Municipalities could face sanctions for filing frivolous lawsuits

New Jersey municipalities are not exempt from lawsuits alleging frivolous litigation, the state Supreme Court ruled today, saying local governments may be held financially accountable and subject to sanctions.

Then-Englewood Cliffs Mayor Mario Kranjac, now a candidate for the Republican gubernatorial nomination, played a key role in a $100 million lawsuit, later dismissed, against four attorneys who had represented the borough in an affordable housing case; a previous administration hired the lawyers.  Later, the lawyers sued Englewood Cliffs.

A 5-0 decision written by Justice Douglas Fasciale found that the state’s Tort Claims Act “addressed the immunity of public entities, including certain circumstances in which immunity is waived, in negligence actions — not municipalities engaging in frivolous litigation.”

“The Borough’s actions here were not the official conduct that judicially created municipal immunity existed to insulate.  Indeed, as opposed to insulating municipalities from filing bad faith claims, the purpose of the (Frivolous Litigation Statute) is to deter such conduct,” Fasciale wrote. “The Legislature has not exempted municipalities.”

Two justices, Stuart Rabner and John Hoffman, did not participate.