Posted by: Patricia Salkin | April 28, 2018

Fed. Dist. Court in NJ Dismisses Substantive Due Process and Equal Protection Claims

This post was authored by Matthew Loeser, Esq.

In 2010, the Sea Isle City Planning Board granted “preliminary and final site plan approval and variance relief” to Plaintiff’s predecessor-in-interest “to construct a three story mixed use building containing 9,669 square feet of interior and ‘outdoor’ restaurant space on the first floor; and thirteen four-bedroom residential units on the second and third floors.” The Complaint reflected that while the permits for the residential units were allegedly issued on April 8, 2015, “the necessary permits for the first floor restaurant space” were allegedly delayed by several months. On September 17, 2015, Defendant Sea Isle City Solicitor Defendant Paul J. Baldini, Esq. wrote a letter to the Sea Isle Zoning Officer Cornelius R. Byrne, stating that the project significantly deviated from the Planning Board approvals. As a result, Byrne issued a Stop Work Order. Plaintiff then filed a complaint in New Jersey Superior Court. The Superior Court held that evocation and denial of the permits were arbitrary, capricious and unreasonable. The Plaintiff filed an Amended Complaint, asserting numerous claims against the Sea Isle City Defendants.

As to Plaintiff’s substantive due process claim, the court found that while the Amended Complaint set forth that “Board Member Mayor Desiderio recused himself from the Application and stepped down from the dais,” it failed to plead any facts suggesting why Defendant Desiderio recused and abstained from voting. The court found that absent facts suggesting competition between the Restaurant Defendants and Plaintiff, it could not find that Defendant Desiderio had a conflict. Absent such a conflict, the court could not find that there was self-dealing. As to the equal protection claim, the court found that the allegation that the relevant comparator was “similarly situated residential properties” was both conclusory and overbroad. Here, the Amended Complaint failed to allege how the residential properties were similarly situated to Plaintiff. Accordingly, the Motion to Dismiss was granted as to the New Jersey substantive due process claim and the New Jersey equal protection claim. Since all of the federal claims were dismissed, the federal common law conspiracy claim was also be dismissed.

Defendants next argued that the Amended Complaint failed to allege all of the elements of a claim for tortious interference with economic advantage under New Jersey law. The court found that the Amended Complaint alleged sufficient facts to plausibly support an inference that Defendants knew that Plaintiff intended to open a restaurant in the subject property, and that such an enterprise likely would involve leasing the restaurant space to a third-party. Thus, the Amended Complaint plausibly plead that Defendants acted with knowledge that their actions would likely interfere with Plaintiff’s economic advantage related to the restaurant space and that Defendants intended that result. Furthermore, the alleged fact that Plaintiff prevailed in the Superior Court action challenging the Stop Work Order plausibly supported a conclusion that Defendants acted without justification. Accordingly, the court held that the Amended Complaint sufficiently stated a claim for common law tortious interference with prospective economic advantage.

The court next noted that whether the issuance of the Stop Work Order, or the delays leading up to the order, were “authorized by law,” and whether each Defendant is entitled to immunity, were not issues that could be resolved on the allegations of the Amended Complaint alone. As such, Defendants’ Motion to Dismiss based on TCA immunity was denied without prejudice.

Finally, as nothing in the Amended Complaint suggested that controlling the decisions of municipal employees and municipal bodies was the type of act a private citizen or restaurant owner  usually performed, the Motion to Dismiss by Kix McNutley’s and Sea Isle Inn was granted in its entirety. As the Amended Complaint failed to allege facts and circumstances plausibly supporting a conclusion that particular Defendants had a meeting of the minds, Defendant Baldini’s Motion to Dismiss the New Jersey common law conspiracy claim was also granted.

8600 Lands, LLC v City of Sea Isle City, 2018 WL 1509088 (D. NJ 3/27/2018)

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