This case involved a New Jersey prison inmate, Alexander Artway, who was found guilty in a disciplinary hearing of damaging government property in his cell and ordered to pay restitution of several hundred dollars deducted from his prison account. Artway sued the ADTC superintendent, alleging that the amount of restitution and the procedures used to impose it violated his constitutional rights to due process, equal protection, access to the courts, and a jury trial under the U.S. and New Jersey Constitutions. The defendant moved for summary judgment, and the court examined whether prison regulations authorizing restitution were followed and whether those procedures satisfied due process. The court reasoned that the regulations generally authorized the sanction and that any deviations caused no injury, but noted that a post-deprivation remedy under state law was likely inadequate and that a pre-deprivation hearing was probably required before deducting funds from the inmate's account.
Charles Patterson, a state prisoner, petitioned for a writ of habeas corpus, arguing that Count 3 of his indictment was defective because it alleged robbery of a gas station rather than a person, violating due process under the Fourteenth Amendment, grand jury protections under the Fifth and Fourteenth Amendments, and the Sixth Amendment right to notice of charges. The district court dismissed the petition for failure to exhaust state remedies under 28 U.S.C. § 2254. Although Patterson had challenged the indictment in state court, he did so only on state-law grounds without citing any federal constitutional provisions or cases, and the court concluded that his state arguments were not the substantial equivalent of his federal claims.
This bankruptcy appeal concerned whether Mellon Bank held a perfected security interest in over $50,000 recovered by the Chapter 7 trustee through preference actions against the debtor's other creditors, where the bank had a pre-petition security interest in the debtor's accounts, inventory, general intangibles, and proceeds. The district court affirmed the bankruptcy court's grant of summary judgment to the trustee, holding that the bank had no interest in the recovered funds. The court reasoned that under 11 U.S.C. § 552(b) and applicable state law (N.J.S.A. 12A:9-306), the preference recoveries could not qualify as proceeds or general intangibles because only the trustee possesses the right to bring preference actions, the debtor never held or could assign that right pre-petition, and the funds were not traceable to the bank's collateral. The decision also noted that allowing the bank to claim the recoveries would improperly extend its security interest beyond what the debtor itself could have obtained.
The case involved Guiseppe Sciarotta, who received a lump-sum worker's compensation settlement after a work-related heart attack and was also awarded social security disability benefits, which the Social Security Administration reduced due to the worker's compensation payment. The court decided that the SSA could not reduce the social security benefits. The reasoning was that New Jersey law requires a reduction in worker's compensation benefits when social security disability is received, and this offset is reflected in lump-sum settlements, satisfying the exception in 42 U.S.C. 424a(d) that prevents federal offset when the state plan already accounts for it.
In Tiger Inn v. Edwards, three Princeton eating clubs challenged the New Jersey Division on Civil Rights' assertion of jurisdiction over complaints that they discriminated by admitting only male students, claiming violations of their federal constitutional rights including freedom of association and due process. The clubs filed suit in federal district court seeking declaratory and injunctive relief against the ongoing state administrative proceedings. The court held that it possessed subject matter jurisdiction over the federal claims but abstained from deciding them under the Pullman doctrine, staying the federal action to allow New Jersey state courts to first interpret the application of the state Law Against Discrimination to the clubs.
The case involved five related corporations in bankruptcy (East Wind) seeking to enjoin the IRS from assessing and collecting 100% penalties against their individual officers and employees under 26 U.S.C. § 6672 for the corporations' unpaid withholding taxes. The Bankruptcy Court issued a limited injunction barring collection for one year, but the District Court vacated the injunction and remanded with instructions to dismiss the adversary complaint. The court reasoned that bankruptcy jurisdiction under 11 U.S.C. § 505 is limited to determining the tax liabilities of debtors and does not extend to the separate liabilities of non-debtor individuals, and that the Anti-Injunction Act barred the injunction because no statutory exceptions applied to allow adjudication of the non-debtors' tax liability.
