Matlack v. Board of Chosen Freeholders of Burlington County
| Decision Date | 06 December 1982 |
| Citation | 191 N.J.Super. 236,466 A.2d 83 |
| Parties | , 13 Envtl. L. Rep. 20,705 Marvin F. MATLACK, Plaintiff, v. BOARD OF CHOSEN FREEHOLDERS OF the COUNTY OF BURLINGTON, Michael J. Conda, Director; Burlington County Conservation Easement and Pinelands Development Credit Exchange, a/k/a Burlington County Conservation Easement and Pinelands Development Credit Exchange Board, Theodore Gordon, Chairman; Arthur J. Collins, III, Burlington County Treasurer/Comptroller, Defendants, and New Jersey Conservation Foundation, Inc. and Environmental Defense Fund, Inc., Defendants-Intervenors. John W. STORY and June G. Story, Plaintiffs, v. BURLINGTON COUNTY BOARD OF CHOSEN FREEHOLDERS; Burlington County Conservation Easement and Pinelands Development Credit Exchange Board; Arthur J. Collins, III, Burlington County Treasurer/Comptroller, Defendants, and New Jersey Conservation Foundation, Inc. and Environmental Defense Fund, Inc., Defendants-Intervenors. |
| Court | New Jersey Superior Court |
Joseph W. Marshall, III, and Myrna P. Field, Philadelphia, Pa., members of the Pennsylvania bar, for plaintiff Marvin F. Matlack (John W. Beasley, Jr., O'Byrne & Beasley, Mount Holly, attorneys).
Anton Muschal, Asst. Burlington County Counsel, Bordentown, for defendants Bd. of Chosen Freeholders of County of Burlington, Michael J. Conda and Arthur J. Collins III (John E. Dimon, Burlington County Counsel, Roebling, attorney).
M. Jefferson Davis, Haddonfield, for defendants Burlington County Conservation Easement and Pinelands Development Credit Exchange, Burlington County Conservation Easement and Pinelands Development Credit Exchange Bd. and Theodore Gordon (Reiners & Davis, Haddonfield, attorneys).
James T.B. Tripp, New York City, member of the New York bar, for defendant-intervenors New Jersey Conservation Foundation, Inc. and Environmental Defense Fund, Inc. (James E. Collins, Cerrato, O'Connor, Mehr & Saher, Freehold, attorneys).
Eileen B. White, Washington, D.C., a member of the Dist. of Columbia bar, and Thomas E. Hookano, Sacramento, Cal., member of the Cal. bar, for plaintiffs John W. Story and June G. Story (Bonnie Goldman, Jeffrey Goldman, Robbinsville, attorneys).
Mary C. Jacobson, Deputy Atty. Gen., for amicus curiae Pinelands Council (Irwin I. Kimmelman, Atty. Gen., attorney).
GOTTLIEB, J.J.D.R.C. (temporarily assigned).
These two matters have been consolidated for hearing. They each challenge, but not for totally identical reasons, the ability of defendants to participate in the purchase, creation of a market for and sale of Pineland Development Credits ("PDC"). The parties have all moved for summary judgment. A recitation of the legislative background and facts in these cases is appropriate to supply the context for this decision.
In May 1978 defendant Burlington County Board of Chosen Freeholders adopted a bond ordinance in the sum of $2,000,000 for the purpose of financing "the acquisition of conservation easements in ecologically sensitive and critical areas of the Pinelands located in Burlington County."
Later that year the Pineland National Reserve, consisting of approximately one million acres, was established under § 502 of the National Parks and Recreation Act, 16 U.S.C.A. 471i(c). In doing so Congress found a national interest in protecting the resources and benefits of the Pinelands. 16 U.S.C.A. 471i(a)(2). Congress also sought to encourage cooperation among various governmental units in furthering that goal. 16 U.S.C.A. 471i(b)(5).
In 1979 the Pinelands Protection Act was enacted by the State Legislature. N.J.S.A. 13:18A-1 et seq. Among other things, the act established the Pinelands Commission, N.J.S.A. 13:18A-4, and directed that it prepare a comprehensive management plan ("CMP") for the Pinelands. N.J.S.A. 13:18A-8. The CMP was to include "a comprehensive statement of policies for planning and managing the development and use of land in the pinelands area" by:
(1) Consider[ing] and detail[ing] the application of a variety of land and water protection and management techniques, including but not limited to, ... acquisition of conservation easements and other interest in land, ... transfer of development rights, dedication of private lands for recreation or conservation purposes and any other appropriate method of land and water protection and management which will help meet the goals and carry out the policies of the management plan; [and]
(2) Includ[ing] a policy for the use of State and local police power responsibilities to the greatest extent practicable to regulate the use of land and water resources in a manner consistent with the purposes and provisions of this act and the Federal Act ....
The CMP was drafted by the Pinelands Commission and approved by the appropriate officials by January 1981. N.J.S.A. 13:18A-10. As relevant, the CMP creates a development credit program to provide an alternative use to property owners in certain portions of the Pinelands:
The program allocates to landowners in these restricted area credits which can be purchased by landowners in growth areas and used to gain bonus residential densities. The credits thus provide a mechanism for landowners in the former areas to participate in any increase in development values which is realized in growth areas. [CMP at 210]
A landowner selling credits must "record a deed establishing a restriction which limits the future uses of his land to those allowed under the plan for the area in which the land is located." The credit program allocates credits at varying rates, depending upon whether it involves farmland or wetland and the district in which it is situate. The CMP also recommends the creation of a "bank" to facilitate the implementation of the credit program. The "bank" would function to buy or sell credits on the open market, provide loans to property owners with credits as security, guarantee loans made by other institutions based on credits as security, and supply public information to promote an understanding of the credit program. CMP at 212.
In discussing management techniques to protect land and water resources, the CMP notes the availability of acquiring conservation easements. In this regard, the CMP opines that "[e]asements may also be used to acquire development rights to prevent all development or to restrict the type of development which may take place." CMP at 214.
The CMP also envisions that local governmental units will be the principal management entities for implementing the plan. CMP at 273.
In September 1981 the board of freeholders adopted a resolution which created defendant Burlington County Conservation Easement and Pinelands Development Credit Exchange (the "Exchange"). The resolution authorized the Exchange, in the name of the board of freeholders, to purchase PDCs at a purchase price of $10,000 per credit or fraction thereof, funded through the 1978 bond ordinance. The Exchange was to purchase PDCs for land within the county, and "[e]xceptions for PDC purchases outside of Burlington County may be considered when they are in the best interest of the public and the County." Acquisition of a PDC would require that there be "a recorded conservation easement which shall run in perpetuity" in the name of the board of freeholders. The board of freeholders was authorized to sell the PDCs in a public manner as provided by applicable statutes. The proceeds from any sale were to be used to buy additional PDCs or direct conservation easements.
In July 1982 the Exchange adopted a resolution proposing to acquire a development credit from Floyd R. Springer covering property in Bass River Township.
In August plaintiffs Marvin F. Matlack and Joseph W. and June G. Story, all residents and taxpayers in the county, instituted these actions seeking a declaration that the purchase of PDCs through the Exchange on behalf of the board of freeholders was illegal. Matlack contends that (1) the use of monies to acquire PDCs is not authorized by the bond ordinance; (2) the board of freeholders and the Exchange are not empowered to buy, sell or otherwise create a market for PDCs; (3) local government units have been preempted from acting with respect to PDCs by the State; (4) the creation of a PDC document and registration system, enabling the transfer of PDCs, violates applicable federal and state securities laws, and (5) the use of bond ordinance monies to buy PDCs on land outside of the county, as authorized by the Exchange's resolution, is illegal.
The Storys assert that (1) the use of monies to acquire PDCs is not authorized by the bond ordinance; (2) the board of freeholders does not have the authority to create the Exchange or to empower it to buy, sell or create a market for PDCs; (3) the setting of a purchase price of $10,000 for a PDC is an arbitrary and capricious designation of value and that that amount denies due process and just compensation to a potential seller of a PDC, and (4) the use of bond ordinance monies to buy PDCs on land outside of the county, as authorized by the Exchange's resolution, is illegal.
On August 5, pursuant to Matlack's request, an order was issued requiring defendants to show cause why a preliminary injunction should not be entered preventing defendants from buying, selling or otherwise creating a market for PDCs. The order included a temporary restraint.
On September 24, the continued return date of the order, an order was allowed permitting (1) the Pinelands Commission to appear as amicus curiae; (2) New Jersey Conservation Foundation, Inc. and Environmental Defense Fund, Inc. to intervene as parties defendant; (3) the consolidation of the two matters for hearing, and (4) various attorneys to be admitted pro hac vice. In an attempt to expedite resolution of the issues by the court, the order also provided for (1) accelerated disclosure of information by defendants to plaintiffs relating to how the purchase price of $10,000 for a...
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