Search Site
Menu
NJ Appellate Court Limits Reach of Suydam Rule in Condemnation Cases

In the bellwether case of Housing Authority of the City of New Brunswick v. Suydam Investors, L.L.C., 177 N.J. 2 (2003), the New Jersey Supreme Court crafted a Solomon-like rule when it came to valuating environmentally impacted properties in eminent domain proceedings. The “Suydam” rule, as it has come to be known, essentially states that (1) contaminated property should be valued as if it were remediated, and (2) that a hearing should be held to determine the reasonable costs of remediating the property. The remediation costs are then held by the court in escrow until the remediation is completed and an environmental cleanup cost recovery action is filed by the condemning party.

The issue brought raised in the recently decided case of Borough of Paulsboro v. Essex Chem. Corp., 2012 N.J. Super. LEXIS 119 (2012), was whether the Suydam rule applied on a property which contained a former landfill that was closed with the approval of the New Jersey Department of Environmental Protection (“NJDEP”). The Appellate Division held that the Suydam rule only applied in cases where a condemnee was subject to liability under New Jersey’s environmental statutes, such as the New Jersey Spill Compensation and Control Act. In this particular case, since the NJDEP approved the closure of the landfill, the condemnee (Essex Chemical Corporation, a wholly-owned subsidiary of the Dow Chemical Company) had no further liability. Therefore, the condemnor (the Borough of Paulsboro) was not entitled to an escrow of the condemned funds.

The Borough of Paulsboro argued that it needed to remediate the property to remove the landfill, and that this would cost nearly $60 million. However, the Appellate Division found that the removal of the landfill was not necessitated by any environmental statute and, in fact, the property was valued by both sides as one with an unusable area where the former landfill is located. Implicit in this decision is the idea that a condemnor’s development costs for an environmentally impaired site cannot be borne by the condemnee.

The attorneys at Lieberman Blecher & Sinkevich have represented many clients in Suydam rule hearings and have successfully argued that construction costs necessitated by a condemnor’s planned use of a site cannot be passed to the condemnee and cloaked with veil of remediation costs. The Appellate Division’s latest decision supports what our litigator’s have long believed to be most protective of condemnee rights.

Leave a Reply

Your email address will not be published. Required fields are marked *

Our Attorneys

Recent Twitter Posts

  • New report finds that significant offshore wind capacity exists along the Atlantic coast. https://t.co/EQG8d5VMw2
    3 weeks ago
  • The Murphy Administration plans to spend $200 million on wind port. https://t.co/Se09U5ZHvy
    1 month ago
  • NJDEP aims to simplify permitting process. https://t.co/UTm92DtrAC
    1 month ago
  • U.S. Supreme Court will hear PennEast Pipeline appeal of New Jersey eminent domain dispute. https://t.co/AqqvTw1QD2
    2 months ago

Recent Blog Posts

Environmental remediation timeframes extended again in February 2021 due to COVID-19

Throughout the COVID-19 public health emergency, keeping up with deadlines and time frames has been a difficult task for many. The State of New Jersey as well as the New
Read More
Environmental remediation timeframes extended again in February 2021 due to COVID-19

New Jersey Courts Make it Easier for Commercial Landlords to Change the Locks and for Lenders to Foreclose

The COVID pandemic began in March of 2020 and placed many individuals, businesses and mortgage lenders in circumstances which seemingly only ever existed in their wildest dreams. Among those impacted
Read More
New Jersey Courts Make it Easier for Commercial Landlords to Change the Locks and for Lenders to Foreclose

Changes to Phase I Environmental Site Assessment standards may change federal environmental due diligence requirements.

At both the state and federal levels, purchasers of commercial property are required to perform certain environmental investigations in order to shield themselves from liability for contamination found after the
Read More
Changes to Phase I Environmental Site Assessment standards may change federal environmental due diligence requirements.

Appeals Court Critical of Law Firm’s “Scorched Earth” Collected Tactics in Landlord Tenant Case

Law firms hired by landlords in collection actions against tenants can be liable to pay the tenant both statutory penalties and attorneys fees if they use improper collection practices. That’s
Read More
Appeals Court Critical of Law Firm’s “Scorched Earth” Collected Tactics in Landlord Tenant Case

In the media

  • Gulf Coast Town Center facing foreclosure

    Naples Daily News, September 16, 2015

    Wells Fargo filed a lawsuit Sept. 8 against an affiliate of CBL & Associates, the owners of the decadeold, 1.2 million-square-foot mall in south Fort Myers for a $190.9 million unpaid loan. The center has 94 stores on 204 acres, with such anchors as Super Target, Belk, Best Buy, Dick’s Sporting Goods, Marshalls and Costco...

    Read More
  • Town liable for private company's leaking underground tanks, court rules

    NJ.com Jul 26, 2017

    CRANFORD -- A couple that owned a businesses in town and became sick from leaking underground tanks owned by an adjacent business can sue the township for damages because the tanks were partially ...

    Read More
  • Dark Waters: How a Class Action Catapulted NJ to Forefront of 'Forever Chemicals' Battle

    NJ Law Journal Jan 09, 2020

    As property owners become increasingly aware of PFAS contamination, and as individuals exposed to PFAS learn of the health risks associated with exposure, liability will likely affect entire supply chains.

    Read More
  1. 1
  2. 2
  3. 3
  4. 4
  5. 5
Contact Our Firm

Quick Contact Form