Liberty & Prosperity 1776 Inc. v. City of Atlantic City

CourtNew Jersey Superior Court Appellate Division
DecidedOctober 21, 2024
DocketA-0420-22
StatusUnpublished

This text of Liberty & Prosperity 1776 Inc. v. City of Atlantic City (Liberty & Prosperity 1776 Inc. v. City of Atlantic City) is published on Counsel Stack Legal Research, covering New Jersey Superior Court Appellate Division primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Liberty & Prosperity 1776 Inc. v. City of Atlantic City, (N.J. Ct. App. 2024).

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-0420-22

LIBERTY & PROSPERITY 1776 INC., a non-profit corporation of New Jersey, JAMES MCLEAN, a resident and taxpayer of Atlantic City and Atlantic County, New Jersey, KAREN BOREK and JANIS HETRICK, residents and taxpayers of Atlantic County, New Jersey,

Plaintiffs,

v.

CITY OF ATLANTIC CITY, a municipality of New Jersey located within Atlantic County, MARTY SMALL, SR., Mayor of Atlantic City, JACQUELYN SUAREZ, Director of the Division of Local Government Services, of the Department of Community Affairs of the State of New Jersey, THE LOCAL FINANCE BOARD OF THE STATE OF NEW JERSEY and THE STATE OF NEW JERSEY,

Defendants. _____________________________ COUNTY OF ATLANTIC, a body politic of the State of New Jersey, by and through DENNIS LEVINSON, the County Executive, THE CITY OF SOMERS POINT, a body politic of the State of New Jersey located within the County of Atlantic, THE TOWNSHIP OF HAMILTON, a body politic of the State of New Jersey located within the County of Atlantic, THE TOWNSHIP OF EGG HARBOR, a body politic of the State of New Jersey located within the County of Atlantic, THE CITY OF ABSECON, a body politic of the State of New Jersey located within the County of Atlantic, THE CITY OF VENTNOR, a body politic of the State of New Jersey located within the County of Atlantic, and the TOWNSHIP OF WEYMOUTH, a body politic of the State of New Jersey located within the County of Atlantic,

Plaintiffs-Respondents,

THE STATE OF NEW JERSEY, PHILIP D. MURPHY, in his official capacity as the Governor of the State of New Jersey, CITY OF ATLANTIC CITY, a municipal body of Atlantic County, MARTY SMALL, SR., Mayor of

A-0420-22 2 Atlantic City, in his official capacity, JACQUELYN SUAREZ, Director of the Division of Local Government Services of the Department of Community Affairs, LOCAL FINANCE BOARD OF THE STATE OF NEW JERSEY, a division of the New Jersey Department of Community Affairs, JEFFREY S. CHIESA, in his official capacity as Emergency Manager of the City of Atlantic City and MATTHEW J. PLATKIN, in his official capacity as the Attorney General of the State of New Jersey,

Defendants-Appellants. _____________________________

Argued March 20, 2024 – Decided October 21, 2024

Before Judges Vernoia, Gummer, and Walcott- Henderson.

On appeal from the Superior Court of New Jersey, Law Division, Atlantic County, Docket Nos. L-0777-16 and L-1254-17.

Tim Sheehan, Deputy Attorney General, argued the cause for appellants (Matthew J. Platkin, Attorney General, and Chiesa Shahinian & Giantomasi PC, attorneys; Michael L. Zuckerman, Deputy Solicitor General, Kavin K. Mistry, Assistant Attorney General, Abiola G. Miles, Deputy Attorney General, Tim Sheehan, Deputy Attorney General, Victoria G. Nilsson, Deputy Attorney General, of counsel and on

A-0420-22 3 the briefs; John Lloyd, Ronald L. Israel, and Brian P. O'Neill, on the briefs).

Ronald J. Riccio argued the cause for respondents (McElroy Deutsch, Mulvaney & Carpenter, LLP, attorneys; Ronald J. Riccio and Eliott Berman (McElroy Deutsch, Mulvaney & Carpenter, LLP) of the New York bar, admitted pro hac vice, on the brief).

The opinion of the court was delivered by

GUMMER, J.A.D.

This case involves the purported settlement of litigation challenging the

constitutionality of the Casino Property Tax Stabilization Act (CPTSA or Act),

N.J.S.A. 52:27BBBB-18 to -28. The parties memorialized that settlement in a

2018 consent order. The Legislature amended the Act in 2021. L. 2021, c. 315

(2021 amendment or Amendment). By way of an order to show cause,

respondents sought to enjoin the enactment of the Amendment, contending it

violated the 2018 consent order. The trial court did not issue an injunction but

instead entered separate orders, finding the Amendment was a violation of the

consent order, denying a reconsideration motion, requiring certain payments be

made to Atlantic County, and awarding plaintiffs attorneys' fees. The State and

Governor Philip D. Murphy appeal from each of those orders. Because a

disputed term in the parties' settlement agreement is ambiguous and because the

trial court failed to resolve the ambiguity by conducting a plenary hearing, we

A-0420-22 4 vacate the orders and remand the case for proceedings consistent with this

opinion.

I.

In 2016, the Legislature enacted the CPTSA, which established a ten-year

"payment in lieu of taxes" (PILOT) program for casino gaming properties

located in Atlantic City. The CPTSA was proposed in response to Atlantic City's

"dire situation" and "fiscal challenges," which arose in part from casino closures

and the "large property tax refunds" Atlantic City owed to the casinos that had

successfully appealed their property tax assessments. Sponsor's Statement to S.

1715 (Feb. 29, 2016); see also Marina Dist. Dev. Co. v. City of Atl. City, 27

N.J. Tax 469, 476-77 (Tax 2013), aff'd o.b., 28 N.J. Tax 568 (App. Div. 2015).

The Legislature declared the Act served a public purpose "because Atlantic City

w[ould] be able to depend on a certain level of revenue from casino gaming

properties each year, making the local property tax rate and need for State aid

less volatile." N.J.S.A. 52:27BBBB-19(m).

The casinos' "gross gaming revenue" (GGR) was one of the criteria used

to calculate the annual PILOT payments. N.J.S.A. 52:27BBBB-20(c)(4). The

Legislature in the CPTSA defined GGR as "the total amount of revenue raised

through casino gaming from all of the casino gaming properties located in

A-0420-22 5 Atlantic City," as determined by the Division of Gaming Enforcement. N.J.S.A.

52:27BBBB-20(a) (2016). In 2018, the Legislature passed a law that authorized

sports wagering at casinos and racetracks, L. 2018, c. 33. See also N.J.S.A.

5:12A-10 to -19 (the Sports Wagering Act). With the passage of that law, the

Legislature also amended the definition of GGR to include "revenue from sports

pool operations," effective June 11, 2018. L. 2018, c. 33, § 14; see also N.J.S.A.

52:27BBBB-20(a) (2018).

In 2016, Liberty & Prosperity 1776 Inc. (L&P) and three residents and

taxpayers of Atlantic County filed suit against the City of Atlantic City, its

mayor, the State of New Jersey, the Local Finance Board of the State of New

Jersey, and the director of the Division of Local Government Services of the

State's Department of Community Affairs, challenging the legality of the

CPTSA. The parties did not include a copy of that complaint in the appellate

record. We take that description from the memorandum of decision entered by

the trial court with its July 29, 2022 order.

On June 19, 2017, Atlantic County and five municipalities located in

Atlantic County filed a complaint (the County action) against the State and

others seeking a judgment declaring the Act null, void, and of no force or effect

and unconstitutional under the Uniformity Clause set forth in Article VIII,

A-0420-22 6 Section 1, Paragraph 1 of the New Jersey Constitution and under Article IV,

Section VII, Paragraph 9(6) of the Constitution. They also sought to enjoin

defendants from implementing or enforcing the Act.

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Liberty & Prosperity 1776 Inc. v. City of Atlantic City, Counsel Stack Legal Research, https://law.counselstack.com/opinion/liberty-prosperity-1776-inc-v-city-of-atlantic-city-njsuperctappdiv-2024.