# Opposition Brief — Morris Industrial Builders, Inc. v. Township of South Brunswick

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## Record

- **Collection:** Supreme Court brief
- **Document type:** Opposition Brief
- **Published:** January 1, 1993
- **Citation:** 507 U.S. 1031

## Text

No. 92-1396

In The

Supreme Court of the United States

+
October Term, 1992

MORRIS INDUSTRIAL BUILDERS, INC., a New Jersey
Corporation,

Petitioner,

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.

On Petition for Writ of Certiorari to the Superier Court of
New Jersey, Appellate Division

RESPONDENTS’ BRIEF IN OPPOSITION

JOSEPH J. BENEDICT
Counsel of Record
BENEDICT AND ALTMAN
Attorneys for Respondents
247 Livingston Avenue
New Brunswick, New Jersey 08901
(908) 745-9000

DORIS E. McNEIL
On the Brief

Lx late BOO) 3 APPEAL + (B00) 5 APPEAL + (900) BRIEF 21

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TABLE OF CONTENTS

Page
COROUUIOMB OD FTUOGICNIOD onc vce ccccwcencnesancces ]
| CTCL ETT TTT Te CTT eT Tee 4
Reasons for Denying the Writ .... 1... cece ccc c cece 7
GEE 5 6 6 enhanaseusebal KRRaReee ead eesecune 13
TABLE OF CITATIONS
Cases Cited:
Adams Nursing Home of Williamstown, Inc. v. Mathews,
A OUT F COUN Ge OT FD 6k 0 6 8W ed 5000 cea sdeess 10
Chevron Oil Co. v. Huson, 404 U.S.97(1971) ......... 3
Daughters of Miriam Center For The Aged v. Mathews,
590 F.2d 1250, 1262 (3rd Cir. 1978) ............... 10, 11
Drop v. Belleville, 192 N.J. Super. 236, 469 A.2d 934
SIN I fad Sad en rn ee a Cr 7
Ferguson v. Skrupka, 372 U.S. 726, 83 S. Ct. 1028, 10 L.
i Fe eee Te eer Teer er Te re 7

Frank A. Greek & Sons, Inc. v. The Township of South
Brunswick, 257 N.J. Super. 94, 607 A.2d 1359 (App.
Div.), certif. denied sub nom Morris Industrial Builders,
Inc. v. The Township of South Brunswick, 130 N.J. 602,
ee Pere ere rer TT Terre rer 2,9

ul

Contents

Page
Holmdel Builders Association v. Township of Holmdel,
121 N.J. 550, 583 A.2d 277 (1990) .......-.-. 2,5, 6, 7,8, 12
McKesson v. Division uf Alcoholic Beverages, 496 U.S.
lt. ee rerrrrerrrerrr rrr etry colt 2, 42
Mourning v. Family Publications Service, Inc., 411 U.S.
356, 93 S.Ct. 1652, 36 L. Ed. 2d 318 (1973) ......... 10
Pension Benefit Guaranty Corporation v. R.A. Gray &
Company, 467 U.S. 717, 730, 104 S. Ct. 2709, 2718, 81
me) Ft, | eer rere re 7
SEC v. Chenery Corp., 332 U.S. 194, 67 S. Ct. 1575, 91 L.
Bd. DOS (IDET) 2.0 cc ccccvccccsccsuvensessecsnes 10
Shepard v. Woodland Township Committee and Planning
Board, 71 N.J. 230, 364A.2d 1005 (1976) ........-- 7,8
Southern Burlington County NAACP v. Mt. Laurel
Township, 67 N.J. 151, 336 A.2d 713, cert. denied, 423
EFS. GOB CIGTS). occ ccccwvscsvesecesesenec cs eo 3,8
Southern Burlington County NAACP v. Mt. Laurel
Township, 92 N.J. 158, 456A.2d 390 (1983) ........ 8

Williamson v. Lee Optical Co., 348 U.S. 483, 75 S. Ct. 461
99 L. Ed. 363(1955) 2... cccccveccecccccccecees 7

tt

Contents
Page

Usery v. Turner Elkhora Mining Co., 428 U.S. 1, 96S. Ct.

EE TOR CR OPED cece cecesacseseusenes 7,10
Statutes Cited:
IE To Sy 8) eer 2
ER SU eee eee eee ee 4
a kha cece see esiaeescsnccess 5
United States Constitution Cited:
CS ee ee 3
TT ee eee 3
Rule Cited:
United States Supreme Court Rule 10 ................ 2
Other Authority Cited:
CF So SSD” See ere eee eee 2

Hochman, The Supreme Court and the-Constitutionality of
Retroactive Legislation, 73 Harv L.Rev. 692, 705-06
OR ee ee 11

No. 92-1396

In The

Supreme Court of the United States

Sa
October Term, 1992

MORRIS INDUSTRIAL BUILDERS, INC., a New Jersey
Corporation,

Petitioner,

vs.

THE TOWNSHIP OF SOUTH BRUNSWICK in the Countyof

Middlesex, a municipal corporation of the State of New

Jersey, THE TOWNSHIP COMMITYEE OF THE

TOWNSHIP OF SOUTH BRUNSWICK, THE PLANNING

BOARD OF THE TOWNSHIP OF SOUTH BRUNSWICK,
Respondents.

On Petition for Writ of Certiorari to the Superior Court of
New Jersey, Appellate Division

RESPONDENTS’ BRIEF IN OPPOSITION

OBJECTIONS TO JURISDICTION

1. On June 16, i992, the Appellate Division of the Superior

2

Court of New Jersey decided Frank A. Greek & Sons, Inc. v. The
Township of South Brunswick, 257 N.J. Super. 94, 607 A.2d 1359
(App. Div.), certif. denied subnom Morris Industrial Builders, Inc.
v. The Township of South Brunswick, 130 N.J. 602, 617 A.2d 1224
(1992). Therein the Appellate Division reversed the trial court and
remanded the matter for further proceedings at the trial level, with
an instruction that the nature of such proceedings would
necessarily depend upon the outcome of the appeals challenging
the regulations passed by the Council on Affordable Housing
(“COAH”) then pending in the Appellate Division.’ The New
Jersey Supreme Court’s denial of Petitioner’s petition for
certification effectively ratified the Appeliate Division’s remand.
Thus, Petitioner’s case is still pending at the trial level and will
remain so until the question of the COAH_ regulations is resolved.
That being the status of Petitioner’s case, it is not ripe for
consideration by this Court.

2. Procedurally it appears that Petitioner’s submission does
not fall into any of the categories set forth in U.S. Sup. Ct. Rule 10,
28 U.S.C.A. (West Supp. 1992). Even if such categories are not all-

1. Uncertainty as to the length of time it would take COAH to adopt rules
and regulations was a factor in the trial court's decision. Ironically, COAH
promulgated the rules and regulations within the time estimated by counsel for
COAH during oral argument before the trial judge on the motion for summary
judgment (See Petition, pp. 16-20; Petitioner's Appendix C, pp. 20a-25a). The
rules and regulations were adopted in December, 1991, and effective in January,
1992. Petitioner implied, in its Statement of the Case, that the new COAH
regulations automatically allow municipalities to retain the fees collected before
December 13, 1990. Such is not the case. A municipality must apply to COAH
for review of its previous development fee ordinance and a determination as to
whether or not the municipality may retain some or all of the fees collected
thereunder (N.J.A.C. 5:91-15.1, et seg.). December 13, 1990 is the date the New
Jersey Supreme Court decided Holmdel Builders Association v. Township of
Holmdel, 121 N.J. 550, 583 A.2d 277 (1990), which directed COAH to
promulgate rules and regulations and is also the underlying decision upon which
Petitioner relied to prosecute its claim for a refund of the fees paid.

3

inclusive, as indicated in the Rule, it must also be noted that
Petitioner failed to raise any Fifth or Fourteenth Amendment
claims in the courts below until the petition for certification to the
New Jersey Supreme Court. At that point, Petitioner claimed that

“the Appellate Division failed to consider the developers’ Fifth
Amendment due process right to a “clear and certain remedy” for
alleged improperly collected development fees. In that petition, as
in this, Petitioner relied primarily on McKesson v. Division of
Alcoholic Beverages, 496 U.S. 18 (1990), to support its claims.
The petition was denied by the New Jersey Supreme Court.
Petitioner should not be permitted to raise here what it failed to
raise below.

3. Petitioner also raised a question of 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).”
Respondents recognize that Petitioner has, at this stage, merely
submitted the petition fora writ of certiorari and that a brief on the
merits will follow if the petition is granted. However, aside from a
brief reference to the Chevron case and a citation of the case which

+ applies it to New Jersey cases, Petitioner completely failed to
provide this Court with any guidance as to how it believes the
Appellate Division mistakenly applied the law or how this
“mistake” relates to Fifth and Fourteenth Amendment claims.

4. Finally, the entire affordable housing issue in the Staie of
New Jersey, from the original decision in Southern Buvlington
County NAACP vy. Mt. Laurel Township, 67 N.J. 151, 336A.2d 713,
cert. denied, 423 U.S. 808 (1975), through the decision under
consideration here, has always been a matter of state constitutional
law. The New Jersey Supreme Court found that municipalities
have an obligation under the New Jersey State Constitution to
provide a realistic opportunity for affordable housing. The
decisions regarding the mandate to provide such housing, methods
of implementation, codification through the Fair Housing Act

4

(“FHA”),? and the appropriateness of development fees as a part of
the solution to the pressing need for affordable housing in New
Jersey, have all been determined on state constitutional grounds.
The State courts are the appropriate interpreters of the State
Constitution and, therefore, this matter should not be before this
Court. Where certiorari has been sought in past affordable housing
decisions, this Court has denied the writ; so, too, is denial
appropriate in this case.

STATEMENT OF THE CASE

To avoid repetition of Petitioner’s presentation, Respondents
’ merely offer the following additions to the Statement of the Case as
set forth in the petition at p. 3, et seq.

1. Before Respondent Township of South Brunswick adopted
its affordable housing trust fund (development fees) ordinance in
1986, it had submitted to and received the approval of COAH for
the housing plan element of its zoning ordinance. This submission
was in accordance with the rules and regulations promulgated by
COAH pursuant to the FHA. That housing plan element identified
certain tracts of undeveloped land within the Township of South
Brunswick which would be suitable for inclusionary developments
(i.e. those which manditorily included affordable housing units)
and yet fit into the master plan for the-Township. The zoning
ordinance provided that developers of those-tracts could be given
certain compensations, such as density bonuses, for including a
specific percentage of low to moderate income housing within the
development. It was not until after the entire plan was in place that
the Township determined that the plan, while imposing substantial
burdens on those dewelopers who chose to develop the
inclusionary parcels, still would not be sufficient to meet the
Township’s future needs for affordable housing as set by COAH

“ from time to time.

2. N.J.S.A.52:27D-301, et seq.

ee

5

It was only then that the Township looked to those other
developers who benefited from the utilization of the Township's
most finite resource — land — i.e. the developers of non-
inclusionary residential tracts and commercial/industrial tracts,
for their contribution to the municipality’s housing obligation. Ihe
FHA specifically provides that municipalities do not have to
expend municipal revenues to provide affordable housing,
N.J.S.A. 52:27D-31id. In Holmdel Builders Association, supra,
121 N.J. at 573-74, the New Jersey Supreme Court interpreted this
provision of the FHA to mean that the Legislature had determined
that affordable housing does not have to be provided directly by
local governments and that local governments are, therefore,
impliedly authorized to use inclusionary-zoning devices such as
mandatory development fees to generate affordable housing. The
Court found that development fees applied to non-inclusionary
developers are the functional equivalent of the mandatory set-
asides imposed on inclusionary developers. /d. at 576. Contrary to
Petitioner’s implication, the Township is not relying solely upon
funds generated by development fees to meet the affordable
housing mandate imposed upon it by the New Jersey Constitution;
indeed, a substantial portion of that obligation is being met by
those developers who are actually including affordable housing
units in their residential developments.

2. Petit?sner claimed, in n.1 of the petition, that the only
procedure for challenging the development fees was “expensive
and protracted” litigation. In the paragraph following the footnote
reference, Petitioner described that very litigation, which was
undertaken by several builders’ associations. Petitioner was a
direct beneficiary of that litigation (without having borne the
expense of it) in that the New Jersey Supreme Court, in Holmdel
Builders Association, supra, indicated that individual developers
‘could seek refunds of the fees previously paid.

Petitioner also claimed that the Court did not address the

6

taking and due process issues raised by the builders’ associations.
In Holmdel Builders Association, supra, 121 N.J. at 558, the Court
defined the issues it would address:

This appeal raises two major substantive
issues. One is whether there is statutory
authority, derived from the FHA, the
Municipal Land Use Law (MLUL), N.J.S.A.
40:55D-1 to -129, and the general police power
of government, N.J.S.A. 40:48-2, that enables
a municipality to impose affordable-housing
development fees as a condition for
development approval. That issue raises the
related questions whether the development-fee
ordinances constitute an impermissible taking
of property or violate substantive due process
or equal protection. The second major issue is
whether affordable-housing development fees
are an unconstitutional form of taxation.
Finally, if these ordinances are invalid, the
appeal presents the issue whether a trade
organization has standing to seek a refund on
behalf of its members.

After determining that the imposition of development fees
was permitted by the FHA, MLUL and general police powers, the
Court did examine the related constitutional claims. The Court
determined that because the plaintiffs therein did not allege that
they were members of a suspect class, the alleged violations of due
process and equal protection could be resolved by reference to the
validity of the development fees as reasonable exercises of
statutory zoning and police powers. /d. at 581. The Court also
stated that, “As long as the measures promulgated are not
confiscatory and do not result in an inadequate return of
investment, there would be no constitutional injury.” /d. at 582.

eo

7

Finally, the Court determined that the fees were a form of
inclusionary zoning and similar to other land-use and related
exactions and thus were regulatory measures, not taxes. /d. at 585.

REASONS FOR DENYING THE WRIT

“It is by now well established that legislative Acts adjusting
the burdens and benefits of economic life come to the Court with a
presumption of constitutionality, and that the burden is on one
complaining of a due process violation to establish that the
legislature has acted in an arbitrary and irrational way.” Usery v.
Turner Elkhorn Mining Co., 428 U.S. 1, 96 S. Ci. 2882, 49 L. Ed.
2d 752 (1976). See also, Ferguson vy. Skrupka, 372 U.S. 726, 83 S.
Ct. 1028, 10 L. Ed. 2d 93 (1963); Williamson v. Lee Optical Co.,
348 U.S. 483, 75 S. Ct. 461, 99 L. Ed. 563 (1955). However,
retroactive legislation does have to meet a burden not faced by
legislation that has only future effects. The retroactive aspects of
legislation, as well as the prospective aspects, must meet the test of
due process, and the justifications for the latter may not suffice for
the former. Usery v. Turner Elkhorn Mining Co., supra, 428 U.S. at
16-17, 96 S. Ct. at 2892-2893. But that burden can be met simply
by showing that the retroactive application of the legislation is
itself justified by a rational legislative purpose. Pension Benefit
Guaranty Corporation v. R.A. Gray & Company, 467 U.S. 717,
730, 104 S. Ct. 2709, 2718, 81 L. Ed. 2d 601 (1984).

Under New Jersey case law the burden which a party must
bear to show that a legislative action violates due process or equal
protection is substantial. He must show that there is no reasonable
basis for the action, it serves no legitimate legislative purpose and
cannot be justified under any conceivable state of facts. Drop v.
Belleville, 192 N.J. Super. 236, 469 A.2d 934 (App. Div. 1983).
Alternatively, to defend an enactment, the legislative body need
only show that the distinctions drawn further an appropriate
government interest and are not arbitrary. Shepard v. Woodland

Township Committee and Planning Board, 71 N.J. 230, 364 A.2d
1005 (1976).

The government interest here is obvious, provision of low
income housing pursuant to the municipality’s obligation under the
New Jersey State Constitution to do so. The basis for imposing the
development fee only on new non-inclusionary development is
equally clear. The Mount Laurel decisions’ require municipalities |
to regulate land development in such a way as to ensure that lower
income housing needs are met. The New Jersey Supreme Court has
held that municipalities are constitutionally obligated to exercise
their zoning powers in such a way that new development will
include a regional fair share of affordable housing. Developers of
inclusionary sites are mandated by the Township’s zoning
ordinance to do their share. The development fee ordinance allows |
the municipality to obtain funds from non-inclusionary developers
to offset, in part, the increased need for affordable housing created |
by such development, an increased need which is part of the total |
affordable housing need in the Township. Moreover, whether |
development fees are utilized to satisfy an indigenous housing |
need or the need created by the new development, a development
fee ordinance bears a real and substantial relationship to a
legitimate government interest and imposes the fee on a fair and
rational basis.

The New Jersey Supreme Court, in Holmdel Builders
Association, supra, at 579-80, deferred to COAH to specify,
through its rulemaking procedures, standards for development
fees, “so that municipalities may consider employing such fees as
inclusionary-zoning devices in designing their housing elements
under the FHA. Regulatory standards will enable us to determine

3. Southern Burlington County NAACP v. Mt. Laurel Township, supra,
(Mt. Laurel I), and Southern Burlington County NAACP v. Mt. Laurel Township,
92N.J. 158, 456A.2d 390 (1983) (Mt. Laurel II).

EE

9

that persons subject to such ordinances have been reasonably
informed of their obligations, and that both municipalities and
COAH in the adoption and approval of such ordinances are acting
in conformity with the legislative intent of the FHA.” After
describing some of the areas which it expected COAH to include in
the regulations, the Court said, at 580:

COAH, in the exercise of sound administrative
discretion, should consider the desireability
and feasibility of such development fees in the
broader context of the State’s affordable
housing policy. Development fees can be a
valuable alternative that some municipalities
desire to employ in fulfilling their Mt. Laurel
obligations. Moreover, such fees should be
considered constituent parts of local housing
elements designed to meet municipal
affordable-housing obligations under the FHA.
Thus, COAH’s regulatory responsibility in this
area must be acknowledged. Accordingly, we
anticipate that COAH will properly discharge
this responsibility by promulgating
appropriate development-fee regulations.

At that point the Court determined that in the absence of such
regulations, the ordinances at issue in the case had to be set aside
and further agreed that the individual developers who had paid fees
under the ordinances could seek refunds. Some five and a half
months later Petitioner instituted this litigation seeking a refund of
development fees.

The Appellate Division, in the well-reasoned Greek decision,
supra, stated that “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

EEE EEE

10

the municipalities. The distinction is important.” (Emphasis
added) (Petitioner’s Appendix A, at 13a). The Appellate Division
was careful to limit its holding to the issue of COAH’s “potential
power” to adopt regulations and did not pass upon the acceptability
of the content of the regulations.‘ It also set forth in substantial
detail the means by which legislation which was improperly
enacted, but is not unconstitutional or ultra vires, can be ratified or
cured (Petitioner’s Appendix A, pp. 13a-15a). In a challenge to the
retroactive application of a statute or regulation, a critical question
is how the challenger’s conduct, or the conduct of others in its
class, would have differed if the rule in issue had applied from the
start. Daughters of Miriam Center For The Aged v. Mathews, 590
F.2d 1250, 1262 (3rd Cir. 1978), citing to Usery v. Turner Elkhorn
Mining Co., supra.

Retroactive measures — whether promulgated
by a legislature or by an administrative agency
— have traditionally been subjected to stricter
scrutiny than have prospective measures. Thus,

.. the validity of a prospective regulation by
an administrative agency “will be sustained so
long as itis ‘reasonably related to the purposes
of the enabling legislation.’ ” [Mourning v.
Family Publications Service, Inc., 411 U.S.
356, 93 S.Ct. 1652, 36 L.Ed.2d 318 (1973)] In
contrast, “courts have generally compared the
public interest in the retroactive rule with the
private interests that are overturned by it” in
deciding whether to uphold a retroactive
promulgation. [Adams Nursing Home of
Williamstown, Inc. v. Mathews, 548 F.2d 1077
(1st Cir. 1977); SEC v. Chenery Corp. 332 U.S.
194, 67 S.Ct. 1575, 91 L.Ed. 1995 (1947)} Such

4. As previously set forth in n.1, the content of the regulations is the
subject of litigation currently pending in the Appellate Division.

ee

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1]

disparate treatment is justified because
retroactive laws interfere with the legally-
induced and settled expectations of private
parties to a greater extent than do prospective
enactments. Still, retroactive rules designed to
cure defects in regulatory schemes ... are
often sustained because the “interest in the
retroactive curing of such a defect in the
administration of government outweighs the
individual’s interest in benefiting from the
defect.” [Hochman, The Supreme Court and
the Constitutionality of Retroactive
Legislation, 73 Harv.L.Rev. 692, 705-06
(1960)] Daughters of Miriam Center For The
Aged, supra, at 1259-60.

Petitioner has made no claim whatsoever that it or anyone else
would have acted differently if the ordinance had been validly
adopted from the outset. Indeed, non-inclusionary developers paid
the fees, developed their properties, and now want the fees back. If
the Township is compelled to refund all or some of the fees before
the validity of the content of the regulations and the retention of
fees collected under prior ordinances is resolved in the state courts,
there will be no way for the Township to recoup the funds. Land
which has been developed will not generate additional
development fees. If the monies are returned before a final
determination as to the retroactivity of the ordinance, substantial
resources which could be used to further the mandated housing
goals would be lost, with no guarantee that a comparable
Opportunity will ever again exist for the collection of such funds.
As a result, there is a strong public interest in the proper retention
of those funds. Moreover, it has been acknowledged by some non-
inclusionary developers who paid the fees that the costs were
passed on to subsequent purchasers/tenants as a cost of business.
To the extent that such is the case, there is only a limited private

i
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f

12

interest in the return of these funds — indeed, they would be a
windfall to the developers. Therefore, any action by this Court,
other than denial of the writ, would be premature at this point.

Finally, Petitioner relied on McKesson v. Division of Alcoholic
Beverages, supra, to support its claim to a due process right to a
“clear and certain remedy” for alleged improperly collected
development fees. In that case Florida enacted a tax scheme
whereby a party had to pay his taxes in full before there could be a
challenge to the tax’s validity; failure to pay would result in
penalties. This Court found that where a tax is declared
unconstitutional, the state must provide a remedy for the erroneous
or unlawful taxation. Thus McKesson deals with a situation where
a state has collected an unconstitutional tax. In the instant matter
the development fees are neither taxes nor unconstitutional.
Holmdel Builders Association, supra, 121 N.J. at 582-585.
Respondents assert that McKesson is inapposite here. |

13
CONCLUSION

Where Petitioner has (1) raised an issue which is not ripe for
consideration by this Court; (2) failed to raise the constitutional
issue claimed in the petition at the state trial and appellate levels;
(3) raised a constitutional issue as to a matter which has been
developed solely through court decisions based on the State
Constitution; and (4) failed to present this Court with adequate
factual or legal reasons for review of the court decision below, the
petition for a writ of certiorari should be denied.

Respectfully submitted,

JOSEPH J. BENEDICT

Counsel of Record
BENEDICT AND ALTMAN
Attorneys for Respondents

247 Livingston Avenue

New Brunswick, New Jersey 08901
(908) 745-9000

DORIS E. McNEIL
On the Brief

---

Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386011_2153%3A2. Public record. Not legal advice.