New Jersey Sports & Exposition Authority v. McCrane

(292 A.2d 545, 61 N.J. 1) (N.J. May 12, 1972)

In a concurring and dissenting opinion later adopted by the majority in Borough of Neptune City v. Borough of Avon-by-the-Sea, 2 ELR 20519, Justice Hall calls for reinvigoration of the Public Trust Doctrine in New Jersey in order to conserve remaining tide-flowed lands. He concludes that it is impossible to determine whether the Public Trust Doctrine has been violated by the New Jersey Sports and Exposition Authority Law, which authorizes the construction of a sports complex on tide-flowed lands, until the precise use of the land is known. The majority upholds the constitutionality of the statute, but remands the case to allow the Sports Authority to comply with the section of the statute requiring consultation with the Meadowlands Commission and the Department of Environmental Protection on ecological and environmental matters. See also Comment, Public Rights and the Nation's Shoreline, 2 ELR 10184 (September 1972).

Counsel for Plaintiffs
Robert N. Wilentz
Wilentz, Goldman & Spitzer
252 Madison Avenue
Perth Amboy, New Jersey 08862

Counsel for Defendants
T. Gerard Wharton
Wharton, Steward & Davis
Somerset Trust Co. Bldg.
50 W. Main Street
Somerville, New Jersey 08876

None

[3 ELR 20598]

Hall, J. (concurring in part and dissenting in part)

These consolidated actions sought a declaratory judgment as to the constitutionality of the New Jersey Sports and Exposition Authority law, L.1971, c. 137, N.J.S.A. 5:10-1 et seq., creating and empowering an agency ("Authority") to construct and operate what may be referred to for present purposes as a sports complex on a 750 acre enclave within the 21,000 acres of salt water swamps, meadows and marshes in the lower Hackensack River basin. Reclamation and development of these meadowlands were earlier committed to an autonomous regional agency, the Hackensack Meadowlands Development Commission ("Agency"), by L.1968, c. 404, N.J.S.A. 13:17-1 et seq. The Sports Authority law largely removes this enclave from the jurisdiction of the Agency and grants very broad powers to the Authority, but at the same time requires considerable interrelation with the Agency. The 750 acre site has been selected by the Sports Authority (presumably with the concurrence of the Agency as the Authority law demands, L.1971, c. 137, § 5, subd. x); it comprises the area in the Borough of East Rutherford, Bergen County, bounded by State Highway Route 3, Berry's Creek, Paterson Plank Road and the western spur of the New Jersey Turnpike. Some of the included area constitutes state-owned tide-land (the land flowed by the tides below the mean high water line); some represents non-tide flowed upland presently claimed by private persons.

The numerous constitutional questions raised are complex and diverse, advanced by many parties having quite differing interests. Each is dealt with in the trial court opinion.119 N.J. Super. 457, 292 A.2d 580 (Law Div.1971). All are essentially directed to the validity of the statute on its face, i.e., the scheme, as distinct from the legality of various possible forms of physical implementation. Certain facts, set forth in the trial court opinion, were, however, stipulated, for the purpose, generally speaking, of some concrete enlightenment with respect to the questions raised, including information concerning the immediate plans, of the Authority. The stipulation shows that the Authority entered into a lease in August 1971 with the New York Giants professional football team for the long term rental of a large stadium to be constructed by the Authority primarily for the use of that team. Construction is required to be commenced at a very early date. Implicit also are the issuance and sale by the Authority of a very large amount of bonds to finance that construction as well as the early erection of a state-owned and operated racetrack (tax free except for 1/2 of 1% of the pari-mutuel "handle"), since the net profit from the track is the principal source to meet debt service and to financially support future projects of the Authority.

The trial court rejected all challenges to the Authority act as legally insufficient and the judgment declared it to be constitutional and valid. Procedurally, the cases were decided by grant of the Authority's motion for summary judgment, although perhaps the disposition could have as well been treated as a non-jury trial on stipulated facts. The court in effect decided that evidence beyond the facts stipulated was legally irrelevant to the constitutional challenges advanced, including certain claims based upon ecological and environmental considerations.

The majority opinion of this court affirms the judgment of constitutionality substantially for the reasons given by the trial judge and without mention of most of the questions raised. I cannot accept the majority's added views on the covenants in the act (L.1971, c. 137, §§ 7 and 15) against future legislative action, during the life of the bonds, relative to the continuance of racing and pari-mutual betting, the number of racing days guaranteed to this track and the inviolability of its revenues for use by the Authority.

The opinion of the Chief Justice joins in the majority opinion (and so concurs with the trial judge) except that he finds that the statutory covenants against future legislative action just referred to do violate the debt provision of the Constitution, but are severable. He therefore would, I assume, modify the judgment to so specify. The difference in effect would be that, pursuant to Holster v. Board of Trustees of the Passaic County College, 59 N.J. 60, 279 A.2d 798 (1971), bondholders would not be protected against such subsequent legislative action and diminution of the Authority's revenues by reason thereof.

I thoroughly agree with the Chief Justice as to the effect of the debt and other constitutional provisions and principles as set forth in Parts II, III and IV of his opinion. I have some differences, however, with respect to other matters dealt with in his, the majority and the trial court opinions, which I feel ought to be mentioned by reason of the importance of the subject matter. In addition, I believe it advisable to state what I conceive not to be decided in this case. Because of the pressure of time and the length of the three opinions to date, my views will be stated in quite summary fashion.

At the outset, although the question is not referred to in any of the other opinions, it is my view that the Sports Authority law is so related to the Meadowlands Development Commission act and the Authority's operations are so interwoven with the Agency's functions that the former law cannot stand in any event unless the latter is constitutional. The validity of the latter statute is under challenge in another appeal pending before us. Decision in that case has been deferred by reason of recently proposed amendments to its vital intermunicipal tax-sharing provisions now before the Legislature.

As to public purpose. The Authority is empowered to construct and operate facilities for "spectator sporting events," including a racetrack, stadiums and related facilities, for the recreation of the public, as well as facilities for "trade shows and other expositions in order to promote industry and development in the State and provide a forum for public events." L.1971, c. 137, § 2. All opinions to date agree that such activities constitute a "public purpose" within the requirement that state revenues may only be used for projects encompassed within that concept. Although the Legislature has wide discretion in the area, the question is still one for the [3 ELR 20599] judiciary under our system of checks and balances. The record discloses the only projects proposed to date to be a state-operated racetrack and a football stadium for lease to a profit-designed enterprise. The present general holding should not be read to grant for all time carte blanche to any facility or activity the Authority may decide to construct or operate.

The majority opinion treats a racetrack as a permissible governmental activity because it supplies "recreation for the people." Realistically, racetracks of the kind planned here exist only to enable people to go to them to wager on horse races which they can observe in the flesh. They are tolerated in this state, as the history of our gambling provisions shows, only so that a heavy tax on such wagers may be exacted for purposes of government. I doubt that they can be classed as recreational in the sense that state parks or even professional football stadiums are. I suppose, however, that state construction and operation of tracks can validly be classified as for a public purpose because of the revenue feature — and here the Authority will also receive for its purposes the profits which would accrue to an owner if the track were private.

Modern cases appear to unanimously uphold governmental construction of sports arenas as for a public purpose, even when in large part used by profit-making professional entrepreneurs. Such operators should, however, be required to pay full market value for the lease, fixed at arm's length, which may well require disclosure of the proposed lessee's financial records. At the same time, the use so granted should not be so exclusive as to prevent fair availability of the stadium for other athletic uses and public functions to which it is adapted. Otherwise, the Authority is subsidizing a private profit-making venture at the expense of the public — in effect making a donation of public resources to a private corporation — and the purpose is no longer a public one, the trial court's peroration on professional sports notwithstanding. See 1947 Const., Art. VIII, § III, par. 3. Such was the sound view of the Massachusetts Supreme Judicial Court in Opinion of the Justices, 356 Mass. 775, 250 N.E.2d 547, 558-560 (1969). The lease with the Giants football team is not before us. The point I make is, however, that the majority opinion should not be thought to approve it.

As to a racetrack referendum. The general racing law, N.J.S.A. 5:5-39.1, permits a racetrack to be established only upon the affirmative approval at a general election of the voters of the county and the municipality in which it is proposed to be located. L.1971, c. 137, § 7, subd. d specifically provides that no referendum shall be required for this track. Part I of the opinion of the Chief Justice correctly points out that if this exception were contained in the racing act, it would be invalid as denying the residents here concerned equality of treatment. But he concludes that the Legislature which passed chapter 137 was not bound by the prior decision of the one which adopted the general racing law and so the later provision controls and is valid. This result has to be reached on the thesis that the no-referendum provision of chapter 137 as to this state-owned track impliedly repealed the referendum requirements of the racing law as to all future privately owned tracts. I find myself unable to agree with these conclusions. Implied repealers are not favored; such an intention must be free from reasonable doubt. It is inconceivable that the Legislature intended any such result, but rather only that this track should be treated specially and differently. In such a situation the special statute will be considered only an exception to the general statute. See State v. Hotel Bar Foods, 18 N.J. 115, 128, 112 A.2d 726 (1955). And the later statute creating the exception must be a constitutional enactment in order validly to restrict the earlier general act. See Washington National Insurance Co. v. Board of Review, 1 N.J. 545, 557, 64 A.2d 443 (1949). Here neither statute in itself is unconstitutional but together they constitute an unconstitutional scheme, denying equal protection to the residents of Bergen County and East Rutherford. The invalidity results from the later act and I would therefore hold that Section 7, subd. d of chapter 137 is unconstitutional in doing away with the referendum requirement, and I would modify the declaratory judgment to so state. In my view, however, the entire chapter is not thereby rendered invalid, since I believe that the Legislature would intend the balance of the act to remain even though a favorable referendum vote would be required to make it effective.

As to the debt and related provisions of the Constitution. As earlier indicated, I completely concur with the Chief Justice that the interplay of the racing provisions and the debt provision of the Constitution requires the holding that the debt provision is violated by the covenants in chapter 137 against future legislative action during the life of the bonds in the respects previously enumerated, but that Authority bonds may be validly issue without the covenants. (See Holster, supra, 59 N.J. 60, 279 A.2d 798). I would add only this. So holding would not mean that the Legislature may not make these guarantees, but only that, in accordance with the debt provision, the voters of the state must approve such long term commitments to make them binding on future Legislatures — a power expressly reserved to the people. There are sound policy reasons for the requirement. Sources of revenue to pay interest and principal must be specified and dedicated for the life of the obligations. Such sources, to the extent required, are thus thereafter unavailable for use for other governmental purposes. State revenue sources are not inexhaustible and, if too many of them are appropriated in futuro to pay too many bond issues, remaining revenue sources may not be adequate for other necessary governmental functions. And there is the question of priorities with respect to the many capital needs of this state; some may be thought of as much more important than others. The debt provision envisages that these are matters which the people should decide before a large, long term capital project is undertaken, for the commitment, once made, is irretrievable.

Whether statutory enactments of this type fall within the four corners of the debt provision is certainly a question for judicial determination. That question has nothing to do with the wisdom of the statute nor does it validly bring into play rubrics about judicial deference to legislative action, presumptions of constitutionality and the like. The majority's stress thereon is inappropriate and misses the point. And I think it quite wrong for a court to aid evasion of a constituional provision, last adopted only 25 years ago, because it believes that provision outmoded. The function of the judiciary is to enforce all constitutional provisions upon all branches of government and not to act as an ad hoc constitutional convention to summarily render nugatory provisions with which it may disagree. Cf. Roe v. Kervick, 42 N.J. 191, 236, 199 A.2d 834 (concurring opinion) (1964); Clayton v. Kervick, 52 N.J. 138, 159, 244 A.2d 281 (concurring opinion) (1968).

As to ecological and environmental considerations. Some of the parties have fashioned constitutional arguments revolving around ecological and environmental considerations. These considerations are of tremendous present and future public importance, especially to the people of north-eastern [3 ELR 20600] New Jersey, the most densely populated portion of the most densely populated state in the union. The constitutional contentions were rejected by the trial court. The majority opinion mentions the considerations only from the viewpoint of a statutory, procedural prerequisite to Authority activity. I think something more should be said at this level.

Modern man has finally come to realize — I hope not too late — that the resources of nature are not inexhaustible. Water, land and air cannot be misused or abused without dire present and future consequences to all mankind. Undue disturbance of the ecological chain has its devastating effect at far distant places and times. Increased density of population and continuing residential, commercial and industrial development are impressing these truths upon us. We trust solution of our problems in this vital area can be aided by modern technology and the expenditure of money, but it seems evident that we must also thoroughly respect the balance of nature.

On of the most important ecological areas in this connection is the so-called "estuarine zone" — that area between the sea and the land. Our Legislature has specifically declared, in the wetlands act (L.1970, c. 272, N.J.S.A. 13:9A-1 et seq.) that it is "one of the most vital and productive areas oof our natural world" and that "it is necessary to preserve the ecological balance of this area and prevet its further deterioration and destruction by regulating the dredging, filling, removing or otherwise altering and polluting thereof." N.J.S.A. 13:9A-1, subd. a.¹

The Hackensack meadowlands are a part of the estuarine zone — about the last of it still largely in its natural state in north-eastern New Jersey. Everyone knows that man has abused them almost beyond belief by vast pollution of the water and the dumping of hundreds of acres of garbage. The Hackensack meadowlands act, N.J.S.A. 13:17-1 et seq., recognizes their ecological as well as economic importance. While its design is to provide means for the orderly, comprehensive development thereof to provide more space needed in the metropolitan area for industrial, commercial, residential and public recreational and other uses, it also declares that these meadowlands "need special protection from air and water pollution and special arrangements for the provision of facilities for the disposal of solid waste" and that "the necessity to consider the ecological factors constituting the environment of the meadowlands and the need to preserve the delicate balance of nature must be recognized to avoid any artificially imposed development that would adversely affect not only this area but the entire State . . . ." N.J.S.A. 13:17-1. The declaration is obviously intended to apply to both state-owned tidelands and privately owned land. The objective appears to be that of a balanced development — new construction for the human uses previously mentioned, with at the same time preservation or restoration of the natural state of at least a substantial portion of the meadows so as not to destroy "the delicate balance of nature." I should think the latter ought to have primary consideration. The task of the Agency in carrying out this objective is Herculean and almost Solomon-like, but we cannot assume it is impossible; its accomplishment does call, however, for the highest degree of public responsibility, because destruction of the natural state cannot be later undone.

This same obligation, with the same standards imposed, is carried over into the Authority law by section 23 of the act (L.1971, c. 137):

It is the express intent of the Legislalature that the authority in undertaking the meadowlands complex shall consult with the Meadowlands Commission and the Department of Environmental Protection with respect to the ecological factors constituting the environment of the Hackensack meadowlands to the end that the delicate environmental balance of the Hackensack meadowlands may be maintained and preserved.

As the majority opinion indicates by way of guidelines, this calls for a hearing and determination by the three agencies at which all interested parties will be given the opportunity to present their views, and with the right to judicial review of the conclusion reached, all as a necessary prerequisite to the commencement of any construction or disturbance of the present natural state.² While the majority expressly refers only to the site of the complex, I presume reference is intended as well, as the statute implies (L.1971, c. 137, § 5, subd. x), to the "type and character of the project or any part thereof and all other matters in connection with all or any part of the project . . . ." I would thus suppose that this procedure would also have to be repeated as additional projects of the Authority are proposed. Furthermore, it would seem that the ecological and environmental impact of Authority projects cannot be considered in a vacuum, but rather in relation to the Agency's plans and proposals for the remainder of the meadowlands.

I agree with the majority as to the necessity for this precedent agency hearing and determination. What disturbs me is the tone of the opinion in speaking of it. I gain the impression therefrom that while the agencies must go through the motions, the proceeding can be a perfunctory, cut and dried one, with a foreordained result, with which no court would disagree. Perhaps my alarm is accentuated by the majority's quotation from legislative committee testimony in support of the act, and especially that of the Director of the Department of Environmental Protection — the state official having the duty to see to the protection of the environment — stating as one reason for approval of the Authority act that the sports complex "would help to give our State a little identity of its own." This to me is not in keeping with the obligation of his office. As I have intimated, this ecological and environmental review is an absolutely vital prerequisite to the Authority's proposed project and will determine its permissible extent and form.These considerations must be thoroughly explored and a sound determination reached, one way or the other, upon unbiased consideration of all environmental aspects. Anything less may well result in untold harm to the long term public interest.

As I understand the principal constitutional argument, it runs like this in its fullest extent: There is a federal constitutional right to "a clean and wholesome environment," derived from the Ninth and possibly the Fourteenth Amendments to the United States Constitution. Implementation of that right with respect to the entire Hackensack meadowlands requires the conclusion, on the basis of facts and expert opinions proposed to be proved at a trial, that [3 ELR 20601] these lands should remain completely in their natural state after reclamation from pollution, that any artificial development of them would irreparably destroy a clean and wholesome environment in that area and the surrounding region, and therefore that the Authority law in permitting such development is unconstitutional. This claimed constitutional right is a very amorphous concept, the exact tenor and boundaries of which I find it most difficult to comprehend. The theory may be developed in time, although there is concededly yet no authority to support it. I believe, however, that existence of such a constitutional right need not be determined in this case and so no fact issue thereon is properly presented. This is so because the Legislature, by virtue of the statutory declarations, standards and mandates previously referred to, has directed that ecological and environmental considerations must be recognized and given appropriate positive effect.

III

As to the public trust doctrine. This concept is advanced as a basis for a constitutional argument by one of the parties and in my view deserves further mention than it is given in the majority opinion, although I agree that it does not go to the on-the-face constitutionality of the Authority act and its precise application here is not involved at this time. The doctrine is concerned with limitations on the utilization and alienation of tide-flowed lands owned by the state. (The stipulation of facts states that the Authority's acreage includes a substantial amount of such lands, apparently contemplated to be purchased by the Authority from the state; we are not informed as to, and this case in its present posture does not involve, the location or exact amount thereof or precisely what use is proposed to be made of them.)

Practical limitations preclude extended discussion of the doctrine. It is of ancient origin and was recognized in English common law and by Magna Charta. For present purposes it may be simplistically defined as state ownership of all tide-flowed lands up to the mean high-water mark, but subject to a permanent and irrevocable trust for the common and public benefit and use, as water resources, of all the people of the state. It has long been recognized in this country (see Illinois Central Railroad Co. v. People of the State of Illinois, 146 U.S. 387, 13 S. Ct. 110, 36 L.Ed. 1018 (1892)) and in this state (Arnold v. Mundy, 6 N.J.L. 1, 78 (Sup.Ct.1821)), although it can be safely said that it has not been fully adhered to in all our later cases.I think it now high time that the doctrine be reinvigorated and enforced to its full intent and purpose in the light of modern conditions, even though we may not be able to undo prior transgressions of it. Remaining tidal water resources encompassed within it are becoming very scarce, demands upon them, by reason of increased population and industrial development are much heavier, and their importance to the public welfare have become much more apparent. We should safeguard the common right and interest in what is left.

The doctrine, at least in this state, does not prohibit all use and alienation by the state of such lands, but conveyances must be subject to use conditions depending on the nature of the particular land involved. Such conveyances have always been subject to the ancient public rights of navigation and fishery. Today it seems to me, speaking quite broadly, that these public rights should include as well recreational uses where appropriate, such as bathing, surfing, launching small boats and walking on the land below the mean high-water line when the tide permits. Water-related uses ought to be permitted where the land lends itself thereto. Examples would be docks and piers along a harbor or tidal estuary. Important public uses such as the site for abutments for a bridge seem likewise within the purpose of the trust. Compliance with the trust becomes a more difficult problem where vast areas of tide-flowed meadowlands are involved and especially where such tidelands are physically closely connected with privately owned non-tidal land. Uses are generally limited to two choices — filling in the meadow for the erection of structures for the ultimate economic benefit of the people or leaving it in its natural state for ecological and limited recreational purposes. I presume here a balance may be struck allowing for some of each, with the portion allocated to the former being determined by the extent of the public need for the preservation of the natural state. The decision calls for the utmost in expert knowledge and objective, good faith consideration.

The trial court recognized the doctrine and said that conveyance to the Authority of state-owned tidelands contemplated by the act would not violate it. I think the reasons given to support that conclusion are not sound, and I do not want to be understood as approving them. The mere fact that compensation will be paid and the moneys received by the state deposited, as required by statute (N.J.S.A. 13:1B-13.13), in the constitutionally protected Fund for the Support of Free Public Schools (Const. Art. VIII, sec. IV, par. 2), does not in and of itself establish compliance with the trust requirements. All moneys received by the State from any source must be used for a public purpose and dedication to the school fund adds nothing. Nor is compliance incontrovertibly demonstrated by the fact that the lands will promote a public purpose, i.e., a racetrack and a football stadium. Since we do not know what precise use of the tide-flowed lands within the 750 acres is contemplated by the Authority, any conclusion as to compliance with the public trust doctrine is quite impossible at this juncture. The point is that the true requirements of the doctrine must be met in agency determinations as to the location, type and character of the Authority's various projects in relation to tide-flowed land owned by the state and, indeed, in decisions of the Meadowlands Commission as to development plans for the whole area, and that, in my opinion, compliance will not be established simply upon the above noted bases stated by the trial court.

I concur with the trial court in its conclusions as to the other issues raised not discussed herein or in the majority opinion in this court and, as I have indicated, with the requirement of the majority opinion of a precedent hearing and determination on ecological and environmental considerations.

I would modify the declaration of constitutionality of L.1971, c. 137 in the respects set forth in parts II, III and IV of the opinion of the Chief Justice and additionally with respect to the matter of a race-track referendum as set forth in this opinion.

1. The Hackensack meadowlands are excluded from the operation of the wetlands act, but the statute specifically relating to them contains comparable provisions. See infra.

2. The majority speaks of a "remand," presumably to the three agencies, for this purpose, with the right in any party desiring review thereof to apply to this court for direct certification. Technically speaking, the sufficiency of such a determination is not encompassed within the present suits. I take it that what is envisaged is a new judicial review proceeding which would be certified directly to this court on application, after a notice of appeal from the determination has been filed in the Appellate Division.