Eminent Domain and the Lame Duck Special

The legislature has spoken. Last week, Governor Codey signed into law one piece of eminent domain legislation - one from column A (4588) and one from column S (2851). The companion senate and assembly bills were selected from a menu of legislative solutions to perceived problems with eminent domain. Finally...eminent domain reform, you say. No such luck! This new law benefits condemnors only, and not property owners.

The sole bill passed is special legislation, designed and pushed through by Middlesex County Democrats, Senator Robert Smith and Assemblyman John Wisneiwski. A-4588 was so lame, the Assembly Environment and Solid Waste Committee voted the bill out of committee without recommendation. No-one testified in its favor; Moreover, the only testimony was offered by groups opposed to the bill, including the Sierra Club, the Environmental Federation, the New Jersey Chamber of Commerce, the New Jersey Business and Industry Association, and the New Jersey Builders Association, and a group of eminent domain attorneys representing both property owners and condemning authorities.

Let's look at the bill. It's instructive for the public to see the process which took place prior to the adoption of the law.

A4588 - Authorizes DEP to replace person responsible for remediation on condemned property with condemnor under certain circumstances.
Identical Bill Number: S2851

John S. Wisniewski and John F. McKeon as Primary Sponsors

12/5/2005 Introduced, Referred to Assembly Environment and Solid Waste Committee
12/8/2005 Reported out of Assembly Comm. with Amendments, 2nd Reading without recommendation
1/9/2006 Substituted by S2851

S2851 - Authorizes DEP to replace person responsible for remediation on condemned property with condemnor under certain circumstances.
Senators Bob Smith and Joseph V. Doria as Primary Sponsors
Passed both Houses
12/1/2005 Introduced in the Senate, Referred to Senate Environment Committee
12/5/2005 Reported from Senate Committee with Amendments, 2nd Reading
12/8/2005 Senate Amendment (33-0) (Smith)
1/9/2006 Passed by the Senate (21-16)
1/9/2006 Received in the Assembly without Reference, 2nd Reading
1/9/2006 Substituted for A4588 (1R)
1/9/2006 Passed Assembly (Passed Both Houses) (43-32-3)

Introduced - PDF Format
Reprint - 2 pages
Statement - SEN 12/5/05 - 1 pages
Reprint - 2 pages
Floor Statement - Senate 12/8/05 - 1 page

The new law invites eminent domain abuse by giving local government the authority to take over ongoing environmental cleanup in conjunction with eminent domain proceedings. See Eminent Domain: Unholy Alliance between Developers & Municipal Officials.

This law gives redevelopers and municipal officials leverage over property owners in negotiations over market value. Private redevelopers inflate cleanup estimates. They will now use cost recovery litigation as a threat to further deplete the owner's resources. This will lead property owners to settle for less than fair market value to avoid litigation expense.

The new law targets one company and one site, National Lead (NL), and its 400-acres property located next to the Garden State Parkway and the Raritan River in Sayreville, N.J. Sayreville Economic Development Agency (SERA) condemned the site and then proceeded to lose a series of court suits. See Eminent Domain and the Dukes of Hazardous Waste (December 3, 2005).
(1) Middlesex County Assignment Judge Robert Longhi ordered SERA to post the full amount of its appraisal, $30M in Superior Court Trust Funds. SERA wanted to put up $6M, claiming the balance was needed to complete the cleanup of the site. Judge Longhi's decision was affirmed by the appellate division and is consistent with the methodology approved the by N.J. Supreme Court in Housing Authority of New Brunswick v. Suydam Investors. Suydam says that contaminated properties must be appraised as if remediated and the full amount of the estimated compensation must be deposited with the clerk of the Supreme Court.
(2) SERA filed another suit seeking to take over the ongoing cleanup of the site. SERA lost again. See decision of Hon. Neil Shuster, Presiding Judge of the Chancery division, Middlesex County.

National Lead's victory was short-lived. Senator Smith and Assemblyman Wisniewski and their co-sponsors have cooked up a New Year's lame duck special for National Lead. Attorney Christopher Gibson of Archer & Greiner of Haddonfield will most likely challenge the new law. We expect SERA and company will be 0-3 at the end of the next round of litigation. In the meantime, other industrial and commercial property owners should be wary.

The new law is unnecessary and arbitrary. NJDEP has in place procedures and regulations for the oversight of environmental cleanups. NJDEP had the authority to remove and replace a private party not meeting obligations in the remediation of environmental contamination.

NJDEP's cleanup supervision of large sites proceeds at a glacial pace. The new law imposes a four-year deadline for the property owner to commence remediation or else the remediation will be in the hands of local government. Adding a new layer of bureaucracy in local government will not expedite the process; On the contrary, it will slow it down. If local government takes over the cleanup process, substantial sums of public money will be required.

This was the only eminent domain legislation passed and signed by Governor Codey and company. Remember all the eminent domain reform bills proposed in response to Kelo v. City of New London? Surely, a forest of paper was destroyed to introduce all that legislation. [See p.2-3 of KO'ing Kelo reprinted from New Jersey Lawyer.] The good news is they recycle at the New Jersey Legislature. Those eminent domain reform bills have morphed (identified by new numbers) and are now pending for the legislature and Governor-elect Corzine to consider in 2006.

Written By:Ken Jones On January 16, 2006 4:37 PM

What more could reasonably be expected of those who preside over the most corrupt state in the United States?

What's most amazing to me is that so many people in New Jersey really expect their elected representatives to act in the best interest of the masses. We're not in Kansas, anymore, Toto.

Written By:frances deluca On January 16, 2006 6:35 PM

Ken, it seems that you and I are among the few citizens in this state that are aware of the conditions of corruption that exist in NJ. I say sign a petition and get every polition to step down and start all over again. Seems out of reach? So did the American Revolution!!!

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