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KESSLER INST. FOR REHABILITATION, INC. v. MAYOR &

January 31, 1995

KESSLER INSTITUTE FOR REHABILITATION, INC., in its own right and for and on behalf of its employees and patients; SALLY TANNENBAUM, Legal Guardian of HEATHER BENNEY; HEATHER BENNY and UNITED ASSOCIATION FOR HANDICAPPED PERSONS, INC., Plaintiffs,
v.
MAYOR AND COUNCIL OF THE BOROUGH OF ESSEX FELLS, a municipality, and BOROUGH OF ESSEX FELLS, Defendants.



The opinion of the court was delivered by: WILLIAM G. BASSLER

 BASSLER, DISTRICT JUDGE:

 Plaintiff, Kessler Institute for Rehabilitation, Inc. ("Kessler"), operates a health care facility for disabled persons in West Orange, New Jersey. In addition, Kessler owns a 12.5 acre tract of land, located a few miles away from its current facility and in the Borough of Essex Fells, New Jersey. Kessler purchased the site for construction of a second facility, to be used as a transitional residence for disabled persons and a skilled nurse training facility.

 The property that Kessler intended to use to expand its services to disabled persons is now the subject of a condemnation action filed by the Borough of Essex Fells in New Jersey Superior Court, Law Division, Essex County. The condemnation action was authorized by a municipal ordinance, enacted on May 17, 1994, pursuant to the New Jersey Eminent Domain Act, N.J.S.A. 20:3-1, et seq. and the New Jersey Local Lands and Building Law 40A:12-1 et seq.

 Plaintiff, Salley Tannenbaum, is the legal guardian for plaintiff, Heather Benney, a disabled person who is allegedly a "candidate" for treatment at Kessler's proposed facility if and when it is constructed. Compl. P 5. Plaintiff, the United Association for Handicapped Persons ["UAFHP"] is a non-profit organization dedicated to advocacy and support for Handicapped Persons in New Jersey. Compl. P 6.

 On May 18, 1994, Plaintiffs initiated this action claiming that Defendants' enactment of the ordinance authorizing condemnation of Kessler's property discriminated against disabled persons and/or those who associate with them in violation of the following laws: the equal protection clauses of the state and federal constitutions, the Fair Housing Act, the Americans with Disabilities Act, and the New Jersey Law Against Discrimination.

 This Court has federal question jurisdiction pursuant to 28 U.S.C. § 1331 (general federal question jurisdiction), 28 U.S.C. § 1343 (jurisdiction over civil rights actions), and 42 U.S.C. § 3613 (jurisdiction over housing discrimination claims). The Court has supplemental jurisdiction over Plaintiffs' New Jersey constitutional and statutory claims pursuant to 28 U.S.C. § 1367.

 Defendants have moved to dismiss all of Plaintiffs' claims on three alternative grounds: (1) lack of standing; (2) abstention; and (3) failure to state a claim upon which relief can be granted.

 For the reasons set forth in this Opinion, Defendants' motion is GRANTED in part and DENIED in part.

 I. BACKGROUND

 On this motion to dismiss, the Court must accept all of Plaintiffs' factual allegation as true. Conley v. Gibson, 355 U.S. 41, 48, 2 L. Ed. 2d 80, 78 S. Ct. 99 (1957). According to the Plaintiffs, the history of the property at issue in the state condemnation proceeding reflects the Defendants' intentional discrimination against persons with disabilities. Before Kessler purchased the property, it was owned by the Northeastern Bible College, which graduated its last class and offered the property for sale in the summer of 1990. Compl. P 10. On August 12, 1991, the Borough purchased a soccer field, totaling approximately three acres from the Bible College. Compl. P 11.

 According to the Plaintiffs, the Borough never made any attempt to purchase the balance of the property from the Bible College. See Compl. P 12. The property remained for sale until May 26, 1992, when Kessler contracted to purchase the property. Compl. P 12.

 Kessler intended to construct a new facility on the site, a few miles away from its existing facility, in order to expand its services to disabled persons. Compl. P 13. The New Jersey Department of Health issued a Certificate of Need to Kessler for a 20 bed transitional living facility for disabled persons and a 60 bed skilled nursing facility to be established on the former Bible College site. Compl. P 14.

 Since the property was zoned for educational use, Kessler appeared before the Borough Planning Board, seeking an amendment to the Borough's zoning ordinance to permit construction of the proposed facility. Compl. PP 15-16. While this matter was pending, on October 23, 1992, the sale contract between Kessler and the Bible College became final. Compl. P 19.

 In order to evaluate Kessler's request to amend the zoning ordinance, Defendants, the Borough, Mayor, and Council of Essex Fells, retained the services of planning and legal experts to evaluate the suitability of the site for Kessler's proposed facility. Compl. P 20.

 At the public hearing, Plaintiffs contend that Kessler was "heckled" by Essex Fells residents, who made several comments evidencing discriminatory animus against disabled persons and those who serve them, including: "We don't want our children to see people in wheelchairs" and "Go back to West Orange". Compl. P 22. Rather than submit the zoning amendment to the Council as originally planned, the Mayor and Council decided to send a questionnaire to all Borough residents. Compl. P 22.

 The questionnaire, mailed on October 19, 1993, asked Borough residents whether they would be willing to pay higher taxes in order to acquire Kessler's property, either through negotiation or condemnation, for the alleged public purpose of maintaining a park and/or open space. Compl. P 24. When the questionnaire was mailed, Kessler contends that 15.9% of the property within the Borough had already been dedicated to parks and open spaces. Compl. P 24.

 A majority of the residents who responded favored acquiring Kessler's property. Compl. P 25. As a result, the Borough offered Kessler $ 2.3 million to sell the property voluntarily, an offer that Kessler refused. Compl. P 26.

 With the proposed amendment to the zoning ordinance stalled, Kessler applied for a use variance with the Borough Board of Adjustment. Compl. P 27. A hearing on the use variance was originally scheduled for May 24, 1994 but was postponed because Kessler failed to provide notice to neighboring property owners as required by New Jersey law. See N.J.S.A. 40:55D-12. Compl. P 27.

 On May 17, 1994, the Borough enacted an ordinance authorizing condemnation of the property pursuant to the New Jersey Eminent Domain Act, N.J.S.A. 20:3-1, et seq. and the New Jersey Local Lands and Building Law 40A:12-1 et seq. The stated purpose for acquiring Kessler's property was to use the property for park land, recreational use, and the protection of a critical environmental area, serving as a water recharge for wells in the area. Compl. P 28.

 According to the Plaintiffs, all six wells located on property adjacent to the condemned property are already purified by "air stripping units", installed because the wells were found to be contaminated by the New Jersey Department of Environmental Protection. Compl. P 29. Since these mechanical purification mechanisms are already in place, Plaintiffs claim that there is no legitimate need for the Borough to condemn its property to provide a "recharge area" for the contaminated wells. Compl. P 29.

 On June 6, 1994, Defendants, pursuant to N.J.S.A. 20:3-8, filed a verified complaint in condemnation, as well as an order to show cause, in the New Jersey Superior Court, Law Division, Essex County. The order to show cause was returnable July 20, 1994. As part of the state condemnation proceeding, Kessler challenged the Borough's actions by denying its authority to condemn the property. See N.J.S.A. 20:3-11. As a result, all subsequent action in the state condemnation proceeding, including the vesting of title in the Borough, has been stayed pending resolution of Kessler's challenge to the Borough's authority. See id.

 II. DISCUSSION

 A. Standing

 An outgrowth of the "case or controversy" requirement of Article III of the constitution, "standing is the determination of whether a specific person is the proper party to bring a particular matter to the Court for adjudication." Erwin Chemerinsky, Federal Jurisdiction § 2.3.1 (1989). In order to invoke the jurisdiction of a federal court, a plaintiff must have "a personal stake in the outcome" of an otherwise justiciable controversy. Warth v. Seldin, 422 U.S. 490, 498-99, 45 L. Ed. 2d 343, 95 S. Ct. 2197 (1975), U.S. Const., art. III, § 2, cl. 2. "At an irreducible minimum, Art. III requires the party who invokes the court's authority to 'show that he personally has suffered some actual or threatened injury as a result of the putatively illegal conduct of the defendant,' . . . and that the injury 'fairly can be traced to the challenged action" and "is likely to be redressed by a favorable decision. . . '"

 Valley Forge Christian College v. Americans United for Separation of Church and State, 454 U.S. 464, 472, 70 L. Ed. 2d 700, 102 S. Ct. 752 (1982) (citations omitted).

 In addition to these three constitutional requirements for standing, the Supreme Court has also identified several prudential standing principles that require a federal court to decline jurisdiction. Even where a party has satisfied the constitutional case or controversy requirement, these prudential requirements dictate that "the Plaintiff must generally assert his own legal rights and interests, and cannot rest his claim to relief on the legal rights or interests of third parties." Warth, 422 U.S. at 499.

 The Supreme Court has recognized, however, several exceptions to this general rule against third party standing. A plaintiff who satisfies constitutional standing requirements can invoke a federal court's jurisdiction to protect the rights of non-parties where: (1) the third party is unable or unlikely to protect its own interests and the plaintiff is capable of adequately representing them; or (2) the plaintiff has a special relationship to the third party. Chemerinsky, § 2.3.4.

 Another related doctrine, organizational standing, might be interpreted as an additional exception to the prudential rule against third party standing. Id. § 2.3.4 n.134. Under certain circumstances, an organization whose own legal rights and interests have not been injured may seek redress on behalf of its members. E.g., Public Interest Research Group of New Jersey, Inc. et al. v. Powell Duffryn Terminals, Inc., 913 F.2d 64, 70 (3d Cir. 1990), cert. denied, 489 U.S. 1109 (1991) [hereinafter PIRG v. Powell Duffryn]. "Such 'representational standing' is appropriate where 1) the organization's members would have standing to sue on their own, 2) the interests the organization seeks to protect are germane to its purpose, and 3) neither the claim asserted nor the relief requested requires individual participation by its members." Id.; accord Natural Resources Defense Council et al. v. Texaco Refining and Marketing, Inc., 2 F.3d 493, 504-05 (3d Cir. 1993).

 1. Kessler

 In the complaint, Kessler has been designated as suing in its own right and on behalf of it patients and employees. Applying the three constitutional standing requirements: (1) injury in fact; (2) traceability; and (3) redressability; as well as prudential standing principles related to third party standing, the Court concludes that Kessler possesses standing to sue in its own right and thus does not reach the issue of whether Kessler can sue on behalf of its patients and employees.

 a. Injury in Fact

 Regarding Kessler's standing to sue in its own right, Defendants' objection focuses on the constitutional requirement of injury in fact. The Supreme Court has defined the injury in fact requirements as: "an invasion of a legally protected interest which is (a) concrete and particularized, and (b) imminent, not conjectural or hypothetical." Lujan v. Defenders of Wildlife, 504 U.S. 555, 119 L. Ed. 2d 351, 364, 112 S. Ct. 2130 (1992) (citations omitted) [hereinafter Defenders of Wildlife]. On a motion to dismiss, a court should "presume that general allegations embrace those specific facts that are necessary to support a claim". Id. at 363-64.

 According to Defendants, Kessler lacks standing in its own right because it has not suffered an actual or threatened injury. Def. Br. at 22. Defendants contend that Plaintiffs will not be injured unless and until Kessler's property is condemned. Since Kessler has challenged the Borough's authority to condemn the property pursuant to N.J.S.A. 20:3-11, all further action by the Borough to condemn the property has been stayed. See N.J.S.A. 20:3-11, see also Bridgewater Township v. Yarnell, 64 N.J. 211, 314 A.2d 367 (1974). As a result, the Borough has not filed a declaration of taking as provided under N.J.S.A. 20:3-17 with a recording office, such as the County Clerk, that would presumably cloud Kessler's title to the property. Therefore, Defendants argue, the injuries alleged by Kessler are not concrete but purely hypothetical. See Defenders of Wildlife, 119 L. Ed. 2d at 364.

 While Defendants correctly argue that the potential deprivation of Kessler's property through condemnation is too hypothetical to support standing, they overlook Plaintiffs' allegations that Kessler has already been injured by the Defendants' specifically targeted and allegedly discriminatory actions. Regardless of whether the property is ultimately condemned, Plaintiffs allege that Kessler has been injured by the enactment of the municipal ordinance and the initiation of state condemnation proceeding. According to Plaintiffs, Defendants' exclusive motive in taking these actions was discriminatory animus against disabled persons in violation of the equal protection clause of the federal and state constitutions.

 The Supreme Court has held that stigmatic injury inflicted by unconstitutional discrimination "accords a basis for standing only to 'those persons who are personally denied equal treatment". Allen v. Wright, 468 U.S. 737, 755, 82 L. Ed. 2d 556, 104 S. Ct. 3315 (1984) (citing Heckler v. Mathews, 465 U.S. 728, 739-40, 79 L. Ed. 2d 646, 104 S. Ct. 1387 (1984)). Standing cannot be used as "a vehicle for the vindication of value interests of concerned bystanders". Id. at 756 (citing United States v. SCRAP, 412 U.S. 669, 687 (1973).

 Although Kessler is not itself disabled, it has allegedly suffered constitutional injury by being stigmatized on the basis of its association with disabled persons. As the owner of the property targeted by the municipal ordinance for condemnation, Plaintiffs claim that the Defendants' unconstitutionally discriminatory motive resulted in Kessler being denied equal treatment. The municipal ordinance authorizing the Borough to initiate condemnation proceedings related exclusively to Kessler's property. Consequently, any stigmatic injury inflicted by the ordinance was both concrete and extremely particularized. See Defenders of Wildlife, 119 L. Ed. 2d at 364.

 Furthermore, Plaintiffs claim that the allegedly unconstitutional ordinance has delayed construction of the proposed treatment facility, presumably resulting in lost profits. Moreover, Kessler has incurred expenses in petitioning for an amendment to the Borough's zoning ordinance, which it claims was unconstitutionally denied, as well as in defending its right to develop the property in the state condemnation action. See Village of Arlington Heights v. Metropolitan Housing Development Corp., 429 U.S. 252, 263, 50 L. Ed. 2d 450, 97 S. Ct. 555 (1977) [hereinafter Arlington Heights].

 In addition to these alleged constitutional injuries, Kessler asserts a variety of statutory claims. Therefore, Kessler's standing to sue under these statutes must similarly be evaluated.

 "Congress may create a statutory right or entitlement the alleged deprivation of which can confer standing to sue even where the plaintiff would have suffered no judicially cognizable injury in the absence of statute." Warth, 422 U.S. at 514.

 Contrary to Defendants' arguments, Kessler possesses standing to protest the Defendants' alleged discriminatory conduct under the Fair Housing Act ("FHA"). The FHA confers standing upon persons or entities "aggrieved" as a result of a discriminatory housing practice prohibited by the Act. 42 U.S.C. §§ 3602(d), 3613(a)(1)(A). The FHA prohibits discrimination against the disabled. 42 U.S.C. § 3604. Kessler argues that the Defendants' condemnation of its property constitutes a discriminatory housing practice, intended to prevent Kessler from providing services, including housing, to disabled persons. Since Kessler was directly targeted by this allegedly discriminatory housing practice, it possesses standing as an "aggrieved person" under the FHA. 42 U.S.C. § 3613(a)(1)(A).

 Moreover, Kessler claims that Defendant's allegedly discriminatory housing practice has deprived it of "important social, professional, business and economic, political and aesthetic benefits" of associating with disabled persons. Cf. Havens Realty Corp. v. Coleman, 455 U.S. 363, 376, 375-379, 71 L. Ed. 2d 214, 102 S. Ct. 1114 (1982). The Supreme Court has recognized that these types of economic and associational harms are cognizable injuries under the FHA. Id., Trafficante v. Metropolitan Life Ins. Co., 409 U.S. 205, 209-212, 34 L. Ed. 2d 415, 93 S. Ct. 364 (1972); Growth Horizons, Inc. v. Delaware Cty. Pa., 983 F.2d 1277, 1281 (3d Cir. 1993).

 Similarly, Kessler has suffered injury to a right conferred by the New Jersey Law Against Discrimination (NJLAD), N.J.S.A. § 10:5, and thus possesses standing to assert claims under that statute. All provisions of the NJLAD prohibiting various types of discrimination apply to "handicapped" persons. N.J.S.A. § 10:5-4.1. Although Kessler is not handicapped, the NJLAD, like the FHA, authorizes "any person claiming to be aggrieved by. . . unlawful discrimination" to file an action. N.J.S.A. §§ 10:5-12.5(b), 10:5-13. Under this standard, Kessler's allegation that it has been deprived of business and professional associations with handicapped persons constitutes an injury sufficient to support standing under the NJLAD. Cf. Trafficante, 409 U.S. at 208-09.

 These economic, stigmatic and associational injuries are not hypothetical but allegedly have already been inflicted by the Defendants' enactment of the ordinance and initiation of the condemnation proceedings. See Defenders of Wildlife, 119 L. Ed. 2d at 364. Regardless of whether Kessler's property is ultimately condemned, the allegedly discriminatory policy embodied by the municipal ordinance has already inflicted injury by depriving Kessler of professional and business associations with disabled persons, delaying its generation of profits from the proposed facility.

 In contrast, Kessler lacks standing to assert claims under the Americans With Disabilities Act ("ADA") because that statute confers no rights upon Kessler as a recipient of municipal services. The ADA provides relief for discrimination against persons with disabilities in three broad areas, each governed by a specific Subchapter of the Act: I. Employment; II. Public Services; and III. Public Accommodations and Services Provided by Private Entities. See id. In opposition to this motion Plaintiffs refuse to limit their claims to specific provisions of the ADA, but rather invoke "any applicable provisions." Pl. Br. at 28.

 Based upon the scheme provided in the ADA, however, only Subchapter II of the Act, governing municipal services, can conceivably confer a right upon Kessler that is enforceable against the Defendants and is sufficient to support standing. Plaintiffs' complaint does not allege that the Defendants have discriminated in their capacities as employers. As a result, Subchapter I is inapplicable. Moreover, Subchapter III, which prohibits discrimination in public accommodations and services, applies only to "private entities". 42 U.S.C. § 1281(6). Municipalities, as well as municipal departments, instrumentalities, and agencies, are specifically excluded from the definition of "private entities" subject to Subchapter III. *fn1" 42 U.S.C. §§ 1281(6), 12131(1). Therefore, if Congress conferred a right upon Kessler, sufficient to support standing, it must be found in Subchapter II of the ADA.

 Unlike the Civil Rights Act of 1964, 42 U.S.C. § 2000e-5(a), and the FHA, 42 U.S.C. § 3610(a), which authorize any person claiming to be aggrieved by discrimination to file a complaint, Trafficante, 409 U.S. at 208-09, Subchapter II of the ADA confers rights upon a much more narrow class of persons: only the disabled. Both 42 U.S.C. § 12132, which confers a substantive right to be free from discrimination in the provision of public services, and 42 U.S.C. § 12133, the enforcement provision (which incorporates 29 U.S.C. § 794 by reference), are limited to "qualified individual(s) with a disability". Since Kessler, an entity that serves the disabled, does not fall within this definition, Subchapter II of the ADA confers no substantive rights upon it to provide a basis for standing. Consequently, Kessler's claim based upon the ADA is dismissed for lack of subject matter jurisdiction pursuant to Federal Rule of Civil Procedure 12(b)(1). *fn2"

 b. Traceability

 A second constitutional standing requirement is that the personal injury must be "fairly traceable to the defendant's allegedly unlawful conduct". Allen, 468 U.S. at 751. Defendants do not seriously contest traceability.

 In contrast to plaintiffs who lacked standing because they alleged indirect injury "resulting from the independent action of some third party not before the court," Simon v. Eastern Kentucky Welfare Rights Org., 426 U.S. 26, 42, 48 L. Ed. 2d 450, 96 S. Ct. 1917 (1976), Kessler has alleged direct injury as a result of the Defendants' enactment of the municipal ordinance and initiation of state condemnation proceedings.

 c. Redressability

 Rather than contest traceability, Defendants argue that Kessler fails to meet the third constitutional standing requirement: the alleged personal injury must be "likely to be redressed by the requested relief". Allen, 468 U.S. at 751.

 According to the Defendants, Kessler's alleged injuries will not be remedied by the requested damages and injunctive relief. Defendants contend that because Kessler's property is currently zoned for educational use, invalidating the municipal ordinance that authorized the condemnation action would not insure that Kessler's proposed facility will ultimately be built. Even if the property were not subject to the condemnation action, construction of the facility depends upon Kessler obtaining a zoning variance. Therefore, Defendants argue, Kessler's alleged injuries are not redressable. Thus, Defendants claim, Kessler lacks standing and its claims should be dismissed.

 With respect to Kessler's request for relief in the form of damages, particularly those allegedly incurred as a result of delayed construction of the proposed facility, Defendants' objection does not really relate to redressability but to the merits of Kessler's equal protection and FHA claims. In fact, Kessler may be entitled to damages on these claims even if the proposed facility is never built. See e.g., 42 U.S.C. § 3604(f)(1)(b) (making it unlawful "to discriminate. . . or otherwise make unavailable or deny, a dwelling to any buyer or renter because of a handicap of. . . a person residing in or intending to reside in that dwelling. . . after it is made available. . ") (emphasis added), 42 U.S.C. § 3602(b) ("'Dwelling' means any building. . . intended for occupancy, as residence. . . ") (emphasis added).

 Regarding the injunctive relief requested by Kessler, the Court finds that invalidating the municipal ordinance authorizing the condemnation action is "substantially likely" to redress one of the harms allegedly inflicted by the Defendants: preventing Kessler's proposed facility from being built. ...


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