Scarinci: Norcross Dismissal Is Good News for N.J. Business

The dismissal of racketeering charges against George Norcross III and his co-defendants was a victory for NJ businesses and economic growth in the state.  It also sent a strong message to prosecutors that their job is to prosecute crimes, not people.

Superior Court Judge Peter E. Warshaw’s well-reasoned opinion not only found that Norcross did not commit any crimes, but also that the prosecutors had conflated hard-nosed business tactics with criminal coercion to the detriment of the business community.

Charges against George Norcross

As detailed in prior articles, Norcross faced 13 criminal charges, including first-degree racketeering. The gist of the allegations was that Norcross and his co-defendants, acting as a “criminal enterprise,” coerced Camden property owners to relinquish long undeveloped waterfront property.  Prosecutors alleged that Norcross threatened a rival developer who held the rights to the property that would become Triad1828 Centre, which is the current home of Norcross’s insurance firm Conner Strong & Buckelew.

Norcross argued that no crimes were committed. Rather, any alleged misconduct was simply “routine” and high-stakes business negotiations. “[T]he only ‘threats’ alleged are everyday economic ones—e.g., to cease doing business, or to breach a contract—that are not prohibited. If it’s a crime to warn of ‘consequences’ if a deal is not reached, or to use expletives in doing so, New Jersey needs to build more prisons,” his attorneys argued in a motion to dismiss.

Judge Warshaw Found No Crimes Were Committed

On February 26, Judge Warsaw dismissed the charges against George Norcross, as well as his brother Phillip Norcross, former Camden Mayor Dana Redd, attorney William Tambussi, John O’Donnell, and Sidney Brown. According to Judge Warsaw, there was no “racketeering enterprise” because the indictment’s “factual allegations do not constitute extortion or criminal coercion as a matter of law,” and Redd “did not commit any act of official misconduct.”

Essentially, because there were no underlying crimes, there could be no “criminal enterprise,” no “conspiracy,” and no “racketeering.” Judge Warsaw found that the charges were facially time-barred as the statute of limitations had already expired.

“It follows that if the facts alleged do not, as a matter of law, constitute a crime, the indictment is manifestly deficient and facially and palpably defective,” Judge Warshaw wrote. “The indictment must be dismissed because its factual allegations do not constitute extortion or criminal coercion as a matter of law.”

What the Decision Means for the Business Community

One of the most important parts of Judge Warsaw’s 100-page order is his conclusion that the allegations against George Norcross, which include allegations that he “threatened” a rival developer, do not constitute extortion or criminal coercion. Not only does this conclusion eviscerate the prosecution’s racketeering case, it reassures many frightened business owners and developers

As Judge Warsaw correctly explained, “Not every threat is criminal, or even wrong.” In support, he cited the Third Circuit’s decision in Brokerage Concepts, Inc v. U.S. Healthcare, Inc., in which the appeals court noted that “[f]ear of economic loss is a driving force of our economy that plays an important role in many legitimate business transactions.”

With regard to the alleged “threats” made by George Norcross, Judge Warsaw found that while the statements may have been “boorish” and “indecorous,” they were not criminal. “Defendants correctly argue that when considering private parties negotiating economic deals in a free market system, threats are sometimes neither wrongful or unlawful,” Judge Warshaw wrote. “In these situations, there may be nothing inherently wrong in using economic fear to obtain property.”

Judge Warsaw specifically addressed the allegations that George Norcross told a rival developer he would be “f**k[ed] up like [he] [has] never been f**ked up before” and that he will “never do business in this town again.” In finding that these threats were not unlawful, he concluded that the “saber-rattling” sounded much like “this town ain’t big enough for the two of us.” Judge Warsaw noted that the businessmen clearly didn’t like each other, both were trying to prevail in the negotiation, and the rival developer gave as good as he got.

Judge Warsaw also emphasized that it is not wrongful to allow your adversaries to fear your reputation for using political power. Similarly, potential litigation is not a wrongful means when the litigation is commenced for appropriate reasons. “The court is not called upon to consider whether the redevelopment could have proceeded in a better, more fair, less political way,” Judge Warsaw wrote. “The court is asked to evaluate whether this ‘threat’ was criminal.”

Ultimately, the judge adopted the commonsense perspective that the prosecution’s theory was not only wrong, but for the business community, dangerously wrong. Every day in New Jersey, business deals are negotiated, often in the context of contentious hard bargaining. If we accept the State’s theory of prosecution, what hardnose businessman engaging in contentious, adversarial bargaining can feel safe from a potential extortion complaint being filed against her/him?

What’s Next?

Incredibly, Attorney General Matt Platkin could barely have read the judge’s opinion before announcing that he plans to appeal. In a bizarre political-sounding press statement, he said he “never promised that these cases would be easy, because too many have come to view corruption as simply the way the powerful do business in New Jersey.”

Judge Warsaw got it exactly right when he found that no crime was committed.

Unfortunately, because of the Attorney General’s obvious obsession with George Norcross, this is not likely the end of a case that should never have been brought in the first place

Donald Scarinci, a regular New Jersey Globe columnist, is the managing partner at Scarinci Hollenbeck.  His firm filed an Amicus Brief in the Norcross matter on behalf of the NAACP State Conference, New Jersey State AFL-CIO, and the New Jersey Building and Construction Trades Council.