When Divorce Litigation Goes Federal
It is unusual for a matrimonial practitioner in the State of New Jersey to comment on a Federal Court decision or any other decision which does not arise directly from the Family Part of the Superior Court of New Jersey. It is even more unusual to comment on a decision from the United States Court of Appeals for the Third Circuit. However, a recent unpublished decision from this Federal Court arising from divorce litigation in Hudson County, New Jersey, brought into focus some unusual issues warranting the within discussion.
The case of Malhan v. Sec’y United States Dep’t of State presented the question of whether a federal court had jurisdiction over certain issues stemming from a divorce matter pending in the family court (a state court).
Significantly, Mr. Malhan – after his bank account was levied upon, and his wages garnished to pay child support during the pendency of an eight-year divorce proceeding after he filed several unsuccessful motions to reduce his support obligation filed a Complaint in federal court seeking declaratory or injunctive relief against the State of New Jersey. Specifically, he alleged that the State violated federal law during the pendency of his divorce proceedings by, amongst other things, levying on his bank account, garnishing his wages, and refusing to permit offsets for the substantial child support arrears which accrued during the divorce proceedings.
Mr. Malhan’s complaint (i) challenged the disclosure of his bank records and the administrative levy of his bank account, alleging violations of 42 U.S.C. § 669a, a provision of the Child Support Enforcement Amendments of 1984 (CSEA) to Title IV-D of the Social Security Act; (ii) claimed his rights to due process of law were violated by refusing to permit counterclaims and offsets of his child and spousal support debt; and (iii) alleged that the garnishment of his wages violates CSEA and § 303 of the Consumer Credit Protection Act, 15 U.S.C. § 1673.
The United States District Court dismissed Mr. Malhan’s Complaint on two jurisdictional grounds. First, the District Court held it lacked subject matter jurisdiction over Mr. Malhan’s complaint under the Rooker-Feldman doctrine, which bars district court review of state court judgments. Essentially, the Rooker-Feldman doctrine is a rule of civil procedure which provides that a lower United States federal court, meaning federal courts other than the Supreme Court, should not sit in direct review of final state court decisions unless Congress has specifically authorized such relief. In short, federal courts below the Supreme Court must not become a court of appeals for state court decisions, such as decisions from a family court sitting in Hudson County, New Jersey. Under the Rooker-Feldman doctrine, a state court plaintiff – in this instance, Mr. Malhan - has to find a state court remedy, or obtain relief from the U.S. Supreme Court.
Second, the United States District Court also invoked the Younger abstention to decline jurisdiction over Mr. Malhan’s complaint. The Younger abstention, whose namesake originates from the Supreme Court case, Younger v. Harris, 401 U.S. 37 (1971), bars federal courts from hearing civil rights tort claims brought by a person who is currently being prosecuted for a matter arising from that claim in a state court.
The United States Court of Appeals for the Third Circuit disagreed with the lower District Court and found that the Rooker-Feldman doctrine did not apply to Mr. Malhan’s complaint as none of the orders in Mr. Malhan’s pending divorce were final judgments. At the time this matter reached the United States District Court, Mr. Malhan had several outstanding motions pending in the divorce action, discovery was still incomplete, and the trial had not yet been scheduled. The Court of Appeals also found that the Younger abstention was not applicable because Mr. Malhan’s claims did not involve a civil rights tort claim being prosecuted in a state court. As a result, the United States Court of Appeals reversed the District Court’s decision and remanded the matter for further proceedings on the merits on Mr. Malhan’s federal complaint.
The Malhan case is interesting for the jurisdictional questions it raised that are not often within the purview of a matrimonial matter. At the same time, a deeper dive into what transpired during the underlying divorce proceedings giving rise to the federal complaint is equally remarkable. An individual’s journey through divorce litigation can be a long and turbulent Odyssey. In the case of Mr. Malhan, it has been an 8-year journey marred by set back after set back.
Mr. Malhan’s divorce case started with the putative ex-wife filing a Complaint for Divorce with a concurrent emergent application seeking sole legal and physical custody of their two children, ages 7 and 10. The trial court granted the application awarded Mrs. Malhan with full legal and physical custody, indefinitely. A parent possessed with sole legal custody has the sole authority to make the major decisions on behalf of the children. As such, Mr. Malhan not only had no parenting time with his children but no say whatsoever in any of the major decisions affecting his children.
Three months later, the family trial court awarded Mrs. Malhan pendente lite child support in the monthly amount of $3,000.00 and pendente lite spousal support in the monthly amount of $3,000.00, for a total of $6,000.00 per month. Additionally, the family court ordered Mr. Malhan to pay Mrs. Malhan the rental income from their jointly owned properties, which the family court earmarked for mortgage payments that Mrs. Malhan was to make toward the former marital residence.
One year later, with the divorce still pending, Mrs. Malhan decided to move out of the area to live with her boyfriend. At that time, Mrs. Malhan agreed to modify the existing custody and parenting time schedule to permit Mr. Malhan to enjoy joint physical and legal custody of their children. In fact, Mr. and Mrs. Malhan entered into a parenting time schedule in which Mr. Malhan – who one year ago did not even have joint legal custody and exercised zero overnights – now had the children 54% of the time. As such, Mr. Malhan effectively became the Parent of Primary Residence.
At this time, Mr. Malhan filed a motion with the trial court to recalculate his child support obligation based on the fact that he was now exercising overnights (as set forth above, he was now exercising more overnights than the Mrs. Malhan). The trial court declined to recalculate his support obligation.
Another year passed before Mr. Malhan finally received some relief when the family court found that Mrs. Malhan was embezzling funds that she was receiving from the rental properties which the court specifically earmarked for the payment of the mortgage. The trial court found she was using the funds for her own personal use rather than the mortgage. At this time, the family court also ordered Ms. Malhan to return the monies she was receiving from spousal support because had been living with her boyfriend. Remarkably, the trial court still did not modify the child support obligations deciding to postpone any reductions in Mr. Malhan’s child support obligation until the time of trial.
Additional years passed. Mrs. Malhan, who at the time of the divorce filing did not earn an income, was now earning over $100,000.00. Despite the reversal in their economic fortunes, coupled with the fact that Mr. Malhan exercised more overnights than Mrs. Malhan, Mr. Malhan remained obligated to pay $3,000 per month in child support. Mr. Malhan quickly fell into arrears. As a consequence, the Office of Child Support Services issued a Notice of Levy on his bank account, first freezing the account and then threatening to seize all of his money. The levy was subsequently removed; but he was still ordered to pay child support by way of wage garnishment and the court ordered his wages to be garnished. Additionally, Mr. Malhan’s arrears continue to mount, perhaps even to this day.
Mr. Malhan, unable to find any relief in the family court, turned to the federal courts, where his case has now been remanded to the United States District Court. However, it will be interesting to see how the divorce case resolves itself. In the State of New Jersey, pendente lite support orders do not survive the entry of a judgment of divorce unless expressly preserved in the judgement itself. Moreover, pendente lite support awards are always subject to modification prior to the entry of final judgment. Notably, arrears, including child support arrears, which accrued during the pendente lite phase may be modified by the trial court prior to the entry judgment of divorce as well. Id. As such, it appears that Mr. Malhan should be entitled to a significant reduction, if not total elimination, of the support arrears. In addition to modifying the prior support orders, reducing and/or eliminating support arrears, and prospectively establishing support (both child support and potentially spousal support, which will be a tricky issue in view of the fact that Mrs. Malhan’s income went from zero to over $100,000.00 during the pendency of the divorce proceedings coupled with her potential cohabitating with an unrelated individual in a relationship that may be tantamount to marriage); there are several other issues that will need to be determined, including, but not limited to, equitable distribution, potential dissipation (stemming from Mrs. Malhan spending funds specifically earmarked for mortgage payments for other personal purposes), and counsel fees which would likely spin out the length of this blog to a text book.
Suffice it to say, as exemplified by the Malhan case, divorce litigation can take strange turns and things can go sideways quickly which is why it is so important to be prepared and educated by a qualified matrimonial attorney as to your rights and obligations.