Opinions of the United
1998 Decisions States Court of Appeals
for the Third Circuit
5-29-1998
Failla v. City of Passaic
Precedential or Non-Precedential:
Docket 96-5538
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"Failla v. City of Passaic" (1998). 1998 Decisions. Paper 125.
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Filed May 29, 1998
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
Nos. 96-5538, 96-5539 and 96-5835
WILLIAM FAILLA
v.
CITY OF PASSAIC;
PASSAIC POLICE DEPARTMENT;
VICTOR JACALONE, Chief of Police
Victor Jacalone, in his official capacity and individually
Appellant in No. 96-5538
City of Passaic and Passaic Police Department
Appellants in No. 96-5539
Victor Jacalone,
Appellant in No. 96-5835
On Appeal from the United States District Court
for the District of New Jersey
(D.C. No. 93-1957)
Argued January 27, 1998
BEFORE: SCIRICA, ROTH, and RENDELL
Circuit Judges
(Filed: May 29, 1998)
Allan Roth, Esq. (argued)
Scarinci & Hollenbeck
500 Plaza Drive, Box 3189
Seacaucus, N.J. 07096
Counsel for Appellants
City of Passaic and Passaic Police
Department
Peter W. Till, Esq. (argued)
Wilf & Silverman
820 Morris Turnpike, Suite 201
Short Hills, N.J. 07078
Counsel for Appellant
Victor Jacalone
Michael Shen, Esq.
Shneyer & Shen, P.C.
1085 Teaneck Road
Teaneck, N.J. 07666
Counsel for Appellee William Failla
Jeffrey E. Fogel, Esq. (argued)
Ball Livingston
661 Franklin Avenue
Nutley, N.J. 07110
Counsel for Appellee William Failla
OPINION OF THE COURT
RENDELL, Circuit Judge.
Appellants City of Passaic, Passaic Police Department,
and Victor Jacalone appeal from a judgment entered upon
a jury's determination that appellants violated the New
Jersey Law Against Discrimination when they transferred
appellee William Failla to a night shift which aggravated his
back condition, and from the district court's orders denying
their consolidated post-trial motions and their motion for
reconsideration of the award of attorneys' fees to Failla. For
the reasons set forth below, we will affirm the judgment
entered against the City and the Police Department, vacate
the judgment entered against Jacalone, and reverse the
district court's order denying appellants' post-trial motions
2
insofar as it imposes individual liability on Jacalone, but
will affirm the order in all other respects. We will also affirm
the order denying appellants' motion for reconsideration of
the attorneys' fee award.
I.
Failla served as a captain with the Passaic Police
Department. In 1989, he suffered a work-related back
injury for which he subsequently received a partial
disability award pursuant to the Worker's Compensation
Act. In 1991, Failla was transferred from day shift to night
shift work. At trial, Failla testified that approximately one
year prior to that transfer, Jacalone, then the Chief of the
Passaic Police Department and Failla's immediate
supervisor, advised Failla that he wanted to transfer Failla
to the night shift. Failla stated that he informed Jacalone of
his back pain, and that Jacalone responded that the night
air would "do [him] good."
Failla testified that following his transfer to the night
shift, his back pain worsened. Several of Failla's co-workers
also testified to his apparent discomfort on the night shift.
Failla claimed that both the night air and the more
strenuous duties required of the night captain aggravated
his back condition. Failla also offered expert medical
testimony in support of his claims. The expert testified that
the cold and dampness of the night air, as well as the
increased stress associated with the busier night shift,
aggravated Failla's back condition. Failla requested a
transfer back to a day shift on at least six occasions
between 1992 and 1993. However, Failla was not reinstated
to a day shift until November 1993, after he filed this suit
and after Jacalone retired.
While still working the night shift, Failla initiated this
action against the City, the Police Department, and
Jacalone in his official and individual capacities. Failla
alleged several causes of action, many of which were
dismissed prior to trial. Failla proceeded to trial on his
claims against all three appellants based upon their alleged
violation of the LAD, and against the City and the Police
Department based on their alleged violation of the
3
Americans with Disabilities Act.1 Failla contended that day
shift work constituted a reasonable accommodation of his
back condition.
At trial, the jury determined that Failla was not
"disabled" within the meaning of the ADA, and judgment
was accordingly entered in favor of the City and the Police
Department on the ADA claim. The jury concluded,
however, that Failla was "handicapped" within the meaning
of the LAD, and that the City and the Police Department
were liable for failing to accommodate Failla's handicap.
The jury also concluded that Jacalone had engaged in
discriminatory conduct within the scope of his employment,
and the district court found him liable on that basis. The
district court awarded Failla compensatory damages of
$143,000, with costs. The district court denied appellants'
subsequent motions for judgment as a matter of law, or in
the alternative for a new trial, and awarded attorneys' fees
to Failla. This appeal followed.2
II.
Appellants have appealed from multiple rulings of the
district court, and different standards of review apply to
different arguments that appellants have raised on appeal.
Appellants' contention that Failla failed to establish a prima
facie case under the LAD relates to their entitlement to
judgment as a matter of law, and this court exercises
plenary review over an order granting or denying a motion
for judgment as a matter of law, applying the same
standard as the district court. See Lightning Lube, Inc. v.
_________________________________________________________________
1. Prior to trial, the district court granted summary judgment in favor of
Jacalone on the ADA claim, finding that the ADA does not impose
individual liability.
2. Failla has not cross-appealed any trial or pre-trial rulings. Failla's
complaint had asserted claims pursuant to S 1983, as well as claims for
punitive damages and intentional infliction of emotional distress (the
district court granted summary judgment in favor of the City, the Police
Department, and Jacalone on the S 1983 claims and the claims for
punitive damages; summary judgment in favor of Jacalone on the
emotional distress claim; judgment as a matter of law in favor of the City
and Police Department on the emotional distress claim).
4
Witco Corp., 4 F.3d 1153, 1166 (3d Cir. 1993). A court
should grant a motion for judgment as a matter of law "only
if viewing the evidence in the light most favorable to the
party opposing the motion, no jury could decide in that
party's favor." Walter v. Holiday Inns, Inc., 985 F.2d 1232,
1238 (3d Cir. 1993). Appellants' arguments relating to
Jacalone's individual liability turn on the district court's
interpretation of the effect of the jury's answers to
interrogatories. We exercise plenary review over the district
court's determination that the jury's findings resulted in a
verdict of individual liability against Jacalone. See
Bradford-White Corp. v. Ernst & Whitney, 872 F.2d 1153,
1158 (3d Cir.), cert. denied, 493 U.S. 993 (1989).
Appellants' challenges to the district court's evidentiary
rulings relate to their right to a new trial, and an abuse of
discretion standard applies to the district court's decision
to grant or deny a new trial. See Rotondo v. Keene Corp.,
956 F.2d 436, 438 (3d Cir. 1992). Where, however, the
district court's decision rests on the application of legal
precepts, we exercise plenary review. See id. (citing Link v.
Mercedes-Benz of N. Am., Inc., 788 F.2d 918, 921 (3d Cir.
1986)). Finally, in considering appellants' arguments that
the district court improperly awarded attorneys' fees, we
apply an abuse of discretion standard. See Rode v.
Dellarciprete, 892 F.2d 1177, 1182-83 (3d Cir. 1990). The
district court had jurisdiction over this case pursuant to 28
U.S.C. SS 1331, 1343, and 1367. This court has jurisdiction
over this appeal pursuant to 28 U.S.C. S 1291.
III.
Appellants raise four arguments on appeal. They contend
that Failla failed to establish a prima facie case under the
LAD, that the district court wrongly imposed a verdict of
individual liability against Jacalone, that the district court
erroneously admitted evidence of a worker's compensation
judgment, and that the district court improperly awarded
attorneys' fees to Failla. We will address these in turn.
A.
We first consider appellants' contention that Failla failed
to establish a prima facie case of discrimination under the
5
LAD. The LAD prohibits discrimination against any person
who is or has been "handicapped," unless the handicap
precludes the performance of employment. See N.J.S.A.
S 10:5-4.1. The regulations promulgated pursuant to the
statute require employers to make reasonable
accommodations to the limitations of a handicapped
employee unless the accommodation would impose an
undue hardship on the employer. See N.J.A.C.S 13:13-
2.5(b); see also Ensslin v. Township of North Bergen, 646
A.2d 452, 458-59 (N.J. Super. Ct. App. Div. 1994).
Appellants challenge two aspects of Failla's prima facie
case under the LAD. First, appellants dispute thefinding
that Failla was "handicapped," arguing that the jury's
determination that Failla was not disabled under the ADA
precluded its determination that Failla was handicapped
under the LAD. Second, appellants contend that Failla
failed to demonstrate any need for an accommodation. We
find these arguments unpersuasive.
The meaning and propriety of the jury's verdict with
respect to the ADA claims on the one hand and the LAD
claims on the other turns on a review of the statutory
definitions of "disability" and "handicapped." Although the
words are often treated interchangeably as a matter of
common usage, we have expressed some skepticism as to
whether the terms, as used in the ADA and LAD, are
actually equivalent. See Olson v. General Elec. Astrospace,
101 F.3d 947, 956 (3d Cir. 1996).
The ADA defines the term "disability" as "a physical or
mental impairment that substantially limits one or more of
the major life activities . . . ." 42 U.S.C. S 12102(2)(A). The
LAD, in contrast, applies to "handicapped" persons, defined
by statute as those who suffer:
from physical disability, infirmity, malformation or
disfigurement which is caused by bodily injury, birth
defect or illness including epilepsy, and which shall
include, but not be limited to, any degree of paralysis,
amputation, lack of physical coordination, blindness or
visual impediment, deafness or hearing impediment,
muteness or speech impediment or physical reliance on
a service or guide dog, wheelchair, or other remedial
6
appliance or device, or from any mental, psychological,
or developmental disability resulting from anatomical,
psychological, physiological or neurological conditions
which prevents the normal exercise of any bodily or
mental functions or is demonstrable, medically or
psychologically, by accepted clinical or laboratory
diagnostic techniques. Handicapped shall also mean
suffering from AIDS or HIV infection.
N.J.S.A. S 10:5-5(q). In contrast to the ADA, the LAD
definition of "handicapped" does not incorporate the
requirement that the condition result in a substantial
limitation on a major life activity. See Olson v. General Elec.
Astrospace, 966 F. Supp. 312, 314-15 (D.N.J. 1997);
Illingworth v. Nestle U.S.A., Inc., 926 F. Supp. 482, 488
(D.N.J. 1996); Gimello v. Agency Rent-A-Car Sys., 594 A.2d
264, 275 (N.J. Super. Ct. App. Div. 1991) (noting that the
LAD definition of "handicapped" does not include a major
life activity requirement). This lower standard under the
statutory definition of "handicapped," as compared to the
definition of "disability," negates any inconsistency in the
jury's verdict with respect to the ADA and LAD claims, and
the district court's instructions advised the jury of the
different statutory definitions.
We also disagree with the second aspect of appellants'
challenge to Failla's prima facie case, and find that Failla
adduced sufficient evidence to support the jury'sfinding
that his back condition warranted a reasonable
accommodation. Appellants contend that Failla failed to
present medical evidence necessary to establish that he
"needed" -- as opposed to merely "wanted"-- to work a day
shift. We find, however, that the evidence demonstrated
that Failla suffered from a painful back condition that was
aggravated by night shift work. Failla adduced expert
medical testimony indicating that the dampness and
coldness of the night air, as well as the increased stress
associated with the busier night shift, exacerbated his
condition. Furthermore, the expert testified that working
the night shift would disrupt Failla's sleeping patterns,
which also negatively affected his condition. The expert
stated that this combination of factors combined to reduce
Failla's ability to function on the night shift.
7
Appellants, however, contend that two aspects of that
expert's testimony undermine the claimed need of an
accommodation. First, the expert acknowledged that cold
and damp conditions during the day would also affect
Failla's back condition. He also testified, however, that it is
generally more cold and humid at night. Furthermore, he
offered testimony that the night shift is busier and causes
a disruption in sleeping patterns.
Second, the expert stated that Failla's condition had
worsened between the two occasions on which the expert
examined him, even though Failla had been reinstated to a
day shift in the interim. The actual effect of a transfer to a
day shift on Failla's back condition, viewed in hindsight, is
largely irrelevant to the question of appellants' obligation to
make a reasonable accommodation at the time Failla
requested the transfer. Furthermore, the expert did not
address the extent to which the worsened condition
reflected deterioration that occurred between the first
examination and the reinstatement to a day shift, rather
than between the reinstatement and the second
examination. In fact, the expert specifically testified that a
reduction in stress and change in schedule would make it
easier for Failla to perform required activities, and Failla
and other witnesses testified that his condition did improve
after his reinstatement to a day shift.
Accordingly, we find that these two aspects of the expert's
testimony do not negate Failla's claimed need of an
accommodation. Appellants have not argued that a transfer
to a day shift constitutes an unreasonable accommodation,
and the evidence demonstrated that Failla suffered from a
back condition that was exacerbated by night shift work.3
_________________________________________________________________
3. We also reject appellants' suggestion, alluded to in this argument,
that
Failla failed to present evidence that his back condition precluded him
from performing the essential functions of his job on the night shift. The
jury was instructed that under the LAD reasonable accommodations
were those that allowed a person with a disability to perform the
essential functions. There was sufficient proof as to the demands of
Failla's work, and as to the ways in which his condition impacted him
in the performance of his work. Appellants do not challenge, nor do we
address, the instructions themselves or the court's statement of the law
as set forth therein.
8
We conclude that Failla adduced sufficient evidence to
establish a prima facie case under the LAD.
B.
We now turn to appellants' challenge to the jury's verdict
regarding the individual liability of Jacalone and the court's
finding with respect thereto. Appellants raise two issues
with respect to Jacalone's liability. First, they contend that
the answers to interrogatories submitted to the jury do not
warrant a conclusion that he is liable for aiding and
abetting under S 10:5-12(e) of the LAD, and second they
argue that the LAD does not contemplate the imposition of
individual supervisor liability under S 10:5-12(a) of the act.
We deal with the latter argument first.4
It is apparent from the district court's instructions that
the issue of liability under N.J.S.A. S 10:5-12(a) was not
presented to the jury, and the only issue on which the jury
was instructed was Jacalone's aiding and abetting liability
under N.J.S.A. S 10:5-12(e). That the jury was not asked to
impose liability on the basis of S 12(a) is clear due to a
variety of factors. First, the district judge stated that only if
the City and the Police Department were found liable could
the jury consider Jacalone's individual liability, which is a
classic aiding and abetting requirement. Moreover, in
explaining the elements necessary to Jacalone's liability,
the district judge's discussion closely paralleled portions of
the discussion of aiding and abetting liability developed by
his colleague Judge Irenas in Tyson v. Cigna Corp., 918 F.
Supp. 836, 839 (D.N.J. 1996). Finally, in denying
appellants' motion for judgment as a matter of law, the
district judge indicates that in his view S 12(e) provides the
only basis for employee liability, so that he did not
_________________________________________________________________
4. We note at the outset that there is very little New Jersey case law
interpreting the relevant provisions of the LAD as applied to individual
employee liability. This case again demonstrates the difficulties
associated with the lack of a certification procedure in New Jersey. See
Hakimoglu v. Trump Taj Mahal Assocs., 70 F.3d 291, 302 (3d Cir. 1995)
(Becker, J., dissenting) (noting that "[s]tates like New Jersey lacking a
certification procedure face the threat that federal courts will
misanalyze
the state's law . . . .").
9
recognize the theory that individuals can be liable as
"employers" under S 12(a). As the issue of the imposition of
S 12(a) liability was not submitted to the jury, we need not
reach this issue.
Turning to the aiding and abetting charge, as an initial
matter, S 12(e) by its express terms contemplates individual
liability of employees for aiding and abetting an LAD
violation.5 In submitting the case to the jury, two questions
were posed regarding Jacalone's conduct:
(1) Did the plaintiff prove, by a preponderance of the
evidence, that defendant Jacalone engaged in
discriminatory conduct?
(2) Did plaintiff prove, by a preponderance of the
evidence, that defendant Jacalone was acting in
the scope of his employment when he denied
plaintiff a transfer to a day shift?
The court's instructions regarding these two questions were
somewhat broader, indicating that Jacalone could be held
liable for engaging in discriminatory conduct if the jury
found that Jacalone knew that Failla was handicapped,
knew that he needed an accommodation -- namely, a
transfer to a day shift -- and failed to transfer him, and
that he could be found to have acted in the scope of his
employment if he had authority to transfer Failla and did
not do so. The jury answered "yes" to both questions, and
the district court concluded, based on those findings, that
Jacalone had been found individually liable to Failla as an
aider and abettor. Jacalone's counsel questioned that
conclusion at trial and again on appeal, and argues that a
finding that Jacalone acted in the scope of his employment
does not lead to the imposition of individual liability.
Accordingly, we must predict whether the New Jersey
Supreme Court would determine that the answers to
interrogatories in this case warranted a finding of individual
_________________________________________________________________
5. The statute provides that it shall be an unlawful employment practice
or unlawful discrimination "[f]or any person, whether an employer or an
employee or not, to aid, abet, incite, compel, or coerce the doing of any
of the acts forbidden under this act, or to attempt to do so." N.J.S.A.
S 10:5-12(e).
10
liability against Jacalone. To resolve that question, we must
consider whether the interrogatories and the corresponding
instructions properly stated the law. No party has objected
to the language of the interrogatories or instructions as
such, although Jacalone's counsel's objection to the district
court's ruling clearly calls them into question. We have
discretion to review instructions, even sua sponte, if they
are such that the jury was without adequate guidance on a
fundamental question and our failure to consider the error
would result in a fundamental miscarriage of justice. See
United States v. 564.54 Acres of Land, 576 F.2d 983, 987
(3d Cir. 1978), rev'd on other grounds, 441 U.S. 506 (1979).
For the reasons set forth below, we find that the jury was
without adequate guidance on the question of Jacalone's
individual liability, and we will exercise our discretion to
review the interrogatories and instructions as part of our
determination that a new trial is warranted. We will focus
first on the legal relevance and appropriateness of the
second interrogatory, and then the first.
In its opinion denying appellants' motion for judgment as
a matter of law, the district court indicated that it viewed
Tyson as setting forth the standard for aiding and abetting
liability under the LAD. According to the district court's
interpretation, "Tyson stands for the proposition that,
under the NJLAD, a supervisory employee may be held
individually liable for discriminatory acts committed in the
scope of his employment." The court in Tyson cites a New
Jersey Superior Court decision analogizing aiding and
abetting liability under the LAD to accomplice liability in
the criminal context. See 918 F. Supp. at 840 (citing Baliko
v. Stecker, 645 A.2d 1218 (N.J. Super. Ct. App. Div. 1994)).
The Tyson court notes that criminal accomplice liability
requires a finding of shared intent: " `[t]he aider and abettor
must share the same intent as the one who actually
committed the offense. There must be a community of
purpose between the actual perpetrator and the aider and
abettor.' " Id. (quoting State v. Newell, 378 A.2d 47, 52 (N.J.
Super. Ct. App. Div. 1977)). The court then reasons that
because a supervisor's acts within the scope of his
employment are the acts of the employer, "a supervisor who
engages in discriminatory conduct while acting within the
scope of his employment shares the intent and purpose of
11
the employer (the principal) and may be held individually
liable (as an accomplice) for aiding and abetting the
employer's unlawful conduct." Id. at 841. In contrast, a
supervisor acting outside the scope of his employment "ipso
facto" does not aid and abet his employer, and is therefore
not subject to accomplice liability under the LAD.6 Id.
Courts in other jurisdictions have endorsed a similar
analysis of aiding and abetting liability under state anti-
discrimination statutes. See, e.g, Glickstein v. Neshaminy
Sch. Dist., No. 96-6236, 1997 WL 660636, at * 12-13 (E.D.
Pa. Oct. 22, 1997).
It is apparent that this concept of shared intent was the
key to the district court's view that a supervisor who
commits a discriminatory act within the scope of his
employment aids and abets a violation of the LAD and is
subject to individual liability under S 12(e). The second
interrogatory to the jury was based on this view. However,
although civil aiding and abetting may to some extent be
analogized to its criminal counterpart,7 the New Jersey
Supreme Court has held that the element of shared intent
necessary in the criminal context is not an element of
aiding and abetting in the civil context. The court
specifically stated that "[t]o borrow . . . from definitions of
aiding and abetting liability in the criminal field, where
criminal intent is stressed because the aider is a criminal
principal, is entirely inappropriate in the context of the
present statute which is basically a remedial, not a criminal
one." Passaic Daily News v. Blair, 308 A.2d 649, 656 (N.J.
1973).8 In its only comment on the LAD aiding and abetting
_________________________________________________________________
6. The court also concludes that, since a non-supervisory employee plays
no role in his employer's reaction to his discriminatory conduct, the non-
supervisory employee does not share any intent or common purpose with
his employer and is therefore not liable as an aider and abettor of the
employer's violation of the LAD. See Tyson, 918 F. Supp. at 840-41.
7. In Baliko, the New Jersey Superior Court states that the same
meaning has applied to the terms "aid" and "abet" in both the civil and
criminal contexts. See 645 A.2d at 1223 (citations omitted). The court
does not, however, expressly refer to the shared intent requirement of
criminal accomplice liability.
8. We note that despite their seemingly different treatment of the analogy
between civil and criminal aiding and abetting liability, the decisions in
12
provision, the New Jersey Supreme Court rejected an
analogy to criminal accomplice liability and its shared
intent requirement. The court rebuffed a newspaper's
challenge to the validity of a regulation, promulgated under
the LAD, prohibiting the publication of classified
employment advertisements with race, gender, or age-based
headings, finding that the newspaper that printed the ads
could be held liable for aiding and abetting an employer's
violation of the LAD, even in the absence of shared intent
or common purpose between the newspaper and employer.
See id. at 656-57.
It should be noted that in Passaic Daily News, the court
determined that shared intent was not necessary in order
to find civil aiding and abetting, while in Tyson, the court
found that the defendant's supervisory status satisfied the
element of shared intent that it thought necessary for
aiding and abetting liability. Taking guidance as we must
from the New Jersey Supreme Court, we conclude that the
issue of shared intent is irrelevant under the LAD. 9
Accordingly, the district court interrogatory to the jury as to
whether Jacalone, conceded to be a supervisor, acted in the
scope of his employment, was not a relevant question for
purposes of determining aiding and abetting liability. The
real issue then becomes what are the elements of aiding
and abetting, and did the court's instructions and the
_________________________________________________________________
Passaic Daily News and Baliko are not necessarily inconsistent. The
court in Passaic Daily News referred specifically only to the intent
requirement of criminal accomplice liability. See 308 A.2d at 656. In
contrast, the court in Baliko does not mention the intent requirement,
but focuses on the meaning of "aid" and "abet" as it relates to the
assistance or encouragement that the aider or abettor provides. See 645
A.2d at 1223.
9. We note that its construction of the shared intent requirement is at
the heart of the Tyson court's distinction between supervisory and non-
supervisory employees. See 918 F. Supp. at 840-41. Our determination
that the LAD does not include a shared intent requirement indicates that
this is not a proper basis for such a distinction. Because the question of
a non-supervisory employees's liability is not before us, we do not
express any view on whether there is some other basis on which to
distinguish between the aiding and abetting liability of supervisory and
non-supervisory employees under the LAD.
13
remaining interrogatory sufficiently explore and probe the
proper test.
As this court has recognized, aiding and abetting liability
traditionally applies to criminal offenses and "is not a well-
settled mechanism for imposing civil liability." American Tel.
& Tel. Co. v. Winback & Conserve Program, 42 F.3d 1421,
1430 (3d Cir. 1994), cert. denied, 514 U.S. 1103 (1995).
The New Jersey Superior Court in Baliko stated its view
that the criminal law definition of the words "aid" and
"abet," namely as meaning respectively " `to assist, support
or supplement the efforts of another,' " and " `to encourage,
counsel, incite or instigate the commission of a crime,' "
should be applied in the civil context. Baliko 645 A.2d at
1223 (quoting State v. Newell, 378 A.2d 47, 52 (N.J. Super.
Ct. App. Div. 1977)). In Passaic Daily News, the court only
opined as to the lack of need for shared intent in the civil
context, but did not otherwise discuss the elements of civil
aiding and abetting. Although Passaic Daily News and
Baliko provide some guidance, they fail to explore, let alone
definitively establish, the full nature and scope of aiding
and abetting liability under the LAD. Based on the limited
available guidance, however, we conclude that the New
Jersey Supreme Court would follow the Restatement of
Torts to define aiding and abetting liability under the LAD.
The Restatement of Torts provides that a person is liable
for harm resulting to a third person from the conduct of
another when he "knows that the other's conduct
constitutes a breach of duty and gives substantial
assistance or encouragement to the other so to conduct
himself . . . ." Restatement (Second) of Torts S 876(b).
Courts have recognized that this Restatement provision sets
forth the standard for civil aiding and abetting liability. See
Landy v. Federal Deposit Ins. Co., 486 F.2d 139, 162 (3d
Cir. 1973), cert. denied, 416 U.S. 960 (1974). The New
Jersey Supreme Court relied on this provision in Judson v.
Peoples Bank and Trust Co., 134 A.2d 761, 767 (N.J. 1957),
to determine a defendant's liability for furnishing funds to
a corporation when it knew the corporate assets were being
used for the personal advantage of the president and
director. Federal courts have subsequently relied on Judson
as evidence that New Jersey has adopted the Restatement
14
standard of civil aiding and abetting liability. See, e.g.,
Pereira v. United Jersey Bank, 201 B.R. 644, 671 (S.D.N.Y.
1996); Resolution Trust Corp. v. Spagnoli, 811 F. Supp.
1005, 1014 (D.N.J. 1993). In addition, a federal district
court applying a New Jersey securities law relied on the
elements of aiding and abetting liability derived in Landy
from the Restatement. See Commodity Futures Trading
Comm'n v. American Metals Exch. Corp., 775 F. Supp. 767,
782 (D.N.J. 1991), rev'd on other grounds, 991 F.2d 71 (3d
Cir. 1993). In Tyson, apart from its discussion of the shared
intent requirement, the court recognizes that an aider and
abettor must "willfully and knowingly" associate himself
with another's unlawful act. See 918 F. Supp. at 840.10
We find no reason to believe that the New Jersey
Supreme Court would adopt a construction of civil aiding
and abetting liability under the LAD that differs from the
Restatement. Both Passaic Daily News and Baliko are
consistent with this understanding of aiding and abetting.
The Restatement requires that an aider and abettor
knowingly give assistance or encouragement. It does not
incorporate the shared intent requirement rejected in
Passaic Daily News. Furthermore, the Restatement, like
Baliko, focuses on whether the aider or abettor has actually
provided assistance or encouragement. Accordingly, we
predict that the New Jersey Supreme Court would find that
an employee aids and abets a violation of the LAD when he
knowingly gives substantial assistance or encouragement to
the unlawful conduct of his employer. The jury in this case
was asked in the first interrogatory whether Jacalone
"engaged in discriminatory conduct." The district court's
instruction regarding this question informed the jury that
Jacalone could be found to have engaged in discriminatory
conduct if he knew Failla was handicapped and needed an
accommodation, but failed to transfer him. As set forth
above, we have concluded that aiding and abetting requires
that one know the other's conduct constitutes a breach of
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10. We note that the district court appears to interpret Tyson as
establishing that any supervisor who engages in discriminatory conduct
within the scope of his employment is liable as an aider and abettor,
while we view Tyson as suggesting that such a supervisor may be liable
if he acts with the requisite knowledge and willfulness.
15
duty and give substantial assistance or encouragement to
that conduct. The court's instruction, requiring only
knowledge of Failla's circumstances of having a handicap
and being in need of an accommodation, combined with
inaction, falls short of this standard. The court did not
advise the jury that Jacalone could be liable as an aider
and abettor only if he knew the failure to accommodate
Failla's handicap was a breach of his employer's duty and
if his inaction actually assisted or encouraged the unlawful
act.11
We note that, as the district court instructed the jury, it
is fundamental to aiding and abetting liability that the aider
and abettor acted in relation to a principal, here, the
employer, the city. Once the city has been found liable, the
issue becomes whether under S 12(e), any employee is liable
for aiding and abetting. Employees are not liable as aider
and abettor merely because they had some role, or
knowledge or involvement. Rather, the degree of
involvement, knowledge and culpability required as a basis
for liability is heightened by the standard that the
Restatement sets forth and we adopt. Only those employees
who meet this heightened standard will be aiders and
abettors. It is important that this standard be set above
mere knowledge and/or implementation, lest a reverse
respondeat superior liability could be created under the
guise of aiding and abetting.
Accordingly, we agree with appellants that the jury's
answers to interrogatories in this case were insufficient to
establish Jacalone's liability as an aider or abettor. Because
the interrogatories and corresponding instructions did not
properly state the elements of aiding and abetting liability,
we conclude that a new trial on the issue of Jacalone's
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11. The court in Tyson found that a failure to act cannot give rise to
aiding and abetting liability. See 918 F. Supp. at 841. We decline to
adopt such a per se rule regarding liability for inaction. Rather, we
conclude that inaction can form the basis of aiding and abetting liability
if it rises to the level of providing substantial assistance or
encouragement. See Dici v. Pennsylvania, 91 F.3d 542, 553 (3d Cir.
1996) (noting that a plaintiff states a claim for aiding and abetting
harassment if he alleges that a supervisor knew of the harassment but
repeatedly refused to stop it).
16
individual liability is required. See NBO Indus. Treadway
Cos. v. Brunswick Corp., 523 F.2d 262, 275 (3d Cir. 1975),
rev'd on other grounds, 429 U.S. 477 (1977).
C.
We next consider appellants' argument that the district
court committed reversible error by permitting Failla to
testify that he received a worker's compensation award for
a partial permanent disability and by admitting a copy of
the judgment, with the amount of the award redacted, into
evidence. Appellants now contend that this evidence was
irrelevant and was highly prejudicial, and should have been
excluded under Federal Rules of Evidence 401 and 403. At
trial, appellants only argued lack of relevance (and not the
application of Rule 403), and the district court determined
that the evidence was relevant because it tended to prove
that Failla "had something wrong with him." We cannot find
the court's ruling an abuse of discretion. The test of
relevance under the Federal Rules of Evidence is low.
"Because [Rule 401] makes evidence relevant `if it has any
tendency to prove a consequential fact, it follows that
evidence is irrelevant only when it has no tendency to prove
the fact.' " Blancha v. Raymark Indus., 972 F.2d 507, 514
(3d Cir. 1992) (quoting 22 Charles A. Wright & Kenneth W.
Graham, Federal Practice and Procedure: Evidence S 5166,
at 74 n. 47 (1978)). We cannot conclude that the district
court erred in determining that the worker's compensation
judgment tended to prove that Failla was disabled or
handicapped. See Starceski v. Westinghouse Elec. Corp., 54
F.3d 1089, 1099 n.12 (3d Cir. 1995) (noting that the
admission of evidence of an EEOC determination is
committed to the discretion of the trial court); Dickerson v.
State of N.J. Dep't of Human Serv., 767 F. Supp. 605, 612
(D.N.J. 1991) (recognizing the probative value of an EEOC
determination).
Appellants raised their argument under Rule 403 for the
first time on appeal.12 Accordingly, they waived any
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12. We note that during his opening statement, Failla's counsel referred
to the amount of the worker's compensation judgment. Jacalone's
17
objection based on Rule 403, and we consider only whether
the admission of the evidence constituted plain error. See
Walden v. Georgia-Pacific Corp., 126 F.3d 506, 517 (3d Cir.
1997), petition for cert. filed, Feb. 17, 1998 (No. 97-1380).
Rule 403 requires a balancing which the district court is in
the best position to evaluate. See United States v. Gatto,
995 F.2d 449, 457 (3d Cir.), cert. denied, 510 U.S. 948
(1993). "[W]hen a trial court is not given an opportunity to
exercise its discretion in striking the balance, we will
seldom find plain error . . . ." Id. On appeal, appellants
have not even argued that the admission of the evidence
constitutes plain error, and we do not find plain error here.
Appellants also object to the admission of this evidence
based on several arguments that might be worthy of
consideration if the district court had given collateral
estoppel effect to the worker's compensation determination
of Failla's disability.13 However, that was not the case and
the district court so stated. It was clear that the district
court admitted evidence of the worker's compensation
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counsel objected, without stating the grounds for the objection, and the
district court sustained the objection and instructed the jury to
disregard the statement. Immediately after the opening statements,
however, the district court clearly explained that it sustained the
objection only because counsel referred to the amount of the award, but
that reference to the mere fact that Failla collected worker's
compensation would be admissible. Appellants did not raise any
objection at that time, or when Failla testified. At the close of Failla's
case, his counsel requested that the district court take judicial notice
of
the judgment, and Jacalone's counsel objected on relevancy grounds.
Appellants' counsel did not articulate any further objection to the
evidence until just prior to the closing arguments, at which time
Jacalone's counsel asserted that he had objected to the evidence
throughout the trial. Even at that time, however, he did not contend that
the evidence was unduly prejudicial under Rule 403.
13. Appellants argue that the standard of proof in a worker's
compensation proceeding differs from the standard of proof in this civil
action, and that Jacalone was not a party to the worker's compensation
proceedings. Even the cases appellants cite on appeal in support of these
arguments are directed at collateral estoppel issues. See City of
Hackensack v. Winner, 410 A.2d 1146 (N.J. 1980); Ensslin v. Township
of North Bergen, 646 A.2d 452 (N.J. Super. Ct. App. Div. 1994).
18
judgment merely as evidence tending to show that Failla
was disabled or handicapped, not for collateral estoppel
purposes. Accordingly, appellants' arguments are
misplaced, and we find no grounds for reversible error in
the district court's admission of evidence relating to the
worker's compensation judgment.14
D.
Finally, we address appellants' challenges to the district
court's award of attorneys' fees. Appellants assert this
argument by incorporating by reference arguments offered
to the district court in opposition to Failla's fee petition. We
have reviewed the record before the district court, in which
appellants disputed Failla's counsel's billing rate, the
number of hours reasonably expended on the case, and the
award of a contingency enhancement. Notwithstanding
appellants' failure to adequately articulate and support
their arguments on appeal with reference to the proper
standard of review, we have reviewed the district court's fee
award and conclude that the district court did not abuse its
discretion.15
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14. We do note that the evidence of the worker's compensation judgment
was cumulative of Failla's expert witness testimony. However, we find
that the district court did not abuse its discretion in refusing to grant
a
new trial on this basis. See Threadgill v. Armstrong World Indus., Inc.,
928 F.2d 1366, 1370 (3d Cir. 1991).
15. Specifically, we find no abuse of discretion in the district court's
determination of the lodestar or the contingency enhancement. With
respect to the lodestar, we find that the district court did not abuse its
discretion in setting the hourly rate or in declining to reduce the number
of hours reasonably expended on the litigation. We reject appellants'
argument that the district court should have deducted time to reflect
Failla's unsuccessful claims and his limited success. Although Failla did
not succeed on every claim originally asserted in his complaint, the
successful and unsuccessful claims all arose from a common core of
fact. Compare Rendine v. Pantzer, 661 A.2d 1202, 1226 (N.J. 1995)
(quoting Rode, 892 F.2d at 1177) (noting that a court may reduce the
claimed hours to reflect unsuccessful claims that are distinct in all
respects from successful claims). Furthermore, the jury awarded Failla
$143,000 in compensatory damages and the district court found that the
verdict represented a significant vindication of civil rights. In these
19
We also reject the tenor of appellants' sparse discussion
of the fee issue in its brief on appeal, which urges that we
reverse the fee award because the district court should
have considered the City's status as a public entity, and
should not have viewed it as a "deep pocket." Appellants
cite no cases in support of this argument, and wefind the
City's public status entirely irrelevant. The LAD provides
that attorneys' fees may be awarded to prevailing parties
without any reference to the losing party's ability to pay.
See N.J.S.A. S 10:5-27.1. The mere fact that the City is a
public entity does not relieve it of its obligation to pay
attorneys' fees when it is found liable for unlawful
discrimination. See Robb v. Ridgewood Bd. of Educ., 635
A.2d 586 (N.J. Super. Ct. Ch. Div. 1993) (awarding
attorneys' fees against a local school board). Accordingly,
we find no abuse of discretion in the district court's award
of attorneys' fees.
IV.
For the foregoing reasons, we will reverse in part the
district court's order denying appellants' motions for
judgment as a matter of law or for a new trial, insofar as
the district court found that individual liability should be
imposed on Jacalone. We will affirm that order in all other
respects, and will affirm the district court's award of
attorneys' fees. We will affirm the judgment entered against
the City and Police Department. We will vacate the
judgment entered against Jacalone, and remand for further
proceedings consistent with this opinion.
_________________________________________________________________
circumstances, the district court was not required to reduce the lodestar
to reflect any "limited" success. Furthermore, we find that the time
records -- which chronologically identified various activities and the
time
expended by particular attorneys -- were sufficiently specific under
Rendine because they enabled the district court to determine the nature
of the services for which compensation was sought. See id. at 1227
(quoting Lindy Bros. Builders v. American Radiator & Standard Sanitary
Corp., 487 F.2d 161, 167 (3d Cir. 1973)). Finally, the court's award of a
thirty-five percent contingency enhancement is within the range
identified by Rendine for typical cases. See id. at 1231.
20
A True Copy:
Teste:
Clerk of the United States Court of Appeals
for the Third Circuit
21