8 ERIE ST. JC LLC v. CITY OF JERSEY CITY

CourtDistrict Court, D. New Jersey
DecidedMay 21, 2020
Docket2:19-cv-09351
StatusUnknown

This text of 8 ERIE ST. JC LLC v. CITY OF JERSEY CITY (8 ERIE ST. JC LLC v. CITY OF JERSEY CITY) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
8 ERIE ST. JC LLC v. CITY OF JERSEY CITY, (D.N.J. 2020).

Opinion

Not for Publication

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY

8 ERIE ST. JC LLC,

Plaintiff, Civil Action No. 19-cv-9351

v. OPINION

CITY OF JERSEY CITY, et al.,

Defendants.

John Michael Vazquez, U.S.D.J. In this matter, Plaintiff 8 Erie St. JC LLC (“8 Erie”) alleges that two city ordinances violated its constitutional rights, state law, and private contractual rights. Presently pending before the Court are motions to dismiss filed by the following Defendants: (1) Jersey City Redevelopment Agency (“JCRA”), D.E. 13; (2) the City of Jersey City and the Jersey City Council (the “Council” and together, the “City”), D.E. 16; and (3) the Jersey City Planning Board (“JCPB”), D.E. 35. Plaintiff filed a brief in opposition to the motions, D.E. 44, to which Defendants replied, D.E. 47, 48, 49.1 The Court reviewed the parties’ submissions and decides the motions without oral argument pursuant to Fed. R. Civ. P. 78(b) and L. Civ. R. 78.1(b). For the reasons set forth below, Defendants’ motions are GRANTED in part and DENIED in part.

1 In this Opinion, JCRA’s brief in support of its motion to dismiss (D.E. 13-1) will be referred to as “JCRA Br.”; the City’s brief in support of its motion to dismiss (D.E. 16-1) will be referred to as “City Br.”; JCPB’s brief in support of its motion to dismiss (D.E. 35-3) will be referred to as “JCPB Br.”; Plaintiff’s brief in opposition (D.E. 44) will be referred to as “Plf. Opp.”; JCRA’s reply brief (D.E. 49) will be referred to as “JCRA Reply”; the City’s reply brief (D.E. 47) will be referred to as “City Reply”; and JCPB’s reply brief (D.E. 48) will be referred to as “JCPB Reply”. I. BACKGROUND2 AND PROCEDURAL HISTORY In 2011, the Council, by ordinance, adopted a redevelopment plan for a building located at 8 Erie Street in downtown Jersey City. Pursuant to the plan, the JCRA issued a request for proposals for redevelopment of the building. Compl. ¶ 17. The plan “set forth no restrictions,

other than those contained in the local zoning ordinances.” Id. ¶ 18. The JCRA awarded 8 Erie the winning proposal in January 2012, and 8 Erie subsequently entered into an agreement (the “Redevelopment Agreement”) with the JCRA on July 20, 2012. Id. ¶¶ 19-20. Through the Redevelopment Agreement, Plaintiff purchased the property and agreed to convert a historic three- story building into residential units on the second and third floors, and commercial space on the ground floor and basement. Id. ¶ 22. Over the next three years, Plaintiff spent over $7 million to redevelop the property; on June 19, 2015, Jersey City issued Plaintiff a certificate of occupancy for the building. Id. ¶¶ 24, 28. While Plaintiff was redeveloping the building, the City passed two ordinances that limited the type of commercial businesses that could lease space in certain areas of Jersey City (the

“Challenged Ordinances”). The Challenged Ordinances, City Ordinances 15.052 and 15.053, were passed by the Council on May 13, 2015. Id. ¶¶ 42, 56. Ordinance 15.052 created a definition for “formula business,” which, generally and subject to certain exceptions, is a commercial business with at least two standardized characteristics and that has ten or more locations within 300 miles of Jersey City. Id. ¶ 40. Ordinance 15.053 amended certain redevelopment plans, including the

2 The factual background is taken from Plaintiff’s Complaint. D.E. 1. When reviewing a Rule 12(b)(6) motion to dismiss, “courts generally consider only the allegations contained in the complaint, exhibits attached to the complaint and matters of public record.” Pension Ben. Guar. Corp. v. White Consol. Indus., Inc., 998 F.2d 1192, 1196 (3d Cir. 1993). plan for 8 Erie Street, by limiting formula business establishments “to a maximum of 30% of ground floor leasable commercial area.” Id. ¶ 49. Plaintiff alleges Jersey City’s Mayor, Steven M. Fulop, forced the Challenged Ordinances through the Council to bolster political support for his gubernatorial campaign. Id. ¶¶ 29-32.

Specifically, Plaintiff pleads that the JCPB made its recommendations as to the Challenged Ordinances “solely at the insistence of the Mayor” and did not conduct any meaningful review before recommending the Ordinances to the Council. Id. ¶ 34. Moreover, the Council, which consisted of a majority of “Fulop-loyalists,” “rubber-stamped” the JCPB’s recommendations to adopt the Challenged Ordinances. Id. ¶¶ 2, 42 Plaintiff also alleges that the restrictions were structured to “focus on soft targets” to avoid public backlash. These soft targets, like Plaintiff, were “least likely to bear the cost of challenging the legality of the ordinances.” Id. ¶ 3. Plaintiff also contends that Defendants have selectively applied Ordinance 15.053, specifically pointing to a 2017 donut shop opening. Id. ¶¶ 62-65. After the Challenged Ordinances were passed, Plaintiff purportedly obtained an

“economically advantageous proposal” from a formula business to lease ground floor commercial space in the building. The formula business, however, was prohibited from leasing the space because of the Challenged Ordinances. Id. ¶¶ 67-68. The Challenged Ordinances also decreased the value of Plaintiff’s property. Id. ¶ 71. Plaintiff brought suit on April 5, 2019. D.E. 1. Plaintiff alleges that the Challenged Ordinances violated the Commerce Clause and the Equal Protection Clause of the Fourteenth Amendment. Plaintiff’s Complaint also asserts multiple state law claims. Plaintiff initially sought injunctive relief declaring that the Challenged Ordinances are unconstitutional, in addition to monetary relief from the lost tenant and decreased property value. Id. After Plaintiff filed its Complaint, however, the Challenged Ordinances were repealed. Although Plaintiff no longer seeks injunctive relief, it still seeks monetary damages through this action. D.E. 21. II. LEGAL STANDARD Defendants seek to dismiss the Complaint pursuant to Federal Rule of Civil Procedure

12(b)(6). Rule 12(b)(6) permits a court to dismiss a complaint that fails “to state a claim upon which relief can be granted[.]” For a complaint to survive dismissal under Rule 12(b)(6), it must contain sufficient factual matter to state a claim that is plausible on its face. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible “when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. Further, a plaintiff must “allege sufficient facts to raise a reasonable expectation that discovery will uncover proof of her claims.” Connelly v. Lane Const. Corp., 809 F.3d 780, 789 (3d Cir. 2016). In evaluating the sufficiency of a complaint, district courts must separate the factual and legal elements. Fowler v. UPMC Shadyside, 578 F.3d 203, 210-211 (3d Cir. 2009). Restatements of

the elements of a claim are legal conclusions, and therefore, are not entitled to a presumption of truth. Burtch v. Milberg Factors, Inc., 662 F.3d 212, 224 (3d Cir. 2011). The Court, however, “must accept all of the complaint’s well-pleaded facts as true.” Fowler, 578 F.3d at 210. III. ANALYSIS 1.

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8 ERIE ST. JC LLC v. CITY OF JERSEY CITY, Counsel Stack Legal Research, https://law.counselstack.com/opinion/8-erie-st-jc-llc-v-city-of-jersey-city-njd-2020.