Opinion ID: 2339947
Heading Depth: 1
Heading Rank: 5

Heading: The Transfer Motions

Text: All of the appeals before us, except one, are taken by municipalities from the trial courts' denial of their motions to transfer Mount Laurel litigation to the Council. In the Tewskbury case, the one exception, the developer is appealing from the trial court's grant of a motion to transfer the litigation to the Council. Section 16 of the Act governs the issue and is here set forth in full in a manner that indicates its original form (the Senate substitute for two bills) along with its ultimate form resulting from an amendment in the course of passage: [14] For those exclusionary zoning cases instituted more than 60 days before the effective date of this act [no exhaustion of the review and mediation procedures established in sections 14 and 15 of this act shall be required unless the court determines that a transfer of the case to the council is likely to facilitate and expedite the provision of a realistic opportunity for low and moderate income housing] any party to the litigation may file a motion with the court to seek a transfer of the case to the council. In determining whether or not to transfer, the court shall consider whether or not the transfer would result in a manifest injustice to any party to the litigation. If the municipality fails to file a housing element and fair share plan with the council within [four] five months from the date of transfer, or promulgation of criteria and guidelines by the council pursuant to section 7 of this act, whichever occurs later, jurisdiction shall revert to the court. b. Any person who institutes litigation less than 60 days before the effective date of this act or after the effective date of this act challenging a municipality's zoning ordinance with respect to the opportunity to provide for low or moderate income housing, shall file a notice to request review and mediation with the council pursuant to sections 14 and 15 of this act. In the event that the municipality adopts a resolution of participation within the period established in subsection a. of section 9 of this act, the person shall exhaust the review and mediation process of the council before being entitled to a trial on his complaint. While this section could be read as committing the transfer issue to the general discretion of the trial court, the confinement of that court's consideration of manifest injustice to such injustice caused only by transfer (and not by non-transfer) along with the Act's clear and strong preference for Council rather than court treatment (the preference is set forth explicitly in section 3; the Act as a whole is better described as a mandate for administrative resolution), persuades us to adopt a different reading. Section 16a, we conclude, means that transfer must be granted unless it would result in manifest injustice to any party to the litigation. All of the cases before us were commenced more than 60 days before the effective date of the Act and hence are governed by section 16a. The propriety of their transfer, therefore, is determined by the meaning of manifest injustice to any party to the litigation. The two Mount Laurel judges in the cases before us ruled that a balancing of all relevant factors was needed to determine manifest injustice. We disagree. The purposes and legislative history of the Act convince us that the Legislature intended all pending Mount Laurel cases to be transferred, except where unforeseen and exceptional unfairness would result. Specifically we conclude that manifest injustice should not be determined in the same way a court decides whether to transfer any kind of case to an administrative agency; nor should it be determined by balancing the injustice done by granting transfer against that done by denying transfer. The standard that we adopt measures only the injustice caused by transfer and precludes transfer only if that injustice is unforeseen and exceptional. The legislative history of the Act makes it clear that it had two primary purposes: first, to bring an administrative agency into the field of lower income housing to satisfy the Mount Laurel obligation; second, to get the courts out of that field. One of the two Senate Bills (S-2046) that were the predecessors to the Senate Committee's substitute that ultimately became the law allowed for a transfer, in the Court's discretion, to be exercised after considering five factors: the age of the case, the amount of discovery and other pretrial procedures that have taken place, the likely date of trial, the likely date by which administrative mediation and review can be completed, and whether the transfer is likely to facilitate and expedite the provision of a realistic opportunity for low and moderate income housing. [15] The Senate Committee substitute changed the transfer provision into that found supra at 48, the change prohibiting transfer unless it is likely to facilitate and expedite the provision of a realistic opportunity for low and moderate income housing. The five factors were reduced to one, and only one. The burden was on the party seeking the transfer to prove the factor's existence. The municipality had to persuade the court that the transfer would facilitate and expedite lower income housing. The passage of the Bill in that form became the subject of controversy. The Legislature, presumably aware that some municipalities were on the brink of the award of a builder's remedy, changed the transfer provision so that the burden of proof was on the party opposing transfer, not on the municipality but on the plaintiff, and that burden was specifically to prove that the transfer would result in a manifest injustice to any party to the litigation. The factor eliminated from consideration was the facilitation of lower income housing caused by transfer; it had been the presence of that factor, and no other, that would require transfer. Before the amendment the presumption was against transfer, proof of facilitation of lower income housing being required to obtain transfer; after the amendment, the presumption was in favor of transfer, proof of manifest injustice being required to prevent it. Furthermore, there was no longer a balancing of numerous factors. The elimination of the explicit standard of expediting lower income housing demonstrates the Legislature's awareness of the transfer's effect on the timing of lower income housing construction and the delay in such construction that would be caused by transfer. While the impact of transfer on lower income housing was to be considered  and practically all parties agree on that [16]  the delay in producing lower income housing could not constitute manifest injustice. That delay, which had previously been the sole factor, was eliminated and replaced by manifest injustice. Hence the interpretation by the trial courts of manifest injustice that, in effect, made delay in providing lower income housing the critical factor is incorrect. It should be emphasized that most pending Mount Laurel litigation is covered by section 16a, the manifest injustice section. It is therefore strongly inferable that the dominant intent underlying this section was that manifest injustice would be confined to the very narrowest, most extreme situation. It is clear that the Legislature never intended the use of its manifest injustice standard to create the risk of the wholesale non-transfer of cases that has occurred in these appeals. It would be ironic if the application of this Act, so long in coming, so outstanding compared to the inactivity of other states, were to be characterized as manifest injustice simply because, in the most limited circumstances, its remedy was not immediate; and ironic to label the inevitable initial delaying effect of this law, so manifestly just in its unprecedented attempt to provide lower income housing, as manifestly unjust in that very respect. The municipalities of this state, and the State itself, are about to have the benefit of a coherent, consistent plan to provide a realistic opportunity for lower income housing. That legislative solution may work well. It certainly may differ from the prior judicial solution. Regions, regional need, fair share, all may be different; the locus of the obligation may be different; the timetable different; the method of satisfying the obligation different; and compliance may in fact become voluntary. As lower income housing is produced, the state will be developed in accordance with a rational comprehensive land-use state plan. It may be that the method of providing lower income housing will be more effective both in the total output and the speed of construction. When all of the standards of the Council are in place, Mount Laurel cases may move expeditiously: the expertise of administrators, and their power to make decisions binding on all municipalities, and to modify them, has a potential of being significantly more effective than case-by-case judicial disposition. It was the State's intention that every municipality would have the benefit of this comprehensive plan and its method of implementation. If any municipality does not receive the plan's benefit, it will be deprived, and the statewide legislative solution will be impaired. Given the potentially substantial scope of the differences between the ad hoc compulsion of builder's remedies and the effectuation of a comprehensive state plan, and the importance of allowing this plan to take effect, it is clear that some added delay in providing lower income housing could not have been intended to be included within the meaning of manifest injustice. There was an obvious risk that such housing mandated by the former judicial remedy might directly conflict with the comprehensive state plan that had not yet been drawn up. From the Legislature's view, the delay in effecting a builder's remedy was not only not manifestly unjust, but it was probably thought wise, and, in any event, was manifestly intended. Whatever else might have been intended to be included in determining manifest injustice, the delay in a builder's remedy was not. That delay the Legislature most certainly sought, as evidenced by the builder's remedy moratorium. [17] Some plaintiffs have also contended that bad faith is either an element of manifest injustice or that, even by itself, such bad faith might constitute manifest injustice sufficient to disallow transfer in certain cases. From the point of view of the State, however, instances of bad faith are irrelevant. The Legislature determined that the goals of the Act were so important that it should, in effect, be given retroactive force by the transferring of preexisting litigation to the Council. The importance of these legislative objectives forecloses a result that would deprive a municipality and its citizens of the Act's benefits because of the asserted bad faith of a municipal official. Our conclusion is that the Legislature intended to transfer every pending Mount Laurel action to the Council. The exception, where manifest injustice would occur, was based on the Legislature's concern that in some particular case, there might be a combination of circumstances, unforeseen but nevertheless possible, that rendered transfer so unjust as to overcome the Legislature's clear wish to transfer all cases. Thus, not confident of their knowledge of the specific facts of each of these cases, legislators provided that transfer could be defeated upon the showing of manifest injustice. In our view, then, the Legislature did not contemplate any particular class of cases or any particular characteristic as preventing transfer. The essence of the manifest injustice standard is its exclusion of the foreseen consequences, some undoubtedly unfair, of transfer. The legislative intent was that only unforeseen and exceptional unfairness would warrant the denial of a transfer motion. None of the consequences brought to our attention in the cases before us meets that standard. Delay in the production of housing, loss of expected profits, loss of the builder's remedy, substantial expenditure of funds for litigation purposes, permit applications, on-site and off-site tract improvements, purchase of property or options at an inflated price, contractual commitments: all of these were no doubt foreseen by the Legislature, were the likely consequences of transfer, and were not intended to constitute manifest injustice. And, although different in kind, the loss to various public interest groups and their counsel of a goal they have sought for many years, fought for for many years, and finally just about attained, that loss was similarly foreseen. While its personal impact is much clearer, since we can identify the very people who are affected, its position in the hierarchy of interests falls far below that of the lower income housing that has been delayed, a delay that we have determined was not intended to constitute manifest injustice. The impact of transfer on a builder, of course, is somewhat different. The builder's loss of expected profits is discordant, under these circumstances, with the connotations of manifest injustice. That loss is a risk to which builders are regularly exposed in a variety of circumstances. It has been suggested that there is a different kind of injustice here, for, as some have put it, this Court in Mount Laurel II invited the builders to bring these suits, solicited the help of the builders in our effort to vindicate the constitutional obligation. In effect, we are said to have asked them to join in a struggle to vindicate a constitutional interest. Those assertions remind us of the opposite claim, which is that we invented the remedial doctrine not for the benefit of the poor, but for the benefit of the builders. The truth is that we devised a remedy that we believed would be effective. We concluded that if it were possible for builders to profit from lower income housing, they would pursue it, and further concluded that such pursuit was likely to increase compliance with Mount Laurel. We did not hope the builders would join in this effort, we expected that they would. Nevertheless there is an obvious basis to a builder's claim that pursuit of this litigation was justifiable, but if that suggestion is intended to create the image of an estoppel, there is no substance to it. If there is any class of litigant that knows of the uncertainties of litigation, it is the builders. They, more than any other group, have walked the rough, uneven, unpredictable path through planning boards, boards of adjustments, permits, approvals, conditions, lawsuits, appeals, affirmances, reversals, and in between all of these, changes in both statutory and decisional law that can turn a case upside down. No builder with the slightest amount of experience could have relied on the remedies provided in Mount Laurel II in the sense of justifiably believing that they would not be changed, or that any change would not apply to the builders. If ever any doctrine and any remedy appeared susceptible to change, it was that decision and its remedy. The opinion itself constituted the strongest possible entreaty for legislative change. We have attached an Appendix to this opinion indicating the factual circumstances of all of the other cases before us on this appeal. None of them includes unforeseen loss amounting to exceptional unfairness. No manifest injustice will result from their transfer. [18] There is one possible consequence of transfer, however, that we believe the Legislature did not foresee, one that it would have intended to constitute manifest injustice, a consequence that would probably be constitutionally impermissible. We refer to a transfer that does not simply delay the creation of a reasonable likelihood of lower income housing but renders it practically impossible. That result would warrant, indeed require, denial of transfer. It does not exist in any of the cases before us, and its occurrence is made even less likely by our decision permitting the imposition of appropriate conditions on transfer. See Part VII, infra at 61. We do not exclude the possibility that there might be some other consequence or loss that may amount to manifest injustice. Like the Legislature, we too cannot anticipate every conceivable set of circumstances that may affect a transfer motion. We therefore order that all cases before us be transferred to the Council, subject to the conditions mentioned infra at 61-63.