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Fenichel v. City of Ocean City

August 6, 2009

STEVEN FENICHEL, GEORGINA SHANLEY, MARIE TOMLINSON, BRIAN H. ARNETT, ALLEN LOVEKIN, JANE MCCARTHY, JAMES F. MCCARTHY, PETER J. GUINOSSO AND JOSEPH A. SOMERVILLE, IN THEIR CAPACITIES AS TAXPAYERS AND RESIDENTS OF THE CITY OF OCEAN CITY, NEW JERSEY, PLAINTIFFS-APPELLANTS,
v.
THE CITY OF OCEAN CITY, A MUNICIPAL CORPORATION OF THE STATE OF NEW JERSEY AND THE CITY COUNCIL OF THE CITY OF OCEAN CITY, DEFENDANTS/THIRD-PARTY PLAINTIFFS-RESPONDENTS,
v.
STATE OF NEW JERSEY, DEPARTMENT OF COMMUNITY AFFAIRS, THIRD-PARTY DEFENDANT-RESPONDENT.



On appeal from the Superior Court of New Jersey, Law Division, Cape May County, Docket No. L-548-06.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued: November 6, 2008

Before Judges Cuff, Fisher and Baxter.

Acting in their capacities as taxpayers and residents of the City of Ocean City (the City), plaintiffs proposed adoption of a fair campaign finance ordinance by the governing body. The matter was not placed before the governing body as a result of the initiative process. The governing body declined to introduce the ordinance. Plaintiffs filed a complaint in lieu of prerogative writs seeking a declaratory judgment that the governing body had the legal authority to enact their proposed ordinance. On cross-motions for summary judgment, the judge granted the motions filed by the City and the State of New Jersey and denied the motion filed by plaintiffs.

On appeal, plaintiffs argue that the issue in this case is whether the governing body possesses authority under State law to enact the proposed ordinance. We view the fundamental issue as whether a justiciable controversy was presented to the Law Division. We hold that plaintiffs have not presented a case or controversy for adjudication by a court; what plaintiffs have presented is a request for an advisory opinion. Therefore, we affirm in the sense that plaintiffs are not entitled to relief in their favor but modify the disposition to reflect that plaintiffs' complaint should have been dismissed for failure to present a justiciable controversy.

On June 15, 2006, plaintiffs Steven Fenichel, Georgina Shanley, Marie Tomlinson, Brian H. Arnett, Allen Lovekin, Jane McCarthy, James F. McCarthy, Peter J. Guinosso, and Joseph A. Somerville proposed to the City governing body adoption of an ordinance entitled "An Ordinance Adding a New Part IX to Chapter II of the Revised General Ordinances of the City of Ocean City: The Fair and Clean Public Financing of Elections Ordinance of 2006." The purpose of the ordinance is to preserve and protect the integrity of the electoral process and local government and to minimize the influence of special interest groups through the creation of a public-funded campaign trust. The trust would be funded by an initial contribution of $150,000 from funds appropriated in the first budget following adoption of the ordinance and $150,000 annually thereafter, less any amount of money that would make the account balance in the fund exceed $300,000. Individuals could make donations up to $5000 each year but individually donated funds would not be eligible for distribution in the following year's campaign. As such, donations from individuals would not count against the amount of public funds needed to fund the project in the year of the donation. The ordinance would also impose restrictions on contributions to and expenditures by participating candidates, and require all participating candidates to engage in all pre-election debates.

On June 15, 2006, the proposed ordinance was discussed at a meeting of the City Council of the City of Ocean City (City Council). The municipal attorney reported to the City Council that an employee of the Department of Community Affairs, with whom he spoke about the proposed ordinance, opined that the municipal governing body lacked the statutory authority to enact a public election financing program and the proposed ordinance was contrary to State law. The ordinance was not introduced following a vote of three in favor and three opposed on the motion to introduce the ordinance.

On September 6, 2006, plaintiffs filed a complaint in lieu of prerogative writs seeking a declaratory judgment that the proposed municipal campaign finance ordinance was authorized by the New Jersey Constitution and State law, that it was not preempted by State law, and that the City Council had the authority to enact their proposed ordinance. In their answer, defendants the City and the City Council asserted that the Legislature had not bestowed authority on it to create a public campaign finance fund, the proposed ordinance conflicted with the New Jersey Local Budget Law, N.J.S.A. 40A:4-1 to -88, the court lacked subject matter jurisdiction of the matter, there was no case or controversy, and the court should not exercise any jurisdiction it had because "there is no proof or demonstration that the present governing body of [the] City would consider the proposed ordinance if the court concluded the governing body had authority to do so."

The City also filed a third-party complaint against the State of New Jersey. The City asserted that the State was an indispensable party and should be required to "advise the court of its position concerning the proposed legislation and whether the legislation does or does not violate provisions of the New Jersey Local Budget Law."

The parties filed cross-motions for summary judgment. In a memorandum of decision issued in conjunction with an order granting the motions for summary judgment filed by the City and the State, the judge held that neither the State Constitution nor any statute specifically prohibits the City from adopting the ordinance proposed by plaintiffs, but no statute expressly authorizes creation of the fund contemplated by the ordinance. The judge further reasoned as follows:

Plaintiffs have not demonstrated that the proposed Ordinance is expressly authorized or that the proposed Ordinance is authorized by necessary or fair implication, or incident to the powers expressly conferred or essential thereto. It is therefore impossible to construe, in any fashion, the total absence of authority as support for Plaintiffs' position.

The City does not have the authority to create the fund required by the proposed ordinance. The City cannot accept conditional donations which are earmarked for an unauthorized purpose.

Accordingly, the judge issued an order denying plaintiffs' motion for summary judgment and granting the motions for summary ...


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