New Jersey Eminent Domain Law Blog

"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.
 

Some say timing is everything. Would it have made a difference if Judge James M. Catterson published the opinion in Matter of Kaur v. New York State Urban Dev. Corp. prior to oral arguments before the Court of Appeals in the Atlantic Yards case, Goldstein v. New York State Urban Development Corporation, d/b/a Empire State Development Corporation? While many think Catterson’s strongly worded opinion could have persuaded the Court of Appeals on the blight issue, in reading the majority opinion in the Atlantic Yards case, it is unlikely that Kaur would have changed the outcome.

Nevertheless, these two cases create a muddle in New York Eminent Domain law regarding blight and its use to acquire properties. A recent poll conducted by Crane’s New York finds public opinion mixed on which of these two court decisions is better for New York City. A majority voted: “Neither. Until it becomes more transparent, the eminent domain process is bad for the city, no matter what project it affects.”

Today the Supreme Court of the United States and the New Jersey Supreme Court heard oral arguments on similar issues in two different cases: Who has title to riparian land created by natural accretion of sand or a public works project to replenish beachfront property? In Stop the Beach Nourishment v. Florida, the issue is whether the legislation coupled with the Florida Supreme Court decision constitutes a judicial taking of private property without compensation; In City of Long Branch. v. Liu, property has already been taken, but the trial court ruled that Liu could not be compensated for the land created by beach replenishment. 

Beaches in many states are the recipients of oceanfront accretion as a result of beach replenishment projects. Most states, including Florida and New Jersey, set the property boundary at the mean high water line: The state owns the area between the mean high water line and the low water line. Up to this point, any natural or man-made accretion that changes the mean high water line belonged to the riparian owner. The state of Florida wants to make this additional land public land. The Florida Supreme Court, in a 5-2 decision, agreed. See SCOTUS Wiki for all the documents in this case and our prior blog post, "SCOTUS grants cert in beachfront renourishment case."

In order to rule in favor of the Florida property owners, at least 5 of the 8 justices hearing the case need to agree with the position of the property owners who are contesting the Forida legislation and the Florida Supreme Court decision. This would require an in depth review of Florida law in order to overrule the Florida Supreme Court -- a big step, considering the deference usually accorded state courts in interpreting state law. But the Florida property owners argue that the court below misinterpreted long standing Florida law with respect to the ownership of beachfront property. 

The New York State Court Appeals heard oral arguments today in Goldstein v. New York State Urban Development Corporation, the eminent domain controversy in which a handful of property owners have tenaciously battled New Jersey Nets owner Bruce Ratner’s attempt to acquire their property to develop the Atlantic Yards.

A centerpiece of the petitioners' argument was an attempt to convince the court that the term public use, as used in the New York State Constitution, should be limited to its original intent. This would necessitate overturning a long line of case law which has significantly broadened the concept of public use. The justices, questioning petitioners' lawyer Matthew Brinkerhoff, appeared to reject this argument; it is unlikely they will narrow the definition of public use in the opinion that results from this case.

There was a strong argument put forth by the respondents' attorney Phillip Karmel that the action in the state court presently before the court of appeals was not filed within the 30 day limitation contained in the statute, New York State’s Eminent Domain Procedure Law (EDPL). The petitioners rely on a six-month grace period to support their application that the action was timely filed. The petitioners initially pursued their remedies in the Federal Courts without success. They subsequently filed an action in the state court relying on the six month grace period to meet the procedural requirements of the statute. Respondents argue that this does not comport with the procedure set forth in the EDPL. The danger in this procedural argument is that, if the respondents position is adopted by the court, the case could be dismissed without addressing the underlying merits or substantive issues. We have seen appellate courts avoid controversial decisions by utilizing procedural devices to bypass the real issues at the heart of the case.

Goldstein v. New York State Urban Development Corporation will be argued tomorrow, October 14, 2009, at 2:00 p.m. in Albany, New York. This controverisal eminent domain case challenges the Atlantic Yards project in Brooklyn. The New York State Court of Appeals will webcast the arguments live.

Daniel Goldstein is the lead plaintiff as well as the catalyst and co-founder of Develop Don’t Destroy Brooklyn, the group that has been fighting developer Bruce Ratner’s efforts to condemn their neighborhood for an arena (the  proposed home for the New Jersey Nets), 16 towers with 5000 residential units, and retail and office uses.

Earlier efforts by the property owners in the Federal Court were dismissed. See Goldstein v. Pataki, 488 F. Supp. 2nd 254 (EDNY 2007). Aff’d 516 F 3d 50 (3nd Cir. 2008). At the heart of the petitioners’ state court action is the provision of the New York Constitution Article I, Paragraph 7, which states that “private property shall not be taken for public use without just compensation.”
 

The litigation over Beachfront North in Long Branch may be over, but eminent domain abuse will continue unless the New Jersey Legislature acts.

A comprehensive review and amendments to the statutes governing eminent domain in New Jersey are needed, including the Eminent Domain Act of 1971, the Local Redevelopment and Housing Law and the Relocation Assistance Act and regulations.

These laws form the statutory framework governing the acquisition of property by state agencies and local government. They also provide protections to the owners and occupants of real estate acquired for a public project.

On June 15, a draft eminent domain bill was voted out of the Senate Community and Urban Affairs Committee, three years after the Assembly passed its version. Five years after the U.S. Supreme Court's decision in Kelo v. City of New London, which called for the states to enact their own legislation, 43 states have passed eminent domain reform. New Jersey has not. Senate President Richard Codey needs to move the eminent domain reform bill to a vote.

Right now, the law stands as written, with piecemeal relief provided by judicial decisions in New Jersey courts. Case by case, property owners are forced to overcome the presumption of validity of the statutes and municipal actions taken in designating their properties in need of redevelopment. This is a difficult and expensive burden for the average residential or small business owner.

Tom Anzalone is proud about his father’s decision to save his beachfront home in Long Branch. “He may be 92,” Tom said, “but my father made all the major decisions. It’s his house. He has that World War II fighting ethic, fighting for his rights.” 

On Tuesday, attorneys for the majority of property owners in the Marine Terrace, Ocean Terrace, Seaview Avenue (MTOTSA) neighborhood in Long Branch signed a final consent order of settlement in their long-standing eminent domain case. As the attorney for homeowner Louis Anzalone, I was one of them. Peter Wegener represented the other homeowners, and Scott Bullock and the Institute for Justice joined the case on appeal. Together we formed a united front on behalf of the property owners. Still, it was the participation of New Jersey’s Public Advocate Ronald Chen that made the difference, not only in this case but in all the important cases that are redefining the way we view eminent domain in New Jersey.

 In the Long Branch matter, the mediation process went on for months after an August 2008 Appellate Court decision, which reversed in part and remanded the case to the same trial court that ruled against the property owners in June 2006. Monmouth County Assignment Judge Lawrence Lawson wisely placed the mediation process in the hands of Superior Court Judge Thomas W. Cavanagh, Jr., who brought negotiations to fruition. On Tuesday evening, the Long Branch City Council voted 4-1 on the resolution to accept the consent order and the terms of settlement. So the litigation is over.

"The Little Guy Wins' is a feature news segment by reporter Mary Murphy, who covered the Long Branch eminent domain story on WPIX Channel 11 last night. The video clip features Louis Anzalone, 92, who never gave up the fight to keep his home, even after his wife Lillian and other senior neighbors including Al Viviano, Mary LaConte, Anna DeFaria, and Carmen Vendetti passed away before their litigation ended. They were, to paraphrase Franklin Delano Roosevelt, a generation that had a rendevous with destiny. They fought for freedom, but they never imagined that they would fight to keep their homes. Through years of litigation, Anzalone, a World War II Navy veteran, epitomized the spirit of that greatest generation, living the words of Winston Churchill: "Never, never, never, never give up."