The first legal action challenging New Jersey's takeover of Atlantic City finances will be decided at the local level after a federal judge sent the case back to Atlantic County Superior Court.
U.S. District Court Judge Renee Marie Bumb ruled Friday that a union challenge to state plans to lay off 100 Atlantic City firefighters does not have federal jurisdiction because claims in the case fall under the New Jersey constitution. The case will now return to Superior Court Judge Julio Mendez, who temporarily blocked the firefighter cuts on Feb. 2 before the state fought to get the case moved to the federal courts.
The International Association of Fire Fighters, Local 198 and the AFL-CIO filed a lawsuit arguing that the state's action to proceed with 100 layoffs and other unilateral contract changes under the Municipal Stabilization and Recovery Act is unconstitutional. This legislation, which was implemented last November after the New Jersey's Local Finance Board rejected an Atlantic City rescue plan, empowers the state alter outstanding Atlantic City debt and municipal contracts.
Prior to Judge's Mendez's Feb. 2 ruling, the state was planning to set up changes to the firefighters' work schedule, salaries and benefits starting Feb. 19 and reduce the 225-member staff roughly in half beginning in September. Former U.S. Sen. Jeffrey Chiesa leads Atlantic City's state intervention.
"We have always understood the safety of Atlantic City to be a local issue best handled by local officials and local courts," Michael Bukosky, an attorney for Local 198, said in a statement. "The firefighters are always prepared to work with the State so long as safety and health is not compromised. That has been our position from day one."
New Jersey is seeking to tackle's Atlantic City's more than $100 million structural deficit and over $500 million of total debt. The gambling hub, which has incurred five casino closures since 2014, has $240 million in outstanding bonded debt.
