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High Court Finds in Favor of Dunes, Not Beach-Front Views

Supreme Court reverses lower court decision, calling compensation awarded to homeowners for obstructed view 'a windfall at public's expense'

In an eagerly awaited decision, the New Jersey Supreme Court yesterday issued a ruling that may make it easier for local governments to tackle dune and beach restoration projects, even if it means partially obscuring ocean-front views from homeowners.

The unanimous decision -- with two justices abstaining -- overturned a lower court decision to award a couple from Harvey Cedars $375,000 in compensation after the borough built a 22-foot high dune that obstructed beach and ocean views from their three-story, $1.9 million home.

The court verdict is deemed essential to the state’s efforts to rebuild the Jersey Shore and make it more resilient in the case of future extreme weather, according to some experts. A massive dune building process is viewed as the cornerstone of that undertaking. So much so, that Gov. Chris Christie has threatened to name homeowners who fail to grant local governments needed easements to allow the projects to move forward.

Perhaps more importantly, if governments had to pay each homeowner similar compensation, it would undermine efforts to build a network of dunes and beach protection projects along the coast. If local governments had to pony up, it would likely make an already expensive proposition, one funded entirely by taxpayers, too costly to move continue.

In the aftermath of the storm, widespread consensus emerged that communities with established dune systems fared far better than towns without such established natural barriers. The high court ruling agreed with that view.

“Without the dune, the probability of serious damage or destruction to the Karan’s property increased dramatically over a thirty-year period,’’ the court said in its 49-page decision. Over that time, the chance of a storm “totally’’ demolishing their frontline home was 56 percent, the court noted..

The case decided by the justices wrestled with a long history of legal rulings by both federal and state courts affirming property owners are entitled to just compensation if there is a partial taking of their land, such as the easement taken by Harvey Cedars on the Karans’ land, which covered one-quarter of their property.

The court found no fault with those rulings dealing with just compensation.

In this case, however, the issue boiled down to a distinction between a “general’’ benefit and a “special’’ benefit, a difference that the justices in their decision conceded is difficult “even for trained legal minds.’’

In its ruling, the court said the lower courts erred in not allowing Harvey Cedars to introduce evidence to consider the special benefits of a $25 million beach replenishment project, a step that also would increase the value of the Karan's property, so it remanded the issue to a trial court. Harvey Cedars contributed $1 million to that project; the state another $7.5 million; and the federal government the balance.

“The Karans are entitled to just compensation, a reasonable calculation of any decrease in the fair market value of their property after the taking. They are not entitled to more, and certainly not a windfall at the public’s expense,’’ the court ruled.

The ruling elicited mixed reactions from participants in the case.

“We are disappointed, but not surprised by the decision of the court,’’ said Peter Wegener, an attorney who represented the Karans in the dispute, noting questions raised by justices in oral arguments did not bode well for a favorable decision.

“It’s going to make it harder for any property owner to get fair compensation from a taking,’’ he said, adding the court undermined 150 years of juridical prudence on the subject of takings.

In his arguments before the court, Wegener suggested that the Karans were paying twice for the beach projects: once through their tax dollars being used to fund the projects, and again when they see their property value plummet because their views are obstructed.

David Apy, an attorney who represented the Jersey Shore Partnership, a group aimed at protecting coastal regions, disagreed.

He said the decision has two practical impacts, the first being that now the protective value of dune and beach restoration projects will be considered when a partial taking is proposed by a community. Also, it may result in many more easement cases being settled without litigation, Apy said.

"This is a significant decision and of great assistance to our taxpayers,'' said East Windsor Township Mayor Janice Mironov, who is also the president of the New Jersey State League of Municipalities.

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