Court Declines to Invalidate Statute Prohibiting Third-Party Appeals in Tax Court

by: Matthew Erickson
12 Oct 2022

On September 28, 2022, the Superior Court of New Jersey, Mercer Vicinage, rendered a thirteen (13) page unpublished opinion in New Jersey Citizen Action, et al. v. State of New Jersey et al. that addressed the constitutionality of a recent change to the property tax appeal statute that removed third-party appeals of local property tax in Tax Court.  Judge Mala Sundar, the Presiding Judge of the Tax Court of New Jersey, sitting by designation to the Superior Court, ruled the statute was facially constitutional in response to the Plaintiff’s challenge.

In this matter, the Plaintiff, New Jersey Citizen Action, filed a verified complaint for declaratory and injunctive relief against the State of New Jersey to prevent them from “enacting, enforcing and/or otherwise acting upon” an enacted bill which removed the ability for third parties to appeal local property tax assessments and exemptions through the Tax Court of New Jersey.  That bill changed the wording of N.J.S.A. 54:3-21(a) by removing the words “or feeling discriminated against by the assessed valuation of other property in the county” from the statute authorizing appeals to the county boards of taxation or the Tax Court of New Jersey.

The Plaintiff’s complaint alleged a number of reasons for the declaratory and injunctive relief, however, most of these reasons have since been found invalid by the court and dismissed.  The court’s opinion here addressed the only remaining count of the complaint, based on the allegation that the bill had prevented third-party appeals in violation of the New Jersey Constitution’s In-Lieu Clause.  The Defendants, arguing that the In-Lieu Clause was not violated, filed a motion to dismiss that remaining count of the Complaint.  Plaintiff responded by filing a cross-motion for summary judgment.  With that motion filed, stating that there were no material facts in dispute, the court found that it could adjudicate the motions without any further proceedings or discovery.

The court approached this matter by first noting that a matter or issue before the court can be found moot if there is no “bona fide justiciable controversy”.  Here, that was crucial as all parties agreed that a third-party local property tax appeal can still be instituted by way of “action in lieu of prerogative writ” under New Jersey Court Rule 4:69.  Since a third-party appeal can still be instituted in this matter, the Constitutional protections provided by the Constitution’s In-Lieu Clause are not violated and therefore there is no basis to sustain the remaining count of the Complaint.  The court continued to review the matter under the guise of an Equal Protection violation and a violation against the New Jersey Civil Rights Act and found that no violations under them could be sustained.

The court dismissed the remaining count of the Complaint, ending the matter.

This case does not seem to rule that the challenged statute will, in all cases, be found Constitutional, however, for the time being, a third-party tax appeal complaint cannot be filed in the county boards of taxation or in the Tax Court.  If you have reason to challenge another entity’s tax assessment or tax exemption, you may wish to seek out competent legal counsel to advise you regarding the current process.  From the initial intake to final resolution, an experienced tax appeal attorney can help you navigate through the specifics of each individual case.  If you have any questions concerning your property tax assessment, contact McKirdy, Riskin, Olson & DellaPelle, P.C. to speak with an experienced attorney. To view the full opinion, click here.