CHRISTOPHER C. CONA, individually and as a class representative on behalf of others similarly situated, Plaintiff-Appellant,
TOWNSHIP OF WASHINGTON, Defendant-Respondent. SHARON DOWNS, individually and as a class representative on behalf of others similarly situated, Plaintiff-Appellant,
BOROUGH OF PAULSBORO, Defendant-Respondent. WILLIAM R. BRODY and KATHLEEN D. O'HARA, individually and on behalf of others similarly situated, Plaintiffs-Appellants,
CITY OF WOODBURY, BOROUGH OF WESTVILLE, BOROUGH OF GLASSBORO, BOROUGH OF NATIONAL PARK, and TOWNSHIP OF DEPTFORD, Defendants-Respondents.
May 24, 2018
appeal from Superior Court of New Jersey, Law Division,
Gloucester County, Docket Nos. L-1602-15, L-0180-16,
L-0487-16 and L-1102-15.
G. Adler argued the cause for appellants (Lewis G. Adler,
attorney; Lewis G. Adler, Roger C. Mattson and Paul DePetris,
of counsel and on the briefs).
P. Shotts argued the cause for respondents Township of
Washington (in A-5067-15) and Township of Deptford (in
A-0443-16) (Grace, Marmero & Associates, LLP, attorneys;
Brian P. Shotts, on the briefs).
James Maley, Jr. argued the cause for respondent Borough of
Paulsboro (in A-5615-15) (Maley Givens, PC, attorneys; M.
James Maley, Jr. and Erin E. Simone, on the brief).
P. Pierson argued the cause for respondent City of Woodbury
(in A-0443-16) (Angelini, Viniar & Freedman, LLP,
attorneys; James P. Pierson, on the brief).
M. Marek argued the cause for respondents Borough of
Westville and Borough of Glassboro (in A-0443-16) (Law Office
of Timothy D. Scaffidi, attorneys; Gary M. Marek and Timothy
D. Scaffidi, on the briefs).
F. Kawalec, III argued the cause for respondent Borough of
National Park (in A-0443-16) (Marshall Dennehey Warner
Coleman & Goggin, attorneys; Walter F. Kawalec, III and
Ashley L. Toth, on the brief).
Judges Simonelli, Haas and Rothstadt.
ROTHSTADT, J.A.D JUDGE
these matters, which we considered back-to-back and have
consolidated for purposes of writing one opinion, plaintiff
landlords rely upon our opinion in Timber Glen Phase III,
LLC v. Township of Hamilton, 441 N.J.Super. 514 (App.
Div. 2015) in their appeals from orders entered in the
Law Division dismissing their complaints that alleged
defendant municipalities' ordinances that required
plaintiffs to pay certain license fees are ultra vires. In
Timber Glen, the ordinance we reviewed required
landlords to obtain a license before any residential rental
unit could be occupied and pay an annual license fee of $100
per unit. Id. at 519. The municipality
contended it had authority under the Licensing Act, N.J.S.A.
40:52-1, to require such licenses and that its authority was
compatible with its regulatory power under N.J.S.A.
40:48-2.12m. Id. at 523. The stand-alone license fee
it charged was in addition to fees it required for mandatory
"annual habitability inspections . . . ."
Id. at 519.
rejected the municipality's position in Timber
Glen, noting, "the powers to regulate and to
license, although related, are discrete" and that the
power to regulate did not include the power to require a
license and payment of a fee. Id. at 526 (citation
omitted). We concluded that a 1998 amendment to the Licensing
Act prohibited the licensing of rental units rented for 175
days or more and that any ordinance attempting to impose such
a requirement was "invalid as ultra vires and
unenforceable." Id. at 532. However, we noted
that "[o]ur opinion [was] confined to the authority to
license and [did] not address [a municipality's]
regulatory or inspection authority granted by other statutes
designed to assure rental premises remain safe, building and
fire code compliant and structurally sound."
Id. at 532 n.4 (citation omitted).
issue raised in the present appeals is whether fees imposed
by defendant municipalities are for revenue generation as
prohibited under Timber Glen, or if they are
reasonably related to the municipalities' exercise of
their regulatory powers as authorized by statute. The
plaintiffs' complaints alleged the municipalities
violated the New Jersey Civil Rights Act (CRA), N.J.S.A.
10:6-1 to -2, and that the ordinances requiring the payment
of license fees were ultra vires under Timber Glen,
entitling them to damages and a declaratory judgment awarding
them injunctive relief. The municipalities responded by
filing motions to dismiss under Rule 4:6-2(e). The
trial court judges who considered the matters found that the
challenged ordinances were distinguishable from the ordinance
invalidated in Timber Glen, as the fees were
permissible under a municipality's regulatory powers in
order to defray costs for inspections or registration of
rental units. For the reasons that follow, we affirm.
challenges raised by each plaintiff are summarized as
follows. O'Hara brought her challenges against defendants
City of Woodbury and the Borough of Glassboro where she
maintained properties for rent. The Woodbury
ordinance requires landlords to secure a license
that "attest[ed] that the rental unit had been properly
registered" under the ordinance. Before a unit can be
registered and occupied, the ordinance requires an inspection
"for the purpose of determining Woodbury City Code
compliance and compliance with [the ordinance's] Housing
Standards . . . ." Annual registration of rental units
and payment of a $100 "license fee" have to be
completed before the city will issue a license to permit
Glassboro ordinance also requires annual registration and the
payment of a fee before it will issue a license permitting
the rental of a unit. In addition, if there is a change in
occupancy, a new registration and an additional fee have to
be paid. A license will not be issued, however, unless the
unit passes an inspection to insure there are no "safety
violations" and that the units meet the ordinance's
"performance standards . . . ." The $160
"annual registration fee [that the ordinance requires]
include[s] all inspections and one re[-]inspection at no
a landlord who maintains rental properties in defendants
Borough of Westville, Borough of National Park and the
Township of Deptford, challenged each of those
municipality's ordinances. The Deptford
ordinance contains a registration and licensing
requirement, but does not require re-registration upon a
change in occupancy, although it requires re-inspection.
Inspection is required "to determine the condition of
rental facilities, rental units and rooming/boarding houses
in order . . . to safeguard the health, safety, welfare of
the occupants . . . and of the general public." The
ordinance further provides that a fee has to be paid upon
registration before a license will be issued. It also
provides for a re-inspection fee upon a change in occupancy.
No separate licensing fee is imposed.
and National Park's ordinances also require annual
registration and the payment of a fee before licenses will be
issued to landlords. Westville's ordinance imposes an
"annual registration fee and first inspection fee"
of fifty or sixty dollars per rental unit depending on the
number of rental units on a property. It also has a
re-inspection fee and late fee that it charged for untimely
payments. The ordinance provides that "inspection shall
be for the purpose of determining . . . Land Use and
Development compliance and, to the extent applicable, to
determine if the property complies with the Property
Maintenance Code, Uniform Construction Code, Housing Code
and/or Building Code and/or Uniform Fire Safety Act."
Westville's ordinance does not designate any of its fees
as license fees.
National Park's ordinance provides "[u]pon the filing
of a completed registration form and payment of the
prescribed fee and a satisfactory inspection, the owner shall
be entitled to the issuance of a license . . . ."
Payment of the fee was due "[a]t the time of the filing
of the registration form . . . ." The ordinance calls
for "inspections to determine the condition of rental
facilities, rental units, and rooming/boarding houses in
order [to] . . . safeguard the health, safety, welfare of the
occupants . . . and of the general public." Periodic
inspections are also required to ensure "zoning, [and]
compliance . . . with Property Maintenance, the Uniform
Construction Code, Housing Code, . . . the Building Code and
the Uniform Fire Safety Act." National Park's
ordinance also does not mandate the payment of a separate fee
for the issuance of a license.
and Brody filed an initial complaint in August 2015, which
they amended in April 2016. Judge David W. Morgan granted the
municipalities' motions to dismiss on June 28,
2016. In his oral decision placed on the record
on that date, Judge Morgan discussed our holding in
Timber Glen, the significance of footnote four in
that case, and the distinction between a fee charged by a
municipality to offset costs of regulation as compared to
generating revenue, as discussed in Timber Glen and
Daniels v. Point Pleasant, 23 N.J. 357 (1957). The
judge then framed the issue before him as being, "Do we
have a license-type of ordinance or is it a regulation-type
of . . . ordinance?" He defined a license as being the
granting of "authority to go out and conduct [the
subject] activity" and "[r]egulations . . . . [as]
relat[ing] to the manner by which the activity is to be
conducted." Relying on N.J.S.A. 40:48-2.12a, N.J.S.A.
40:48-2.12a1, N.J.S.A. 40:48-2.12c,  and N.J.S.A.
40:48-2.12m the judge noted that municipalities are
authorized to regulate buildings in order to insure the
public's health and safety and make inspections for that
purpose, require registrations, and issue certificates of
occupancy (CO) and charge fees for those certificates.
to the challenged ordinances, he observed that the
municipalities' "ordinances have very similar
framework." He found that the ordinances were different
from the one addressed in Timber Glen because in
order to get a license under the framework of the challenged
ordinances, a landlord had to comply with various regulations
that were authorized by statute, not just pay a fee as was
the case in Timber Glen. The distinction, he
concluded, gave the challenged ordinances "the
appearance of . . . regulation, as opposed to simply a
licensing act." After reviewing in detail the specific
contents of the ordinance challenged in Timber Glen,
and commenting on what parts related to regulation versus
licensing, the judge turned to the subject ordinances, which
he also discussed in detail.
his review, Judge Morgan observed that unlike Timber
Glen, Woodbury's ordinance required landlords to
pay a fee and comply with various regulations before being
able to obtain a license. He stated:
[W]hen you read . . . [the] ordinances they're . . . a
very integrated set of ordinances that basically regulate the
conduct, the operations of the apartment.
And charge a fee for the license that you get, once
you've demonstrated after an inspection that you're