265 A.3d 164
N.J. Super. Ct. App. Div.2021Background
- JWC Fitness, a kickboxing studio in Franklin, NJ, closed March 16, 2020 under Gov. Murphy's EOs that shut gyms and fitness centers during the COVID-19 public-health emergency.
- EOs 104 and 107 initially closed gyms; EO 157 (June 26, 2020) allowed outdoor and limited individualized indoor instruction; EO 181 (Aug. 27, 2020) allowed indoor reopening Sept. 1 at 25% capacity; subsequent orders gradually increased capacity and lifted limits in 2021.
- JWC offered free live-stream classes during the shutdown, limited outdoor classes in summer 2020, delayed indoor reopening until Oct. 12, 2020, and permanently closed after eviction proceedings and revenue shortfalls.
- JWC sought compensation under the Disaster Control Act (N.J.S.A. App. A:9-34) arguing the EOs effectively "commandeered and utilized" its property and thus triggered the Act’s compensation procedures.
- JWC also asserted federal and state constitutional takings claims (Fifth/Fourteenth Amendments; N.J. Const. art. I, ¶ 20).
- The Appellate Division held the EOs were exercises of the State’s police power (regulation), not physical commandeering triggering statutory compensation, and no compensable constitutional taking occurred.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the Disaster Control Act required compensation because the EOs "commandeered and utilized" private property | EOs closing/limiting gyms amounted to commandeering/utilization under N.J.S.A. App. A:9-34, so an emergency compensation board must be appointed and compensation paid | EOs were regulatory police-power actions under N.J.S.A. App. A:9-40/9-45, not physical takings or requisitions under A:9-34; compensation provisions apply only to actual taking/utilization | Court: No. The statute contemplates compensation for physical seizure/use; these EOs were regulatory and did not trigger A:9-34 compensation procedures |
| Whether the EOs effected a constitutional taking (state or federal) | The restrictions deprived JWC of the use/value of its business and thus constitute a taking requiring just compensation | The EOs did not physically seize property; business operations are not a property interest for takings purposes; restrictions were temporary public-health regulations under the police power | Court: No taking. No physical occupation; not a total loss of property use; Penn Central factors/precedent weigh against finding a regulatory taking given the temporary, broadly applied public-health measures |
Key Cases Cited
- Lucas v. S.C. Coastal Council, 505 U.S. 1003 (establishes categorical rule for total deprivation regulatory takings)
- Penn Central Transp. Co. v. New York City, 438 U.S. 104 (adopts multi-factor test for regulatory takings)
- Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg'l Plan. Agency, 535 U.S. 302 (temporary regulatory moratoria not per se takings; length and context matter)
- Klumpp v. Borough of Avalon, 202 N.J. 390 (New Jersey takings law coextensive with federal)
- Mansoldo v. State, 187 N.J. 50 (takings framework in NJ; regulatory-taking analysis)
- Bernardsville Quarry, Inc. v. Borough of Bernardsville, 129 N.J. 221 (fact-intensive inquiry for regulatory takings)
- Pheasant Bridge Corp. v. Township of Warren, 169 N.J. 282 (temporary regulatory limitations do not necessarily constitute takings)
- Worthington v. Fauver, 88 N.J. 183 (discusses scope of Governor’s powers under Disaster Control Act)
- TJM 64, Inc. v. Harris, 475 F. Supp. 3d 828 (district court decision rejecting physical-taking theory for COVID-19 closure orders)