Entrepreneurial Inmate Loses Lawsuit

by:  Peter J. Gallagher (@pjsgallagher) (LinkedIn)

Jail (pd)While pro se lawsuits by prisoners are not unusual, you don't see ones like Tormasi v. Hayman every day.

In Tormasi, plaintiff sued several officials from the prison in which he was serving a life sentence. In the lawsuit, he claimed that they improperly seized his intellectual property assets and corporate records. As the Appellate Division explained: "During his incarceration, plaintiff acquired various intellectual property assets, which he assigned to Advanced Data Solutions Corporation (ADS) in exchange for sole ownership of the corporation." At some point during his incarceration, prison officials seized plaintiff's personal property, including: "1) miscellaneous corporate paperwork related to ADS . . 2) patent-prosecution documents; 3) an unfiled provisional patent application; 4) several floppy diskettes; and 5) various legal correspondence." Plaintiff sued in federal court, asserting a claim under the Takings Clause of the Fifth Amendment to the U.S. Constitution, various federal civil rights claims, and a state law claim for inverse condemnation.


The federal court dismissed the lawsuit, holding that plaintiff's claims were premature because he had not exhausted New Jersey's post-taking compensation procedures. Undeterred, plaintiff filed a nearly identical lawsuit the following year. This one was dismissed on the merits and plaintiff appealed. The  Third Circuit affirmed, holding that plaintiff was operating a business, which is prohibited by Department of Corrections regulations, which forbid inmates from "commencing or operating a business or group for profit or commencing or operating a nonprofit enterprise without the approval of the Administrator." Because the items that were seized from him were all related to this impermissible business, they were contraband and plaintiff was not entitled to compensation for confiscated contraband. The Third Circuit also held that an adequate post-deprivation remedy existed but that plaintiff had failed to avail himself of that.

While the second federal lawsuit was pending, plaintiff filed a third, nearly identical lawsuit in state court. Following the Third Circuit's decision, defendants filed a motion to dismiss that lawsuit, arguing that plaintiff's claims were barred by res judicata and that plaintiff failed to state a claim for which relief could be granted. Just to add to the uniqueness of this case, that motion was, "for reasons that are not clear from the record," not heard until three years after it was filed. When it was finally heard, however, it was granted. The trial court held that plaintiff's claims had already been resolved by the federal courts, and that plaintiff could not state a due process claim because there was a "meaningful post-deprivation remedy for [his] loss" through the state's compensation program. Plaintiff appealed the dismissal, but the Appellate Division affirmed the trial court's decision.

[NOTE: This lawsuit, while unique, may not be the most interesting aspect of plaintiff's journey through the legal system. As set forth in this article, someone with the same name as plaintiff recently moved to have his criminal conviction for murdering his mother overturned based on an affidavit that his father, now deceased, allegedly provided, in which his father admitted to hiring a private detective to commit the murder. The trial court originally refused to consider the affidavit because the signature page was missing and therefore, the trial court held, the affidavit could not be authenticated. But, several family members testified that they had seen the signed version and were certain that plaintiff's father signed it. On appeal, the Appellate Division held that a hearing should be held into the authenticity, and admissibility, of the affidavit.]

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