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Waste Management of New Jersey, Inc. v. Union County Utilities Authority

April 7, 2008

WASTE MANAGEMENT OF NEW JERSEY, INC., PLAINTIFF-RESPONDENT,
v.
THE UNION COUNTY UTILITIES AUTHORITY AND IWS TRANSFER SYSTEMS OF NJ, INC., DEFENDANTS, AND DELAWARE AND HUDSON RAILWAY COMPANY, INC., DEFENDANT-APPELLANT, AND WASTE SOLUTIONS GROUP; BRIDGEWATER RESOURCES, INC., DEFENDANTS-RESPONDENTS, WASTE MANAGEMENT OF NEW JERSEY, PLAINTIFF-RESPONDENT,
v.
THE UNION COUNTY UTILITIES AUTHORITY, DEFENDANT-APPELLANT, AND WASTE SOLUTIONS GROUP AND BRIDGEWATER RESOURCES, INC., DEFENDANTS-RESPONDENTS, AND IWS TRANSFER SYSTEMS OF NJ, INC., DEFENDANT.



On appeal from the Superior Court of New Jersey, Law Division, Union County, Docket No. L-4449-06.

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

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Argued January 28, 2008

Before Judges Stern, A.A. Rodríguez and C.S. Fisher.

In these appeals, we consider whether the trial judge erred in permanently enjoining defendant Union County Utilities Authority (the Authority) from awarding a contract for the removal of all non-processible solid waste within Union County to defendant Delaware and Hudson Railway Company, Inc. (DHRC), the lowest bidder.*fn1 DHRC's low bid proposed the transloading of waste materials onto rail cars at the Oak Island facility in Newark for rail transportation to sites in Ohio.

We initially conclude that the existing procedural framework upon which the judge acted did not permit the entry of a permanent injunction. We also have examined the record to determine whether the entry of an interlocutory injunction would have been appropriate, leading us to conclude that plaintiff Waste Management of New Jersey, Inc. (plaintiff), an unsuccessful bidder, failed to demonstrate a likelihood of success on the merits of its claim that the Authority's decision to award the contract to DHRC, the lowest bidder, was arbitrary, capricious or unreasonable. In this regard, we reject the judge's first factual basis for the injunction -- that the Authority imperfectly investigated whether DHRC was a material subsidiary of its parent -- because, even if true, it has not been clearly and convincingly established that the Authority ultimately reached the wrong conclusion. And we reject the judge's only other factual basis for the injunction -- that DHRC's lack of a state-issued permit rendered the bid non-conforming -- because it appears to us far more likely that the Interstate Commerce Commission Termination Act of 1995 (the Termination Act), 49 U.S.C.A. §§ 10101 to 11908, federally preempts the State's right to require that DHRC obtain a permit for the transloading of waste materials.

As a result, we vacate the permanent injunction and -- even though we find insufficient evidence to support a finding that plaintiff demonstrated a reasonable probability of success -- we remand for the trial judge's determination of whether an interlocutory injunction, limited to preserving the status quo, is appropriate in the circumstances.

I.

This action was commenced by plaintiff for injunctive relief to prevent the Authority's awarding of a contract for the removal of all non-processible solid waste within Union County to DHRC, the lowest bidder. Based on its contentions that there were defects in DHRC's bid, plaintiff applied for and, on January 10, 2007, obtained an order that required defendants to show cause why, among other things, the Authority should not be preliminarily enjoined from entering into a contract with DHRC for the disposal of solid waste. The parties provided their written submissions; they also declined an invitation to provide live testimony on the questions posed by the order to show cause.

On May 25, 2007, the trial judge rendered an oral decision and entered a final judgment, which: permanently enjoined the Authority from implementing the contract with DHRC; in relying upon Meadowbrook Carting Co., Inc. v. Borough of Island Heights, 138 N.J. 307 (1994), denied plaintiff's application for an award to it of the contract with the Authority; and directed the Authority to rebid the contract.

As a result, DHRC and the Authority appealed to this court, arguing that the trial judge misapplied the law and facts. During the pendency of these appeals, we stayed that part of the final judgment that ordered the Authority to rebid the contract and accelerated the appeals. We also invited the New Jersey Department of Environmental Protection (DEP) to appear as amicus curiae. In addition, we have been advised that, in light of the injunction, the Authority entered into an eighteen-month agreement with the New Jersey Meadowlands Commission on June 21, 2007; this temporary contract is subject to termination pending the outcome of this suit.

II.

We must first consider the procedural posture of the case. This action was commenced by plaintiff's filing of a complaint and securing from the trial court the entry of an order to show cause. This was the vehicle that led to the entry of a permanent injunction and a final judgment.

The process adopted in our court rules for seeking injunctive relief applications, however, does not allow for the entry of an order to show cause for the entry of a permanent injunction; rather, it permits only the entry of an order requiring a party to show cause why a temporary restraint or an interlocutory injunction should not issue. R. 4:52-1 and 2. See also, Solondz v. Kornmehl, 317 N.J. Super. 16, 20-21 (App. Div. 1998).*fn2 Here, the order itself largely confines itself to Rule 4:52's limits. It directed defendants to show cause why an order should not be entered "preliminarily"*fn3 enjoining defendants in the following ways:

(a) Enjoining and restraining [the Authority] from entering into, performing or continuing performance of the Contract for Solid Waste Disposal Services . . .; and

(b) Declaring the [Authority's] award of the aforesaid contract to DHRC null and void, and further, vacate any other actions taken by Defendants in furtherance of said award or Contract; and

(c) Permanently restraining and enjoining [the Authority] from making any payments to DHRC for the performance of any work related to the Contract; and

(d) Enjoining [the Authority] from awarding the Contract to [the other unsuccessful bidders]; and

(e) Directing the [Authority] to award the Contract to Plaintiff, and to thereafter take any and all steps necessary to finalize and consummate the Contract with Plaintiff[; and]

(g) [sic] Granting such other relief as the court deems equitable and just. [Emphasis added.]

Assuming we were to indulge the idea that a permanent injunction in this setting may be sought by way of the order to show cause procedure, we observe there is nothing about the language of the order to show cause in question that would suggest plaintiff had applied for permanent relief except for the single word highlighted in the quoted portion that appears above. We do not find persuasive the argument that the single appearance of the word "[p]ermanently" in one of the subparagraphs of the order to show cause somehow converts the application into a mechanism for the entry of a permanent injunction or a final judgment. For example, the particular subparagraph, which contains the word "permanently," relates only to the request that the court restrain the Authority "from making any payments to DHRC for the performance of any work" related to the contract and did not extend to a request for a permanent injunction against the issuance of the contract to DHRC. Thus, if read literally, the order to show cause at most sought only a permanent injunction barring the Authority's payments to DHRC.

In short, the order neither precisely nor logically suggests that plaintiff sought a permanent injunction. Moreover, the single word in the order talismanically urged by plaintiff in support of their contention that the judge was authorized to enter a permanent injunction, when read literally, presents only an utterly illogical description of the application, i.e., that plaintiff sought a "preliminary" injunction that would "permanently" enjoin defendants. Consequently, we reject plaintiff's contention that the order to show cause, on its face, put the Authority and DHRC on notice that a permanent injunction or any other final relief was then being sought.

We are mindful that in practice it is not unheard of for parties to consent to a final determination on the return of an order to show cause for an interlocutory injunction when the facts are not in dispute or when an evidentiary hearing would add no illumination to the court's resolution of the issues presented. It is also not uncommon, when a plenary hearing is conducted for the purposes of resolving factual disputes on an interlocutory injunction application, for the parties to consent to have the trial judge render a final judgment. Such a sensible and practical approach often provides the parties with a swift and efficient resolution of their disputes that is not inconsistent with our rules of procedure, which favor "just determination[s], simplicity in procedure, fairness in administration and the elimination of unjustifiable expense and delay." R. 1:1-2. See also Ragusa v. Lau, 119 N.J. 276, 283-84 (1990); Kellam v. Feliciano, 376 N.J. Super. 580, 587 (App. Div. 2005); State v. Bowen, 269 N.J. Super. 203, 213 (App. Div. 1993); Tumarkin v. Friedman, 17 N.J. Super. 20, 26-27 (App. Div. 1951), certif. denied, 9 N.J. 287 (1952). Accordingly, we do not intend to preclude pragmatism in the resolution of disputes, but we must insist that such an approach is only appropriate when the parties understand and consent to a summary disposition of their disputes. Otherwise, the process would possess only the qualities of simplicity and efficiency, not fairness or justice.

In responding to these concerns, counsel for plaintiff, as well as counsel for defendants Waste Solutions Group and Bridgewater Resources, Inc., who were also unsuccessful bidders,*fn4 argue that the tenor of the proceedings on the return date of the order to show cause, when the judge asked about the impact of time on her reserved decision, suggests that the parties had either invited or acceded to a final disposition of their claims and defenses. These parties also refer us to correspondence between the trial court and counsel regarding the need for additional discovery or live testimony as further evidence of this contention. We suppose their argument is colorable, but it is hardly persuasive. What would convince us that the parties had consented to a final disposition -- and what the record lacks -- is a clear and unambiguous statement from the judge and the unequivocal consent of the parties to a final resolution at the interlocutory injunction stage. Absent such a firm and definite statement, we conclude that the trial judge advanced too far afield when she rendered final judgment and a permanent injunction. We, thus, must conclude that the order's qualities of finality and permanency cannot persist.

This, however, does not end our inquiry.

III.

Despite our conclusion that the trial judge mistakenly entered a permanent injunction, we nevertheless review the record to determine whether it would allow for the entry of an interlocutory injunction.

In determining whether to enter an interlocutory injunction, a judge must find that the movant has demonstrated a reasonable probability of success on the merits; that a balancing of the equities and hardships favors injunctive relief; that the movant has no adequate remedy at law and that the irreparable injury to be suffered in the absence of injunctive relief is substantial and imminent; and that the public interest will not be harmed. Crowe v. De Gioia, 90 N.J. 126, 132-34 (1982); McKenzie v. Corzine, 396 N.J. Super. 405, 413 (App. Div. 2007); Subcarrier Commcn's, Inc. v. Day, 299 N.J. Super. 634, 638 (App. Div. 1997); J.H. Renarde, Inc. v. Sims, 312 N.J. Super. 195, 206 (Ch. Div. 1998).

Each of these factors must be clearly and convincingly demonstrated. McKenzie, supra, 396 N.J. Super. at 414; Subcarrier, supra, 299 N.J. Super. at 639; American Employers' Ins. Co. v. Elf Atochem N.A., Inc., 280 N.J. Super. 601, 610-11 n.8 (App. Div. 1995). However, although it is generally understood that all the Crowe factors must weigh in favor of injunctive relief, see, e.g., McKenzie, supra, 396 N.J. Super. at 414; Sherman v. Sherman, 330 N.J. Super. 638, 642-43 (Ch. Div. 1999), a court may take a less rigid view than it would after a final hearing when the interlocutory injunction is merely designed to preserve the status quo. General Elec. Co. v. Gem Vacuum Stores, Inc., 36 N.J. Super. 234, 236-37 (App. Div. 1955). The issuance of an interlocutory injunction must be squarely based on an appropriate exercise of sound judicial discretion, N.J. State Bar Ass'n v. Northern N.J. Mortgage Assocs., 22 N.J. 184, 194 (1956); Bancroft & Sons Co. v. Shelley Knitting Mills, Inc., ...


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