Jury slaps Morristown with $1.7M in damages for police chief demotion of whistleblowing detective

Editor’s note: This version contains updated information.

Morristown Police Chief Pete Demnitz removed Keith Hudson from the detective bureau in 2015 in retaliation for his blowing the whistle to authorities about his extra-duty jobs, a jury ruled unanimously Tuesday in Superior Court, Morristown.

And for that, the town should pay Hudson $1.5 million in punitive damages, the jury determined.

After deliberating for about 90 minutes, the jury also awarded Hudson $199,000 for past and future lost earnings, and $10,000 for emotional distress.

Additionally, the town is on the hook for Hudson’s legal fees, a figure not yet submitted to the court.

“Facts still matter,” Hudson’s lawyer, Jeffrey Catrambone, said after the decisions. “This jury focused on our case. Keith is forever grateful that this jury corrected this wrong.”

Asked if the town will appeal, Morristown Municipal Attorney Vij Pawar replied: “We’ll absolutely evaluate all options.”  Mayor Tim Dougherty said he was “disappointed” by the outcome, adding “we rely on recommendations from the police chief when it comes to personnel.”

Demnitz was not present in Judge Louis Sceusi’s courtroom when the 6-0 verdicts were announced. The chief did not respond to a request for comment.

Hudson, a 13-year veteran of the police force, grinned broadly afterward but declined to comment.

Watch VIDEOS of closing arguments

During the seven-day trial, the defense argued that Demnitz was unaware of Hudson’s July 2014 complaint to the Morris County Prosecutor’s Office when he removed Hudson from the bureau.

Demnitz acted because he was concerned about recent mass shootings across the country, and Hudson had balked at investigating a gunman arrested by the Secret Service at Headquarters Plaza in July 2015, the town’s lawyer, Brent Davis, said during summations.

The chief also testified he became aware on that same day of a disciplinary action against Hudson in the winter of 2014, another factor in his decision to reassign the detective to patrol duty.

But Hudson’s lawyer told the civil jury that this didn’t add up. Superior officers testified they disagreed with Hudson’s reassignment and considered him a model detective and officer.

Catrambone noted key discrepancies in the town’s defense. A police captain testified he informed the chief of the 2014 disciplinary action 12 days after the arrest of the Headquarters Plaza gunman.

And the former town business administrator testified he had no recollection of an October 2014 conversation with Hudson about the chief’s alleged freelancing on town time; Catrambone claimed that did not square with a sworn statement by the official.

Over seven months in 2014, Demnitz worked 62 freelance jobs on 43 dates, Catrambone reminded the jurors.

“This case… is about Keith Hudson’s reasonable belief that Chief Demnitz was…double dipping,” Catrambone told the jury of six voting members and two alternates.

An investigator for the Prosecutor’s Office had testified he took the word of then-Business Administrator Michael Rogers’ that the town had no extra-duty policy for Demnitz to violate, and ended his investigation of the complaint by Hudson and Officer Eric Petr. Petr was not a party to Hudson’s whistleblower lawsuit.

Catrambone presented circumstantial evidence suggesting a pattern of harassment against Hudson. This included conversations between Demnitz and Hudson, conversations between other officers and Hudson, a curious ban on Hudson bringing police union matters to the chief’s personal assistant, and a Demnitz memo to a sergeant questioning Hudson’s “fitness for duty.”

During a brief penalty phase at the end of the trial, Davis argued that Demnitz had not committed an “evil-minded act” as required under stringent guidelines for punitive damages.

“He was doing what he thought was right,” Davis contended, reiterating the chief had no knowledge of Hudson’s whistleblowing when he reassigned him to the patrol division in August 2015.

The attorney also argued that Demnitz was not part of the town’s upper management, and thus the town should not be punished.

But the jury “soundly rejected those arguments,” Catrambone told Judge Sceusi.

The penalty amount may be reduced. A provision of the New Jersey Conscientious Employee Protection Act– the whistleblower law–limits punitive damages to five times the amount of compensatory damages, the judge said.

Both sides will submit written arguments on that point.

Davis also contended Hudson won’t qualify for compensatory payment of lost future earnings–an amount including detective stipends, pension benefits and periodic personal use of a Town vehicle, as calculated by an economist and accepted by the jury– if Hudson is reinstated as a detective.

That, the lawyer said, would be double-dipping.

However, Hudson has not requested a return to the detective bureau, nor has the town offered it.

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