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Tosco Corp. v. New Jersey Dept. of Transportation

February 16, 2001


Before Judges King, Coburn and Landau.

The opinion of the court was delivered by: Coburn, J.A.D.


Argued January 24, 2001

On appeal from the Final Decisions of the New Jersey Department of Transportation.

This is an appeal from a determination of the New Jersey Department of Transportation ("DOT") concerning the design and alignment of a state highway. Mobil Oil Corporation ("Mobil") the original appellant, sold the adversely affected private property to appellant Tosco Corporation ("Tosco"), whose right to pursue Mobil's claims is conceded.

The DOT's decision was made in the context of a road-improvement project in West Windsor Township involving construction of a grade-separated interchange, commonly known as an overpass. A proposed ramp included an acceleration lane abutting the Mobil property, a gas station and convenience store, that would eliminate its existing access to the highway and render the property unusable. Tosco wants to continue the business previously operated by Mobil.

Mobil had proposed to the DOT alternative plans that would have permitted continued operation of its business while increasing the adverse impact of the project on a shopping center operated by respondent MarketFair. Mobil's plans included shifting the ramp and acceleration lane in MarketFair's direction, thereby requiring a taking of additional land used by the shopping center for parking. MarketFair opposed the change and was supported in that regard by the administration of West Windsor Township.

Tosco's primary claim is that there was a denial of procedural due process because the DOT made its decision on the basis of undisclosed evidence and arguments offered by or in support of MarketFair. Tosco also contends that there was a denial of procedural due process with respect to what it claims was a request for a waiver of the denial of a highway access permit. Finally, Tosco contends that the DOT's decision was "arbitrary and unreasonable because (A) it is not based on adequate findings; (B) it impermissibly delegates decision-making authority to the mayor of the township; (C) it is inconsistent with DOT's subsequent actions; and (D) it is ambiguous."


In the spring of 1997, the DOT proposed construction of an overpass at the intersection of Route 1 and Meadow Road in West Windsor Township. On November 3, the West Windsor Council signed a "Partnering Agreement" with the DOT for this project. (The DOT formally signed the agreement in January 1998.) The agreement gives West Windsor the initial responsibility for selecting a design consultant who would prepare right-of-way and construction plans. The DOT is responsible for design-review, right-of-way acquisition, and construction. If more than one alternative is proposed, the DOT has the right to final design approval.

On November 13, 1997, the DOT made a presentation to the public of its plan for the overpass. That detailed plan included a ramp from Meadow Road to Route 1 southbound with an acceleration lane that ended south of the gas station/convenience store owned by Mobil. Since access to a state highway is prohibited along the full width of acceleration lanes by N.J.A.C. 16:47-3.5(e)6 and DOT's Design Manual - Roadway, Section 7-11, the effect of the proposed plan would be to render Mobil's property, which is currently served by two driveways leading onto Route 1, unusable.

Mobil reacted by proposing to the DOT over a number months alternative designs that would shift the acceleration lane and ramp to the north so that the lane would end before reaching Mobil's southerly property line, thereby allowing Mobil to retain one driveway onto Route 1. That design required the DOT to take an additional .65 acres from MarketFair's parking area. That taking would reduce the shopping center from about 38.5 acres to about 37.8 acres.

On April 15, 1998, the DOT wrote to the mayor of West Windsor Township. The letter indicated that after a review "of the many alternatives submitted on behalf of the Mobil Oil Corporation . . . we are pleased to report that the design alternative is being modified to provide the best access possible along Route 1 southbound." (Emphasis added.) This plan would have permitted the continued operation of the Mobil station with access to the highway. The letter asked that the township adopt a formal resolution of support. The DOT's "Monthly Design Progress Report" of the same date recited that the shift of the acceleration lane would "save the Mobil station but require additional, albeit less costly, takings at . . . MarketFair." The DOT contends that it did not perform a detailed analysis of the impact on MarketFair and that it accepted Mobil's representations with respect to the relative costs involved in allowing Mobil's business to continue while taking more of MarketFair's land. Those assertions are denied but without reference to anything to the contrary in the record.

On May 11, the mayor wrote to the DOT raising questions about the new design and asking that efforts be made to find a solution satisfactory to MarketFair. On May 14, MarketFair's attorneys met with the DOT to review and discuss the proposed plan. On May 20, the attorneys for MarketFair wrote to the DOT objecting to the change of plan on the ground that any increased loss of space would impose "a significant burden on MarketFair and its tenants." The letter went on as follows:

Specifically, loss of spaces directly impacts MarketFair's obligations under its lease with one of its major anchor tenants, Barnes & Noble, and will prevent MarketFair from realizing the expansion plans which it has been developing over the last year. The out- parcel in front of MarketFair which you propose for possible replacement of spaces is an integral part of those expansion plans. MarketFair has been preparing a site plan for parking for that ...

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