WHS Realty Co. v. Town of Morristown

The opinion of the court was delivered by

HAVEY, J.A.D.

By leave granted, defendants Township of Morristown, its May- or and Town Council and its Health and Public Works Departments, appeal from a partial summary judgment declaring a portion of the Township’s garbage collection ordinance unconstitutional. We affirm.

The Township’s ordinance provides for the collection of garbage from single-family residences, apartment complexes having less than four units and any housing complex consisting of four or more dwelling units in which the majority of such units are separately owned in fee or as condominiums. Plaintiffs apartment complex, consisting of 140 units, does not fall within that classification and therefore does not receive garbage collection service.

In its complaint, plaintiff claims that the Township’s ordinance violates due process and equal protection guaranteed by the New Jersey and United States Constitutions. It demands garbage collection service equal to service provided to all other residents within the Township and also makes a claim under 42 U.S.C.A. § 1983 for compensatory damages, attorneys’ fees, interest and cost of suit.

In granting partial summary judgment to plaintiff, Judge Stanton reasoned that there was no rational basis for the Township to make a distinction between those who live in single-family units, condominiums, and apartment complexes having less than four *143units, and those who live in an apartment complex having four or more units. He concluded that the classification discriminated against apartment dwellers in a way that “is unacceptable under our Constitution,” and found that onee the Township elected to provide garbage collection service, paid for from the general revenue of the Township, exclusion of a class of apartment-unit dwellers from such a service constituted invidious discrimination. The judge elaborated:

[WJhen we deal with suburban communities and the vast number of our citizens in this state live in suburban communities, we have the risk of having an invidious social economic class system of the worst kind.
And the reality is that the more affluent people in residential communities, suburban residential communities, live in single-family residences and . in condominium complexes. And the less advantaged economically live in rental apartments, and those less advantaged people have smaller political clout and lesser ability to assert their rights. They are at risk, and it is precisely those people who are not protected by legislation such as this.

The judge was also of the view that apartment complex owners viere being discriminated against for a different reason:

There is also another class of people who are at risk, and that is to say the owners of apartment complexes. Now they are not economically disadvantaged. On the contrary, I would assume that most of them are economically advantaged. But they — they are targets for a kind of cheap populism that puts them at risk. And I think that the risk here of invidious treatment, either because someone doesn’t like a relatively small class of property owners, or because someone doesn’t care about a relatively small and unimportant class, but a larger class, of rental apartment dwellers, the risk that those people will be discriminated against is real and — and schemes like this, I think, are — are unfortunately an embodiment of that reality.

Equal protection analysis employs different tiers of review: strict scrutiny when legislation involves a fundamental right or suspect class; intermediate scrutiny when an act involves a semi-suspect class; and minimal rational-basis scrutiny in all other cases. Drew Assocs. of N.J., L.P. v. Travisano, 122 N.J. 249, 258, 584 A.2d 807 (1991); Property Owners & Managers Ass’n v. Town Council of Parsippany-Troy Hills, 264 N.J.Super. 538, 544, 624 A.2d 1381 (App.Div.1993). Under the rational basis test, the legislation “ ‘need be only rationally related to a legitimate state interest to satisfy federal equal protection requirements.’ ” Ibid. *144(quoting Brown v. City of Newark, 113 N.J. 565, 573, 552 A.2d 125 (1989)). The same type of analysis has been adopted essentially respecting an equal protection analysis under Article I, paragraph 1, of the New Jersey Constitution. Property Owners & Managers Ass’n, 264 N.J.Super. at 544, 624 A.2d 1381.

Here, Judge Stanton properly applied the lowest standard of review, the rational-basis scrutiny, since the Township’s ordinance does not implicate a suspect or semi-suspect class, or a fundamental right. See Pleasure Bay Apartments v. City of Long Branch, 66 N.J. 79, 91, 328 A.2d 593 (1974); New Jersey State League of Municipalities v. State, 257 N.J.Super. 509, 518, 608 A.2d 965 (App.Div.1992), certif. dismissed, 133 N.J. 423, 627 A.2d 1132, appeal dismissed, 133 N.J. 419, 627 A.2d 1129 (1993).

Municipal ordinances, like all legislation, are entitled to a strong presumption of constitutionality. Pleasure Bay Apartments, 66 N.J. at 93-94, 328 A.2d 593. The challengér has the burden to refute all possible rational bases for the classification in the ordinance providing for different treatment, whether or not the enacting body has cited those bases as reasons for the enactment. New Jersey State League of Municipalities, 257 N.J.Super. at 518, 608 A.2d 965. Thus, legislation must be upheld if the court can conceive of any reason to justify the classification, even if the classification is fairly debatable. Id. at 518-19, 608 A.2d 965.

Neither statutory nor case law imposes a mandatory duty on a municipality to provide for municipal garbage removal. Pleasure Bay Apartments, 66 N.J. at 90, 328 A.2d 593. A municipality “may provide for the ... collection or disposal of solid waste, and may establish and operate a system therefor____” N.J.S.A. 40:66-1a (emphasis added).

In Pleasure Bay Apartments, our Supreme Court upheld municipal regulations limiting garbage collection service to curbside collection. 66 N.J. at 95, 328 A.2d 593. The Court rejected the claim by owners of garden apartment complexes that the muniei-*145pality’s refusal to remove garbage from “dumpsters” situate within the apartment complexes constituted invidious discrimination. Id. at 95-96, 328 A.2d 593. The Court observed that the statutory power under N.J.S.A. 40:66-1 was discretionary, not mandatory, and that:

No case has ever held that a municipality electing to furnish garbage removal services at municipal expense must provide means and facilities which are all inclusive and will insure collection of all garbage and refuse produced in the municipality. All cases which have dealt with the issue have ruled to the contrary.
[Pleasure Bay Apartments, 66 N.J. at 90, 328 A.2d 593.]

The distinguishing factor in Pleasure Bay Apartments is that the limitation imposed requiring curbside collection, although burdensome to garden apartment complexes, was “based on real and not feigned differences in the problems inherent in collection of garbage from locations within [the garden apartment complexes], as contrasted with collections from the curbside.” Id. at 95, 328 A.2d 593. The problems cited by the Court include the substantial costs incident to on-site collection and the practical difficulties associated with entry upon private roads and private property. Id. at 96, 328 A.2d 593.

In Property Owners & Managers Ass’n, 264 N.J.Super. at 546, 624 A.2d 1381, we upheld N.J.S.A. 40:66-1b, which provides that a municipality may limit service to curbside collection along public streets.1 We held that the statute “passes constitutional muster because it does not exclude any class of residents from receiving municipal solid waste collection.” 264 N.J.Super. at 543, 624 A.2d 1381. Noting the plaintiffs’ argument that the statute is facially discriminatory because it does not distinguish between a “public” and “private” street, we deferred to the Legislature’s classification because it is “ ‘better situated than courts to make policy decisions concerning public ... safety....’” Id. at 545, 624 A.2d 1381 (quoting Brown, 113 N.J. at 571, 552 A.2d 125). We observed that the Legislature no doubt was concerned with “safety on the private streets and cost containment for solid waste collection” and *146thus “the factual distinction between private and public streets has a real and substantial relationship to a legitimate governmental objective on a statewide basis.” Property Owners & Managers Ass’n, 264 N.J.Super. at 546-47, 624 A.2d 1381.

Pleasure Bay Apartments and Property Owners & Managers Ass’n are not helpful to defendants since both cases involve the physical impediments and additional costs associated with on-site collection of garbage as opposed to the collection at curbside. Plaintiff does not seek on-site collection of the garbage.

More to the point are our opinions in Boulevard Apartments, Inc. v. Mayor of Lodi, 110 N.J.Super. 406, 265 A.2d 838 (App.Div.), certif. denied, 57 N.J. 124, 270 A.2d 27 (1970) and 399 Lincoln Assocs. v. City of Orange Tp., 244 N.J.Super. 238, 581 A.2d 1364 (App.Div.1990). In Boulevard Apartments, Inc., the owner of a 108 apartment-unit complex challenged Lodi’s ordinance which provided for garbage collection service to residential dwellings, businesses, public buildings and public housing complexes, but excluded garden apartment housing from its coverage. 110 N.J.Super. at 408-09, 265 A.2d 838. Numerous other multifamily dwellings, ranging from two- to eight-family units, received the garbage collection service. Id. at 409, 265 A.2d 838. A rationale for the classification excluding garden apartments was the additional $75,000 to $80,000 in annual cost necessary to provide service to the over 1,400 units contained in thirty-eight garden apartments in the borough. Ibid.

We invalidated the Lodi ordinance, concluding that while limiting the collection of garbage to certain classifications is not forbidden, “there can be no invidious discrimination in the establishment of such classifications.” Id. at 411, 265 A.2d 838. There is a denial of equal protection “unless the service is available to all persons in like circumstances upon the same terms and conditions.” Ibid. We found no reasonable justification for the borough to classify garden-type apartment houses differently from other residential dwellings, first because the garbage produced by a one-family unit in an apartment house and a one-family dwelling *147house is “substantially the same,” and second because the cost of collection from family units in an apartment house where the accumulated garbage is concentrated in one spot to be picked up at the curb is “unquestionably less than the cost of collection from an equal number of family units residing in separate private dwellings.” Id. at 412, 265 A.2d 838. We also rejected the notion that garden apartment houses may be treated differently on the basis that the owner of the complexes may realize a profit on his investment. Id. at 411, 265 A.2d 838. We reasoned:

The resolution in question makes no distinction between owner-occupied dwellings and those rented for income. The evidence reveals that there are numerous rented multi-family dwellings containing from two to eight family units which are not precluded from receiving municipal garbage collection service. Moreover, the resolution on its face provides for collection from public housing projects and various places of business.
Wd.}

We adopted the reasoning of Boulevard Apartments, Inc. in 399 Lincoln Assocs. in striking down an ordinance providing for garbage collection service to residential dwellings, but excluding service to “residential premises that contain five dwelling units or more.” 244 N.J.Super. at 240, 581 A.2d 1364. We reasoned that “[t]he volume of garbage on a per-unit basis generated by a five-family home is the same as other multi-family dwellings.” Id. at 242, 581 A.2d 1364. Thus, the result of the ordinance “does not treat alike, persons situated alike.” Id. at 245, 581 A.2d 1364.

A commercial landlord who rents a one, two, three or four-family building receives free garbage collection and thus does not have to factor into his rent a cost for that service, whereas, a commercial landlord with five or more units must pay for this service and thereby factor that cost into the rents charged. Persons situated alike are not treated alike under Ordinance # 5-89, and thus it is unconstitutional.
[Ibid.].

In our view, Boulevard Apartments, Inc. and 399 Lincoln Assocs. are dispositive. We can conceive of no rational basis for differentiating between an apartment dweller living in a complex consisting of four units or more and all other residents within the community. Judge Stanton made the point eloquently:

People are people. They live in what are to them homes. Doesn’t matter whether it’s a lovely single-family residence or a modest single-family residence or *148a spiffy condominium or a — modest condominium or a fancy residential unit, or as would be more common, a relatively modest residential unit.

The nature of the solid waste produced by residents of condominiums, single-family units and all apartment complexes is the same. The apartment dweller in a complex with four or more units generates no more solid waste than other residents. Defendants do not claim that there are physical impediments or safety hazards relating to the curbside collection of solid waste from large apartment complexes. See Pleasure Bay Apartments, 66 N.J. at 96, 328 A.2d 593. Indeed, Judge Stanton left it to the municipality to implement a collection plan in a practical but “user friendly way.” Further, nothing in the record suggests, nor have defendants argued, that “[ajdministrative convenience” justifies the classification. 399 Lincoln Assocs., 244 N.J.Super. at 244, 581 A.2d 1364.

Finally, the 'fact that the owners of apartment complexes with four or more units may realize a profit from their investment is not a rational basis for the classification. Boulevard Apartments, Inc., 110 N.J.Super. at 411, 265 A.2d 838. Without public garbage collection service, these apartment owners will retain private scavengers and, no doubt, at least part of that cost will be passed on to the tenants. 399 Lincoln Assocs., 244 N.J.Super. at 245, 581 A.2d 1364. We endorse Judge Stanton’s observation that these tenants, at least on the local level, “have smaller political clout and lesser ability to assert their rights. They are at risk, and it is precisely those people who are not protected by legislation such as this.” The profit factor should not forfeit the right of these tenants to equal treatment.

Defendants acknowledge that our holdings in Boulevard Apartments, Inc. and 399 Lincoln Assocs. would be fatal to their position but for our holding in New Jersey State League of Municipalities, 257 N.J.Super. 509, 608 A.2d 965. There, we considered the constitutionality of newly-adopted P.L. 1989, c. 299, codified as N.J.S.A, 40:67-23.2 to -23.8, which mandates that municipalities provide certain municipal services, or reimburse for such services, to condominiums and other private communities, but *149not to apartment complexes. 257 N.J.Super. at 513, 608 A.2d 965. The League of Municipalities challenged the statute on various grounds, including the argument that it deprived apartment owners of equal protection of the law. Id. at 513-14, 608 A.2d 965. The trial court agreed and invalidated the statute. Id. at 514, 608 A.2d 965. Before us, the State argued that there was a reasonable basis for the distinction made between apartment complexes and other residential communities, including condominiums, because such communities and condominiums “foster the valid goal of individual home ownership.” Id. at 516, 608 A.2d 965. The League responded that the statute was over-inclusive and irrational if intended to promote home ownership, since a significant percentage of condominium owners rent their units to others and thus are in an identical position as apartment owners. Id. at 517, 608 A.2d 965.2

As to the League’s over-inclusiveness argument, we recognized that the statute benefitted the owners of condominiums who rented their units, as well as those who occupied the units. Id. at 520-21, 608 A.2d 965. We also acknowledged that the benefit to the former category did not promote the policy of fostering home ownership by helping those who pay twice for some municipal services. Id. at 521, 608 A.2d 965. Nevertheless, applying the “rational basis” test, we concluded that the statute need not be invalidated simply because it benefits some who are not members of the class the Legislature hoped to assist. Ibid. Groupings need not be mathematically precise. Ibid. Since “most condo owners do satisfy the Act’s intended aim” by living in their unit, the fact that some do not share those traits “does not deprive the Act of all rational basis.” Ibid. We concluded:

the Legislature could have reasonably decided that condo owners as a group suffer ' most from the evil of double taxation. Most do live in their units and suffer from *150the consequences of paying taxes and also having to pay condo fees to cover municipal services provided to other residents without charge.
[Id. at 521-22, 608 A.2d 965.]

The thrust of defendants’ argument here is that New Jersey State League of Municipalities expressly recognizes that the fostering of home ownership is a rational basis to distinguish between apartment complexes and other residential dwellings. Relying on our analysis in New Jersey State League of Municipalities, defendants assert that providing garbage collection service to apartment buildings having less than four units promotes home ownership because “two and three family units offer owner-occupants an opportunity to own an affordable home while at the same time providing the owner a mechanism to pay for it.”

In our view, this hypothetical rationale does not justify the Township’s classification. In Neiv Jersey State League of Municipalities, we concluded that the rational basis for the statutory classification was that doing away with double taxation (property tax and monthly condominium fees) encouraged home ownership by making the expense of condominium ownership less burdensome. Id. at 522, 608 A.2d 965. In other words, the statute makes condominium ownership more inviting because the owner-resident of the condominium no longer suffers “from the consequences of paying taxes and also having to pay condo fees to cover municipal services provided to other residents without charge.” Ibid.

Here, it has never been argued that, by providing two- and three-unit apartment houses with garbage collection service, citizens would be encouraged to purchase such apartment houses. Defendants themselves recognize that what fosters home ownership of such a house is the rentability of at least one of the units, thereby “providing the owner a mechanism to pay for it.” It is this “mechanism” and not garbage collection service, that may foster home ownership.

Moreover, even if some of the owners of two- and three-unit apartment houses reside in the apartment house and use rental *151income from the other units to meet their roof expenses, the Township cannot rationally provide a municipal service to such resident-owners to the exclusion of other apartment dwellers simply because the latter reside in a complex with four or more units. That fact alone, as far as the excluded tenant is concerned, is entirely fortuitous; it does not make that tenant’s need for the municipal service any less compelling than the needs of other residents.

Further, as Judge Stanton correctly observed, New Jersey State League of Municipalities involved a challenge to a statute which provided multiple services, such as garbage collection, lighting and snow removal, to a “qualified private community” such as residential condominium, cooperative and planned fee-simple developments. See N.J.S.A. 40:67-23.2 and -23.3. The Act’s legislative goal was to give such a “qualified private community” relief where the residents of such communities do not receive tax abatements or tax exemptions, and yet pay monthly fees to homeowners associations to off-set the costs of such services charged by private entities. See Statement to Senate Bill No. 2869 (1989), P.L. 1989, c. 299. New Jersey State League of Municipalities, in upholding the statute, was addressing a challenge to the entire statute based in part on its over-inclusiveness because it provided services to condominium owners who rent their unit to others. It did not address the discrete issue before us: whether the failure to make a specific municipal service equally available to all persons in like circumstances denies equal protection of the law.

Indeed, Judge Skillman in his concurring opinion in New Jersey State League of Municipalities, recognized that the issue now before us was not being addressed by the majority. 257 N.J.Super. at 522, 608 A.2d 965 (Skillman, J.A.D., concurring). Judge Skillman would have expressly preserved the issue:

this is not a suit by an apartment owner and his tenants seeking to extend the benefits of chapter 299 to apartments but rather a suit by the League of Municipalities and various municipalities seeking a declaration that the law is invalid in its entirety.
[Id. at 523, 608 A.2d 965.]

*152He went so far as to suggest that passage of N.J.S.A. 40:67-23.2 to -23.8 “may strengthen an apartment owner’s claim of constitutional entitlement to those services, due to the similarities between qualified private communities and apartment complexes with respect to physical lay-out and other conditions.” Id. at 523, 608 A.2d 965. We agree, and are satisfied that the majority opinion in New Jersey State League of Municipalities does not undercut the well-founded principles enunciated by us in Boulevard Apartments, Inc. and 399 Lincoln Assocs.

Our dissenting colleague would reverse for the purpose of conducting a public hearing to determine whether there is a rational basis for the classification because: (1) the ordinance fosters home ownership; (2) there is a difference in the tax treatment between single-family homes and condominiums on the one hand, and large apartment complexes on the other; and (3) it may cost more to collect garbage from large apartment complexes than other residential units.

' We are convinced that the first ground advanced by the dissent may be disposed of without a plenary hearing. As stated, what may foster home ownership of two- and three-unit apartment houses is the ability to rent at least one unit as a “mechanism to pay for it,” not that the municipality provides garbage collection service to it. Even if a plenary hearing may show that this “mechanism” induces some to buy such apartment houses, the fact remains that once the Township decides to provide garbage collection service, “[tjhere is a denial of equal protection of the laws unless the service is available to all persons in like circumstances upon the same terms and conditions.” Boulevard Apartments, Inc., 110 N.J.Super. at 411, 265 A.2d 838. All residents of Morristown in all types of housing, apartments, condominiums and single-family residences alike, produce the same type and amount of garbage, id. at 412, 265 A.2d 838, and all require the removal of garbage on a regular basis for health and safety reasons. The single fact that some residents have chosen to purchase and reside in two- and three-unit apartment houses does not diminish the *153constitutional mandate that all persons in like circumstances be treated equally.

The second and third grounds advanced by the dissent surprise us and no doubt surprise the litigants and trial judge. Defendants have never even suggested that the classification was justified based on the difference in tax treatment between residences, condominiums and apartment complexes. They never asked for a plenary hearing on that issue. They did not brief it before the trial court, nor have they raised or briefed it before us. The single ground raised by defendants below and before us is that the ordinance fosters home ownership. The parties recognized this question as being legal in nature, and therefore no one pressed for a plenary hearing. We therefore are at a loss to understand the dissent’s conclusion that “there is a material issue of fact as to whether there exists a rational basis for the classification made in the ordinance.” Post, at 155, 661 A.2d at 328.

In any event, the dissent first notes the distinctions between taxation of residences, condominiums and apartments, and concludes that such distinctions “may well” constitute a reason for treating apartments differently. It is his view that the municipality may rationally conclude that, because of the limited ratables received from larger apartment buildings, “[t]he town may have well considered that the added expended resources [in collecting garbage from the complexes] were not worth the benefit.” Post, at 165, 661 A.2d at 333.

First, not a single reported case is cited by the dissent in this jurisdiction or elsewhere which supports the proposition that, once a municipality decides to provide residential garbage collection service, it may refuse the service to larger apartment complexes simply because the assessment methodology for apartment complexes may be different than that applied to condominiums and single-family residences. Indeed, the municipalities in Pleasure Bay ApaHments, Boulevard Apartments, Inc. and 399 Lincoln Assocs., never attempted to make such an argument. Perhaps *154this is so because of the invidious consequences resulting from such a classification.

For example, it should make absolutely no difference if the taxes generated from plaintiffs 140-unit apartment complex are more or less than the taxes generated from 140 condominium units. It is undisputed that the Township includes the cost of collecting residential garbage as a component of its property tax. Presumably, plaintiffs apartment complex, condominium complexes and single-family residences are all assessed at true value for taxation purposes. See Ford Motor Co. v. Township of Edison, 127 N.J. 290, 298, 604 A.2d 580 (1992). When plaintiff pays its property taxes, it absorbs part of the cost of the garbage collection service provided to other residents within the Township. Depriving plaintiff of the service requires it to pay double for precisely the same service provided to other residential owners. In our view, such a result constitutes invidious discrimination. See Juleah Co. v. Incorporated Village of Roslyn, 56 A.D.2d 483, 392 N.Y.S.2d 926, 928 (1977), aff'd o.b., 44 N.Y.2d 845, 406 N.Y.S.2d 760, 378 N.E.2d 123 (1978) (ordinance setting lower limits on amount of garbage collected per unit from apartment complexes than that imposed on one- and two-family homes, and imposing additional charge on apartment owners violated constitutional guarantee of equal protection).

Finally, the dissent reasons that a plenary hearing may produce evidence that “it in fact costs more to collect garbage from a larger apartment complex because the garbage at an apartment complex, although stacked in one or two places, is much greater than at smaller apartment buildings, and thus, takes longer to collect and remove.” Post, at 168, 661 A.2d at 335. Again, defendants have never, either in the Law Division or before us, offered such a rationale to justify its classification. No doubt this is so because it is undisputed that the type and quantity of refuse generated by each tenant in large apartment complexes is no different than that generated by each resident in other types of housing. There is absolutely no suggestion, for example, that it *155costs the Township more to collect the garbage of ten tenants, deposited in a single curbside dumpster, than it costs to collect garbage from ten condominium units, also deposited in a curbside dumpster. Nor is there any assertion that garbage collection from ten tenants costs more than collection from ten single-family residences. As we stated in Boulevard Apartments, Inc.:

Moreover, it is clear that the cost of collection from family units in an apartment house where the accumulated garbage is concentrated in one spot to be picked up at the curb is unquestionably less than the cost of collection from an equal number of family units residing m separate private dwellings.
[110 N.J.Super. at 412, 265 A.2d 838.]

The fact that defendants have never advanced such a reason for excluding large apartment complexes is sufficient reason not to reverse the judgment and thoughtful opinion of the Law Division, and require a plenary hearing on the issue.

We hold that the Township’s ordinance denying garbage collection services to garden apartment complexes with four or more units denies the owners and tenants of such complexes equal right to a municipal service and is therefore unreasonable, discriminatory and invalid.

We affirm and remand for further proceedings.

N.J.S.A. 40:66-1b codified the holding m Pleasure Bay Apartments.

According to New Jersey State League of Municipalities, the 1980 Census showed that over one-fifth of New Jersey condominium owners rented their units to others. 257 N.J.Super. at 517-18, 608 A.2d 965.