Posted on June 23, 2016
In April, I reported on Supreme Court Judge Julio Mendez’ 65-page Opinion upholding the authority of the New Jersey Department of Environmental Protection (“NJDEP”) to construct dunes along the shoreline in Margate City, New Jersey – “absent an appeal.”
Well, after three years of legal challenges, the fat lady has finally sung and Margate’s Commissioners have unanimously thrown in the proverbial beach towel by deciding not to appeal Judge Mendez’ opinion. The US Army Corps of Engineers has announced its plan to award a contract in July and commence construction in the fall. Once completed, the “missing link” will complete Absecon Island’s 8.1 mile dune project and finally respond to Hurricane Sandy’s damage to New Jersey’s beachfront.
Posted on April 20, 2016
Last month when the Ocean County, NJ challenge to the New Jersey Department of Environmental Protection’s (“NJDEP”) authority to implement dunes for shore protection was dismissed, I wrote that the decision could very well be precedential for similar challenges in other New Jersey counties.
And so it was. In a 65-page opinion, Superior Court Judge Julio Mendez also upheld the DEP’s authority to construct dunes in the City of Margate (Atlantic County) as being neither “arbitrary or capricious” nor an “abuse of power.” The opinion recognized the US Army Corps of Engineers’ (“Corps”) 6-year study and the need to be better prepared for coastal storms such as Hurricane Sandy in 2012. With this ruling – absent an appeal – the DEP will proceed to obtain the necessary easements through the eminent domain process (a prior attempt to do so via an administrative order having failed) with the appropriate compensation paid to the affected beachfront owners.
Judge Mendez acknowledged that the dunes on the oceanfront would not resolve flooding concerns to the bayfront properties nor obviate some protection afforded by seawalls and bulkheads. Interestingly, he found that the dunes in the adjacent City of Ventnor had not only protected Ventnor’s beaches but also expanded the beaches in Margate, and that the dunes in Margate would be protective of its coastal properties and was therefore not arbitrary or capricious.
Posted on April 19, 2016
Last month, while New Jersey Superior Court Judge Julio Mendez was considering Margate’s challenge to the authority of the New Jersey Department of Environmental Protection (“DEP”) to condemn City-owned lots on which to build dunes, New Jersey Superior Court Judge Marlene Lynch Ford dismissed a similar challenge by 28 oceanfront property owners in Ocean County, NJ.
In her decision, she ruled that (1) DEP’s condemnation activities were authorized to “protect the state’s fragile coastal system and [afford] public access” and (2) the taking of the requisite coastal acreage to do so was as a lawful use of that authority, provided that the eminent domain process of compensating affected property owner was followed, which she found to be the case in this instance.
Although it would appear likely that this decision should have significant precedential effect on the other pending challenges, it should be pointed out that the theory in other cases includes not only a challenge to DEP’s authority, but the reasonableness of constructing dunes on the beachfront as opposed to other “shore protection projects.” In fact, although she dismissed the challenge to DEP’s authority to condemn, Judge Ford granted a hearing to other homeowners who claim that DEP acted arbitrarily because their sea walls eliminated the need for dunes.
And so, although the authority of DEP to use eminent domain for shore protection would appear to be judicially blessed, the manner in which it is does so remains subject to challenge.
So, as always, stay tuned.
Posted on February 3, 2016
In my last blog, I summarized the substantive arguments made by the City of Margate’s attorneys in their countersuit against the New Jersey Department of Environmental Protection’s eminent domain proceedings, which were filed in state court—the federal court overturned DEP’s attempts to proceed via administrative orders. The court will have to consider: (a) is dune construction a reasonable use of the state’s “taking” powers; or (b) were alternative storm protections – e.g., sea walls and wooden bulkheads – more reasonable?
While awaiting a ruling by the court after the upcoming February 4th hearing, there have been two new developments:
1. Seventeen residents of Point Pleasant Beach in Ocean County have filed a suit against DEP, claiming the agency’s taking of their beaches was a “land grab” of the residents’ private property destined to require future maintenance expenses and possible development of boardwalks, public restrooms, etc. These cases are scheduled for hearings next month.
2. The super storm/blizzard over the January 22-24th weekend again left Margate’s streets flooded. Governor Christie took a “serves you right” position, whereas Margate officials blamed the flooding on the bay, not the ocean.
As I “go to press,” we’ll soon see whether the plaintiffs’ “we don’t need dunes” position “holds water” (pardon the pun).
Posted on December 11, 2015
In my latest blog, I related that New Jersey Superior Court Judge Julio Mendez had taken under advisement the City of Margate’s request for an evidentiary hearing on the reasonableness of the state’s condemnation of easements on 87 City-owned lots. The request had stressed the public’s express opposition to dunes (2 referenda) and the alleged superiority of bulkheads and seawalls for both bay and ocean front properties.
Well, the Judge ruled on Tuesday, December 8, to grant Margate’s Motion to hear its argument in a February hearing on alleged abuse of the state’s eminent domain power. Margate also challenged the Corps of Engineers’ reliance on a 20-year old study, claiming that the study was outdated and its beach protections were as good as, if not better than, dunes.
If Margate’s arguments are successful, Governor Christie’s 127 mile Sandy Relief Act program would have an approximate 1½ mile gap in continuity (its neighbors Ventnor and Longport have agreed to give the state easements to build dunes).
Next month look for the lowdown on Judge Mendez’ decision in Part 8 of my series, “Doin the Dunes.”
Posted on November 30, 2015
As we left off, the New Jersey Supreme Court ruled that in obtaining easements to build dunes, the amount of compensation for the partial loss of ocean view would have to take into account a credit for the benefit afforded by the dunes’ protection.
When the New Jersey Department of Environmental Protection, in carrying out Governor Christie’s program to construct a $3.5 billion dune system to protect its 127 mile coastline, decided to acquire the necessary easements by administrative actions, the City of Margate in Atlantic County challenged the failure to proceed by eminent domain: U.S. District Judge Bumb agreed with Margate and invalidated this mechanism, ordering the Department to proceed with eminent domain in state court.
Ten months later, New Jersey Superior Court Judge Mendez took under consideration two issues: (1) the reasonableness of the use of eminent domain to acquire easements from 10 private lot owners and 87 city-owned lots, and (2) instead of his making a summary ruling, the need to allow Margate to have an evidentiary hearing, citing the two referenda in which Margate’s voters voted to oppose the dunes.
Once Judge Mendez rules, I will update this matter, keeping in mind that the author owns a 10th floor condominium in Margate, the Municipality Governor Christie calls the most “selfish” municipality in New Jersey.
Posted on December 2, 2013
On June 13, I posted the first blog, in what has now become a series, initially called “Doin’ The Dunes: What Will They Cost?”, exploring the way in which New Jersey’s three branches of government intended to treat compensation for the easement agreements for the construction of dunes – New Jersey’s response to climate changes (e.g., Superstorm Sandy). At the time, the New Jersey courts had determined that the landowner would be compensated for a partial obstruction of the ocean view without any reduction for the benefit received from the dune’s protection (called a “general”, not “special” benefit).
On July 19, I posted the second blog, which described the New Jersey Supreme Court’s unanimous decision in Borough of Harvey Cedars v. Karan, 214 N.J. 384 (2013) to reverse the prior precedents and recognize that dunes did confer storm protection as a “special benefit” to the subject landowner which would reduce the otherwise compensable amount for that portion of the award for the partial loss of the ocean view. Since the lower courts had not calculated the amount of the special benefit, the Court remanded the case to the trial court for a determination of the amount of the “special benefit” and its resultant reduction of the amount of the takings claim. (The case was reported to have settled with the Karans’ receiving $1.00 for the partial loss of ocean view and the parties “acknowledgement that municipalities cannot enact or enforce laws or regulations that would interfere with the state’s plans to build dunes as part of flood mitigation effort.” (Phila Inquirer, PP A-1, A-9 (Nov 9, 2013)).
In the aftermath of Karan, the Appellate Division had an opportunity to revisit the issue (of the amount of compensation to be paid for the dune’s reduction of ocean view) in Petrozzi v. City of Ocean City, argued on September 9 and decided on October 28, 2013. Although the facts in the Petrozzi case are critical to the decision, the Court was asked to determine whether a municipality’s failure to maintain a 3 foot above sea level elevation of the dunes justified the payment of additional compensation. In this case, Ocean City had obtained easement agreements with a number of its residents in which the City obligated itself to maintain the 3 foot elevation. Subsequent legislation in New Jersey, administered by the New Jersey Department of Environmental Protection (NJDEP), required municipalities to obtain a Coastal Areas Facilities Review Act (CAFRA) permit for the maintenance of dunes. Several of the plaintiffs, who signed agreements with Ocean City before the law changed, asked the trial court to determine whether the impossibility of the City to perform the maintenance (NJDEP having denied the City’s permit application) constituted “reasonable unforeseen circumstances beyond its control”, such as to relieve it of its duty to maintain the 3 foot elevation level but make no further payments for the additional partial loss of ocean view (due to the dunes exceeding the 3 foot “cap”). (City of Ocean City v. New Jersey Department of Environmental Protection, A-5199-06 (App. Div. September 26, 2008). Ocean City argued that it was relieved of its maintenance obligation without having to make any further payment; the plaintiffs disagreed and filed suit.
The Court acknowledged the general rule that where one party was excused from performing a contract due to unforeseen circumstances that made performance impracticable, the other party would generally be excused from its performance. In this case, however, since the plaintiffs had given up their rights to additional compensation for partial loss of ocean view, in reliance upon the City’s promise to protect their ocean views above the 3 foot level, they argued that were it not for this reliance, Ocean City would have had to pay plaintiffs additional money for the additional partial loss of ocean view (i.e., above the 3 foot elevation).
The Court agreed with the plaintiffs and remanded the case to the trial court to determine the additional compensation to be paid; however, citing Karan as precedent, it acknowledged that any such amount needed to be reduced by the “special benefit” conferred by the additional storm protection provided by the increased elevation of the dune.
In its conclusion, the Court, referring to “the admonition in [Karan] that the quantifiable decrease in the value of their property – loss of view – should [be] set off by any quantifiable increase in its value – storm protection benefits.” The bottom line is that the special benefit principle upheld in Karan is now the “law” in New Jersey.
Posted on July 19, 2013
On June 13, 2013, I posted a blog regarding how to compensate New Jersey beach owners who have an easement condemned on their property to allow the Corps of Engineers to construct dunes. In the blog, I indicated that the trial court and Appellate Division in New Jersey had excluded testimony on the value that the dunes would bring to the property as a “special benefit”, determining that dunes provided a “general benefit” for not only the property owner but all of the other owners who may be affected, as well as the state of New Jersey, and therefore would not be taken into account in determining the condemnation value for the easement. At the same time, the New Jersey legislature was considering a bill that would specifically require recognition of these “special benefits” and Governor Christie was criticizing beach owners who would not cooperate in helping forestall the damages that such beachfront owners would incur from future “Sandy” storm events.
On Monday, July 8, 2013, the New Jersey Supreme Court, in a unanimous decision, reversed the Appellate Division and remanded the case for the jury to consider the value of the protection afforded by the dune, a “special benefit”, which obviated the need for the legislature to speak to the issue.
The bottom line is that in constructing dunes on the 127 mile coastline, the property owners are “not going to be paid a windfall for [their] easement[s]”, according to Governor Christie.
While it remains to be seen how the lower court will now value the easement, from the standpoint of protection against rising sea levels and catastrophic floods, the recognition that dunes will benefit coastal owners appears to this author to be a step in the right direction.
Posted on June 13, 2013
How appropriate was the name “Sandy”, which hit the New Jersey shore, leaving in its wake a $30 billion cleanup/rebuild price tag. Climate change experts agree that such catastrophic storms will continue to occur in the future and that adaptation is essential to confront repetitions.
So it is in New Jersey where all 3 branches of government have suggested ways in which to do so. First, Governor Christie has gone on record as being “not in favor of using eminent domain to kick people out of their homes”. He therefore proposes to spend $300 million to acquire key beach homes on the Ocean and Monmouth County shorelines.
Second, and most interesting to environmental and land use attorneys, is the U.S. Army Corps of Engineers’ (Corps) pursuit of acquiring easements along the New Jersey shore lines on which to construct and maintain 2-story high sand dunes. This program, begun in 2003 and contemplated to last 50 years, is focused on 14 miles of New Jersey’s barrier islands at an estimated cost of $144 million. (The Corps’ estimate does not recognize the issues raised here.) The wild card in the Corps’ approach is how much needs to be paid in compensation for the property owners’ easement, including a partial loss of ocean view. This is the issue moving through the New Jersey legislature and, more importantly, its courts. In the most recent case, Borough of Harvey Cedars v. Harvey Karan and Phyllis Karan, Judge E. David Millard, the lower court judge, was faced with the question whether the compensation award for an easement on 1/3 of the Karans’ beachfront property, on which the Corps built a 22 foot high sand dune which partially obstructed their ocean view, should be reduced by the resultant benefit of protection from future storms provided by the dunes – or whether the general benefit to others, and the entire state of New Jersey, made such a “special benefit” to the Karans not recognizable under existing New Jersey case law. Finding such “special benefit” not consistent with prior law and extremely speculative to calculate, Judge Millard instructed the jury not to make any such reduction in the $375,000 award. The New Jersey Superior Court Appellate Division affirmed the result, Borough of Harvey Cedars v. Harvey Karan and Phyllis Karan, 45 A.3d 983 (2012) . The New Jersey Supreme Court granted certification to the Borough and heard two hours of argument on May 20, 2013.
Third, while all this was going on, a bill was introduced in the New Jersey Senate in March 2013 which, if enacted, would allow the Court to consider the “special benefit” which dunes would afford to the affected homeowners. Whether the bill ever becomes law, as well as questions as to its constitutionality and its effect on New Jersey case law would certainly emerge – as will be the question as to whether the New Jersey Supreme Court will take notice of the bill in rendering its decision.
Issues such as these will clearly impact the cost of climate change adaption, especially so with the threat of the anticipated rising of sea levels and recurring coastal storms to island properties. Stay tuned.