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D. Russo, Inc. v. Romankow

September 17, 2010

D. RUSSO, INC. AND DANIEL RUSSO, PLAINTIFFS-APPELLANTS,
v.
THEODORE J. ROMANKOW, IN HIS OFFICIAL CAPACITY AS THE PROSECUTOR OF THE TOWNSHIP OF UNION, DEFENDANT-RESPONDENT, AND KEVIN KALENDEK, DEFENDANT.
TOWNSHIP OF UNION, PLAINTIFF-RESPONDENT,
v.
D. RUSSO, INC. AND DANIEL RUSSO, DEFENDANTS-APPELLANTS.



On appeal from Superior Court of New Jersey, Law Division, Union County, Docket No. L-3740-04.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued February 4, 2010

Before Judges Skillman, Fuentes and Simonelli.

Plaintiff*fn1 Daniel Russo is the owner of a sexually oriented business know as Hott 22. A Union County Grand Jury indicted Russo on several counts of operating Hott 22 within 1000 feet of a residential or recreational area in violation of N.J.S.A. 2C:34-7.*fn2 In response, Russo filed this civil action in the Law Division against defendants the Township of Union and Theodore J. Romankow, in his official capacity as the Union County Prosecutor, seeking injunctive and declaratory relief concerning the constitutionality of N.J.S.A. 2C:34-7 as applied to the operation of Hott 22.

The matter was adjudicated before the Law Division during a four-day bench trial. Both sides presented expert testimony concerning the factors outlined by the Court in Township of Saddle Brook v. A.B. Family Center, Inc., 156 N.J. 587 (1999). At the conclusion of the trial, the court issued a memorandum of opinion upholding the constitutionality of the statute as applied to Hott 22.

Plaintiff now appeals arguing that defendants failed to prove the existence of alternative sites where he can operate his sexually oriented business within its relevant market area. He also argues that defendants' expert witnesses' testimony, concerning the availability of alternate sites within the relevant market area, should have been rejected by the trial court as net opinions.

After reviewing the record before us, we reverse and remand for the trial court to conduct the analysis mandated by the Court in Saddle Brook, namely: (1) to make specific findings as to what constitutes the relevant market for this type of sexually oriented business; (2) to identify what alternative sites exist within this market area; and (3) to determine whether the number of available sites in relation to the size of the market area passes constitutional muster. Saddle Brook, supra, 156 N.J. at 597. We reject, however, plaintiff's argument challenging the admissibility of defendants' experts' opinions.

The following facts will inform our discussion of the legal issues raised by the parties.

I.

It is not disputed that Hott 22 is a sexually oriented business.*fn3 It is equally undisputed that given its location, Hott 22 cannot conduct business unless the court finds N.J.S.A. 2C:34-7 unconstitutional as applied to this case.

Because the statute impinges upon a form of expression protected by the First Amendment, the Court in Saddle Brook imposed upon defendants the burden of proving what constitutes plaintiff's relevant market area and what available alternative sites exist within this area for plaintiff to operate his business. Id. at 597-98. At trial, defendants sought to meet this burden of proof through the testimony of two expert witnesses.

Susan Gruel, a licensed professional planner, testified for the Township. She utilized a "twenty-minute drive time" test to establish Hott 22's relevant market area, focusing on the major highways that are accessible to Hott 22's customers from the club's current location. She determined that Hott 22's market area included forty-nine municipalities in five counties. After analyzing this market area, Gruel opined that available sites existed in Newark, Carteret, Springfield, and Woodbridge Township for plaintiff to operate Hott 22.

Richard Preiss, a professional planner, testified as an expert witness on behalf of the Union County Prosecutor. In determining the relevant market area, Preiss utilized customer data collected by the staff of Hott 22*fn4 and concluded that the primary market area, consisting of the towns in which seventy percent of the club's customer base lived, was located within a fourteen-mile radius of the club's current location.

After examining the zoning ordinances of the municipalities within this relevant market area, Preiss concluded that eighteen municipalities permitted sexually oriented businesses either as a permitted use, a conditional use, or in some other form of zoning category that required the procurement of a variance. Utilizing maps published on the New Jersey Department of Environmental Protection's website, Preiss excluded areas where Hott 22's business could not relocate because the site: (1) was covered by water; (2) included environmentally protected wetland areas; (3) was covered by a transportation right-of-way, such as those areas devoted to railroads or public utilities; or (4) violated N.J.S.A. 2C:34-7 because of its proximity to municipal recreational areas or residential zones. Ultimately, Preiss identified eleven municipalities that had sites suitable for Hott 22's relocation. These sites ranged in size from "very small" to "extremely large." The municipalities identified by Preiss were located in the northern part of the State, with Middlesex County representing the southern border of the group of sites and Bergen County representing the northern border.

Plaintiff called Jason Kasler, a planning and zoning expert, to offer his analysis and opinion on the availability of suitable sites within Hott 22's relevant market area. Kasler also relied on the customer data collected by the Hott 22 staff to demarcate the boundaries of the proposed market area. Using the place of residency indicated by seventy percent of Hott 22's customers, he determined that the relevant market area included: Union, Livingston, West Orange, Berkley Heights, Hillside, Mountainside, Millburn, Maplewood, Roselle, Roselle Park, Springfield, Elizabeth, Clark, Linden, Rahway, and Newark. He did not find any alternative available sites within this market area.

Against this evidence, the trial court found that defendants had met their burden of proof under Saddle Brook; it therefore upheld the constitutionality of N.J.S.A. 2C:34-7 as applied to plaintiff's sexually oriented business. The trial ...


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