Court Opinion

ID: 867037
Source: CourtListenerOpinion
Date Created: 2013-05-09 16:53:19.986166+00
Date Added: 2024-06-11T13:14:39.681283
License: Public Domain

PRECEDENTIAL

       UNITED STATES COURT OF APPEALS
            FOR THE THIRD CIRCUIT
                 ____________

               Nos. 12-1630 and 12-2386
                    _____________

NATIONAL AMUSEMENTS INC., a Maryland Corporation,
                            Appellant

                          v.

THE BOROUGH OF PALMYRA, a municipal corporation of
the State of New Jersey; ENVIRONMENTAL RESOURCES
  MANAGEMENT, INC.; MUNITIONS MANAGEMENT
                       GROUP, LLC
                      _____________

   APPEAL FROM THE UNITED STATES DISTRICT
                        COURT
       FOR THE DISTRICT OF NEW JERSEY
             (D.C. Civil No. 1-08-cv-02469)
       District Judge: Honorable Joseph E. Irenas
                     ____________

       Submitted Under Third Circuit LAR 34.1(a)
                   March 21, 2013
                    ____________

     Before: FUENTES, CHAGARES and BARRY,
                  Circuit Judges

             (Opinion Filed: May 9, 2013)
                    ____________
Marc D. Haefner, Esq.
Nicole B. Dory, Esq.
Kevin J. Coakley, Esq.
Connell Foley LLP
85 Livingston Avenue
Roseland, New Jersey 07068

Counsel for Appellant

Richard L. Goldstein, Esq.
Walter F. Kawalec, III, Esq.
Marshall, Dennehey, Warner, Coleman & Goggin
200 Lake Drive East
Woodland Falls Corporate Park, Suite 300
Cherry Hill, NJ 08002

Counsel for Appellee
                        ____________

                OPINION OF THE COURT
                     ____________

BARRY, Circuit Judge

                              I.

       In 2008, the Borough of Palmyra (“Palmyra”) ordered
closed for five months an open-air flea market, owned and
operated by National Amusements, Inc. (“NAI”), due to
safety concerns posed by unexploded munitions left behind
when the site had been used as a weapons-testing facility for
the United States Army. NAI filed the instant action alleging
that Palmyra’s action violated its constitutional rights under
42 U.S.C. § 1983 and New Jersey law. During pendency of
the action, NAI filed a motion for a preliminary injunction
requesting that the emergency closure order be lifted.
Because the parties agreed pursuant to a Consent Order that
the market could resume operations subject to strict safety
precautions, that motion was never decided. On February 3,
2012, the District Court granted Palmyra’s motion for
                              2
summary judgment and dismissed the action in its entirety.
Despite losing the summary judgment motion, NAI declared
victory on its § 1983 claims based on the earlier Consent
Order, and sought attorney’s fees pursuant to 42 U.S.C. §
1988. The District Court denied this motion. NAI appeals
both the order granting summary judgment and the order
denying fees. We will affirm.

                              II.

        From 1976 until the present, NAI has operated an
open-air flea market (the “Market”) on a 65.4-acre parcel of
land that NAI’s predecessor had purchased from Palmyra.
The Market has approximately 458 vendor locations and
generates significant customer traffic. In 2002, Palmyra
began considering a 186-acre redevelopment project which
included NAI’s parcel. As part of the project, Palmyra
contracted with Environment Resources Management
(“ERM”) to conduct a site inspection of the proposed area.
That inspection uncovered the possible presence of
unexploded munitions left over from a weapons-testing
facility used by the United States Army during and shortly
after World War II. Following the initial inspection, ERM
contracted with Munitions Management Group, LLC
(“MMG”) to investigate the risk to the public and
redevelopment efforts and to execute a plan for the safe
removal of the munitions. NAI, ERM, and MMG entered into
an access agreement, pursuant to which NAI would be
permitted to operate the Market on the weekends, while ERM
and MMG conducted their inspections and remedial work
during the week.

       On March 10, 2008, however, MMG discovered an
unexploded artillery shell flush with the surface of the
Market’s parking lot, which, because vendors often drove
stakes into the ground to secure their tents, raised concerns of
accidental detonation. That same day, the Borough Council
of Palmyra issued a resolution authorizing Police Chief
Richard Dreby to request that NAI voluntarily cease its
operations, and, if NAI refused, to exercise his emergency
powers to restrict public access to the Market. After NAI
                               3
refused to comply voluntarily, Chief Dreby issued an
emergency order on March 12, 2008, restricting access to the
property while MMG conducted further munitions detection
and disposal. Over the course of its effort, MMG discovered
and disposed of hundreds of munitions on the property, both
explosive and inert.
       On April 24, 2008, NAI filed the instant action, which
Palmyra timely removed to federal court. The Complaint
alleges that Palmyra’s action (1) was arbitrary and capricious
under New Jersey law; (2) violated NAI’s right to procedural
due process; and (3) constituted a “taking” without just
compensation. The gist of the Complaint is that Palmyra
overstated the danger posed by the unexploded munitions as
pretext to shut down NAI’s economic activity on property
Palmyra had been eyeing for redevelopment. NAI contends
that Palmyra’s failure to enact similar restrictions on adjacent
property or adopt a less restrictive course of action that could
have permitted the continued operation of the Market
demonstrated this surreptitious intent. NAI sought damages
and injunctive relief requiring Palmyra to permit the Market
to reopen and operate as it had for more than thirty years
without incident.

       On June 6, 2008, NAI filed a motion for a preliminary
injunction to lift Chief Dreby’s emergency order. Before the
District Court could resolve the motion, however, the parties
agreed that the Market could reopen on the weekends subject
to certain institutional controls, at NAI’s cost, including
erecting barriers and hiring security guards to prohibit public
access to hazardous areas. Pursuant to the agreement, the
District Court entered a Consent Order on July 30, 2008,
whereby the Market could resume operations beginning on
August 13, 2008. Both parties have complied with the
Consent Order, and the Market continues to operate with the
agreed-upon institutional controls. The Market was closed as
a result of Chief Dreby’s emergency order for approximately
five months.

        For the next two years, the issue that was primarily
litigated was whether NAI was entitled to $200,000 in interim
attorney’s fees related to the Consent Order. On October 8,
                               4
2010, the District Court denied NAI’s application for fees
subject to renewal at the end of the case. On February 3,
2012, the District Court granted Palmyra’s motion for
summary judgment. On May 9, 2012, the District Court
denied NAI’s motion for attorney’s fees, holding that any
success NAI had in relation to the Consent Order was based
on its state law claim not its federal constitutional claims.
NAI appeals both orders.1

                            III.

       Our standard of review of a district court’s grant of
summary judgment is plenary, and we view the facts in the
light most favorable to the non-moving party. A.W. v. Jersey
City Pub. Sch., 486 F.3d 791, 794 (3d Cir. 2007).

    A. Procedural Due Process

       NAI claims that Palmyra deprived NAI of due process
by closing the Market without providing pre-deprivation
notice or opportunity to be heard. To state a procedural due
process claim, NAI must establish (1) that it was deprived of
an individual interest that is encompassed within the
Fourteenth Amendment’s protection of life, liberty and
property, and (2) that the procedures available to it did not
provide due process of law. Schmidt v. Creedon, 639 F.3d
587, 595 (3d Cir. 2011). NAI cannot establish the second
prong.

       “[D]ue process, unlike some legal rules, is not a
technical conception with a fixed content unrelated to time,
place and circumstances.” Gilbert v. Homar, 520 U.S. 924,
930 (1997) (quotation marks and citation omitted). While
“[t]he fundamental requirement of due process is the
opportunity to be heard at a meaningful time and in a
meaningful manner,” Mathews v. Eldridge, 424 U.S. 319, 333
(1976) (quotation marks omitted), the Supreme Court “has
recognized, on many occasions, that where a State must act

1
 The District Court had jurisdiction under 28 U.S.C. § 1331
and we have jurisdiction under 28 U.S.C. § 1291.
                              5
quickly, or where it would be impractical to provide
predeprivation process, postdeprivation process satisfies the
requirements of the Due Process Clause.” Gilbert, 520 U.S.
at 930. The Court has established a three-factor balancing test
to determine what process is constitutionally due:

      First, the private interest that will be affected by
      the official action; second, the risk of an
      erroneous deprivation of such interest through
      the procedures used, and the probable value, if
      any, of additional or substitute procedural
      safeguards; and finally, the Government’s
      interest.

Matthews, 424 U.S. at 335.

       NAI’s private interest in maintaining revenue from the
continued operation of the Market is substantially outweighed
by the overwhelming government interest in protecting the
public safety from the danger posed by unexploded munitions.
Although the Market had operated without incident for years,
NAI does not dispute the presence of unexploded munitions.
Given the imperative of an efficient response to the threat to
public safety, due process did not require that Palmyra
provide NAI pre-deprivation notice. See Gilbert, 520 U.S. at
932-33 (holding that police officer arrested on drug charges
was not entitled to notice and hearing prior to being
suspended without pay because of state’s significant interest
in the officer’s immediate suspension); N. Am. Cold Storage
Co. v. City of Chicago, 211 U.S. 306, 320 (1908) (holding
that the state did not violate due process by confiscating
potentially contaminated food without a prior hearing).2 Put

2
  NAI attempts to distinguish N. Am. Cold Storage Co. on the
ground that munitions experts agreed that the risk to the
public was low. Appellant’s Br. at 33. NAI does not,
however, dispute the existence of unexploded munitions close
to the surface in a heavily-trafficked area. Even if NAI’s
attempt to minimize the potential risk to the public were
convincing, it is not appropriate for us to weigh the
immediacy or magnitude of the risk to the public. Under the
                              6
simply, a municipality need not conduct a pre-deprivation
hearing before acting to prevent the public from walking
around a surface littered with live explosives. As NAI does
not argue that the post-deprivation procedures available to it
were inadequate, summary judgment was properly granted on
NAI’s procedural due process claim.

   B. Takings Clause

        The Takings Clause of the Fifth Amendment provides
that “private property [shall not] be taken for public use,
without just compensation.” U.S. Const. amend. V. “The
paradigmatic taking requiring just compensation is a direct
government appropriation or physical invasion of private
property.” Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 537
(2005). The government must pay just compensation for such
takings “except to the extent that ‘background principles of
nuisance and property law’ independently restrict the owner’s
intended use of the property.” Id. (quoting Lucas v. S. C.
Coastal Council, 505 U.S. 1003, 1032 (1992)); see Lucas, 505
U.S. at 1032 (“[H]armful or noxious uses of property may be
proscribed by government regulation without the requirement
of compensation.”) (quotation marks and citation omitted).
For instance, “orders temporarily prohibiting access to crime
scenes, businesses that violate health codes, fire-damaged
buildings, or other areas that we cannot now foresee . . . have
long been considered permissible exercises of the police
power,” which do not entitle the individuals affected to
compensation. Tahoe-Sierra Pres. Council, Inc. v. Tahoe
Reg’l Planning Agency, 535 U.S. 302, 335 (2002). It is
difficult to imagine an act closer to the heartland of a state’s
traditional police power than abating the danger posed by
unexploded artillery shells. Palmyra’s emergency action to
temporarily close the Market therefore constituted an exercise
of its police power that did not require just compensation.

   C. Action in Lieu of Prerogative Writ

circumstances, Palmyra was well within its discretion to act
quickly to prevent public access to the Market without
                           7
       NAI also brought an action under New Jersey law “in
lieu of prerogative writ.” This action permits a “court [to] set
aside a municipal board decision if it is shown to be arbitrary,
capricious or unreasonable, not supported in the evidence, or
otherwise contrary to law.” Rivkin v. Dover Twp. Rent
Leveling Bd., 671 A.2d 567, 580-81 (N.J. 1996). Under New
Jersey law, a court reviewing an action under this standard
applies a test of “essentially . . . rational basis. Arbitrary and
capricious action . . . means willful and unreasoning action,
without consideration and in disregard of circumstances.
Where there is room for two opinions, action is [valid] when
exercised honestly and upon due consideration, even though it
may be believed that an erroneous conclusion has been
reached.” Worthington v. Fauver, 440 A.2d 1128, 1139 (N.J.
1982) (alteration in original) (quotation marks and citation
omitted). Under this deferential standard, NAI cannot prevail.

        Even if NAI is correct that Palmyra’s public safety
motive was pretextual, it is undisputed that there were
unexploded munitions on the property. While the property
had been free from incident since 1955, NAI concedes that
there was at least a “low” risk of injury or death. Palmyra was
not required to adopt the option most protective of NAI’s
rights. Rather, Palmyra was required to act rationally and not
arbitrarily and capriciously. Even if there were valid
alternatives that would have kept the Market open—such as
instituting the controls adopted in the Consent Order—no
reasonable finder of fact could determine that Palmyra acted
arbitrarily or capriciously by temporarily restricting access to
NAI’s property. Accordingly, the District Court properly
dismissed NAI’s action in lieu of prerogative writ.

                               IV.

       NAI also appeals the District Court’s denial of interim
attorney’s fees. “We exercise plenary review over legal issues
relating to the appropriate standard under which to evaluate
an application for attorneys’ fees. . . . We review the
reasonableness of the District Court’s award of attorneys’ fees

holding a hearing.
                                8
for abuse of discretion.” People Against Police Violence v.
City of Pittsburgh, 520 F.3d 226, 231 (3d Cir. 2008).

         Under 42 U.S.C. § 1988, “[i]n any action or
proceeding to enforce a provision of section[] . . . 1983 . . . of
this title, the court, in its discretion, may allow the prevailing
party, other than the United States, a reasonable attorney’s fee
as part of the costs.” Despite having its claims dismissed in
their entirety and on the merits, NAI claims victory on its §
1983 claims based on the Consent Order authorizing NAI to
reopen the Market. The District Court disagreed, finding that
although the Consent Order could have conferred “prevailing
party” status, any success was based only on NAI’s state law
action, not its constitutional claims. We will affirm for
different reasons. 3

       A consent order may serve as a basis for awarding
attorney’s fees. Parties are considered “prevailing parties” if
“they succeed on any significant issue in litigation which
achieves some of the benefit the parties sought in bringing
suit.” Hensley v. Eckerhart, 461 U.S. 424, 433 (1983).
Accordingly, “settlement agreements enforced through a

3
  The District Court relied on Luria Bros. & Co. v. Allen, 672
F.2d 347, 357-58 (3d Cir. 1982), in which we held that a party
that loses its § 1983 claim does not become a “prevailing
party” if that party prevails on a related state claim. The
Court examined NAI’s moving papers, noting that on the
“likelihood of success” prong of its argument, NAI “primarily
argued that Plaintiff will succeed on the merits of the [state]
claim for an action in lieu of prerogative writ. . . . Although
[NAI] also devoted a page to the due process claim, the
argument was not pursued further.” J.A. 33. Therefore, the
Court concluded that “any success that [NAI] had by way of
the Consent Order was based only on . . . [the] action in lieu
of prerogative writ.” Id. Because NAI’s brief in support of
the injunction did reference due process, and the Consent
Order—as would be expected—did not include a legal basis
for the resolution, we will not speculate, after the fact, as to
whether the Consent Order was based solely on NAI’s state
law claims.
                               9
consent decree may serve as the basis for an award of
attorney’s fees.” Buckhannon Bd. & Care Home, Inc. v. W.
Va. Dep’t of Health & Human Res., 532 U.S. 598, 604 (2001);
see P.N. v. Clementon Bd. of Educ., 442 F.3d 848, 853 (3d
Cir. 2006) (finding that a settlement confers prevailing party
status “where it alters the legal relationship of the parties and
is judicially sanctioned”). We have also held that temporary
relief may support § 1988 fees, even if the prevailing party
does not obtain a final judgment in its favor. People Against
Police Violence, 520 F.3d at 235-36 (upholding award of
attorney’s fees where organizer of rally obtained preliminary
injunction, but new legislation mooted case before final
judgment).

        We have never held, however, that a party may recover
attorney’s fees under § 1988 for interim relief when a district
court ultimately dismisses the party’s § 1983 claims on their
merits. The Supreme Court’s decision in Sole v. Wyner, 551
U.S. 74 (2007) is instructive. In Sole, the plaintiff challenged
Florida’s “bathing suit” rule under the First Amendment. The
plaintiff also sought preliminary relief permitting a protest the
next day in which naked participants would form a peace sign
at a state beach. Id. at 78. The district court granted the
preliminary injunction on the condition that the state could put
up a barrier to shield beachgoers who did not wish to see the
nude artwork. Id. at 79-80. Ultimately ruling on the merits
with the benefit of a fuller record, however, the district court
found that the state’s prohibition on nudity in state parks was
constitutional, and dismissed the case. Id. at 80-81. Because
the plaintiff had succeeded in securing a preliminary
injunction, however, the district court awarded her interim §
1988 attorney’s fees. Id. at 81.

        The Supreme Court reversed, holding that a party that
obtains preliminary relief is not a “prevailing party” if that
party loses on the merits a final decision denying permanent
injunctive relief. 551 U.S. at 84. The Court rejected the
plaintiff’s argument that “she got precisely what she wanted
when she commenced th[e] litigation: permission to create the
nude peace symbol without state interference.” Id. at 83.
Rather, it found “[o]f controlling importance . . . , [that] the
                              10
eventual ruling on the merits for defendants after both sides
considered the case fit for final adjudication, superseded the
preliminary ruling. [The plaintiff’s] temporary success rested
on a premise the District Court ultimately rejected.” Id. at 84-
85. Accordingly, the Court held that “a plaintiff who
‘secur[es] a preliminary injunction, then loses on the merits as
the case plays out and judgment is entered against [her], has
‘[won] a battle but los[t] the war.” Id. at 86 (quoting Watson
v. Cnty. of Riverside, 300 F.3d 1092, 1096 (9th Cir. 2002)).

        So too here. The Consent Order resolving the motion
for a preliminary injunction motion did grant some of the
relief sought by NAI: the reopening of the Market. To the
extent that NAI achieved success in securing the Consent
Order based on its constitutional claims, however, these
claims “rested on a premise the District Court ultimately
rejected.” Id. at 85. Once the case was deemed fit by both
parties for final adjudication, the Court denied NAI’s § 1983
claims on their merits; the “same claim[s] [NAI] advanced in
[its] preliminary injunction motion.” Id. at 86; see also
People Against Police Violence, 520 F.3d at 234 (noting that
where initial relief proves fleeting, attorney's fees are
inappropriate). NAI may have won a battle, but it lost the
war.4

4
  It is not entirely clear that NAI even won a battle. The relief
achieved by the Consent Order was not the specific relief NAI
sought in its Complaint: reopening the Market which it had
operated for the last thirty years. Rather, the Order reopened
the Market on the condition that NAI undertake controls to
eliminate the safety risk. The result could also be viewed as a
success for Palmyra or, simply, a reasonable interim solution
while the parties awaited a determination by the Court. See
Biodiversity Conservation Alliance v. Stern, 519 F.3d 1226,
1232 (10th Cir. 2008) (finding that temporary relief that won
the “right to have the status quo preserved,” did not make the
plaintiff a prevailing party once the claims were dismissed).
Indeed, the parties expressly agreed that the Consent Order
was “not meant to waive any rights that any of the parties
currently have in law or in equity or which may be later
obtained.” J.A. 235. In other words, the Consent Order did
                                 11
        “The purpose of § 1988 is to ensure ‘effective access
to the judicial process’ for persons with civil rights
grievances.” Hensley, 461 U.S. at 429 (1983) (quoting H.R.
Rep. No. 94-1558, p. 1 (1976)). This purpose is not furthered
by awarding fees when a plaintiff includes constitutional
claims in its complaint and achieves a modicum of interim
relief before these claims can be disposed of on the merits.
Indeed, were that to become the practice, plaintiffs might be
encouraged to include meritless § 1983 claims to leverage
their negotiating positions, hardly the purpose of § 1988. The
District Court properly denied attorney’s fees.

                             V.

        For the reasons set forth above, we will affirm the
order of the District Court granting Palmyra’s motion for
summary judgment and its order denying interim attorney’s
fees to NAI.

not purport to resolve any of the merits of NAI’s
constitutional claims. By proceeding to summary judgment,
the parties left that determination to the final order of the
District Court.
                              12