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Rohaly v. State of New Jersey, Department of Environmental Protection and Energy

323 N.J. Super. 111, 732 A.2d 524 (N.J. Super. App. Div. 1999)

CONDEMNATION; REGULATORY TAKINGS; PHYSICAL TAKINGS—Groundwater monitoring wells installed by the State may constitute a physical taking where, unlike a regulatory taking, the size of the invasion is not an impediment to an owner’s claim for compensation.

After purchasing a small piece of vacant, heavily overgrown land, the buyer discovered three groundwater monitoring wells that had been installed by the Department of Environmental Protection (DEP). The buyer contended that the installation of those wells constituted an unconstitutional taking of its property for which it was entitled to just compensation. It further asserted that it tried for five years to get the DEP to remove the wells. The lower court ordered the DEP to seal the wells and restore the surface of the property to its prior condition, but awarded no damages to the owner. Instead, it held that the owner’s loss, if any, was due to its failure to make adequate inquiry when it acquired title to the property. It also determined that the wells did not substantially impair the use of the property and that the effect of the presence of the wells was “minimal” and “temporary.” The Appellate Division reversed. “Inverse condemnation is a remedy designed to protect a landowner whose property had been taken ... by insuring that he be paid reasonable compensation… .” There are several types of “takings” requiring just compensation to be paid, including those involving physical invasion of land and those involving taking due to government regulation. The lower court relied on a case where the Appellate division concluded that lack of diligence at the time of acquisition of title caused the plaintiff to fail to discover a natural water course and that the municipality was not accountable for the loss. Here, the Appellate Division determined that the lower court failed to understand that such a standard applies to a regulatory taking, but not to a physical taking. In a physical invasion case, the law is clear that the size of the invasion does not affect an owner’s right to compensation. Further, a “taking” that predates the ownership of land it not an impediment to a subsequent owner’s right to seek redress through an inverse condemnation action. In fact, if government action constitutes a permanent physical occupation of property, there is “a taking to the extent of the occupation, without regard to whether the action achieves an important public benefit or has only minimal economic impact on the owner.” Complicating the issue of damages was that the presence of the wells was only a temporary limitation. This made the issue of compensation subject to a complex balancing process. Applying those principles, the Court concluded that the lower court erred in concluding the installation of the wells did not require compensation because the loss was de minimis and because the owner took title after the installation and then discovered their presence on the property. However, the record was insufficient to enable the Court to determine whether the DEP’s activities constituted a “permanent physical occupation” entitling the landowner to compensation. Accordingly, it reversed the lower court and remanded the matter for a trial on the issue of permanence and for a determination of the amount of compensation due to the landowner if a “taking” was established.


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