N.J. judge tosses George Norcross’ lawsuit against Gov. Phil Murphy over tax-credit investigation

TRENTON — A New Jersey judge on Wednesday dismissed a lawsuit filed by South Jersey power broker George E. Norcross III against Gov. Phil Murphy alleging that the governor had unlawfully formed a task force to investigate the state’s multibillion-dollar tax-incentive programs.

Mercer County Superior Court Judge Mary C. Jacobson also denied a request by four companies with ties to Norcross to modify subpoenas served by the task force.

She said there was no evidence in the lawsuit to support the plaintiffs’ contention that the task force was conducting a sham investigation that had improperly targeted Norcross, a private citizen, and the companies.

“There were legitimate concerns about the [Economic Development Authority],” she said, pointing to reports by the state auditor and comptroller.

Her decision Wednesday may not be the last word on the matter. Norcross and the companies that joined him in filing the lawsuit could appeal the ruling.

“The judge’s decision sets a dangerous precedent that this administration -- or any administration -- can hold investigatory hearings without allowing their targets basic due process rights,” Dan Fee, a spokesperson for Norcross and other plaintiffs, said in a statement.

“The plaintiffs will review the judge’s written decision in order to make a determination about whether and how to move forward to protect their rights and the good names they’ve built over decades in business," the statement said. "The plaintiffs are proud they are to have brought new jobs to Camden, invested more than $300 million in the city’s future, and become an integral part of its ongoing renaissance and neither today’s ruling, nor the Task Force’s actions, will diminish this success.”

For now, though, the ruling represented a victory for Murphy, a first-term Democrat whose feud with Norcross, widely regarded as the state’s most powerful Democratic kingmaker, has in many ways defined his tenure.

Murphy appointed the task force in January after the state comptroller issued a report that found the Economic Development Authority had failed to adequately oversee the incentives programs.

The task force has questioned whether the companies with ties to Norcross misled state officials on their applications for tax credits. Norcross’ insurance brokerage, Conner Strong & Buckelew, and two business partners were awarded $245 million in tax breaks in 2017 to build an office tower in Camden and move jobs there. Norcross also chairs the board of Cooper University Health Care, which was awarded $40 million in tax credits in 2014.

Norcross and the companies sued Murphy in May, alleging the governor lacked the authority to investigate the Economic Development Authority.

In June, Jacobson denied Norcross’ request for a preliminary injunction to block the release of an investigative report prepared by the task force.

The report suggested that Conner Strong, Cooper, and other companies with ties to Norcross had made false representations to the Economic Development Authority that they would move jobs to locations in Philadelphia if the state did not provide incentives. The report said the companies received tens of millions of dollars in incentives for which they shouldn’t have been eligible.

The companies have denied wrongdoing and vigorously contested the report’s findings.

Norcross’ attorneys allege that Murphy established the task force to go after him personally and that the political vendetta was masked as an effort to examine the development authority.

While the governor has the power to investigate state officers and departments, he has no such authority to probe private citizens or companies, said attorney Herbert J. Stern.

“I’m old enough to remember the days of McCarthy,” Stern, an attorney for Cooper, told the judge during a daylong hearing in Trenton. “This is serious business.”

“They set out to get us, and they did. And they’re gonna keep on doing it too,” Stern said.

Murphy’s lawyers said that the task force was properly convened and that it could only conduct a full investigation of the EDA by reviewing its dealings with the companies that applied for tax credits.

Ted Wells, an attorney for Murphy, said courts have rejected similar cases alleging political vendettas.

“If all one had to do was allege that the investigation was not bona fide, or that the investigation was unlawful, then any party who may be negatively affected in some way by a state investigation could really put a halt to that investigation,” he told the judge. “You could arguably stop every grand jury in the state.”

Shortly after releasing the June report, the task force served subpoenas on Conner Strong, Cooper, and two other plaintiffs in the case -- the developer the Michaels Organization and the logistics company NFI -- seeking records regarding their pursuit of alternative locations in Philadelphia. (The task force did not issue a subpoena to Norcross himself.)

The companies had asked the judge to order the task force to modify the subpoenas so that the companies would have to comply only if they were granted the right to cross-examine witnesses at a public hearing and present their own evidence.

Jacobson said Wednesday that the law didn’t grant the plaintiffs those rights. She also noted that the companies had declined an opportunity to testify at a task force hearing.

“I can agree it’s always better to get two sides to the story,” the judge said, “but that was offered to you, and you chose not to do that.”

The EDA has said it is reviewing a number of applications in light of the task force’s investigation, including those submitted by Conner Strong, Cooper, NFI, and the Michaels Organization. A state grand jury is also conducting a criminal investigation.

New Jersey’s economic development programs expired July 1. The Democratic-controlled Legislature passed a bill extending the programs into early next year, but Murphy has vowed to veto it.

The daylong hearing grew heated near the end. The judge said she was “extremely concerned” that Norcross’ attorneys “would try to prevent the court from looking at” what she described as a critical piece of evidence “and instead suggest that a blog post was something that I should look at to review the bona fides of this investigation.” It was a reference to a post on a state political news site that had been attached to court papers.

After she concluded around 7:30 p.m., an attorney for Norcross shot back that his team had made no such suggestion. Attorney Michael Critchley told the judge her remarks were an “ad hominem attack on us.”