The U.S. senator and former Newark mayor was named in a lawsuit targeting more than a dozen individuals who trustees for the city's watershed agency argued should share in the responsibility for its collapse.
NEWARK--A federal judge has dismissed a case against U.S. Sen. Cory Booker (D-N.J.) that charged he failed to properly oversee Newark's now bankrupt watershed corporation when he served as mayor of New Jersey's largest city.
However, U.S. Bankruptcy Judge Vincent F. Papalia let stand a civil complaint against Vaughn McKoy, the former board vice chairman of the Newark Watershed Conservation and Development Corp.
The ruling on Tuesday came in the wake of a lawsuit filed last year by the provisional trustees of the agency against Booker and McKoy, along with former executive director Linda Watkins-Brashear and more than a dozen others, following allegations that the non-profit corporation had bilked millions of dollars from taxpayers.
Created in 1973, the agency was formed to manage Newark's vast watershed properties in Morris, Passaic and Sussex counties, and later expanded its reach to manage the city's Pequannock water treatment facility and manage Newark's reservoirs.
The corporation operated under the radar screen for decades, until it came under fire in a scathing report issued in 2014 by the state Comptroller's Office, which accused the former director of the agency and her cohorts of siphoning off millions of city dollars in illegal payments, insider deals and risky stock ventures.
Watkins-Brashear later pleaded guilty to federal charges in December in connection with the soliciting nearly $1 million in bribes from businesses in return for overinflated and no-work contracts.
The civil lawsuit by trustees for the agency, which is now in federal bankruptcy court, argued that Booker and other officials with oversight responsibilities must also share financial responsibility for the scandal--even if they were caught off guard by the corporation's ultimate collapse--because their inattention to matters allowed it to happen.
Papalia, however, said as a public employee, Booker was immune from liability under the Tort Claims Act.
"Booker's alleged actions or inactions were taken in the exercise of 'judgment or discretion' and or were legislative in nature," wrote the judge in a 39-page opinion.
Watershed agency took the city for millions
The trustees had argued that Booker was not entitled to the immunity afforded a public employee under the Tort Claims Act because the statute was meant to protect a public employee from a private suit for damages, not to protect a public employee from a claim made by a public entity.
The judge rejected the argument, saying that nowhere in the Tort Claims Act did it state that claims by public entities were excluded.
"Making Booker potentially liable for actions or inactions taken by these various and numerous entities would be directly contrary to many of the act's central purposes," wrote the judge, who said it would fail to protect him from a legal jeopardy for his official functions and also fail to recognize the breadth of his public responsibilities.
He added that finding the exception to immunity urged by the watershed corporation "would endorse a piecemeal approach to public employee liability that would, in this court's view, result in disorder and, more importantly, discourage public service."
Booker's attorney, Marc Elias, called the lawsuit frivolous.
"We hope the trustees will stop wasting watershed resources and respect the decision," he said in a statement. "As we told the court, Senator Booker faithfully executed his duties as they related to the watershed, and we hope that the court's agreement brings this bizarre legal chapter to a conclusion."
The Newark Water Group, a citizen's organization that first shed light on the abuses at the watershed agency, said called the decision unfortunate.
In a statement, the group said despite the senator's dismissal from the suit, it was undisputed that the level of corruption uncovered inside the Newark Watershed Conservation and Development Corp. occurred during Booker's tenure as Newark's mayor.
"Booker never attended even one NWCDC meeting to make certain its dealings were above board," the group said. "Had Booker's plan to turn the NWCDC into a municipal utility authority been approved, the NWCDC corruption would have been institutionalized and continued for years to come."
The trustee's case against McKoy will continue. The judge said the former board chairman was present during the time which the alleged misconduct began to occur with regularity, found the trustees set forth "a plausible claim" that he failed to act in good faith.
Although McKoy maintained he was unaware of the alleged misconduct, which surfaced two years after he resigned, the judge said they were issues entitled to be explored through pre-trial discovery by the trustees.
An attorney for McKoy did not respond to a request for comment.
Ted Sherman may be reached at tsherman@njadvancemedia.com. Follow him on Twitter @TedShermanSL. Find NJ.com on Facebook.