This is a "taking" case. A large wooded portion of the Sheerr property was first zoned by Evesham Township for public park and recreation purposes and, by later amendment, for conditional uses considered appropriate for environmental reasons. No permitted use was established, except in the sense that conditional uses are permitted uses. Other ordinances provided further restrictions.
These regulations are claimed to be so restrictive as to constitute a taking of private property for public use, requiring just compensation under the Fifth Amendment to the United States Constitution and Art. I, par. 20, of the New Jersey Constitution (1947).
Regulation may constitute a taking:
The general rule at least is, that while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking. [ Pennsylvania Coal Co. v. Mahon , 260 U.S. 393, 415, 43 S. Ct. 158, 160, 67 L. Ed. 322 (1922)]
The present case raises difficult and largely unanswered questions concerning such takings. The basic issue, whether the regulations have gone too far, is not easily decided, and novel questions arise when it is decided, as here, that they have. It must then be determined whether the municipality is obliged to acquire the property, paying "just compensation," or whether the regulation should be invalidated and, if so, whether damages for a temporary taking are recoverable.
In addition to the "taking" issue, plaintiffs advance the theory that Evesham, through its adoption of arbitrary and otherwise invalid legislation, has violated their right to due process under the Fourteenth Amendment to the United States Constitution
and Art. I, par. 1, of the New Jersey Constitution (1947), consequently entitling them to the recovery of damages under the Federal Civil Rights Act, 42 U.S.C.A. § 1983. The theory has only inferential support in a few cases.
Plaintiffs also attack another zoning provision of the township which restricts part of their property to commercial uses; they claim that this zoning is arbitrary.
The two portions of plaintiff's property involved in these proceedings consist of vacant land fronting on Route 73, a busy state highway; the frontage of the wooded tract is 1,250 feet, of the commercial tract, 1,050 feet. Existing land uses along the highway are primarily commercial, becoming somewhat scattered in the area of plaintiff's premises. Across Route 73 are a funeral home, a life care facility and undeveloped woodlands. South of the property are a commercial office and a residential development. To the rear is a major residential development with reverse frontage. To the north lies the Garden State Community Hospital and a medical center. Route 73 and two side roads provide access. A by-pass road, shown on Evesham Township's master plan and official map, will bisect the property, connecting Route 73 and routes to the Ashland High Speed Line. The residential development in the rear of plaintiff's property is planned to accommodate this by-pass.
Prior to the adoption of the challenged ordinance plaintiff's property (meaning, throughout this opinion, the portions thereof in dispute) was zoned "GB" and "GB-5," permitting commercial uses along the highway. The GB zone permitted uses on one-acre lots; GB-5 required five-acre lots. In January 1979 Evesham adopted Ordinance 1-1-79, amending its zoning legislation to conform to the new Municipal Land Use Law, N.J.S.A. 40:55D-1 et seq. This ordinance placed the wooded portion of plaintiff's property (formerly zoned GB-5) in a "PPR" district, which permitted only public park and recreational uses. The remaining portion of the property (formerly zoned GB) was zoned "CH-5," a highway commercial district, in which subdivisions
of not less than five acres were permitted. Plaintiff's claim that the PPR designation amounted to a taking of their property and that the CH-5 designation is arbitrary.
On April 17, 1979 the township adopted Ordinances 9-4-79 and 11-4-79 changing plaintiff's PPR designation to "EP-1: Environmental Protection." No permitted use was allocated to the EP-1 zone. Conditional uses, allowed after obtaining municipal permission, consisted of:
Private recreational areas such as camps, golf courses, playgrounds, athletic fields, lakes, picnic areas, operated for profit or hire . . . .
Single family detached dwellings . . . .
The following commercial uses . . . .:
3. Bank or other financial institution
4. Bakery, confectionery or custom shop
7. Any use of the same general character as above.
No use was permitted on a lot of less than five acres and significant design criteria were established. The ordinance recited, as reasons for the EP-1 designation, the "unique character by virtue of the presence of a Beech and Maple hardwood forest with many Holly trees thereon, the function of the area as a natural replenishing of ground water and the function of the area as a natural habitat for birds and other wildlife."
Written protests were filed (pursuant to N.J.S.A. 40:55D-63) against the adoption of the EP-1 ordinance, which thereafter received a favorable vote of 3 to 2. The statute required a 4 to 1 favorable vote. The municipality, relying upon the Appellate Division's opinion in Levin v. Parsippany-Troy Hills Tp. , 164 N.J. Super. 409 (1978), believed that the protest statute did not apply in its circumstances, and therefore considered the ordinance valid. Levin was reversed by the Supreme Court, 82 N.J. 174, 181 (1980). As a consequence, Evesham's ordinance establishing the EP-1 zoning was invalidated in a summary judgment ruling in these proceedings. Finally, in June 1980, new, but identical EP-1 legislation was adopted by a 4 to 1 vote.
On April 17, 1979 Evesham enacted Ordinance 12-4-79, which adopted an official map for the township. This map placed a portion of plaintiff's property in a "Proposed Preservation Area." The township's master plan designated that property "Park or Preservation Area." Plaintiff argues that these restrictions significantly and adversely affected every potential use of her property.
On February 5, 1980 the township adopted Ordinance 43-10-79, restricting the cutting of trees and shrubs on lands reserved for public use. This ordinance affected plaintiff's property while it was zoned PPR, and so long as the official maps carried it in a "Park or Preservation" classification. In December 1980 Ordinance 43-10-79 was amended by Ordinance 56-12-80, designed to protect trees and shrubs growing in a natural state anywhere within the township; it required a permit, renewable annually, to be obtained before any trees or shrubs could be removed and also authorized the planning board to protect trees in a development by requiring a developer to convey a "tree preservation easement" to the township. The amended ordinance affected and continues to affect all of plaintiff's property.
Plaintiff claims that these ordinances, severally and collectively, effected a taking of their property without just compensation. They also claim that they are arbitrary, violating due process and equal protection requirements. Relief sought consists of (1) an order requiring the municipality to purchase the property, or (2) invalidation of the ordinances and (3) damages.
Evesham's legislative history underlines an intent to preserve the plaintiff's property for the benefit of the public while avoiding payment of compensation.
On January 30, 1979 its governing body adopted the new zoning ordinance applying a "PPR" (Public Parks and Recreation) classification to the property. When the new ordinance was discussed on January 16, 1979 the solicitor warned members of the township council that the PPR designation probably
amounted to unconstitutional taking. The governing body, not prepared to treat plaintiff's property otherwise, decided to adopt the ordinance without change, believing that any damages it might have to pay would be minimal. At the same time, township officials knew that plaintiff had executed an agreement to sell the entire tract of land. The attorney for the buyers had appeared before the governing body, advised them of his client's interest and warned them that the PPR designation under consideration was illegal. Shortly after the new ordinance was adopted these buyers terminated their agreement because they could not use the property as zoned.
In December 1978 the township adopted a master plan and an official map. The map designated the plaintiff's property as "Park or Preservation Area." Under N.J.S.A. 40:55D-44, in connection with subdivision or site plan approval, a property so designated in a master plan or on an official map is subject to acquisition. The statute permits the planning board to reserve the location and extent of streets, drainageways, basins and public areas for a period of one year after approval of a final plat of a development, during which it may arrange for the acquisition of the reserved areas. Thus, a developer must risk considerable time and expense in taking a proposed plan of development through planning board processes to the point of final approval and then face a one-year delay before he knows whether he may proceed with his approved plans or whether all or part of the property is to be acquired by the municipality. While the statute requires the developer to be compensated for his actual loss, in the event of acquisition, the reservation offers the considerable likelihood that a developer will take no interest in acquiring the property. This conclusion was supported by trial testimony.
On April 17, 1979 the township amended its zoning ordinance to create an EP-1 (Environmental Protection) zone, a classification applied originally to only two properties in the township. Plaintiff's EP-1 zone contained about 55 acres; the adjoining second tract (owned by a third party) contained only 4.6 acres.
The second tract is no longer zoned EP-1, so that plaintiff's property is now the only one so zoned. As noted above, the ordinance was not effective because it did not receive the required number of votes at the time of its claimed adoption. A new ordinance, containing identical provisions, was enacted by lawful vote in June 1980. These ordinances were adopted in the face of strong public protests by the affected property owners, who claimed that the ordinance amounted to a confiscation of their property. It limited the properties to restrictive conditional uses, allegedly justified by environmental concerns. These concerns were suspect; contrary information produced by plaintiff during public argument against the ordinance raised serious questions about the governing body's assumptions, which, as shown below, were not valid.
The discussions of the township officials during their consideration of the adoption of the PPR and EP-1 ordinances are revealing. At the meeting of January 16, 1979 when the PPR regulations were adopted for plaintiff's property, the township solicitor advised the governing body that the designation probably was unconstitutional. It was nevertheless adopted because the governing body (erroneously) thought that it had to be adopted before February 1, 1979. It was believed that an amendment changing the zoning of plaintiff's property could be adopted in a matter of days so that any exposure of the township to damages would be very modest.
On February 15, 1979 further discussion was devoted to plaintiff's zoning. One councilman understood the PPR designation to indicate property intended for "Green Acres" (State) funding. It was reported that the planning board attorney questioned the propriety of placing plaintiff's property in the PPR zone. This property was the only private parcel of land so designated in Evesham Township. Lands directly across the highway from plaintiff's property were zoned CH-5, permitting certain commercial uses, thus distinguishing them from both PPR and EP-1 uses applied to plaintiff's property.
Various councilmen were deposed. One attempted to distinguish the properties, but his statements indicate very little distinction. He said he would seriously consider buying the premises if there was no other reasonable alternative, but, because he was in the minority, believed some other means of preservation should be found. Another member of council expressed the belief that acquisition of plaintiff's property was appropriate. The mayor testified that his main objective in zoning the property was to protect its aquifer recharging function; according to the township planner, this concern was significant. He did not believe that the recreational uses proposed by the EP-1 ordinance were practical since substantial fill would be required. He said he could not get excited about using the property as a wildlife habitat; it would not last long by reason of the traffic on Route 73 and the proposed by-pass. The mayor remembered a discussion about whether the township could afford to purchase plaintiff's premises; he doubted this possibility. It was his feeling, however, that plaintiff's woodlands were probably unique. Another councilman expressed a belief that Evesham should not purchase plaintiff's property until it had exhausted all alternatives, including the adoption of the EP-1 zoning; buying should be a last resort.
At a caucus meeting held on April 10, 1979 one councilman pointed out that the EP-1 zoning would do what the master plan recommended for the property, namely, permit its preservation. At a later meeting concerning the EP-1 ordinance held on April 17, 1979, the township planner said that he had always recommended some preservation of plaintiff's lands. One councilman said that the ordinance was "conditional" because the township was still groping for a solution to the problem of preserving the property without being required to undertake its purchase. He thought the EP-1 zoning should be adopted; it put Evesham in a better position than the PPR zoning and would permit the owners to negotiate with the township concerning the use of the property. The solicitor advised council point-blank that the PPR zone was not constitutional and should
not be continued. He recommended the adoption of the EP-1 ordinance until a better plan could be worked out. Another councilman said that the planner's recommendations (reflected in the EP-1 classification) should be adopted; all environmental factors pointed in that direction and he recognized the need to preserve open space.
At the meeting of September 2, 1980, after the initial EP-1 ordinance had been invalidated, a new EP-1 ordinance was under consideration. By then council had received numerous warnings that "taking" problems were involved. This suit had been instituted. At this meeting one councilman stated that there was absolutely no intention to preserve the parcel for public use or recreational use, or any other particular use. Another councilman said he never thought this was a taking, that no one on council had said so, that the Township's only interest was in allowing development of the property while preserving the environment.
I. The Constitutional Provisions
The "taking" issue arises under the Fifth Amendment to the United States Constitution (enforceable against the states through the Fourteenth Amendment) which provides, ". . . nor shall private property be taken for public use, without just compensation."
The Fourteenth Amendment is also involved. It provides: ". . . nor shall any State deprive any person of life, liberty, or property, without due process of law."
Art. I, par. 20, of the New Jersey Constitution (1947) provides that "Private property shall not be taken for public use without just compensation."
Art. IV, § 6, par. 3, requires that takings by eminent domain "shall be with just compensation." Art. I, par. 1, contains the due process clause. It provides:
All persons are by nature free and independent, and have certain natural and unalienable rights, among which are those of enjoying and defending life and liberty, of acquiring, possessing, and protecting property and of pursuing and obtaining safety and happiness.
This provision of our Constitution has been interpreted as substantially encompassing rights guaranteed under the Federal Constitution. Montville v. Block 69, Lot 10 , 74 N.J. 1, 18 (1977). The Montville court said that "in fact, we have at times interpreted our State Constitution to provide greater protections than those existing under analogous Federal provisions". Particularly appropriate here is Pennsylvania-Reading S.S. Lines v. Public Utility Comm'rs Bd. , 5 N.J. 114, 124 (1950), in which the court said: "Under the guise of regulation, the property of a railroad may not be taken by requiring services or facilities not reasonably necessary to serve the public." It applied Art. I, pars. 1 and 20, of the New Jersey Constitution and the Fourteenth Amendment to the Federal Constitution.
A. Decisions of the United States Supreme Court
(1) Pennsylvania Coal Co. v. Mahon , 260 U.S. 393, 43 S. Ct. 158, 67 L. Ed. 322 (1922).
This is the precursor of all cases dealing with questions of taking by regulation. Justice Holmes, who wrote the majority opinion, said:
Government hardly could go on if to some extent values incident to property could not be diminished without paying for every such change in the general law. As long recognized some values are enjoyed under an implied limitation and must yield to the police power. But obviously the implied limitation must have its limits or the contract and due process clauses are gone. One fact for consideration in determining such limits is the extent of the diminution. When it reaches a certain magnitude, in most if not all cases there must be an exercise of eminent domain and compensation to sustain the act. So the question depends upon the particular facts. The greatest weight is given to the judgment of the legislature but it always is open to interested parties to contend that the legislature has gone beyond its constitutional power. [at 413, 43 S. Ct. at 159]
Thus, the rule was established that a difference of degree and not of kind distinguished a regulation from a taking. On this basis the court held that a statute which prohibited mining of
coal, where the coal company had title, was unconstitutional as a taking of the mining company's property rights without due process, although the mining would cause the probable destruction of plaintiff's dwelling which rested on the bed of coal. The Pennsylvania Coal Co. test, recited above and repeated here, has been adopted in many subsequent cases:
The general rule at least is that while property may be regulated to a certain extent, if regulation goes too far it will be recognized as a taking. [at 415, 43 S. Ct. at 160]
This was the first zoning case considered by the United States Supreme Court. Ambler alleged that a zoning ordinance deprived it of due process and equal protection, claiming it reduced the value of its land from $10,000 to $2,500 an acre. The court upheld the ordinance, but did so without reaching the taking issue.
(3) Zahn v. Board of Public Works , 274 U.S. 325, 47 S. Ct. 594, 71 L. Ed. 1074 (1927).
In this case the court upheld a zoning ordinance, citing Euclid. The taking clause was not involved.
Plaintiff's land was zoned for residential uses after he had executed an agreement to sell the property for an industrial use at price of $63,000; the land was "of comparatively little value" under the residential classification. The court held that the owner's loss in value was much greater than the value of the zoning classification to the community. The ordinance was held to be invalid. There was no discussion of taking by regulation. The court merely found a violation of the Fourteenth Amendment because there was no clear community interest in the regulation.
(5) Penn Central v. New York , 438 U.S. 104, 98 S. Ct. 2646, 57 L. Ed. 2d 631 (1978).
New York adopted a regulation which prohibited the demolition of Grand Central Station. The Supreme Court nevertheless held that Penn Central was not deprived of its Grand Central property without due process. The test: Was there a deprivation of all reasonable return on the property? The New York regulation provided a noncash compensation consisting of the grant of transferrable development rights which were of value to Penn Central in connection with other properties it owned in the area. This was held to satisfy the constitutional demand; the development rights represented a reasonable return. The court, in fixing the basis upon which to calculate that return, excluded the portion of the current market value of the property conferred upon it by the community. The value question is difficult. (What would the value of the terminal be without government and community activity? Stated differently, what part of the building's value was conferred privately?)
(6) Agins v. Tiburon , 447 U.S. 255, 100 S. Ct. 2138, 65 L. Ed. 2d 106 (1980).
After plaintiff purchased land in Tiburon, California, its use was restricted by a zoning ordinance, decreasing its value. The City of Tiburon was sued for damages on a theory of inverse condemnation and for a declaration that the zoning ordinance was unconstitutional. A taking without just compensation was alleged. Under the ordinance plaintiff's property could be used for the construction of five single-family residences, much less than the number permitted before the ordinance was adopted. The court held that this satisfied the constitutional demand: there was no taking. It said that "the application of a general zoning law to particular property effects a taking if the ordinance does not substantially advance legitimate state interests . . .," citing Nectow , or "denies an owner economically viable use of his land . . .," citing Penn Central. It acknowledged that "no precise rule determines when property has been taken" and
that "the question necessarily requires a weighing of private and public interest". 100 S. Ct. at 2141.
The California Supreme Court, from which the appeal to the United States Supreme Court was taken, held that damages could not be recovered even if the regulation constituted a taking; that the only remedy was invalidation. The Supreme Court refused to consider this issue, saying,
Because no taking has occurred, we need not consider whether a State may limit the remedies available to a person whose land has been taken without just compensation. [100 S. Ct. at 2143]
(7) San Diego Gas & Electric Co. v. San Diego , 450 U.S. 621, 101 S. Ct. 1287, 67 L. Ed. 2d 551 (1981).
Plaintiff utility company owned 412 acres of land upon which it intended to construct a nuclear power plant. The City of San Diego rezoned part of the property, changing its classification from industrial to agricultural and designated it "open-space." The Gas & Electric Company sued. Its theory was inverse condemnation. The trial court found that plaintiff had been "deprived of all practical, beneficial or economic use of the property designated as open space, and has further suffered severance damage with respect to the balance of the subject property." Further, it held that "the property designated as open space and the remainder of the larger parcel is unmarketable in that no other person would be willing to purchase the property and the property has, at most, a nominal fair market value." It concluded that there was a taking for which just compensation must be paid under the constitution. Subsequent appeals through the state courts resulted in the conclusion that damages could not be recovered -- that the only available remedy was invalidation of the ordinance. The United States Supreme Court was then asked to decide what it had refused to decide in Agins , namely, that compensation had to be paid when private property was taken for public use by regulation. It held, in a 5 to 4 decision, that no final judgment had been entered in California, and refused to address the taking issue. Justice
Rehnquist, however, in a concurring opinion, said that he would have agreed with the dissent, absent the final judgment question.
The dissent by Justice Brennan argued that a final judgment had been entered; that the case should be considered on the merits. The dissenting opinion held that there could be as much of a "taking" by police power regulation, e.g. , a zoning ordinance, as by formal condemnation.
In my view, once a court establishes that there was a regulatory 'taking' the Constitution demands that the government entity pay just compensation for the period commencing on the date the regulation first effected the 'taking', and ending on a date the government entity chooses to rescind or otherwise amend the regulation.
He believed that once a taking has occurred, the constitutional provision which requires compensation is self-executing and compensation must be awarded; and further, that a temporary regulatory taking is no less of a constitutional taking. He disagreed with the California rule; he would not limit relief to invalidation. Since Justice Rehnquist announced his agreement with the dissent, absent the procedural question, it would appear that 5 of 9 Supreme Court Justices shared Justice Brennan's philosophy. Nevertheless, his dissent is not yet law.
A zoning ordinance denied all use of the plaintiffs' property. This was held to be confiscatory and the ordinance was invalidated.
Property was zoned for school, park or playground use only. The court held that for all practical purposes its value was destroyed, that a taking had occurred. It is not clear from the opinion, but it appears that the ordinance was set aside.
(3) Morris Cty. Land v. Parsippany-Troy Hills , 40 N.J. 539 (1963).
The municipal zoning ordinance severly restricted the use of swamp lands. The court found that its practical effect was to appropriate private property for a flood water detention basin or open-space -- a taking. It said:
While the issue of regulating as against taking is always a matter of degree, there can be no question but that the line has been crossed where the purpose and practical effect of regulation is to appropriate private property for a flood water detention basin or open space. [at 555]
The same result [confiscation] ordinarily follows where the ordinance so restricts the use that the land cannot be practically utilized for any reasonable purpose or when the only permitted uses are those to which the property is not adapted or which are economically infeasible. [at 557]
It is quite impossible or at least impracticable even if a proper function or responsibility of a court, to attempt to sift any wheat from the chaff and pick out certain uses or certain land reclamation provisions which might individually be valid. That which thereby could be saved would be so fractional and incomplete as not to amount to a comprehensive, reasonable regulation of the area. Therefore, we must hold the provisions invalid in their entirety. [at 559]
The court struck down the zoning regulation but delayed its judgment for a reasonable time to permit the enactment of a new ordinance. (In a footnote (at 556) it excluded flood plain regulations from the scope of its opinion.)
(4) Harrington Glen v. Leonia , 52 N.J. 22 (1968).
An undersized lot was zoned into idleness. The cause was remanded for reconsideration of a variance, with instructions to weigh the matter of confiscation, in connection with which the court said:
There is nothing in the out-of-state cases which denies recognition to the principal that in its ordinary operations, government would be seriously hampered if to some extent certain values incident to property could not be diminished without payment. Obviously, some values are enjoyed under implied limitation and must yield to the police power. But the extent of a particular diminution must be considered in determining its ...