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Matlack v. Board of Chosen Freeholders

ELR Citation: 13 ELR 20705
Nos. Nos. L-67582-81 P.W., -69372-81 P.W., 466 A.2d 83/(N.J. Super. Ct. Law Div., 12/06/1982)

The court holds that Burlington County has authority to acquire transferable Pineland Development Credits (PDCs) in the New Jersey Pinelands incidental to the acquisition of conservation easements, but that the county acted improperly in delegating unfettered PDC acquisition powers to an Exchange Board. First, the court hold that plaintiffs, as county residents and taxpayers, have standing to contest the actions of the County Board of Chosen Freeholders and the Exchange Board. Plaintiff Matlack does not have standing under federal and New Jersey securities laws to assert that the PDC transfer system violates the securities laws. Plaintiff Story has standing to challenge the reasonableness of the purchase price of the PDCs, but not to assert that the price denies purchasers due process and just compensation.

The court holds that the bond ordinance grants the county the power to buy and sell PDCs derivative from the conservation easements that it acquires, but not to purchase PDCs independent of conservation easements. The court finds that the Board of Chosen Freeholders has authority to create the Exchange Board and has not acted ultra vires by violating the securities laws. The court finds that (1) PDCs are not securities under the Securities Act of 1933, (2) it does not have jurisdiction to determine violations under the Securities Exchange Act of 1934, and (3) PDCs are exempt from state securities laws because they were created by the Pinelands Commission, an agency of the state. However, the Board did act ultra vires in delegating to the Exchange Board power to buy and sell without any rules of conduct to govern its operation. The court rejects plaintiff's assertion that the state Pinelands Commission has preempted the county from dealing in PDCs, but it does find that the county resolution creating the Exchange Board is invalid to the extent that it permits the acquisition of conservation easements outside of the county. Finally, the court holds that the reasonableness of the $10,000 purchase price for PDCs, set by the Board of Chosen Freeholders, cannot be determined as a matter of law.

Counsel for Plaintiffs
Joseph W. Marshall III, Myrna P. Field
Mid-Atlantic Legal Foundation, 1521 Locust St., Philadelphia PA 19102
(215) 545-1913

John W. Beasley Jr.
O'Byrne & Beasley
33 Grant St., Mt. Holly NJ 08060
(609) 261-4300

Eileen B. White
Pacific Legal Foundation, 1990 M St. NW, Washington DC 20036
(202) 466-2686

Thomas E. Hookano
Pacific Legal Foundation, 455 Capitol Mall, Sacramento CA 95814
(916) 444-0154

Counsel for Defendants
Anton Muschal
Burlington Cty. Legal Dep't, Rancocas Rd., Mt. Holly NJ 08060
(609) 261-5001

M. Jefferson Davis
Reiners & Davis
Suite 102, 25 Chestnut St., Haddonfield NJ 08033
(609) 428-7473

Counsel for Defendants-Intervenors
James T.B. Tripp
Environmental Defense Fund, Inc.
444 Park Ave. S., New York NY 10016
(212) 686-4191