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Mile Square Towing, LLC v. City of Hoboken

Superior Court of New Jersey, Appellate Division

June 13, 2013

MILE SQUARE TOWING, LLC, Plaintiff-Appellant,
CITY OF HOBOKEN, a municipal entity, Defendant-Respondent, and LOGAN AUTOMOTIVE INC., and TRUCHAN BROTHERS AUTO & TOWING, Defendants.


Argued April 17, 2013

On appeal from Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-5733-11.

Jared B. Weiss argued the cause for appellant (Fruchter & Associates, attorneys; Harvey Fruchter, of counsel; Mr. Weiss, on the brief).

Christopher K. Harriott argued the cause for respondent (Florio & Kenny, LLP, attorneys; Mr. Harriott, of counsel and on the brief).

Before Judges Grall and Simonelli.


Plaintiff Mile Square Towing, LLC (Mile Square) appeals the denial of its challenges to the validity of an ordinance adopted by defendant the City of Hoboken. The ordinance — City of Hoboken's Ordinance No. Z-131, codified as Chapter 184 of the General Code of the City of Hoboken — provides for licensing and regulation of businesses that remove and store motor vehicles. Because the ordinance does not exceed Hoboken's authorization to license and regulate towing services provided in N.J.S.A. 40:48-2.49, or impermissibly delegate authority to the director of Hoboken's Department of Parking and Transportation to administer and enforce Chapter 184, we affirm. But to the extent the order upholds provisions of Chapter 184 authorizing the director to amend and supplement the ordinance, we reverse the order and invalidate those provisions.

The ordinance was adopted by the city council and approved by the mayor in late September 2011. Mile Square filed an action in lieu of prerogative writ contesting its validity in December 2011. In addition, Mile Square applied for a license, noting it was doing so "under protest." Hoboken denied the application because it was filed under protest, and in response to that denial Mile Square amended its complaint to seek an order compelling Hoboken to grant its application if the ordinance was upheld.[1]

The judge decided the matter on the parties' written and oral arguments and supporting documents, which include selected portions of the deposition of the director of Hoboken's Department of Parking and Transportation. For reasons stated in a letter opinion, the judge entered an order upholding the ordinance but concluding that Mile Square's application was arbitrarily denied and directing Hoboken to consider it on the merits.

On appeal, Mile Square acknowledges that Hoboken's post-judgment grant of its application moots its objections to the initial denial. The issuance of the license, however, does not, as Hoboken argues, moot Mile Square's objections to the validity of the ordinance.


Prior to the enactment of this ordinance, Mile Square had a contract with Hoboken under which it acted as the exclusive provider of towing services requested by the City. Apart from that contract, Mile Square also provided towing services within the city limits at the request of and by agreement with private parties. Although Mile Square's contract with Hoboken expired in 2005, Mile Square continued as the sole provider of towing services requested by Hoboken until the adoption of this ordinance.

The "whereas" clauses of the ordinance explain that Chapter 184 was adopted to address "downfalls" in Hoboken's traditional approach to obtaining towing services — contracting with a single supplier under the Local Public Contracts Law, N.J.S.A. 40A:11-1 to -51. Hoboken, N.J., Ordinance No. Z-131 (Sept. 21, 2011) (Ordinance No. Z-131). Hoboken's purpose was to address the prior system's "lack of oversight, inefficiency in towing services, lack of necessary services during times of emergency and high volume, litigation expense, and lack of ability to recoup costs incurred by the City relating to the services" and to "increase effectiveness and efficiency of towing services within the City." Ibid.

The director of Hoboken's Department of Parking and Transportation, an engineer with experience in managing projects involving traffic studies, parking analyses, impact studies and license applications, spearheaded the effort to draft the ordinance. Hoboken's business administrator, deputy director of emergency management and assistant counsel participated.

In explaining the reasons for Hoboken's adoption of Chapter 184 to license and regulate towing services, the director noted that the City received "multiple complaints" about poor treatment received by owners of towed vehicles. In Hoboken's view, those problems were not adequately addressed through its prior contract with Mile Square. The director further explained that under the terms of that contract, Hoboken was required to pay an hourly rate, per vehicle and per driver, for some services and incurred costs in managing and dealing with the operations. To remedy those problems and accomplish the goals stated in the ordinance, Hoboken elected to move from sole provider contracting "to the towing model authorized by N.J.S.A. 40:48-2.49." Ordinance No. Z-131. While Chapter 184 does not refer to the statute, the ordinance leaves no room to question that Hoboken adopted this ordinance pursuant to the authority granted in N.J.S.A. 40:48-2.49.

In pertinent part, N.J.S.A. 40:48-2.49 authorizes licensing and regulation of those in the business of towing and storing motor vehicles as follows:

[A] municipality may regulate, by ordinance, the removal of motor vehicles from private or public property by operators engaged in such practice, including, but not limited to, the fees charged for storage following removal in accordance with [N.J.S.A. 40:48-2.50], fees charged for such removal, notice requirements therefor, and the mercantile licensing of such operators.
The ordinance shall set forth non-discriminatory and non-exclusionary regulations governing operators engaged in the business of removing and storing motor vehicles. The regulations shall include, but not be limited to:
a. A schedule of fees or other charges which an operator may charge vehicle owners for towing services, storage services or both;
b. Minimum standards of operator performance, including but not limited to standards concerning the adequacy of equipment and facilities, availability and response time, and the security of vehicles towed or stored;
c. The designation of a municipal officer or agency to enforce the provisions of the ordinance in accordance with due process of law;
d. The requirement that such regulations and fee schedules of individual towers shall be made available to the public during normal business hours of the municipality.
Nothing in this section shall be construed to authorize a municipality to establish charges for services that are not included in the schedule of towing and storage services for which a towing company may charge a service fee established by the Director of Consumer Affairs pursuant to [N.J.S.A. 56:13-14]. Nothing in this section shall be construed to exempt an operator from ...

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