Eminent Domain Case at the N.J. Supreme Court: Gallenthin Realty v. Borough of Paulsboro

On Thurday, April 26, 2007, at 9:30 a.m., the New Jersey Supreme Court will hear oral argument on the case of Gallenthin Realty Development Inc v. Borough of Paulsboro. This case has been characterized on the front page of the New Jersey Lawyer (April 23, 2007) as “perhaps the most significant eminent domain case to reach the high court in decades.” (See New Jersey Lawyer, "Eminent Domain: Showdown at the Court" by Robert Seidenstein.)

This case come to the Court through a petition for certification granted by the Court in October 26, 2006. Gallenthin Realty Development is represented by Peter Dickson of the firm of Potter & Dickson in Princeton.  Dickson alleges in his brief that the case raises questions regarding the abuse occurring under the 15-year old Local Redevelopment Housing Law, where land is taken that is not blighted as that term is used in the New Jersey Constitution of 1947, Article VIII, Paragraph III. Dickson further alleges that the legislature has gone beyond the state constitution in enacting the LRHL in 1992 and in its definition of blight (NJSA 40A:12A-5 a-h).

In a unanimous opinion decided on July 14, 2006, the Appellate Division of the New Jersey Superior Court rejected all of Gallenthin’s arguments regarding the propriety of the blight declaration and the underlying action of the planning board and the governing body of the Borough of Paulsboro.

In its brief in support of the petition of certification, Gallenthin asserts that:

This Court has never reviewed any case under the “Local Redevelopment Housing Law,” N.J.S.A. 40A:12A-1 et seq. (“LRHL”), enacted in 1992. This case brings before this Court very significant unanswered questions raised by the increasing use – and abuse – of the LRHL to take land far beyond any reasonable test of what constitutes a “blighted area” under N.J. Const. Art. VIII, 11 3, § 1 If the lower court opinions stand, then there will be virtually no check or limits on what kinds of property may be designated an “area in need of redevelopment,” and no meaningful judicial review of whether such designations are supported by “substantial evidence.”

The questions which the Court agreed to review are as follows:

A. Whether a designation of a property as “in need of redevelopment” can be based solely upon a bar assertion that the property is “vacant” or not “fully productive” without any analysis or finding that such property is part of a “blighted area” as required by N.J. Contst. Art I, ¶ 1 and Art. VIII, § 3, ¶ 1?

B. Whether a municipal designation of a property as “in need of redevelopment” is to be judicially reviewed according to a very deferential standard, or according to a true “substantial evidence” standard, or a standard based upon heightened scrutiny because of the severe interference with property rights secured by N.J. Const. Art. I, ¶ 1 and the substantial powers acquired by a municipality as a consequence of such a designation?

The case has attracted significant attention from interested parties on both sides of the eminent domain issue. Amicus briefs have been filed by the League of Municipalities and the Builders Association; in addition, Ronald Chen, New Jersey's Public Advocate, has filed an Amicus Brief , as has the Stop Eminent Domain Abuse Coalition of New Jersey (StopEDA),  and others.

The Gallenthin property consists of 63 acres of vacant land located on the Delaware River opposite the Philadelphia Airport. At the heart of the argument before the Court is whether the blighting of this property is proper merely because it is vacant land and not presently utilized. Gallenthin asserts that the testimony before the planning board was based on mere conclusions without any evidence of decline, decay or other unsafe or undesirable conditions that would substantiate a blight designation.
The case is important because the New Jersey Supreme Court has been asked to review whether the Legislature overstepped its constitutional bounds in defining blight as “an area in need of redevelopment.” The oral argument Thursday should give some indication of how the Justices view this situation. Whatever opinion is issued, it will have significant impacts on pending cases involving the LRHL and blight designations.