Thursday, June 14, 2012

New Jersey Supreme Court Grants Certiorari in Oceanfront Takings Case

Earlier this week, the New Jersey Supreme Court granted certiorari in an important takings case that could indirectly determine the fate of public beach replenishment projects in the Garden State moving forward.

For decades, the U.S. Army Corps of Engineers has pumped millions of cubic feet of sand onto New Jersey’s beaches in an effort to protect the state’s highly developed and highly populated beachfront.  Generally, the federal government funds approximately 75% of the cost of these multi-million dollar projects, with the state and relevant local governmental entities paying the remainder.  Under this arrangement, however, it is the local governments that bear the responsibility to acquire any necessary property interests to allow the project to move forward.  In many instances, New Jersey municipalities have acquired voluntary construction and public access easements from private beachfront landowners who overwhelmingly welcome the shore protection provided by beach replenishment.  However, select landowners recently have refused to confer such easements without compensation, creating a significant “hold out” issue that has stalled several large projects. 

At least one town along the 18-mile long, narrow spit of sand known as Long Beach Island—the Borough of Harvey Cedars—chose to exercise its eminent domain authority to secure easements from these holdouts in the face of particularly monumental beach erosion.  However, certain landowners were displeased with the Borough’s offered price of $300.  And, as reported on this blog two months ago, an appellate panel in Borough of Harvey Cedars v. Karan affirmed a jury verdict awarding one of these oceanfront landowners $375,000 in (additional) takings compensation, based on the fact that the project included raising the height of a sand dune by up to three feet in a manner that reduced the property owner’s view of the ocean.  Touting the shore protection value of sand dunes, the Borough’s Mayor, Jonathan Oldham, admitted that the increase in the height of the dune affected the view from the landowner’s first-floor dining room, but asked, “What do you want, the view or the house?”

Property scholars have long debated whether and how courts should consider the reciprocal individualized benefits that the government’s use of condemned land imparts on the condemnee as an offset to the condemnation award (as opposed to the general benefits the project provides for the public at large, which most agree should not be considered an offset).  Identifying and evaluating offsetting benefits can be quite difficult, and judicial efforts to do so have proven quite varied.  Some courts have held that benefits must include only those directly conferred from the government’s action; others have considered a far wider range of benefits.  (In this way, the issue mirrors one in the regulatory takings context, where evidence that a landowner receives an “average reciprocity of advantage” from the regulatory act at issue can serve as a bar to any recovery at all.) 

In Karan, the appellate court assumed that special benefits can be taken into account in New Jersey condemnation cases, but held that the replenished beach and dunes directly adjacent to Karan’s property did not confer a special benefit in this particular case.  The statement of the issue on appeal prepared by the state’s Office of the Clerk asserts: “Did the public construction of a ... dune to protect against hurricanes and severe storms, for which the municipality condemned an easement on the homeowners' beachfront property and which partially blocks their ocean view, confer a special benefit on the property beyond the general benefit for which the dune was constructed?” However, such statements are neither reviewed nor endorsed by the Court.  It is not entirely likely the state’s highest court granted certiorari simply to assess the fact-intensive application of an acknowledged legal doctrine.  Instead, the Court may have taken the case to provide broader guidance on the range of direct and indirect—and short and long term—benefits that New Jersey’s lower courts are to consider in accord with this doctrine.  As renowned property scholar Hanoch Dagan has noted, “Reciprocity of advantage is a familiar concept in takings jurisprudence. Nonetheless, in law - as well as in life - reciprocity is a contested concept that admits of different conceptions.”

Stay tuned to the Environmental Law Prof Blog for updates on this important takings case.

-Tim Mulvaney

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