. JJC denied Pritchett’s request without explanation. Facing termination, Pritchett applied for retirement disability benefits. Despite Pritchett’s claims of ADA violations and failure to engage in the interactive process, the possibility of reinstatement was deemed moot due to Pritchett’s retirement.

Pritchett filed a complaint against the State of New Jersey (“Defendant”), alleging that the state had violated the New Jersey Law Against Discrimination (“LAD”), N.J.S.A. § 10:5-1 to -50, by failing to accommodate her disability and discriminating against her due to the perception that she was disabled. The jury returned a verdict for Pritchett, awarding her $1,842,911 in compensatory damages and $10 million in punitive damages. On appeal in 2020, the Appellate Division affirmed the liability finding and the award of compensatory damages, but remanded for consideration of the punitive damages award. The New Jersey Supreme Court modified the remand instructions by holding that when reviewing a punitive damages award against a public entity, a trial court must consider the factors discussed by the New Jersey Supreme Court in Baker v. National State Bank, 161 N.J. 220 (1999), and by the United States Supreme Court in BMW of North American, Inc. v. Gore, 517 U.S. 559 (1996) and also apply heightened scrutiny as required under Lockley v. State, Department of Corrections, 177 N.J. 413 (2003). Pritchett v. State (Pritchett I), 248 N.J. 85, 88 (2021).

On remand, the trial court determined that the verdict for punitive damages was “reasonable” and comport[ed] with due process” even when examined under “heightened scrutiny.” Defendant appealed again, asserting that the $10 million punitive damages award violated due process because the trial court did not apply the “heightened scrutiny” standard in reviewing the reasonableness of the award and did not consider its proportionality to the Defendant’s bad behavior. Defendant also raised arguments regarding the appropriate standard in reviewing punitive damages awards against public entities.

In considering the most recent appeal, the court established a hybrid standard of review when considering an award of punitive damages against a public entity: the court should use a deferential standard of review to a judge’s determination of whether the jury’s punitive damages award is “reasonable” and “justified in the circumstances of the case” under N.J.S.A. § 2A:15-5.14(a). However, when the punitive damages award is challenged on constitutional grounds, the trial court’s decision as to the amount of the punitive damages award must be reviewed de novo.

Under this framework, the Appellate Division considered each of the Baker/BMW factors. In regard to the punitive damages award, the court must consider (1) “the degree of the reprehensibility of” defendants conduct; (2) “the disparity between the harm or potential harm suffered by … plaintiff … and the … punitive damages award”; and (3) “the difference between th[e punitive damages award] and the civil penalties authorized or imposed in comparable cases.” Baker, 161 N.J. at 220 (quoting BMW, 517 U.S. at 575).

In determining the reprehensibility of a defendant’s conduct, courts evaluate the type of harm caused (physical or merely economic), indifference to other’s safety, financial vulnerability of the victim, whether the defendant’s actions are repeated, and whether the defendant exhibited intentional malice. Saffos v. Avaya Inc., 419 N.J. Super. 244, 264 (App. Div. 2011). It is presumed that compensatory damages make the plaintiff whole; thus, punitive damages should only be awarded if necessary to punish the defendant or deter future bad behavior, as determined by the reprehensibility of defendant’s actions. State Farm Mut. Auto. Ins. Co. v. Campbell, 538 U.S. 419 (2003). In the case at hand, the evidence showed the defendant was aware of Pritchett’s MS diagnosis, ignored HR’s advice, failed to notify the ADA coordinator, which resulted in a denial of accommodation and early retirement, causing economic harm.

In assessing the second Baker/BMW factor, “[t]he measure of punishment [must be] both reasonable and proportionate to the amount of harm to the plaintiff and to the general damages recovered.” Saffos, 419 N.J. Super. At 266, 268-69 (quoting State Farm, 538 U.S. at 418, 426). The Court found that the jury’s award of $575,000 in emotional distress damages likely contained a punitive element, since Plaintiff was not in treatment, nor did she receive any diagnoses regarding her emotional distress. Guided by Saffos, the court subtracted the emotional distress award from the total compensatory damages, leaving a base of $1,249,911. After this subtraction, the $10 million punitive damages award was approximately seven times the compensatory award; however, the high ratio was not considered impermissible given the holistic assessment required. Pritchet I, 248 N.J. at 113. Moreover, the punitive damages cap under the Punitive Damages Act does not apply to cases regarding the LAD.

As for the third Baker/BMW factor, wherein “the difference between the punitive damages awarded and the civil penalties authorized” is evaluated, the Appellate Division previously found the comparison to be “not particularly helpful in determining the propriety of the amount of punitive damages.” Saffos, 419 N.J. Super. at 269. The defendant’s actions in denying plaintiff’s leave request for MS treatment, disregarding HR advice, and acting with blatant disregard for the LAD weighed heavily in the court’s decision,  especially given that other corrections officers had been granted leave in excess of the FMLA time. Given the reprehensibility of Defendant’s actions, the court found the ratio to not be dispositive and affirmed the trial court’s decision.

This case is a huge win, making clear that New Jersey State employees with disabilities can receive appropriate punitive damages awards under the LAD.

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