New Jersey Court holds that juries cannot be informed of treble damages.
On November 25, 2008, the Superior Court of New Jersey held that informing the jury of the ultimate outcome of a verdict on the RICO count was inappropriate. Finderne Management Company, Inc. et al. v. James W. Barrett, et al., --- A.2d ----, 2008 WL 4979937, N.J.Super.A.D.,2008; citing St. James v. Future Fin., 342 N.J.Super. 310, 348 (App.Div.), certif. denied, 170 N.J. 388 (2001). The trial judge advised the jury that if the defendants were liable under RICO, the damages are trebled and attorney's fees awarded. 18 U.S.C.A. § 1964(c). The court went on to explain that those federal courts addressing the issue have consistently held that the implementation of treble damages is a function for the court, not the jury. HBE Leasing Corp. v. Frank, 22 F.3d 41, 45 (2d Cir.1994). This avoids presenting the jury with information irrelevant to its deliberations that could tempt jurors to manipulate the outcome and lead to intellectually dishonest results.
Plaintiffs Finderne Management Company, Inc. (“FMC”) and others sought recovery of losses alleged to have resulted from false and misleading representations by defendants. The defendants induced plaintiffs to establish what they represented was a “tax qualified,” “419 annuity” by participating in a program known as the Employers Participating Insurance Cooperative (EPIC). EPIC purported to be a multiple employer welfare benefit plan and trust that provided employers with a tax-deductible vehicle to fund pre-retirement death benefits for owner-employees through the purchase of specific life insurance products, and allowed the individual insured to convert the insurance policy to obtain post-retirement benefits.
Six years after FMC commenced participation in EPIC, the Internal Revenue Service audited the company and disallowed claimed deductions for two tax years. As a result of the IRS audit, plaintiffs paid additional taxes and interest deemed due. Thereafter, plaintiffs terminated participation in EPIC. Plaintiffs' complaint asserted various misrepresentation claims, sounding in negligence and fraud.
