Estate of Lagano v. Bergen Cnty. Prosecutor's Office

• Decision Date: 20 March 2018
• Docket Number: DOCKET NO. A–1861–16T4
• Parties: ESTATE OF Frank P. LAGANO, Plaintiff–Respondent, v. BERGEN COUNTY PROSECUTOR'S OFFICE, Defendant–Appellant, and Michael Mordaga, Defendant. State of New Jersey, Plaintiff–Appellant, v. $1,297,522.20, Defendant, and Estate of Frank P. Lagano, Claimant–Respondent.
• Court: New Jersey Superior Court — Appellate Division

454 N.J.Super. 59

184 A.3d 126

ESTATE OF Frank P. LAGANO, Plaintiff–Respondent,

v.BERGEN COUNTY PROSECUTOR'S OFFICE, Defendant–Appellant,andMichael Mordaga, Defendant.

State of New Jersey, Plaintiff–Appellant,

v.$1,297,522.20, Defendant,andEstate of Frank P. Lagano, Claimant–Respondent.

DOCKET NO. A–1861–16T4

Superior Court of New Jersey, Appellate Division.

Argued November 8, 2017

Decided March 20, 2018

Steven A. Yomtov, Deputy Attorney General, argued the cause for appellant State of New Jersey (Christopher S. Porrino, Attorney General, attorney; Mr. Yomtov, of counsel and on the brief).

David J. Pack argued the cause for appellant Bergen County Prosecutor's Office (Hanrahan Pack, LLC, attorneys, join in the brief of appellant State of New Jersey).

Brian D. Gillet, Deputy First Assistant Prosecutor, argued the cause for appellant Middlesex County Prosecutor's Office (Andrew C. Carey, Middlesex County Prosecutor, attorney, joins in the brief of appellant State of New Jersey).

Eric V. Kleiner argued the cause for respondent.

Before Judges Yannotti, Carroll, and Leone.

The opinion of the court was delivered by

LEONE, J.A.D.

The State appeals orders issued December 1 and 15, 2016, unsealing wiretap materials, including intercepted conversations and evidence derived from them, and compelling their disclosure to the Estate of Frank P. Lagano (Estate). We agree with the trial court that disclosure for use in civil litigation is permissible "upon a showing of good cause" under N.J.S.A. 2A:156A–17(c). We disapprove the contrary ruling in In re Disciplinary Proceedings Against Spinelli, 212 N.J. Super. 526, 515 A.2d 825 (Law Div. 1986). We also affirm the court's finding of good cause for disclosure in general.

However, we vacate the orders to the extent they allowed the disclosure of information revealing the roles of confidential informants. We remand for the trial court to consider whether disclosure will reveal a person was a confidential informant for a particular agency, in a particular investigation, during a particular period, or in a particular way, and to consider whether disclosure of such particular information was justified by the Estate's showing. We also remand for entry of a broader protective order.

I.

This appeal relates to "Operation Jersey Boyz," an extensive joint investigation by the Bergen County Prosecutor's Office (BCPO) and the New Jersey State Police. Between August and November 2004, a Passaic County Law Division judge (original judge) issued wiretap orders and communication data warrants. In December 2004, officers under the command of Michael Mordaga, then the BCPO Chief of Detectives, conducted a series of raids which were the culmination of the "Jersey Boyz" investigation. Over forty people were arrested during the raids, including Frank P. Lagano. Lagano was charged with racketeering, promoting gambling, conspiracy to promote gambling, and two counts of criminal usury.

In January 2005, the BCPO initiated a civil forfeiture action in Bergen County against monies seized in the "Jersey Boyz" raids. State v. $1,297,522.20, Docket No. L–0311–05. That included $264,428 in cash seized from the residence of Lagano and his wife and from their safety deposit boxes at two banks. Lagano filed an answer asserting that the seized funds were not connected to any criminal activity.

In a December 14, 2006 order and sealed opinion, the original judge suppressed the "Jersey Boyz" wiretaps, communication data warrants, and search warrants, and "the fruits thereof." The record of these proceedings were sealed. The BCPO appealed and we reversed as to seven warrants, remanded three warrants for further hearings, and affirmed the suppression of sixteen warrants, including each of the three wiretaps that captured or referenced Lagano. We impounded our opinion, as well as the appellate briefs and appendices.

On April 12, 2007, Lagano was fatally shot in East Brunswick. The Middlesex County Prosecutor's Office (MCPO) commenced a still-open investigation into his death. Thereafter, the Estate asserted its interest in the seized $264,428 in the forfeiture action.

The forfeiture action was stayed for six years during the suppression proceedings and subsequent ex parte litigation before the original judge by the BCPO and the Office of the Attorney General (the State) regarding legal issues stemming from the "Jersey Boyz" wiretaps and warrants. After the stay was lifted, the Estate sought discovery. However, the State refused to produce the documentation sought on the grounds it was under seal by the prior orders of the Law Division.

In April 2012, the Estate filed a motion to unseal and compel the production of all relevant discovery. Another Law Division judge denied the motion and a motion to reconsider. On June 26, 2013, that judge granted summary judgment to the BCPO. However, we reversed and remanded, ruling the Estate's submissions created a genuine issue of material fact. State v. $1,297,522.20, No. A–0208–13 (App. Div. Dec. 7, 2015).

Meanwhile, in August 2012, the Estate filed a civil complaint against the BCPO and Mordaga in federal district court, Docket No. 12–CV–0441. The majority of its factual averments were based on allegations made by James Sweeney, a now-deceased former investigator, in a 2010 complaint he filed following his termination by the Division of Criminal Justice (DCJ). See Estate of Lagano v. Bergen Cty. Prosecutor's Office, 769 F.3d 850, 853 & n.2 (3d Cir. 2014).

The Estate's federal complaint alleged the following. Lagano and Mordaga "enjoyed a personal and business relationship," which included socializing and vacationing together, as well as "multiple business ventures." Id. at 852. Lagano was also under investigation for his possible involvement in an organized crime gambling operation by the BCPO, where Mordaga was Chief of Detectives. Ibid. After Lagano was arrested, charged, and had cash and other items seized, Mordaga allegedly brought Lagano to his office and told Lagano that if he retained a certain attorney, "90% of his problems would go away." Ibid. However, Lagano did not take Mordaga's recommendation and instead agreed to serve as a confidential informant for Sweeney. Ibid.

The federal complaint also alleged that, in early 2007, Mordaga showed up unexpectedly at a restaurant where Lagano was having a dinner meeting and again urged Lagano to hire the attorney he had previously recommended, with the assurance that, if Lagano did so, "half his money would be returned and ... [he] would serve no prison time." Ibid. Lagano rejected Mordaga's offer, and their relationship "soured." Ibid. Afterwards, "[BCPO] personnel ... disclosed to alleged members of traditional Organized Crime families ... that [Lagano] had been an informant," and Lagano was shot and killed thereafter. Ibid.

In the Estate's three-count federal amended complaint, count one claimed the disclosure of Lagano's status as a confidential informant established a state-created danger in violation of his due process rights. Ibid. Count two asserted the same claim under the New Jersey Civil Rights Act, N.J.S.A. 10:6–1 to 2. Count three alleged unlawful conversion of Lagano's property (the seized $264,428) in violation of the Fourth Amendment and 42 U.S.C. §§ 1983 and 1985. Id. at 853.

The BCPO and Mordaga each filed a motion to dismiss. The federal district court dismissed the Estate's claims on the grounds that the defendants were acting on behalf of the State, that the BCPO had sovereign immunity, that Mordaga had qualified immunity, and that count three was barred by the statute of limitations. Id. at 853–54. On October 15, 2014, the Third Circuit Court of Appeals affirmed the district court's ruling that count three was barred by the statute of limitations, but vacated the dismissal of the state-created danger claim in counts one and two, and remanded to the district court. Id. at 854–61.

In December 2015, pursuant to the order of a federal magistrate judge, the Estate returned to the Law Division in Passaic County and filed a motion to unseal the records the Law Division had sealed. Estate v. BCPO, et al., Docket No. L–0093–16. Pursuant to Rule 1:38–12, the motion sought "entry of an order unsealing and compelling the production of all court records and documentary evidence in the Bergen County gambling investigation ‘Jersey Boyz,’ and all records and evidence relevant to" the forfeiture and federal actions. Oral argument was heard by the original judge. Sealed in-camera sessions were held to discuss issues related to the possible disclosure of confidential informants.

In a December 1, 2016 order, the original judge "substantially granted" the motion after reviewing the extensive evidence and history of the case in a sealed opinion. The judge denied the State's motion for reconsideration and issued a revised order on December 15, 2016. We granted motions by the State, the BCPO, and the MCPO for leave to appeal and for a stay of the Law Division's orders and proceedings.

II.

The State argues the release of the sealed wiretaps and related evidence to a private litigant for use in a civil action is not authorized by Title III of the Omnibus Crime and Safe Streets Act, 18 U.S.C. §§ 2510 – 2520 (Title III), or New Jersey's Wiretapping and Electronic Surveillance Control Act, N.J.S.A. 2A:156A–1 to -37 ("Wiretap Act" or "Act"). Whether wiretap evidence may be disclosed "is an issue of statutory construction; our review is therefore de novo." State v. Olivero, 221 N.J. 632, 638, 115 A.3d 1270 (2015). We must hew to that standard of review.

Because "this is a case of statutory interpretation," our task " ‘is to discern and give effect’ to the legislature's intent." State v. Munafo, 222 N.J. 480, 488, 120 A.3d 170 (2015) (citation omitted). "To begin, we look at the plain language of the statute." Ibid. Courts "can also draw inferences based on the statute's overall structure and composition." State v. S.B., 230 N.J. 62, 68, 165 A.3d 722 (20...