SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
A-2373-97T5
MICHAEL J. MCDONNELL,
Plaintiff-Appellant,
v.
STATE OF ILLINOIS; STATE OF
ILLINOIS, DEPARTMENT OF
REVENUE; SAMUEL MCGAW; MICHAEL
SCADUTO; JOSEPH BARTLETTI; JUAN
MORALES; FRANK NUGNES; and
BRIAN MCGRAIL;
Defendants-Respondents.
_________________________________________________________________
Argued: January 27, 1999 - Decided: March 15,
1999
Before Judges Stern, Braithwaite and Wecker.
On appeal from the Superior Court of New
Jersey, Law Division, Bergen County.
Michael J. McDonnell argued cause pro se.
Stephen E. Klausner argued the cause for
respondents (Klausner, Hunter & Rosenberg,
attorneys; David L. Rosenberg and Mr.
Klausner, on the brief).
The opinion of the court was delivered by
BRAITHWAITE, J.A.D.
The central issue in this appeal is whether plaintiff, a New
Jersey resident and former employee of the State of Illinois at
the New Jersey field office of the Illinois Department of Revenue
(IDOR), may sue the State of Illinois in a New Jersey Court for
age discrimination under the New Jersey Law Against
Discrimination (LAD), N.J.S.A. 10:5-1 to -42. Plaintiff filed a
complaint against defendants alleging that he was denied
promotions and terminated from his employment because of his age.
Plaintiff's complaint also sought relief for: (1) alleged
violations of the IDOR employee handbook grievance procedure; (2)
intentional infliction of emotional distress; (3) negligence; and
(4) violations of the Employment Retirement Income Security Act
(ERISA),
29 U.S.C. §1140.
Defendants moved to dismiss all counts of plaintiff's
complaint for lack of subject matter jurisdiction and,
alternatively, for summary judgment on the intentional infliction
of emotional distress and negligence claims. Defendants' motion
was denied. Thereafter, defendants moved for reconsideration.
On reconsideration, the motion judge dismissed plaintiff's
complaint finding that: (1) Illinois law applied; (2) New Jersey
did not have jurisdiction; (3) the LAD did not apply to the State
of Illinois; (4) plaintiff failed to comply with the notice
provisions of the New Jersey Tort Claims Act; (5) plaintiff
failed to present evidence to support a claim for intentional
infliction of emotional distress; and (6) an ERISA claim must be
brought in federal court and therefore our State courts lacked
jurisdiction.
Plaintiff concedes that the motion judge properly dismissed
the ERISA claim but contends that the judge erred in dismissing
the remaining counts of his complaint. We hold that New Jersey
has jurisdiction, that New Jersey law applies, and that the LAD
does apply to the State of Illinois as an employer in this State.
We therefore reverse the dismissal of plaintiff's LAD claim found
in count one of his complaint, and his claim for alleged
violations of the IDOR Employee Handbook Grievance Procedure
found in count two of his complaint. We affirm the dismissal of
the remaining counts in his complaint.
Plaintiff is a New Jersey resident who was hired by the IDOR on November 28, 1988, as an "Accounting and Fiscal Administrative Career Trainee" to work in IDOR's New Jersey regional office in Paramus. On October 17, 1989, plaintiff was promoted to the position of Revenue Auditor I. Plaintiff performed audits of the tax records of individuals and business entities that were subject to Illinois taxes.
After his promotion to Revenue Auditor I, plaintiff was never promoted again. According to plaintiff, he was denied promotion because of his age. He was terminated from his position on August 10, 1993, when he was fifty-two years old. He asserts that he was terminated because of his age.
Defendants Juan Morales, Frank Nugnes, and Brian McGrail are all New Jersey residents and were employed by IDOR in positions superior to plaintiff. Defendants Samuel McGaw, Michael Scaduto and Joseph Bartletti are Illinois residents. McGaw was the Commissioner of IDOR. Scaduto and Bartletti were superiors of plaintiff in the State of Illinois.
Plaintiff and defendants essentially agree on plaintiff's disciplinary history and the events leading up to his termination. In January 1993, plaintiff was suspended for five days after he had allowed a "statute of limitations waiver to lapse," which resulted in a $700 loss to IDOR. Plaintiff was subsequently terminated after he allowed five tax payment checks, totalling $48,900, to sit on his desk for approximately six weeks. According to the individual defendants, when plaintiff was confronted, he denied knowing that he had the checks. Plaintiff disputes that he denied knowing that he had the checks.
While plaintiff was employed by IDOR, all of his paychecks were issued from the State of Illinois. No New Jersey taxes or other New Jersey deductions were withheld from his salary. In addition, following his termination, plaintiff filed a claim for unemployment compensation benefits with the Illinois Department of Employment Security and ultimately received unemployment compensation payments from Illinois.
We note at the outset that defendants do not urge that the Superior Court of New Jersey does not have personal jurisdiction. There are two types of personal jurisdiction: specific and general.
Specific jurisdiction is established when a
defendant's acts within the forum-state give
rise to the cause of action.
In contrast, when the defendant's
presence in the state is unrelated to the
subject matter of the lawsuit, general
jurisdiction may be obtained based on the
defendant's "continuous and substantial"
contacts with the forum.
[Jacobs v. Walt Disney World, Co.,
309 N.J.
Super. 443, 492 (App. Div. 1998) (citations
omitted).]
Clearly the State of Illinois and the individual defendants have
"minimum contacts" with New Jersey. International Shoe Co. v.
Washington,
326 U.S. 310,
66 S. Ct. 154,
90 L. Ed. 95 (1945).
"`[I]t is essential that there be some act by which the defendant
purposefully avails itself of the privilege of conducting
activities within the forum state, thus invoking the benefit and
protection of its laws.'" Waste Management Inc. v. Admiral Ins.
Co.,
138 N.J. 106, 119 (1994), cert. denied, WMX Technologies,
Inc. v. Canadian General Ins. Co.,
513 U.S. 1183,
115 S. Ct. 1175,
130 L. Ed.2d 1128 (1995) (quoting Hanson v. Denckla,
357 U.S. 235, 253,
78 S. Ct. 1228, 1240,
2 L. Ed.2d 1283, 1298)).
The motion judge, in ruling that Illinois law applied to
plaintiff's claims, seems to have confused choice of law with the
issue of personal jurisdiction. Even if Illinois law applied,
which we do not hold, that would not preclude a New Jersey court
from exercising personal jurisdiction and adjudicating the matter
applying Illinois law. See Gantes v. Kason Corp.,
145 N.J. 478,
484 (1996); Veazey v. Doremus,
103 N.J. 244, 247-49 (1986); Keil
v. National Westminster Bank,
311 N.J. Super. 473, 488-91 (App.
Div. 1998).
Defendants assert that "sovereign immunity and/or comity
bars the New Jersey courts from exercising personal jurisdiction
over the State of Illinois." We disagree. The doctrine of
sovereign immunity "supports the conclusion that no sovereign may
be sued in its own courts without its consent, but it affords no
support for a claim of immunity in another sovereign's courts."
Nevada v. Hall,
440 U.S. 410, 416,
99 S. Ct. 1182, 1186,
59 L.
Ed.2d 416, 422 (1979).
In Hall the United States Supreme Court held that the
federal constitution does not prohibit one state from exercising
jurisdiction over another. Plaintiff, John Hall, a California
resident, was involved in a car accident with an employee of the
University of Nevada (University), which is an instrumentality of
the State of Nevada (Nevada). 440 U.S. at 411, 99 S. Ct. at
1184, 59 L. Ed.
2d at 419. At the time of the accident, the
University employee was engaged in official business while
driving a car owned by Nevada. Ibid. The accident took place in
California. Ibid.
Hall and his mother filed suit in a California state court
and properly served the University and Nevada. Id. at 412, 99 S.
Ct. at 1184, 59 L. Ed.
2d at 419. The trial court quashed
service on Nevada, but its decision was reversed by the
California Supreme Court, which held that under California law,
Nevada could be sued in a California court. Ibid. The matter
was remanded and proceeded to trial. Ibid.
At trial, Nevada filed a motion to limit the amount of
damages that plaintiffs could recover because Nevada's liability
was limited to $25,000 under its tort claims act. Ibid. Nevada
argued that the Full Faith and Credit Clause of the United States
Constitution required the California court to apply Nevada's
statute limiting damages. Id. at 412-13, 99 S. Ct. at 1184, 59
L. Ed.
2d at 420. Nevada's motion was denied, and the plaintiffs
were awarded $1,150,000. Id. at 413, 99 S. Ct. at 1184, 59 L.
Ed.
2d at 420-21. The California Court of Appeals affirmed the
judgment, and the California Supreme Court denied review. Ibid.
The United States Supreme Court, however, granted certiorari and
affirmed the California Court of Appeals' decision. Id. at 414,
427, 99 S. Ct. at 1185, 1191, 59 L. Ed.
2d at 421, 429.
The Supreme Court rejected the position that sovereign
immunity barred California from exercising jurisdiction over
Nevada. Moreover, the Court's examination of Article III and the
Eleventh Amendment of the United States Constitution did not
reveal any basis to prohibit California from exercising
jurisdiction over Nevada. Id. at 421, 99 S. Ct. at 1188, 59 L.
Ed.
2d at 425. "[T]here is no constitutional limitation upon the
exercise of jurisdiction by the courts of one state over another
state, even absent consent of the defendant state." Baldwin
Enters., Inc. v. Town of Warwick, N.Y.,
226 N.J. Super. 549, 552
(App. Div.), certif. denied,
113 N.J. 364 (1988).
Although sovereign immunity does not prohibit New Jersey
from exercising jurisdiction over Illinois, principles of comity
may cause New Jersey to decline jurisdiction. Ibid. "But even
though New Jersey jurisdiction is recognized, the question
remains whether its exercise should now fairly be withheld under
principles of comity." Interstate Wrecking Co. v. Palisades
Interstate Park Comm'n,
57 N.J. 342, 350 (1971). Here, the
application of comity requires us to examine the public policy of
both New Jersey and Illinois. Baldwin Enters., supra, 226 N.J.
Super. at 553.
Plaintiff's claim is essentially one for age discrimination.
Both Illinois and New Jersey have a strong public policy against
discrimination. Illinois has a statute known as the Illinois
Human Rights Act (HRA), 775 ll1. Comp. Stat. 5/1-101 to 5/10-103
(West 1993) which, among other things, prohibits discrimination
in employment. Our review of that statute, however, convinces us
that plaintiff would be unable to seek relief for his claim of
age discrimination. First, the purpose of the HRA is "to promote
the public health, welfare and safety of the People of Illinois
by preventing unlawful discrimination in employment . . . ." 775
Ill. Comp. Stat. 5/1-101 (emphasis added). Second, the avowed
public policy of Illinois with respect to employment
discrimination is "[t]o secure for all individuals within
Illinois . . . freedom from discrimination . . . ."
775 Ill.
Comp. Stat. 5/1-102(A) (emphasis added). Third, and perhaps most
significantly, the definition of employee includes "[a]ny
individual performing services for remuneration within the State
for an employer."
775 Ill. Comp. Stat. 5/2-101(A)(1)(a)
(emphasis added). The definition of employer includes the State
of Illinois "and any political subdivision, municipal corporation
or other governmental unit or agency, without regard to the
number of employees." 775 Ill. Comp. Stat. 5/2-101(B)(1)(c).
We did not find any case law that addresses the issue of
whether the HRA applies to a non-Illinois resident who is
employed by the State of Illinois outside of its borders.
However, the clear language of the HRA, as well as its stated
purpose, leads us to the conclusion that the Illinois Legislature
intended that, in this context, the HRA should apply only to
Illinois residents who work for employers within the State of
Illinois. We are satisfied that an Illinois court would
similarly interpret the HRA as we do.
The cardinal rule of all statutory
construction, to which other rules are
subordinate, is that the true intent and
meaning of the legislature must be
ascertained and given effect. The language
used in a statute is the primary source for
determining this intent, and where that
language is certain and unambiguous, the
proper function of the courts is to enforce
the statute as enacted. Absent statutory
definitions indicating a different
legislative intention, courts will assume
that words have their ordinary and popularly
understood meaning.
[General Motors Corp. v. Industrial Comm'n,
338 N.E.2d 561, 564 (Ill. 1975) (citations
omitted).]
In the Interest of M.G.,
307 N.J. Super. 348, 354 (App. Div.),
certif. denied,
154 N.J. 607 (1998) (holding that statute's
"[c]lear language precludes . . . any meaning other than as
expressed"); State v. Panther Valley Property Owners Ass'n,
307 N.J. Super. 319, 329 (App. Div. 1998) (holding that statute's
plain language "should be `given its ordinary meaning and [be]
construed in a common sense manner to accomplish the legislative
purpose'") (citation omitted). Accordingly, we conclude that
although Illinois has a strong public policy against
discrimination, by the clear language of the statute, it does not
apply to plaintiff.
When we look to the LAD, plaintiff's age discrimination
claim is covered and the only issue is whether it applies to
Illinois. We are satisfied that the definition of employer,
under these circumstances, includes Illinois. The LAD provision
applicable to plaintiff's claim prohibits an employer from
denying promotions and discharging an employee because of the
employee's age. N.J.S.A. 10:5-12a (emphasis added). Illinois
and IDOR were plaintiff's employer. Under the LAD, however, the
term "employer" does not specifically identify non-New Jersey
governmental entities. The LAD defines employer as follows:
"Employer includes all persons as defined in subsection aSee footnote 1 of
this section unless otherwise specifically exempt under another
section of this act, and includes the State, any political or
civil subdivision thereof, and all public officers, agencies,
boards or bodies." N.J.S.A. 10:5-5e (emphasis added).
One could argue that the language "the State" in the
definition of employer only applies to New Jersey. Support for
this construction can be found by comparison with other statutes
where the Legislature clearly sets forth that "the State"
includes other states of the United States. Compare N.J.S.A.
2A:41A-1 (Interstate Compact on Interpleader identifying "[a]
State" to mean, among other things, "a State of the United
States") and N.J.S.A. 2A:159A-2(a) (Interstate Agreement on
Detainers identifying "State" to mean, among other things, "a
State of the United States") and N.J.S.A. 30:7B-2(h) (Interstate
Transfers of Mentally Ill Act identifying "State" to mean, among
other things, "any State . . . of the United States") with
N.J.S.A. 18A:72-10(a) (Higher Education Assistance Authority Law
referring to institutions "outside the State") and N.J.S.A. 59:1-3 (Tort Claims Act identifying "State" to mean "the State") and
N.J.S.A. 59:13-2 (New Jersey Contractual Liability Act
identifying "State" to mean "the State"). These examples could
arguably support the position that the words "the State" found in
the LAD definition of employer applies only to New Jersey because
in those situations where the Legislature intended a different
meaning it has clearly said so.
However,
Unless it be otherwise expressly
provided or there is something in the subject
or context repugnant to such construction,
the following words and phrases, when used in
any statute and in the revised statutes,
shall have the meaning herein given to them.
State. The word "State" extends to and
includes any State, territory or possession
of the United States, the District of
Columbia and the Canal Zone.
[N.J.S.A. 1:1-2]
Here, the LAD does not otherwise expressly provide that the
phrase "the State" is limited solely to New Jersey. Moreover,
the extension of the phrase to include Illinois is not "repugnant
to such construction," ibid., because the LAD is to be liberally
construed to further its goal of eradicating "`the cancer of
discrimination.'" Dale v. Boy Scouts of America,
308 N.J. Super. 516, 533 (App. Div.), certif. granted,
156 N.J. 381 (1988)
(quoting Fuchilla v. Layman,
109 N.J. 319, cert. denied sub.
nom., University of Medicine and Dentistry of N.J. v. Fuchilla,
488 U.S. 826,
109 S. Ct. 75,
102 L. Ed.2d 51 (1988)).
Under these circumstances, to construe the LAD otherwise, so
as to not include Illinois, would be contrary to its purposes.
The State of Illinois maintains an office in New Jersey employing
New Jersey residents where it reaps certain benefits from doing
business in New Jersey. To limit the reach of the LAD so as to
exclude other states who do business here and employ our
residents would be manifestly unfair to those New Jersey
residents employed by those states. The State of New Jersey,
unfortunately, is not the only state in our union that is capable
of discrimination. Other states who do business here and subject
our residents to acts of discrimination should be subject to our
laws. We do not think that the LAD, in the area of employment
discrimination, should apply to the State of New Jersey and not
to another state operating within our borders and employing our
residents. To interpret the LAD otherwise would be "irrational."
Dale, supra, 308 N.J. Super. at 533.
Although the policies of both New Jersey and Illinois are
similar with respect to discrimination in employment, plaintiff
has no remedy in Illinois. Our failure to exercise jurisdiction
would leave plaintiff without a remedy for his claims. Leaving
plaintiff with no remedy either under the law of the state where
he resides and worked, or under the law of the state that
employed him, is repugnant to New Jersey's statutorily based
policy of protecting its residents from discrimination, N.J.S.A.
10:5-3. When applying principles of comity, one important
interest of the forum state is the protection of its citizens.
Baldwin Enterprises, supra, 226 N.J. Super. at 552.
Moreover, despite the similarity in purpose between New
Jersey's and Illinois' anti-discrimination statutes, they diverge
greatly in the remedy to be awarded to a victim of
discrimination. New Jersey permits recovery of "[a]ll remedies
available in common law tort actions . . . ." N.J.S.A. 10:5-13.
Illinois is not so generous. It limits a plaintiff's recovery
under the HRA to his or her actual damages. See
775 Ill. Comp.
Stat. 8A/104. Further, HRA claims in the State of Illinois may
not be instituted in a court proceeding, but only before the
Human Rights Commission created by the HRA.
775 Ill. Comp. Stat. 8/101. Even if a claimant under the HRA could recover in tort,
the damages would be limited to $100,000.
705 Ill. Comp. Stat. 505/8(d).
When we consider the public policy of New Jersey and
Illinois in these circumstances, principles of comity do not
cause us to conclude that New Jersey ought to decline
jurisdiction over Illinois. The circumstances are compelling for
exercising jurisdiction considering our strong public policy
against discrimination and the lack of an available remedy to
plaintiff under Illinois law.
We deem it appropriate to comment briefly on the choice of law issue. Based on our earlier discussion, we are satisfied that New Jersey law applies to plaintiff's viable claims. New Jersey's choice of law rule "applies a flexible `governmental interest' standard, which requires application of the law of the state with the greatest interest in resolving the particular issue that is raised in the underlying litigation." Gantes v. Kason Corp., supra, 145 N.J. at 484 (citation omitted). "The initial prong of the governmental interest analysis entails an inquiry into whether there is an actual conflict between the law of the respective states . . . ." Ibid. Here, as noted supra, there is a conflict because plaintiff would not have a remedy in Illinois.
The second prong of the analysis "seeks to determine the interest each state has in resolving the issue in dispute. That analysis requires the court to `identify the governmental policies underlying the law of each state and how those policies are affected by each state's contacts to the litigation and to the parties.'" Id. at 485 (quoting Veazey, supra, 103 N.J. at 248).
The purpose of HRA is to prevent unlawful discrimination in order to promote the health, welfare and safety of Illinois' citizens. In the context of employment discrimination, Illinois' policy is to protect Illinois' residents who work for employers within the State of Illinois. Plaintiff did not work in the State of Illinois. By contrast, the LAD also seeks to prevent unlawful discrimination, but is much broader in its scope than the HRA. It is to be liberally construed. "[T]he clear public policy of this State is to abolish discrimination in the work place." Fuchilla, supra, 109 N.J. at 334.
As the Legislature has declared,
"discrimination threatens not only the rights
and proper privileges of the inhabitants of
the State but menaces the institutions and
functions of a free democratic State." The
day is long past when any employee need
endure discrimination because of his or her
race, religion, national origin, [age] or
gender. Employment discrimination is not
just a matter between employer and employee.
The public interest in a discrimination-free
work place infuses the inquiry.
[Id. at 334-35 (citations omitted).]
Plaintiff is a New Jersey resident. The acts that are the
basis of his claims occurred in New Jersey. Three of the
individual defendants are New Jersey residents. Illinois
maintains an office in New Jersey to assist in the collection of
taxes from individuals and entities liable for Illinois taxes.
Applying these factors, we are convinced that New Jersey has the
more significant relationship to the parties and the litigation.
Applying our choice-of-law rule, New Jersey law applies only to
plaintiff's viable claims.
The motion judge erroneously concluded that plaintiff failed to comply with the notice provision of the New Jersey Tort Claims Act (Act). N.J.S.A. 59:8-8 and -9. Claims of discrimination are not subject to the notice requirements of the Act. Fuchilla, supra, 109 N.J. at 337-38. The Illinois statute covering notice of claims is likewise not applicable. Any violation under the HRA is brought before the Illinois Human Rights Commissions which has exclusive jurisdiction over claimed violations of the HRA. 775 Ill. Comp. Stat. 8/101; Mein v. Masonite Corp., 485 N.E.2d 312, 315 (Ill. 1985). The Illinois notice provision applies only to claims filed in its court of claims. 705 Ill. Comp. Stat. 505/22-1. Further, applying our choice-of-law rule, on the issue of notice, New Jersey law would apply. Here, as noted supra, New Jersey has the most significant interest in the litigation. Gantes, supra, 145 N.J. at 492-93.
Finally, we affirm the dismissal of the last three counts of plaintiff's complaint. Plaintiff's negligence claim is barred by the Workers' Compensation Statute. N.J.S.A. 34:15-7. It is also barred in Illinois. 820 Ill. Comp. Stat. 305/3; Mier v. Staley, 329 N.E.2d 1 (Ill. App. Ct. 1975).
Plaintiff concedes that his ERISA claim was properly dismissed. We agree. It can only be commenced in federal court.
We also affirm the dismissal of plaintiff's claim for intentional infliction of emotional distress. Because defendants' motion, in this respect, was based on matters outside the record, it was in the nature of a motion for summary judgment. R. 4:6-2(e). "Generally speaking, to establish a claim for intentional infliction of emotional distress, the plaintiff must establish intentional and outrageous conduct by the defendant, proximate cause, and distress that is severe." Buckley v. Trenton Savings Surety, 111 N.J. 355, 366 (1988). The same standard applies under Illinois law. See Pavilon v. Kaferly, 561 N.E.2d 1245, 1250 (Ill. App. Ct. 1990). Plaintiff's allegations do not give rise to a finding that defendants' conduct exceeded "all possible bounds of decency." Ibid.; Taylor v. Metzger, 152 N.J. 490, 509 (1998). No reasonable fact-finder could conclude that defendants' conduct satisfied the standard for intentional infliction of emotional distress. The judge properly granted summary judgment to defendants with respect to this claim. See Brill v. Guardian Life Ins. Co., 142 N.J. 520 (1995).
We reverse the dismissal of count one and two and remand for further proceedings consistent with this opinion. We affirm in all other respects.
Footnote: 1 N.J.S.A. 10:5-5a states: "Person" includes one or more individuals, partnerships, associations, organizations, labor organizations, corporations, legal representatives, trustees, trustees in bankruptcy, receivers, and fiduciaries.