On appeal from the Superior Court, Law Division, Hudson County.
Petrella, Arnold M. Stein and Kestin. The opinion of the court was delivered by Kestin, J.A.D.
In 1965, an ordinance was enacted in the Town of West New York regulating and licensing coin operated amusement or game devices. On June 20, 1990 the ordinance was amended to 1) increase the annual license fee from $75 to $500 per device,*fn* 2) change the limit on the number of devices per location from three to two, and 3) eliminate a "grandfather's clause", i.e., the prospective application of a 2,500 sq. ft. per device requirement.
Plaintiffs, who distribute covered devices, challenged the validity of the ordinance as amended on various grounds. On cross-motions for summary judgment, the trial court held the ordinance to be preempted by operation of state law as an impermissible regulation of gambling. The trial court was apparently led to adopt this focus because of the municipality's insistence that its sole purpose for legislating in the area was to prevent criminal activity, i.e., the use of video games in the gambling operations of organized crime.
We reverse the trial Judge's determination on the preemption ground and remand for full consideration of remaining issues. Some issues mentioned by the Judge in his letter opinion of March 20, 1991, such as those relating to undue burden and valid exercises of police powers, cannot be fully adjudicated in the absence of constitutional considerations, which the trial Judge expressly put aside. Other arguments advanced by plaintiffs have not yet been addressed by the trial court.
A municipality possesses only those powers which are delegated to it by the State. In re Public Service Elec. and Gas Co., 35 N.J. 358, 370, 173 A.2d 233 (1961). It is also
fundamental that a municipality may not exercise governmental power in those areas of regulation preempted by the State, Overlook Terrace Mgt. Corp. v. Rent Control Bd., 71 N.J. 451, 366 A.2d 321 (1976), particularly in the criminal law area, State v. Crawley, 90 N.J. 241, 247-51, 447 A.2d 565 (1982); N.J.S.A. 2C:1-5d.
The general grant of police powers to municipalities contained in N.J.S.A. 40:48-2 is, however, to be broadly and liberally construed, N.J. Const. Art. IV, § VII, para. 11; Fred v. Mayor and Council, Old Tappan Borough, 10 N.J. 515, 517-18, 92 A.2d 473 (1952); but always with regard for the limits of legislative prescription. Id. at 521, 92 A.2d 473. Municipal exercises of governmental power must relate
to matters of local concern which may be determined to be necessary and proper for the good and welfare of local inhabitants, and not to those matters involving state policy or in the realm of affairs of general public interest and applicability.
Further by way of basic premise, the Legislature has granted municipalities specific, plenary power to regulate places of public amusement, N.J.S.A. 40:52-1f, and the machinery and equipment used therein, N.J.S.A. 40:48-1(20). See also N.J.S.A. 5:8-101 which establishes the power of some municipalities to license owners and operators of certain amusement games under the aegis of the Amusement Games Control Commissioner. These powers, although plenary in stated scope, may of course be limited by an expressed or construed legislative intent to preclude their exercise when they touch upon other, preempted, subject matters and conflict with state policy. See State v. Crawley, supra.
Several other fundamental principles govern resolution of the question whether West New York was preempted from legislating with respect to coin operated amusement or game devices because of its stated objective to prevent criminal ...