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NJ Appeals Court Requires Hearing on Wetlands Impacts in Post-Condemnation Valuation Proceeding

After New Jersey Transit used its power of condemnation to take fourteen acres of vacant land in North Bergen from a private landowner (Mori), a valuation proceeding followed. The case, New Jersey Transit v. Mori, focused on one of fourteen acres that contained wetlands regulated by the federal government (US Army Corp of Engineers or ACOE). At the trial court level, New Jersey Transit and the property owner presented competing estimates of the value of the condemned property. New Jersey Transit estimated that the one acre was valued at $61,000 because of the presence of wetlands. The property owner presented contrary expert testimony that it was reasonably probable that the landowner would obtain an ACOE permit to develop the land despite the presence of wetlands. With such a permit, the landowner argued that the property should be valued at $666,000. After trial, the jury awarded the property owner $425,000. 

The Appellate Division concluded that it was “error for the trial court to submit to the jury the question of whether the ACOE would have granted a Section 404 permit to a private developer without the court first conducting [its] gate-keeping function.” In short, the appeal court explained that “the trial court was obligated to conduct an N.J.R.E. 104 pre-trial hearing to determine whether there existed sufficient evidence of a reasonable probability the ACOE would have granted a permit for the proposed private development.” In reaching this conclusion, the Appellate Division relied on the recent decision of the New Jersey Supreme Court in the Borough of Saddle River v. 66 East Allendale, 216 N.J. 115 (2013).

The Mori decision is published at 435 N.J. Super. 425, and is also available here. For more information on the regulation of both coastal and freshwater wetlands in the state of New Jersey, visit Lieberman & Blecher, P.C.’s wetlands resource page. Property owners and developers confronted with the issue of wetlands regulated by federal or state law in New Jersey should contact a knowledgeable environmental lawyer to discuss their legal obligations and explore their options.

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