More from the Shore – Proposed Legislation Seeks to Limit Just Compensation

by: Joseph Grather
25 Mar 2013

Photo courtesy of Associated Press

Owners of property along the Jersey shore continue to be battered, this time by their own elected officials.  The New Jersey Senate recently introduced S-2618, which provides:

“Just compensation for an easement over a portion of beachfront property condemned for the purpose of dune construction or beach replenishment shall include consideration of the increase in value to the entire property due to the added safety and property protection provided by the dune or replenished beach. Any additional rights of the public to access property held in the public trust arising as a result of the easement, or the dune construction or beach replenishment, shall not be considered to cause a diminution in the value of the entire property.”

The State Assembly has a companion bill mirroring the above – A-3896 – introduced on March 7, 2013.  Similar legislation has also been introduced in the State Senate and Assembly by other legislators, S-2599 and A-3889.  These bills are awaiting legislative committee review.

So we all understand the jumping off point, “just compensation” is a constitutional term and is found in the New Jersey Constitution (N.J. Const. Art. 1, Par. 20) and the U.S. Constitution (5th Amend.)  The text of the New Jersey Constitution reads: “Private Property shall not be taken for public use without just compensation.”

Every court in the history of the United States has interpreted the Fifth Amendment as limiting government’s authority to take private property.  Within the clause there are two limitations expressed.

First, the taking must be for a “public use.”  Second, government must pay “just compensation”.

While most, if not all, may agree that government taking of private property in order to replenish New Jersey beaches damaged by Superstorm Sandy would satisfy the “public use” criteria of the Constitution, legislation like the bills mentioned above that attempt to legislatively satisfy the “just compensation” part of the analysis appears to be constitutionally infirm for several reasons.

First, it would violate the fundamental concept that the just compensation is to be determined by judicial processes, not by legislative mandate.  United States v. Cors, 337 U.S. 325 (1949);   Monongahela Navigation Co. v. United States, 148 U. S. 312  (1893).   In other words, “there is no precise and inflexible rule for the assessment of just compensation.” State v. Gallant, 42 N.J. 583 (1963).

Second, the proposed legislation might allow government to acquire private property “without just compensation” in violation of the Constitution.  If a statute mandates a particular valuation rule which fails to afford “just compensation”, it is contrary to the constitutional mandate.

Third,  the proposed statute seeks to preemptively decide the issues pending before the New Jersey Supreme Court is a case known as Borough of Harvey Cedars v. Karan, 425 N.J. Super. 155 (App. Div. 2012).  The issue in Karan is whether the decision of an Ocean County jury to award a property owner “just compensation” for the taking of their private property should be affirmed.  The government has appealed the award of just compensation arguing that the property owners should not receive more than $1 dollar for the taking of their private beachfront property because the government put a public dune on the part taken that benefits the entire beach-going public, as well as the inland residences and businesses occupying the barrier island.  The trial court and the Appellate Division rejected the government’s argument, and the Supreme Court decided to take the case before Superstorm Sandy struck.

Finally, any legislation which seeks to treat some people or classes of people differently than others may itself violate the Equal Protection Clause contained in the 14th Amendment to the U.S. Constitution.

Now, in the aftermath of a devastating natural disaster, government seeks to remedy the devastation – that it alone could have prevented – by making private property owners the scapegoat.

But the property owners are not to blame. Let’s not forget that the Army Corps warned of these very dangers decades ago, and government failed to prepare use for the coming storms.  Let’s not let government attempt to foist its responsibility on the narrow shoulders of a small group of property owners.

For more on these issues, see our prior blog postings:

In the Wake of a Superstorm the Debate Continues – Who Should Pay for the Dunes?

Rebuilding After Sandy: Government Assistance at Odds With Private Property Rights

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