Soon to be argued in the New Jersey Supreme Court: a little-noted case with profound implications for efforts to restore and protect the Jersey Shore in the aftermath of Hurricane Sandy and before the next major storm hits.
The case is Borough of Harvey Cedars v. Karan. You may not have heard of it; few have.
But if you’re among the millions of New Jerseyans living or working on the Jersey Shore, how the high court decides this case could have big impact on you — and on the state’s economy, which depends heavily on those Shore vacation dollars.
The justices are being asked to clarify a nettlesome issue at the crossroads of public funding for shore protection projects: dunes.
Everyone agrees that dunes are needed to protect life and property. But what about the rights of the owners of private property who want to be fully compensated for losing ocean views when these engineered dunes are bulldozed into place?
The facts in this case are not disputed, but what is up for grabs is the rule of law the justices will apply. Will they feel bound by a rigid 1889 precedent, like the lower courts, or will they try to modernize a doctrine that’s slowing shore protection efforts, and eating up scarce shore restoration funds?
The Karans own one of those enviable beachfront houses in a gracious shore community, Harvey Cedars. When the Army Corps of Engineers asked them for an easement on the beachfront side of their land to build a dune to replace what previous storms had washed away, the Karans refused.
If you want it, they replied, you’ll have to pay for it.
(Aside: the governor has lately threatened to “call out” property owners he has labeled as “selfish,” and who he accuses of standing in the way of the state’s plan to establish protective dunes along the coast “because their view of the ocean is blocked.”)
As a result of the Karan’s refusal, Harvey Cedars had to condemn the easement — pay just compensation for it — so the Army Corps could proceed to build a continuous line of artificial dunes along the seashore.
Here’s where it gets complicated for the justices.
There’s no doubt that governments — municipal, state, and federal — may take private property for “public use,” provided they pay the property owner “just compensation.”
This is the traditional power of eminent domain, useful for public projects like roads and schools and — yes — shore protection initiatives like beach replenishment and dune creation that need to be located, at least in part, on the private property of beachfront homes, like the Karan’s.
(Full disclosure: The writer is the attorney for the New Jersey Association for Floodplain Management, which has petitioned the State Supreme Court to allow it to submit a friend of the court brief in the Karan case.)
Why are dunes so important? When storms hit the coast, the dunes absorb the brunt of hurricane-force wind and rain, shielding the structures built behind them. In effect, the dunes are sacrificed to protect the houses that would otherwise be destroyed, which is what happened during Sandy. The superstorm caused an estimated $3.8 billion in damages to New Jersey homes and $1.87 billion in commercial property losses.
The problem facing the courts is how to determine the “just compensation” that must be paid property owners for the privilege of building or restoring the dunes that protect not only the first houses behind the dunes — like the Karan’s — but also properties located further inland.
No one doubts that the Karans are entitled to just compensation for the value of the land taken for the dune project. This is measured in lost property values when the house no longer boasts an expansive ocean view but faces a solid wall of sand. Not a pretty picture.
What’s disputed — and the Supreme Court will decide — is whether the value conferred by the dune in protecting the Karan’s house against future destruction should be considered as a partial offset for the compensation paid for the easement.
Say the Karan’s house was worth $2 million when it had a beautiful view of the ocean. With a dune blocking the view, it is now worth only $1.5 million.
Based on that scenario, the government owes the Karans $500,000. Multiply that by the hundreds if not thousands of property owners who may demand similar payment for lost views, and you can see why the case is so important — and why the governor is so agitated.
If the government — municipal, state, or federal — must pay every property owner along the shore for lost ocean views, either the cost of coastal protection will skyrocket or a lot less of the coast will be protected from the next storms, which are growing in frequency and intensity as a result of climate change.
Common sense would dictate that any award for just compensation would reflect the value of the protection offered by that same view-blocking dune. Isn’t it better to have an intact house after the next storm, even one with an obstructed view of the surf, than no house at all.
Not according to two lower courts. They reasoned that the dunes provide what courts call “general benefits” to the community, not “special benefits” limited to the Karans. Therefore, no offset is permitted.
Relying primarily on an obscure 1889 case, the courts held that the jury in setting just compensation was not even allowed to hear evidence of the protection afforded the Karans by the dunes.
But that dune was paid for with public tax dollars, and because of it the Karans escaped largely unscathed from Sandy. In contrast, Sandy wreaked havoc in dune-free communities like Ortley Beach — where the dunes were bulldozed to make way for a boardwalk — ripping the first row of houses off their foundations.
In other words, without sand dunes, whether natural or engineered, the first rows of houses facing the ocean act like dunes, taking the brunt of wave and wind, dissipating the storm’s energy, and often being washed away.
In short, there is a “special benefit” to the first row of houses, such as the Karan’s. The dunes spare those houses the full fury of a hurricane.
For this reason, the high court could well decide that even with the rigid binary categories handed down from an 1889 court ruling — special vs. general benefits — the Karan’s house and other first-row dwellings do enjoy special benefits.
Better yet, the justices could use this case to announce a new rule of law on these “partial-taking” cases. It seems only fair that when the government shells out millions of dollars to protect life and property, that evidence of the benefits directly conferred on property owners who lose ocean views should at least be heard by the jury when setting the value of the taking.
After all, just compensation must do justice both to the property owner and to the public paying to protect that same property owner.