State of New Jersey v. Moriarity

• Decision Date: 31 March 1967
• Docket Number: Civ. A. No. 262-64.
• Citation: 268 F. Supp. 546
• Parties: STATE OF NEW JERSEY, Plaintiff, v. Joseph V. MORIARITY, Defendant. Frank J. FARLEY, Treasurer of the County of Hudson, and County of Hudson, Petitioners, v. $168,400.97, Respondent. STATE OF NEW JERSEY, by Arthur J. SILLS, Attorney General of New Jersey, Plaintiff, v. Frank J. FARLEY, Treasurer of the County of Hudson, and County of Hudson, Defendants.
• Court: U.S. District Court — District of New Jersey

268 F. Supp. 546

STATE OF NEW JERSEY, Plaintiff, v. Joseph V. MORIARITY, Defendant.

Frank J. FARLEY, Treasurer of the County of Hudson, and County of Hudson, Petitioners,

v.

$168,400.97, Respondent.

STATE OF NEW JERSEY, by Arthur J. SILLS, Attorney General of New Jersey, Plaintiff, v. Frank J. FARLEY, Treasurer of the County of Hudson, and County of Hudson, Defendants.

Civ. A. No. 262-64.

United States District Court D. New Jersey.

March 31, 1967.

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William F. Kelly, Jr., County Counsel, by Isadore Glauberman, Jersey City, N. J., of counsel, for petitioners.

David M. Satz, Jr., U. S. Atty., by Vincent J. Commisa, Asst. U. S. Atty., for District Director of Internal Revenue.

OPINION

COOLAHAN, District Judge:

I.

Petitioners Frank J. Farley and the County of Hudson bring this motion to remand the captioned actions, now consolidated, to the Superior Court, Law Division, of Hudson County, New Jersey. The matter has a history.

On February 13, 1964, Farley and Hudson County obtained an order to show cause in the County Court, Criminal Division, pursuant to New Jersey statutes providing for forfeiture of contraband as an aid to enforcement of the State's anti-gambling laws. N.J.S.A. 2A:152-7 to 9.¹ The complaint and affidavit in support of the order alleged that:

(1) On July 6, 1962, as the result of a raid conducted by the then Prosecutor of Hudson County and members of the Jersey City Police Department pursuant to a search warrant, the sum of $168,400.79 in United States Currency was seized by these law enforcement officers;

(2) under the prosecutor's instruction, the moneys were deposited, and still were on deposit, in the Hudson County National Bank;

(3) One Joseph V. Moriarity was subsequently indicted for violation of the gambling laws of New Jersey, and on June 3, 1963, he pleaded guilty to such violations on divers dates from December 14, 1961, through July 6, 1962, inclusive;

(4) by reason of the foregoing, the moneys were contraband and forfeited to the County;

(5) various other claims had been asserted against the money, including a United States tax lien asserted by the District Director of Internal Revenue.

The Order directed the persons named therein and all others interested in the subject currency to show cause why it should not be declared contraband and forfeited to Hudson County under the cited statute.

On February 27, 1964, the State of New Jersey sued the petitioners in Hudson County Superior Court for a judgment that the funds should escheat to the State under its statutes on abandoned property. N.J.S.A. 2A:37-29 et seq. On March 9, New Jersey's action and the forfeiture proceeding instituted by Hudson County were consolidated in the Superior Court, Law Division.

On March 18, 1964, copies of the complaint, affidavit and order to show cause in the forfeiture action were served on Frank S. Turbett, Jr., as District Director of Internal Revenue (Newark). On March 24, Turbett petitioned for removal on the ground that the matter fell within the provisions of 28 U.S.C. § 1442 (a) (1).² The petition recited the several administrative steps taken by Turbett in connection with the aforementioned federal tax lien asserted against Moriarity.³ It further averred that at all times mentioned in the complaint:

"* * * petitioner Turbett was acting solely under the color of his office, and all his actions in connection with the matters charged in said complaint were committed by him under color of his office, * * *."

Upon removal, the Director filed an answer and a counterclaim which prayed for judgment awarding it the currency in partial payment of the tax lien.⁴

II.

Petitioners Farley and Hudson County contend that removal was improper and urge to remand on three grounds.

First, they contend that the currency was reduced to the possession of State law enforcement officers, who then commenced an in rem action in the appropriate State court. As a result, they argue, the State court not only assumed control over the res, but also acquired exclusive jurisdiction to hear the matter free from interference by other fora.

Second, they claim that since this is merely a forfeiture proceeding against a specific res, no relief in personam, no imposition of civil or criminal liability, is sought against the District Director. Hence, petitioners maintain that the action is not a removable civil or criminal proceeding brought "against" the Director within the meaning of Section 1442(a) (1).

Finally, petitioners stress the penal aspect of the State forfeiture proceeding designed to aid enforcement of its criminal laws. This Court is urged, as a matter of deference to New Jersey's sovereign police power, not to preempt or interfere with the administration of its criminal law and the policies embodied therein.

III.

Petitioner's threshold point, while potentially diversionary, may be disposed of briefly. It is true that when two or more courts assert conflicting jurisdiction over property, the well-established rule is that the court first acquiring control of the res has exclusive jurisdiction to hear the matter; the other courts will abate, or at least defer, their proceedings pending the outcome of the first one. United States v. Bank of New York and Trust Co., 296 U.S. 463, 56 S.Ct. 343, 80 L.Ed. 331 (1936). Such exclusivity is especially important when problems of federalism are raised by conflict between a federal and a state jurisdiction. Ibid.

The doctrine of prior exclusive jurisdiction is inapplicable here, since there is but a single suit, not two separate in rem actions. The rule's purpose is to avoid awkward confrontation between two courts, each trying to dispose of the res pursuant to its own judgment. Thus, where only the first suit is in rem, and the second court can hear personal claims to debts or rights to share in the property without disturbing the first court's jurisdiction over the res, both actions may proceed. Kline v. Burke Construction Co., 260 U.S. 226, 232, 43 S.Ct. 79, 67 L.Ed. 226 (1922).

The reason for the rule is also absent in the case of removal. It is not a matter of competing suits; the question is simply whether the action begun in the State court may be removed here. Popovitch v. Kasperlik, 59 F.Supp. 993 (W.D. Pa., 1945). To the extent it may be conceptualized, while the case is here—until and unless it is remanded—there is no proceeding pending in the Superior Court with which my adjudication might conflict. In a word, it is not a matter of who should go first, but merely of who should go, period.

IV.

Petitioner's remaining points pertain to the main issue before me: whether this action is within the purview of the removal provision upon which the District Director has relied. The disruption of State jurisdiction caused by removal is a statutory privilege to be construed strictly. The burden is upon the party removing to establish his right to do so. Moreover, removal jurisdiction, when challenged by motion to remand, must be clearly demonstrated; and if there are significant doubts about its propriety, those doubts must be resolved against removal. Cameron v. Hodges, 127 U.S. 322, 8 S.Ct. 1154, 32 L.Ed. 132 (1888); John Hancock Mut. Life Insurance Co. v. United Office & Professional Workers of America, 93 F. Supp. 296 (D.N.J., 1950); Winsor v. United Air Lines, 159 F.Supp. 856 (D. Del.1958); Maurer v. International Typographical Union, 139 F.Supp. 337 (E.D.Pa., 1956); Walls v. City of New York, 156 F.Supp. 3 (D.C.1957); Breyman v. Pennsylvania, O. & D. R. Co., 38 F.2d 209 (6th Cir. 1930).⁵

If the Director cannot clearly show that this proceeding is, in some real sense, an action against him within the meaning of Section 1442(a) (1), then all else is commentary; the many concepts debated at length by both counsel including in rem, in personam, "constructive seizure", and proper alignment of parties, are relevant for present purposes only insofar as they bear on the ultimate issue of that Section's applicability.

For the reasons discussed below, I find that the Director has not met his burden of establishing removal jurisdiction under § 1442(a) (1), and, therefore, that the matter must be remanded to the Superior Court, Law Division, of Hudson County.

V.

Our starting point is the removal statute itself. Its general scheme is to insure that all civil or criminal actions brought against specified classes of Federal officers and agents for their official actions may be tried in a Federal court. Of the myriad cases construing Section 1442, however, the overwhelming majority assume, with little or no comment, that the suit has been brought "against" the officer for his acts, within the meaning of the provision; these cases consider whether the acts in question were performed "under color of office" (for purposes of § 1442(a) (1)); or in the performance of "official duties" (for purposes of § 1442(a) (3)); and whether the actor was "an officer of the United States or of an agency thereof, or a person acting under him" within the statute.⁶

To determine whether the peculiar circumstances of this proceeding constitute an action "against" the District Director on account of his official actions within § 1442(a) (1) is a more difficult question, involving the perplexing intricacies of federalism frequent in removal problems.⁷

The series of enactments culminating in Section 1442(a) were initially designed to protect Federal revenue officers from prosecution or civil suit in State Court for violation of State law. See State of Tennessee v. Davis, 100 U.S. 257, 25 L.Ed. 648 (1880); Gay v. Ruff, 292 U.S. 25, 54 S.Ct. 608, 78 L.Ed. 1099 (1934).⁸ Removal was restricted to cases where the officers defense was that no personal liability, civil or criminal, could be attached to his action, since he was only performing his Federal duties.

Subsequent amendments have, from...