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Rivkin v. Dover Tp. Rent Leveling Bd.

February 29, 1996

DAVID RIVKIN, EDWARD RIVKIN, AND JUDITH RIVKIN, T/A GALAXY MANOR, A NEW JERSEY PARTNERSHIP, PLAINTIFFS-APPELLANTS,
v.
DOVER TOWNSHIP RENT LEVELING BOARD, DEFENDANT-RESPONDENT.



On certification to the Superior Court, Appellate Division, whose opinion is reported at 277 N.J. Super. 559 (1994).

The opinion of the Court was delivered by O'hern, J. Chief Justice Wilentz and Justices Handler, Pollock, Garibaldi, Stein and Coleman join in Justice O'HERN's opinion.

The opinion of the court was delivered by: O'hern

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

DAVID RIVKIN, ET AL. V. DOVER TOWNSHIP RENT LEVELING BOARD (A-26-95)

(NOTE: This is a companion case to General Motors Corp. v. City of Linden also decided today.)

Argued October 24, 1995 -- Decided February 29, 1996

O'HERN, J., writing for a unanimous Court.

The issue on appeal is whether a party that has appeared before a local rent leveling board has a claim under the Federal Civil Rights Act, 42 U.S.C. § 1983 (§ 1983), for an unconstitutional deprivation of property when a member of the board has acted in a biased manner and the other members of the board did not move to disqualify the member lacking in impartiality. Also addressed is whether the doctrine of Parratt v. Taylor (the Parratt doctrine) applies in the context of municipal rent controls. Parratt holds that when a deprivation of property results from the random and unauthorized actions of a state employee and any pre-deprivation process would have been impracticable, there is no due process violation so long as an adequate post-deprivation remedy is available.

David Rivkin, Edward Rivkin and Judith Rivkin (the Rivkins) are partners in Galaxy Manor, a mobile home park in Dover Township. Under the Dover Township Mobile Home Park Rent Leveling Ordinance, landlords must apply to the Dover Township Rent Leveling Board (Board) for rental increases.

In May 1990, the Rivkins filed an application with the Board for a rent increase based on $59,624.96 of capital improvements to Galaxy Manor. The Board conducted hearings on this application in 1990. Edward Baltarzuk, an actual member of Galaxy Manor, was a member of the Board. In these hearings, Baltarzuk acted as a biased advocate rather than as one sitting in impartial judgment. The Rivkins requested that Baltarzuk be removed from the proceedings. The Board denied that request and, with Baltarzuk participating, granted $20,641.42 in rent increases.

The Rivkins appealed to the Law Division, seeking a court determination of the amount of the rental increase, arguing that the findings of the Board were arbitrary, capricious and unreasonable because the Board had failed to disqualify a biased Baltarzuk. According to the Rivkins, the Board's actions constituted a violation of § 1983, permitting recovery of damages and counsel fees.

The Law Division reserved decision on the Rivkins' application for counsel fees but agreed that Baltarzuk's bias had tainted the proceedings. The court did not determine the amount of the rental increase, but ruled that the Board members were not biased and would not be influenced once Baltarzuk was removed from the proceedings. The court remanded the matter to the Board with all issues to be reconsidered absent Baltarzuk's participation. After the rehearing, the Board approved an additional increase of $24,089.67.

Thereafter, the trial court addressed the issues it had previously reserved decision on. The court awarded counsel fees and compensatory damages pursuant to § 1983 and § 1988, finding that Baltarzuk's action had "permeated the Board" and that the actions of the Board had violated the Rivkins' due process rights.

Both parties appealed to the Appellate Division, which affirmed the remand order, finding that the Rivkins' had suffered no due process violation under § 1983 and, therefore, were not entitled to counsel fees or compensatory damages. The Appellate Division concluded that Baltarzuk's actions were random and unauthorized and that the Rivkins had been afforded an adequate post-deprivation remedy under State law. As such, the requirement of procedural due process had been satisfied.

The Supreme Court granted the Rivkins' petition for certification. Before the Court the Rivkins assert that they have been denied their constitutionally guaranteed rights under the Fourteenth Amendment to "substantive due process" and have been deprived of their property without "procedural due process.

HELD: Absent egregious misconduct that shocks the conscience in the sense of violating civilized norms of governance, or invidious discrimination on the part of a board member or board, so long as the State provides a plain, adequate and timely remedy to redress irregularities in the proceedings, a party aggrieved by the determinations of a municipal rent leveling board does not have a claim for relief under the Federal Civil Rights Act, 42 U.S.C. § 1983.

1. Substantive due process is reserved for the most egregious governmental abuses against liberty or property rights, abuses that shock the conscience or otherwise offend either judicial notions of fairness or human dignity. Thus, the conduct of a Board member at a rent proceeding in violation of acceptable Board practice does not rise to the level of a substantive due process violation under U.S. Supreme Court standards. Moreover, when property rights are denied in the course of conventional municipal decisionmaking, there is no substantive due process violation. (pp. 7-22)

2. Under the Parratt doctrine, for deprivation of property to violate the Due Process Clause of the Fourteenth Amendment, it must occur without the opportunity to be heard at a meaningful time and in a meaningful manner. Post-deprivation remedies are satisfactory substitutes for pre-deprivation process when a meaningful pre-deprivation hearing is impracticable, and when property interests, rather than life or liberty interests, are at stake. Thus, an adequate post-deprivation hearing will satisfy the requirements of the Due Process Clause. Of course, the existence of a post-deprivation state remedy is constitutionally inadequate when the deprivation of property results from an established state procedure. Thus, a threshold question in any procedural due process case is whether the deprivation was caused by random and unauthorized conduct or whether it resulted from an established state procedure. (pp. 22-26)

3. Here, the analogy to Parratt is appropriate, though imperfect. The State system itself neither caused the deprivation of the Rivkins' property nor amounts to a per se violation of the Rivkins' procedural due-process rights. Rather, it was the unpredictable behavior of the tenant representative that went beyond the scope of the ordinance that caused the Rivkins' problems. (pp. 26-31)

4. The Rivkins contend that an action in lieu of prerogative writs is not an adequate remedy because it does not enable them to recover damages, counsel fees or costs. Parratt makes clear that state remedies need not provide all the relief that would have been available if the plaintiff were successful under § 1983. Moreover, a state remedy would not be considered inadequate simply because it did not allow for the recovery of counsel fees. Therefore, the action in lieu of prerogative writs afforded the Rivkins an adequate post deprivation state remedy to address the misconduct of the Board member or the Board. As such, the Rivkins' rights to procedural due process were not violated and they cannot sustain an action for damages and attorneys' fees under § 1983. (pp. 31-34)

5. The Equal Protection Clause should not be invoked each time applications are incorrectly denied by a municipal agency. Ordinarily, to sustain a claim of violation of equal protection, a plaintiff must be singled out because of membership in a protected class and cannot be just the victim of a random act of governmental incompetence. (pp. 35-37)

6. So long as state legal systems are committed to principles of equal Justice and provide plain and adequate remedies to prevent unconstitutional deprivations of property, there is no reason for claimants to seek redress in federal court or under federal law. When, however, a governmental agency is engaged in egregious misconduct rising to the level of a substantive due process violation or has invidiously discriminated against a member of society, a § 1983 violation occurs regardless of the fairness of the procedures used to implement the abuse. The conduct in this case does not rise to such a level. (pp. 34-42)

Judgment of the Appellate Division is AFFIRMED.

CHIEF JUSTICE WILENTZ and JUSTICES HANDLER, POLLOCK, GARIBALDI, STEIN and COLEMAN join in JUSTICE O'HERN's opinion.

The opinion of the Court was delivered by O'HERN, J.

The question in this appeal is whether a party that has appeared before a local rent leveling board has a claim under the Federal Civil Rights Act, 42 U.S.C. § 1983, for an unconstitutional deprivation of property when a member of the board has acted in a biased manner and the other members of the board did not remove or disqualify the member lacking in impartiality. The question is related to that concerning an allegedly unconstitutional tax assessment in General Motors v. Linden, N.J. (1996), also decided today. In General Motors, we relied on National Private Truck Council, Inc. v. Oklahoma Tax Comm'n, 515 U.S. , 115 S. Ct. 2351, 132 L. Ed. 2d 509 (1995), to conclude that there was no basis for courts to award relief under § 1983 when an adequate state legal remedy exists to correct an arbitrary tax assessment. We find that similar principles of federalism lead generally to the same Conclusion in the context of land use controls.

The primary issue is whether the doctrine of Parratt v. Taylor, 451 U.S. 527, 101 S. Ct. 1908, 68 L. Ed. 2d 420 (1981), applies in this context of municipal rent controls. Parratt holds that when a deprivation of property results from the random and unauthorized actions of a state employee and pre-deprivation process would have been impracticable, there is no due process violation so long as an adequate post-deprivation remedy is available. We hold that, absent egregious misconduct that shocks the conscience in the sense of violating civilized norms of governance, or invidious discrimination on the part of a board member or board, so long as the State provides a plain, adequate and timely remedy to redress irregularities in the proceedings, a party aggrieved by the determinations of a municipal rent leveling board does not have a claim for relief under 42 U.S.C. § 1983.

I

David Rivkin, Edward Rivkin, and Judith Rivkin are partners in Galaxy Manor, a mobile home park in Dover Township. Dover Township has a Mobile Home Park Rent Leveling Ordinance ("Code") that requires landlords to apply to the Dover Township Rent Leveling Board ("Board") for rental increases. Dover Code § 104-35A provides that the Board be made up of one mobile home park landlord, one mobile home park tenant, and three non-affiliated public members.

In May 1990, the Rivkins filed an application with the Board for a rent increase based on $59,624.96 of capital improvements to the Galaxy Manor mobile home park. The Code provides:

A landlord may seek an additional charge for major capital improvements. . . . The landlord seeking a capital improvement surcharge shall appeal for said surcharge to the Rent Leveling Board, which shall determine . . . if said improvement is a major improvement and, if so, the amount of increase granted for such major improvement and establish the conditions of such increase.

[Dover Code § 104-34B.]

The Board conducted four hearings on the application in June, July, August and October, 1990. Edward Baltarzuk, the mobile home park tenant member of the Board, took an active part in the proceedings. Baltarzuk, who was actually a resident of the Galaxy Manor Mobile Home Park, appeared to view his position on the Board as one of advocacy rather than adjudication. He stated on the record that it was his function to "serve the people of the mobile home park." He continually challenged the Rivkins and their representatives both on a personal basis, referring to their attorney as a "yo-yo," and on a partisan basis, introducing facts from outside the record.

Baltarzuk's manner was threatening to the Rivkins. He said: "You are looking for trouble and you are going to get it. Baltarzuk urged a tenant witness to file a complaint against the Rivkins for violating equal housing opportunity laws. The following is a typical antagonistic exchange between the Rivkins and Baltarzuk:

Mr. Levin (attorney for Rivkin): That is our application. Our obligation is to provide this application --

Mr. Baltarzuk: You are supposed to file the truth, sir.

Mr. Levin: Before you call anyone a liar, you are the fellow that is challenging our application without giving us the benefit of telling us where you get the information.

Mr. Rivkin, is the rental structure as contained within the application true and accurate?

Mr. Rivkin: As of the first of May, yes.

Mr. Baltarzuk: Therefore, this application should not even be heard. It is an illegal rental increase. I have a person right here in the audience who is paying a wrong rent. How can she pay 275? You are telling me here she is paying 223.

Mr. Levin: I find this incredible, that somebody who has to make a judgment here has apparently taken it upon himself to go out and solicit whatever it is your [sic] trying to tell us . . . .

Baltarzuk, in essence, offered himself as a witness concerning certain items and was, in effect, testifying in the proceedings.

The Rivkins requested that Baltarzuk be removed from the proceedings. The Board denied these requests and, with Baltarzuk participating, granted $20,641.42 in rent increases for capital improvements, finding that the majority of the Rivkins' application constituted "capital expenditures" rather than "major capital ...


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