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Mountain Hill, LLC v. Middletown Twp.

A-1968-01T1 and A-2556-01T1 (N.J. Super. App. Div. 2003) (Unpublished)

ZONING; ORDINANCES; CONFLICTS OF INTEREST—Even if a municipal council member with a financial tie to a party that would be affected by a council vote, such as an attorney for a developer, votes in a way that is adverse to that interest, the vote is still tainted and invalid.

A developer challenged a municipal “open spaces” ordinance because the municipality’s definition of “open spaces” conflicted with the Municipal Land Use Law’s (MLUL) definition of open spaces. The ordinance prohibited off-street parking in open space areas, whereas the MLUL did not. The ordinance defined useable open space but limited the amount of wetlands, detention basins, open bodies of water that could be counted as useable open space, and counted impervious surfaces only if they were related to recreation and drainage facilities. The lower court found the ordinance requirements to be inconsistent with the MLUL’s requirements and concluded that the ordinance was invalid. The lower court also found the adoption vote tainted because a voting member of the municipality’s council was a partner of the law firm that represented the developer. It found it irrelevant that the member voted for the ordinance that the developer found objectionable. The Appellate Division affirmed. The Court did not focus on the inconsistencies with the MLUL, but focused its attention on the conflict of interest of the council member. A council member must be disqualified from voting if: (a) he or she will receive a direct financial gain dependant on the outcome; (b) if someone closely tied to the member (e.g., a family member or business partner) would receive financial gain (i.e., an indirect financial gain to the council member); (c) if the vote would benefit a family member in a non-financial, but important way; or (d) if the member’s judgment might be affected because the member is involved in an organization and might desire to further that organization’s policies. The Court found that the council member, as a partner in the law firm that represented the developer, had an indirect financial gain in the outcome. Consequently, the member’s vote was tainted. It rejected the municipality’s argument that the measure was approved unanimously so the tainted vote had no effect. It also rejected the argument that because the vote was not tainted because the member voted against his firm’s client’s interest. The Court noted that outcome is not a relevant factor. The issue is whether the conflict had the capacity to affect the voter’s judgment. Lastly, the municipality claimed that the ordinance should not have been invalidated because the developer was aware of the member’s presence at the meeting and did not object. The Court rejected that argument, noting that the developer did not object because it received assurances from the member that he would not vote on issues affecting the developer.

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