NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE 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.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1335-15T1
FRIENDS OF RAHWAY
BUSINESS, L.L.C.,
Plaintiff-Respondent/
Cross-Appellant,
v.
RAHWAY MUNICIPAL COUNCIL
AND CITY OF RAHWAY,
Defendants-Appellants/
Cross-Respondents.
_________________________________
Argued May 18, 2017 – Decided July 3, 2017
Before Judges Hoffman, O'Connor and Whipple.
On appeal from Superior Court of New Jersey,
Law Division, Union County, Docket No. L-0410-
15.
Brian M. Hak argued the cause for appellants
(Weiner Lesniak, L.L.P., attorneys; Mr. Hak,
of counsel and on the briefs; John P. Miller
and Julia O. Donohue, on the briefs).
William H. Michelson argued the cause for
respondents.
Robert S. Goldsmith argued the cause for
amicus curiae Morristown Partners, Inc., d/b/a
Morristown Partnership (Greenbaum, Rowe,
Smith & Davis, L.L.P., attorneys; Mr.
Goldsmith, of counsel and on the brief; Robert
J. Flanagan, III, on the brief).
Edward Purcell argued the cause for amicus
curiae New Jersey State League of
Municipalities and New Jersey Institute of
Local Government Attorneys (Mr. Purcell,
Associate Counsel, on the brief).
Edward J. Trawinski argued the cause for
amicus curiae New Jersey Managed Districts
Association and Ironbound Business
Improvement District (Schenck Price Smith &
King, L.L.P., attorneys; Mr. Trawinski, on the
brief).
Melanie R. Walter, Deputy Attorney General,
argued the cause for amicus curiae New Jersey
Office of the Attorney General (Christopher
S. Porrino, Attorney General, attorney;
Melissa H. Raksa, Assistant Attorney General,
of counsel; Ms. Walter and Susan M. Scott,
Deputy Attorneys General, on the brief).
PER CURIAM
Defendants Rahway Municipal Council and City of Rahway
(Rahway) appeal from the October 19, 2015 Law Division order
invalidating a municipal ordinance enacted under the Special
Improvement District (SID) statutes, N.J.S.A. 40:56-65 to -89.
Plaintiff cross-appealed the denial of counsel fees. Four amicus
briefs were submitted, with the court's approval. Because of the
trial court's misinterpretation of N.J.S.A. 40:56-65 to -89, we
reverse and vacate certain provisions of the October 19, 2015
2 A-1335-15T1
order, affirm the denial of counsel fees, and remand for further
proceedings.
In September 1993, Rahway adopted Ordinance No. A-40-93,
pursuant to N.J.S.A. 40:56-65 to -89, amending the Rahway Municipal
Code to create a SID. The ordinance allowed the city to collect
special assessments on affected properties. In 2014, Rahway
enacted Ordinance No. 0-42-14 (the Ordinance), expanding the SID
to include all non-residential and non-public properties in the
city, and residential properties with more than four units. Rahway
sent letters to affected property owners providing notice of a
December 8, 2014 public hearing. Some affected property owners
claim they only received the notices on December 5, 2014, but at
least twenty-five members of the public attended.
Affected property owners formed plaintiff Friends of Rahway
Business, L.L.C. to challenge the Ordinance, and filed a complaint
in the Law Division through plaintiff. The court conducted a
hearing on October 9, 2015, where plaintiff argued Rahway had not
utilized money from the SID since 1993 and the expansion of the
SID was only to collect additional assessments. Plaintiff also
argued the affected property owners were given insufficient notice
for the Ordinance to be enacted, the scope of the SID was
unprecedented, and defendants' actions amounted to constitutional
violations entitling plaintiff to counsel fees. Rahway asserted
3 A-1335-15T1
all statutory notice requirements were satisfied, and the
Ordinance is subject to a presumption of validity. Rahway
referenced other towns with similar SIDs and argued the statute
does not prohibit a citywide SID.
The judge disagreed with Rahway and invalidated the Ordinance
in the October 19, 2015 order. The judge considered the
legislative intent of the enabling statutes and found the
legislature had not intended for a SID to encompass an entire
city. The judge denied plaintiff counsel fees and failed to
address plaintiff's other arguments. This appeal followed. Amici
support and join in the arguments raised by Rahway, and urge us
to overturn the judge's decision.
At the outset, we note our standard of review. A court may
not substitute its judgment for that of a municipal body unless
it is proven the Board's action was arbitrary, unreasonable or
capricious. Cell S. of N.J., Inc. v. Zoning Bd. of Adjustment of
W. Windsor Twp., 172 N.J. 75, 81 (2002) (citing Medici v. BPR Co.,
107 N.J. 1, 15 (1987)).
Rahway argues the trial judge should have yielded to the
Ordinance's required presumption of validity. Rahway also assails
four findings of the trial judge. Specifically, Rahway challenges
the judge's findings that the SID statute does not allow: 1) a
municipal-wide SID; 2) SIDs containing non-contiguous properties;
4 A-1335-15T1
3) SIDs in an area of a municipality other than a traditional
"downtown" area; and 4) SIDs containing non-commercial use, such
as industrial and certain multi-family apartment properties. We
address each argument in turn.
The judge considered the presumption of validity attached to
municipal ordinances. Lake Valley Assocs., LLC v. Twp. of
Pemberton, 411 N.J. Super. 501, 505 (App. Div.), certif. denied,
202 N.J. 43 (2010). The SID statute provides "municipalities
should be given the broadest possible discretion in establishing
by local ordinance the self-help programs most consistent with
their local needs, goals, and objectives." N.J.S.A. 40:56-
65(b)(3). In fact, the trial judge addressed the presumption by
saying, "[t]his presumption may only be overcome by a showing that
the [O]rdinance is arbitrary or unreasonable, or that it is
constitutionally defective on its face[,]" and "a court need only
decide whether the [O]rdinance represents a reasonable exercise
of the legislature's delegation of authority to municipalities in
enacting the SID statute."
However, the judge determined "[c]ontrary to being
presumptively valid, the court finds [the Ordinance], expanding
the SID, to be irreconcilable with the enabling statutes and the
legislative intent behind the states' enactment." The judge
considered the Ordinance "an improper exercise of the authority
5 A-1335-15T1
delegated to the City Council under the SID statutes," and ordered
it invalidated.
In Fanelli v. City of Trenton, 135 N.J. 582 (1994), our
Supreme Court stated,
In determining whether [an] ordinance is
authorized by the SID statute, we do not pass
on the wisdom of the City's plan. We need
decide only whether the ordinance represents
a reasonable exercise of the Legislature's
delegation of authority to municipalities in
enacting the SID statute. Furthermore, we
interpret those delegated powers broadly.
[Fanelli, supra, 135 N.J. at 591 (citations
omitted).]
It is well established, a statute's plain language is the
clearest indication of its meaning. Bergen Commercial Bank v.
Sisler, 157 N.J. 188, 202 (1999) (citing Lehmann v. Toys 'R' Us,
Inc., 132 N.J. 587, 600-01 (1993); Grigoletti v. Ortho Pharm.
Corp., 118 N.J. 89, 107-08 (1990)). When interpreting a statute,
our "overriding goal is to give effect to the Legislature's
intent." State v. D.A., 191 N.J. 158, 164 (2007) (citing
DiProspero v. Penn, 183 N.J. 477, 492 (2005)). The best indicator
of that intent is "the plain [statutory] language chosen by the
Legislature." State v. Perry, 439 N.J. Super. 514, 523 (App.
Div.), certif. denied, 222 N.J. 306 (2015) (quoting State v.
Gandhi, 201 N.J. 161, 176 (2010)). We thus read the text of a
statute in accordance with its ordinary meaning unless otherwise
6 A-1335-15T1
specified. Ibid.; see also N.J.S.A. 1:1-1 (explaining "words and
phrases [in statutes] shall be read and construed with their
context, and shall, unless inconsistent with the manifest intent
of the legislature or unless another or different meaning is
expressly indicated, be given their generally accepted meaning,
according to the approved usage of the language.").
In cases where a plain reading of the statute "leads to a
clear and unambiguous result, then the interpretive process should
end, without resort to extrinsic sources." D.A., supra, 191 N.J.
at 164 (citing DiProspero, supra, 183 N.J. at 492). If, however,
the plain language of the statute is ambiguous, we may turn to
extrinsic evidence to determine the Legislature's intent in
enacting the statute. Ibid. Turning to such extrinsic evidence
is also necessary if a plain reading of a statute renders "an
absurd result" at odds with the Legislature's intent. Ibid.;
State v. Williams, 218 N.J. 576, 586 (2014) (citing DiProspero,
supra, 183 N.J. at 493). Such extrinsic evidence includes
"legislative history, committee reports, and contemporaneous
construction." DiProspero, supra, 183 N.J. at 492-93 (quoting
Cherry Hill Manor Assocs. v. Faugno, 182 N.J. 64, 75 (2004)). Such
evidence aids us in elucidating the Legislature's intent. We "may
not rewrite a statute or add language that the Legislature
7 A-1335-15T1
omitted." State v. Munafo, 222 N.J. 480, 488 (2015) (citing
DiProspero, supra, 183 N.J. at 492).
The SID statute defines "special improvement district" as an
area within a municipality designated by municipal ordinance as
"an area in which a special assessment on property within the
district shall be imposed for the purposes of promoting the
economic and general welfare of the district and the municipality."
N.J.S.A. 40:56-66(b). Our Supreme Court has held a special
assessment is different from a tax, and such assessments reimburse
the town for improvements made to SID properties. 2nd Roc-Hersey
Assocs. v. Town of Morristown, 158 N.J. 581, 592-96 (1999).
N.J.S.A. 40:56-68(b) allows a municipality to adopt a SID if
the municipality finds:
(1) that an area within the municipality, as
described by lot and block numbers and by
street addresses in the enabling ordinance,
would benefit from being designated as a
special improvement district; (2) that a
district management corporation would provide
administrative and other services to benefit
the businesses, employees, residents and
consumers in the [SID]; (3) that a special
assessment shall be imposed and collected by
the municipality with the regular property tax
payment or payment in lieu of taxes or
otherwise, and that all or a portion of these
payments shall be transferred to the district
management corporation to effectuate the
purposes of this amendatory and supplementary
act and to exercise the powers given to it by
municipal ordinance; and (4) that it is in the
best interests of the municipality and the
8 A-1335-15T1
public to create a [SID] and to designate a
district management corporation; except that
no district management corporation shall be
designated to receive any funds or to exercise
any powers pursuant to the provisions of this
amendatory and supplementary act, unless the
board of directors of that corporation shall
include at least one member of the governing
body of the municipality.
When creating the SID, the ordinance "may exempt residential
properties, residential portions of mixed use properties, parcels
with any number of residential units, or vacant properties located
within the district from special assessment." N.J.S.A. 40:56-
66(b).
The statute allows the governing body to "authorize the
commencement of studies and the development of preliminary plans
and specifications relating to the creation and maintenance of a
pedestrian mall facility or [SID], including, whenever possible,
estimates of construction and maintenance, and costs and estimates
of potential gross benefit assessment." N.J.S.A. 40:56-70.
The statute also provides for the designation of "downtown
business improvement zones":
Any municipality which has adopted or adopts
an ordinance authorizing the establishment of
a [SID] pursuant to section 7 of P.L. 1972,
c. 134 [N.J.S.A. 40:56-71] may, by ordinance,
designate all or any portion of that district
which contains primarily businesses providing
retail goods and services as a "downtown
business improvement zone," notwithstanding
9 A-1335-15T1
that the designated zone is located within an
urban enterprise zone.
[N.J.S.A. 40:56-71.2.]
The statute defines "downtown business improvement zone" as "a
zone designated by a municipality, by ordinance, pursuant to
section 2 of P.L.1998, c.115 in order to promote the economic
revitalization of the municipality through the encouragement of
business improvements within the downtown area." N.J.S.A. 40:56-
71.1.
Regarding imposition of a citywide SID, the trial judge made
the following findings:
These words and phrases, read and construed
within their context, indicate that the
legislature's intent in enacting the statute
was for SIDs to be considered specific regions
within the larger municipality. No words or
phrases in N.J.S.A. 40:56-66 indicate that the
legislature intended the statute to be
construed to mean that an entire municipality
was envisaged as a potential SID.
The judge further found "[i]t is improbable that the legislature
intended that an entire [c]ity could be considered a SID."
Rahway asserts the size and boundaries of the SID are not the
relevant inquiry. Rahway frames the issue as "whether the
municipality's governing body could find the area, no matter where
it is located, would benefit from being designated as a SID."
10 A-1335-15T1
Rahway challenges the trial judge's concern a municipal SID would
amount to a special assessment for every nonresidential property.
We agree with defendants the SID statute does not specifically
prohibit a citywide SID; the language of the pertinent statutory
provisions merely suggests a SID could be a small, designated area
within a municipality. For example, a SID is defined as an "area
within a municipality" that the municipality designates through
an ordinance. N.J.S.A. 40:56-66(b). Additionally, a municipality
can create a SID if it finds "an area within the municipality . .
. would benefit from being designated as a SID." N.J.S.A. 40:56-
68(b)(1) (emphasis added).
The trial judge relied on the language in these statutes, as
well as a news release from the Office of the Governor and a
statement issued by the legislature when the 1984 amendment to the
SID statute was enacted. However, the governor's press release
indicated the legislation would allow "municipalities to create
[SIDs] to promote economic growth and employment in downtown
business districts," and the legislature's statement accompanying
the enactment of the 1984 amendment stated the statute "would
permit municipalities to establish [SIDs] to promote economic
growth and employment in downtown business districts." Consistent
with the legislature's intent, the SID statutes provide
municipalities with broad discretion when creating SIDs, calling
11 A-1335-15T1
into question the trial court's narrower reading of the statutes.
See N.J.S.A. 40:56-65(b)(3). Moreover, the New Jersey
Constitution grants municipalities broad discretion: "The
provisions of this Constitution and of any law concerning municipal
corporations formed for local government, or concerning counties,
shall be liberally construed in their favor." N.J. Const. art.
IV, § VII, ¶ 11.
Nothing in the SID statutes specifically prohibits a citywide
SID, provided a municipality can support such a SID with the
specific findings necessary to adopt a SID ordinance, as set forth
at N.J.S.A. 40:56-68. This standard requires a municipality to
support its determination an area would benefit from being a SID
and services would be provided to benefit individuals within the
SID. Ibid.
Rahway asserts it met these requirements; however, such
evidence is not before this court, and the trial court did not
reach this issue. Nevertheless, we are able and do find there is
no prohibition against a municipality adopting a citywide SID, and
we remand for the trial court to consider the merits of the
Ordinance itself.
Rahway also argues the trial judge incorrectly concluded the
SID statute does not allow for a noncontiguous SID. The trial
judge found, "The legislature's intent should not be misconstrued
12 A-1335-15T1
to mean that a SID can be created anywhere in a municipality, in
a noncontiguous manner, incorporating all commercial and
industrial property, so long as the entire municipality benefits
from the same."
N.J.S.A. 40:56-66(b) allows exemptions from special
assessments on certain properties within the SID. This follows
the SID definition, which provides for "an area in which a special
assessment on property within the district shall be imposed."
Ibid. Thus, all properties within a SID are subject to the special
assessment, unless they are subject to a possible exemption.
Here, the Ordinance included all non-residential and non-
public properties in the city, as well as residential properties
with more than four units.1 Plaintiff argues the exemption of
residential properties made the SID "noncontiguous," but the
statute permits these exclusions. If the SID is the entire
municipality, the only reason the SID is noncontiguous is its
exclusions. The court's determination a SID must be contiguous
was erroneous because the statute specifically provides for
exemptions of some properties within a SID, as the Ordinance did
here.
1
With the exception of the Merck campus within the city, which
defendants assert is the only location zoned "for research
development."
13 A-1335-15T1
Rahway also asserts the trial court erroneously found the SID
statute only permits SIDs in downtown business districts. We
agree. A separate section of the statute authorizes creation of
"downtown business improvement zone[s]." N.J.S.A. 40:56-71.1.
Another portion provides, "Any municipality which has adopted or
adopts an ordinance authorizing the establishment of a special
improvement district . . . may, by ordinance, designate all or any
portion of that district which contains primarily businesses
providing retail goods and services as a 'downtown business
improvement zone,' . . . ." N.J.S.A. 40:56-71.2.
If the legislative intent for the creation of SIDs was to
revitalize only "downtown business districts," the legislature
would not have separately allowed for a "downtown business
improvement zone" within a SID. The plain language of N.J.S.A.
40:56-71.2 is unambiguous.
Rahway finally argues the trial court improperly found non-
commercial properties are not allowed within a SID. Rahway asserts
the "trial court specifically held Class 4B (Industrial) and Class
4C (Apartments-4 units and over) properties would not 'stand to
benefit in the ways intended by the legislature when enacting the
statute.'" The trial judge found "residential properties, or
vacant lots, or mixed use properties . . . should be excluded" and
14 A-1335-15T1
found they "should not be subject to a special assessment for such
improvements and programs."
Having the discretion to exclude residential properties does
not require a municipality to exclude residential properties from
SIDs. Nothing in the statutes mandates these properties be
excluded; on the contrary, the statute provides that these
properties "may" be excluded. N.J.S.A. 40:56-66(b). Thus, the
judge's findings "[t]he legislature recognized these types of
properties were not the ones that would benefit from SID
improvements" is inconsistent with a plain reading of the statute.
The judge's determination these properties must always be excluded
is unsupported.
Rahway argues the trial court misconstrued the SID statutes
and argues sixty-seven SIDs within nineteen counties have
established SIDs with similar characteristics to its own. However,
this evidence was not included in the trial record. The only
evidence before the trial court on this point was a map of
Carteret. Accordingly, we decline to consider the arguments
relating to the content of ordinances from other municipalities.
See R. 2:5-4(a); R. 2:6-1(a).2
2
Plaintiff argues Rahway violated Rule 2:6-1(a) by failing to
include five certifications in its appendix included in the record
before the trial court and inappropriately included 101 pages in
15 A-1335-15T1
In its cross-appeal, plaintiff argues the Ordinance violated
the constitutional rights of the affected property owners under
the Equal Protection Clause and the Tax Uniformity Clause of the
New Jersey Constitution and seeks counsel fees and litigation
expenses under the New Jersey and Federal Civil Rights Acts. We
disagree and affirm the denial of counsel fees.
Plaintiff relies on Tumpson v. Farina, 218 N.J. 450 (2014).
In Tumpson, the New Jersey Supreme Court found a city clerk had
violated the plaintiff's constitutional right when the clerk
refused to accept a petition for a referendum for filing, and the
Court held the failure to accept the petition violated a
substantive right protected by the New Jersey Civil Rights Act,
N.J.S.A. 10:6-2(c). Tumpson, supra, 218 N.J. at 481-86. The
Tumpson court found a "court may award the prevailing party
its appendix that were not before the trial court. Rule 2.6-
1(a)(1) provides appellant's appendix must include "such other
parts of the record, excluding the stenographic transcript, as are
essential to the proper consideration of the issues, including
such parts as the appellant should reasonably assume will be relied
upon by the respondent in meeting the issues raised." The failure
to submit the five certifications is not excused by any exception
in Rule 2:6-1. However, plaintiff does not articulate why these
certifications are relevant to our review. Thus, we need not
consider this particular omission on defendant's part.
However, plaintiff is correct that defendant's appendix pages
Da241-322 were not included in the record before the trial court;
therefore, we do not consider this evidence on appeal. See R.
2:5-4(a).
16 A-1335-15T1
reasonable attorney's fees and costs" under the Civil Rights Act.
Id. at 472 (citing N.J.S.A. 10:6-2(f)). To establish a violation
of the Civil Rights Act, the affected property owners must prove
(1) "'the Constitution or laws of this State' conferred on them a
substantive right; (2) the [defendants] deprived them of that
right; and (3) the [defendants were] 'acting under color of law'
when [they] did so." Id. at 473.
Here, plaintiff has not established any of these elements.
Plaintiff argues the receipt of a tax bill that violated the
enabling statute constitutes a "legal violation," and "at worst
is unconstitutional." Thus, plaintiff seems to recognize this may
not be a constitutional issue; however, plaintiff does assert,
"property rights are indistinguishable from civil rights" in this
matter, and "the right not to pay a tax . . . has to be viewed as
one of constitutional dimension." Plaintiff has not established
the substantive right violated by defendants, let alone provide
evidence to support its claim, beyond claiming a parallel to
Tumpson.
Affirmed in part, vacated in part, and remanded for further
proceedings consistent with this opinion. We do not retain
jurisdiction.
17 A-1335-15T1