NJ Transit board kept lawsuit payouts from public view

NJFOG’s John Paff and Walter Luers are quoted in this Bergen Record article about a public body approving a settlement agreement in closed session and making no mention of it in open session. A vote to take formal action must take place at an open public meeting. – NJFOG

September 11, 2013
By Karen Rouse
staff writer | The Record
(full article here and re-posted below)

Despite its insistence that it operates transparently, NJ Transit’s board has been voting behind closed doors for years to settle personal injury lawsuits, renew its insurance program, and settle other legal claims people have filed against the agency, according to published minutes of meetings since early 2012.

Because votes on settlements have not been taken in public sessions, millions of dollars in payouts by the agency have gone unnoticed by the general public.

Minutes of NJ Transit board’s closed-session meetings for all of 2012 and through May 2013 show the board voted at nearly every executive session to settle claims for hundreds of thousands of dollars. The board meets monthly in public session, and holds closed-door executive sessions when they need to discuss a matter privately, such as litigation. A public session is scheduled for 9 a.m. Thursday at the agency’s Newark offices.

Documentation of the cases and the dollar amounts on which the board members signed off do not show up on the public meeting minutes posted on the agency’s website. The board does not post the minutes from the closed sessions online. The Record obtained the executive session minutes through a public records request.

But even those records are heavily redacted, with settlement amounts blacked out. However, the board, in most cases, must take a vote when a settlement is above $500,000, according to the agency’s bylaws. In some cases, the threshold is higher, with a vote required at $600,000 or $700,000. There have been at least a dozen votes on settlements for personal injury cases from January 2012 through May of this year, the documents show.

In one case, the board voted during an April 11, 2012, closed session to settle the personal injury claim filed on behalf of Rosalina Barbosa-Ortiz, a woman who died after she was struck by an NJ Transit bus in Camden. NJ Transit settled with Barbosa-Ortiz’s estate last year for $990,000, but that information is not documented in subsequent minutes posted online. It was obtained through a prior public records request.

In June 2012, the board voted in private to renew its liability and workers compensation insurance for a price of $11 million for fiscal year 2013. There is no indication in the public meeting minutes that the purchase was ratified in an open session.

Open government advocates say matters involving legal strategy and contract negotiations can be discussed privately, but ultimately, the vote should be held in public and documented in both the public meeting agendas and minutes.

The agency has been criticized recently for trying to keep details of its rail hurricane plan from the public. When the plan was requested, only a blacked out document was provided. NJ Transit later released the full plan after it was sued by The Record.

Spokesman John Durso Jr. said he would look into the settlement votes, but so far has not produced any public minutes that show how the board voted on dozens of settlements and other legal matters. On Monday, he released a statement saying the agency decided to change its procedures.

“In response to your inquiry, NJ Transit had been following a standard meeting operating procedure dating back more than 30 years. Based on the advice NJ Transit received from the Attorney General’s Office earlier this year, we have reviewed and updated our executive session procedures.”

He did not respond to requests for copies of its long-standing procedures and the updated executive session procedures. He declined to comment further for this story.

John Paff, a treasurer at the Bound Brook-based Foundation for Open Government, said the state’s Open Public Meetings Act allows for the agency to discuss certain topics like contract negotiations, lawsuits and real estate matters in closed session, and even to make a decision in closed session — as long as the board subsequently takes action in public.

The open meetings law “is violated when formal action is taken in closed session and is never ratified or even discussed in a public session,” he said.

Paff said that according to a 2009 Appellate Division case, it’s not the act of approving something that the appellate division says is illegal, it’s the fact of not mentioning it, ratifying it, or letting the public know.

“The real wrong comes when you make a decision in executive session and don’t even mention it in the public session minutes that the decision was made,” Paff said.

Walter Luers, an attorney and president of the New Jersey Foundation for Open Government, said votes should take place in public.

“At some point there should be something in public that says that the settlement was made,” Luers said.

“Here is the problem: If you are a member of the public that goes to the public meetings, you would never know these cases are being settled unless you know to ask for the executive session minutes,” Luers said. “At some point, there should be some formal approval in public session. It should be as soon as possible.”

The New Jersey Turnpike Authority regularly posts in its public meeting agenda a list of cases to be voted on by the board. They include the settlement of workers’ compensation and personal injury or wrongful death claims, and payouts negotiated with landowners for property taken for highway widening projects.

Thomas Feeney, spokesman for the Turnpike Authority, said the board does not vote during executive session meetings. Rather, it discusses cases, such as pending lawsuits. He said if a settlement offer is a made to a litigant who accepts it, the settlement is brought to a vote during the public session.

Those decisions can be viewed by the public in the minutes posted on the Turnpike Authority’s website.

Luers said when public agency boards meet, “their meeting has to be open to the public and the public has the right to attend the meeting … and that the public be allowed to observe all that happens.”

He said it is not in the public’s interest for the board to discuss its legal strategy or contract negotiations in public.

“You don’t want someone from the other side’s attorney’s office coming to the meetings and listening to them discuss what they’re going to offer,” Luers said. If the litigant knows the maximum offer NJ Transit is willing to offer, [the litigant] won’t settle for less, which means the agency may end up spending more of the taxpayer dollars to end a claim.

The amount of money NJ Transit’s board is authorizing should be confidential until the settlement is final, Luers said.

At that point, he said, the vote “should happen publicly.”