On May 14, 2008, Appellate Division Judge Donald S. Coburn issued an opinion, approved for publication, affirming the jury verdict in the Township of Piscataway v. South Washington Avenue LLC; Ruth Halper, Lawrence Halper, et al. Download the opinion here. There are two important issues in this case: first, the Halpers appeal regarding their objection to the right to take their property; and second, the date of valuation per N.J.S.A. 20:3-30.

As to the first issue, the court ruled in favor of Piscataway, noting that once the deposit is withdrawn, the condemnee waives any rights other than those related to the amount of compensation:

We are satisfied that Piscataway's interpretation of N.J.S.A. 20:3-27 is sound, particularly when it is construed in light of the fundamental common law rule that "a litigant who voluntarily accepts the benefits of a judgment is estopped from attacking it on appeal." Tassie v. Tassie, 140 N.J. Super. 517, 524 (App. Div. 1976) (citations omitted). We also noted in Tassie, that

[t]he rule that a litigant cannot seek appellate review of a judgment under which he has accepted a benefit is but a corollary to the established principle that any act upon the part of a litigant by which he expressly or impliedly recognizes the validity of a judgment operates as a waiver or surrender of his right to appeal therefrom.
[Id. at 525 (citations omitted).]

I would note that this holding seems to be at odds with the recent decisions of the Appellate Division in the Harrison cases. All three cases were reversed and sent back to Hudson County Assignment Judge Maurice Gallipoli for further action. There are serious complications in one of the companion cases, Harrison Redevelopment Agency v. Amaral: Mr. Amaral withdrew the deposit, the buildings on the property have been demolished, and he has relocated his business to Lyndhurst, New Jersey. If Judge Gallipoli follows the courts reasoning in the Halper case, Mr. Amaral has achieved a pyrrhic victory and the only issue remaining for him is the argument over compensation.

The second issue regarding the date of value in the Halper case is also interesting. The court has bypassed the clear language of N.J.S.A. 20:3-30 in order to fashion a remedy for the Halpers. The Eminent Domain Act provides as follows:

Just compensation shall be determined as of the date of the earliest of the following events: (a) the date possession of the property being condemned is taken by the
condemnor in whole or in part; (b) the date of the commencement of the action; (c) the date on which action is taken by the condemnor which substantially affects the
use and enjoyment of the property by the condemnee; or (d) the date of the declaration of blight by the governing body upon a report by a planning board pursuant to section 38 of P.L.1971, c. 361 (C. 20:3-38), or, in the case of a property being maintained as an abandoned property for failure to remove the property from the abandoned property list, as provided pursuant to subsection c. of section 37 of
P.L.1996, c. 62 (C. 55:19-56), if there was no declaration of blight, as of the date of
expiration of the condemnee's right to appeal inclusion of the property on the
abandoned property list. [N.J.S.A. 20:3-30 (emphasis added).]

Piscataway argued that the court should apply the provisions of the act literally, citing Township of West Windsor v. Nierenberg, 150 N.J. 111 (1997) and Mt. Laurel Twp v. Stanley A-103/104-2004) and use the date of the filing of the complaint as the date of value. N.J.S.A. 20:3-30(b). 

The court, however, reasoned that where there is a 5 year gap between the filing of the complaint and the filing of the declaration of taking in a rising real estate market, the property owner’s constitutional right to just compensation is adversely impacted by the time delay. The court, therefore, relied on Judge (now Justice) Long’s decision in Ocean City v. Maffucci ( p.20) where she concluded that "arbitrary application of N.J.S.A. 20:3-30 to set the valuation date . . . as of the date the . . . condemnation action was filed is not required where application of the statute would result in unjust compensation to the property owner."

The court in the Halper case concluded:

Under the Act, the date of taking is the date on which the declaration of taking is filed accompanied by the deposit of the just compensation deposit. N.J.S.A. 20:3-19; N.J.S.A. 20:3- 21(a). When the property increases in value due to inflation or
market factors unrelated to the initiation of the condemnation action, the valuation date must be the date of the taking.

Thus, the verdict of $17.9 million rendered by the jury as of the date of the filing of the declaration of taking has been affirmed. As of the date of this post, attorneys for Piscataway are considering filing a petition for certification to the New Jersey Supreme Court. This appears to be a case the Court would consider, given the novelty of the issues decided, and the apparent conflicts between this decision and the decisions of the Appellate Division in the Harrison cases.

Download today's coverage in The Asbury Park Press and The Star-Ledger. 

The consensus of the attorneys on the property owners' side was that the decision of Judge Lawson will be reversed. The question remains whether the court will grant an outright dismissal of the complaints filed against the MTOTSA property owners, or will remand the case to the trial court for a full plenary hearing pursuant to R4:67-5. If such a hearing is granted, it will likely involve discovery and depositions focused on the conflict issues raised by the property owners. If the court grants an outright dismissal of the condemnation complaints, the property owners will seek counsel fees and costs under N.J.S.A. 20:3-26(b) and the recent Appellate decision in West Orange v. 769 Associates LLC (A-5677-05).

Presiding Judge Joseph Lisa asked pointed questions regarding the applicability of the recent New Jersey Supreme Court decision in the Gallenthin case to this matter and focused specifically on the passage of time (ten years) between the finding of blight and the hearing before Judge Lawson where the property owners for the first time contested the designation of their properties as being an “area in need of redevelopment.” A key issue is that these property owners are not contesting the blighting of the entire redevelopment area for Beachfront North, but only the three square blocks which comprise their neighborhood. Critically, this neighborhood was designated as residential infill in the plan adopted by Long Branch in 1996. The property owners, as well as the Thompson Group, planners for Long Branch, understood this to mean that these single family residential dwellings would remain, and the vacant land that existed in this neighborhood would be infilled with additional single family residential units.

The Thompson Group specifically included in the plan support and encouragement for this long established residential area. The attorneys for Long Branch attempted to twist the meaning of residential infill to include the construction of an additional 185 condiminium units in place of these houses. The decision to acquire these homes which was made in 2001, not 1996, dovetails with the joint venture agreement between Hovnanian subsidiary Matzel Mumford and Applied Management of Hoboken. Our view of this change is that it was a purely economic decision made in favor of the developer because the construction of these units in gross dollars would result in over $120M in additional revenue.

Legal Briefs and Background:

Appellants Brief in City of Long Branch v. Anzalone

Respondents Brief in City of Long Branch v. Anzalone

Appellants Response Brief in City of Long Branch v. Anzalone

Amicus Brief submitted by the Public Advocate in City of Long Branch v. Anzalone and Brower

City of Long Branch v. Gregory Brower background page at the Intitute for Justice web site.

The Appellate Division of the Superior Court will hear oral arguments tomorrow in two eminent domain cases, City of Long Branch v. Anzalone and City of Long Branch v. Brower, on the 5th floor of the Richard J. Hughes Justice Complex, 25 Market Street, Trenton, New Jersey. The arguments are before Judges Joseph Lisa, Richard Newman, and Paulette Sapp-Peterson (Panel G). The Appellate Division has issued a revised media advisory.

Louis and Lillian Anzalone, who in their nineties are the eldest residents of the MTOTSA (Marine Terrace, Ocean Terrace, Seaview Avenue) neighborhood, are represented by William J. Ward of the law firm of Carlin & Ward in Florham Park and Brian Weeks of the Office of the Public Advocate, amicus in the case. The bulk of the MTOTSA residents are represented by Peter Wegener of Bathgate, Wegener, & Wolf in Lakewood and Scott Bullock and Jeff Rowes, attorneys with the Institute for Justice in Arlington, Virginia. The IJ argued the Kelo case before the U.S. Supreme Court.

The homeowners appealed the June 22, 2006 decision of Monmouth County Assignment Judge Lawrence Lawson, who ruled that the property owners were not entitled to a hearing or discovery on the “right to take” and dismissed the owners objections to the appointment of condemnation commissioners -- a final judgment on the right to take issue. This decision, issued a day before the first anniversary of the Kelo case, would allow the condemnation suits regarding the various properties to go forward. The Anzalones obtained a stay at the inception of the appeal.

The chief issues to be addressed by the court will be:
I. Conflicts of Interest and the Local Government Ethics Law as it applies to municipal officials and their legal representatives
II. Blight and its definition in light of the New Jersey Supreme Court’s decision in Gallenthin v. Borough of Paulsboro
III. Notice and Due Process regarding the redevelopment plan where the status of the properties in the neighborhood was changed from residential infill to properties to be acquired by condemnation.

The property owners seek a reversal of Judge Lawson's 2006 decision. In light of recent case law, attorneys representing the property owners will ask the court to dismiss the condemnation cases outright. At the very least, the matter should be remanded to the trial court for discovery and a full evidentiary hearing.

The Anzalones will be in court tomorrow for the proceedings. Louis Anzalone, a veteran of World War II and a former engineer with Lionel Trains, has always maintained that he wanted to stay in his home. "I don't want their money," he told the Public Advocate. "I want my house. From my back porch, I have a panorama of the whole ocean. It's heaven on earth."  

A rally is scheduled for 8:20 a.m. in front of the Hughes Justice Complex. 

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 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.

A major change proposed to the Eminent Domain Act 20:3-6, regards precomplaint disclosure to the property owner. Right now, the property owner receives written notice of the appraisal and a written offer letter accompanied by a copy of the appraisal prepared on behalf of the condemning authority. One proposed change is that, in the event of an acquisition under the LRHL, the offer cannot be less than the bona fide mortgages on the property. This change comes too late for Thomas Orlando of Asbury Park. The proposed change also gives the condemnee 45-70 days to consider the offer, or to seek clarification of the offer. The bill also gives the right to the condemnee to provide to relevant information to the condemnor, redeveloper, or their representative regarding the particulars of the property in question.

Although the New Jersey Constitution Article VIII, Section 3, Paragraph 1 authorizes condemnation for any property located within the “blighted area” (i.e., area in need of redevelopment); the new bill seeks to create a newly defined term, “condemnation redevelopment area.” This will undoubtedly create confusion and may not pass constitutional review, since the Constitution authorizes condemnation for any property declared to be blighted.

The notice provisions suggested to be sent to the property owners would be equally confusing. (See pages 15 and 19 of S-757.) One notice provision says that your property is in an area in need of redevelopment and your property will not be taken for redevelopment purposes (p.15)  and the other notice says that your property is in an area in need of redevelopment and you will be taken for redevelopment purposes (p.19). These two notice provisions, if adopted, will undoubtedly open the door for more litigation because they create two distinct classes of blighted property within the same redevelopment area, presumably based on the results of a redevelopment study submitted and approved by the planning board, mayor and council. How will the municipality determine whose property is taken and whose is not? What prevents political corruption or favoritism from influencing this decision?

Another significant change provides that the designation of an area in need of redevelopment shall lapse after 7 years following the adoption of the resolution if the municipality has not developed a redevelopment plan for the redevelopment area and made substantial progress on implementing the plan. For purposes of this new subsection, a bona fide agreement for project financing shall consitutute commencement of a project or substantial progress on implementing the plan.
(See page 18).

This proposed change will precipitate arguments on what constitutes bona fide financing and what constitututes substantial progress on implementation. There have been many examples:  Asbury Park is one of the most egregious, where projects have been started and abandoned, developers gained financial backing and then declared bankruptcy, and layers of developer’s blight piled on top of blight.  A better solution to this problem would require that the blight declaration be rescinded after 7 years if the condemning authority and developer have not adopted a plan, commenced construction, and demonstrated the financial resources and ability necessary to complete the project in the statutory time frame.

This bill also creates a new criteria for blight: contamination. This provision would replace the undefinable “smart growth” criteria "h"in the LRHL. The new criteria "i" would be defined as “property, either improved or unimproved that has remained vacant or substantially underutilized for at least 24 consecutive months because of environmental contamination.” One property that comes to mind that fits this description would be the National Lead site in Sayreville, which has been the subject of continous litigation for at least seven years. National Lead is undertaking its own cleanup of the site and has fought to maintain its control of the cleanup. This is in opposition to the municipality taking over, where the cleanup costs would expand exponentially once the politically favored consultants become involved. The legislation that makes this criteria possible was passed in the lame duck session of the Legislature in January 2006 (A - 4588 and S-2851). It was one of the few eminent domain reforms adopted into New Jersey law since the Kelo decision.

Stay tuned for the next revision.

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.

The Court had ruled that the TIF Act grants a third-class city such as Arnold the power of eminent domain. However, there is no reference in the Act to any statute governing the procedures to be followed if an eminent domain case is filed. If there is no statutory procedural reference in the Act, petitioners argue that Tourkakis will be denied due process in any ensuing eminent domain case:

Due process requires that the Tourkakises know beforehand what rules will
apply to their case. Without such knowledge, they will not be afforded the adequate
hearing to which they are entitled. Cf. Goe v. City of Mexico, 64 S.W.3d 836, 840
(Mo. Ct. App. 2001).

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).

There is a larger severance damage that will occur, which has been written about, but does not involve compensation per se. That is the severance of the communities, both Mexican and American, which have developed many cross-border relationships over the years.

There are several examples of universities, Texas El Paso, University of Texas at Brownsville and Texas Southmost College, which have facilities and students on both sides of the border. The University of Texas at Brownsville recently posted an update on the fence situation. A revised map from the U.S. Department of Homeland Security no longer includes plans to build a fence north of the International, Technology, Education and Commerce Campus (ITECC). The plan still includes an 18-foot-high fence on the levee south of the Scorpion Baseball Field and the Education and Business Complex parking lot. The proposed fence places all of the Fort Brown Memorial Golf Course and the remnants of historic Fort Texas on the fence’s south side.

There has been talk of a “virtual fence” with censors and cameras instead of an actual, physical structure. This probably makes more sense. But yesterday the Washington Post reported that the Government Accountability Office reported that technical problems would delay the first phase of the virtual fence project by three years. Today the GAO announced that it might not be able to build the 370 miles of fencing along the border before December 2008 and construction of a virtual fence in Arizona will be delayed until 2011. According to the Associated Press, yesterday DHS officials said they would build almost 57 miles of fencing and other border technology in the El Paso area by the end of 2008.

A consensus on a new immigration policy would go further to eliminate the need for the fence and the related issues which result from its construction. All three of the top presidential candidates (Senators McCain, Obama and Clinton) voted for the Secure Fence Act of 2006.

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.

The notice issue has been a frequent topic on this site, and here are some of the relevant posts:

• In one of his reports the Public Advocate described due process deprivations, in which towns fail to provide clear notice to residents that their property may be condemned and do not hold fair hearings. Property owners and tenants do not receive proper notice. When property owners appear at meetings, that agenda item can be tabled and carried to another meeting, thereby frustrating and dissipating potential opposition to a project.
• In City of Passaic v. Charles Shennett , the court said, "In exercising their powers of eminent domain, government entities must strictly comply with the rules and statutes governing condemnation. The circumstances here are so egregious that no remedy will suffice but to void the judgment and require the City to properly serve defendant with the requisite precondemnation notice pursuant to N.J.S.A. 20:3-6 and proceed from that point forward in accordance with the rules and statutes governing condemnation proceedings. "
• Also download my article, Eminent Domain: Getting Noticed, which appeared in the New Jersey Lawyer a year ago today.

While the decisions in the Harrison redevelopment cases clearly state that a property owner must be told that the blighting of their property may result in eminent domain proceedings against them, the notice provision is among several changes to the LRHL proposed in pending bills before the New Jersey Legislature. I believe that the Legislature should go further and provide specific notice language in the statute revisions so that there is no question as to the meaning, no ambiguity in the text. This would avoid confusion and require conformity by all municipalities that wish to utilize their powers of eminent domain under the LRHL.

The three Harrison cases now revert back to Hudson County Assignment Judge Maurice Gallipoli for further hearings. In the DeRose case, the Appellate Court stated:

On remand, the trial court shall consider the merits of appellant's contention that the
proposed taking of his property for redevelopment violates the LRHL and the Blighted Areas Clause of the New Jersey Constitution. In particular, the trial court must assess, among
other things, whether the forced acquisition of appellant's land for redevelopment satisfies the criteria the Supreme Court recently expressed in Gallenthin Realty Dev., Inc. v. Borough of Paulsboro, 191 N.J. 344 (2007).

Manuel Amaral, a victor in one of the companion suits, was the owner of Amaral Auto Center and other family run corporations formerly located on Frank Rodgers Blvd, near the New Jersey Transit line in Harrison. Mr. Amaral has been a tireless advocate for property owner rights and testified before the Senate Community and Urban Affairs Committee in October of 2006. In an emotional appeal, he told Senator Ronald Rice, “I called my mayor...How come you guys are taking my property? I’m very concerned for my future, my kids’ future, and my neighbors….I see my future, my kids’ future going down the drain... There’s no place in Harrison to go. I’ve worked 30 years for this….We’re losing our freedom.”

Given the admonition of the Appellate Division in these cases and the New Jersey Supreme Court decision in Gallenthin, Harrison faces an uphill battle to prove blight by substantial credible evidence as required by the New Jersey Constitution (Section VIII, Paragraph 3) and the LRHL, N.J.S.A. 40A: 12A – 3, 5 et seq.

There are two practical problems in the Amaral case: One, he was forced to relocate. Amaral has relocated to Lyndhurst and now leases the former DeMassi Cadallac facility. A further complication is that Amaral withdrew a portion of the funds deposited with the clerk of the Superior Court. In the event that Judge Gallipoli rules in Amaral's favor, the declaration of taking would have to be vacated, Amaral would have to return funds to Harrison, and Harrison potentially would be obligated to pay Amaral legal fees and costs pursuant to N.J.S.A. 20:3-26b (See  Township of West Orange v. 769 Associates (A-5677-05T5), approved for publication on December 24, 2007).

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.

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.

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.

As reported in the Nogales International, Doris Meissner, senior fellow at the Migration Policy Institute in Washington, D.C. said, "The eminent domain lawsuits are a clear indicator of what has changed in the immigration reform debate."  Exactly what does DHS gain from the eminent domain lawsuits? Access to the properties for up to 6 months and  the right to remove structures in the way of surveyors and engineers. In addition, each landowner, according to the Nogales report, will receive $100 and be reimbursed for any damage to the property.

There should be soundtrack to this story. It's a tune by Cole Porter with original lyrics by Bob Fletcher, an engineer who worked for Montana's Department of Highways. The chorus goes like this:

Oh, give me land, lots of land
Under starry skies above.
Don't Fence Me In.
Let me ride through the wide open
Country that I love.
Don't Fence Me In.

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.

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.

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.

The concept of standing refers to a litigant’s “ability or entitlement to maintain an action before the court”. Triffani v. Somerset Valley Bank, 343 N.J. Super. 73, 80 (App. Div. 2001). The “essential purpose” of the standing doctrine in New Jersey is to:

“Assure that the invocation and exercise of judicial power in a given case are appropriate. Further, the relationship of plaintiffs to the subject matter of the litigation and to other parties must be such to generate confidence in the ability of the judicial process to get to the truth of the matter and in the integrity and soundness of the final adjudication. Also, the standing doctrine serves to fulfill the paramount judicial responsibility of a court to seek just and expeditious determinations on the ultimate merits of deserving controversies. [N.J. State Chamber of Commerce v. N.J. Election Law Enforcement Comm’n, 82 N.J. 57, 69 (1980).]”

The court noted in the opinion that New Jersey law regarding standing was much more liberal than federal law in that New Jersey “remains free to fashion its own law of standing consistent with notions of substantial justice and sound judicial administration.” Solario v. Glaser, 82 N.J 482, 491 (1980). Based on its review of the more liberal New Jersey standard, the court concluded that plaintiffs' standing is readily apparent. The individual plaintiffs were personally involved with the efforts to have Hoboken adopt meaningful pay-to-play legislation; each of the four individual plaintiffs were part of that effort and had an interest in the effective enforcement of the ordinance. Having reached this conclusion, the Appellate panel reversed and remanded the matter to the trial court for further findings consistent with the opinion. To summarize:

..the individual plaintiffs in this case of great public interest have sufficient private interest to confer standing to prosecute this suit. Measuring "plaintiffs' status in the case against the essential purposes of the standing doctrine in New Jersey [which is] to assure that the invocation and exercise of judicial power in a given case are appropriate," we conclude that "the relationship of plaintiffs to the subject matter [is] . . . such to generate confidence in the ability of the judicial process to get to the truth of the matter and in the soundness of the final adjudication." New Jersey State Chamber of Commerce, supra 82 N.J. at 69. Further, according plaintiffs standing in this case "serves to fulfill the paramount judicial responsibility of a court to seek [a] just and expeditious determination [ ] on the ultimate merits of [a] deserving controversy." Ibid. We discern no "counterbalancing consideration," Taxpayers Ass'n of Cape May v. City of Cape May, 19 A-4926-05T1 2 N.J. Super. 27, 32 (App. Div. 1949). Our holding is not likely to "result in a flood of proceedings which will hamper the conduct of the public business." Ibid.; see Crescent Park, supra, 58 N.J. at 107 (citing and quoting Scanwell Labs., Inc. v. Shaffer, 424 F.2d 859, 872 (D.C. Cir. 1970)).

Because of the individual plaintiffs' standing, the organizational plaintiff, POG, of which they are members, has standing as well. Crescent Park, supra, 58 N.J. at 109-11; Common Cause v. N.J. Election Law Enforce. Comm'n, 74 N.J. 231 (1977).

In an unanimous decision of the Appellate Division issued on December 24, 2007, and approved for publication, Judge Jose Fuentes writing for the panel, ruled that a property owner can recover litigation costs under the provision in the Eminent Domain Act, N.J.S.A. 20:3-26(b). At issue in the litigation was whether the property owner’s legal contest of the right to take was the cause for the abandonment of the condemnation case. In a ruling reversing the trial court, which had trimmed the litigation fees sought by the property owner, the appellate court said:

“in the context of an abandonment of condemnation action, the right to recover costs and counsel fees is not contingent upon the success of the property owner’s defense strategy.…[S]tated differently, to recover costs and professional fees in an abandonment setting, a property owner does not have to show a causal link between its legal efforts resisting the condemnation and the condemning authority’s decision to abandon the taking.”

This decision is a corollary to the Supreme Court’s decision in West Orange v. 769 Associates, LLC, 172 NJ 564 (2002) where the court ruled that the taking contemplated by West Orange was a legitimate public purpose. Thereafter, West Orange and the property owner entered into a Consent Agreement whereby West Orange formally abandoned the condemnation action. This resulted in the property owner seeking legal fees and costs under N.J.S.A. 20:3-26(b) which provides:

 “...if the court renders final judgment that the condemnor cannot acquire the real property by condemnation or, if the condemnation action is abandoned by the condemnor, then the court shall award the owner any right or title to or interest to such real property, such sum that will reimburse such owner for his reasonable costs, disbursements and expenses actually incurred, including reasonable attorney, appraisal and engineering fees.”

The Appellate Court concluded that the trial judge properly excluded pre-litigation expenses and those arising from a prerogative writ suit that challenged a related municipal planning board decision, since those fees and costs did not arise from the “four corners” of a condemnation action. The Appellate Court also affirmed the trial court’s disallowance of counsel fees incurred in attending municipal hearings, reproducing municipal records and obtaining transcripts of the sessions of the municipal governing body.  Download the opinion here.

In 2006, the demolition of the C-8 steel skeleton, a symbol of redevelopment failure, gave hope to Esperanza, the high-rise residential tower undertaken by developer Dean Geibel and  president of Metro Homes. The Hoboken developer halted construction and temporarily closed its sales office as reported in the Asbury Park Press.

Portions of the oceanfront in Asbury Park were blighted in 1984. Development never reached fruition due to a corrupt admininstration and a developer, Carabetta, who went bankrupt. In the 20 years that ensued, the city became a ghost-town. When Asbury Partners purchased Carabetta’s interest from the bankruptcy court in 2002,  it seemed that redevelopment finally arrived. This is why Geibel’s announcement that he was halting construction was a blow to those involved in Asbury Park's redevelopment.  Geibel’s efforts missed the market, and if action is not taken by Asbury Park and its designated developer Asbury Partners, the city will again experience a period of non-activity and further decline in its most desirable section – the oceanfront.

These events point to one of the most pressing issues for eminent domain reform – the capping of the effective time for blight. We have suggested 5-7 years is sufficient. In the case of Asbury Park, 25 years puts a tremendous burden on the property owners, who would develop their own properties if allowed to.  In D&M Asbury Realty LLC v. City of Asbury Park (N.J. Super.A.D.2006), property owners sought to develop their properties in conformity with the redevelopment plan. This position was rejected by Judge Lawrence Lawson in the Monmouth County Superior Court and affirmed by the appellate division in an unanimous decision. Download the opinion here. Instead, these properties lie fallow, captive to the exclusive pre-emptive rights of Asbury Partners to develop the entire waterfront. They will only release portions of their development rights upon payment of exhorbitatnt fees to the potential developers. This scenario must be addressed by the New Jersey Legislature in 2008.