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Hartz Mountain Industries, Inc. v. New Jersey Sports & Exposition Authority

May 14, 2004

HARTZ MOUNTAIN INDUSTRIES, INC., ON ITS OWN BEHALF AND ON BEHALF OF THE JOINT VENTURE KNOWN AS"EXPO PARK," PLAINTIFF-APPELLANT,
v.
NEW JERSEY SPORTS & EXPOSITION AUTHORITY, THE MILLS CORPORATION, AND MACK-CALI REALTY CORPORATION, DEFENDANTS-RESPONDENTS.
ELLIOT BRAHA, INDIVIDUALLY AND ON BEHALF OF A CLASS OF SIMILARLY SITUATED MEMBERS, PLAINTIFF-APPELLANT,
v.
NEW JERSEY SPORTS & EXPOSITION AUTHORITY, THE MILLS CORPORATION, AND MACK-CALI REALTY CORPORATION, DEFENDANTS-RESPONDENTS.
IN THE MATTER OF THE NJSEA'S DENIAL OF THE DECEMBER 2, 2003, JANUARY 2, 2004, AND FEBRUARY 5, 2004, REQUESTS FOR PUBLIC RECORDS FILED PURSUANT TO THE OPEN PUBLIC RECORDS ACT ("OPRA"), N.J.S.A. 47:1A-1 ET SEQ. BY HARTZ MOUNTAIN INDUSTRIES, INC.



On appeal from the Superior Court of New Jersey, Law Division, Bergen County, L-2126-03 and L-4909-02, and the New Jersey Sports & Exposition Authority.

Before Judges Pressler, Alley and R.B. Coleman.

The opinion of the court was delivered by: Pressler, P.J.A.D. (retired and temporarily assigned on recall)

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued April 27, 2004

This litigation arises out of the award of a bid and subsequent contract by New Jersey Sports & Exposition Authority (NJSEA) to defendants The Mills Corporation and Mack-Cali Realty Corporation (MMC) for a massive multi-use development, denominated the Meadowlands Xanadu, to be constructed and operated at and around the Continental Arena site in the Hackensack meadowlands. The bid and contract award are challenged by the two unsuccessful finalists who also bid for the award of the development project, Hartz Mountain Industries, Inc. (Hartz) and Westfield Corporation (Westfield). The Xanadu project is also challenged by a taxpayer, Elliott Braha, a Jersey City retailer, on his own account and those similarly interested.

The challenges to the Xanadu project are multifaceted, multi-forum, and multiplicitous. Of the eight appeals now pending in this court, three of them are now before us. In Docket No. A-5255-02T3 Hartz appeals from a judgment of the Law Division in an action, in which Braha sought to intervene, raising issues arising under the Open Public Records Act (OPRA), N.J.S.A. 47:1A-1, and the Open Public Meetings Act (OPMA), N.J.S.A. 10:4-6, et seq., as well as a number of issues challenging the validity of the initial request for public bids (RFP), the procedures attendant upon the award of the bid, and the conduct of the ensuing protest hearing. The complaint was dismissed by order entered on May 1, 2003, essentially on the ground that Hartz failed to exhaust its administrative relief, the trial judge having also concluded that because NJSEA is a state agency, Hartz, in any case, should have brought its complaint in the Appellate Division pursuant to R. 2:2-3(a)(2) rather than in the trial court. In Docket No. A-708-03T3, Braha appeals the dismissal of his complaint by the Law Division in which he raised issues that the parties agree are substantially subsumed by those that had been raised in the Hartz action. The Braha complaint was also dismissed on exhaustion grounds.

Finally, by way of preliminary procedural recitation, we note that of the remaining five appeals that are not now before us*fn1, three of them, Docket Nos. A-1169-03T3, 1218-03T3, and 1243- 03T3, are individual challenges by Hartz, Braha, and Westfield, respectively, from the September 10, 2003, action of the NJSEA rejecting the bid protest against the MMC award which each brought, and two of them, Docket Nos. A-2657-03T3 and 2734-03T3, are individual challenges by Hartz and Westfield to the December 3, 2003, resolution of NJSEA authorizing its execution of the development agreement with MMC. The final appeal, A-3805-03T3, is a challenge by Hartz to decisions of NJSEA respecting its further document requests. Because we address in this opinion the global issue of document access, we sua sponte dismiss A- 3805-03T3, which we consolidate for purposes of this opinion, as moot. The issues therein raised are subsumed by our holding here.

As to the appeals before us, we remand to the trial court for reconsideration of the OPRA issues in accordance with the directions in this opinion. In addition, since the merits have been fully briefed on appeal and because, for reasons we will set forth, we are satisfied that NJSEA is a state agency for purposes of appellate review, we consider the OPMA issues as if transferred to this court pursuant to R. 1:13-4. We also now address the question of NJSEA's status as a state administrative agency, affirming the trial judge's holding to that effect. We also address the question of the nature of the required hearing on the bid protest and the appropriate forum therefor, holding that the hearing is within the jurisdictional competence of NJSEA itself. Finally, as to the question of the correct statutory authorization for NJSEA's procurement process for the project in question, we hold that it is N.J.S.A. 5:10-21.2 that applies in the circumstances. We are, however, satisfied that all other issues raised by appellants must be considered or reconsidered by NJSEA following the new or supplemental bid protest hearing which we here direct.

We have chosen to proceed in this manner having concluded that as a matter of expedition and orderly proceeding, the issue of the documents, if any, to which the appellants are entitled in order fully and effectively to prosecute their bid protest but to which they have heretofore been denied access must be decided first. That is so because appellants have not only received additional documents from NJSEA following the protest hearings, but it also appears not unlikely that as a result of the OPRA proceedings we herein direct appellants may be accorded access to additional documents relevant to the bid protest. That being so, we are satisfied that they would also be entitled to a new or supplemental bid protest hearing, the question of a new or only supplemental hearing being in NJSEA's discretion. Beyond that, we also think it clear that before any new or supplemental hearing is held, the issue of the manner and type of hearing to which appellants are entitled must be decided, and the identity of the forum to which appeals from NJSEA's actions are to be brought must be clarified.

We address first the OPRA issue. As we understand the record, appellants, and particularly Hartz, have made repeated requests for hundreds of NJSEA documents assertedly relevant to the RFP, the decision to award the bid to MMC, and the executed redevelopment agreement. We also understand that NJSEA has, from time to time, acceded to some of those requests and, as to the others, has prepared and delivered to Hartz a privilege log which states the basic reason for non-disclosure of each requested document. Hartz, in its initial complaint in the Law Division, sought access to withheld documents under OPRA. The Law Division, which dismissed the complaint prior to the holding of the protest hearings, was of the view that the challenges brought by Hartz in the Law Division were premature since the administrative relief afforded by NJSEA through the mechanism of the protest hearings had not yet been exhausted. The Law Division also opined that because NJSEA is a state agency subject to direct Appellate Division review pursuant to R. 2:2- 3(a)(2), any legal issues not subject to exhaustion should be brought directly to this court. The Law Division viewed the OPRA demands, therefore, as cognizable in the first instance in this court. As an alternative ground for rejection of the OPRA claim, the Law Division opined that as a general proposition, the bid having been awarded but the development agreement not yet having been entered into because of ongoing negotiations, NJSEA was not obliged to afford Hartz access to any confidential financial information supplied by MMC.

We take a different view of the matter. To begin with we are satisfied that even if the denied OPRA request is made in connection with a proceeding pending before a state administrative agency whose final decisions are reviewable in the Appellate Division, it is the Law Division rather than the Appellate Division which, as a matter of cognizability and allocation of the court's business, should initially entertain the OPRA application. We are aware that N.J.S.A. 47:1A-6 provides for proceedings either in the Superior Court or before the Government Records Council and, moreover, that the statute does not expressly specify the Division of the Superior Court in which the proceeding should be filed if the judicial rather than the administrative route is chosen. We believe, however, that the Law Division must be the forum. We point out that the statute requires the OPRA challenge to"be heard in the vicinage where it is filed by a Superior Court Judge who has been designated to hear such cases...." The vicinage concept is relevant only to the trial courts - the Appellate Division is a unified statewide court - it does not operate by vicinage. Moreover, it is our understanding that a trial judge has in fact been designated in each vicinage to hear OPRA cases consistently with the legislative scheme.

There are other more fundamental reasons for the allocation of OPRA hearings to the trial court. We think it plain that under OPRA, as under its predecessor statute, the Right to Know Law, N.J.S.A. 47:1A-2 to -4, repealed by L. 2001, c. 404,*fn2 the court is obliged, when a claim of confidentiality or privilege is made by the public custodian of the record, to inspect the challenged document in camera to determine the viability of the claim. See, e.g., Loigman v. Kimmelman, 102 N.J. 98 (1986). That inspection implies the necessity of recorded fact-finding by the trial judge as well as the opportunity of the parties to address general principles relative to the claim of confidentiality and privilege, as well, perhaps, an opportunity to the government custodian to argue specifically, as part of the in camera review, why the document should be deemed privileged or confidential or otherwise exempt from the access obligation. These procedures, because they require verbatim recording and fact-finding are appropriately handled by a trial court - they do not lend themselves to the essential review jurisdiction of the Appellate Division. See, e.g., Colon v. Tedesco, 125 N.J. Super. 446 (Law Div. 1973). And see Allstate Ins. Co. v. Fortunato, 248 N.J. Super. 153, 159 (App. Div. 1991), noting that even where Appellate Division's initial review is in accordance with the court's cognizability rules, it is both necessary and appropriate for the appellate court to refer to the trial court those issues requiring fact-finding and the making of a record.

We further note that on other occasions when a statute referred to initial proceedings in the Superior Court but did not specify the Division, this court has interpreted the legislative direction to accord with general and accepted principles of cognizability as established by the court rules, and, more particularly, R. 2:2-3(a). See, e.g., Bishop v. N.J. Sports & Exposition Authority, 168 N.J. Super. 533, 536-537 (App. Div. 1979). In sum, as we have heretofore explained, the question of allocation of court business among the constitutional Divisions of the court is not jurisdictional in the subject-matter sense, but is rather a matter of expedition and organization referred by the Constitution to the rules adopted by the Supreme Court. N.J. Const. art. VI, § 3, ¶ 3. See, e.g., Equitable Life Mort. v. N.J. Div. of Taxation, 151 N.J. Super. 232, 237-238 (App. Div.), certif. denied, 75 N.J. 535 (1977).

We thus reconfirm the general propriety of the procedures followed in In re Adoption of N.J.A.C. 10A:23, 367 N.J. Super. 61, 72-75 (App. Div. 2004), in which a citizens' group unsuccessfully sought numerous documents from the Department of Corrections in connection with its challenge to the Department's lethal injection regulations. The appellants followed two simultaneous paths in seeking access to those documents, as have appellants here. They filed a motion with this court for supplementation of the record to include the withheld documents, and they filed an OPRA suit in the Law Division. We referred the motion to settle the record for disposition in accordance with OPRA to the trial court, which then consolidated our referral with the OPRA action.*fn3 The trial judge in that case then reviewed all the disputed documents in camera based on the Department's specific claims of confidentiality, privilege, or other OPRA exemption, making a finding as to each, including ...


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