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2021 was an expensive year for New Jersey in lawsuit settlements

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New Jersey doled out more than $196 million last year to settle lawsuits — more than three times what the state paid in 2020 and the priciest year for payouts in at least a decade.

Two settlements sparked by tax disputes with the state accounted for over half the money the state paid to end 287 lawsuits, with Johnson & Johnson pocketing almost $68.4 million and Verizon getting $47 million, according to data the New Jersey Monitor obtained through records requests.

Payouts over the past decade have ranged from a low of $49 million in 2012 to a high of $112 million in 2018, according to NJ.com. That makes last year’s settlements a costly outlier.

Taxes, transit top list of payouts

People and businesses successfully sued the state for all sorts of reasons, with 2021’s public payouts ranging from $264.47 to $68,356,505.19.

Even one of New Jersey’s most famous residents won a settlement last year from the state. New Jersey paid Dana Owens — professionally known as Queen Latifah — nearly $500,000 to settle a 2017 lawsuit she filed against the state Division of Taxation for wrongfully denying tax refund claims she made dating back to 2006, according to court paperwork.

The two biggest payouts also stemmed from tax complaints. Johnson & Johnson successfully challenged how New Jersey calculated risks for an insurance premium tax, while Verizon won millions in its fight against New Jersey over a corporate business tax overpayment by Vodafone. That’s the British company whose U.S. Verizon Wireless shares Verizon bought out nearly a decade ago.

The majority of last year’s 22 costliest cases — those that settled for $1 million or more — involved public transit crashes or accidents that left people dead or permanently maimed. The state paid:

  • A combined $12.6 million in six separate payouts to people hurt when a NJ Transit train crashed in Hoboken Terminal in September 2016. A woman waiting on the platform was killed and about 110 others were injured in an accident that federal investigators blamed on the engineer’s sleep apnea, as well as the agency’s lack of a speed-control system like positive train control that Congress in 2008 ordered transit agencies to install by the end of 2020.
  • $7.4 million in three separate settlements to people injured when an empty NJ Transit bus ran a red light in August 2016 and collided with another NJ Transit bus in Newark, killing the bus driver and a passenger and injuring a dozen other passengers.
  • $5 million to a Delaware man, Anthony Simmons, who was injured in March 2017 after a car driven by a state employee ran a stop sign and hit his car on Route 40 near a New Jersey Turnpike access road in Carney’s Point.
  • $2 million to a pedestrian, Kiliek Anthony, who suffered a traumatic brain injury after he was hit by a NJ Transit bus in December 2015 in Irvington.
  • $1.6 million to the family of Alvin Maracallo, a 10-year-old Bergenfield boy killed when a NJ Transit bus hit him as he rode his bicycle in May 2019.
  • $1.35 million to the family of a pedestrian, Rosalyn Quinones, who died when a NJ Transit bus hit her in Pleasantville in December 2015.

Criminal justice cases accounted for $8.5 million of 20 seven-figure payouts, with three exonerees — Michael Castro, Eric Kelley, and Ralph Lee Jr. — getting $7 million to settle their claims of wrongful prosecution and imprisonment.

Castro, who was paid $5 million, was twice prosecuted by the Atlantic County Prosecutor’s Office for a 2012 murder in Mullica (the charges were dropped both times). Kelley and Lee, who received $1 million each, wrongly served 24 years in prison for a 1993 murder in Paterson that DNA evidence later showed they didn’t commit, according to the Innocence Project.

The family of a state correctional officer who died at a youth correctional facility in Chesterfield received $1.5 million after his wife sued, saying medical staff there failed to diagnose and treat his cardiac arrest.

A spokesman for the Office of the Attorney General said litigation-related payout and recovery numbers fluctuate from year to year “depending on many variables.”

“But one constant has been the professionalism and dedication of the public servants within the Division of Law,” office spokesman Steve Barnes said. “Our DOL attorneys work hard to protect and defend New Jersey in court, ensure environmental justice, preserve civil rights, protect consumers, and otherwise serve Garden State residents. On a daily basis, their work touches on virtually every aspect of life in our state.”

Money gained

The state made over $73.4 million in recoveries last year from more than 700 people and businesses, data shows. That’s down from $95.2 million in recoveries made in 2020, state data shows.

Millions of last year’s recoveries came from drug makers implicated in multistate lawsuits for fueling the opioid epidemic.

The global consulting firm McKinsey & Company forked over one of the bigger recoveries, paying New Jersey $16 million for designing aggressive marketing strategies used by some of the nation’s largest opioid manufacturers.

Insys Therapeutics paid the state $5 million to resolve allegations that its founder John N. Kapoor illegally arranged bribes to New Jersey doctors as part of a nationwide kickback scheme to inflate sales of its flagship opioid drug Subsys.

Boston Scientific paid New Jersey $3.7 million as part of a multistate settlement over allegations that it deceptively marketed its surgical mesh devices to consumers.

An Old Bridge man, Sandy John Masselli, who was indicted for running a multi-year investment fraud scheme, paid the state over $5 million.

Advanta Medicaid turned over $1.4 million after the state sued the Ocean County-based business for accepting hundreds of thousands of dollars from consumers after promising to help them establish eligibility for Medicaid coverage and then failing to provide promised services.

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