Oradell Village v. Wayne Tp.

• Decision Date: 16 November 1967
• Docket Number: No. C-2702,C-2702
• Parties: ORADELL VILLAGE, Esquire Estates, Inc., Povershon Construction Co., Inc., Southfield Homes, Inc., Brooklawn Gardens, Inc., New Jersey corporations, and Richard Geiger and Willson Kaplan trading as Wayne Village, Plaintiffs, v. TOWNSHIP OF WAYNE, a municipal corporation, Defendant.
• Court: New Jersey Superior Court

Page 8

98 N.J.Super. 8

235 A.2d 905

98 M.J.Super. 8 ORADELL VILLAGE, Esquire Estates, Inc. Povershon Construction Co., Inc., Southfield Homes, Inc. Brooklawn Gardens, Inc., New Jersey corporations, and Richard Geiger and Willson Kaplan trading as Wayne Village, Plaintiffs, v. TOWNSHIP OF WAYNE, a municipal corporation, Defendant.

No. C-2702.

Superior Court of New Jersey Chancery Division.

Nov. 16, 1967.

Harvey Blicksilver, Paterson, for plaintiffs (Lieblich & Cole, Paterson, attorneys, Oscar R. Wilensky, Passaic, of counsel).

Peter J. Van Norde, Wayne, for defendant.

MOUNTAIN, J. S. C.

Wayne Township owns and operates a water distribution system pursuant to R.S. 40:62-47 et seq., N.J.S.A. As the owner of such a utility it has the power to fix rates. R.S. 40:62-77, N.J.S.A. Plaintiffs are the owners of garden apartments located within the municipality and served by the municipally-owned water system.

On December 6, 1960 the governing body of the township amended its former schedule of water rates by adopting an ordinance to which the plaintiffs take vigorous exception upon the ground that it discriminates against the owners of garden apartments. This ordinance, as well as its predecessor, follows the generally accepted practice of fixing (1) a volume charge graduated downward as consumption increases, and (2) a minimum quarter-annual charge increasing with the size of the meter. Prior to 1960 an owner of a one-family residence and an owner of a garden apartment each paid a minimum charge of $7.50 per quarter. The garden apartments were so constructed that a single meter and a single connection provide for distribution to a large number of separate apartments within the complex, and until the adoption of the new ordinance the rate schedule, as mentioned above, was the same with respect to such an apartment house complex and a single-family residence. It became obvious that the owner of a multi-tenant building would in general pay much less for water per unit than would be the case with respect to the owners of single-family residences. A typical example, as suggested by defendant, is the following, where it is assumed that each residential dwelling unit and each garden apartment unit consumes 10,000 gallons per quarter:

20 one-family dwellings

served through 20 meters Amt. pd. per quarter: 20 7.50 (min. chg.) $ $150

20 garden apartment units

served through 1 meter Amt. pd. per quarter: 200,000 .20 $ $40

This result being deemed unsatisfactory by the municipality, the ordinance in question was adopted. It imposes a minimum charge of $20 a year on each multi-tenant residential building for each tenant unit over and above the first tenant unit, this minimum charge entitling the consumer to 5,000 gallons per quarter. Plaintiffs contend that this rate is discriminatory to such an extent as to be in violation of the equal protection clause of the Fourteenth Amendment of the Federal Constitution.

The issue presented appears to be one of novel impression in New Jersey although it has been passed upon by courts of several other states. The great weight of authority supports such a classification. Knotts v. Nollen, 206 Iowa 261, 218 N.W. 563 (Sup.Ct.1928); Lewis v. Mayor, etc., of Cumberland, 189 Md. 58, 54 A.2d 319 (Ct.App.1947); Land v. City of Grandville, 2 Mich.App. 681, 141 N.W.2d 370 (App.Ct.1966); Caldwell v. City of Abilene, 260 S.W.2d 712 (Tex.Civ.App.1953); City of Kermit v. Rush, 351 S.W.2d 598 (Tex.Civ.App.1961). To the contrary see Kliks v. Dalles City, 216 Or. 160, 335 P.2d 366 (Sup.Ct.1959). I believe the majority view is sound and should be followed in this state.

It seems clear and is not disputed by plaintiffs that the dual aspect of the rate structure is unobjectionable. It is clearly proper and quite customary to charge a smaller rate to one whose volume of consumption is larger. But a charge for water need not be based entirely upon volume consumed. It is proper to establish, additionally, a minimum rate which a consumer must pay even though he uses less than the minimum amount of water for which the charge is made. This is, in effect, a service charge for those who use less than the minimum amount, differing only from a fixed service charge unrelated to a minimum quantity of water in that under such a minimum rate the charge is absorbed when the minimum quantity of water is used. City of Rochester v. Rochester Gas and Electric Corporation,...