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Chancery Judge Takes DEP to Task for Making Developer Wait for Highlands Act Decision



October 31, 2005

Residential builder ABD Liberty, Inc. (“ABD”) may have thought it had narrowly beaten the deadline. Just before the Highlands Water Protection and Planning Act (“Highlands Act”) was signed into law in August 2004, ABD obtained major preliminary subdivision approval for a project in Warren County, in an area covered by the Highlands Act. (The approval was actually memorialized eight days after then-Governor McGreevey signed the statute into law.) But the Legislature made the statute — including its provisions requiring special state approvals for projects like ABD’s — retroactive to March 29, 2004. Evidently frustrated with being caught in the Highlands Act’s snare, ABD filed suit against the Department of Environmental Protection (“DEP”) in the Chancery Division for Somerset, Hunterdon and Warren Counties, arguing that the statute’s retroactivity provision was unconstitutional and worked a “manifest injustice.” DEP responded by arguing that besides lacking merit, ABD’s claim was not ripe, and further argued that because the case concerned an act of the Legislature, it should be transferred to Mercer County, where the Legislature sits. Judge R. Ruggiero Williams, Presiding Judge of the Chancery Division in Somerset/Hunterdon/Warren, dismissed the case as unripe, but not before sending DEP a clear message that its delays in deciding whether the statute is applicable to ABD’s project would have to end, and soon.

Judge Williams first rejected DEP’s contention that the case should have been venued in Mercer County because it concerned the constitutionality of a legislative act. “The mere fact that the legislature sits in Mercer County and the Act was passed by the legislature is insignificant,” Judge Williams ruled. “Under this argument all matters involving legislation should be heard in Mercer County.” Slip op. at 12. Accusing DEP of forum shopping, Judge Williams declared, “This court is as qualified to hear a Constitutional challenge as a judge located in Mercer County.” Id.

On the merits, ABD argued that the statute’s retroactivity provision was unconstitutional and also worked a “manifest injustice” under the standard set forth in Nobrega v. Edison Glenn Associates, 167 N.J. 520, 546 (2001), which in turn quoted Gibbons v. Gibbons, 86 N.J. 515 523-24 (1981). (Such a claim requires the court to inquire whether the affected party relied, to his or her detriment, on the law that was changed due to a new statute’s retroactivity, with consequences “so deleterious and irrevocable” that retroactive application would be unfair.) Judge Williams never ruled on these claims, however, holding that they were unripe because “several viable remedies still exist.” Slip op. at 15. Various portions of the Highlands Act provide for government purchase of land, for a Transfer of Development Rights Program that can ameliorate any impacts on landowners, and for waivers of the statute’s requirements to avoid takings claims. Without any decision on the availability or extent of any of these remedies, the court could not rule on ABD’s claims.

Still, Judge Williams did not let DEP completely off the hook. After noting that the Deputy Attorney General who argued the case for DEP had represented that he would recommend that DEP “view this matter as unique with an eye towards relief,” id. at 17, Judge Williams further noted that more than eight months had passed since the case was filed, and that despite several requests from the court to make a determination, and despite being given a specific deadline to make a decision, DEP had instead repeatedly asked ABD for more information. Under these circumstances, the court ruled, simple justice required a speedy answer from DEP. “Therefore,” said Judge Williams, “this court will fashion a remedy which will expedite exhaustion of available remedies and create a ripe controversy.” Id. at 18. DEP was given 90 days to complete its review and come to a decision. The absence of a decision would be treated as a denial of ABD’s application for relief. Once DEP makes its decision — or is deemed to have made its decision — the matter will be considered ripe for adjudication, and ABD can proceed however it wishes. Id. at 18-19. ABD may yet turn out to be the first important test case of the Highlands Act’s constitutionality. In the meantime, DEP is under orders to fish or cut bait, so that ABD does not have to keep sitting and waiting for an answer.