Lesser v. City of Cape May, Civil Action No. 99-5575(JAP)

• Court: United States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey
• Writing for the Court: Joel A. Pisano
• Parties: FRANCES D. LESSER, GEORGE LESSER, BARBARA SKINNER, JANET SKINNER, BRUCE MINNIX, CORINNE MINNIX, FRED WILSON, ALICE STEER WILSON, MARTIN PYLE, and HANNAH PYLE, Plaintiffs, v. THE CITY OF CAPE MAY, in its capacity as designee of the UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, THE HONORABLE WILLIAM G. GAFFNEY, as MAYOR OF THE CITY OF CAPE MAY, CATHY BUFORD SLATER, as CHAIRPERSON OF THE ADVISORY COUNCIL ON HISTORIC PRESERVATION, an independent agency of the UNITED STATES OF AMERICA, ADVISORY COUNCIL ON HISTORIC PRESERVATION, an independent agency of the UNITED STATES OF AMERICA, ROBERT C. SHINN, JR., in his official capacity as the NEW JERSEY STATE HISTORIC PRESERVATION OFFICER, and CONGRESS HALL PARTNERS, LLC, Defendants.
• Docket Number: Civil Action No. 99-5575(JAP)
• Decision Date: 01 September 2000

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FRANCES D. LESSER, GEORGE LESSER, BARBARA SKINNER, JANET SKINNER, BRUCE MINNIX, CORINNE MINNIX, FRED WILSON, ALICE STEER WILSON, MARTIN PYLE, and HANNAH PYLE, Plaintiffs,
v.
THE CITY OF CAPE MAY, in its capacity as designee of the UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, THE HONORABLE WILLIAM G. GAFFNEY, as MAYOR OF THE CITY OF CAPE MAY, CATHY BUFORD SLATER, as CHAIRPERSON OF THE ADVISORY COUNCIL ON HISTORIC PRESERVATION, an independent agency of the UNITED STATES OF AMERICA, ADVISORY COUNCIL ON HISTORIC PRESERVATION, an independent agency of the UNITED STATES OF AMERICA, ROBERT C. SHINN, JR., in his official capacity as the NEW JERSEY STATE HISTORIC PRESERVATION OFFICER, and CONGRESS HALL PARTNERS, LLC, Defendants. Civil Action No. 99-5575(JAP) United States District Court, D. New Jersey.

Jonathan M. Preziosi, Esq., Michael J. Canavan, Esq., Jamieson, Moore, Peskin & Spicer, P.C., Princeton, NJ, Stephen N. Dennis, Esq., pro hac vice counsel, Philip N. Walker, Esq., pro hac vice counsel Attorneys for plaintiffs

Anthony P. Monzo, Esq., Michael I. Gross, Esq., Cooper Perskie April Niedelman Wagenheim & Levenson Cape May Court House, NJ, Attorneys for defendants City of Cape May and Mayor William G. Gaffney,

Robert J. Cleary, Esq., United States Attorney, Susan Handler-Menahem, Esq. Assistant United States Attorney, United States Attorney's Office Newark, NJ, Attorneys for defendants Cathy Buford Slater and Advisory Council on Historic Preservation.

John J. Farmer, Jr., Attorney General of New Jersey, Valerie Anne Gray, Deputy Attorney General, Richard J. Hughes Justice Complex, Trenton, NJ, Attorneys for defendant Robert C. Shinn, Jr.

Jonathan I. Epstein, Esq., Christine Cartwright, Esq., Drinker Biddle & Shanley LLP, Princeton, NJ, Attorneys for defendant Congress Hall Partners, LLC.

Richard B. Nettler, Esq., pro hac vice counsel, Attorneys for defendant Congress Hall Partners, LLC

OPINION

JOEL A. PISANO, UNITED STATES DISTRICT JUDGE

INTRODUCTION

As the largest nineteenth century beach-front hotel remaining in the City of Cape May ("City" or "Cape May"), New Jersey, the Congress Hall Hotel ("Hotel") is a National Historic Landmark. Congress Hall Partners, LLC ("CHP"), the current owner of the Hotel, seeks to restore the Hotel and to construct a new conference center adjacent to the existing structure. Plaintiffs, a group of ten Cape May residents, challenge the proposed rehabilitation on the ground that certain statutory procedural requirements, which must precede any federally funded historic rehabilitation project, have not been satisfied. Plaintiffs allege violations of the National Historic Preservation Act of 1966 ("NHPA"), 16 U.S.C. § 470 et seq., and the National Environmental Policy Act of 1969 ("NEPA"), 42 U.S.C. § 4321 et seq., and seek judicial review of those alleged violations pursuant to the Administrative Procedure Act ("APA"), 5 U.S.C. § 701 et seq. On November 30, 1999, plaintiffs filed a seven-count complaint seeking declaratory and injunctive relief.¹ The Court has subject matter jurisdiction pursuant to 5 U.S.C. § 702, 28 U.S.C. § 1331, and 28 U.S.C. § 1361.

Pending before the Court are the following motions: (1) a motion to dismiss for failure to state a claim, or in the alternative, for summary judgment filed by defendant CHP; (2) a motion to dismiss for failure to state a claim, or in the alternative, for summary judgment filed by defendants Advisory Council on Historic Preservation ("Advisory Council") and Cathy Buford Slater;² (3) a motion to dismiss for failure to state a claim, or in the alternative, for summary judgment filed by defendants Cape May and Mayor William G. Gaffney ("Mayor Gaffney");³ (4) a motion to dismiss for failure to state a claim, or in the alternative, for summary judgment filed by defendant Robert C. Shinn, Jr.;⁴ (5) a cross-motion for summary judgment filed by plaintiffs; and (6) a motion for leave to file a second amended complaint filed by plaintiffs. All of the motions have been opposed. On April 7, 2000, the Court heard oral arguments.⁵

In the amended complaint, plaintiffs allege the following causes of action arising from the NHPA and the NEPA project review process: (1) that defendants arbitrarily and capriciously concluded that 202 parking spaces are permitted on the Hotel premises (Count One); (2) that defendants arbitrarily and capriciously decided to have the project governed by a Programmatic Agreement ("PA") rather than a Memorandum of Agreement ("MOA") (Count Two); (3) that the City arbitrarily and capriciously decided to bifurcate the project, thereby limiting the consideration of environmental effects to Phase I, the rehabilitation phase, and not reviewing Phase II, the new construction phase (Count Three); (4) that defendants failed to take into account the adverse effects of the project and failed to mitigate the potential harm of those effects (Count Four); (5) that the City failed to document adequately its determination that the project would have no adverse effects, and never considered feasible alternatives to the project (Count Five); and (6) that the City abrogated its duty to conduct an independent environmental review by relying on reports prepared by outside consultants (Count Six).⁶ Plaintiffs also seek leave to file a second amended complaint to assert an eighth claim which alleges that the improper decision to bifurcate the project resulted in an arbitrary and capricious determination that the rehabilitation phase qualified for a categorical exclusion from the requirement that an environmental impact statement ("EIS") be prepared.

In their motions, defendants argue that there are no substantive requirements of the NHPA and the NEPA, only procedural ones, and they have been satisfied. Defendants also contend that the discretionary decisions to use a PA, to bifurcate the project, and to rely on reports drafted by outside environmental consultants, are entitled to judicial deference because they were neither arbitrary nor capricious.

Having reviewed the numerous submissions from the parties, applicable case law, statutes and administrative regulations,⁷ the Court agrees with defendants and finds no genuine issues of material fact and no merit to any claim asserted by plaintiffs. Accordingly, the Court grants defendants' motions for summary judgment,⁸ and denies plaintiffs' cross-motion for summary judgment. The Court also denies plaintiffs' motion for leave to file a second amended complaint because there is no basis to sustain the proposed Count Eight. The Court's rejection of Count Three necessarily makes the proposed amendment futile.

Although the Court rejects plaintiffs' challenges, the Court recognizes the legitimate concerns that plaintiffs have voiced persistently throughout the administrative agency review process and during the course of this litigation. The Court is mindful of the competing interests at play here, which the NHPA and the NEPA seek to balance. See 16 U.S.C. § 470-1; 42 U.S.C. § 4332. Simply put, the economic interests of CHP, the project developer, are pitted against the historic and environmental preservation interests that plaintiffs have raised on behalf of themselves and the public. With respect to the public interests, the Court recognizes the unique features of Cape May, including its shoreline and rich history, which are important factors that warrant consideration. The Court is convinced that all interests were given due consideration during the NHPA and NEPA reviews, and that the outcome is adequately supported by the administrative record.

STATUTORY BACKGROUND

I. The NHPA

By enacting the NHPA, Congress empowered the federal government to play a more active, yet limited, role in preserving, restoring and maintaining the historic and cultural foundations of the nation. See 16 U.S.C. § 470; Exec. Order No. 11,593, 36 Fed. Reg. 8,921 (1971). This role is satisfied, in part, if the federal government "foster[s] conditions under which our modern society and our prehistoric and historic resources can exist in productive harmony and fulfill the social, economic, and other requirements of present and future generations . . . . " 16 U.S.C. § 470-1(1). The NHPA created the Advisory Council, an independent federal agency, whose function, among others, is to "review the policies and programs of Federal agencies and recommend to such agencies methods to improve the effectiveness, coordination, and consistency of those policies and programs with the policies and programs carried out under [the NHPA]." 16 U.S.C. § 470j(a)(6).

The function of the Advisory Council in relation to a federal agency that is reviewing an undertaking⁹ is as follows:

The head of any Federal agency having direct or indirect jurisdiction over a proposed Federal or federally assisted undertaking in any State and the head of any Federal department or independent agency having authority to license any undertaking shall, prior to the approval of the expenditure of any Federal funds on the undertaking or prior to the issuance of any license, as the case may be, take into account the effect of the undertaking on any district, site, building, structure, or object that is included in or eligible for inclusion in the National Register. The head of any such Federal agency shall afford the Advisory Council on Historic Preservation established under sections 470i to 470v of this title a reasonable opportunity to comment with regard to such undertaking.

[16 U.S.C. § 470f ("Section 106").]

When an undertaking may negatively affect a National Historic Landmark, the following additional requirement is mandated during the NHPA review process:

Prior to the approval of any Federal undertaking which may directly and adversely affect any National Historic Landmark, the head of the responsible Federal agency shall, to the maximum extent possible, undertake such planning and actions as may be necessary to...