NOT FOR PUBLICATION

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

:

BARRY DELOATCH, et al., : CIVIL ACTION NO. 11-2265 (MLC)

:

Plaintiffs, : O P I N I O N

:

v. :

:

INTEGRATED PACKAGING :

CORPORATION, et al., :

:

Defendants. :

 :

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

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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. Cf.

11 U.S.C. § 362. 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.

 IPC also asserts that there is another proceeding pending 1

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

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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

3

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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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