Rockleigh Country Club, LLC v. Hartford Ins. Grp.
| Decision Date | 03 March 2023 |
| Docket Number | A-2615-21 |
| Parties | ROCKLEIGH COUNTRY CLUB, LLC, Plaintiff-Appellant, v. HARTFORD INSURANCE GROUP, a/k/a THE HARTFORD, d/b/a HARTFORD FIRE INSURANCE COMPANY, STRATEGIC INSURANCE PARTNERS, INC., PHILIP D. MURPHY, in his capacity as Governor of the State of New Jersey, and STATE OF NEW JERSEY, Defendants-Respondents. |
| Court | New Jersey Superior Court – Appellate Division |
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
Submitted February 1, 2023
On appeal from the Superior Court of New Jersey, Law Division Bergen County, Docket No. L-4013-20.
Newman & Denburg, LLC, attorneys for appellant (Gary S. Newman of counsel and on the briefs; David F. Scheidel, II, on the briefs).
Matthew J. Platkin, Attorney General, attorney for respondents Philip D. Murphy and State of New Jersey (Jeremy M. Feigenbaum, Solicitor General, of counsel; Jeffrey S. Posta and Nathaniel Levy, Deputy Attorneys General, on the brief).
Before Judges Vernoia and Natali.
In this appeal arising from an as-applied challenge to Governor Philip D. Murphy's Executive Order (EO) 107,[1] plaintiff, the owner/operator of an event venue, alleges the order resulted in an uncompensated taking of its property in violation of its right to just compensation under the State and Federal Constitutions. More specifically, plaintiff argues EO 107 effected a regulatory taking that deprived it of all economically beneficial uses of its property. In the alternative, plaintiff argues EO 107 resulted in a per se taking of its property by appropriating its right to exclude for which it seeks just compensation pursuant to the United States Supreme Court's holding in Cedar Point Nursery v. Hassid, 594 U.S.___, 141 S.Ct. 2063, 2072 (2021).
For the following reasons, we find plaintiff did not suffer a compensable taking of its property, and we therefore dismiss plaintiff's claim.
"COVID-19 is a highly contagious, dangerous, and . . . deadly disease . . ." Biden v. Missouri, 595 U.S.___, 142 S.Ct. 647, 653 (2022). The SARS-CoV-2 coronavirus, which causes COVID-19, "spreads by person-to-person contact in confined indoor spaces[.]" Nat. Fed'n of Indep. Bus. v. Dep't of Labor, Occupational Safety &Health Admin., 595 U.S.___, 142 S.Ct. 661, 670 (2022) (Breyer, J., dissenting). Beginning in March 2020, the COVID-19 pandemic created a "rare, once-in-a-century . . . health emergency" and thus required "ordering individuals to stay at home to fight the disease's spread ...." See New Jersey Republican State Comm. v. Murphy, 243 N.J. 574, 607-08 (2020).
New Jersey "ha[d] been hit particularly hard" by the pandemic at its outset and at the time "rank[ed] second in the nation in COVID-19 deaths . . . ." Id. at 583. More recently, this court observed COVID-19 has "killed more than 900,000[,]" has "hospitalized about 4,000,000[,]" and has infected "[a]t least 75,000,000 Americans . . . ." New Jersey State Policemen's Benevolent Assoc. v. Murphy, 470 N.J.Super. 568, 575 (App. Div. 2022). The Court has aptly described the COVID-19 pandemic as "a true disaster with widespread consequences . . . ." New Jersey Republican State Comm., 243 N.J. at 580-81.
Governor Murphy issued executive orders, including EO 107, "in response to health-related emergencies caused by the spread of the COVID-19 coronavirus." JWC Fitness, LLC v. Murphy, 469 N.J.Super. 414, 419-20 (App. Div. 2021); see also New Jersey State Policemen's Benevolent Assoc., 470 N.J.Super. at 584. EO 107, which became effective March 21, 2020, implemented "social mitigation strategies "requiring "every effort to reduce the rate of community spread of the disease[.]"
Pertinent here, EO 107 imposed restrictions which "limit[ed] person-to-person contact" in the State. The executive order required residents to "remain home" unless engaging in certain well-delineated activities and additionally "cancelled" all "[g]atherings of individuals, such as parties, celebrations, or other social events[.]" The cancellation of social events, including those that were or could have been scheduled at plaintiff's venue, continued from EO 107's March 21, 2020 effective date until the issuance of EO 152, which permitted resumption of in-person gatherings on June 9, 2020. Exec. Order. No. 152 (June 9, 2020), 52 N.J.R. 1301(a) (July 6, 2020).
"In the context of a public health emergency, "and "[g]iven the scientifically undisputed risk of spreading this deadly virus," the COVID-19 pandemic demanded the State take "many actions . . . to protect the common good." Matter of City of Newark, 469 N.J.Super. 366, 385-86 (App. Div. 2021). EO 107 was one such action.[2]
II.
Plaintiff filed a complaint stating it "is an event venue which provides large rooms for purposes of pre-booked social gatherings at [its] premises," including weddings and other events. In part, the complaint alleges EO 107 effected a regulatory taking of its property "without just compensation" by "forcing [it] to suspend its business" of hosting social events and thereby "denying [it] economic use of its property."
A regulatory taking occurs where "the owner of real property has been called upon to sacrifice all economically beneficial uses" of its property. See Lucas v. South Carolina Coastal Council, 505 U.S. 1003, 1019 (1992) (emphasis in original). An exception to the State's duty to pay just compensation for a regulatory taking applies where "the court determines that background principles of property and nuisance law [otherwise] preclude [the owner's] intended use of the property." Mansoldo v. State, 187 N.J. 50, 62 (2006). In other words, "restrictions that background principles of the State's law of property and nuisance already place upon land ownership[,]" such as the State's power "to abate nuisances that affect the public generally" or "forestall other grave threats to the lives and property of others[,]" are not compensable. Lucas, 505 U.S. at 1029 n.16.
The exception also applies to per se taking claims. See Cedar Point Nursery, 141 S.Ct. at 2079 (quoting Lucas, 505 U.S. 1028-29) ( "the government does not take a property interest when it merely asserts a 'preexisting limitation upon the land owner's title.'"). A per se taking occurs where a regulation "appropriates a right" inherent in property ownership, such as the right to exclude, id. at 2072, which plaintiff additionally alleges occurred here.
The Law Division transferred plaintiff's complaint to this court pursuant to Rule 1:13-4(a), which permits transfer where, among other things, the transferor court is without subject-matter jurisdiction to adjudicate the cause.
Because Rule 2:2-3(a)(2) gives this court as-of-right appellate jurisdiction "to review final decisions or actions of any state administrative agency or officer, and to review the validity of any rule promulgated by such agency or officer[,]" the Law Division judge, citing our decision in JWC Fitness, determined "[j]urisdiction to decide challenges to executive orders issued by the Governor resides in the Appellate Division. "
We have previously decided appeals from EOs pursuant to Rule 2:2-3(a)(2). See, e.g., New Jersey State Policemen's Benevolent Assoc., 470 N.J.Super. at 575-76; JWC Fitness, 469 N.J.Super. at 419; Comm. Workers of Am., AFL-CIO v. Christie, 413 N.J.Super. 229, 251 (App. Div. 2010); Perth Amboy Bd. of Educ. v. Christie, 413 N.J.Super. 590, 593 (App. Div. 2010). But in those cases, the plaintiff challenged an EO's facial validity or otherwise raised an as-applied challenge based on a fully developed record fit for appellate review. Compare Comm. Workers of Am., 413 N.J.Super. at 234-35 (), with New Jersey State Policemen's Benevolent Assoc., 470 N.J.Super. at 575-78, 585-86 ().
Facial challenges generally involve issues that "are purely legal" for which "no fact-finding hearings are necessary." Comm. Workers of Am., 413 N.J.Super. at 252. In contrast, as-applied challenges present mixed questions of law and fact that are typically inappropriate to decide in the absence of either stipulated facts, the lack of any dispute over the facts, or a court's findings of fact based on a fully developed record. To proceed differently "would be incompatible with the function of a[n] [appellate] court." Montclair Twp. v. Hughey, 222 N.J.Super. 441, 446-47 (1987).
In this as-applied challenge to EO 107, plaintiff claims the order resulted in a compensable taking because it deprived plaintiff of all economically beneficial uses of its property. In our view, the record on appeal does not permit a definitive finding EO 107 effected a total deprivation of all economically viable uses of plaintiff's property during EO 107's effective period of March 21, 2020 to June 9, 2020, and, for that reason, we are unable to determine if plaintiff actually suffered a taking in the first instance. Cf. JWC Fitness, 469 N.J.Super. 420.
Therefore resolution of plaintiff's as-applied challenge to EO 107 would generally require development of an evidentiary record to determine if, as plaintiff alleges, EO 107 totally deprived it of all economically viable uses of its property.[3] Although "the ordinary course" would be a remand to the Law Division for factfinding on plaintiff's claim, we need not remand here because the record includes undisputed facts allowing disposition of plaintiff's claim as a matter of law, even if it is assumed...
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