The Supreme Court of New Jersey recently addressed whether N.J.S.A. 18A:16-6 entitles a school board employee to indemnification for attorney fees and costs spent in defense of a civil action arising from the same allegations contained in a dismissed criminal indictment. In L.A. v. Board of Education of the City of Trenton, the court held that the statute requires indemnification unless there is proof by a preponderance of the evidence that the employee’s conduct fell outside the course of performance of his or her employment duties.

The Legal Background

Under the civil indemnification statute, N.J.S.A. 18A:16-6, a board of education employee may be indemnified for attorney’s fees and costs incurred defending civil actions arising out of an act or omission that took place in the course and scope of employment duties. Meanwhile, the criminal indemnification statute, N.J.S.A. 18A:16-6.1, requires a disposition of the criminal charges in favor of the employee before he or she is entitled to reimbursement for costs incurred in defending against the charges.

The Facts of the Case

The plaintiff, L.A., worked as an elementary school security guard for the Trenton Board of Education (Board). While at work, L.A. allegedly had unlawful sexual contact with two minor students, N.F. and K.O. Following an investigation by the Institutional Abuse Investigation Unit (IAIU) of the Department of Children and Families, L.A. was indicted on several related criminal charges. L.A. pled guilty to one count of second-degree endangering the welfare of a minor (N.F.) in exchange for dismissal of the remaining charges regarding N.F. and complete dismissal of the K.O. indictment.

K.O.’s guardian ad litem subsequently filed a civil complaint alleging that L.A. sexually assaulted K.O. and that the Board negligently hired L.A. Ultimately, the civil action settled without any admission of wrongdoing by L.A. or the Board. After the settlement, L.A. sought reimbursement for the attorney’s fees and costs incurred in defending the civil action.

The Administrative Law Judge (ALJ) awarded L.A. attorney’s fees and costs pursuant to N.J.S.A. 18A:16-6 after concluding that the Board had failed to meet its burden of establishing that L.A.’s conduct fell outside of the performance of his duties as an elementary school security guard. On appeal by the Board, the Appellate Division reversed, holding that indemnification was not warranted because the IAIU report substantiated K.O.’s allegations against L.A. and provided sufficient evidence to prove that the claim did not arise out of, or in the course of performance of, his employment duties.

The Court’s Decision

The New Jersey Supreme Court held that N.J.S.A. 18A:16-6 requires indemnification unless there is proof by a preponderance of the evidence that the employee’s conduct fell outside the course of performance of his or her employment duties.

In reaching its decision, the court held that the Appellate Division erroneously conflated the civil and criminal indemnification statutes. “We have a question of civil indemnification, which requires only a determination of whether the employee was acting within the scope of his or her employment duties. Thus, the criminal indemnification statute, N.J.S.A. 18A:16-6.1, is not germane to our inquiry,” the court explained.

The court further held that the ALJ’s summary decision was inappropriate because he failed to determine by a preponderance of the evidence whether L.A. was acting within the scope of the duties of his employment. The NJ Supreme Court further noted that the fact that an employee was charged with a crime but not convicted does not establish that the conduct was within the scope of his or her employment duties.

According to the court, the ALJ should have considered “ the extent of any factual overlap between the offenses alleged in the N.F. indictment, which L.A. admitted to, and the offenses alleged in the K.O. indictment” as well as “L.A.’s admission during his plea colloquy that he spoke inappropriately to K.O., or the evidence referred to in the IAIU report substantiating K.O.’s allegations.”

Because disputed issues of material fact exist regarding whether L.A. was acting within the scope of the responsibilities of his employment, the court remanded the matter to the Commissioner of Education to determine the issue.

For more information about this case or the legal issues involved, we encourage you to contact a member of Scarinci Hollenbeck’s Government Law Group. 

The Tax Court of New Jersey recently clarified the standard for determining whether a tax-exempt religious organization qualifies for a property tax exemption when the property is no longer used for worship services. The court’s decision in Borough of Hamburg v. Trustees of the Presbytery of Newton is particularly useful given the number of recent church closures in New Jersey.

The Facts of the Case

The Borough of Hamburg sought to overturn the judgment of the Sussex County Board of Taxation (County Board) granting a property tax exemption to the Trustees of the Presbytery of Newton (Presbytery) under the religious use provision of N.J.S.A. 54:4-3.6. The Presbytery is a tax-exempt religious organization formed under section 501(c)(3) of the Internal Revenue Code, and maintains a church building and a manse in the Borough of Hamburg. 

In recent years, the use of the Subject Property has declined. In tax documents submitted to the municipality, the Presbytery acknowledged that the church and manse had not been used for weekly worship services or as living quarters since 2010. However, it stated that the property continued to be used for storage purposes, citing that the church housed artifacts including the pulpit, organ, baptismal font, Bibles, church bell, religious garments, and hymnals, while the manse was used to store church records. In addition, the Presbytery stated that it allowed The Foundation for Peace, a non-profit charity, to store goods used in its mission work in South America.

On December 19, 2012 the Borough’s tax assessor issued a letter denying the Presbytery’s request for tax-exempt status of the Subject Property for tax year 2013. The Presbytery appealed to the County Board, which granted tax-exempt status to the Subject Property, finding that the Presbytery satisfied the requirements of the religious use exemption pursuant to N.J.S.A. 54:4- 3.6. The Borough appealed to the Tax Court of New Jersey.

The Legal Background 

The Supreme Court of New Jersey has established the following test for whether a property qualifies for exemption under N.J.S.A. 54:4-3.6.: (1) the owner of the property must be organized exclusively for the tax-exempt purpose, (2) the property must be actually used for the exempt purpose, and (3) the operation and use of the property must not be conducted for profit. This case centered exclusively on whether the property is actually used for a tax-exempt purpose

The Court’s Decision

The court affirmed the County Board’s judgment granting the property tax exemption to defendant. It concluded that the Presbytery actually used the Subject Property for its religious purpose, thus satisfying the requirements for exemption under N.J.S.A. 54:4-3.6.

It reaching its decision, the court highlighted that there is no requirement in N.J.S.A. 54:4-3.6 that worship services must be offered in order to qualify for exemption. As further explained in the opinion:

The court finds that the testimony during trial adequately established that a substantial quantity of religious artifacts were stored in the Church. Based on the size and quantity of these artifacts, no reasonable storage alternative was available to the Church. Further, the use of the Church to store goods in connection with the Foundation for Peace is a valid charitable purpose that advances the religious mission of the Presbytery.

For more information about this case or the legal issues involved, we encourage you to contact a member of Scarinci Hollenbeck’s Government Law Group. 

In 62-64 Main Street, LLC, et al. v. The Mayor and Council of the City of Hackensack, the Supreme Court of New Jersey held that, in most instances, a municipality need not expressly find that deteriorated conditions on a property negatively affect surrounding properties, in order to declare the deteriorated property as in need of redevelopment under the New Jersey Constitution and the Local Redevelopment and Housing Law (LRHL). The decision should make it easier for New Jersey municipalities to declare properties in need of redevelopment and potentially to acquire them by eminent domain. 

The Legal Background

The New Jersey Constitution provides that private property shall not be taken for public use without just compensation. One such public use is the redevelopment of blighted areas. To implement the Blighted Areas Clause of the Constitution, the New Jersey Legislature has adopted, over time, various laws governing the designation of property as blighted/in need of redevelopment. The most recent of those enactments is the LRHL, which identifies several criteria describing property conditions which could be used to qualify a property as in need of redevelopment.

In Gallenthin Realty Development, Inc. v. Borough of Paulsboro, 191 N.J. 344 (2007), the New Jersey Supreme Court held that a municipality could not designate property as in need of redevelopment under Section 5(e) of the LRHL, which is predominantly related to the non-productive use of property, unless the conditions on that property negatively affected surrounding areas.

The Facts of the Case

The 62-64 Main Street, LLC litigation involved designation by the City of Hackensack of five properties owned by the plaintiffs as in need of redevelopment. Some of the properties contained buildings found to be in substandard condition, while other properties included parking lots which the City also designated as satisfying the redevelopment criteria. However, these designations were made under different LRHL ‘blight’ criteria than the criterion examined in Gallenthin. In 62-64 Main Street, LLC, the parties disputed whether the obligation by the municipality to prove that the conditions on the property negatively affected surrounding uses applied to all criteria in the LRHL or simply the subsection (e) criterion, related to underutilization or lack of productive use. The Appellate Division held that it applied to all the redevelopment criteria and found that Hackensack failed to meet this additional burden grafted onto the statutory criterion by the court in Gallenthin. Therefore, the Appellate Division reversed the trial court’s determination upholding the Hackensack redevelopment area designation for these properties. 

The New Jersey Supreme Court Decision

In a sharply divided opinion, the three-justice majority of the New Jersey Supreme Court reversed the Appellate Court determination, finding that the Appellate Division had improperly broadened the scope of the decision in Gallenthin. The Court concluded that a designation of an area as in need of redevelopment under the LRHL criteria utilized in this case (which did not include subsection (e)) does not require a finding that the property conditions negatively affect surrounding properties. “We therefore reject the notion that Gallenthin established a constitutional blight standard to be superimposed on top of the legislative classifications of blight.” The court expressed considerable concern that, were the dissent’s view to prevail, “countless redevelopment projects up and down the State might be halted and mired in litigation.”

The lengthy dissent, authored by Chief Justice Stuart Rabner, argued that the majority was taking a step back from the Court’s decision in Gallenthin. He argued that private property rights required a showing of both deterioration or stagnation of the property and negative impact on surrounding properties in order for that property owner to be deprived of its rights by a redevelopment area designation.

The Court’s decision represents a shift from several recent decisions following Gallenthin, in which property owners have prevailed in their efforts to challenge redevelopment area designations that courts felt did not include a rigorous evaluation of the redevelopment criteria. In this new decision, the Court continues to admonish local governing bodies and planning boards that they have an “obligation to rigorously comply with the statutory criteria for determining whether an area is in need of redevelopment.” However, in this case, the Court concluded that the record, reviewed differentially on appeal, supported Hackensack’s determination that the property was in need of redevelopment.

For more information about this case or the legal issues involved, we encourage you to contact a member of Scarinci Hollenbeck’s Government Law Group. 

On March 10, the Supreme Court of New Jersey transferred the administration of affordable housing rules back to the courts, effectively stripping the “moribund” Council on Affordable Housing (COAH) of any power to regulate where and when affordable housing will be built in New Jersey. The much-anticipated decision opens yet another chapter in the state’s controversial affordable housing history.

The Legal Background

As previously detailed on the Scarinci Hollenbeck Government & Law Blog, COAH’s third round regulations have been the subject of intense debate and frequent litigation for over a decade. Last September, the New Jersey Supreme Court rejected the previous iteration of COAH’s “third round” rules, which proposed a “growth share” methodology for assessing prospective need in allocating a municipality’s fair share of the region’s need for affordable housing.

After COAH missed previous rulemaking deadlines, several groups, including Fair Share Housing Center, filed suit to enforce the Court’s order. In March 2014, the Supreme Court again established a timeline for the adoption of the regulations outlined what could happen if COAH failed to implement new rules. The Court expressly authorized motions in aid of the litigant’s right to lift the protections provided to municipalities in accordance with the Fair Housing Act N.J.S.A. 52:27D-313.

On October 31, 2014, the Fair Share Housing Center filed a motion in aid of litigants’ rights with the Supreme Court. Given COAH’s failure to approve new regulations, it asked that the Supreme Court allow various trial courts, rather that COAH, to “be responsible” for implementing the Fair Share Housing Act. The goal was to lift the restrictions in place on the “builder remedy” lawsuits that could be brought against municipalities across the State.

The Court’s Latest Ruling

The New Jersey Supreme Court concluded that COAH had failed to comply with its March 14 order, leaving the court little choice than to effectively dissolve, until further order, the FHA’s exhaustion-of-administrative-remedies requirement. However, the Supreme Court also acknowledged that municipalities should not be punished for COAH’s failure to act.

“Due to COAH’s inaction, we agree that there no longer exists a legitimate basis to block access to the courts,” Justice Jaynee LaVecchia wrote. “Parties concerned about municipal compliance with constitutional affordable housing obligations are entitled to such access, and municipalities that believe they are constitutionally compliant or that are ready and willing to demonstrate such compliance should be able to secure declarations that their housing plans and implementing ordinances are presumptively valid in the event they later must defend against exclusionary zoning litigation.”

Below is a brief overview of the new procedures put in place by the decision, which will take effect on June 8, 2015:

• All municipalities will have an additional thirty-day period in which to file actions affirmatively seeking to demonstrate constitutional compliance. After that thirty-day period expires, FSHC or any other interested party may file a challenge to a town’s constitutional compliance against a municipality.
• Only constitutional compliance actions may proceed initially as against a town with substantive certification from COAH. A builder’s remedy is not authorized unless a court determines that the substantive certification that was granted is invalid, no constitutionally compliant supplementing plan is developed and approved by the court after reasonable opportunity to do so, and the court determines that exclusionary zoning actions, including actions for a builder’s remedy, are appropriate.
• Towns that were in “participating” status before COAH and that now affirmatively seek to obtain a court declaration that their affordable housing plans are presumptively valid will have five months in which to submit their supplemental housing element and affordable housing plan. During that period, the court may provide initial immunity preventing any exclusionary zoning actions from proceeding.
• If a town elects to wait until its affordable housing plan is challenged for constitutional compliance, immunity requests covering any period of time during the court’s review will be assessed on an individualized basis.

What is not known yet is what standards each designated “Mount Laurel” judge will apply in each county to determine a municipality’s fair share obligation. It is also not known whether COAH will take any action in response to the decision of the Supreme Court.

For more information about the NJ Supreme Court’s COAH decision or the legal issues involved, we encourage you to contact a member of Scarinci Hollenbeck’s Government Law Group. 

In Griepenburg v. Township of Ocean, the Supreme Court of New Jersey addressed the power of municipalities to zone property consistent with their Master Plan and Municipal Land Use Law (MLUL) goals. In addition to finding the ordinances at issue were not were not arbitrary, capricious, or unreasonable, the court also held that plaintiffs must exhaust their administrative remedies before being able to attack municipal land use ordinances in court. This ruling represents a dramatic change in the law. It now may preclude challenges brought for the sole purpose of challenging the validity of a land use ordinance.

The Facts of the Case

Thomas and Carol Griepenburg filed a lawsuit challenging the validity of a series of ordinances enacted by the Township of Ocean (the Township). The ordinances, which were enacted in accordance with smart growth principles, rezoned the plaintiffs’ property from residential and commercial use to an Environmental Conservation district (EC district), thereby restricting future development of their property. The property in question did not contain any environmentally sensitive attributes or wildlife, but bordered undeveloped woodlands.

In their suit, the Griepenburgs alleged that the ordinances were arbitrary, unreasonable, capricious, and illegal and that the rezoning constituted inverse condemnation. The trial court applied the criteria for assessing a zoning ordinance’s validity established in Riggs v. Township of Long Beach, 109 N.J. 601, 611-12 (1988), and determined that the ordinances were a valid exercise of municipal zoning power and were not arbitrary, capricious, or unreasonable. The Appellate Division reversed, finding that the property lacked specific environmental constraints.

The Court’s Decision

The New Jersey Supreme Court found that the ordinances represented a legitimate exercise of the municipality’s power to zone property consistent with its MLUL goals. Moreover, it held that the plaintiffs failed to overcome the ordinances’ presumption of validity. As explained in the opinion:

The inclusion of plaintiffs’ property in the EC district rationally relates to the municipality’s comprehensive smart growth development plan, which concentrated development in a town center surrounded by a green-zone buffer. That plan had the additional benefit of protecting a sensitive coastal ecosystem through the preservation of undisturbed, contiguous, forested uplands, of which plaintiffs’ property is an integral and connected part.

The New Jersey Supreme Court further held that a landowner who wishes to challenge the validity of an ordinance as applied should exhaust administrative remedies before initiating an action at law unless the interests of justice requires otherwise. In so ruling, the Court rejected the argument that its prior decision in the Court’s decision in Pheasant Bridge Corp. v. Township of Warren, 169 N.J. 282 (2001) should be read to suggest that a landowner challenging an ordinance as applied to his or her property is excused from first exhausting administrative remedies. In this case, the court held that the plaintiffs should have sought a variance before pursuing either an as-applied challenge or an inverse condemnation claim because none of the exceptions to the exhaustion doctrine apply. This ruling may result in numerous cases being challenged on this basis by municipalities. It will also impact the property rights of landowners who believe that their ability to develop their property has been taken away from them in an unjust and possibly unconstitutional manner.

For more information about this case or the legal issues involved, we encourage 

In Scoblink-O’Neill v. Local Finance Board, the Appellate Division recently concluded that the former Mayor of the Borough of Haddon Heights did not violate New Jersey’s Local Government Ethics Law when he facilitated the appointment of his personal attorney as borough counsel.

The Facts of the Case

Susan Scoblink-O’Neill filed an ethics complaint against the then-Mayor of the Borough of Haddon Heights, Scott M. Alexander. It alleged that the Mayor had violated the Local Government Ethics Law (N.J.S.A. 40A:9-44.5(d)) by proposing and supporting the appointment of Robert Gleaner, Esq., as the Borough’s Solicitor in 2009, at a time when Gleaner represented the Mayor in a private family law matter.

In response, the Mayor acknowledged that he and Mr. Gleaner had discussed the possibility of conflicts with his representation of the Mayor’s family law matter and the execution of the duties of being Borough Solicitor. The Mayor further stated that Mr. Gleaner provided him with Opinion 665 of the Advisory Committee on Professional Ethics of the New Jersey Supreme Court, which was decided in December of 1991. The opinion states that a municipal attorney’s representation of a municipal official in a private matter is not per se prohibited, but that such representation may not be undertaken where the “municipality might be affected directly or indirectly [.]”

On January 28, 2013, the Local Finance Board (LFB) dismissed the complaint. It concluded that the business relationship between the Mayor and Mr. Gleaner was “too tenuous to constitute a prohibit[ed] involvement” and could not “reasonably be expected to impair” the Mayor’s “objectivity or independence of judgment.” Scoblink-O’Neill appealed, arguing that the Mayor’s appointment of “his personal lawyer to the position of municipal attorney,” created the “appearance of a conflict of interest” which had the “potential to impair his objectivity or independence of judgment” in violation of the Local Government Ethics Law.

The Court’s Decision

The Appellate Division affirmed the LFB’s decision, agreeing that the relationship between counsel and the Mayor was “too tenuous” to support a violation of N.J.S.A. 40A:9-44.5(d).

In reaching its decision, the court highlighted that appointment of Mr. Gleaner as the Borough Solicitor for the municipality was made by the Borough Council, which likewise reviewed and approved his invoices without any vote by the Mayor. Moreover, the court concluded that “[n[othing in the record remotely suggests that the private family law matter that arose between the Mayor and his former wife affected or implicated any public interest pertaining to the municipality.”

For more information about this case or the legal issues involved, we encourage you to contact a member of Scarinci Hollenbeck’s Government Law Group.

In a recent decision, the Appellate Division of the New Jersey Superior Court declined the Borough’s request to set a bright-line rule that completion of discovery or the commencement of a disciplinary appeal precluded a related retaliation suit. Instead, the court held that the imposition of estoppel involves a “fact-sensitive consideration of the status of the administrative action and the basis for withdrawal.”

The Facts of the Case

The case, Hunt v. Borough of Wildwood Crest, revolves around the Borough of Wildwood Crest (the Borough) appeal of a final decision issued by the New Jersey Civil Service Commission (the Commission), allowing Thomas Hunt to withdraw his agency appeal challenging his termination as a police sergeant with the Wildwood Crest Police Department. In Hunt’s agency appeal, he asserted that he was terminated in retaliation for engaging in union activities. He had also filed a civil rights complaint in the United States District Court for the District of New Jersey, asserting retaliatory discharge.

The day after Hunt commenced his administrative appeal, the New Jersey Supreme Court decided Winters v. North Hudson Regional Fire & Rescue. The court held that the Commission’s final decision, on a question of retaliatory discharge, precludes a plaintiff from filing a lawsuit for damages on the same basis in court.

As explained in the opinion, “If an employee and employer engage the system of public employee discipline established by law and the employee raises a claim that employer retaliation at least partially motivated the decision to bring the charge or the level of discipline sought, then both the employee and employer must live with the outcome, including its potential preclusive effect on related employment-discrimination litigation as a matter of the equitable application of estoppel principles.”

After three additional hearing days, Hunt sought to withdraw his agency appeal in favor of pursuing his retaliation lawsuit in federal court, citing the Winters decision. The Commission granted the request. On appeal, Wildwood Crest argued that the Commission erred in allowing Hunt to withdraw his apeal, asserting that such withdrawals not only violate Winters, but also lead to “fragmented litigation, forum shopping, judicial inefficiency, undue expense, and a waste of judicial resources.”

The Court’s Decision

The Appellate Division was unpersuaded by the borough’s arguments. The Court refused to rule that the commencement of disciplinary appeal proceedings were sufficient to preclude the plaintiff’s federal suit.

“We decline the borough’s urging to expand Winters’ application of collateral estoppel to bar claims that could have been presented when withdrawal is made at the commencement of an administrative proceeding because discovery was undertaken and motion practice conducted,” the court stated.

In distinguishing the case from Winters, the court noted that Hunt not only requested the case be withdrawn prior to a final decision, but very early into the process when many witnesses were left to be called over several days of hearings. Accordingly, it determined that Wildwood Crest was not prejudiced.

“This case is unlike Winters, where the agency issued a final decision and Winters lost his challenge, because here there was no finality,” the court stated. It also highlighted that Hunt withdrew his appeal shortly after the Winters decision was announced and was “not motivated by forum shopping or avoiding a potentially bad result.”

The court further concluded that the Civil Service Commission also did not err in declining to dismiss Hunt’s appeal with prejudice, noting that a dismissal with prejudice functions as an adjudication on the merits.

As explained by the court, “The withdrawal pursuant to N.J.A.C. 1:1-19.2, made early in the hearing prior to presentation of all evidence on any issue, does not foreclose Hunt’s later presentation of the claims arising from alleged retaliation in the United States District Court. The Borough has failed to demonstrate how the Commission’s actions in accepting the withdrawal were contrary to law, unreasonable, arbitrary, capricious or unsupported by the evidence.”

For more information about this case or the legal issues involved, we encourage you to contact a member of Scarinci Hollenbeck’s Government Law Group.

In 2014, New Jersey state and federal courts issued several important decisions that impacted municipalities and local agencies. In case you missed our posts, below is a brief summary:

Open Public Records Act: In O’Boyle v. Borough of Longport, the New Jersey Supreme Court held that the common interest rule applied to litigation documents requested under the state’s Open Public Records Act (OPRA). The decision confirmed that the attorney-client privilege may shield documents that otherwise meet the statutory definition of government record from inspection or production, and it also helps ensure that municipal and private attorneys will be able to share information and work together.

Municipal Land Use: In October, the Council on Affordable Housing (COAH) deadlocked on the vote to approve the agency’s proposed “third round regulations,” as mandated by the deadlines set forth by the Supreme Court of New Jersey. The Fair Share Housing Center subsequently filed a motion in aid of litigants rights, which asks that the state Supreme Court allow various trial courts, rather than COAH, to “be responsible” for implementing the Fair Share Housing Act. Such a ruling would lift the restrictions in place on the “builder remedy” lawsuits. Oral argument is scheduled for January 6, 2015.

Public Employment: In Lane v. Franks, the U.S. Supreme Court held that the First Amendment protected a public employee when he testified truthfully about fraud in the work place pursuant to a subpoena. According to the Court, the key question in determining whether an employee is speaking as a citizen for First Amendment purposes is “whether the speech at issue is itself ordinarily within the scope of an employee’s duties, not whether it merely concerns those duties.”

Voting Law: In Tumpson v. Farina, the New Jersey Supreme Court found that the City of Hoboken Clerk lacked the discretion to prevent the filing of a referendum petition based on facial insufficiency. In doing so, the panel further held that the clerk violated the New Jersey Civil Rights Act, thereby entitling the plaintiffs to attorney’s fees.

Constitutional Law: In Town of Greece v. Galloway, the U.S. Supreme Court upheld Christian prayers at the beginning of local town meetings, finding the limited prayer was consistent with long-standing, national traditions. The slim majority further reasoned that the content of the prayers is not significant as long as they do not disparage those of other religions or seek to convert them.

Looking ahead to the New Year, there are several ongoing cases that are expected to impact local municipalities, most notably the COAH hearing scheduled for January. The country highest court will also consider several key cases, including whether an Arizona town’s sign ordinance violates the First Amendment.

For more information about these cases or the legal issues involved, we encourage you to contact a member of Scarinci Hollenbeck’s Government Law Group.

In Dublirer v. 200 Linwood Avenue Owners, the Supreme Court of New Jersey recently held that a co-op’s leaflet ban was unconstitutional. In reaching its decision, the court clarified the standard to evaluate restrictions on free speech in a common-interest community like the building in this case.

The Facts of the Case 

The case centers on a house rule imposed on residents in a Fort Lee high-rise cooperative apartment building. The rule, entitled “Soliciting/Notices,” provides:

There shall be no solicitation or distribution of any written materials anywhere upon the premises without authorization of the Board of Directors.

Without prior consent of the Board of Directors, no sign or notice shall be placed upon the bulletin board, [in] the mailroom, in the halls, lobby, elevators or on the doorways. A bulletin board for residents[‘] use is provided [near] the rear door.

Plaintiff Robert Dublirer, a shareholder of defendant Linwood Avenue Owners, Inc., and a resident of one of the units, sought to distribute literature in support of his candidacy for the board of directors. Citing the house rule, it denied the request.

Dublirer filed, suit, alleging that the co-op’s board of directors violated his rights under Article I, Paragraph 6 of the New Jersey Constitution. In support of his case, Dubliner argued that the board regularly granted exceptions to the rule by distributing its own shareholder updates to residents and permitting local police and firefighters’ associations solicit donations on the premises. Dublirer further contended that his request to distribute flyers was summarily denied because he is often critical of the board in his publication, “The Med South Gadfly.”

The trial court dismissed the suit. However, the Appellate Division reversed after finding that the co-op’s house rule was too restrictive.

The Court’s Decision

The Supreme Court of New Jersey affirmed the decision, finding that the board of director’s policy violates the free speech clause of the State Constitution. As explained by the court, “The important right of residents to speak about the governance of their community, which presents a minimal intrusion when a leaflet is placed under a neighbor’s apartment door, outweighs the Board’s concerns.”

“Dublirer did not seek approval to use a bullhorn or a loudspeaker, or to erect a large sign in the lobby,” Chief Justice Stuart Rabner added. “And residents could simply ignore or throw away any literature he placed under their doors.”

In determining the standard to evaluate restrictions on free speech in a common-interest community, the New Jersey Supreme Court considered existing precedent regarding the balance between the rights of owners of private property, used by the public, and the free speech rights of visitors. However, it concluded it was “not a perfect fit” because “different concerns arise when the speaker is an owner, not a visitor, who seeks to exercise the right to free speech in the common-interest community where he or she lives.”

Accordingly, the court outlined a new test under which courts should focus on “the purpose of the expressional activity … in relation to” the property’s use and conduct as a more “general balancing of expressional rights and private property rights.”

For more information about this case or the legal issues involved, we encourage you to contact a member of Scarinci Hollenbeck’s Government Law Group.

The Appellate Division of the New Jersey Superior Court recently held that banning digital billboards, while allowing static ones, does not violate the U.S. Constitution. The trial court had previously held that the Franklin Township ordinance violated the First Amendment.

The Facts of the Case

The dispute in E&J Equities v. Township of Franklin revolved around the proposed placement of a digital billboard in an M-2 industrial zone adjacent to I-287 in Franklin Township. While plaintiff E&J Equities was in the process of pursuing a variance for the billboard, Franklin Township passed a new ordinance regulating the placement of billboards. 

While conditionally permitting static billboards in the M-2 industrial zone, the ordinance prohibited digital/electronic billboards such as the one plaintiff sought to erect. After the Board of Adjustment of the Township denied the application seeking a variance, E&J Equities filed an appeal challenging the constitutionality of the ordinance. The plaintiff maintained that the billboard ordinance violated E&J’s First Amendment rights through its unjustified limitation on commercial and non-commercial speech. As detailed in a prior post, the trial court agreed that the ordinance impermissibly curtailed commercial speech and, thus, violated the First Amendment to the U.S. Constitution.

The Court’s Decision

The Appellate Division reversed, finding that the ordinance’s ban on digital billboards passes constitutional muster. In so ruling, the Appellate Division noted that the trial court failed to apply the proper standard for determining whether a sign restriction of this nature violates the First Amendment.

“The trial court’s interpretation imposed a burden on the Township that is not required for content-neutral restrictions on time, place and manner expression,” the panel held.

In reaching its decision, the appeals court relied on the Supreme Court’s decision in Ward v. Rock Against Racism, 491 U.S. 781 (1989) under which time, place or manner restrictions are valid, provided they satisfy three criteria: (1) they “are justified without reference to the content of the regulated speech,” (2) “they are narrowly tailored to serve a significant governmental interest,” and (3) “they leave open ample alternative channels for communication of the information.”

In this case, the Appellate Division found that the municipality satisfied the first prong of the Ward test because its prohibition of digital billboards was based on its interest in aesthetics and traffic safety, “without reference to the content of the regulated speech.”

The Appellate Division reasoned that “Even if the use of an electronic multi- message is considered a form of expression, the incidental effect of the Ordinance’s ban on announcements to be communicated in eight-second segments does not strip the Ordinance of its content neutrality”.

Under the second step of the analysis, the court noted that the appropriate standard requires only that “the means chosen does not ‘burden substantially more speech than is necessary to further’ the [municipality’s] content-neutral interest.” Accordingly, it found that the trial court erred in requiring that the ordinance’s restriction be “the least restrictive means of advancing its legitimate government interest.”

The Appellate Division further concluded that a complete ban of digital billboards could still be “narrowly tailored.” The opinion specifically cited the U.S. Supreme Court’s decision in City Council of Los Angeles v. Taxpayers for Vincent, in which the Court found that a total sign ban “did no more than eliminate the exact source of the evil it sought to remedy,” which was visual clutter.

With regard to the Franklin Township ordinance, the appellate court found that the ban on digital billboards was no broader than was necessary to eliminate the “heightened intrusive quality of digital billboards, affecting the aesthetics of the town and the residential area nearby, and a not unreasonable unease that the digital billboards would have a negative impact upon traffic safety.”

With regard to the third prong, the court minimized the argument that electronic multi-message billboards are advantageous because the message may be posted or changed quickly. As noted by the court, the lion’s share of the commercial speech to be projected on E&J Equities’ proposed billboard did not require this feature, and there are other means available for the town to broadcast emergency information.

As explained by the panel, “[B]ecause the audience who can receive communications through the proposed digital billboard is limited to motorists on a limited stretch of I-287, the alternative means are clearly superior in terms of their ability to reach the residents of the Township.”

For more information about this case or the legal issues involved, we encourage you to contact a member of Scarinci Hollenbeck’s Government Law Group.