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Million Bucks, Inc. v. Borough of Seaside Park Zoning Board of Adjustment

A-2002-08T3 (N.J. Super. App. Div. 2009) (Unpublished)

ZONING; CONFLICTS OF INTEREST — Where a member of a land use board belongs to an organization that opposes the conduct of an applicant’s business, that board member must be disqualified and hearings that may have taken place before disqualification must be reheld.

A former member of a municipal zoning board of adjustment was working as a zoning enforcement officer when he believed that a restaurant was running a nightclub in violation of applicable municipal ordinances. He issued a cease and desist letter. The restaurant appealed the cease and desist letter to the zoning board. After ten public hearings, the restaurant filed a complaint in the Law Division alleging that eight of the nine board members should be disqualified because they were also members of an organization that had been arguing for years that the restaurant had been operating as a nightclub. Three of them were directors or trustees of that organization. Five had attended two meetings with the mayor and municipal counsel relating to the renewal of the restaurant’s liquor license in which a videotape depicting the restaurant’s activities as a nightclub was introduced. The organization also opposed the issuance of a liquor license to the restaurant. The restaurant further argued that the zoning officer, when he was a planning board member, took part in prior hearings approving the restaurant’s site plan application and therefore should have been disqualified from being able to issue the cease and desist letter. Finally, the restaurant contended that the hearings were tainted and sought a declaration that the proceedings to date were invalid. Thus, it believed that further consideration by the board as presently constituted would be in violation of the Municipal Land Use Law (MLUL).

The lower court required recusal of five of the board’s nine members on conflict of interest grounds because of their previous attendance at meetings of the mayor and council. It declined to disqualify the other four members and denied the restaurant’s request to invalidate the proceedings and start anew. In addition, it rejected the restaurant’s motion to disqualify the zoning enforcement officer. The restaurant appealed.

The Appellate Division affirmed in part and reversed in part. First, it rejected the lower court’s conclusion that mere membership in the opposing organization was insufficient to require the recusal of those members. It cited the MLUL and the Local Government Ethics Law as two authorities for the proposition that a board member involved in any matter in which he or she has, either directly or indirectly, any personal or financial interest must be disqualified. To the Court, the question was whether there was a potential for conflict, not whether a particular public servant succumbed to a temptation or was even aware of it since a perceived conflict is as harmful to the public’s confidence as the actual existence of such conflict. Here, the organization actively opposed the renewal of the restaurant’s liquor license and continued to oppose the restaurant’s operation of a nightclub. In addition, the Court noted that the potential for psychological influences by the organization on the board members could not be ignored. Further, the organization’s positions were related to the precise issue that was before the board, not some peripheral issue. Second, it rejected the lower court’s position that the proceedings could continue with the appointment of new members for this matter. It held that the comments and votes by the now-disqualified members were too prejudicial to allow the hearings to continue. Thus, the mere existence of a conflict required the whole action to be invalidated. As a result, the Court concluded that the proceedings had to begin de novo once replacement members were designated. Finally, it saw no reason to disqualify the zoning officer simply because he participated in planning board meeting at which he voted in favor of the restaurant’s request for variances.

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