IN RE: PETITION FOR REFERENDUM TO REPEAL ORDINANCE 2354-12 OF THE TOWNSHIP OF WEST ORANGE v. THE TOWNSHIP OF WEST ORANGE

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

IN RE: PETITION FOR REFERENDUM

TO REPEAL ORDINANCE 2354-12 OF

THE TOWNSHIP OF WEST ORANGE, ESSEX

COUNTY, WINDALE SIMPSON, MARK

MEYEROWITZ, ALTHIA TWEITEN, MICHAEL

SCHARFSTEIN, and ROSARY MORELLI,

Plaintiffs-Appellants,

v.

THE TOWNSHIP OF WEST ORANGE, a

Municipal Corporation of the State

of New Jersey, ROBERT D. PARISI,

Mayor, and KAREN CARNEVALE, Clerk of

West Orange Township,

Defendants-Respondents,

and

PRISM GREEN ASSOCIATES IV, L.L.C., PRISM

GREEN URBAN RENEWAL ASSOCIATES, IV, L.L.C.,

AND GP 177 MAIN URBAN RENEWAL, L.L.C.,

Defendants/Intervenors-

Respondents.

____________________________________________

Argued May 28, 2013 Decided July 23, 2013

Before Judges Espinosa and Guadagno.

On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-3587-12.

George B. Campen argued the cause for appellants.

William W. Northgrave argued the cause for respondents (McManimon, Scotland & Baumann, L.L.C., attorneys; Jennifer L. Credidio and Mr. Northgrave, on the brief).

DeCotiis, Fitzpatrick & Cole, L.L.P., attorneys for respondents Prism Green Associates, IV, L.L.C., Prism Green Urban Renewal Associates, IV, L.L.C., and GP 177 Main Urban Renewal, L.L.C., join in the brief of respondents Township of West Orange,Robert D. Parisi,and Karen Carnevale.

PER CURIAM

Plaintiffs, Windale Simpson, Mark Meyerowicz, Althia Tweiten, Michael Scharfstein, and Rosary Morelli, appeal from the July 5, 2012 order of the Law Division dismissing their complaint in lieu of prerogative writs. Plaintiffs' complaint challenged the rejection of their petition that sought a referendum on an ordinance adopted by the Township of West Orange. Because plaintiffs' complaint challenging the ordinance was not timely filed and the ordinance was statutorily exempt from referendum, we affirm.

I.

While Thomas Alva Edison is known as the "Wizard of Menlo Park," many of his best-known inventions were discovered after he established a huge factory and laboratory complex in West Orange. For many years, the Township of West Orange has been attempting to redevelop parts of the Main Street area, including one of the former Edison factories, the Edison Battery Building. Andrew Jacobs, Re-Inventing Edison's Old Neighborhood, N.Y. Times, March 18, 2001.

In 2006, Prism Green Associates (Prism) was designated as redeveloper of the area. Prism planned to construct 650 condominiums, with the Battery Building featured as the centerpiece. Prism began work on the project, but stopped in 2008 due to lack of finances.

On March 20, 2012, the Township of West Orange adopted Ordinance 2354-12 (the Ordinance), providing for the issuance of $6.3 million in general improvement bonds. The Ordinance identified an area in downtown West Orange, the "Downtown Redevelopment Area," as an "area in need of development." The Edison Battery Building was identified in the Ordinance as a "historically significant" site within the Downtown Redevelopment Area.

On April 5, 2012, plaintiffs submitted a petition containing approximately 1500 signatures, requesting a referendum on the Ordinance. On April 16, 2012, Karen Carnevale, the West Orange Municipal Clerk rejected the petition as prohibited by N.J.S.A. 40:49-27 and N.J.S.A. 40A:12A-28. Carnevale also found several of the signatures invalid.

On April 23, 2012, plaintiffs filed an amended petition. Carnevale again rejected the petition as it was prohibited by statute and did not contain a sufficient number of valid signatures.

On May 14, 2012, plaintiffs filed a complaint in lieu of prerogative writs naming the Mayor, Clerk, and Township of West Orange as defendants. The complaint claimed the Ordinance was invalid as the Township failed to comply with the requirements of N.J.S.A. 40A:12A-37(d), by first presenting the Ordinance to the local finance board for approval. Plaintiffs also claimed that the Ordinance was not subject to N.J.S.A. 40A:12A-28 and the Township Clerk improperly rejected their petitions.

On May 22, 2012, a case management conference was held and the Law Division granted the application of Prism to intervene.

The parties appeared before Judge Thomas Vena for oral argument on June 22, 2012. Judge Vena dismissed plaintiffs' complaint finding that it was untimely pursuant to Rule 4:69-6, and that plaintiffs had not shown the Ordinance was invalid or subject to referendum.

On appeal, appellants raise the following points:

POINT I

since the law clearly provides that all ordinances involving bond issues under the lrhl1are to be submitted to the local finance board for review and approval first, an ordinance not submitted for review would necessarily be invalid or incomplete.

POINT II

since, even assuming ambiguity, the legislative history clearly indicates an intent for review by the local finance board before enactment of an ordinance under the lrhl, an ordinance not submitted for review would not be enforceable.

iii.

since the state statutes contemplate that the people should be able to challenge any law referendum, except as otherwise provided, the withdrawal of the right to referendum should be narrowly construed and cannot be applied without some other protection of the people's interest without violating basic fairness principles.

a. the lrhl should not be interpreted to contain a presumption of validity of redevelopment bond ordinances that are incomplete.

b. the protest was brought within the time period provided and was, therefore, timely.

c. the right of the people to challenge ordinances imposing indebtedness cannot be circumvented by recharacterizing them as redevelopment ordinances.

II.

"The 'power of referendum' is a check on the exercise of local legislative power, fostering citizen involvement in the political affairs of the community." In re Referendum Petition to Repeal Ordinance 04-75, 192 N.J. 446, 459 (2007). Referendum "is an exercise in democracy that profoundly affects the relationship between the citizens and their government by affording the people the last word if they choose to take a stand against the wisdom of an ordinance that the government has enacted." In re Petition for Referendum on City of Trenton Ordinance 09-02, 201 N.J. 349, 353 (2010). However, the Legislature has excluded particular ordinances from the purview of the referendum statute. Ordinance 04-75, supra, 192 N.J. at 466. One example of this preclusion can be found in the LRHL, N.J.S.A. 40A:12A-28, which provides:

No ordinance, amendment or revision of an ordinance, or resolution under this act shall be submitted to or adopted by initiative or referendum, notwithstanding any other law to the contrary.

Faced with this clear and unambiguous provision, plaintiffs argue the Ordinance was not a re-development bond ordinance, but rather a general obligation bond and therefore was subject to referendum. Plaintiffs argue the exemption contained in N.J.S.A. 40A:12A-28 should only apply to re-development bond ordinances when they do not create municipal indebtedness. In support of this argument, plaintiffs cite In re City of Margate City, 424 N.J. Super. 242 (App. Div. 2012). Margate City involved an ordinance authorizing renovations, additions and improvements to a municipal fire station. Id. at 243. The estimated cost of this project was $2.3 million. Id. at 243-44. The ordinance provided that the project would be funded by a $115,000 down payment from the City's capital improvement fund, and the balance would be paid from a bond issue in an aggregate amount not to exceed $2,185,000. A group of Margate City residents filed a petition for a referendum on the proposed bond based on N.J.S.A. 40:49-27, which establishes a right to a public referendum regarding any ordinance authorizing the incurring of an indebtedness. Ibid. The Margate City Clerk rejected the petition based on the mistaken belief that N.J.S.A. 40:49-27 (the Home Rule Act) did not apply to Margate City because the City is incorporated under the Walsh Act.2 Ibid. The trial court agreed that municipalities organized under the Walsh Act, were exempt from the section of the Home Rule Act which established the right of residents to petition for a referendum regarding any ordinance authorizing the incurring of an indebtedness. Id. at 244.

We reversed and directed Margate City to schedule a referendum regarding the ordinance, holding that a petition for a referendum regarding an ordinance authorizing the incurring of an indebtedness is governed by N.J.S.A. 40:49-27, and N.J.S.A. 40:74-5 did not abolish the right to petition for a referendum with respect to such an ordinance. Id. at 251-52.

We find Margate City distinguishable. The Margate City panel held "a court will construe a statute establishing a right to a public referendum to apply unless there is a 'clear and unequivocal' expression of a legislative intent "to carve out . . . a particular type of ordinance" from this part of the democratic process. Id. at 250-51 (quoting Trenton Ordinance 09-02, supra, 201 N.J. at 362). We find N.J.S.A. 40A:12A-28 presents just such a clear and unequivocal expression of legislative intent to exclude LRHL ordinances from citizen challenge through referendum.

Plaintiffs next claim Judge Vena erred in concluding that their challenge to the ordinance was untimely. Rule 4:69-6(a) provides that "[n]o action in lieu of prerogative writs shall be commenced later than 45 days after the accrual of the right to the review, hearing or relief claimed[.]" Rule 4:69-6(b) establishes a more limited period to bring certain challenges:

No action in lieu of prerogative writs shall be commenced . . . (11) to review any resolution or ordinance authorizing the issuance of notes or bonds of any municipality or other political subdivision, after 20 days from the date of the first publication thereof following final passage.

The Ordinance here was adopted by the Township Council on March 20, 2012, and advertised on March 22, 2012. Plaintiffs filed their complaint on May 14, 2012, fifty-three days after publication.

At oral argument, plaintiffs' counsel conceded the complaint was not timely filed as to the ordinance but maintained they were challenging the Township Clerk's "interpretation of this ordinance," and her conclusion "that it was a re-development bond entitled to protection because it wasn t vetted by the protecting agency."

We note the time limitations of Rule 4:69-6(b) are subject to enlargement under Rule 4:69-6(c) "where it is manifest that the interest of justice so requires." However, plaintiffs do not argue that Judge Vena should have enlarged the twenty day period, nor was he asked to do so. Instead, plaintiffs claim that their cause of action did not accrue until the Township Clerk rejected their second petition. Judge Vena found this argument "illogical," and we agree. As plaintiffs' challenge to the ordinance is time-barred, their challenge to the clerk's interpretation of the ordinance is moot. As Judge Vena concluded: "I do not believe that you can transform a challenge to a re-development bond ordinance by calling it a challenge within time of the determination of the clerk . . . ."

1 The Local Redevelopment and Housing Law (LRHL), N.J.S.A. 40A:12A-1 to -49.

2 The Walsh Act contains a separate referendum provision, N.J.S.A. 40:74-5, which excludes "ordinances authorizing an improvement or the incurring of an indebtedness" from the voter referendum provisions of that Act.