On appeal from the Superior Court, Appellate Division, whose opinion is reported at 243 N.J. Super. 157 (1990).
For affirmance and remandment -- Chief Justice Wilentz and Justices Clifford, Handler, Pollock, O'Hern and Garibaldi. Opposed -- None. The opinion of the Court was delivered by Garibaldi, J.
This appeal concerns the use of actions in lieu of prerogative writs and the scope of the jurisdiction of the Council on Affordable Housing (COAH) created under the New Jersey Fair Housing Act of 1985, N.J.S.A. 52:27D-301 to -329 (FHA). Specifically at issue is whether a plaintiff challenging a borough's zoning ordinance that implements COAH's substantive certification of its fair-share housing plan may bring an action in lieu of prerogative writs in Superior Court or may bring such an action only before COAH or the Appellate Division.
We find that the FHA does not restrict or extinguish a party's constitutional right to challenge municipal actions or decisions by instituting an action in lieu of prerogative writs. Although COAH possesses "extremely broad" powers, Hills Dev. Co. v. Township of Bernards, 103 N.J. 1, 32, 510 A.2d 621 (1986), including incidental jurisdiction over legal questions regarding the direction and control of its proceedings, it may not bar plaintiff from bringing suit in the Law Division challenging municipal actions not directly related to the COAH proceedings themselves. We therefore affirm the judgment of the Appellate Division, see 243 N.J. Super. 157, 578 A.2d 1241 (1990), remanding to the Law Division for further proceedings.
In an exclusionary-zoning suit brought in 1976 by a developer seeking to build low-income housing, defendant Borough of Paramus was ordered by the Law Division to rezone and provide a realistic opportunity for construction of affordable
housing. That court transferred the case to COAH shortly after the FHA was enacted in 1985. See N.J.S.A. 52:27D-316. During the ensuing two years, Paramus, various objectors including Westland Garden State Plaza, L.P., and Westland Properties, Inc. (Westland), and COAH worked on a plan for the Borough to meet the constitutional obligation to provide "a realistic opportunity for the construction of its fair share of low and moderate income housing." See Southern Burlington County NAACP v. Township of Mount Laurel, 92 N.J. 158, 221, 456 A.2d 390 (1983) (Mt. Laurel II).
In 1987, Paramus and Westland agreed that Westland would transfer $2,500,000 and eight to eleven acres of property to Paramus to be used to meet the Borough's low- and moderate-income housing need. Paramus, in turn, agreed to rezone Westland's property to provide both a new site for multi-family housing and a significant density increase to enable Westland to expand its mall by 750,000 square feet. That accord was set forth in an August 18, 1987 agreement and depended on Paramus receiving substantive certification from COAH for its housing element and fair-share plan and enacting zoning ordinance amendments.
On September 6, 1988, COAH granted substantive certification to Paramus's housing element and fair-share plan contingent on the municipality's subsequent adoption of the proposed zoning-ordinance amendments. Thereafter, on October 18, 1988, Paramus adopted the ordinance implementing its certified plan. Plaintiffs, Alexander's Department Stores of New Jersey, Inc., and Sakraf Wine and Liquor Store, Inc., (together "plaintiffs" or "Alexander's"), who also own commercial property in Paramus, had notice of COAH's proceedings and could have participated as objectors in the agency's evaluation of Paramus's fair-share plan but did not.
On December 8, 1988, Alexander's filed a complaint in lieu of prerogative writs in the Law Division, challenging the validity of the ordinance and naming Westland, COAH, Paramus, and
the Borough Council, Planning Board and Mayor of Paramus as defendants. The trial court dismissed counts alleging that defendants had violated the Open Public Meetings Act, N.J.S.A. 10:4-6 to -21, and had broken anti-trust laws, and that COAH had acted improperly in failing to refer the transferred builder's-remedy suit to the Office of Administrative Law (OAL) for an evidentiary hearing. The court denied defendants' motions to dismiss plaintiffs' remaining counts, which alleged that the Paramus-Westland agreement and zoning amendments were ultra vires and invalid as an unlawful sale of commercial zoning; that the agreement and zoning amendments unlawfully shifted to commercial developers the financial burden to fund Paramus's obligations under Mt. Laurel II and required them to finance improper off-site improvements; that by participating in negotiations for the agreement and zoning amendments Paramus's mayor had created an unlawful conflict of interest because of his relatives' relationship with Westland; that the agreement and zoning amendments were invalid because Paramus's governing body had made an unlawful contract not to alter a zoning scheme; that the zoning amendments were invalid spot zoning that created a favorable commercial zone consisting solely of Westland's properties; that contrary to COAH's substantive certification the agreement and ordinance did not provide a realistic opportunity for construction of affordable housing; that Paramus improperly failed to present the proposed amendments for the planning board's review; and that the ordinance was invalid because it was vague, inconsistent, and ambiguous.
The Appellate Division granted defendants' interlocutory appeal. Defendants argued that plaintiffs lacked standing to maintain the litigation, had failed to exhaust their administrative remedies, had presented their claims to the wrong court, and were barred by statutory time limitations as well as by principles of repose.
The Appellate Division affirmed in part and reversed in part. It dismissed, on principles of standing, plaintiffs' allegations
that the Westland agreement and zoning amendments failed to provide a realistic opportunity for the construction of low- and moderate-income housing. The court found that plaintiffs, as neighboring landowners and taxpayers, "cannot claim protection against zoning that unconstitutionally deprives others of housing opportunities, and * * * have an insufficient stake in the outcome of a suit to enforce the Mt. Laurel rights of others." 243 N.J. Super. at 165, 578 A.2d 1241. We denied plaintiffs' interlocutory cross-appeal on that point. N.J. (1991).
The court rejected COAH's argument that by choosing not to appear as objectors before COAH, plaintiffs had failed to exhaust their administrative remedies and should be barred from raising their arguments in the Law Division. The court found that plaintiffs' remaining counts had the following four common characteristics:
(1) they do not question Paramus's satisfaction of its Mt. Laurel duties, (2) they are the kinds of attacks on municipal action that neighboring landowners or taxpayers have traditionally made by prerogative writ, (3) they do not directly challenge any decision made by COAH, and (4) many of them concern issues that did not ripen until after COAH granted substantive certification, when the governing body took action on the zoning amendments. [243 N.J. Super. at 166, 578 A.2d 1241.]
Accordingly, the court found that the remaining counts did not charge Paramus with failing to provide for affordable housing. The court recognized COAH's incidental jurisdiction over legal matters arising in the course of the agency's proceedings, but found no basis for granting to COAH jurisdiction over legal questions generally related to municipal action. It also rejected defendants' argument that allowing plaintiffs' suit in the Law Division would erode the Appellate Division's exclusive jurisdiction over appeals from state-agency decisions. See R. 2:2-3(a)(2). The court reasoned that "[o]nly if every related legal issue, including those ripening after COAH completed its work, had ...