Appellate Division Rejects Property Owners' Due Process Claims in Redevelopment Case
A New Jersey appellate court recently rejected certain property owners’ claims that city officials violated their procedural and substantive due process rights by frustrating plaintiffs’ business ventures in connection with a local redevelopment plan and project. In Sandone v. Park, A-6346-07 (App. Div. February 2, 2010), the Appellate Division affirmed the trial court’s dismissal of the owners’ complaint challenging the muncipal redevelopment plan. In 1998, the Haddon Township governing body authorized the local planning board to examine whether certain areas should be redeveloped. The planning board recommended redevelopment for various parts of the Township in May 2002, which the governing body accepted, and officially designated several properties in need of redevelopment. A redeveloper and appraiser were both appointed in 2003. Between the 1998 investigation authorization and appointment of the redeveloper and appraiser in 2003, the plaintiffs acquired property in the study area.
The plaintiffs opposed the redevelopment zone and filed a challenge in June 2004 alleging that the adoption and implementation of the plan was arbitrary and capricious, and also asserted a §1983 civil rights challenge based on claims that the governing body interfered with the plaintiffs’ business interests. Plaintiffs filed another action in 2005 before the 2004 case was settled and dismissed. A motion for summary judgment was filed by the municipality in the 2005 case , and the trial judge granted the motion and dismissed the case. On appeal, the plaintiffs argued that genuine issues of material fact precluded summary judgment, and that the judge misapplied the law to the facts.
The Appellate Division agreed with the trial judge that no direct evidence existed that the Township adopted and implemented the redevelopment plan with the specific purpose of interrupting and frustrating plaintiffs’ business ambitions. Additionally, the plaintiffs had recognized a substantial return on their investments following a settlement that dismissed a 2004 prerogative writ action. The Appellate Division also agreed with the trial judge that plaintiffs were not denied due process. Specifically, plaintiffs had voiced their opposition to the plan at public hearings, and remedies were available for plaintiffs to attack the in need of designation and any claims of low or delayed just compensation. The Appellate Division noted that the Supreme Court has greatly limited the New Jersey courts’ ability to redress grievances other than through existing remedies, especially when an adequate state remedy exists to correct an arbitrary government action. Additionally, the court stated that substantive due process claims in the land use context were reserved for “‘truly irrational’ governmental abuses that bear no relationship to the merits of the pending matter.” The appellate court concluded that the plaintiffs had already successfully taken advantage of the available remedies by filing a prerogative writ action that led to a settlement almost doubling the plaintiffs’ return on its investment. Furthermore, plaintiffs had failed to take advantage of additional remedies to challenge the properties’ value in a condemnation proceeding.
The author wishes to acknowledge the assistance of Cory K. Kestner, Esq., of McKirdy & Riskin, PA, in the preparation of this article.
