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Redeb Amusement Inc. v. Mayor and Committee of Township of Hillside

February 16, 1983


Feller, J.s.c. retired, temporarily assigned on recall.



This is an action in lieu of prerogative writs. On April 19, 1982 plaintiff applied to the Township Clerk for a license for 35 video games for a proposed video arcade in the Shop-Rite Mall Satellite Store Shopping Center. He tendered a check for $5250.00, the correct license fee for the machines pursuant to Chapter VII Sec. 7-14.1 through 7-14.6 of the Revised General Ordinances of the Township of Hillside.*fn1

The application was denied because the building inspector had refused to issue a certificate of occupancy, claiming that video games were not permitted uses in the Highway Commercial (HC) zone. In addition, the investigation by the police department pursuant to § 7-1.3 revealed that the Hillside police had responded to that shopping center 246 times in the period from January 1981 through April 29, 1982. On the basis of this investigation, the chief of police had strongly recommended

against granting the application. Subsequently, in July 1982 the Township adopted an 18 month moratorium ordinance on future licenses for mechanical amusement devices.

Plaintiff contends that both this moratorium ordinance and the mechanical amusement devices ordinances § 7-14.1 through 6 are unconstitutional and void as applied to plaintiff's application as an improper and unlawful exercise of municipal police power.

The issues presented are:

I -- Must plaintiff exhaust his administrative remedies?

II -- Are video game machines permitted uses in HC zones?

III -- Is the Hillside licensing ordinance valid?

IV -- Is the increased license fee valid?

V -- Is the licensing moratorium of 18 months duration valid?

VI -- Is the plaintiff's application subject to the moratorium?



Defendant claims that plaintiff should be required to exhaust its administrative remedies. However, this court is of the opinion that a remand at this time would not be in the interests of justice since it would result in undue delay of the final disposition of this matter.

The doctrine of exhaustion of administrative remedies is set forth in R. 4:69-5 and is expressly subject to exception "where the interests of justice require otherwise." In Durgin v. Brown, 37 N.J. 189 (1962) our Supreme Court recognized that "The requirement for the exhaustion of the administrative remedy is neither jurisdictional nor absolute in its terms." Id. at 202-203. Rather the rule vests discretion in the trial court to determine whether the interests of justice require that the process of administrative appeal be bypassed, and no rigid formula can be prescribed for the exercise of that discretion. Id. at 203. See also Atlantic City v. Laezza, 80 N.J. 255, 265

(1979); Garrow v. Elizabeth Gen. Hosp. & Disp., 79 N.J. 549, 561 (1979); Swede v. Clifton, 22 N.J. 303, 314-316 (1956).

Thus, in the interests of justice the court will dispense with the doctrine of exhaustion of administrative remedies in this case.



One of the reasons given for denying plaintiff's application was that the building inspector had "denied plaintiff a C.O.*fn2 for said premises as a video arcade, as a nonpermitted use." The shopping center is in an HC zone, § 22-6(i). The list of permitted uses does not include video games per se, but does include shopping centers. At trial Frank Volturo, the Hillside Construction Official and former building inspector, testified that the term "designed shopping centers" was not defined in the ordinance, but that in his opinion it consisted of "4 or 5 stores."

The subject shopping center contains a Burger King Restaurant even though restaurants are not permitted uses in the HC zone. Volturo testified that Hillside "traditionally" allowed restaurants of this type in the HC zone.

Bowling alleys and billiard rooms are also not in the ordinance list of HC permitted uses, but under their licensing ordinance, § 7-15.3, they are located in HC and Light Industrial zones. The licensing ordinance for "Mechanical Amusement Devices," § 7-14, does not include a location section. But the use is so similar to bowling alleys and billiard rooms that to discriminate between them would be arbitrary, unreasonable and capricious. "Classification [must] rest on real and not feigned differences." Katobimar Realty Co. v. Webster, 20 N.J. 114, 123 (1955). Arbitrary deviations from general classifications

are void as being constitutionally forbidden and against the basic rationale of zoning. Id.; Rock Hill v. Chesterfield Tp., 23 N.J. 117, 126 (1957); Roselle v. Wright, 37 N.J. Super. 507 (Law Div.1955), aff'd, 21 N.J. 400 (1956).

Bowling alleys, pool tables, and video games are essentially the same. All are mechanical amusements. Many pool tables are coin-operated. All must be treated alike.

Therefore, it is the opinion of this court that the zoning ordinance must be read in conjunction with the permitted uses under the licensing ordinances. Mechanical amusement devices are, under a rational interpretation of the licensing ordinances, permitted uses in HC and the Light Industry zones.



An ordinance is presumed to be constitutional and valid until declared otherwise by the court. Hasbrouck Hts. Hosp. Ass'n v. Hasbrouck Hts. Boro., 15 N.J. 447 (1954); Kozesnik v. Montgomery Tp., 24 N.J. 154, 167 (1957); Moyant v. Paramus Boro., 30 N.J. 528, 554 (1959). In fact there must be compelling evidence to overcome the presumption of validity that attaches to a municipal ordinance. Clifton v. Weber, 84 N.J. Super. 333, 339 (App.Div.1964), aff'd, 44 N.J. 266 (1965).

For a licensing ordinance to be valid, it must set out specific standards and norms which control the designated officials in their determination of whether to grant licenses. Silco Auto. Vend. Co. v. Puma, 105 N.J. Super. 72 (Law Div.1969) rev'd on other grounds 108 N.J. Super. 427 (App.Div.1970); Gross v. Allan, 37 N.J. Super. 262 (App.Div.1955); Raritan Tp. v. Hubb Mtrs., Inc., 26 N.J. Super. 409 (App.Div.1953).

Where there are no standards or inadequate standards resulting in unbridled discretionary powers, licensing provisions

are void. Id. See also Weiner v. Stratford Boro., 15 N.J. 295, 299, 300 (1954). Such standards as "the approval of particular administrative or police officer," Gross v. Allan, supra, 37 N.J. Super. at 268, or "for sufficient cause appearing" are invalid. Lipkin v. Duffy, 119 N.J.L. 366 (E. & A.1938).

However, in 1 Davis, Administrative Law Treatise (1958), sec. 2.15 at 150 as cited in Esso v. Holderman, 75 N.J. Super. 455, 474 (App.Div.1962) aff'd o.b., 39 N.J. 355 (1963), it is stated:

The direction of movement of the law of delegation is clear. In the federal courts nothing but a congressional abdication or clear abuse is likely to be held an invalid delegation. One state court declared in 1956: "The modern tendency of the courts is toward greater liberality in permitting grants of discretion to administrative officials in order to facilitate the administration of the laws as the complexity of governmental and economic conditions increase." Too many courts remain unaware of this "modern tendency."

In Ward v. Scott, 11 N.J. 117, 123-124 (1952) the court held that the exigencies of modern government have increasingly dictated the use of general rather than minutely detailed standards in regulatory enactment under the police power. Thus, the Board of Public Utility Commissioners has been guided by simple standards of "public convenience of necessity." R.S. 48:2-21. See Fornarotto v. Bd. of Public Util. Comm., 105 N.J.L. 28, 32 (Sup.Ct.1928). The Commissioner of Alcoholic Beverage Control, with authority to fix prices and promulgate regulations, Gaine v. Burnett, 122 N.J.L. 39 (Sup.Ct.1939), aff'd, 123 N.J.L. 317 (E. & A.1939), has been guided by the general legislative pronouncement that the statute shall be administered in "such a manner as to promote temperance and eliminate the racketeer and bootlegger." N.J.S.A. 33:1-3, 39. And the Director of the Milk Control Board has been authorized to take measures including the fixing of prices and the promulgation of regulations as may be "necessary to control or prevent unfair, unjust, destructive and demoralizing practices which are likely to result in . . . the demoralization of agricultural interests in this State engaged in the production of milk; . . as will best protect the supply of fresh, wholesome and sanitary milk in this State." State Bd. of Milk Control v. Newark Milk Co., 118 N.J. Eq. 504, 508, 509

(E. & A.1935); Como Farms, Inc. v. Foran, 6 N.J. Super. 306, 311 (App.Div.1950). See also Veix v. Seneca B. & L. Ass'n, 126 N.J.L. 314, 323 (E. & A.1941); Little Ferry Boro. v. Bergen Cty. Sewer Auth., 9 N.J. 536, 544 (1952).

Under § 7-14.2 all operators of commercial mechanical amusement devices must be licensed. The licensing procedure is set out in § 7-1.2 and 3. Two problems are immediately apparent.

First, it is evident that in the instant case the requirements of § 7-1.3 have not been followed by the municipality. The ordinance states in pertinent part:

7-1.3 Investigation of Applicants. Each application shall be referred to the police chief or a police officer designated by him, who shall immediately institute whatever investigation of the applicant's business responsibility, moral character and ability to properly conduct the licensed activity he considers necessary for the protection of the public. He shall communicate his findings in writing to the township clerk within a reasonable time after the application has been filed. If the investigator decides that the applicant's character, ability or business responsibility is unsatisfactory, or the products, services or activity are not free from fraud he shall disapprove the application and the clerk shall refuse to issue the license and so notify the applicant. Otherwise, the clerk shall issue the license immediately, provided the required license fees have been paid.

Thus, the specific objects of investigation are the business responsibility, moral character and ability to conduct the business of the applicant. The focus of the instant investigation and the stated reason for denying the license application concerned an investigation not of the applicant but of the proposed site of the video arcade, the shopping center. It was the high incidence of police calls to that area without the arcade in it, that resulted in the investigator's strong recommendation against the granting of the license, not the moral character, business responsibility or ability of plaintiff.

Thus, this action by the police department constituted an abuse of its power under the ordinance causing a denial of the application for faulty reasons.

Second, the issue arises whether § 7-1.3 has sufficient standards and guidelines for the designated ...

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