Petition for Writ of Certiorari — Morris Industrial Builders, Inc. v. Township of South Brunswick
Supreme Court brief1993
Ask Donna
What actually matters in this document.
Text
(92-1396 Fe
—_ | 1993 |
|
In The GERICE OF THE CLEP
| Suprene Court of the Hnited States
*
October Term, 1992
MORRIS INDUSTRIAL BUILDERS, INC., a New Jersey
Corporation,
Petitioner,
vs.
THE TOWNSHIP OF SOUTH BRUNSWICK in the County of
Middlesex, a municipal corporation of the State of New Jersey,
THE TOWNSHIP COMMITTEE OF THE TOWNSHIP OF
SOUTH BRUNSWICK, THE PLANNING BOARD OF THE
TOWNSHIP OF SOUTH BRUNSWICK,
Respondents.
Petition for Writ of Certiorari to the Superior Court of New
Jersey, Appellate Division
PETITION FOR WRIT OF CERTIORARI
DAVID B. RUBIN
Counsel of Record
RUBIN, RUBIN, MALGRAN,
KAPLAN & KUHN
Attorneys for Petitioner
501 Hoes Lane
Piscataway, New Jersey 08854
(908) 463-7500
3327
juz
C) (800) 3 APPEAL » (800) 5 APPEAL * (800) BRIEF 21
ae
QUESTIONS PRESENTED FOR REVIEW
1. Does the Due Process Clause of the Fourteenth
Amendment as construed in McKesson v. Division of Alcoholic
Beverages, 496 U.S. 18 (1990) entitle citizens to a “clear and
certain remedy” for improper collection of money in violation of
state, as well as federal, law?
2. Does McKesson apply only to taxes, or to any
governmentcompelled payment of money?
3. Was petitioner real estate developer denied a “clear and
certain remedy” for illegally collected development fees by the
New Jersey appellate court’s mistaken application of the choice-of-
law factors of Chevron Oil Co. v. Huson, 404 U.S. 97 (1971)?
ii
RULE 29.1 STATEMENT
There are no parent companies or subsidiaries of Morris
Industrial Builders, Inc.
iti
TABLE OF CONTENTS
Page
Questions Presented forReview ...............00005. i
Mo 5 GA 6h ch Sb eke ccesceresscesesas il
AP ER UTES CUTE EELU TERETE TERE ili
Table of Citations ................ Sau Nobu usecseeas iii
ETE TET EE EEE TELELELETE Eee l
ge WRTETETEL ELLE ee 2
Constitutional Provisions Involved .................. 2
Statement of the Case DURRERRAA LADO S CAS RS ed bS 005604 3
Reasons forGrantingthe Writ ...............020008: 7
a oh eer er 22
TABLE OF CITATIONS
Cases Cited:
American Trucking Assns. v. Smith, 496 U.S. 167 (1990) sa
Atchison, T. & S.F.R. Co. v. O’Connor, 223 U.S. 280
OS eer ee Teer eee 6,9, 10, 16
Bi-Metallic Investment Co. v. State Board of Equalization
OF Coneraao, 239 U.S. 441 (1918) .. 0c ccc cccccess 8
iv
Contents
Page
Bivens v. Six Unknown Named Agents, 403 U.S. 388
CEP TE) oo ac caccncrcesencnceeecceesscessenecuces 11
Carpenter v. Shaw, 280 U.S. 363 (1930) .............. 10
Chevron Oil Co. v. Huson, 404 U.S.97(1971) ......... i, 12,22
Cleveland Bd. of Educ. v. Loudermill, 470 U.S. 532 (1985)
ELEC CT ETT TT TTT TUT Te Tree Tr err re 8
District of Columbia v. Thompson, 281 U.S. 25(1930) .. 11
Crespo v. Stapf, 128 N.J. 351, 608 A.2d 241 (1992)
Pid WNGSER REORDER OD EERE REENGA DRED A ERE s Oast 12,13
Edgewater Park v. Edgewater Park Housing Auth., 187 N.J.
Super. 588, 455 A.2d 575 (Law Div. 1980) .......... 15
Ferreira v. City of Asbury Park, 237 N.J. Super. 142, 567
A.2d 230, certif. denied, 121 N.J. 627, 583 A.2d 324
GRWUWE 6406 04 dOE ORS RGwls thGeh eekans ox cesses 15
First English Evangelical Lutheran Church v. County of
Los Angeles, 482 U.S. 304 (1987) ................. 12
Frank A. Greek & Sons, Inc. v. The Township of South
Brunswick, 257 N.J. Super. 94, 607 A.2d 1359 (App.
Div. 1992), certif. denied, _ N.J.__,__ A.2d___ (1992)
(SEALER OUENNESENN CEASERS SSE ARAERER MOCO RSTSE 1,5,6, 22
Groel v. Newark, 78 N.J.L. 142, 73 A. 522 (Sup. Ct. 1909)
v
Contents
Page
Holmdel Builders Ass’n v. Township of Holmdel, 121 N.J.
550, 583 A.2d 277 (1990) ......... eee eee 4,5, 12,14, 16,22
Houman v. Mayor & Coun. Bor. Pompton Lakes, 155 N.J.
Super. 129, 382 A.2d 413 (Law Div. 1977) .......... 15
James B. Beam Distilling Co. v. Georgia, 501 U.S. __
(i. | PREP RPE PEPTIC TTECRe Ly Te PECL ieee 12
Logan v. Zimmerman Brush Co., 455 U.S. 422 (1982) ... y
Mathews v. Eldridge, 424 U.S.319(1976) ............ 8
McKesson v. Division of Alcoholic Beverages, 496 U.S. 18
0 err rr reer rT rrr yy rT i, 7,9, 13, 15, 16, 22
Montana Nat’! Bank v. Yellowstone County, 276 U.S. 499
to Per error rrr ne rer err rer or rss 10
O’Connell Management Co. v. Massachusetts Port
Authority, 744 F. Supp. 368 (D. Mass. 1990) ........ 16
Owen v. City of Independence, 445 U.S. 622 (1980) ..... 10, 11
Paul v. Davis, 424 U.S. 693 (1976) ........-. 2 eee eeee 7
Salorio v. Glaser, 93 N.J. 447, 461 A.2d 1100, cert. denied,
SEATS. FOS CIGSS) occ cvvocsovccsnccacsessesecs 22
Smith v. Travis County Educ. Dist., 791 F. Supp. 1170
CURR: ME, SHED eb eda ncceaneseneesssesueeuses 15
vi
Contents
Page
Southern Burlington County NAACP v. Mt. Laurel
Township, 67 N.J. 151, 336 A.2d 713, cert. denied, 423
ED 6s ies a0cuxs ep hav ks dekctubeeetas 3
Southern Burlington County NAACP v. Mt. Laurel
Township, 92 N.J. 158, 456A.2d 390(1983) ........ 3
State, of Vreeland et al., pros. v. Town of Bergen, 34 N.J.
Es | RR ny nnn 15
United States v. Locke, 471 U.S. 84(1985) ............ 8
Ward v. Board of County Commissioners, 253 U.S. 17
SL 2s bre SA SUNG ek Wann als hee Ra eds e 6a 1]
Statutes Cited:
CD 6. ccebeckevasetacesecate cutee 2
a hae oa dens 504 ada 8 RA REaOS 10
United States Constitution Cited:
NE ee 2,7
I «3. oka Abs Huu dikes dhe paaGbanaas} 2
Rule Cited:
New Jersey Court Rule 2:2-5(b) ...................-. 6
vii
Contents
Page
APPENDIX
Appendix A — Opinion of New Jersey Superior Court,
Appellate Division, Filed June 16,1992 ............ la
Appendix B — Order of New Jersey Supreme Court, Filed
Mowember Dh, TOFS nc ccccccsccsccsccccsscsecs 18a
Appendix C — Excerpts of Transcript of Proceedings of
New Jersey Superior Court, Law Division, July 19,
SE Wubeb Ge cthecacdeudek Cenenetreesevesxesss 19a
le ea,
TE OE ENE,
EEE
|
No.
In the
Supreme Court of the United States
October Term, 1992
MORRIS INDUSTRIAL BUILDERS, INC., a New Jersey
corporation,
Petitioner,
vs.
THE TOWNSHIP OF SOUTH BRUNSWICK in the County of
Middlesex, a municipal corporation of the State of New Jersey,
THE TOWNSHIP COMMITTEE OF THE TOWNSHIP OF
SOUTH BRUNSWICK, THE PLANNING BOARD OF THE
TOWNSHIP OF SOUTH BRUNSWICK,
Respondents.
Petition for Writ of Certiorari to the Superior Court of New
Jersey, Appell« ie Division
PETITION FOR WRIT OF CERTIORARI
OPINIONS BELOW
Frank A. Greek & Sons. Inc. v. The Township of South
Brunswick, 257 N.J. Super. 94, 607 A.2d 1359 (App. Div. 1992),
certif. denied, __ N.J.
A.2d__ (1992) (1a, 18a).
2
STATEMENT OF JURISDICTION
Petitioner, Morris Industrial Builders, Inc., invokes the
Court’s jurisdiction to review the June 16, 1992 final judgment of
the New Jersey Superior Court, Appellate Division, where
petitioner’s rights under the Fifth and Fourteenth Amendments to
the United States Constitution were drawn into question (1a). See
28 U.S.C. § 1257(a). The New Jersey Supreme Court denied
discretionary review of this judgment by order dated November
23, 1992 (00a).
CONSTITUTIONAL PROVISIONS INVOLVED
The Fifth Amendment to the Constitution of the United States
provides:
... Nor shall any person . .. be deprived of
life, liberty or property, without due process of
law;...
U.S. Const. Amend. 5.
The Fourteenth Amendment states:
Section 1 ... No state shall make or enforce
any law which shall abridge the privileges or
immunities of citizens of the United States; nor
shall any State deprive any person of life,
liberty or property, without due process of law;
U.S. Const. Amend. 14 § 1.
3
STATEMENT OF THE CASE
In Southern Burlington County NAACP v. Mt. Laurel
Township, 67 N.J. 151, 336 A.2d 713, cert. denied, 423 U.S. 808
(1975) (Mt. Laurel I), the New Jersey Supreme Court held that
developing municipalities were required by the New Jersey
Constitution to provide a realistic opportunity for development of
low-income and moderate-income housing. In Southern
Burlington County NAACP v. Mt. Laurel Township, 92 N.J. 158,
456 A.2d 390 (1983) (Mt. Laurel II), the court went further and
imposed an affirmative obligation on every municipality to
provide its fair share of affordable housing. Some municipalities,
including respondent Township of South Brunswick, attempted to
finance their Mt. Laurel II obligation by requiring real estate
developers to contribute to affordable-housing trust funds as a
condition of securing land use approvals from local planning and
zoning boards.
Petitioner is an industrial developer headquartered in
Secaucus, New Jersey. Beginning in the 1970's, Morris and its
affiliates appeared regularly before the South Brunswick Planning
Board for approval to construct warehouse/office buildings in the
industrial section of the Township. In response to Mt. Laurel II, the
Township adopted an affordable-housing trust fund ordinance
which imposed development fees on most commercial and
residential development as a condition for site-plan or subdivision
approval. The fees for non-residential developments depended on
the type of project involved, ranging from twenty-five to fifty cents
per square foot. From 1988 to 1990, $602,580.89 was deposited
under protest with the Township's affordable-housing trust fund on
six Morris projects.'
1. There was no procedure available for challenging the validity of these
fees before their exaction, except for commencement of expensive and
protracted legal proceedings which would have delayed and, in some cases,
terminated the projects.
4
Several builders’ associations initiated suits in the New Jersey
Superior Court challenging South Brunswick’s ordinance and
those of four other municipalities. The associations claimed that
the ordinances were ultra vires, an invalid tax in violation of the
New Jersey Constitution’s uniform property taxation requirement,
a taking without just compensation, and a denial of due process and
equal protection in violation of the United States and New Jersey
Constitutions.
In Holmdel Builders Ass'n v. Township of Holmdel, 121 N.J.
550, 583 A.2d 277 (1990), decided December 13, 1990, the New
Jersey Supreme Court found these ordinances invalid, but not on
constitutional grounds. The court held that municipalities could
collect such fees only pursuant to uniform regulations of the New
Jersey Council on Affordable Housing (“COAH”), a state agency
entrusted with oversight of affordable housing development. Since
that agency had never promulgated any regulations, the court
found that the challenged ordinances “were not validly adopted[.}”
121 N.J. at 585. The court did not reach the constitutional issues
raised, except to “observe that insofar as those contentions are
addressed to the facial validity of the development-fee ordinances
in these cases, they do not have merit.” /d. at 581. The court then
considered the New Jersey Builders Association’s claim for a
refund on behalf of its members and dismissed for lack of standing
“without prejudice to the right of individual members to seek
refunds in separate actions.” Jd. at 586.
On January 28, 1991, COAH disseminated to New Jersey
municipalities a so-called “Administrative Order” announcing its
intent to adopt the sort of regulations envisioned in Holmdel, and
“ordering” that municipalities “may” in the meanwhile retain
funds previously collected from developers like Morris.? On May
2. For several weeks following Holmdel, the Township refunded
contributions to some builders voluntarily. A new political administration took
control of the Township Committee in January and promptly reversed this
position.
3
1991, Morris commenced an action in the New Jersey Superior
Court seeking a refund of its contributions. The claim was
consolidated with severa! others already pending against the
Township.
On July 19, 1991, before COAH had proposed and adopted
any regulations, the trial judge granted summary judgment to
Morris and its fellow developers and ordered an immediate refund
(25a-38a). The judge was satisfied he was implementing the
obvious intention of the State Supreme Court in Holmdel.
Respondents unsuccessfully attempted to persuade him to delay
action until COAH could adopt regulations which might validate,
retroactively, collection of the fees already in the Township's
custody. The trial judge refused because COAH was unable to
represent when such regulations would be adopted and, more
importantly, because no such regulations could lawfully revive
South Brunswick’s ordinance in any case.
The Township and COAH appealed to the Appellate Division,
New Jersey’s intermediate appellate court, where the matter was
consolidated for argument and decision with appeals from similar
decisions in several other municipalities. On January 21, 1992, six
months before the appeal was argued, COAH finally adopted
regulations authorizing municipalities to adopt development-fee
ordinances and to apply them retroactively to fees collected prior
to the December 1990 Holmdel decision. Several builders filed a
separate appeal with the Appellate Division from the adoption of
these new regulations. Morris’ application for leave to participate
in that appeal was summarily denied.
On June 16, 1992, a three-judge panel of the Appellate
Division unanimously held that the trial judge granted Morris
summary judgment too hastily. Frank A. Greek v. South Brunswick
Tp., 257 N.J. Super. 94, 607 A.2d 1359 (App. Div. 1992), certif.
denied, _N.J.__,__A.2d__ (1992) (1a, 18a). The court rejected
the trial judge’s conclusion that the State Supreme Court intended
6
for developers like Morris to receive refunds automatically:
Undoubtedly, the Court recognized that the
invalidation of the ordinances would not
necessarily require a complete refund. In such
matters, issues concerning the disruption of
governmental policies and other equitable
considerations determine whether a decision of
this nature should be given prospective effect
only, ... retroactive effect, ... or partial
retroactive effect[.]
257 N.J. Super. at 103-104 (12a-13a). Without reaching the
validity of the new regulations then the subject of a separate
appeal, the panel held that COAH had the “potential power” to
validate the prior levies, relying on caselaw upholding curative
legislation to rectify imperfect exercises of government power.
The matter was remanded to the trial judge with instructions to stay
further action until the validity of the new regulations had been
thoroughly tested.*
Morris petitioned the New Jersey Supreme Court for
discretionary review of the Appellate Division’s decision.‘ The
petition argued that the Appellate Division confused retroactivity
as a choice of law with the constitutional duty to provide the “clear
and certain remedy” mandated by Atchison T.& S.F.R. Co. v.
O’Connor, 223 U.S. 280, 285-286 (1912), recently reaffirmed in
3. Petitioner's contributions have remained in an interest-bearing account
in the Township's custody throughout this litigation.
4. Under New Jersey Court Rule 2:2-5(b), the Appellate Division's
decision is considered a final judgment for purposes of review by the New Jersey
Supreme Court, even though it remanded to the trial court for further
proceedings.
McKesson v. Division of Alcoholic Beverages, 496 U.S. 18
(1990).The New Jersey Supreme Court summarily denied review
on November 23, 1992 (18a).
REASONS FOR GRANTING THE WRIT
The Fifth Amendment to the Constitution of the United States
provides:
... Nor shall any person ... be deprived of
life, liberty or property, without due process of
law;...
U.S. Const. Amend. 5.
The Fourteenth Amendment states:
Section 1 ... No state shall make or enforce
any law which shall abridge the privileges or
immunities of citizens of the United States; nor
shall any State deprive any person of life,
liberty or property, without due process of law;
U.S. Const. Amend. 14 § 1.
The procedural guarantees of the Fourteenth Amendment
apply whenever the State removes or significantly alters property
interests recognized and protected by state law. Paul v. Davis, 424
U.S. 693, 710-711 (1976). It is difficult to conceive of any
definition of “property” that would not include one’s own money.
Citizens are “deprive[d]” of this property interest whenever
Government requires them to part with their funds.
A loss of money may be compelled through judicial,
8
administrative or legislative action. The effect on the citizen’s
wallet is the same in each case, but the “process” that is “due” may
differ. When it takes the form of a money judgment or fine in a
judicial proceeding, the Court’s precedents plainly require
advance notice and a meaningful opportunity to be heard. Mathews
v. Eldridge, 424 U.S. 319, 333-335 (1976). When a tenured
government employee loses salary as a result of administrative
action like suspension or termination of employment, due process
requires “some kind of hearing”. Cleveland Bd. of Educ. v.
Loudermill, 470 U.S. 532, 542 (1985).
The Due Process Clause applies to legislative action as well,
although the entitlement to individualized consideration is less. In
Bi-Metallic Investment Co. v. State Board of Equalization of
Colorado, 239 U.S. 441 (1915), Justice Holmes wrote:
Where a rule of conduct applies to more than a
few people it is impracticable that everyone
should have a direct voice in its adoption. The
Constitution does not require all public acts to
be done in town meeting or an assembly of the
whole. General statutes within the state power
are passed that affect the person or property of
individuals, sometimes to the point of ruin,
without giving them a chance to be heard. Their
rights are protected in the only way that they
can be in a complex society, by their power,
immediate or remote, over those who make the
rule.
Id. at 445. More recently, in United States v. Locke, 471 U.S. 84,
108 (1985), Justice Marshall stated:
In altering substantive rights through
enactment of rules of general applicability, a
legislature generally provides constitutionally
[hicairnesienteeininiimenaiiniiias iii
9
adequate process simply by enacting the
statute, publishing it, and, to the extent the
statute regulates private conduct, affording
those within the statute’s reach a reasonable
opportunity both to familiarize themselves
with the general requirements imposed and to
comply with those requirements.
See also Logan v. Zimmerman Brush Co., 455 U.S. 422, 433
(1982) (“... [T]he legislative determination provides all the
process that is due[.]”). When property rights are disturbed by a
legislative body without appropriate enabling authority or
compliance with prescribed legislative procedures, however, the
Fourteenth Amendment is still offended. That is what happened
here.
Most of the cases reaching this Court involving due process
and the payment of money have involved taxation. The Court in
McKesson v. Division of Alcoholic Beverages, reaffirmed the
principles stated by Justice Holmes in Atchison T.& S.F-R. Co. v.
O’Connor:
It is reasonable that a man who denies the
legality of a tax should have a clear and certain
remedy. The rule being established that apart
from special circumstances he cannot interfere
by injunction with the State’s collection of its
revenues, an action at law to recover back what
he has paid is the alternative left. Of course we
are speaking of those cases where the State is
not put to an action if the citizen refuses to pay.
In these latter he can interpose his objections
by way of defence, but when, as is common, the
State has a more summary remedy, such as
distress, and the party indicates by protest that
10
he is yielding to what he cannot prevent, courts
sometimes perhaps have been a little too slow
to recognize the implied duress under which
payment is made. But even if the State is driven
to an action, if at the same time the citizen is put
at a serious disadvantage in the assertion of his
legal, in this case of his constitutional, rights,
by defence in the suit, justice may require that
he should be at liberty to avoid those
disadvantages by paying promptly and
bringing suit on his side.
283 U.S. at 285-286, quoted in McKesson, supra, 496 U.S. at 32-
33.
In Carpenter v. Shaw, 280 U.S. 363 (1930), the Court held that
“a denial by a state court of a recovery of taxes exacted in violation
of the laws or Constitution of the United States by compulsion is
itself in contravention of the Fourteenth Amendment.” Jd. at 369.
In Montana Nat'l Bank v. Yellowstore County, 276 U.S. 499
(1928), the Court stated: “[A taxpayer] cannot be deprived of its
legal right to recover the amount of tax[es] unlawfully exacted of it
by [a] later decision which, while repudiating the construction
under which the unlawful exaction was made, leaves them thus
exacted in the public treasury.” 276 U.S. at 504-505.
The federal right to retroactive relief is not limited to
unconstitutional taxation. In Owen v. City of Independence, 445
U.S. 622 (1980), for example, the Court held that a city is not
entitled to immunity from damage claims in an action under 42
U.S.C. § 1983. The Court reached that result in large part because it
was consonant with general remedial principles: “[A] damages
remedy against the offending party is a vital component” of any
remedial scheme (445 U.S. at 651). The Court added that “[iJ]t
hardly seems unjust to require a municipal defendant which has
11
violated a citizen’s constitutional rights to compensate him for the
injuries suffered thereby. . .. Elemental notions of fairness dictate
that one who causes a loss should bear that loss.” Jd. at 654; see
also Bivens v. Six Unknown Named Agents, 403 U.S. 388, 396
(1971); id. at 407-409 (Harlan, J., conc.).
The Court concluded in Owen that these remedial
considerations apply with particular force when the violation
stems from official government policy. “[T]he importance of
assuring [the] efficacy [of a scheme for vindicating constitutional
rights] is only accentuated when the wrongdoer is the institution
that has been established to protect the very rights it has
transgressed.” 445 U.S. at 651. In this situation especially, “it is
fairer to allocate any resulting financial loss to the inevitable costs
of government borne by all the taxpayers, than to allow its impact
to be felt solely by those whose rights . . . have been violated.” /d.
at 655. See also Ward v. Board of County Commissioners, 253 U.S.
17, 24 (1920) (“[t}o say that the county could collect these
unlawful taxes by coercive means and not incur any obligation to
pay them back is nothing short of saying that it could take or
appropriate the property of these [taxpayers] arbitrarily and
without due process of law”); and District of Columbia v.
Thompson, 281 U.S. 25, 31 (1930) (citing Ward for the principle
that government must make restitution of funds held “in its
treasury .. . which it has no right in equity, good conscience, or
common honesty to retain”).
There are striking parallels between the tax refund cases and
others where there is a governmental taking of private property
requiring payment of just compensation. See Ward, 253 U.S. at 24
(characterizing the county’s refusal to provide refunds as a
“tak[ing]” of the taxpayers’ property). In both circumstances, the
individual is deprived of ownership or use of property under the
compulsion of government authority, but, upon judicial
examination, the government is held to have no right to act as it did.
12
In the takings situation, the government must either
discontinue its conduct or pay just compensation fer the full value
of the property. Whichever course it chooses, it must return to the
property owner the value of the property taken prior to the judicial
determination. First English Evangelical Lutheran Church v.
County of Los Angeles, 482 U.S. 304 (1987). The analysis here is
informed by the Framers’ conclusion — embodied in the Takings
Clause — that government is not entitled simply to restore the
property to its owner for future use. Instead, it must make
restitution (in the form of just compensation) for the value taken
prior to restoration of the property. In the context of taxes and fees,
government should have a comparable obligation not only to stop,
but to restore the aggrieved party to the position it would have
enjoyed but for the unlawful exaction.
These rights are triggered whenever a court makes “fully
retroactive” a decision invalidating a tax or fee. “Full
retroactivity” means application of a holding “both to the parties
before the court and to all others by and against whom claims may
be pressed. . ..” James B. Beam Distilling Co. v. Georgia, 501 U.S.
__, __ (1991). A court’s determination to apply a rule of law
“forward” or “backward” is governed by reliance interests and
other equitable considerations reflected in the three-factor test of
Chevron Oil Co. v. Huson, 404 U.S. 97, 106-107 (1971).° Once the
decision is made to apply a rule of law “backward”, however,
“McKesson establishes that equitable considerations play only the
most limited role in delineating the scope of that relief.” American
Trucking Assns. v. Smith, 496 U.S. 167, 181 (1990).
Holmdel was “fully retroactive”. The court explicitly found
5. The New Jersey courts apply the Chevron test to determine the
retrospective effect of their rulings whether the substantive rights in question
arise under federal or state law. See Crespo v. Stapf, 128 N.J. 351, 365-66, 608
A.2d 241 (1992).
13
that the ordinances before it had not been adopted lawfully, and
“set [them] aside . . . without prejudice to the right of individual
[developers] to seek refunds in separate actions.” 121 N.J. at 586.
Even if the court did not intend that refunds automatically flow, as
the Appellate Division later held, Morris was still entitled to some
form of prompt, meaningful relief.
Under McKesson, the Due Process Clause requires that the
remedy rectify the legal flaw which invalidated the exaction in the
first place. Where an otherwise lawful tax is struck down as
discriminatory, the legal infirmity stems not from deprivation of
the taxpayer’s money per se, but from failure to treat similarly
situated parties equitably. The appropriate remedy in that case
might be equalization of the burden, rather than a complete refund.
Discrimination was not what invalidated the development fees in
this case.
The ordinance here was set aside for lack of uniform enabling
regulations. As the New Jersey Supreme Court saw it, COAH
would not merely rubberstamp the ordinances already in place, but
would develop from scratch a statewide framework for exaction of
such fees, informed by practical insights and policy concerns
developed in the administrative rule-making process:
... [W]e determine that COAH, through its
rulemaking procedures, should specify
standards for development fees, so that
municipalities may consider employing such
fees as inclusionary-zoning devices in
designing their housing elements under the
[New Jersey Fair Housing Act]. Regulatory
standards will enable us to determine that
persons subject to such ordinances have been
reasonably informed of their obligations, and
that both municipalities and COAH in the
14
adoption and approval of such ordinances are
acting in conformity with the legislative intent
of the [Fair Housing Act].
Such regulations will define more precisely the
impact and effect of development fees. They
presumably wiil address the types of
developments that will be subject to fees, the
amount and nature of the fees imposed, the
relationship of fees to other inclusionary-
zoning measures such as mandatory set-asides
and density bonuses, the conditions for the
creation and administration of affordable-
housing trust funds, the requirements for the
use and application of such funds, and whether
a system of development fees should include
counterbalancing density bonuses....
Because we cannot and should not
prognosticate what scheme COAH will devise
for non-residential development fees, we do
not determine on the present record whether
development fees without bonuses might or
might not in a particular application be
constitutionally objectionable.
COAH, in the exercise of sound administrative
discretion, should consider the desirability and
feasibility of such development fees in the
broader context of the State’s affordable
housing policy.
Holmdel, 121 N.J. at 579-80.
Adherence to prescribed legislative procedure is required by
the Due Process Clause before a police power regulation can
15
require citizens to pay money. The court plainly had in mind more
than curative legislation to correct a technical defect in South
Brunswick’s ordinance.®
Respondents may argue that McKesson is limited to taxes in
the strict sense and, even then, only when collected in violation of
federal, not just state, law. We do not read that decision so
narrowly, and can conceive of no legal or policy reasons why the
Court’s holding should be so narrowly construed. The few lower
courts addressing the issue agree. In Smith v. Travis County Educ.
Dist., 791 F. Supp. 1170 (W.D. Tex. 1992), also a tax case, District
Judge Nowlin reached the same conclusion:
In McKesson, the Supreme Court in no way
limited its holding to state taxes that are only in
violation of the United States Constitution. The
Due Process Clause applies to any unlawful
collection of taxes. [Footnote omitted. ]
Id. at 1178. Earlier in his opinion, he highlighted an excerpt from
6. The New Jersey courts have long sanctioned retroactive ratification of
technically defective exercises of government power. The “curative act”
doctrine originated in the context of ratifying contracts, Houman v. Mayor &
Coun. Bor. Pompton Lakes, 155 N.J. Super. 129, 160, 382 A.2d 413 (Law Div.
1977), and was later extended to other government actions. Houman (decision to
proceed with tax appeal); Ferreira v. City of Asbury Park, 237 N.J. Super. 142,
567 A.2d 230, certif. denied, 121 N.J. 627, 583 A.2d 324 (1990) (ratification of
land use ordinance without prior reference to planning board); Edgewater Park
v. Edgewater Park Housing Auth., 187 N.J. Super. 588, 602, 455 A.2d 575 (Law
Div. 1980) (employment of legal counsel). Curative legislation has been limited
to procedural or technical irregularities not affecting the substance of the action.
State, of Vreeland et ai., pros. v. Town of Bergen, 34 N.J. Eq. 438 (Sup. Ct. 1871).
When the irregularity is likely to affect the substance of the action, such
legislation has been rejected. Groel v. Newark, 78 N.J.L. 142,73 A. 522 (Sup. Ct.
1909).
16
Justice Holmes’ opinion in O’Connor implying that due process
attaches whenever the State collects money in violation of any
“legal. . . rights”. O’Connor, 223 U.S. at 285-286, quoted at 791 F.
Supp. at 1177, n.3. See also O’Connell Management Co. v.
Massuchesetts Port Authority, 744 F. Supp. 368, 378, n. 13 (D.
Mass. 1990), applying McKesson to all government-compelled
fees.
The thrust of McKesson is that an aggrieved party is entitled to
be restored to the same position he would have occupied if a
meaningful predeprivation challenge had been available. Morris
has been denied this right for over two years, in a setting rife with
well-intentioned abuse of government authority. For the seven
month period between the Holmdel decision and argument of
Morris’ summary judgment motion, South Brunswick retained the
improperly collected development fees under the aegis of an
“Administrative Order” from COAH without a scintilla of legal
authority.’ The trial judge was disturbed at the prospect of leaving
the developers twisting in the wind indefinitely, even if the agency
had the power to adopt retroactive regulations:
THE COURT: Ms. Callahan, before you begin
your argument perhaps you can help me on a
couple of questions I might have. As I
understand it from your position, the Council is
currently considering forms of regulations
which they now intend to adopt sometime in
the future. Is that right?
MS. CALLAHAN: Yes, Your Honor.
7. It was not really an “order” at all — at least not in the sense of a
compulsory directive. It “ordered” that municipalities “may” retain the monies
until COAH adopts statewide regulations and the municipalities, in turn,
promulgate ordinances conforming to their requirements. See further discussion
by the trial judge at 30a-32a.
iE eae ti cetera Ome.
17
THE COURT: Okay. And I’m a little fuzzy on
my administrative law but if I understand
correctly I’m asking you now, first you reach
tentative drafts of regulations. Correct?
MS. CALLAHAN: Yes, Your Honor. If you’d
like, I could give you a little summary of how
the rule —
THE COURT: And then from there you
advertise and have hearings published?
MS. CALLAHAN: Correct. You don’t
necessarily have to have hearings. You allow
the opportunity for comment.
THE COURT: Comment. Okay.
MS. CALLAHAN: And generally that is
written -
THE COURT: And that is a formal adoptive
process?
MS. CALLAHAN: Yes.
THE COURT: Okay. And I suppose they've
been doing this since January or at least since
the Holmdel case was decided?
MS. CALLAHAN: Yes, Your Honor.
THE COURT: When would you anticipate the
Council would have these adopted regulations?
18
MS. CALLAHAN: Filing in place, I would
guess December and —
THE COURT: Would you bet me, would you be
willing to pay all your co-counsel for lunch?
There’s a restaurant here called La Fontana. It’s
very expensive.
MS. CALLAHAN: I know that one.
THE COURT: Would you be willing to buy
lunch for everybody if these aren’t formally
adopted by December?
MS. CALLAHAN: Almost, Your Honor.
THE COURT: Out of your own pocket?
MS. CALLAHAN: Almost, because —
THE COURT: Almost?
MS. CALLAHAN: I say almost because I’m
fairly certain that they will be done by then
because, number one, the Council already had
proposed regulations, orders in June. They did
not formally propose them in the New Jersey
register because some policy issues needed to
be ironed out, so they anticipate to have all that
ironed out for the proposal to go in the register
for August or September. Then there’s also a
thirty day comment period. Then after that the
agency can adopt the regulations.
* * *
19
THE COURT: . . . I was just discussing timing
and what happens when the municipalities that
wish to voluntarily become part of this have to
adopt ordinances, do they not?
MS. CALLAHAN: Yes, Your Honor.
THE COURT: Okay. And we all know how fast
municipalities move, do their drafting, so I
would guess that if everything went as quick as
you think it might, somewhere in the summer
of 1992 South Brunswick might have an
ordinance in place that could then be —
properly be challenged.
MS. CALLAHAN: I would hope it would be
before then.
THE COURT: I know you would hope.
MS. CALLAHAN: I cannot guess as to what
would happen.
THE COURT: Okay. And of course you would
agree, given the issues that are involved in the
legal history, that no matter what happens there
certainly would be a challenge in the Court,
both to the ordinance and to the regulations
again.
MS. CALLAHAN: Yes, Your Honor.
THE COURT: Which probably would not be
resolved until the Supreme Court resolution
two years after that. So we'd be talking about
20
holding on to this money somewhere until
1994, 1995 until the resolution of the issue.
MS. CALLAHAN: Your Honor, the money is
being held in a separate interest bearing
account.
THE COURT: I understand that. That wasn’t
my question, Counsel. We can reasonably
predict under your scenario at least another
four years before these people even will have
an opportunity under your suggestion to get
their money back, if in fact they are entitled to
it.
MS. CALLAHAN: Your Honor, I am not
willing to predict how long it will take.
(20a-24a).
At the conclusion of the argument, the judge ruled:
... [T]here is no clear schedule [for adopting
regulations by COAH]. There are some fond
hopes that it will be done sometime by the end
of this year and that perhaps all the public
bodies will act in appropriate fashion sometime
by the middle of next year or perhaps a little
later, which would only then for the first time,
following COAH’s argument, would permit
the plaintiffs here to challenge the sufficiency
of those ordinances and regulations in an
attempt to get back the money that was
concededly paid pursuant to an invalid,
whether you call it an invalidly adopted or
sn Sma to htc
Os settle acter bi eee geet Ket
(31a).
(35a).
21
invalid in general, an ordinance which had no
legal effect and under which constitutionally is
the only way a public entity, whether it be a
legislature or a municipality or a county can
exact from private persons monies.
There’s only certain ways in a republican or
democratic society — I use those with the
small letters — that governments may extract
from its citizens money. That indeed is that
which separates us from other forms of
government.
And it is not, as I’ve ever understood it, in our
Constitutional process permitted that monies
may be held or obtained by a simple letter of an
appointed public official. It frankly staggers
the mind.
I really don’t understand and I rule here as a
matter of law that any regulation, even one
validly adopted in futuro and validly adopted
by the municipality, would constitute an ex
post facto rule or regulation, and you cannot
now resuscitate that which was exacted
illegally in the first place. Hiding the gun after
the robbery doesn’t make it legal.
22
On appeal, the Appellate Division held that it was premature
to consider a remedy for petitioner until COAH developed
regulations, determined whether to apply them retroactively and
had them tested in the courts. The sole authority relied on was the
New Jersey Supreme Court’s formulation of the Chevron
retroactivity doctrine. 257 N.J. Super. at 103-104, citing Salorio v.
Glaser, 93 N.J. 447, 465-67, 461 A.2d 1100, cert. denied, 464 U.S.
993 (1983) (12a-13a). This was plainly wrong since the New
Jersey Supreme Court’s decision in Holmdel was retroactive. From
that point forward, petitioner was entitled under McKesson to a
“clear and certain remedy”. The trial judge’s determination to
award a refund certainly met the Court’s minimum constitutional
standard. The Appellate Division’s treatment of the question did
not.
CONCLUSION
The Court should grant certiorari to review the Appellate
Division’s erroneous judgment.
Respectfully submitted,
DAVID B. RUBIN
Counsel of Record
Rubin, Rubin, Malgran, Kaplan &
Kuhn
Attorneys for Petitioner
501 Hoes Lane
Piscataway, NJ 08854
(908) 463-7500
la
APPENDIX A — OPINION OF NEW JERSEY SUPERIOR
COURT, APPELLATE DIVISION, FILED JUNE 16, 1992
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE COMMITTEE ON OPINIONS
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
A-6073-90T3
A-6080-90T3
A-205-91T3
A-206-91T3
A-394-91T3
A-429-91T3
FRANK A. GREEK & SONS, INC., DKM PROPERTIES
CORPORATION, RICHARD V. NELSON, I. HELLER
CONSTRUCTION COMPANY, INC. AND M. ALFIERI
COMPANY, INC.,
Plaintiffs-Respondents,
v.
THE TOWNSHIP OF SOUTH BRUNSWICK in the County of
Middlesex, the TOWNSHIP COMMITTEE OF SOUTH
BRUNSWICK and the PLANNING BOARD OF THE
TOWNSHIP OF SOUTH BRUNSWICK OF ADJUSTMENT,
Defendants-Appellants.
TIMBER PONDS, INC.,
Plaintiff-Respondent,
2a
Appendix A
TOWNSHIP OF SOUTH BRUNSWICK, in the County of
Middlesex, the TOWNSHIP COMMITTEE OF SOUTH
BRUNSWICK and the PLANNING BOARD OF THE
TOWNSHIP OF SOUTH BRUNSWICK BOARD OF
ADJUSTMENT,
Defendants-Respondents.
MORRIS INDUSTRIAL BUILDERS, INC.,
Plaintiff-Respondent,
Vv.
TOWNSHIP OF SOUTH BRUNSWICK, in the County of
Middlesex, a municipal corporation of the State of New Jersey,
THE TOWNSHIP COMMITTEE OF THE TOWNSHIP OF
SOUTH BRUNSWICK, THE PLANNING BOARD OF THE
TOWNSHIP OF SOUTH BRUNSWICK,
Defendants-Appellants.
FRANK DIMISA, d/b/a FOX RUN II, and McCAMPBELL
DEVELOPMENT, INC., a New Jersey Corporation,
Respondents,
Vv
THE TOWNSHIP OF HOLMDEL, in the County of Monmouth,
THE TOWNSHIP COMMITTEE OF THE TOWNSHIP OF
HOLMDEL and THE PLANNING BOARD OF THE TOWNSHIP
OF HOLMDEL,
Appellants.
eel mh al a Nh Rt VB 2.
fae Nelms te se
iii
3a
Appendix A
EUGENE J. LONG,
Respondent,
Vv.
THE TOWNSHIP OF CHESTER, in the County of Morris, a
municipal corporation of the State of New Jersey, and the MAYOR
AND TOWNSHIP COUNCIL OF THE TOWNSHIP OF
CHESTER,
Defendants.
CHESTERFIELD FARMS, DIRAJE CORPORATION,
CHESTNUT RUN LIMITED PARTNERSHIP, CUSTOM
LIVING HOMES, INC., TWIN BROOKS LIMITED
PARTNERSHIP, ARTHUR N. FURHMAN, KENDALL WOODS
LIMITED PARTNERSHIP and KENDALL CONSTRUCTION
CORPORATION,
Plaintiffs,
Vv.
THE TOWNSHIP OF CHESTER in the COUNTY OF MORRIS, a
municipal corporation of THE STATE OF NEW JERSEY and THE
MAYOR AND TOWNSHIP COUNCIL OF THE TOWNSHIP OF
CHESTER,
Defendants.
REALTY TRANSFER COMPANY LIQUIDATING TRUST,
Plaintiff,
4a
Appendix A
TOWNSHIP OF CHESTER, COUNTY OF MORRIS, a municipal
corporation of THE STATE OF NEW JERSEY and THE
TOWNSHIP COUNCIL OF THE TOWNSHIP OF CHESTER,
Defendants.
CHERRY HILL PROPERTIES CORPORATION,
Respondent,
Vv.
THE TOWNSHIP OF CHERRY HILL in the County of Camden, a
Municipal Corporation of the State of New Jersey, and THE
TOWNSHIP COUNCIL OF THE TOWNSHIP OF CHERRY
HILL,
Appellants,
and
COUNCIL ON AFFORDABLE HOUSING (COAH),
Intervenor-Appellant.
Argued March 30, 1992 - Decided June 16, 1992
Before Judges Bilder, Stern and Keefe.
On appeal from the Superior Court of New Jersey, Law
Division, Middlesex County (A6073-90T3; A-6080-90T3)
Monmouth County (A205-91T3) Morris County (A-206-91T3),
Camden County (A-394-91T3; A-429-91T3).
Sa
Appendix A
Geraldine Callahan, Deputy Attorney General, argued the
cause for appellant Council on Affordable Housing (Robert J. Del
Tufo, Attorney General of New Jersey, attorney; Joseph L.
Yannotti, Assistant Attorney General, of counsel; Ms. Callahan, on
the brief).
Edward L. Picone argued the cause for appellant Township of
South Brunswick (Lawrence W. Saltzman, on the brief).
Francine I. Axelrad argued the cause for appellants, The
Township of Cherry Hill and the Township Council of the
Township of Cherry Hill.
Thomas F. Carroll, III argued the cause for respondents, Frank
A. Greek & Sons, Inc., DKM Properties Corporation, Richard V.
Nelson, I. Heller Construction Company, Inc., M. Alfieri
Company, Inc., Timber Ponds, Inc., Frank DiMisa d/b/a Fox Run
II, McCampbell Development, Inc., Eugene J. Long, Chesterfield
Farms, Diraje Corporation, Chestnut Run Limited Partnership,
Custom Living Homes, Inc., Twin Brooks Limited Partnership,
Author N. Furhman, Kendall Woods Limited Partnership and
Kendall Construction Corporation (Hill Wallack, attorneys).
David B. Rubin argued the cause for respondent, Morris
Industrial Builders, Inc. (Rubin, Rubin, Malgran & Kuhn,
attorneys).
Eugene Iadanza argued the cause for respondent, Township of
Holmdel and the Township Committee of the Township of
Holmdel (Tucci, Iadanza & Reisner, attorneys).
Gary T. Hall argued the cause for respondents, Township of
Chester and the Mayor and Township Council of the Township of
Chester (McCarter & English, attorneys).
6a
Appendix A
Jeffrey Kantowitz argued the cause for respondents, Realty
Transfer Company Liquidating Trust and Cherry Hill Properties
Corporation (Greenbaum, Rowe, Smith, Ravin & Davis, attorneys;
Mr. Kantowitz, of counsel; Deirdre Moore, on the brief).
The opinion of the court was delivered by KEEFE, J.A.D.
After the Supreme Court issued its decision on December 13,
1990, in Holmdel Builders Ass'n v. Township of Holmdel, 121 N.J.
550 (1990), the Council On Affordable Housing (COAH) issued an
“Administrative Order” (AO) on January 28, 1991, announcing its
intention to adopt regulations with respect to mandatory
development fees designed to establish “standards and criteria for
such ordinances” and “how fees collected prior to the Holmdel
decision are to be handled.” The AO also provided that
municipalities which had collected such fees prior to the Holmdel
decision could retain the fees in a separate, interest bearing account
“provided that the municipality adopts and submits to COAH a
duly adopted resolution of the municipal governing body
expressing its intent to submit its ordinance to COAH immediately
upon COAH promulgation of comprehensive regulations that set
standards for such ordinance.” About the same time or shortly
thereafter, plaintiff developers and builders in these consolidated
matters! either reactivated suits that had been previously stayed or
instituted actions against the defendant municipalities to recover
fees paid by plaintiffs under the municipalities’ invalidated
development fee ordinances. In each case, the defendant
municipality relied upon the AO as a defense. COAH was
permitted to intervene in each case and either moved for a stay of
the proceedings pending promulgation of the regulations or a
transfer to the Appellate Division, contending that any challenge to
the validity of the AO must be heard in this court. Plaintiffs and
defendant municipalities cross-moved for summary judgment.
Ta
Appendix A
On June 14, 1991, the Law Division judge in the matters
involving the Township of Chester denied COAH’s motion to
transfer to the Appellate Division, holding that the provisions of R.
2:2-3(a)(2) were not applicable to these circumstances. He
concluded that “the Supreme Court has decided that the ordinances
are invalid and that the fees collected pursuant to those ordinances
were invalidly collected and they go back to either developer or
some derivative person appropriately thereunto authorized.” He
further decided that there was no way in which COAH could adopt
a regulation or regulations which could result in the “resuscitation
of these invalidly adopted ordinances.”
However, the judge stopped short of granting summary
judgment to the plaintiffs finding that “there still are open
questions about who gets the money.” Finally, he directed the
parties to attempt to enter into a stipulation concerning terms for
the refund. When he later learned that such a stipulation could not
be agreed upon, he scheduled an evidentiary hearing to determine
the amount owed to the individual plaintiffs. We granted COAH’s
motion for leave to appeal that interlocutory order and stayed the
trial court proceedings pending appeal.
On July 15, 1991, the trial judge in the matter involving the
Township of Holmdel addressed motions similar to those
presented in the Township of Chester cases. He understood the
Supreme Court’s decision in Holmdel to say that the individual
builders were entitled to start their own actions for a return of the
money but did not interpret the decision to hold that the builders
were entitled to a return of the monies as a matter of law and
1. This court initially denied a motion to consolidate these matters but ordered
that they be scheduled back-to-back for oral argument. Further consideration satisfies
us that there are common issues which permit consolidation for the purpose of this
opinion.
8a
Appendix A
without the development of a full record. He considered the AO to
be advisory and denied COAH’s motion to transfer the matter to
the Appellate Division and/or stay the proceedings pending
decision on COAH’s motion to obtain leave to appeal in the
Township of Chester case. Instead, he elected to press forward with
the litigation and scheduled a pretrial conference. We granted
COAH’s motion for leave to appeal and stayed the trial court
proceedings pending appeal.
On July 30, 1991, the trial judge in the matters involving the
Township of South Brunswick entertained motions involving
arguments similar to those presented in the Chester and Holmdel
matiers. He denied COAH’s motion to stay the cases and/or
transfer them to the Appellate Division finding that the AO did not
rise to the level of rule-making or quasi-judicial action. He further
found “as a matter of law that any regulation, even one validly
adopted in futuro and validly adopted by the municipality, would
constitute an ex post facto rule or regulation, and you cannot now
resuscitate that which was exacted illegally in the first place.”
Thus, he entered summary judgment in favor of the plaintiffs in
those cases and ordered that the monies on deposit with the
Township be returned to them. COAH and the Township of South
Brunswick filed separate notices of appeal from this final
judgment. Thereafter, we entered a stay pending appeal.”
Finally, on August 2, 1991, the trial judge in the matter
involving the Township of Cherry Hill also denied COAH’s
motion for a stay and/or transfer to the Appellate Division. He
concluded that no deference should be given to the AO and entered
summary judgment in favor of plaintiffs ordering a return of the
2. The order granting the stay permitted plaintiffs to obtain the money on
condition that a bond or letter of credit is posted with the Clerk of the Superior Court.
9a
Appendix A
money with interest. He also determined that the Cherry Hill
ordinance was invalid because the Township Council substantially
altered it by passing a resolution after the first reading increasing
the fee from one percent to three percent without notification to the
public. However, he stayed the order pending appeal. Cherry Hill
and COAH filed separate notices of appeal.’
On appeal, COAH contends that in each case the validity of its
AO was directly at issue and, for that reason, the trial judges erred
in failing to transfer the cases to the Appellate Division for
determination. COAH contends further that the AO was a
reasonable exercise of its statutory authority under the Fair
Housing Act (FHA), that it has the power to adopt regulations
providing procedures to validate the invalidly adopted ordinances,
and that the announcement of its intention to adopt such
regulations is not prima facie invalid and should have been
honored. The municipalities have essentially adopted the same
position as COAH. However, in the Cherry Hill matter the
municipality also contends that the trial judge erred in determining
that the Cherry Hill ordinance was procedurally invalid.
We need not address the issue of whether the trial judges erred
in denying COAH’s motion to transfer that portion of the litigation
before them challenging COAH’s authority to issue the AO, nor
need we decide whether the AO was a valid exercise of COAH’s
power. As we see it, those issues are simply ancillary to the primary
issue which undergirds each of the orders under review, save
perhaps the order stemming from the Holmdel matter. The
principle issue to be decided is whether COAH has the potential
3. COAH's motion to expedite all appeals was granted.
10a
Appendix A
power’ to promulgate regulations upon which the defendant
municipalities may rely to validate prior action on their part in
collecting the mandatory builders’ fees. For the reasons stated
herein, we conclude that COAH has such power and that there is
sufficient general authority permitting municipalities to validate
prior conduct. In light of this conclusion, we further hold that the
trial judges should have deferred action for a reasonable period of
time pending completion of the administrative process. Thus,
whether the AO was validly promulgated and binding or whether it
was simply advisory is of no moment. The matters should have
been stayed pending COAH’s proposed action whereupon the
rights of the parties could be more clearly evaluated.
We begin our analysis by stating our understanding of what
the Supreme Court in Holmdel decided and what it did not decide.
Importantly, the Court held that “development fees are the
functional equivalent of mandatory set-asides; and it is fair and
reasonable to impose such fee requirements on private developers
when they possess, enjoy, and consume land, which constitutes the
primary resource for housing. Such measures do not offend the
zoning laws or the police powers.” Holmdel, supra, 121 N.J. at 573
(citation omitted). Not only did the Court determine that such fees
are authorized by the Municipal Land Use Law (MLUL) and
general police power, but it held that such fees were authorized by
the FHA which
4. We use the phrase “potential power” because the AO advises the reader of
COAH'’s intent to promulgate regulations enabling municipalities to validate prior
conduct under certain circumstances. We are now aware that COAH has promulgated
such regulations and that there is an appeal pending which challenges them. We have
specifically declined to address the particular regulations because the appeal was not
perfected by the time these matters were heard.
lla
Appendix A
confers on a municipality a broad range of
general powers, including the authority “to
provide for its fair share of low and moderate
income housing by means of any technique or
combination of techniques which provide a
realistic opportunity for the provision of [its]
fair share.” [Jd. (citation omitted). ]
* * *
Mandatory development fees that do not
violate COAH requirements and otherwise
meet standards of reasonableness are not
inconsistent with the FHA. They may be fairly
regarded as “other techniques proposed by the
municipality.” [/d. at 574 (citation omitted). ]
However, the Court specifically declined to “determine the
validity of uncompensated fees as applied by the municipalities in
the cases now before us” perhaps because it remained to COAH “in
the first instance to develop a comprehensive system of
development fees.” /d. at 576. The Court then found that COAH’s
exercise of rule-making authority in this area was “incomplete”
because it had not specifically addressed mandatory development
fees. Although finding that rule-making was necessary, the opinion
recognized that COAH had taken action in these cases suggesting
“an understanding that these measures are not invalid or ultra
vires.” Id. at579. The Court noted that COAH approved each of the
municipality's housing plans which had included the builders’ fee
ordinances in question but failed to pass specifically on them
finding that they were “‘not required to implement the fair share
plan.’ ” Jd. at 579.
12a
Appendix A
In essence, the Supreme Court found that COAH imperfectly
exercised its jurisdiction because “the development-fee
ordinances were subject to review and certification by COAH as a
constituent part of the housing-element plan of the respective
municipalities.” Jd. The Court then suggested that 1) COAH adopt
regulations on the subject for the purpose of enabling courts “to
determine that persons subject to such ordinances have been
reasonably informed of their obligations,” id., and 2) “both
municipalities and COAH in the adoption and approval of such
ordinances are acting in conformity with the legislative intent of
the FHA.” Jd. at 579-80. Consequently, in the absence of
regulations the Court felt “constrained” to set aside the ordinances,
id. at 580, because they were “not validly adopted.” Jd. at 585.
Lastly, the Court affirmed the Appellate Division’s ruling that
the New Jersey Builders Association lacked standing in the
Chester Township matter to assert damage claims on behalf of its
members. However, it acknowledged that the dismissal of the
damage claim was “without prejudice to the right of individual
members to seek refunds in separate actions.” /d. at 586 (emphasis
added). Thus, we agree with the trial judge in the Holmdel case,
that the Supreme Court did not mandate that the money be
refunded to the builders and developers as a matter of course. The
words used by the Court were that individual members would have
an opportunity to “seek” such refunds. Jd.
Undoubtedly, the Court recognized that the invalidation of the
ordinances would not necessarily require a complete refund. In
such matters, issues concerning the disruption of governmental
policies and other equitable considerations determine whether a
decision of this nature should be given prospective effect only, see
Salorio v. Glaser, 93 N.J. 447, 465-67, cert. denied, 464 U.S. 993,
78 L. Ed.2d 682 (1983); Borough of Neptune City v. Borough of
13a
Appendix A
Avon-by-the-Sea, 61 N.J. 296, 310-11 (1972), retroactive effect,
see New Jersey Builders Ass'n v. Bernards Tp., 108 N.J. 223, 238
(1987); Mill Race v. Mayor of Bernards Tp., 230 N.J. Super. 160,
167 (App. Div. 1989), or partial retroactive effect, see Automatic
Merchandising Council v. Township of Edison, 102 N.J. 125, 131-
132 (1986); In re Fees of State Bd. of Dentistry, 84 N.J. 582, 589
(1980). Although the records before the trial judges in the Chester
cases and the Holmdel case are not complete, we assume that the
trial judges in those cases recognized the relevancy of such issues,
at least in part, and thus declined to enter full summary judgment in
favor of plaintiffs. Thus, standing alone, considerations of such
issues requiring as they do the development of a full record would
be sufficient to reverse the summary judgments entered in the
South Brunswick and Cherry Hill cases which were final.
More importantly, however, the Supreme Court did not decide
whether COAH could promulgate regulations having the effect of
validating prior municipal action. Indeed, it had no occasion to do
so since COAH was not a party to that litigation and had not
declared its intent to promulgate such regulations prior to the
decision. Each of the trial judges, with the exception of the trial
judge in the Holmdel case, found that COAH could not possibly act
SO as to permit validation of the subject ordinances. We disagree
with their conclusion. It is important to reiterate that the ordinances
in question were authorized by statute, i.e., the MLUL, the general
police power, and the FHA. Thus, they were not ultra vires acts by
the municipalities. The distinction is important.
It is elemental “that if a municipal body or agency has the
power to act, but has failed to follow exactly the proper procedures
to exercise that power, its irregular, but not ultra vires, action may
be subsequently ratified.” Ferreira v. City of Asbury Park, 237 N.J.
Super. 142, 162 (App. Div. 1989). Here, the municipalities were
statutorily authorized to act. However, the Supreme Court was
ida
Appendix A
unable to determine the validity of the uncompensated fees “as
applied,” Holmdel, supra, 121 N.J. at 576, because it could not
compare the ordinances against “[rjegulatory standards” to
ascertain whether they were in conformity with legislative intent as
interpreted by COAH. /d. at 579-80.
Unlike the usual case in which a municipality may correct its
prior invalid act, validation of the prior invalid acts in this case is
dependent on COAH’s administrative rule-making. In the context
of this case, it is readily apparent that such administrative rule-
making is legislative in nature. Shapiro v. Essex Cty. Bd. of Chosen
Freeholders, 177 N.J. Super. 87, 95 (Law Div. 1980), aff’d, 183
N.J. Super. 24 (App. Div.), aff’d, 91 N.J. 430 (1982). COAH’s AO
expressed its intent to promulgate regulations having the effect of
curing prior, imperfectly executed ordinances. In a general sense,
legislative action can be specifically designed to enable a
municipality to validate prior conduct. Such action is considered
curative, thus permitting retrospective validation even where the
initial municipal action may have been considered void. See
Edwards v. Mayor of the Bor. of Moonachie, 3 N.J. 17,21 (1949). If
the Legislature can promulgate curative legislation having the
effect of validating municipal conduct which at its inception was
void, id., we see no reason why an administrative agency cannot by
properly exercising its rule-making authority cure municipal
action which was not void ab initio.
While legislation and regulations are generally applied
prospectively, Gibbons v. Gibbons, 86 N.J. 515, 521 (1981); In re
Appeal of Adoption of N.J.A.C. 7:7A-1.4, 118 N.J. 552 (1990),
rev'd on dissent, 240 N.J. Super. 224, 239 (App. Div. 1989), there
are recognized exceptions to the general rule. Gibbons, supra, 86
N.J. at 522; see Carnegie Bank v. Shalleck, —N.J. Super. — (App.
Div. 1992). A statute or regulation can be applied retrospectively
where 1) the legislative body has expressed the intent to do so, 2)
15a
Appendix A
the legislation is ameliorative or curative, 3) the expectations of the
parties warrant retroactive application, and 4) manifest injustice to
the adversely affected party does not result. Gibbons, supra, 86
N.J. at 522-23. The AO on its face expresses COAH’s intent to pass
regulations that are curative with the express intent to allow
municipalities to retroactively validate prior conduct. We cannot
pass on the merits of the third or fourth elements of the test without
a more complete record.
We reiterate that we are now deciding only the question of
whether COAH has the potential power to pass curative
regulations and whether the municipalities have the potential
power to validate prior ordinances that were not ultra vires their
power to enact. We do not pass upon the regulations as
promulgated or municipal conduct taken in response thereto. It is
necessary only to point out that the decisions of the trial judges in
the Chester, South Brunswick and Cherry Hill cases on this point
were premature. Recognizing the potential for COAH to act
appropriately in this field, the trial judges should have deferred
further action for a reasonable period of time in the “spirit of
comity.” Board of Educ. of Asbury Park v. Asbury Park Educ.
Ass'n, 145 N.J. Super. 495, 510 (Ch. Div. 1976). In our view the
complex issues now presented in this litigation can be rationally
decided only after COAH has been permitted to exercise the power
which the Supreme Court in Holmdel recognized and the challenge
to those regulations has been disposed of by this court. Thus, the
trial judges should stay the subject actions until “the predicates for
judicial disposition of the controversy as initially raised before
[them are resolved].” Daaleman v. Elizabethtown Gas Co., 150
N.J. Super. 78, 84 (App. Div. 1977), rev'd on other grounds, 77 N.J.
267 (1978).
Finally, we address the question of whether Cherry Hill’s
mandatory development fee ordinance was improperly adopted in
16a
Appendix A
that the fee was increased from one percent to three percent by
resolution after the first reading of the ordinance. That issue was
properly before the Law Division judge irrespective of the validity
and effect of the COAH AO. See Alexander's Dep't Stores of N.J. v.
Borough of Paramus, 125 N.J. i00, 112-13 (1991). The attempt to
change a significant provision of the ordinance by resolution
between the first and second reading renders the ordinance
invalidly adopted. The substantial change required republication
because of the additional burden on those affected. See Gilman v.
City of Newark, 73 N.J. Super. 562 (Law Div. 1962).
However, the defect in the ordinance claimed by Cherry Hill
Properties Corporation (CHP) is purely a procedural one and quite
capable of detection upon passage by anyone who was affected by
it. The ordinance as first published called for a one percent fee
whereas the ordinance as adopted called for a three percent fee. At
the time of adoption, CHP had obtained preliminary site plan
approval and was in the process of obtaining final site plan
approval. It cannot contend that it was unaware of the discrepancy
which was a matter of public record. Such procedural deficiencies
can be cured by appropriate action by the municipal governing
body. It is for that reason that challenges of this nature must be
presented within the time limitations provided in R. 4:69-6. Trust
Co. of N.J. v. Planning Bd. of the Bor. of Freehold, 244 N.J. Super.
553, 560 (App. Div. 1990). Unlike the claims which undergirded
the Supreme Court’s decision in the Holmdel case, this challenge,
limited as it was to a procedural defect, is neither of constitutional
dimension nor of great public interest. Thus, there is no just cause
to extend the forty-five day time limit permitted by the provision of
R. 4:69-6(c). We hold that CHP’s claim on this particular issue is
time-barred.
Finally, CHP contends that the Cherry Hill ordinance is
invalid as applied to it because it impermissibly altered the terms of
17a
Appendix A
CHP’s preliminary and final approvals. The issue was initially
raised by CHP in a footnote in its brief before the trial judge.
Although it was addressed by the defendant Township and again by
CHP in its reply brief, the trial judge did not decide the issue. In any
event, we conclude that the issue is without merit. R. 2:11-3(e). A
builders’ fee ordinance such as the one adopted by Cherry Hill is
unrelated to any of the conditions over which the Cherry Hill
Planning Board would have jurisdiction in granting preliminary
approval.
The final judgments under review involving the Township of
South Brunswick and the Township of Cherry Hill are reversed. All
matters are remanded to their respective trial courts for further
proceedings the nature of which must necessarily depend upon the
outcome of the appeal now pending challenging the regulations
passed by COAH.
Thereby certify that the foregoing is a
true copy of the original on file in my
Office.
s/ [illegible]
Clerk
18a
APPENDIX B— ORDER OF NEW JERSEY SUPREME
COURT, FILED NOVEMBER 24, 1992
SUPREME COURT OF NEW JERSEY
C-365 September Term 1992
35,470
MORRIS INDUSTRIAL BUILDERS, INC.
Plaintiff-Petitioner,
v.
THE TOWNSHIP OF SOUTH BRUNSWICK, etc. et al.,
Defendants-Respondents.
AND OTHER RELATED MATTERS
ON PETITION FOR CERTIFICATION
To the Appellate Division, Superior Court:
A petition for certification of the judgment in A-6073/6080-
90 and A-205/206/394/429-91 having been submitted to this
Court, and the Court having considered the same;
It is ORDERED that the petition for certification is denied,
with costs.
WITNESS, the Honorable Robert N. Wilentz, Chief Justice,
at Trenton, on this 23rd day of November, 1992.
s/ Stephen W. Townsend
CLERK OF THE SUPREME COURT
I hereby certify that the foregoing is a true copy of the original on
file in my office.
s/ Stephen W. Townsend
CLERK OF THE SUPREME COURT
OF NEW JERSEY
19a
APPENDIX C — EXCERPTS OF TRANSCRIPT OF
PROCEEDINGS OF NEW JERSEY SUPERIOR COURT,
LAW DIVISION, JULY 19, 1991
SUPERIOR COURT OF NEW JERSEY LAW DIVISION —
MIDDLESEX COUNTY
DOCKET NO. W-013004-89 P. W.
GREEK, ETALS,
Plaintiff,
VS.
SOUTH BRUNSWICK, ETALS
Defendant.
TRANSCRIPT OF PROCEEDINGS
JULY 19, 1991
MIDDLESEX COUNTY COURTHOUSE
NEW BRUNSWICK, NEW JERSEY BEFORE
BEFORE
THE HONORABLE C. JUDSON HAMLIN, J.S.C.
APPEARANCES:
VALERIE K. BOLLHEIMER, ESQ.
ATTORNEY FOR PLAINTIFF GREEK
DAVID B. RUBIN, ESQ.
ATTORNEY FOR PLAINTIFF MORRIS
20a
Appendix C
PAUL CATANESE, ESQ.
ATTORNEY FOR DEFENDANT SOUTH BRUNS.
GERALDINE CALLAHAN, ESQ.
ATTORNEY FOR DEFENDANT COAH.
ad * *
[18] have already been dispersed to one builder but may not be
dispersed to him simply because of who was advising the town at
the time.
Now, your Honor when we were here earlier mentioned that
because of the importance and —of land use issues politically and
governmental’ in South Brunswick you wouldn’t necessarily
hold it against the town per se that different legal positions were
taken. That doesn’t mean they were right or wrong, but I think that
whatever happens here, that that can’t be over-looked in how the
Court addresses these issues.
THE COURT: Okay.
MR. RUBIN: Thank you, Judge.
THE COURT: Thank you.
Miss Callahan.
MS. CALLAHAN: Thank you, your Honor.
THE COURT: Miss Callahan, before you begin your
2la
Appendix C
argument perhaps you can help me on a couple of questions I might
have. As I understand it from your position, the Council is
currently considering forms of regulations which they now intend
to adopt sometime in the future. Is that right?
MS. CALLAHAN: Yes, your Honor.
[19] THE COURT: Okay. And I’m a little fuzzy on my
administrative law but if I understand correctly I’m asking you
now, first tentative drafts of regulations. Correct?
MS. CALLAHAN: Yes, your Honor. If you’d like, I could give
you a little summary of how the rule —
THE COURT: And then from there you advertise and have
hearings published.
MS. CALLAHAN: Correct. You don’t necessarily have to
have hearings. You allow the opportunity for comment.
THE COURT: Comment. Okay.
MS. CALLAHAN: And generally that is written —
THE COURT: And that is a formal adoptive process.
MS. CALLAHAN: Yes.
THE COURT: Okay. And I suppose they’ve been doing this
since January or at least since the Holmdel case was decided.
MS. CALLAHAN: Yes, your Honor.
22a
Appendix C
THE COURT: When would you anticipate the Council would
have these adopted regulations?
MS. CALLAHAN: Finally in place I would [20] guess
December and —
THE COURT: Would you bet me, would you be willing to pay
all your co-counsel for lunch? There’s a restaurant here called La
Fontana. It’s very expensive.
MS. CALLAHAN: I know that one.
THE COURT: Would you be willing to buy lunch for
everybody if these aren't formally adopted by December?
MS. CALLAHAN: Almost, your Honor.
THE COURT: Out of your own pocket?
MS. CALLAHAN: Almost, because —
THE COURT: Almost?
MS. CALLAHAN: I say almost because I’m fairly certain that
they will be done by then because, number one, the Council already
had proposed regulations, orders in June. They did not formally
propose them in the New Jersey register because some policy
issues needed to be ironed out, so they anticipate to have all that
ironed out for the proposal to go in the register for August or
September.
Then there’s also a thirty day comment period. Then after that
the agency can adopt the regulations.
23a
Appendix C
[21] THE COURT: Do you think that this issue will be
addressed very shortly before the election?
MS. CALLAHAN: Your Honor, what the Council is going to
do as far as the Council is not an elective body.
THE COURT: I know that and you know that. But you are not
naive enough not to understand the impact of these kinds of issues
on the public and the population.
MS. CALLAHAN: Frankly, your Honor, I have not heard any
mention at all either, publically —
THE COURT: Of course not. Those things are never discussed
openly. They just seem to happen and after thirty or forty years in
this business you tend to see it happen a couple times. It’s a reality.
You deal with it.
It’s not significant. I was just discussing timing and what
happens when the municipalities that wish to voluntarily become
part of this have to adopt ordinances, do they not?
MS. CALLAHAN: Yes, your Honor.
THE COURT: Okay. And we all know how [22] fast
municipalities move, do their drafting, so would guess that if
everything went as quick as you think it might, somewhere in the
summer of 1992 South Brunswick might have an ordinance in
place that could then be — properiy be challenged.
MS. CALLAHAN: I would hope it would be before then.
THE COURT: I know you would hope.
24a
Appendix C
MS. CALLAHAN: I can not guess as to what would happen.
THE COURT: Okay. And of course you would agree, given
the issues that are involved in the legal history, that no matter what ~
happens there certainly would be a challenge in the Court, both to
the ordinance and to the regulations again.
MS. CALLAHAN: Yes, your Honor.
THE COURT: Which probably would not be resolved until the
Supreme Court resolution two years after that. So we'd be talking
about holding on to this money somewhere until 1994, 1995 until
the resolution of the issue.
MS. CALLAHAN: Your Honor, the money is being held in a
separate interest bearing account.
(23] THE COURT: I understand that. That wasn’t my
question, Counsel. We can reasonably predict under your scenario
at least another four years before these people even will have an
opportunity under your suggestion to get their money back, if in
fact they are entitled to it.
MS. CALLAHAN: Your Honor, I’m not willing to predict
how long it will take.
THE COURT: Okay.
MS. CALLAHAN: I think the important thing we have to
remember here is suppose the Council goes ahead and does exactly
what it says going to do right now and your Honor orders the funds
to be returned and those funds are returned.
25a
Appendix C
Practically speaking, since your Honor seems to like to look at
the reality of things, practically speaking, the towns aren’t going to
get that money back. The builders are going to have the money
back. The money’s going to be gone.
And if the Council is upheld throughout all the various appeals
that probably will take place, that money will be gone.
THE COURT: Well, that assumes that you. . . .
« * *
[45]... was adopted. They paid the money on that ordinance
and now we really have to correct what amount to the deficiencies.
THE COURT: I compliment you on your cleverness. Go
ahead. What’s next?
MR. CATANESE: That’s it, your Honor.
THE COURT: Okay. Thank you.
The matter before the Court presents an_ interesting
combination of social, political, and legal concerns. When I talk
about social and political I do not mean to imply that those things
play a part in the conclusions that I would reach. I mean to imply
them in the broadest and best sense.
It deals with public policy regarding priorities of this State and
the people of this State in regards to housing, and how to deal with
the provision of housing for persons who are generally decided or
conceived to be unable to afford them.
Those are significant policy decisions beyond the realm of this
26a
Appendix C
Court, but they nonetheless are present and only a Court of unusual
obtuseness would be unaware of them.
Whether or not as a matter of social [46] policy it is better fora
government to provide housing or the private sector is beyond the
purview of this Court, although concededly there are significant
_ arguments made on both sides of the issue, but it deals with an
extremely significant social goal and a manner of achievement.
COAH indeed probably owes its existence to precisely that
tension that exists between the executive, legislative, and the
judicial branches in this regard.
I don’t think it uncommon to say that indeed many of the
comments in many of the articles that appeared shortly after Mount
Laurel One and Two that dealt extensively with these issues raised
them.
There is a substantial body of opinion which concluded that
the Supreme Court acted in the void of action by the Legislature to
create remedy that some would argue was beyond the purview of a
judicial body.
By the same token there are others who applauded that action
as being Constitutionally mandated and dealing specifically with
the responsibilities to the Supreme Court. Be that [47] as it may, it
was a groundbreaking and unusual action by a Court in almost any
State in the union.
It necessarily caused tension between the legislative branch
and the judiciary because clearly in order to carry out the mandates
of Mount Laurel, clearly actions of other branches of government
had to be undertaken to complete or at least carry out the process.
27a
Appendix C
Thus in the context of a public out-cry COAH was created as a
way of dealing with the somewhat unwieldy efforts of the Mount
Laurel Court to establish or start resolving all manner of municipal
land use that would still be consistent with what may be an out-
dated idea of home rule in the State.
COAH was the agency to which the Legislature and the
judiciary could retreat without confrontation and try to permit a
more orderly and more consistent attack on a problem at hand.
That, however, is not, of course, an abdication of the
responsibilities of the judiciary in general of overseeing
administrative agency to determine if they comply [48] with
minimal Constitutional guaranteed standards.
Those considerations, and because those things came about in
that way, are much the reason why this continues to remain a
wellspring of litigation, misunderstanding, and error.
Thus many years after Mount Laurel and COAH, I have yet to
see empirically reliable studies to indicate how many homeless or
low income people really have been provided affordable housing.
Affordable housing may well be argued to be less expensive
housing, but still not affordable to the reach of the average fifteen
or seventeen thousand dollar worker in this State.
We've done things like cluster zoning. We’ ve reduced other
requirements. We’ve done a whole number of things. We’ ve done
this wonderful business of trading money for housing units
wherein more wealthy communities are able to give money to less
wealthy communities to absorb their housing obligations. That has
been sanctioned, but it’s an interesting development given the
alleged overall social policy considerations that might be
accomplished.
28a
Appendix C
The instant case presents several issues [49] for this Court to
resolve directly. Concededly Judge Stanton has reached a
resolution on his cases and he has expressed his opinion. I might
say Judge Stanton is a well-respected, thoughtful, reflective judge.
In our business there are some of us who are more or less able
to deal with complicated issues. Certainly Judge Stanton’s
reputation is one as being able to deal both in sophisticated and
complicated areas with competence and indeed with compassion.
Judge McGann’s reputation needs no comment by me. He is a
pragmatic, intelligent judge whose reputation is equally worthy in
the Courts.
Having said that, their issues deal some respect in some small
differences with some of the issues I have to deal with here but
nonetheless reach the bottom number of the same issue and quite
properly this will wind up in the Appellate Division. Whether I do
it by way of order of transfer or whether I do it by way of judgment
and order, it will wind up in the Appellate Division and eventually I
expect the Supreme Court.
And it is not improper, given the [50] different posture of the
different issues in the different counties, that it may well be, in
terms of effective judicial resolution, for the Appellate Division or
the Supreme Court to have before it cases in varying postures and
procedural situations so they will have the opportunity rather than
raise issues sua sponte, as the Attorney General points out, much to
the surprise of all litigants and to the generation of further
litigation, to have a broad and varied set of alternatives open to
them so instead of inventing something new, that they may pick
and choose something that reflects their evaluation of the situation.
29a
Appendix C
Now, let’s deal with one issue at a time. The first issue I think
deals with the jurisdiction and the authority of this Court to deal
with the case given the promulgation of the administrative order
which is dated — what’s the date of Mr. Griffith’s order? Looks
look January nineteen. Am I correct?
MS. CALLAHAN: It’s twenty-eighth, your Honor.
THE COURT: Twenty-eighth.
MS. CALLAHAN: Yes.
{51] THE COURT: Okay. While these cases bear docket
numbers subsequent to the original action, clearly the issues in
dispute and the claim for relief has been before the Courts of this
County long before this administrative order and indeed were
disposed of by an order of Judge Figarotta wherein not only did he
determine that the South Brunswick ordinances either were invalid
or invalidly adopted, but not of legal dimension which could
warrant the exaction of monies from private citizens and ordered
the return of those funds.
The matter wound its way through the Courts and eventually
wound up consolidated with the Supreme Court cases and resolved
by the Supreme Court of the State of New Jersey. They resolved the
matter from the existing facts and existing orders and existing body
of law.
The only thing that they left open was the concern expressed
by the Court below and that is that in terms of actual return, the
industrial or professional group that had the standing to challenge
the regulations were not the ones who could seek the returns and
indicated that those returns would have to be sought separately.
30a
Appendix C
[52] As Judge Stanton, I do not for a minute read into that the
idea or the foreseeability by the Supreme Court of what
subsequently happened in this action. I think in the context of the
cases as they arose and the orders before them, which in this case
were Judge Figarotta’s orders required the money to be returned,
indicated, at best, a mechanical or procedural relief by individual
builders or persons who paid these exactions to determine the
specificity of the nature of their claims and the exactness of the
monies paid. That’s all. I don’t think it anticipated anything else.
What followed was a proposal by COAH for the governor's
signature. It’s not important why this matter was not signed or
whether it was withdrawn or whatever. The bottom line is that the
chief executive of this State took no action in regard to the
proclamation of emergency or other conclusions or orders that
might have been promulgated by him. But what’s important and
what’s interesting is, in the letter of transmittal to Governor Florio
dated January eleventh by Chuck Griffiths, the first sentence
indicates I think the overriding concern that’s [53] exhibited here.
Dear Governor Florio, quote, we have an immediate
opportunity to retain in excess of thirty million dollars for
affordable housing investments while creating construction and
related jobs and income in our State, close quote. We got the
money. The fact that we got this money illegally, folks, let’s hold
on to it.
For whatever reason, whether it was withdrawn or otherwise,
it was not signed. Thereafter Mr. Griffiths promulgated on behalf
of COAH the emergency administrative order which in essence
presumed to direct all municipalities of the State of New Jersey
who had funds on deposit pursuant to these ordinances to keep
them, promising that sometime in futuro some regulation would be
3la
Appendix C
promulgated which might comply with the requirements of the
Supreme Court if the municipalities chose to adopt ordinances
consistent with it.
As is evidenced by colloquy today, there is no clear schedule.
There are some fond hopes that it will be done sometime by the end
of this year and that perhaps all the public bodies will act in
appropriate fashion sometime by the middle [54] of next year or
perhaps a little later, which would only then for the first time,
following COAH’s argument, would permit the plaintiffs here to
challenge the sufficiency of those ordinances and regulations in an
attempt to get back the money that was concededly paid pursuant to
an invalid, whether you call it an invalidly adopted or invalid in
general, an ordinance which had no legal effect and under which
Constitutionally is the only way a public entity, whether it be a
legislature or a municipality or a county can exact from private
persons monies.
There’s only certain ways in a republican or a democratic
society — I use those with the small letters — that governments
may extract from its citizens money. That indeed is that which
separates us from other forms of government.
And it is not, as I’ ve ever understood it, in our Constitutional
process permitted that monies may be held or obtained by a simple
letter of an appointed public official. It frankly staggers the mind.
But be that as it may, the question here is: Does this constitute
the type of regulatory [55] action which, by Appellate rule, can be
asserted only before that body? This Court concludes that the
answer to that is no. I conclude that the answer is no for two
reasons. First, that where litigation has already begun, has been
subject to judicial control and determination, indeed to disposition
32a
Appendix C
by the Supreme Court of this State, under those circumstances a,
quote, administrative order, close quote, not a rule promulgated
consistent with the requirements of rules or regulations, is
insufficient to rise to the level of a quote rule or quasi-judicial
determination of an administrative agency, close quote, which
gives rise to exclusive jurisdiction of the Appellate Division.
Rather I construe this letter to be precisely what it is, a stop-
gap holding action, without standards. Not quasi-judicial. Not
quasi-anything. And under those circumstances does not rise to
that level.
I also point out that the Court, once it undertakes jurisdiction
of a particular matter, may not be deprived of jurisdiction by some
formal action such as a letter from Chuck Griffiths. It is simply, just
because you write [56] on the letterhead of something called
COAH, doesn’t mean it’s a rule or a quasi-judicial action.
And that’s really frankly the only indicia of official action that
we have is the letterhead. And I’m saying it very directly and I
suppose very cruelly, but I want to frame the issue directly for the
Appellate Division to give them a broad range of conclusions that
they deal with. They’re free to reject it, but they’re also free to
accept it.
So for those two reasons, A, it’s already a matter of judicial
determination, B, that it does not rise to the level of a ruling making
it a judicial action. I’m not satisfied that the Appellate Division has
exclusive jurisdiction. This Court does have jurisdiction. The
motion to transfer is denied.
Now, to reach the merits of the cause, let me deal with a couple
things first. Although you are not put on notice, Miss Callahan,
33a
Appendix C
there was last week an application on behalf of Mr. Mezey’s client
for a turnover of funds.
In that regard I’m not quite sure how the Sheriff gota levy by a
party not named in the [57] original litigation, but I am satisfied
that given the clear statement of the Supreme Court that individual
parties would have to make individual claims, that that envisages
not mere! obtaining a writ of execution under the original caption.
It envisions a claim made upon a municipality and, failing their
payment, separate litigation with a separate caption.
Under those circumstances a levy previously entered in this
matter by Summerfield Suites Development Company was
improvidently granted, is ineffective and shall be vacated.
If you want to get that money you have to do it by independent,
separate action.
Mr. Catanese, I ask you to submit an order in that regard.
As to the issue of Summary Judgment, I’m not satisfied that
any material issue of fact exists in this case. The motion to strike
the late answer is denied. I am not satisfied that it — maybe it’s not
procedurally correct, but I don’t have to reach that issue.
I will permit that issue or that answer to be filed and to be
retained. But I am not satisfied that the sole issue that raises here is
[58] to the entitlement or whether or not a rebate may or may not be
due from Morris or any other persons is an issue which affects the
claim before the Court and accordingly I am satisfied that all the
other matters are concededly resolved.
The only question is the legal effect of the action of the
34a
Appendix C
Supreme Court and the current litigation. It’s ripe for Summary
Judgment, and in this regard I observe two things. First, that the
original order upon which the appeal is based not only concluded
that the ordinances were improper, but ordered their return,
ordered the return of fees and indeed South Brunswick under*ook
to return the principal fees paid in the one captioned matter and
declined to pay the interest and then in others only declined to pay
completely.
I’m satisfied that the effect of the lower Court order, once a
disposition is made on the merits, is appropriate and effective, and
was not vacated by the Court other than to indicate that individuals
would have to apply for the money as opposed to the group
representing all of them.
Under those circumstances I’m satisfied [59] that Summary
Judgment should be granted, that the monies on deposit with the
Township should be turned over.
But alternatively and further I think I have to deal with the
order which has received somewhat rough handling on my part.
I’m afraid I badgered Miss Callahan somewhat, not because I in
any way am hostile to her. Her brief is well-thought out. She does
what an adversary had to do. Did good research. Argued her
position as diligently and as completely as possible.
But as J zeview the matter, the fatal aspect of this is that what
COAH’s trying to do is frankly what astonished Judge Stanton and
astonished me and what we are doing here is determining that a
public body which may act only within Constitutional legislatively
mandated standards exacted monies from private citizens pursuant
to an ordinance which had been declared illegal, thus the monies
which were paid and are kept are illegal and obtained without
authority.
|
35a
Appendix C
What COAH now seeks to do is to now hold the money raised
on the theory that money is a scarce resource and in Mr. Griffiths’
letter it says analogous, he uses that word, analogous to [60] the
scarce resources.
The scarce resource theory talks about things that which, in
equity, we used to call irreparable things, things which cannot be
replaced.
If there’s one common concept in the law is that money is not
irreplaceable or irreparable harm. Legal damages have always
been considered something that is not quote irreparable.
Money, although it may be difficult to obtain, is not a scarce
resource. I may not have it, you may not have it, but somebody's
got it. It’s out there.
And I think the reasoning which substantiates or which
validated the earlier decisions recognizing the scarce resource
order as being within the purview of COAH and within their
Constitutionally mandated standards does not apply where the res
we’ re talking about is a replenishable source.
Sure you want it. But you hold it illegaily. You attempted to.
I really don’t understand and I rule here as a matter of law that
any regulation, even one validly adopted in futuro and validly
adopted by [61] the municipality, would constitute an ex post facto
rule or regulation, and you cannot now resuscitate that which was
exacted iliczally in the first place. Hiding the gun after the robbery
doesn’t make it legal.
And I sorule. There are interesting questions.
36a
Appendix C
Getting to the policy question, which is not paramount in the
context of what I am doing now, the answer is that COAH
governmental bureaucracy is going to better provide housing and
better dispose of the thirty million dollars that was in place and that
it will create some social good. And without being an advocate, I
can see the other side of that coin and I’m sure all of you are
intelligent enough to see the other side of that coin also. Builders
are going bankrupt in the State Jersey left and right. In the long haul
that is not a healthy economic development for the State. They are a
resource.
Do I iike builders? Do we like anybody who goes up and
knocks down a farm and trees and builds up houses and shopping
centers? No. I don’t like that. I don’t want to see that. I [62] want
my state to stay the same as it is right now. But that’s not the issue.
Well, we’re saying yeah, we want to hold your money. Well,
how long are you going to hold my money? You got my money.
How long are going to hold it? A year? years? Four years maybe?
Gee. I might go out of business. My employees are going to go out
of business. They’ re going to lose their jobs.
That, that housing tract that I had options on and mortgages
on, I’m not going to be able to service the mortgage.
Well, the bank’s going to come in. But the value of the
collateral that they gave me the money on four years ago has
depreciated. Given the housing market now the bank probably
doesn’t even want it. And if they do wan: ‘t, what are they going to
do with it? The bank might have some problems because then
they’ ve got collateral that isn’t going to match the loan.
Do we have any banking problems now? I think we do. The
answer is nothing happens in a vacuum.
37a
Appendix C
Sure you want it. Sure you want to build houses. But there’s an
effect on the other side [63] of the coin which while I can’t properly
concern myself with because I must properly apply the law, but you
have to look at the overall housing development in the State
provided by the State private developers. I think I have to look at
that and that’s why I get back to the fact or why, in colloquy, I
talked about the fact that there may be other policy considerations
which might be given rise to sometime in the future. Nothing is
done in a vacuum.
We have an entirely different housing economy now thar. we
did five years ago, ten years ago, or when Mount Laurel came
down. It may well be that some of the regulations in practice have
proved to be impractical, and there’s no guarantee that these
regulations will ever be adopted or, if so, when because the make-
up of the bodies would be different, and the thrust, the policy thrust
that may be put upon it may be different, which gets me back to the
colloquy asked, if this order is valid that has been promulgated by
Mr. Griffiths, it’s valid. If it’s invalid, it’s invalid. If it’s invalid for
Constitutional standards, it’s invalid for Constitutional standards.
Invalidity will not [64] arise next June, next December, May of
1992, or June of 1994 if I have to judge the legality of the public
action.
This thing put on the letterhead of the Council for Affordable
Housing doesn’t give me a Constitutional standard to do so.
Clearly even in Counsel's argument she concedes that if the
regulations were not adopted over an extended period of time there
would be some Constitutional deprivation.
Well, the money is being held without legal authority now and
this letter doesn’t give rise to, quote, legal authority, close quotes,
38a
Appendix C
and under those circumstances I’m fully and completely satisfied
that Summary Judgment in Greek, Timber Ponds, and Morris
Industrial should be granted and is granted, and I will order the
return of the funds in question.
* * *
This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.