3:23-cv-09446
D.N.J.Aug 4, 2025Background
- Plaintiffs (Cowan, Price, and their business PHG) allege they were targeted by Defendants (Ocean County Prosecutor’s Office members including Scharfenberg, Billhimer, Coronato, Malinowski) over a business rivalry tied to Hurricane Sandy reconstruction grants.
- Scharfenberg, while both Assistant Prosecutor and owner of competitor Beacon Homes, allegedly used his official position to initiate a criminal investigation against Plaintiffs and interfere in their business, leading to bankruptcy and prosecution.
- Plaintiffs assert misuse of power, false statements to customers and government agencies, concealment of exculpatory evidence, and improper inclusion of non-victims in an indictment.
- Federal claims were brought under 42 U.S.C. § 1983 and the Declaratory Judgment Act, with state law tort claims appended.
- Defendants moved to dismiss on grounds of sovereign immunity, failure to state a claim, absolute immunity, lack of standing, state tort claims bar, and non-“person” status under § 1983.
- Beacon Homes, a private party, answered separately and is not covered by the court’s rulings on the governmental Defendants' motions to dismiss.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Eleventh Amendment Immunity | State agencies/employees liable for damages under federal law | Sovereign immunity bars all claims against OCPO and its employees in official capacity | Claims against OCPO and employees (official capacity) dismissed |
| Section 1983 – Malicious Prosecution & Other Violations | Prosecutors' actions as individuals violated constitutional rights | Absolute immunity applies; no favorable termination as required; non-person status under § 1983 | Malicious prosecution claim barred; Scharfenberg, Billhimer, Coronato protected by absolute immunity for advocacy-related actions |
| State Law Tort Claims | Defendants liable for tortious interference, defamation, conspiracy | NJ Tort Claims Act precludes claims due to lack of timely statutory notice | State law claims dismissed |
| PHG Standing | PHG can assert claims as a harmed business | Dissolved/canceled LLC cannot sue under NJ law | All claims by PHG dismissed with prejudice |
Key Cases Cited
- Imbler v. Pachtman, 424 U.S. 409 (prosecutorial absolute immunity in § 1983 claims applies to advocacy functions)
- Will v. Michigan Dept. of State Police, 491 U.S. 58 (§ 1983 does not create liability against state entities or officials in their official capacity)
- Heck v. Humphrey, 512 U.S. 477 (malicious prosecution under § 1983 requires favorable termination of proceedings)
- Pennhurst State School & Hosp. v. Halderman, 465 U.S. 89 (sovereign immunity bars federal courts from hearing state law claims against state entities)
- Burns v. Reed, 500 U.S. 478 (scope and limits of prosecutorial immunity)
- Hafer v. Melo, 502 U.S. 21 (distinction between official- and individual-capacity suits for immunity purposes)
- Kulwicki v. Dawson, 969 F.2d 1454 (3d Cir.) (absolute immunity covers prosecutors' advocacy, not investigatory or administrative actions)