A recent decision from the U.S. District Court found that New Jersey acted unconstitutionally when it tried to add the U.S. subsidiary of Kyocera to a State list of Russian-affiliated entities that are banned from State and local government contracts and other government dealings under P.L. 2022, c. 2.
The ruling comes after the court in August issued a temporary restraining order (TRO), enjoining the State from enforcing N.J.S.A. 52:32-60.1 against the company on the grounds that the statute is likely inconsistent with federal law. This in turn led the Treasury to voluntarily stop enforcement of the law, something the League has previously reported on.
N.J.S.A. 52:32-60.1 requires the Department of the Treasury to establish a list of persons and entities engaging in prohibited activities in Russia or Belarus and to update that list every six months. The law also prohibits the State from engaging in certain activities with a person or entity identified on the list as engaged in prohibited activities or whose subsidiaries, parents, or affiliates are so engaged. Local contracting units are also subject to the law and prohibited from contracting with those persons or entities appearing on the Treasury’s list.
While the District Court’s decision is applicable only to the named company filing suit, the Treasury has not altered their determination to stop enforcement against all entities. Further, Politico has reported that a spokesperson for Governor Murphy said the State is reviewing the decision and that there was “no immediate change” to the State Treasury’s decision.
You should review this information with your municipal attorney, purchasing agent, and other professionals for additional guidance.
Contact: Frank Marshall, Esq., Associate General Counsel, fmarshall@njlm.org, 609-695-3481, x137