DELOATCH et al v. INTEGRATED PACKAGING CORPORATION et al

Filing 41

OPINION filed. Signed by Judge Mary L. Cooper on 8/8/2012. (mmh)

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
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BARRY DELOATCH, et al.,
Plaintiffs,
v.
INTEGRATED PACKAGING
CORPORATION, et al.,
Defendants.

CIVIL ACTION NO. 11-2265 (MLC)
O P I N I O N

IN THIS ACTION (“Federal Action”) brought under the Worker
Adjustment and Retraining Notification Act, 29 U.S.C. § 2101, and
state law to recover wages and benefits, the defendants are (1)
Integrated Packaging Corporation (“IPC”), and (2) Albert Fuller,
who controls IPC.

(Dkt. entry no. 18, Am. Compl.)

This Court

discovered that IPC had instituted a proceeding in New Jersey
state court (“State Proceeding”) seeking relief pursuant to the
New Jersey Assignment for the Benefit of Creditors Act (“NJABC”),
N.J.S.A. § 2A:19-1, et seq., and thus ordered the parties to show
cause why this Court should not either (1) abstain, or (2) stay
and administratively terminate the Federal Action.

(Dkt. entry

no. 34, 3-20-12 Order.)
THE PLAINTIFFS acknowledge in their response that the State
Proceeding exists, but do not directly address the concerns raised
in the 3-20-12 Order.

(See dkt. entry no. 36, Pls. Mem.)

The

defendants assert that a stay would be appropriate, as (1) the New

Jersey state court has appointed an assignee, (2) the assignee is
charged with recovering or reaching assets for the benefit of the
creditors, and (3) the plaintiffs can seek relief as part of the
NJABC process. (See dkt. entry no. 37, IPC Br. at 3-4 (citing
N.J.S.A. § 2A:19-14); dkt. entry no. 38, Fuller Response; see also
IPC Br., Ex. B, State Ct. Order Authorizing Assignee To Continue
Assignor’s Business (concerning Assignee Charles A. Stanziale,
Jr., who is acting for the benefit of IPC’s creditors).)1
THE NJABC does not contain an automatic stay provision.
11 U.S.C. § 362.

Cf.

But this Court has the discretion to stay and

administratively terminate the Federal Action pending the outcome
of a related proceeding brought under the NJABC.

See Abondolo v.

Jerry WWHS Co., 829 F.Supp.2d 120, 127 (E.D.N.Y. 2011) (stating,
as to assignment proceeding brought under New York law, whether
to impose stay in favor of an assignment proceeding remains
matter of judicial discretion); DiMaria v. Goor, No. 09-1011,
2010 WL 3923227, at *9-13 (E.D.N.Y. Sept. 30, 2010) (abstaining
from adjudicating claims that were related to NJABC proceeding).
“There is nothing manipulative or improper about an assignment
for the benefit of creditors”.

In re Short Hills Caterers, No.

1

IPC also asserts that there is another proceeding pending
before “the Department of Labor” wherein some of the claims
raised in the Federal Action are being pursued. (IPC Br. at 1,
n.2.) But this Court is uncertain whether IPC is referring to
the United States Department of Labor, the New Jersey Department
of Labor and Workforce Development, or some other entity.
2

08-18604, 2008 WL 2357860, at *6 (Bankr. D.N.J. June 4, 2008)
(discussing NJABC).

An assignee, on behalf of the creditors,

must seek to void any transfer of assets by the assignor to
others, but a creditor may independently seek such relief in the
state court overseeing the NJABC proceeding if an assignee
refuses to act.

Id.

THIS COURT, upon the inherent power to control the docket,
determines that judicial resources would be conserved, and the
plaintiffs would receive a more expeditious determination of the
claims, if the plaintiffs were to proceed in state court as part
of the ongoing State Proceeding.

See Landis v. N. Am. Co., 299

U.S. 248, 254 (1936); Rolo v. Gen. Dev. Corp., 949 F.2d 695, 702
(3d Cir. 1991).

Indeed, this Court has determined through an

independent examination of the state court docket that the
assignee in the State Proceeding is aggressively pursuing the
interests of IPC’s creditors by, inter alia, seeking recovery
from Fuller.

See Stanziale v. Fuller, No. L-3979-12 (N.J. Super.

Ct., Middlesex Cnty.).

Therefore, this Court will stay and

administratively terminate the Federal Action, and direct the
plaintiffs to pursue their claims in state court.
THE PLAINTIFFS ARE ADVISED that an order administratively
terminating a federal action is not the equivalent of a dismissal
of a complaint with prejudice, and is issued pursuant to this
Court’s inherent power to control its own docket and in the

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interests of judicial economy.

See Delgrosso v. Spang & Co., 903

F.2d 234, 236 (3d Cir. 1990) (stating administrative termination
is not a final determination, as it “permits reinstatement and
contemplates the possibility of future proceedings”, and “does
not purport to end litigation on the merits”).

This Court is

purposely declining to abstain, in order to allow the plaintiffs
to return to federal court if they are prevented from pursuing
relief by the assignee and by the state court in the State
Proceeding.

For good cause appearing, the Court will issue an

appropriate order.

s/ Mary L. Cooper
MARY L. COOPER
United States District Judge
Dated:

August 8, 2012

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