The opinion of the court was delivered by: BISSELL
The present action arises under the general federal question jurisdiction of this Court (28 U.S.C. § 1331) and the more particular provisions of 28 U.S.C. § 1343(3) and (4). The plaintiff Bass River Associates T/A Bass River Yachting Center (BRA) is a limited partnership organized under the laws of the State of New Jersey. BRA owns and operates the Bass River Yachting Center, a marina in Bass River Township, New Jersey. Plaintiff Mariner Houseboats, Inc. (Mariner) is a corporation organized under the laws of the State of New Jersey with its principal place of business in Egg Harbor Township, New Jersey. Mariner manufactures floating homes which it seeks to sell and moor at Bass River Yachting Center. Defendants are the Mayor, Township Commissioners and Planning Board of Bass River Township, in their official capacity, and Bass River Township, a municipal corporation organized under the laws of the State of New Jersey.
Plaintiffs bring this action for injunctive, monetary and declaratory relief, attacking the validity of Bass River Township's Ordinance 83-1. A copy of that Ordinance is set forth in the Minutes of January 20, 1983, D-8 in evidence, annexed hereto as Appendix A. Plaintiffs attack both the underlying findings and the operative provisions of 83-1 because it excludes the use of floating homes and the operation of floating home marinas in Bass River Township.
Applications for preliminary injunctive relief and summary judgment were heard and considered by the Court in April, 1983. On April 28, 1983, this Court made several summary findings and conclusions regarding some of the issues in this matter. Those determinations were embodied in an Order of Partial Judgment entered May 18, 1983, as follows:
1. For purposes of determination of the Plaintiffs' arguments on preemption and burdens on interstate commerce, with the right reserved to the Defendants, however, to refute and rebut the Finding and Order hereby made, the Court Finds and Orders that the floating homes, subject matter of the litigation, are vessels for purposes of applying discussions of Admiralty Law and burdens on interstate commerce.
2. The Court further Finds and Orders that although the floating homes, subject matter of the litigation, are vessels, they are nonetheless designed primarily for homes for dockside use.
4. The Court Finds and does hereby Order that Congress has not intended to preempt the regulation and control of 'gray water' discharge and does not bar nor prohibit either state or political subdivisions of states from enacting ordinances regulating and prohibiting 'gray water' discharge, provided such ordinances do not provide standards less stringent than those provided by Federal Law or regulation.
5. The Court Finds and does hereby Order that the impact of the ordinance on interstate commerce is incidental at best and not excessive when weighed and considered with local interests and local benefits and therefore it is Ordered that the ordinance does not impose an impermissible burden on interstate commerce.
6. The Court expressly reserves the following issues to be determined after a plenary trial, and the foregoing findings shall not limit the issues to be tried:
a. The issue of municipal estoppel as a result of the actions of members of the planning board or governing body and other municipal officials.
b. Whether the enactment of the questioned ordinance is a valid and proper exercise of the police powers, giving particular attention to the questions of whether the ordinance is void as being violative of due process or is void for being violative of the Equal Protection Clause of the Fifth and Fourteenth Amendments to the Constitution of the United States; and further, whether the ordinance is a reasonable exercise of the police power.
7. The Court Finds and Orders that prohibition of the houseboats or floating homes in question does not make the ordinance in question invalid per se, but such issue shall be reserved to be addressed by the Plaintiffs at the time of trial.
Trial upon the issues stated in paragraph 6 above was conducted before this Court on the dates of May 9-13, 17-19 and 23-26, 1983. Having received proposed findings of fact and conclusions of law (and replies thereto) from all parties, the Court submits this Opinion adjudicating those issues.
A review of the description and use of plaintiffs' floating homes is in order. Copies of diagrams of these units (part of trial exhibit D-6) are annexed hereto as Appendix B. Plaintiffs' floating homes are documented as recreational vessels with the United States Coast Guard, in accordance with the Vessel Documentation Act of 1980, 46 U.S.C. § 65 et seq., and are subject to preferred ship mortgages filed with the U.S.C.G. at the ports of documentation. They are also registered as vessels with the State of New Jersey pursuant to N.J.S.A. 12:7-24.38. These vessels vary in length from thirty-two feet to forty-two feet and from twelve feet to fourteen feet in beam. Draft is less than one foot. Construction is of 3/4" marine plywood covered in fiberglass. The frames (ribs) are 2" X 10", with frame spacing of 16". The super-structure exterior is covered in 3/4" cedar siding, finished in one of a number of natural finishes, attractive in appearance. The vessels may be either towed from location to location or propelled by optional outboard engines. However, of the thirty-four floating homes built by Mariner through 1982, only three had tapered bows and none were ordered with an optional outboard. Each vessel is equipped with a U.S.C.G. approved Type III Marine Sanitary Device which complies with applicable U.S.C.G. and E.P.A. regulations. The retail price of these vessels ranges from approximately $50,000 to $70,000.
In early June 1982, Lawrence Alper, then the owner of Bass River Yachting Center, representing the plaintiffs, spoke by telephone to Mayor Floyd West of Bass River Township and described the plaintiffs' plan for the acquisition and development of that marina for the selling and mooring of plaintiffs' vessels. Mr. Alper invited Mayor West to Mariner's Cove Marina, in Egg Harbor Township, to examine models.
Within approximately ten days after that telephone conversation, John Best and Lawrence Alper met with Mayor West at Mariner's Cove Marina where several of the floating homes were located. At this meeting, which lasted approximately one and one-half hours, the plan for development of the marina in Bass River Township was described in depth to Mayor West, who was given an opportunity to visit and inspect models at Mariner's Cove. Included among the subjects discussed was litigation between Egg Harbor Township and Mariner's Cove Marina involving local opposition to the floating homes, and plaintiffs' desire to avoid a similar problem in Bass River Township. Also discussed was the issue of whether gray water discharged from the vessels presented an environmental problem. Plaintiffs informed the Mayor that, in their view, gray water was not an environmental problem and that the vessels did comply with all applicable U.S.C.G. and E.P.A. regulations. Plaintiffs then invited the Mayor, the Township Commissioners, the Township Engineer, and all members of the Township Planning Board to a meeting at which the plan for developing the marina would be presented, questions could be answered, and problems explored in hopes that the opposition encountered in Egg Harbor would not arise in Bass River Township.
In early July 1982, John Best and Larry Alper met with Mayor West, members of the Bass River Township Planning Board and others at Mariner's Cove Marina, in order to discuss the purchase and development of Bass River Yachting Center and other elements of the plan. At this meeting Messrs. Best and Alper made it clear that a substantial amount of money would be required for plaintiffs to acquire and develop the marina. It was also made clear that, if the plan were carried out, plaintiffs' floating homes would be sold and moored at the marina. The representatives of the Township toured the models of these boats. Questions asked by the Township officials were answered or discussed by plaintiffs' representatives. The Township officials expressed their interest in further exploring plaintiffs' plan, stating that they wished to see the marina in question successfully developed in some fashion. There were questions by several members regarding gray water discharge from the vessels, to which Messrs. Best and Alper responded. It was then agreed that an informal Planning Board meeting would be held, at which time an architect's rendering of the marina development would be presented, any additional questions asked and answered, and specifics of the development discussed further.
Larry Alper, principal partner of Bass River Water Works; Marty Blatt, attorney; and Joel Bergman, architect approached the Board for an informal discussion regarding Bass River Marina's plans for (1) rearranging docking facilities for the inclusion of 66 houseboat slips; (2) new parking facilities; (3) refurbishing of the restaurant; (4) the addition of tennis courts; and (5) general cleaning up and refurbishing the marina. The discussion entailed details of the items listed above and two primary concerns of the Board: (1) the possible impact of the 66 houseboat units on the Bass River Elementary School and tax rate and (2) potential problems regarding the pollution of the Bass River with sewage and gray water. Mr. Woods and Mr. Seay stated that they hoped that the Board could work with the applicant to improve the marina while adequately addressing the problems of an influx of school age children and pollution of the Bass River.
Mr. Blatt stated that the sewage would be held aboard the houseboats in holding tanks and pumped out by a 'honey boat' using a vacuum system, that grey water flowing directly into the river posed no environmental problems, and that the marina would have houseboat owners sign a lease that prohibited children from living aboard except during the summer months.
Mr. Blatt, an attorney, advised that a substantial investment would be involved and that he and his partners wanted to know whether there would be opposition to the redevelopment of the marina including the presence of floating homes. Plaintiffs also expressed a desire to bring models to the marina to see if there were interested purchasers. It was in response to these initial comments, as well as the architectural presentation by Mr. Bergman, that questions ensued concerning children, local taxes and water discharge. Mr. Blatt's answers included comments that the floating homes were equipped with Coast Guard approved systems for gray water treatment and that plaintiffs could dock them at the marina free from local regulation.
The Planning Board did not express any open hostility to plaintiffs' plans. The comments of Messrs. Woods and Seay (supra) reflect the Board's general attitude. The Board and its members contemplated, however, that a formal presentation to the Board for site plan approval and a building permit would be forthcoming before the project would proceed. While site plan approval might not be necessary to permit the coming and going of different vessels at the marina, plaintiffs' presentation included plans for substantial alteration of docks, parking lots and the restaurant, as well as the addition of tennis courts. Furthermore, the presence of a residential community of over sixty housing units clearly constituted a significant change in the general use of the marina. Hence, it was reasonable for the Planning Board to assume, as the July 22 meeting drew to a close, that a formal application for site plan approval would be made. At no time did defendants represent to plaintiffs (either expressly or by implication) that they could proceed to develop their floating home community without site plan approval from the Planning Board.
Nor was there reason for that Board to assume that plaintiffs understood otherwise. Mr. Alper had made a prior formal application, approximately one and one-half years previously, regarding different plans for the marina. Mr. Blatt was an attorney, assumed to know the requirements of municipal law in this respect. Mr. Best had held several positions in the municipal government of Ventnor City, New Jersey over a fifteen-year period, including membership on or affiliation with its planning board for about ten years. This Court finds that these sophisticated, experienced developers were not misled to believe that they could proceed to market and install floating homes at the marina without any other action by the municipality.
In August 1982, Peter Stemmer, Secretary/Clerk of the Planning Board, visited the marina and met briefly with Mr. Alper. Stemmer went aboard a model floating home with Alper, who also gave him a copy of an anticipated "lease" with occupants of these units that would prohibit children from living aboard during the school year. Neither Stemmer nor Alper mentioned any further interaction between the Planning Board and the plaintiff/developers. During this same time period, various investors, including Mr. Best, formed BRA, raised capital totalling approximately $250,000 and then negotiated a financing package of approximately $750,000 with their bankers. On October 13, 1982, BRA purchased the Bass River Yachting Center for the sum of $655,000. Some floating homes had already been moved to the marina and capital improvements had commenced.
In September 1982, Ira Milovsky, Bass River Township Engineer, upon instructions from Mayor West and the Planning Board, who were concerned about the intrusion of plaintiffs' floating home community, began formulating and drafting Ordinance 83-1. Neither plaintiffs nor any of their representatives were informed about this development. The drafting of the ordinance continued through the fall of 1982. At the November 1982 Township Planning Board meeting the ordinance was discussed at great length. At the December 1982 meeting the ordinance was recommended, in its final form, by the Board.
Also in November, prior to the November Planning Board meeting, Ira Milovsky telephoned David Martin, a naval architect, to inquire about a "volume coefficient"
which would be applicable to the floating homes to be moored at plaintiffs' marina. Milovsky did not reach Martin and when advised that Martin had been retained by plaintiffs, Milovsky ceased his efforts to contact him. Following this call, Mr. Alper telephoned Floyd West inquiring as to why Mr. Milovsky had called, whether he, Alper, could be of any assistance or answer any questions and, finally, if the matter was of concern to the marina or Mr. Alper personally. Mayor West stated that he did not know why Milovsky called Mr. Martin and did not advise Mr. Alper of the drafting of Ordinance 83-1. Instead, he gave Alper Milovsky's telephone number and advised him to call Milovsky. Mr. Alper called Milovsky, making the same inquiry of him and offering the same assistance. Mr. Milovsky, the individual chiefly responsible for the development and drafting of Ordinance 83-1, determined that his efforts should be confidential. Accordingly, he not only failed to tell Mr. Alper about the ordinance, he stated that his inquiry "did not concern" Mr. Alper.
Milovsky also telephoned several other persons, including Mr. William Healy, representing Viking Yachts, a local builder of pleasure craft. They discussed the "volume coefficient" and how it related to Viking boat hulls, ascertaining the Viking boat hulls fell below a specified "volume coefficient".
Milovsky formulated his "volume coefficient" and drafted Ordinance 83-1 specifically to exclude floating homes as they are defined in that ordinance. As of January 1983 only plaintiffs had expressed plans to establish a floating home marina in Bass River Township.
On January 7, 1983, plaintiffs learned from an article appearing in the Atlantic City Press that the Township was in the process of passing an ordinance which would ban the floating homes and thus thwart their planned development at the marina. This was the first notice plaintiffs had regarding Ordinance 83-1. The ordinance was scheduled for final passage on second reading on January 20, 1983.
On January 14, 1982 Mr. Blatt wrote to the Township Solicitor and requested that the final passage of the ordinance be stayed until plaintiffs could provide information which would obviate the need for a total prohibition of the floating homes. The Township refused this request.
The second reading of Ordinance No. 83-1 was held before the Board of Commissioners on January 20, 1983. Representatives of the plaintiffs appeared and argued against the premature passage of the ordinance. They stated that they had no intention of polluting the Bass River and that the floating homes would not detrimentally affect the environment. They again requested that the Board of Commissioners defer action on the ordinance to permit time to determine whether the Township's concerns could be met without the necessity of a complete ban of these vessels. The request was denied and the Township's Board of Commissioners proceeded to consider 83-1. As reflected in the Minutes of that meeting (Appendix A), thirteen written exhibits were received and considered (D-8a through D-8m), the last of which was the report of one Frank Sciremammano. Mr. Sciremammano had been retained by plaintiffs as a consultant regarding the impact of the floating home project upon the waters of the Bass River and vicinity. As summarized in the Minutes noted above, "He stated that the gray water from the proposed houseboats would not pollute the Bass River or harm the oyster beds" downstream. Appendix A/D-8 at p. 2184. When questioned at the meeting, however, Sciremammano acknowledged that he could not make a specific statement regarding the impact of such a gray water discharge on the oyster beds.
Rejecting plaintiffs' argument that there was neither a factual nor a legal basis for enactment of that ordinance, the Board of Commissioners, at the close of the meeting, passed Ordinance 83-1 in the form appearing in Appendix A.
Plaintiffs contend that defendants encouraged the pursuit of plans to develop the floating home community at the marina while, at the same time, secretly drafting an ordinance to ban that project. Plaintiffs contend further that they reasonably believed that their plans were acceptable and, in reliance thereon, made substantial investments and financial commitments which are now thwarted by Ordinance 83-1. Accordingly, plaintiffs argue that defendants should be estopped from enforcing that ordinance or otherwise denying plaintiffs the right to sell and dock up to sixty-six floating homes at Bass River Yachting Center. Plaintiffs, however, have failed to establish this estoppel claim. Neither the supposed "encouragement" from the Planning Board and its members nor the equivocations of West and Milovsky to Alper (whether considered separately or together) raise an estoppel against the defendants from banning plaintiffs' floating homes.
The vast majority of reported decisions in New Jersey on the subject of municipal estoppel have evolved under circumstances where building permits have been issued and later revoked for various reasons. These cases themselves have gravitated into three general categories, described in Trenkamp v. Township of Burlington, 170 N.J.Super. 251, 271, 406 A.2d 218 (L.Div. 1979), as follows:
In the present case, no building permit was ever issued. Indeed, no formal application for site plan approval was filed. Plaintiffs sought only an informal meeting with the Planning Board in order to present their plans and determine whether clear opposition would be forthcoming. Meetings of this sort are expressly defined by New Jersey statute N.J.S.A. 40:55D-10.1, which provides as follows:
At the request of the developer, the planning board shall grant an informal review of a concept plan for a development for which the developer intends to prepare and submit an application for development. The developer shall not be required to submit any fees for such an informal review. The developer shall not be bound by any concept plan for which review is requested, and the planning board shall not be bound by any such review.
Plaintiffs chose to terminate their submissions to the municipality with the conclusion of the informal Planning Board meeting based upon the firm belief, which they have continued to assert throughout this litigation (albeit erroneously), that their project to sell and moor floating homes was not subject to local regulation and, more particularly, did not require formal site plan approval and the issuance of a building permit.
Defendants argue that since no formal action of any sort was sought from the municipality, the body of decisional law which has arisen concerning municipal estoppel (including the few instances when it has been applied) is unavailable to plaintiffs; accordingly, the municipal estoppel claim is without legal basis and must therefore be dismissed. Though logically appealing, this argument is overly simplistic. The New Jersey decisions on the subject of municipal estoppel can provide some guidance in the present matter because of their treatment of the element of reasonable reliance by the developer. Indeed, the evaluation of the "middle ground" category of cases mentioned in Trenkamp centers upon the competing considerations of reasonable reliance on behalf of the developer and the public interest served by the challenged municipal action. Those considerations are as applicable in the present matter as they would be in a case where a building permit had been issued and subsequently revoked. See: Howland v. Freehold, 143 N.J.Super. 484, 488-90, 363 A.2d 913 (App.Div. 1976). In the case at bar, in light of the limited, informal inquiries to municipal officials and the Planning Board, considering the express statutory provision that any review at such an informal meeting is not binding upon the Planning Board, considering further that the encouragement from municipal officials was general and cautious, without any specific endorsement of a floating home residential project, and considering also the plaintiffs' constant position that although they would seek to avoid controversy they nevertheless had the absolute right to proceed with the project free of local regulation, this Court finds and determines that the plaintiffs have failed to establish any reasonable reliance upon any action or inaction of the defendants which could form the basis for the imposition of municipal estoppel.
Nor do the evasive tactics of Mayor West and Mr. Milovsky in November 1982 resurrect any claim for municipal estoppel. The actions of these gentlemen took place after plaintiffs had fully committed their funds and their credit to the development of the marina. Furthermore, plaintiffs were given ample opportunity to attack Ordinance 83-1, in its final form, at second reading before the Township's Board of Commissioners. Accordingly, this Court determines that plaintiffs suffered no injury by not being advised of the potential enactment of such an ordinance during its formative stages.
Due Process, Equal Protection and Exercise of the Police Power
At the outset, it is to be noted that a "zoning ordinance comes to the courts clothed with every presumption of validity." City of Ann Arbor, Michigan v. Northwest Park Construction Corp., 280 F.2d 212, 223 (6th Cir. 1960). See also: Sternaman v. County of McHenry, 454 F. Supp. 240, 242 (N.D.Ill. 1978); City of Highland Park v. Train, 519 F.2d 681, 696 (7th Cir. 1975); Nasser v. City of Homewood, 671 F.2d 432, 441 (11th Cir. 1982). "Unless it is based upon a suspect classification or impinges on a fundamental right . . . zoning legislation may be held unconstitutional only if it is shown to bear no possible relationship to the State's interest in securing the health, safety, morals or general welfare of the public and is, therefore, manifestly unreasonable and arbitrary." City of Highland Park v. Train, supra, at 696.
In assessing the validity of an enactment such as Ordinance 83-1, the test to be utilized is whether the ordinance is "reasonable". A leading decision so stating is Goldblatt v. Town of Hempstead, 369 U.S. 590, 82 S. Ct. 987, 8 L. Ed. 2d 130 (1962). There, the appellant challenged a local ordinance on the ground that it deprived him of the beneficial use of his land without due process of law. The Court upheld the ordinance and in so doing refrained from enunciating any specific criteria by which to judge an ordinance. Instead, it preferred to utilize "the familiar standard of 'reasonableness'." See: Goldblatt, supra, at 594, 82 S. Ct. at 990. The Court, quoting from Lawton v. Steele, 152 U.S. 133, 137, 14 S. Ct. 499, 501, 38 L. Ed. 385 (1894), phrased the standard of review as follows:
to justify the State in . . . interposing its authority in behalf of the public, it must appear, first, that the interests of the public . . . require such interference; and second, that the means are reasonably necessary for the accomplishment of the purpose and not unduly oppressive upon individuals.
Id. 369 U.S. at 594-95, 82 S. Ct. at 990.
The standard of "reasonableness" has been affirmed and utilized in numerous cases subsequent to Goldblatt,3 and accordingly will be the criterion by which the present ordinance will be assessed.
Plaintiffs, in their Verified Complaint, insist that Ordinance 83-1 violates the Due Process and Equal Protection Clauses. They contend that the subject ordinance offends substantive due process in that it has no reasonable basis in a legitimate governmental purpose, is wholly arbitrary and capricious, and is nothing more than a facade behind which defendants mask their true purpose of depriving plaintiffs of their property without due process. Similarly, plaintiffs claim that defendants' differentiation between vessels based upon "volume coefficient" is an irrational distinction between similar vessels, contravening the Equal Protection Clause. Furthermore, plaintiffs contend that defendants use of an exclusionary rather than a regulatory ordinance violates both due process and equal protection. Defendants reply that Ordinance 83-1 represents a valid, proper exercise of the police power, reasonably based upon legitimate governmental interests, thus depriving plaintiffs of neither due process nor equal protection.
Similar due process claims were asserted and rejected in the Third Circuit's decision in Rogin v. Bensalem Township, 616 F.2d 680 (3d Cir. 1980). There, a real estate developer purchased land in Bensalem Township and received approval of Bensalem's Board of Supervisors to build a 557-unit condominium project. In reliance on this approval, the developer began construction and by early September 1976 had nearly completed 106 of the units. Later that month, the developer sought to obtain twelve additional building permits but, for the first time, his request was denied. The developer was informed that his plan no longer complied with Bensalem's zoning ordinance, which had been amended approximately one month after the approval of the original plan.
The developer appealed to the Zoning Hearing Board of Bensalem, and while this appeal was pending the ordinance was again amended, reducing the permissible density further still. After several unsuccessful administrative and state court proceedings, the developer brought an action in federal court seeking injunctive relief directing the Township to issue the remaining permits, and also requesting money damages. The District Court dismissed the claims and plaintiff appealed.
In addressing the developer's substantive due process claim, the Third Circuit noted that "the focus of due process analysis is not whether the Township has irrationally distinguished between similarly situated classes, but whether it was irrational for the Township to have passed the law at all. . . ." Rogin, supra, at 689. The Court went on to hold that the ordinance "'need not be in every respect logically consistent with its aims to be constitutional. It is enough that there is an evil at hand for correction, and that it might be thought that the particular legislative measure was a rational way to correct it.'" Id. at 689. (Quoting Williamson v. Lee Optical Co., 348 U.S. 483, 487-88, 75 S. Ct. 461, 464, 99 L. Ed. 563 (1955).) Having weighed the competing arguments, the Court dismissed the developer's substantive due process claim, ruling that "the Township has a legitimate interest in controlling population growth and density and the zoning amendments are a rational and reasonable means to accomplish that purpose. Therefore, the zoning amendments were not arbitrary or irrational . . . ." Id. at 689.
In Village of Euclid v. Ambler Realty Co., 272 U.S. 365, 47 S. Ct. 114, 71 L. Ed. 303 (1926), the Village Council established a comprehensive zoning scheme regulating and restricting the location of industries, shops, apartment buildings, family housing and the height of buildings. A portion of Ambler's land lay within an area in which the zoning ordinance had completely prohibited industry. Ambler proceeded to attack the ordinance on due process grounds, claiming that it had held the land in question for a number of years with the purpose of selling and developing it for industrial purposes, and that the newly-enacted law prevented it from doing so. The Court spurned Ambler's arguments and upheld the validity of the ordinance, noting that the legislation represented a reasonable and valid exercise of the police power of the Village. Furthermore, it recognized the ...