New Jersey Eminent Domain Law Blog

The New Jersey Supreme Court has granted Certification to the Borough of Harvey Cedars in the case of Harvey Cedars v. Karan (A. 120-11). At issue in the case is the longstanding policy in eminent domain cases that does not permit off-setting general benefits against damages that ensue from easement takings for dune replenishment and blocking ocean views from the beachfront homes. See Borough of Ridgewood v. Sreel Investment Co., 28 N.J. 121 (1958). In the Karan case, the Borough acquired an easement over one-third of Karans' property and constructed a 22-foot high dune which blocked the ocean views. The Borough, through its expert Donald Molliver, MAI, offered $300.00 as compensation for the taking and damages. Molliver opined that the damages were offset by the special benefit to the property for the project.

New United Corporation v. Essex County Vocational-Technical School Board of Education [A-2014-10T2]

By William J. Ward and Winifred E. Campbell

Yesterday the Appellate Division unanimously dismissed a condemnation complaint filed by the Essex County Vocational-Technical Schools Board of Education (ECVS) for the acquisition by eminent domain of property owned by New United Corporation, consisting of 7.5 acres adjacent to Interstate 280, which was the former site of the United Hospital facility in Newark. Download New United Corporation v. Essex County Vocational-Technical School Board of Education.

The court ruling was based on the condemnor’s failure to engage in bona fide negotiations as required by N.J.S.A. 20:3-6, et al., of the Eminent Domain Act. The ECVS used its power of eminent domain with the intent to construct a county-wide regional school that would consolidate several existing technical and vocations schools in surrounding communities. In overturning the condemnation, the court stated, “[t]he record reveals nothing that remotely resembles bona fide negotiations by the Board of Education.”

The Eminent Domain Act requires the condemnor to engage in “bona fide negotiations” with a condemnee before commencing an eminent domain action. N.J.S.A. 20:3-6. This provision “encourage[s] public entities to acquire property without litigation…saving both the public and the condemnee the expense and delay of court action.” Township of W. Orange v. 769 Assocs., LLC, 198 N.J. 529 (2009).  A cornerstone to protecting the Constitutional rights of property owners is the requirement that government entities seeking to exercise their power of eminent domain deal “forthrightly and fairly” with property owners. Jersey City Redevelopment Agency v. Costello, 252 N.J. Super. 247, 257 (App. Dic.), certif.. den. 126 N.J. 332 (1991).

Challenging a wetlands designation in eminent domain cases is often a key issue for property owners attempting to obtain just compensation for the acquisition of their property. While the decision of the Supreme Court  in Sackett v. EPA is not made in the context of eminent domain, the Court's findings with respect to the EPA could well be germane in cases that involve eminent domain.

Sackett v. U.S.Environmental Protection Agency
Supreme Court of the United States No. 10–1062.
Argued January 9, 2012—Decided March 21, 2012

by Winifred E. Campbell, Esq.

Last week the United States Supreme Court handed a decisive win to property owners battling to protect their due process rights against baseless environmental regulation. In Sackett v. EPA, the Sacketts were denied their due process rights when they attempted to challenge the Environmental Protection Agency’s (EPA) determination that the Sackett property was encumbered with wetlands. Download Sackett v. EPA.    

The Sacketts purchased a 0.63 acre lot in a residential, platted subdivision in Idaho intending to build a house. All permits were granted by the local municipality and gravel was laid in preparation for building the foundation of the home. Without warning, evidence, or explanation, the EPA issued the Sacketts a “compliance order,” demanding construction stop and the land be returned to its pre-gravel condition. According to their attorneys at the Pacific Legal Foundation, the Sacketts were told by the EPA that it controlled the land because the land is “wetlands.” Failure to comply with the EPA’s order racked up fines of $75,000 a day.

Borough of Harvey Cedars v. Harvey Karan and Phyllis Karan,
Superior Court of New Jersey Appellate Division - A-4555-10T3
Decided March 26, 2012

by Scott A. Heiart, Esq.

Yesterday the New Jersey Appellate Division affirmed a jury award in the amount of $375,000 for the acquisition of an easement in order to construct a dune in conjunction with a beach replenishment project.  Download the decision.

In 1973, Harvey and Phyllis Karan built their “dream house” on the New Jersey shore in Harvey Cedars. Their home was uniquely situated with sweeping views of the beach, shoreline, and ocean. The Borough of Harvey Cedars, as part of a large-scale beach replenishment project in 2008, used eminent domain to take numerous easements from beach-front property owners to construct an enormous dune.

Harvey Cedars offered the Karans $300 for the taking, arguing any loss of views was de minimus and that they would receive a “special benefit” due to the added protection against beach erosion and future storm damage. The Karans argued the loss of view was so significant it reduced the value of their property by $500,000.

by Winifred E. Campbell, Esq.

The United States House of Representatives passed with bi-partisan support H.R. 1433, The Private Property Rights Protection Act, on February 29, 2012. The bill aims to bar the federal government from using eminent domain for economic development. The bill would also withhold federal development funding to states that take private property for economic development. The bill is now being considered by the Senate.

The proposed Private Property Rights Protection Act is in response to the 2005 U.S. Supreme Court decision in Kelo v. City of New London. In Kelo, the Court upheld the condemnation of private property for transfer to other private owners to support “economic development.” The Kelo decision was met with outrage across the country. Frequently, the use of condemnation for economic development benefits wealthy developers at the expense of the poor and politically weak.

Ciaglia v. West Long Branch Zoning Board of Adjustment (A-0787-10T1)

In a rare example of a case meeting the stringent standard for inverse condemnation, the Appellate Division, in a ruling issued October 25, 2011, reversed the trial court and found the circumstances of that case constituted a taking in Ciaglia v. West Long Branch Zoning Board of Adjustment. The standard, which is a deprivation or substantially all of the beneficial use of the property, was met in this instance. The case was remanded to the trial court for the institution of an eminent domain case.

The court, in a per curiam unpublished opinion, discussed the detailed factual background of the property, which resulted in a conveyance to the plaintiff of a lot which did not meet current municipal standard. The judges called for a “heightened sensitivity on the part of local land use agents…in order to avoid regulatory takings that would be funded by the municipal treasury. “ (p. 18)

On two occasions, the plaintiff, Joseph Ciaglia, attempted to get approval of variances in order to build a single family home on the lot and was denied. In these circumstances, the court found that there had been a regulatory taking and that Ciaglia was entitled to compensation. The court followed and felt it was bound by the precedent set in the Moroney case. See Maroney v. Mayor and Council of Borough of Old Tappan, 268 NJ Super 458 (App. Div. 1993), cert denied, 136 NJ 295 (1994). In the Maroney case, the plaintiff had not exhausted his administrative rights to seek variance relief regarding the lot in question in that case. Here, Ciaglia had on two occasions sought variance approval and been denied; accordingly, the court remanded the case to the law division for the institution of condemnation proceedings.

By Janice Dooner Lynch, Esq.

On February 11, 2011, the Fordham Urban Law Journal presented a continuing legal education conference at the Fordham University School of Law entitled, “Taking New York: The Opportunities, Challenges, and Dangers posed by the Use of Eminent Domain in New York.” Many attorneys and non-attorneys from the eminent domain field spoke about various aspects of the challenges which have arisen in this area of the law in recent years.

One of the key issues discussed during the conference was the differing definitions of “blight” in each state, which is a major factor in determining whether a government may appropriate property by way of its eminent domain powers. Professor Lynn Blais of the University of Texas School of Law pointed out that while most states have enacted legislation limiting the use of eminent domain to take property for economic development or to be transferred to a private entity, such legislation has, at the same time, provided for an exception to this limitation in the case of “blight.” In other words, an eminent domain taking of property for non-public purposes can take place if a showing can be made that such a taking is necessary for the eradication of “blight” on the property. The following questions then arise: how is the concept of “blight” to be defined by the state legislature or constitution, and how is much judicial review of that definition can be exercised by the courts? The varying approaches to this issue by different states can be seen in the New York State Court of Appeals in Kaur v. New York State Urban Dev. Corp., 933 N.E.2d 721, 892 N.Y.S.2d 8 (2010), and the New Jersey Supreme Court in Gallenthin v. Paulsboro, 191 N.J. 344, 924 A.2d 447 (2007).

"After finally conceding, in 2005, that a taking occurred forty-three years earlier, the Borough now attempts to hide behind the six-year statute of limitations to claim that plaintiffs have no right to an inverse condemnation action....Although physical invasion and physical taking of real property by a governmental entity ought to be notice sufficient to awaken property owners to act to protect their interest in receiving compensation for the taking, government also should provide some other form of notice to affected property owners before, and surely after, a physical taking." - New Jersey Supreme Court Justice Jaynee LaVeccia

The New Jersey Supreme Court issued a unanimous 7-0 opinion written by Justice Jaynee LaVecchia remanding Klumpp v. Borough of Avalon  to the trial court to consider compensation for a beach replenishment taking which occurred first in 1965. Download the eminent domain decision here.

The Klumpps had built an ocean front home in 1961, which was destroyed by the famous nor’easter storm of 1962. After the home was destroyed, the Borough of Avalon appropriated the property for beach replenishment. No compensation was offered to the Klumpps. The Klumpps continued to be the record owner on the tax maps of Avalon and paid taxes. In 1995, the Klumpps sought permits to rebuild. By this time, Avalon no longer permitted access to the Klumpps property off the local road 75th Street. In addition, the Borough in 1995-96 denied Klumpp building permits and access permits thereby rendering the property useless. The Appellate Division found there had been both a physical taking in 1965 and a regulatory taking circa 1995 both denying the Klumpps all beneficial use and enjoyment of their property.  See our previous blog post of August 6, 2009,  Inverse condemnation at the beach. At no time did the Borough of Avalon offer any form of compensation to the Klumpps. The Supreme Court agreed with the Appellate Division and found there had been both a regulatory and physical taking of Klumpps property without compensation, contrary to the New Jersey Constitution, Article I ¶20 and the 5th and 14th amendments of the U.S. Constitution.

The critical ruling by the court in favor of Klumpp was the Supreme Court’s rejection of the statute of limitations argument set forth by the Borough of Avalon. The Court related the critical taking events to 1995-1996, when the Klumpps were denied building permits by Avalon. In remanding the matter to the trial court for consideration of inverse condemnation and just compensation, several interesting legal issues will come into play.

What is the date of valuation? N.J.S.A. 20:3-30(a)-(c) provides for a date of valuation to be the earliest of three events:

a) date of entry
b) date of interference with use and enjoyment of the property
c) date of the filing of the complaint

Fox Five News, Good Day New York segment, Eminent Domain Battle with Rosanna Scotto (May 21, 2010).

"In recent years there has been an increase in legal challenges to the law when 'blight' is used as the primary reason by the state for a takeover...'The eminent domain process is subject to abuse. Where the controversy comes in is in redevelopment projects under the Local Redevelopment Housing Law (in NJ) that says certain areas of a city are blighted,' Ward told co-host Rosanna Scotto."

The Appellate Division decided a group of eminent domain cases involving the Broadway Corridor in Long Branch: Cottage Emporium, Inc., t/a, Rainbow Liquors, Gopal Panday, Davita Panday, The Lighthouse Institute for Evangelism et al v. Broadway Arts Center, City of Long Branch v. Lighthouse Mission and City of Long Branch v. Gopal Panday, Davita Panday and Cottage Emporium (A-0048-07T2, A-4415-07T2, A-4416-07T2). The cases were argued March 15, 2010, before Judges Lisa, Baxter, and Alvarez, and a per curiam decision was issued on April 16, 2010.

The unanimous panel remanded the Broadway Corridor cases back to the trial judge, Monmouth County Assignment Judge Lawrence Lawson. Instead of dismissing the eminent domain complaints, the court is fashioning a remedy which is not supported by the law.

Here the court arrived at a conclusion similar to the decision in City of Long Branch v. Anzalone, and City of Long Branch v. Brower, which both involved the MTOTSA neighborhood. The appellate panel, led by one of the judges who heard the Anzalone case and two who did not, invited Long Branch to revisit the blight issue and attempt to meet “the substantial, credible evidence” standard for proof of blight. Here the court wrote in its opinion:

However, our courts have cautioned that the "substantial evidence" standard requires "a record that contains more than a bland recitation of applicable statutory criteria and a declaration that those criteria are met." Gallenthin, supra, 191 N.J. at 373. That standard similarly prohibits a municipality from exercising eminent domain on findings that are "supported by only the net opinion of an expert." Ibid. Instead of simply describing the physical and financial status of the properties to be taken, the municipality or its expert must perform "an analysis of the statutory criteria as [they] applied to each of the properties in the designated" redevelopment area, and of how each property's condition reflected or contributed to the area's blight. ERETC, supra, 381 N.J. Super. at 279-80.

The city will not be able to prove blight under this standard. Why not dismiss outright? That’s the law.