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New York v. Sacco

Decided: May 10, 1990.

STATE OF NEW YORK AND THOMAS C. JORLING, ET AL., PLAINTIFFS,
v.
FRANK SACCO, LILLIAN SACCO, MATERIAL TRANSPORT SERVICE AND DART CORPORATION, DEFENDANTS



Lawrence D. Smith, J.s.c.

Smith

The essential issue addressed in this opinion is whether the "penal exception" to the Full Faith and Credit Clause of the United States Constitution precludes enforcement of a series of New York judgments which imposed substantial sanctions on defendants for contempt of court based on their failure to comply with an earlier judgment. For the reasons expressed herein, I find the sanctions involved, because they were intended to be coercive rather than punitive, are entitled to full faith and credit.

Litigation was instituted in New York by the State of New York and Thomas C. Jorling (Commissioner of the New York State Department of Environmental Conservation (DEC)) against Frank Sacco, Lillian Sacco, Material Transport Service, Reynard Barone and Sarkis Khourouzian, all of whom were the owners and operators of a landfill in Tuxedo, New York. The last two named defendants in the New York litigation are not parties to the instant proceeding. The purpose of the action was to secure closure of that landfill. I am informed that Dart Corporation subsequently became involved after it acquired the

assets of Material Transport and shortly before the entry of the initial judgment.*fn1

Frank Sacco, Lillian Sacco and Material Transport Service all agreed to appear pro se in the New York litigation, although only Frank Sacco subsequently actually appeared at some of the ensuing court proceedings. After a 12-day hearing, a preliminary injunction was issued. Thereafter, a settlement was reached whereby all defendants agreed to voluntarily discontinue the landfill operation. The DEC then sought, in addition, an order directing defendants to post a bond to cover the estimated expenses of such additional testing, monitoring and remedial measures as might be required to provide "maximum protection for the public" in effectuating closure of the landfill. Expert testimony was introduced to show the anticipated and potential costs involved and the court ordered that defendants post a bond or other acceptable security in the amount of 4.5 million dollars to ensure the expenses of proper and appropriate closure. Judgment was entered on August 25, 1988, the court directing that a bond be posted within ten days.

Defendants in the present litigation chose neither to post a bond nor to file a timely appeal.*fn2 The State of New York thereafter secured an order to show cause seeking to impose sanctions based upon defendants' failure to comply with the court's earlier judgment. Defendants were directed to appear for a hearing the purpose of which was styled as a hearing "to punish defendants . . . for a contempt of court." The content

of the order to show cause noted that the potential "punishment" could "consist of fine or imprisonment, or both, according to law."

All of defendants were served with the order to show cause. On November 3, 1988, Judge Hickman found defendants had "committed the offense" and were "guilty of the misconduct and contempt of court charged against them." He further found that the misconduct of defendants "was calculated to and did actually defeat, impair, impede and prejudice the rights and remedies of the plaintiffs." He fined defendants, prospectively, in the sum of $1,000 a day until such time as the mandated bond or acceptable security was posted. Accumulated fines were later reduced to three separate money judgements, each of which was entered against all of the present defendants. On November 28, 1988, judgment was entered in the sum of $25,000; on February 27, 1989, judgment was entered in the sum of $75,000; on July 9, 1989, judgment was entered in the sum of $124,000.

In this litigation, plaintiffs contend that full faith and credit mandates recognition of New York's monetary judgments. Defendants contend that those judgments are founded on "severe monetary penalties," denominated by defendants as "punishment for failure to post the bond," and that they should not be afforded cognizance because they should be viewed, in legal contemplation, as "penal" in nature.*fn3 Defendants have not introduced any proofs which would suggest any jurisdictional deficiency associated with the New York proceedings and, therefore, have not sustained their burden of demonstrating an absence of jurisdiction. Philadelphia v. Wheeler, 192 N.J. Super. 616, 619,

471 A.2d 821 (Law Div.1983). See also Landis v. Kolsky, 81 N.J. 430, 435, 409 A.2d 276 (1979). Further, the proofs show proper service at all phases of the New York litigation. Nor have defendants in any fashion attempted to suggest that they did not have the ability to post the bond decreed. Unless the penal ...


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