Eminent Domain Knock Out: Recent cases on the right to take

New Jersey court decisions have evidenced a heightened awareness by trial judges to eminent domain abuse. The abuse for the most part comes about in redevelopment projects implemented under the Local Redevelopment Housing Law (LRHL) 40A:12A-1 et seq. through the relationships between developers and local municipal officials.

The New Jersey Constitution, Article VIII, paragraph 3, says takings for blight are a public purpose. The abuse has come about through the legislature's broad definition of blight, most recently in the amendments to the LRHL in 1992:

"Redevelopment area" or "area in need of redevelopment" means an area determined to be in need of redevelopment pursuant to sections 5 and 6 of P.L. 1992, c.79 (C.40A:12A-5 and 40A:12A-6) or determined heretofore to be a "blighted area" pursuant to P.L.1949, c.187 (C.40:55-21.1 et seq.) repealed by this act, both determinations as made pursuant to the authority of Article VIII, Section III, paragraph 1 of the Constitution. A redevelopment area may include lands, buildings, or improvements which of themselves are not detrimental to the public health, safety or welfare, but the inclusion of which is found necessary, with or without change in their condition, for the effective redevelopment of the area of which they are a part. An area determined to be in need of redevelopment pursuant to this section shall be deemed to be a "blighted area" for the purposes of Article VIII, Section III, paragraph 1 of the Constitution. If an area is determined to be a redevelopment area and a redevelopment plan is adopted for that area in accordance with the provisions of this act, the municipality is authorized to utilize all those powers provided in section 8 of P.L. 1992, c.79 (C.40A:12A-8).

This definition could include just about any property and it has. "Blight is in the eye of the beholder," Justice Kennedy said during the Kelo oral arguments. We have not seen a planning report yet where the consultant hired by the municipality rejected blight for the study area. Particularly problematic is the all-inclusive 40A:12A-5. Determination of need for redevelopment (section d):

Areas with buildings or improvements which, by reason of dilapidation, obsolescence, overcrowding, faulty arrangement or design, lack of ventilation, light and sanitary facilities, excessive land coverage, deleterious land use or obsolete layout, or any combination of these or other factors, are detrimental to the safety, health, morals, or welfare of the community.

Justice Kennedy, in his concurring opinion in Kelo v. New
London
, said the following: "A court confronted with a plausible
accusation of impermissible favoritism to private parties should treat the objection as a serious one and review the record to see if it has merit." This is exactly what Essex County Assignment Judge Patricia Costello and Judge Richard Donohue cite in the recent cases Township of Bloomfield v. 110 Washington Street Associates, ESX-L-2318-05 and LBK Associates, L.L.C, et al v. Borough of Lodi, BER-L-8766-03 and Costa Realty Co., Inc. et al v. Borough of Lodi, BER-L-8768-03. Download Lodi decisions Although these decisions aren't published, they are available online and frequently requested.

The 110 Washington Street case turned on two critical
issues. Judge Costello found there was an impermissible conflict
of interest in the Township of Bloomfield utilizing the services of the same attorney who represented the board of adjustment,
the planning board, and the mayor and council. This is a blatant violation of the Municipal Land Use Law (MLUL). Thus, the conflict tainted the whole process underlying the municipality's eminent domain complaint. In addition, the court found that Bloomfield's consultant, Heyer & Gruel, did not include in its study a finding that the conditions complained of were detrimental to the public health, safety and welfare. All these defenses were properly raised with the trial judge on the return date of the order to show cause for the appointment of condemnation commissioners. The condemnation complaint and order to show cause were filed in a summary manner consistent with Rule 4:67-1.

Recent case law in Hirth v. City of Hoboken, 337 N.J. Super. 149 (App. Div 2001), and the unreported cases of Township of North Bergen v. Shiva Properties, et als, (HUD-L-6587-03) and Township of North Bergen v.Spylen of North Bergen, Inc (A-6868-03T2), clearly give a property owner the right to raise all these defenses to the eminent domain taking.

It should be noted there was a prerogative writ suit in the matter of
110 Washington Street v. Township of Bloomfield that was heard by Judge Claude M. Coleman and dismissed because it was filed beyond the 45-days to contest municipal action. Judge Coleman made no findings of fact or conclusions of law on the merits of the prerogative writ case, which effectively prevented Bloomfield's counsel from arguing judicial
estoppel.

In the consolidated Lodi cases actions in lieu of prerogative writ contesting the municipality's determination of blight Judge Donohue found the municipality had not established by substantial evidence the premises in question were in need of redevelopment. The court concluded the municipality's actions were arbitrary and capricious. The standard for judicial review of a blight declaration is limited to whether the municipality's action is supported by substantial evidence. See Hirth v. City of Hoboken Supra 337 N.J. Super. at 161; Levin v. Township of Bridgewater, 57 N.J. 506 (1971).

Consistent with the decisions of Judges Costello and Donohue cited
above, the Appellate Division approved for publication an opinion by
Judge Parker in the matter of ERETC, L.L.C. v. City of Perth Amboy A-2035-04T2, decided Nov. 15, 2005. Download the decision
The plaintiff, ERETC, owns a light manufacturing building located in the proposed redevelopment area. ERETC uses part of the building, which is in good condition, and rents the remainder. The preliminary report of the city's planner identified criteria D and E of the LRHL applicable to the area. At trial the plaintiff 's expert testified she found the plaintiff 's property to be neat, maintained and painted, with no apparent structural flaws. She concluded the city planner's report was "inadequate and void of any information that would lead to the conclusion that was obtained by the City which was that the area was in need of redevelopment." A mere recitation of the criteria of the statute without substantiation of the criteria is not enough to declare a property in need of redevelopment. In the appeal, the court states that nowhere in the report did the city planner "undertake an analysis of the statutory criteria as it applied to each of the properties in the designated area." The court reversed and remanded to the planning board for reconsideration.

This is an example of a win, but the redevelopment plan could proceed
once the errors and defects in the report are corrected. The developer behind the municipality will keep funding legal maneuvers. The power of eminent domain doesn't go away. Even if municipalities such as Bogota pass resolutions that they are not going to use it, they cannot abolish it. Agencies can't abolish it. Only the legislature can change it.

To read the full article Download KO'ing Kelo article from the December 5 issue of the New Jersey Lawyer.