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

NEWJERSEY
EMINENT DOMAIN
BLOG

New Jersey court decisions have evidenced a heightened awareness by trial
judges to eminent domain abuse.

12 7 2005 Posted By Bill Ward

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repealed by this act, both determinations as made pursuant to the authority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.

http://www.njeminentdomain.com/state-of-new-jersey-46-eminent-domain-knock-out-recent-cases-on-the-right-to-take.html