Specifies nonprevailing party in proceeding or judgment deemed frivolous by judge may include municipality or municipal corporation.

This bill amends New Jersey law to clarify that municipalities and municipal corporations can be held liable for litigation costs and attorney fees if a judge deems their lawsuit "frivolous." It specifies that a judge must find the nonprevailing party (including a municipality) acted in bad faith or lacked a reasonable legal basis to justify sanctions. If found frivolous, the losing party must pay the winning party's reasonable legal costs and fees. The amendment responds to a 2025 Supreme Court ruling confirming municipalities qualify as "nonprevailing parties" subject to these sanctions.