Port Authority might be on the hook for Bridgegate legal expenses

Remember "Bridgegate"? That was a New Jersey scandal when Governor Chris Christie was accused of shutting down traffic around the George Washington Bridge to punish the mayor of Fort Lee for not supporting Christine's campaign for governor. That shutdown caused great havoc in Fort Lee. Various public officials, including the plaintiff in this case, were prosecuted over this scandal, but his conviction was overturned, and he sued the Port Authority for indemnification covering his roughly $4 million in legal expenses he incurred in defending himself. Is Port Authority on the hook for these legal expenses? 

The case is Baroni v. Port Authority, issued on December 2. Plaintiff was the deputy executive director of the Port Authority. As the Court of Appeals (Walker, Carney and Menashi) describes the genesis of this case:

While serving in that position in September 2013, Baroni approved a plan to modify the deployment of traffic cones in the New Jersey approaches to the George Washington Bridge. The plan substantially increased traffic for residents of Fort Lee, New Jersey. It was reported in the press that the plan aimed to retaliate against the mayor of Fort Lee, who had refused to endorse then-Governor Chris Christie for re-election. The resulting political scandal was known as “Bridgegate.” Baroni became a subject of investigations by the New Jersey Legislature and the U.S. Attorney for the District of New Jersey.

Baroni went through the wringer in this case, having to respond to legislative subpoenas and criminal charges. But Port Authority would not indemnify him for the legal expenses in fighting off the legislative and criminal charges. Baroni was convicted in criminal court, but he was ultimately exonerated after the U.S. Supreme Court held that the fraud counts were not actionable under federal law. Yet, while plaintiff is a free man with a clean record, he spent millions of dollars in defending himself, and public officials, including those who work for the Port Authority, usually do not have this kind of money. Port Authority refused to indemnify plaintiff, who sued Port Authority in federal court for reimbursement of his legal fees.

This is not an easy case because Port Authority argued that it has sovereign immunity, meaning it cannot be sued under the Eleventh Amendment, which says you cannot sue the state unless the state has waived such immunity. But the Supreme Court has already addressed this issue, in Hess v. Port Authority, 513 U.S. 30 (1994), holding that Port Authority "is not cloaked with the Eleventh Amendment immunity from suit in federal court." Bi-state entitles like Port Authority, which regulate services in New York and New Jersey, do not resemble the sovereign states that are normally protected under the Eleventh Amendment. The reason this remains in dispute for plaintiff is that the Second Circuit, in Caceres v. Port Authority, 631 F.3d 620 (2d Cir. 2011), made incorrect assumptions in interpreting Hess that supported the Port Authority in this case. Hess remains the primary authority for plaintiff. The complexity of this issue is one reason why it took nearly two years for the Court of Appeals to decide this case following oral argument.

What it means for plaintiff is the case cannot be dismissed for lack of subject matter jurisdiction. The parties will continue to fight over whether Port Authority must reimburse him for the approximately $4 million in legal fees. The case is also remanded so that plaintiff can amend his complaint to address another issue that was held against him in the district court: whether he complied with certain notice-of-claims filing requirements in order to maintain this lawsuit against Port Authority.