State Agency’s “Contumacious” Discovery Failures Over Many Years Called for Dismissal of Agency’s License Suspension Proceeding

New Jersey Department of Children & Families v. E.L., ___ N.J. Super. ___ (App. Div. 2018).  Courts often give public entity parties more leeway in complying with rules, court orders, and the like than private parties are given.  Sometimes Court Rules themselves give preference to public agencies, as is so, for example, of Rule 2:9-6(b), which exempts the State, its political subdivisions, and “any of their respective officers or agencies” from posting a supersedeas bond on appeal.  But there is a limit to such tolerance, and today’s opinion by Judge Fisher is a case where that limit was reached and, as Judge Fisher emphatically made clear,  exceeded.

The case arose out of alleged child abuse at a resource home operated by defendants in this matter.  After the abuse allegations were made, plaintiff Department of Children & Families sought, in an administrative proceeding, to revoke defendants’ resource home license.

Defendants sought discovery, but the Department, in a series of events recounted by Judge Fisher that must be read to be believed, failed for six years to provide it.  The Administrative Law Judge handling the matter gave the Department multiple opportunities to comply with its discovery obligations, including an order that stated in bold, capital letters that she was giving the Department “ONE LAST CHANCE” before dismissing the case with prejudice.  When the Department missed that deadline, the ALJ granted dismissal with prejudice.  The Department contested that ruling, and the Department’s Acting Assistant Commissioner reversed it.  Even when the case went to trial, six years after the alleged abuse, discovery was still incomplete, and some key evidence of the Department’s investigation of the matter had been destroyed.

Judge Fisher rightly identified the issue before the Appellate Division as not whether the ALJ’s decision to dismiss the case was proper, but whether the agency’s reversal of that decision was arbitrary, capricious, and unreasonable, the standard of review of agency action.  The panel “[did] not hesitate in answering yes.”  The procedural rules applicable to administrative matters, like the Court Rules that govern in ordinary litigation, afford the ability to dismiss a case for egregious discovery violations.

The Department’s main argument was that a deputy attorney general who had an “overwhelming workload” simply could not get to the “voluminous” discovery.  But Judge Fisher observed that this showed only that “the Department consciously made choices that held [defendants’] rights hostage.”  The Department, represented by the Attorney General’s office, could have assigned someone else or otherwise afforded the overworked deputy attorney general some relief.  Instead, the Department defended by, as Judge Fisher said, “throwing the deputy under the bus.”

The Department’s behavior was the type of “‘deliberate’ and ‘contumacious’ conduct” that justified the ALJ in dismissing the case with prejudice.  It was true that concerns about child abuse are important ones, but also important was the need to afford defendants a fair process.  The Department acted arbitrarily and capriciously when it reversed the ALJ’s dismissal with prejudice before trial, and that same relief of dismissal when defendants sought it at the close of trial should also have been granted.

Government agencies must “turn square corners” in dealing with the public.  Though the panel did not use that term, Judge Fisher’s opinion amply demonstrated that that did not happen here.

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