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Griffith v. State of New Jersey Department of Environmental Protection

OCN-L-2456-95 (N.J. Law Div. 2000) (Unpublished)

CONDEMNATION; REGULATORY TAKINGS—A property owner is not entitled to compensation for the period between what would have been a regulatory taking and the time that the regulatory authority makes an effective amelioration offer.

In this inverse condemnation case, a finding was made that the State of New Jersey effected a regulatory taking of property because the conditions attached to a New Jersey Department of Environmental Protection Freshwater Wetlands permit rendered the property without value. After several visits to the courthouse, the Appellate Division, in an earlier portion of the proceeding, ruled that the State had the option to ameliorate the taking to avoid the necessity of paying compensation for the value of the property taken. Subsequent to that ruling, the Department of Environmental Protection made a bona fide offer to ameliorate the regulatory taking by offering all state permits needed to effectuate development of the parcel, and waiving application and other fees. This effectively ended the regulatory taking. Now, in this action, the property owner was seeking fair and just compensation for loss of the use of the property during the tenure of the State’s appropriation, albeit temporary. In 1987, a United States Supreme Court case addressed the question of whether a declaration of invalidity for a regulation was enough to ameliorate a regulatory taking, thus restoring the property rights and denying a claim for just compensation. “Recognizing the concept of a temporary taking, the [U.S. Supreme] Court held that constitutional notions of fair and just compensation, in the face of a temporary taking, requires just compensation from the date of the confiscatory regulatory action until the date of the regulation’s rescission or amendment.” Here, the Court found that the New Jersey statute allowing the State to ameliorate a regulatory taking of this nature was the statutory equivalent to the regulatory rescission or amendment referred to in the 1987 U.S. Supreme Court decision. Therefore, the Court found that the property owner was entitled to fair and just compensation from the date of the regulatory taking until an effective exercise of the amelioration option by the Department of Environmental Protection was taken. The property owner argued, however, that it was entitled to receive compensation to the date that all state development permits were issued. He argued that the regulatory agency would be more compelled to act in good faith on the full complement of development applications if the threat of economic sanctions continued to loom. The Court felt, however, that “[s]uch a consideration, however, has no place in the determination process for just compensation. If such a policy were adopted, the effect would be to place the property owner in a better position than he had been in if the objectionable regulatory action, a Freshwater Wetlands permit, so hobbled by conditions as to be meaningless, had not occurred.” In the mind of the Court, the goal of damages in an inverse condemnation case is to restore the property owner, through the economics of money, to the position he was in before the regulatory taking. Once the amelioration had been offered, coupled with a reasonable review in response to obtain the approvals, the property owner was restored to the status quo ante.


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