New Jersey Eminent Domain Law Blog

Tomorrow May 5 at 10 a.m., the Senate Community and Urban Affairs Committee will take up S-757, the latest version of eminent domain reform, sponsored by Senator Ronald Rice. To read the most recent amendments, download bill S-757. The meeting  will take place in Committee Room 7 on the second floor of State House Annex, Trenton, New Jersey.

Rice is desperate for a second to move the bill, and committee affirmation, so that the bill can be put before the full Senate for action. This belies a critical question: How will this bill will be reconciled with other pending bills - A1492, S559, and S1020, by Assemblyman Burzichelli, Senators Sweeney and Weinberg respectively – which also propose reform to the current version of the New Jersey Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1 et seq. Burzichelli’s bill passed the assembly in June 2006, ironically on the same day that Judge Lawrence Lawson issued his decision in the MTOTSA cases - City of Long Branch v. Brower and Anzalone.

Once again, the forces of eminent domain reform have been summoned to Trenton to testify and demonstrate for change. We expect the League of Municipalities to reiterate what they have said before: The courts have clarified the existing law in the Gallenthin and DeRose cases regarding the requisite substantial evidence required for blight determination and all-important notice provisions to affected property owners. Simply put, their position will be that the recent case law is all that needs to be memorialized in the statutes. We have yet to hear from Senate President Codey or Governor Corzine regarding the progress of eminent domain reform.

In a significant case, widely anticipated by the eminent domain bar, the Missouri Supreme Court overturned a lower court ruling which would have blocked communities from using eminent domain for private development supported by tax concessions on March 18, 2008. Meanwhile, the city has attacked the defendants in the press for defending themselves in the courts when the city condemned their property, as reported by Timothy Sandefur of the Pacific Legal Foundation (PLF). On April 1, 2008, The Pacific Legal Foundation filed a motion for reconsideration with the Missouri Supreme Court.

The issue in the case was whether a provision in the Missouri Constitution that allows so- called charter cities to use eminent domain also prevents non-charter cities from taking private property.  A charter city is defined as a municipalilty which had a minimum of 5,000 people at the time of
its incorporation and whose residents approved a local constitution.

The case, City of Arnold v. Tourkakis, was brought to the court by Dr. Homer Tourkakis, a dentist who practices in the city of Arnold, Missouri. Tourkakis challenged Arnold’s attempt to seize his property through eminent domain proceedings. In a 6-1 decision written by the Hon. Mary Rhodes Russell, the Supreme Court ruled in favor of Arnold, saying the state constitution gives the legislature the power to allow cities to use the power of eminent domain for redevelopment purposes. The court agreed with Arnold, and reversed the lower court.

The Supreme Court said that condemnation is authorized to Arnold for redevelopment of blighted areas under the Tax Increment Financing Act (TIF). The lower court sitting in Jefferson County had distinguished Arnold from constitutionally charter cities, or third-class cities,  with regards to the use of eminent domain to achieve economic development.  There are 37 charter cities in Missouri.

"They're going to put up some fence, and it's going to be in Eagle Pass just to make an example of the mouthy mayor of Eagle Pass." – Mayor Chad Foster, as quoted in the Houston Chronicle.

The Bush administration’s decision to move forward with condemnation to acquire the necessary easements for the construction of the border fence makes very little sense. "I think the way that the Bush administration is going about this, filing eminent domain actions against landowners and municipalities makes no sense," Senator Hillary Clinton said in a recent debate with Senator Obama held at the University of Texas in Austin.

In any taking such as this – a partial taking – the affected property owners will have a claim for the value of the land taken as well as damage to the remainder. The Texas Constitution provides compensation for any property taken or damaged as a result of an acquisition for public use in Article I, Paragraph 17:

TAKING, DAMAGING, OR DESTROYING PROPERTY FOR PUBLIC USE; SPECIAL PRIVILEGES AND IMMUNITIES; CONTROL OF PRIVILEGES AND FRANCHISES
No person's property shall be taken, damaged or destroyed for or applied to public use without adequate compensation being made, unless by the consent of such person; and, when taken, except for the use of the State, such compensation shall be first made, or secured by a deposit of money; and no irrevocable or uncontrollable grant of special privileges or immunities, shall be made; but all privileges and franchises granted by the Legislature, or created under its authority shall be subject to the control thereof.

The border fence project certainly falls within that provision and the damages to the remainder will in all likelihood be a larger issue than the taking itself. We posted earlier that the DHS wanted access to the properties for up to 6 months and the right to remove structures in the way of surveyors and engineers, and each landowner would receive $100 and be reimbursed for any damage to the property. See Don't fence me in with eminent domain (January 24, 2008).

NOTICE: YOUR PROPERTY MAY BE CONDEMNED.  If you own a property in an "area in need of redevelopment," (a.k.a blighted area") you would expect to see those exact words at the top of the notice you receive from a municipality. The notice issue was first discussed on this blog in a commentary about the Shennett case, when the Passaic Redevelopment Agency justified taking Charlie Shennett's land and said they did what they were legally required to do. I wrote then: This is not enough. The notice requirement does not spell out in the text what the ultimate outcome will be: in this case, condemnation and acquisition of the property through eminent domain proceedings. How is this due process?

Yesterday the Appellate Division of the New Jersey Superior Court decided the due process issue in three cases. Writing for the court, Judge Jack Sabatino issued an 88-page opinion, approved for publication, in Harrison Redevelopment Agency  v. De Rose v. Town of Harrison, et al. The companion cases are Harrison Redevelopment Agency  v. Amaral and Harrison Redevelopment Agency  v. Harrison Eagle.

The court ruled that the 45-day limit to file suit against a municipality's effort to blight property for redevelopment is constitutional only if the owner received notice that the action contemplated by the redevelopment may result in the condemnation of their property. The court said:

We hold that, unless a municipality provides the property owner with contemporaneous written notice that fairly alerts the owner that (1) his or her property has been designated for redevelopment, (2) the designation operates as a finding of public purpose and authorizes the municipality to acquire the property against the owner's will, and (3) informs the owner of the time limits within which the owner may take legal action to challenge that designation, an owner constitutionally preserves the right to contest the designation, by way of affirmative defense to an ensuing condemnation action. Absent such adequate notice, the owner's right to raise such defenses is preserved, even beyond forty-five days after the designation is adopted.

Three's a charm.  New Jersey's promised eminent domain reform enters its third year after many iterations of the bill, passed by the Assembly in 2006, failed in the Senate Community and Urban Affairs Committee in 2007, and reintroduced and referred on January 8 to the Assembly Commerce and Economic Development Committee as A1492.  The new eminent domain reform legislation (download the PDF) is the latest attempt by New Jersey legislators (sponsors John J. Burzichelli, Nilsa Cruz-Perez, Douglas H. Fisher,  and Pamela R. Lampitt) to amend the Local Redevelopment Housing Law (LRHL, N.J.S.A. 40A:12A-1 et seq.). The companion bill introduced to the Senate Community and Urban Affairs Committee is S559, sponsored by Senators Steven M. Sweeney, Barbara Buono, and Loretta Weinberg.

The public hearings, drafts of legislation, and testimony for interested parties on all sides of this contentious issue have continued without resolution.  Governor Corzine promised voters during his gubernatorial campaign in 2005 that eminent domain reform would be accomplished early in his administration.  Last year, at one of his public forums in Union Township, the governor said he would sign a bill by the fall of 2007.  The public is still waiting.

Note: Kevin Moore of Sills Cummis and William J. Ward of Carlin & Ward will discuss the current bill, its merits and shortcomings, and the status of eminent reform at the Eminent Domain in New Jersey  Lorman Education Seminar on April 17, 2008, in North Brunswick. For more information about the agenda, faculty, and continuing education credit, click here.

SAVE THE DATE...William J. Ward, Esq., author of the New Jersey Eminent Domain Law Blog, will moderate the Lorman Education seminar Eminent Domain in New Jersey for the third consecutive year on Thursday, April 17, 2008, in North Brunswick, New Jersey.  The seminar is an opportunity for attorneys, real estate appraisers, planners, and other professionals involved in real estate development, land use, and eminent domain practice to participate in a dynamic exploration of current legal issues and obtain continuing education credit. Download the brochure.

This year, in addition to an emphasis on recent case law and eminent domain reform legislation, the agenda will include fair housing, RLUIPA (Religious Land Use and Institutionalized Persons Act), zoning and its effects on highest and best use, contesting the right to acquire property, and the ethics of redevelopment and eminent domain practice. The faculty includes many attorneys and real estate professionals who have been active on the frontlines of eminent domain litigation and legislative reform.

Last year, more than 75 people registered for this seminar. Interested parties can register online beginning Monday, January 28, 2008, at Lorman Education Services, Seminar ID: 377876. There will be a limited number of press credentials available. Interested publications should contact Susan Ward at 973-377-3350.

"Even in the most egregious eminent domain cases, the party whose land is being taken is given his or her day in court. The people of Texas should be outraged by the sneaky, underhanded methods used by the Department of Homeland Security....Informing the city after the judge ruled that their land is already taken is not the Texan or American way of justice." -- Monica Weisberg-Stewart, co-chair of the Texas Border Coalition Immigration Committee, Caller Times

The line most-quoted in Robert Frost's poem Mending Wall reads, "Good fences make good neighbors." But it is the first line that speaks from the deep heart's core and tells us, "Something there is that doesn't love a wall."  Something indeed. History demonstrates that border walls and fences for the most part don’t work. The Berlin Wall came down when the U.S.S.R. lost power during the Reagan administration. The Great Wall of China did not keep out the Mongolian hordes. This week we have seen the Israeli wall around Gaza and along the Egyptian border breached by Hamas, through a few well-placed land mines, in order to allow Palestinans access to much needed supplies. According to the Associated Press, Egypt has not yet indicated how it plans to reseal the border, though it began positioning armored vehicles Thursday along sections of the breached, seven-mile frontier.

Onward to the vast Mexican-U.S. border: President Bush and Homeland Security head Michael Chertoff are committed to build 370 miles of the proposed 670-mile border fence through Texas, California, and Arizona by the end of 2008. Bush signed the Secure Fence Act of 2006 in October 2006, giving the Secretary of Homeland Security 18 months to achieve and maintain operational control over the borders of the United States. The act also provides for the construction of fencing and security improvements along the border area from the Pacific Ocean to the Gult of Mexico. There was an amendment to the act (inserted into a $555 billion spending bill signed into law the day after Christmas 2007 by President Bush). As reported in the Houston Chronicle on January 12, the measure repealed parts of the 2006 law.  But Senator Kay Hutchinson, who was accused by two congressmen of repealing the mandate to build the fence, said the new law, SA 2466, requires govenment to consult with landowners and elected officials as it moves to build 130 miles of fence in Texas.

However, the government will use eminent domain against property owners opposing acquisition and use of their land for this purpose. Municipalities and property owners affected by the fence question the efficacy of the proposed fence and the cost. As reported in the Rio Grande Guardian yesterday, Laredo Mayor Raul Salinas said, "The fence will not work, so why squander away taxpayer's dollars? I think we have to think about comprehensive immigration reform legislation and think about the guest worker program as alternatives to the wall."

According to the Guardian, Salinas was referring to the recent lawsuit where the the federal government won its lawsuit against the city of Eagle Pass to gain access to city-owned land. On Monday, U.S. District Judge Alia Moses Ludlom ordered the city of Eagle Pass, located on the Texas border 100 miles southwest of San Antonio to surrender 233 acres of municipal land. “It seems a little heavy handed,” said Eagle Pass Mayor Chad Foster, who also heads The Texas Border Coalition. The group of mayors, city officials, and business leaders have complained they had not had enough time and opportunity to comment regarding the effect of the fence on their communities, according to a report issued on January 16 by the Associated Press. Instead, Eagle Pass was sued for access to municipal land and blindsided when the judge's ruling was decided within hours on the very same day, before the city could challenge the lawsuit. "Giving the other side notice sounds pretty basic to me. The government is not even following what our justice system asks for," said San Juan Mayor Juanita Sanchez.

The New Jersey Institute for Continuing Legal Education will hold its 2008 Redevelopment Law Institute on Friday January 25 in New Brunswick featuring The Impact of Gallenthin v. Paulsboro and Other Recent Cases. Several cases following the Gallenthin decision have affected municipalities' use of eminent domain in redevelopment efforts. The morning panel, comprised of Mitchell Abrahams, Anne S. Babineau, Robert Beckelman, the Hon. Peter Buchsbaum, and James M. Turteltaub, will discuss the impact of Gallenthin on redevelopment.

Turteltaub represented Suydam Investors in the Housing Authority of New Brunswick v. Suydam Investors, LLC, 177 N.J.2 (N.J. Supreme Court, 2003). He also successfully argued on behalf of the property owners in 110 Washington Street v. Township of Bloomfield (L-2318-05) and Carolyn Evans and Rivco Group, LLC v. Township of Maplewood (L-6910-06). The Bloomfield case was instrumental in laying the groundwork for subsequent cases contesting the right to take in New Jersey and discussed on this blog here and here. The opinion in the Maplewood case is a thorough application of the Gallenthin case, which has been discussed here.

Reference materials submitted for the seminar include the following resources:

1. "Clarifying Blight Criteria for Redevelopment in New Jersey,"  by James M. Turteltaub, written for the NJ ICLE seminar
2. "Defining Blight," by William J. Ward, reprinted here with permission of the New Jersey Law Journal
3. "Reversal of Blight," by William J. Ward, reprinted here with permission from the New Jersey Law Journal

To reserve a space for the NJICLE seminar, click here.

There was one eminent domain bill passed in New Jersey -- on January 13, 2008, to be exact. No, it was not a reform of the Local Redevelopment Housing Law, long considered by the Legislature, passed by the Assembly, and never voted out of the Senate Community and Urban Affairs Committee. Instead, two Hudson County Democrats, former Senator Joseph Doria and former Assemblyman Louis Manzo have given us P.L. 2007, c.290 (Bills S-2743 and A-4625 respectively), which amend P.L. 1962, c.198, N.J.S.A. 48:12-35.1, concerning procedures to be followed by railroad authorities seeking to expand their right of way and condemnation of property.. The bill was co-sponsored by Assemblyman Patrick J. Diegnan of South Plainfield.

Under the new bill, railroads seeking to use eminent domain must demonstrate to the Department of Transportation:

...that alternative property suitable for the specific proposed use of the property to be taken is unavailable, either through on-site accommodation or through voluntary sale of alternative, reasonably situated property, and that the interest in the property to be taken does not exceed what is necessary for the proposed use, and shall also demonstrate to the Department of Transportation at an informal hearing the specific use to be made of the land or other property or interest to be acquired and that such proposed use is necessary and consistent with the purposes enumerated for such railroad utility and with the extent of the land or other property or interest to be condemned; and (c) any land and property necessary to comply with any order, determination, rule or regulation of the Department of Transportation.

The law provides for an administrative hearing before the Office of Administrative Law (OAL) where the railroad seeking to use eminent domain must demonstrate compliance with the new act and bears the burden of proof. Interestingly, the bill provides for notice to the fee-owner as well as tenants, and easement holders whose interest may be affected by the taking. This was a stealth bill which received little or no comment in the press and was not the focus of any of the eminent domain activist groups or those who oppose reform. The new law, signed by Governor Corzine on January 14, was among a number of bills pushed through during the lame duck session of the Legislature.  See the statement and reprint of S-2743 here and here.

Pay-to-play remains at the heart of the problem in New Jersey redevelopment and the authorization of eminent domain. Simply put, developers contribute to the campaigns of mayors and council members; and, in turn, the mayor and council designate the developer for the project and use the municipal power of eminent domain to acquire properties needed to assemble the project area. Although New Jersey recently adopted pay-to-play legislation, the piece that would apply specifically to eminent domain has been notably missing in any of the iterations of the proposed eminent domain reform bills to date. See my paper and power point (PDF-2MB) presented last October at  the CLE International seminar on Ethics and Redevelopment in New Jersey.

Yesterday the Appellate Divison of the New Jersey Superior Court issued an important public policy decision in the case People for Open Government v. David Roberts (A-4926-05T1). The opinion of the court was delivered by Judge Harvey Weissbard and approved for publication. The case involves litigation instituted by former residents of Hoboken seeking to compel the Mayor and Council to enforce a municipal ordinance designed to curtail “pay-to-play” where individuals and corporations are awarded municipal contracts as a reward for political contributions. The issue involves a Hoboken ordinance passed on November 2, 2004, which had been placed on the ballot through voter initiative. Among other things, the ordinance restricts political contributors from negotiating or entering into contracts with the city. The Law Division dismissed plaintiffs’ suit based on a conclusion that the plaintiffs lacked standing. The Appellate Division reversed and remanded, concluding that the plaintiffs have a sufficient particularized interest in the enforcement of the ordinance beyond their status as “mere taxpayers.” Download the case here.