In Marrama v. Citizens Bank of Massachusetts, the Court ruled 5-4 that a debtor's right to convert a Chapter 7 bankruptcy to a case under Chapter 13 is not absolute. Marrama initially filed a bankruptcy petition under Chapter 7 but then attempted to convert his case to a Chapter 13 petition in order to preserve his interest in an $85,000 piece of property. Citizens Bank challenged the conversion, and the bankruptcy court refused to allow the conversion due to Marrama's bad faith. The Supreme Court upheld the lower court decision from the US Court of Appeals for the First Circuit, concluding "that the courts in this case correctly held that Marrama forfeited his right to proceed under Chapter 13." The Court wrote:

Nothing in the text of either §706 or §1307(c) (or the legislative history of either provision) limits the authority of the court to take appropriate action in response to fraudulent conduct by the atypical litigant who has demonstrated that he is not entitled to the relief available to the typical debtor. On the contrary, the broad authority granted to bankruptcy judges to take any action that is necessary or appropriate "to prevent an abuse of process" described in §105(a) of the Code, is surely adequate to authorize an immediate denial of a motion to convert filed under §706 in lieu of a conversion order that merely postpones the allowance of equivalent relief and may provide a debtor with an opportunity to take action prejudicial to creditors.

A Seattle attorney has filed a class-action lawsuit on behalf of people who reported getting sick after eating contaminated peanut butter.

It's one of at least three lawsuits filed against ConAgra Foods, which is recalling all Peter Pan and Great Value peanut butter made at its Sylvester, Georgia, plant.

Federal officials have linked the peanut butter to a salmonella outbreak that has sickened almost 300 people nationwide since August. No deaths have been reported.

The Seattle firm Marler Clark says it has been contacted by 25-hundred people. Attorney William Marler says the lawsuit seeks compensation for people who got sick, but were not hospitalized. Marler says the more-serious cases will be handled separately.

A ConAgra spokeswoman says the company takes consumer concerns seriously -- that's why it has recalled the peanut butter.

The Sacramento County Superior Court Tuesday struck down a plan by California Governor Arnold Schwarzenegger to transfer prisoners to private out-of-state facilities in order to reduce prison overcrowding. The ruling by Judge Gail Ohanesian held that an emergency declaration issued by Schwarzenegger in October violated the California Emergency Services Act and the state constitution, which prohibits contracting with private companies to perform jobs usually held by state workers. Schwarzenegger announced his intent to appeal what he called the "disappointing ruling," warning that it could cause some prisoners to be released prematurely.

California has an estimated 174,000 prisoners held in facilities designed for 100,000. Last year, a federal judge ordered California to solve the crowding problem, vowing to release prisoners early if an adequate solution was not reached. Schwarzenegger issued the emergency proclamation in response. The California Department of Corrections began out-of-state transfers in November.

In the Oregon case, Mayola Williams, widow of Jesse Williams, a Portland janitor who died of lung cancer in 1996, sued Philip Morris, maker of Marlboros, the brand of cigarette her husband had smoked for 45 years. The jury awarded Williams $821,000, then added a $79.5 million punitive award. Philip Morris, which is now owned by Altria Group, had denied that its cigarettes were addictive, and lawyers for Williams' estate had told jurors to consider the damage done to other smokers in Oregon in their verdict.

In Tuesday's ruling, the justices countered that the Oregon court should not have allowed consideration of any harm done to smokers, except Williams.

Justice Stephen G. Breyer, writing for the majority, said the Constitution bars courts from using punitive awards to penalize companies for injuries they inflict upon others who are "essentially, strangers to the litigation."

Robert S. Peck, the Washington lawyer who represented Mayola Williams, told the Washington Post that the Supreme Court decision "slays a dragon that didn't exist," and predicted that further litigation in Oregon would "reaffirm" the jury's punitive verdict. Peck noted that contrary to the justices finding, the jury had based the award on Philip Morris' profitability and not on the number of victims harmed by smoking.

Exactly how the jury reached the award amount remains unclear and that uncertainty was a key factor in the decision of the high court to overturn the punitive award and send the case back to Oregon for further litigation.

Despite the court's refusal to use the case to set a firm limit on how much can be awarded in punitive damages, as some in the business community had hoped, Tuesdays ruling is being viewed as not only a victory for Philip Morris, but for corporations weary of what they view as run-away punitive awards in state courts.

The New York Times reports that in a note to investors, Christopher R. Growe, an analyst at A. G. Edwards and Sons hailed the ruling as "a positive," that "effectively limits the size of punitive damages in future cases."

Roberts and Bryan were joined in the majority opinion by Justices Anthony M. Kennedy, David H. Souter and Samuel A. Alito. Justices John Paul Stevens, Ruth Bader Ginsburg, Antonin Scalia and Clarence Thomas dissented.

Writing for the minority, Stevens said he had no doubt that earlier Supreme Court decisions limiting punitive awards were correct, but said the Oregon case was different because that state's supreme court had "faithfully applied the reasoning in those opinions to the egregious facts disclosed by this record...no procedural error even arguably justifying reversal occurred at the trial in this case."

WHITE PLAINS, N.Y. — A man who was fired by IBM for visiting an adult chat room at work is suing the company for $5 million, claiming he is an Internet addict who deserves treatment and sympathy rather than dismissal.

James Pacenza, 58, of Montgomery, N.Y., says he visits chat rooms to treat traumatic stress incurred in 1969 when he saw his best friend killed during an Army patrol in Vietnam.

In papers filed in federal court in White Plains, Pacenza said the stress caused him to become "a sex addict, and with the development of the Internet, an Internet addict." He claimed protection under the Americans with Disabilities Act.

His lawyer, Michael Diederich, says Pacenza never visited pornographic sites at work, violated no written IBM rule and did not surf the Internet any more or any differently than other employees. He also says age discrimination contributed to IBM's actions. Pacenza, 55 at the time, had been with the company for 19 years.

International Business Machines Corp. has asked Judge Stephen Robinson for a summary judgment, saying its policy against surfing sexual Web sites is clear. It also claims Pacenza was told he could lose his job after an incident four months earlier; Pacenza denies that.

"Plaintiff was discharged by IBM because he visited an Internet chat room for a sexual experience during work after he had been previously warned," the company said.

IBM also said sexual-behavior disorders are specifically excluded from the ADA and denied any age discrimination.

If it goes to trial, the case could affect how employers regulate Internet use that is not work-related, or how Internet overuse is categorized medically. Stanford University issued a nationwide study last year that found that up to 14 percent of computer users reported neglecting work, school, families, food and sleep to use the Internet.

Pacenza was making $65,000 a year operating a machine at a plant in East Fishkill, N.Y., that makes computer chips.

Several times during the day, machine operators are idle for five to 10 minutes as the tool measures the thickness of silicon wafers.

It was during such down time on May 28, 2003, that Pacenza logged onto a chat room from his workstation.

Diederich says Pacenza had returned that day from visiting the Vietnam Veterans Memorial in Washington and logged onto a site called ChatAvenue and then to an adult chat room.

Pacenza, who has a wife and two children, said using the Internet at work was encouraged by IBM and served as "a form of self-medication" for post-traumatic stress disorder.

He said he tried to stay away from chat rooms at work, but that day, "I felt I needed the interactive engagement of chat talk to divert my attention from my thoughts of Vietnam and death."

A lawyer pleaded guilty to stealing more than $20 million from a bank and at least one client, spending the loot on vacation homes, a wedding and generous salaries for his employees, authorities said.

Under a deal with prosecutors, Anthony Bellettieri, 53, faces more than a decade in prison after admitting Thursday in federal court to bank and mail fraud dating to at least 2003.

AdvertisementBellettieri, a real estate lawyer, stole the funds through check kiting – taking money from his law firm's escrow account and writing checks on another account to cover the escrow account's losses.
According to J.P. Morgan Chase, the primary victim, the tactic worked partly because he used checks with a printed error. The scheme fell apart after the bank issued correct checks in November.

Authorities said Bellettieri also convinced a client to invest almost $2 million in phony private mortgages.

Defense lawyer Murray Richman told The Journal News, “It's a terrible thing to see a man destroyed and humbled by his own actions and lose control of his life.”

Prosecutor Cynthia Keefe Dunne said the stolen money paid for, among other things, a swimming pool at Bellettieri's Pleasantville home, a family wedding, high salaries for the law firm's workers and condos in Miami Beach and Aruba.

Bellettieri was released on $500,000 bond. Sentencing is May 18. His plea agreement requires him to pay as much as $22 million in restitution and forfeit properties he purchased.