Nat'l Amusements Inc. v. Borough of Palmyra, Corp.

• Decision Date: 21 March 2013
• Docket Number: Nos. 12–1630,12–2386.,s. 12–1630
• Citation: 716 F.3d 57
• Parties: NATIONAL AMUSEMENTS INC., a Maryland Corporation, Appellant v. The BOROUGH OF PALMYRA, a municipal corporation of the State of New Jersey; Environmental Resources Management, Inc.; Munitions Management Group, LLC.
• Court: U.S. Court of Appeals — Third Circuit

716 F.3d 57

NATIONAL AMUSEMENTS INC., a Maryland Corporation, Appellant

v.The BOROUGH OF PALMYRA, a municipal corporation of the State of New Jersey; Environmental Resources Management, Inc.; Munitions Management Group, LLC.

Nos. 12–1630, 12–2386.

United States Court of Appeals, Third Circuit.

Submitted Under Third Circuit

LAR 34.1(a) March 21, 2013.

Opinion Filed: May 9, 2013.

Marc D. Haefner, Esq., Nicole B. Dory, Esq., Kevin J. Coakley, Esq., Connell Foley LLP, Roseland, NJ, for Appellant.

Richard L. Goldstein, Esq., Walter F. Kawalec, III, Esq., Marshall, Dennehey, Warner, Coleman & Goggin, Cherry Hill, NJ, for Appellee.

Before: FUENTES, CHAGARES and BARRY, Circuit Judges.

OPINION OF THE COURT

BARRY, Circuit Judge.

I.

In 2008, the Borough of Palmyra (“Palmyra”) ordered closed for five months an open-air flea market, owned and operated by National Amusements, Inc. (“NAI”), due to safety concerns posed by unexploded munitions left behind when the site had been used as a weapons-testing facility for the United States Army. NAI filed the instant action alleging that Palmyra's action violated its constitutional rights under 42 U.S.C. § 1983 and New Jersey law. During pendency of the action, NAI filed a motion for a preliminary injunction requesting that the emergency closure order be lifted. Because the parties agreed pursuant to a Consent Order that the market could resume operations subject to strict safety precautions, that motion was never decided. On February 3, 2012, the District Court granted Palmyra's motion for summary judgment and dismissed the action in its entirety. Despite losing the summary judgment motion, NAI declared victory on its § 1983 claims based on the earlier Consent Order, and sought attorney's fees pursuant to 42 U.S.C. § 1988. The District Court denied this motion. NAI appeals both the order granting summary judgment and the order denying fees. We will affirm.

II.

From 1976 until the present, NAI has operated an open-air flea market (the “Market”) on a 65.4–acre parcel of land that NAI's predecessor had purchased from Palmyra. The Market has approximately 458 vendor locations and generates significant customer traffic. In 2002, Palmyra began considering a 186–acre redevelopment project which included NAI's parcel. As part of the project, Palmyra contracted with Environment Resources Management (“ERM”) to conduct a site inspection of the proposed area. That inspection uncovered the possible presence of unexploded munitions left over from a weapons-testing facility used by the United States Army during and shortly after World War II. Following the initial inspection,ERM contracted with Munitions Management Group, LLC (“MMG”) to investigate the risk to the public and redevelopment efforts and to execute a plan for the safe removal of the munitions. NAI, ERM, and MMG entered into an access agreement, pursuant to which NAI would be permitted to operate the Market on the weekends, while ERM and MMG conducted their inspections and remedial work during the week.

On March 10, 2008, however, MMG discovered an unexploded artillery shell flush with the surface of the Market's parking lot, which, because vendors often drove stakes into the ground to secure their tents, raised concerns of accidental detonation. That same day, the Borough Council of Palmyra issued a resolution authorizing Police Chief Richard Dreby to request that NAI voluntarily cease its operations, and, if NAI refused, to exercise his emergency powers to restrict public access to the Market. After NAI refused to comply voluntarily, Chief Dreby issued an emergency order on March 12, 2008, restricting access to the property while MMG conducted further munitions detection and disposal. Over the course of its effort, MMG discovered and disposed of hundreds of munitions on the property, both explosive and inert.

On April 24, 2008, NAI filed the instant action, which Palmyra timely removed to federal court. The Complaint alleges that Palmyra's action (1) was arbitrary and capricious under New Jersey law; (2) violated NAI's right to procedural due process; and (3) constituted a “taking” without just compensation. The gist of the Complaint is that Palmyra overstated the danger posed by the unexploded munitions as pretext to shut down NAI's economic activity on property Palmyra had been eyeing for redevelopment. NAI contends that Palmyra's failure to enact similar restrictions on adjacent property or adopt a less restrictive course of action that could have permitted the continued operation of the Market demonstrated this surreptitious intent. NAI sought damages and injunctive relief requiring Palmyra to permit the Market to reopen and operate as it had for more than thirty years without incident.

On June 6, 2008, NAI filed a motion for a preliminary injunction to lift Chief Dreby's emergency order. Before the District Court could resolve the motion, however, the parties agreed that the Market could reopen on the weekends subject to certain institutional controls, at NAI's cost, including erecting barriers and hiring security guards to prohibit public access to hazardous areas. Pursuant to the agreement, the District Court entered a Consent Order on July 30, 2008, whereby the Market could resume operations beginning on August 13, 2008. Both parties have complied with the Consent Order, and the Market continues to operate with the agreed-upon institutional controls. The Market was closed as a result of Chief Dreby's emergency order for approximately five months.

For the next two years, the issue that was primarily litigated was whether NAI was entitled to $200,000 in interim attorney's fees related to the Consent Order. On October 8, 2010, the District Court denied NAI's application for fees subject to renewal at the end of the case. On February 3, 2012, the District Court granted Palmyra's motion for summary judgment. On May 9, 2012, the District Court denied NAI's motion for attorney's fees, holding that any success NAI had in relation to the Consent Order was based on its state law claim not its federal constitutional claims. NAI appeals both orders.¹

III.

Our standard of review of a district court's grant of summary judgment is plenary, and we view the facts in the light most favorable to the non-moving party. A.W. v. Jersey City Pub. Sch., 486 F.3d 791, 794 (3d Cir.2007).

A. Procedural Due Process

NAI claims that Palmyra deprived NAI of due process by closing the Market without providing pre-deprivation notice or opportunity to be heard. To state a procedural due process claim, NAI must establish (1) that it was deprived of an individual interest that is encompassed within the Fourteenth Amendment's protection of life, liberty and property, and (2) that the procedures available to it did not provide due process of law. Schmidt v. Creedon, 639 F.3d 587, 595 (3d Cir.2011). NAI cannot establish the second prong.

“[D]ue process, unlike some legal rules, is not a technical conception with a fixed content unrelated to time, place and circumstances.” Gilbert v. Homar, 520 U.S. 924, 930, 117 S.Ct. 1807, 138 L.Ed.2d 120 (1997) (quotation marks and citation omitted). While “[t]he fundamental requirement of due process is the opportunity to be heard at a meaningful time and in a meaningful manner,” Mathews v. Eldridge, 424 U.S. 319, 333, 96 S.Ct. 893, 47 L.Ed.2d 18 (1976) (quotation marks omitted), the Supreme Court “has recognized, on many occasions, that where a State must act quickly, or where it would be impractical to provide predeprivation process, postdeprivation process satisfies the requirements of the Due Process Clause.” Gilbert, 520 U.S. at 930, 117 S.Ct. 1807. The Court has established a three-factor balancing test to determine what process is constitutionally due:

First, the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interest through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally, the Government's interest.

Mathews, 424 U.S. at 335, 96 S.Ct. 893.

NAI's private interest in maintaining revenue from the continued operation of the Market is substantially outweighed by the overwhelming government interest in protecting the public safety from the danger posed by unexploded munitions. Although the Market had operated without incident for years, NAI does not dispute the presence of unexploded munitions. Given the imperative of an efficient response to the threat to public safety, due process did not require that Palmyra provide NAI pre-deprivation notice. See Gilbert, 520 U.S. at 932–33, 117 S.Ct. 1807 (holding that police officer arrested on drug charges was not entitled to notice and hearing prior to being suspended without pay because of state's significant interest in the officer's immediate suspension); N. Am. Cold Storage Co. v. City of Chicago, 211 U.S. 306, 320, 29 S.Ct. 101, 53 L.Ed. 195 (1908) (holding that the state did not violate due process by confiscating potentially contaminated food without a prior hearing). ² Put simply, a municipality need not conduct a pre-deprivation hearing before acting to prevent the public from walking around a surface littered with live explosives. As NAI does not argue that the post-deprivation procedures available to it were inadequate, summary judgment was properly granted on NAI's procedural due process claim.

B. Takings Clause

The Takings Clause of the Fifth Amendment provides that “private property [shall not] be taken for public use, without just compensation.” U.S. Const. amend. V. “The paradigmatic taking requiring just compensation is a direct government appropriation or physical invasion of private property.” Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 537, 125 S.Ct. 2074, 161 L.Ed.2d 876 (2005). The government must pay just compensation for such takings “except to the extent that ‘background principles of nuisance and property law’...