Former Atlantic City Councilman John Schultz.

Danny Drake

Atlantic City is not responsible for damages a former councilman had to pay in a civil lawsuit stemming from a sex tape scandal, an appellate panel ruled today.

Former Councilman John Schultz claimed the city should compensate him for any payment he made to former Councilman Eugene Robinson as part of a civil suit.

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Robinson was the target of a 2006 blackmail scheme in which a prostitute was hired to seduce Robinson and then capture him on video engaged in a sexual act with her. Three men were convicted in the case. Schultz was charged, but has insisted he believed he was asked to get an editor for the tape as part of an FBI investigation.

He was not prosecuted, and instead completed a pretrial intervention program. He has maintained his innocence.

Robinson then sued Schultz and video editor David Santos for emotional distress and other problems stemming from the case. Schultz and Robinson reached a confidential settlement in June 2011, the day before a civil trial was to begin.

Judge Carol Higbee found that the city was not liable for Schultz’s actions, because — even if he believed he was aiding an FBI investigation — he was not acting in the scope of his employment nor did his “actions occur because of a law, ordinance, custom, policy or practice” of the city.

After the settlement, Schultz appealed the decision.

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