Opinion
DOCKET NO. A-5450-10T1
12-11-2012
HILLSIDE ESTATES, INC., a New Jersey corporation, Plaintiff-Appellant, v. BOROUGH OF SAYREVILLE, a New Jersey municipal corporation, Defendant-Respondent.
Bruce H. Snyder argued the cause for appellant (Lasser Hochman, L.L.C., attorneys; Mr. Snyder, of counsel and on the brief; Ryan M. Buehler, on the brief). Paul D. File argued the cause for respondent (Vlasac & Shmaruk, LLC, attorneys; Mr. File, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges A. A. Rodríguez, Sabatino and
Ashrafi.
On appeal from the Superior Court of New
Jersey, Law Division, Middlesex County,
Docket No. L-10570-09.
Bruce H. Snyder argued the cause for
appellant (Lasser Hochman, L.L.C.,
attorneys; Mr. Snyder, of counsel and on the
brief; Ryan M. Buehler, on the brief).
Paul D. File argued the cause for respondent
(Vlasac & Shmaruk, LLC, attorneys; Mr. File,
on the brief).
PER CURIAM
This litigation involves a dispute over the fairness of a municipality's method of imposing sewerage charges upon a large apartment complex, Winding Woods Apartments ("Winding Woods"). Plaintiff Hillside Estates, Inc. ("Hillside"), the owner of Winding Woods, appeals the trial court's June 17, 2011 order granting summary judgment to defendant, the Borough of Sayreville ("the Borough") and denying its own cross-motion for summary judgment.
The summary judgment order dismissed with prejudice Hillside's action in lieu of prerogative writs contesting, under both statutory and constitutional theories, the Borough's classification of Winding Woods as an "industrial" user. The classification results in Hillside having to pay a higher sewerage rate than other residential property owners that use the Borough's sewerage system, including six other apartment complexes. The Borough contends the rate differential is justified because Winding Woods, unlike the other local residential properties, has its own sewerage meter, which shows that the composition of Winding Woods's sewage exceeds the maximum standards for a residential user in the Borough.
We reverse the trial court's decision on non-constitutional grounds, as the record establishes that the Borough's method of calculating Winding Woods's sewerage fees is not "equitable," as is required by N.J.S.A. 40A:26A-10. The Borough's classification of Winding Woods as an industrial user, while simultaneously treating all other apartment complexes as residential users, results in a system that does not impose sewerage charges, as the law requires, in "fair proportion" to the user's characteristics. Subject to the resolution of certain open issues, including the timeliness of Hillside's lawsuit, we remand this matter for the trial court to fashion an appropriate remedy, on notice to interested parties.
I.
Hillside is the owner and operator of Winding Woods, which opened in 1981. Winding Woods contains 1,958 garden-apartment units, and it is the largest apartment complex in the Borough.
The other apartment complexes situated in the Borough are Brooklawn Gardens (358 units), Crestview Apartments (171 units), and Skytop Gardens (840 units). Three other apartment complexes, which are not in Sayreville, are also part of its municipal sewerage system.
When Winding Woods was built, it was not located near an existing sewerage collection system. Consequently, the project's developer installed a pumping station on the property, enabling sewage to be pumped directly from the premises to the collection system of the Middlesex County Utilities Authority ("MCUA").
Pursuant to an arrangement with the MCUA, a sewerage meter was installed many years ago at the complex. That meter measures, among other things, the biochemical oxygen demand ("BOD"), the suspended solids content ("SS"), and chlorine demand ("CD"), of the sewage discharged from the property. It is undisputed that no other residential property in the Borough's system, including the six other apartment facilities, has a meter that measures the sewage flow generated solely from each individual site.
MCUA's other meters measure sewage that has already been commingled with wastewater from multiple residential, apartment, commercial and/or industrial facilities.
In 1988, the developer of Winding Woods and the Borough entered into a settlement agreement conveying the property's wastewater pumping station to the Borough. Since that time, the Borough has relied upon data from the meter to place Winding Woods in a municipal user class for calculating the sewerage charges it owes. Specifically, the meter data is collected by the MCUA, which then bills the Borough for sewerage services. In turn, the Borough assesses sewerage charges upon Winding Woods.
The Borough assesses its sewerage charges in accordance with Chapter XIV, Article III, Section 14-49, of the Sayreville Code (the "Code"), "Rules and Regulations of the Sewer System." Section 14-49.1 of the Code provides, in pertinent part:
User Classes shall mean and include eight (8) classes of users which shall be established.
(a) User Class A. Users (Residential and Apartment) discharging domestic normal sewage. The domestic normal sewage shall be defined as sewage with a maximum:
Five (5) day biochemical Oxygen Demand (BOD) of two hundred twenty (220) MG/L. Suspended solids content (SS) of two hundred twenty (220) MG/L. Chlorine Demand (CD) of fifteen (15) MG/L.
(b) User Class B. Users discharging non-domestic waters and/or industrial wastes. Industrial wastes shall mean any solid, liquid or gaseous substance discharged, permitted to flow or escaping the course of any industrial, manufacturing, trade or business process or in the course of the development, recovery or processing of natural resources, as distinct from domestic sewage.
[Emphasis added.]
In addition to these two categories that are at the heart of this appeal, the Code includes six other user classes: C for "Food Preparation and Processing"; D for "Hotels and Motels"; E for "Cleaning Services"; F for "Car Service"; G for "Light Commercial"; and H for "Laundromats."
Article IV of the Water and Sewer chapter in the Code explains why industrial users, who do not treat their own sewage, are classified differently from residential sewerage users. The preamble to Article IV, Section 14-55.1, states:
The Borough of Sayreville has a contract with the Middlesex County Sewerage Authority for processing its domestic sewage which now represents one (1) of its larger
operating expenses, i.e., several hundred thousand dollars per annum; and with the exception of several of our very large industries which are individual members of the Middlesex County Sewerage Authority, or who treat their own industrial sewage, there is discharged into the Sayreville Sewage System the effluent from all other industries as well as the domestic sewage from individual home owners, all of which is handled without additional charge. The effluent discharge by these industries not only exceeds the average effluent discharge by a home owner by upwards of one thousand (1,000%) percent or more, but the industrial effluent is of such a character as to impose a heavier burden upon the treatment facilities and a much heavier expenditure on behalf of the Borough under its contract, by reason of the nature of such sewage. All of these factors result in an unfair discrimination against the home owner in favor of industry and an unreasonable burden on the cost of furnishing governmental services by the Borough to its constituents.
Schedule A to Section 14-49.22 of the Code specifies the "rents, rates and fees and other charges" to be assessed for connection, use, and service of the sewerage system. Schedule A sets forth respective "Sewer User Charges" for Class A and B users. The Class A charges are based upon a rate solely tied to the rate of water consumption:
Class A Users Discharging Normal Domestic Sewage. All Class A users of the Borough of Sayreville sanitary sewer system discharging normal domestic sewage, as herein described in the Sanitary Use Regulations, shall be charged at a rate of nineteen dollars and sixty-five centsBy contrast, the Class B charges are based upon "actual flow" calculations, as measured by outflow meters or, if no meters are on the property, by the rate of water consumption:
($19.65) per thousand cubic feet of water consumed.
Class B Users Discharging Nondomestic Industrial Wastes. All users of the Borough of Sayreville sanitary sewer system discharging other than normal sewage shall be billed quarterly as follows:
a. For Middlesex County Utilities Authority (MCUA) charges based on the ratio of the actual flow and actual flow parameters of each Class B user to the total actual flow and total actual flow parameters from the Borough to MCUA using the billing rates prescribed by the MCUA at the beginning of the year.
b. For Borough of Sayreville charges based upon the actual flow of each Class B user at a rate of one dollar and seventy-nine cents ($1.79) per thousand gallons.
Actual flow shall be established based on sewage flow where metered or water consumption where unmetered.
Billing procedures for Class B users shall be more specifically described in Schedule B of Article IV, Industrial Wastes of the Borough of Sayreville Code.
Given that one thousand cubic feet equals 7480.52 gallons, the Class A rate — under the ordinance that was in effect at the time Hillside's complaint was filed in December 2009 — was $2.62 per thousand gallons. By comparison, Class B users that year were assessed a flat charge of $1.79 per thousand gallons, or $13.39 per thousand cubic feet (representing 68% of the Class A flat charge), plus an additional charge for their share of the MCUA charges, which Class A users do not pay. Each year these rates change, as the Borough adopts an updated ordinance establishing new annual rates.
Hillside asserts that it paid over $1 million more than it would have paid as a Class A user between 2004 and 2010.
The Code further provides the Borough with the authority to place Class A apartment users into other user classes when, as is the case here, metering demonstrates the sewage composition is above that of the standards prescribed for Class A users. Section 14-49.23(h) states that, "[f]or those types of uses not specifically referenced in the User Class Definitions, the Borough of Sayreville Sewer Department shall be responsible for assigning an appropriate category to the use based on anticipated flow rates and flow parameters." In that same vein, Section 14-49.23(i) of the Code states that, "[s]hould metering and sampling data from apartment uses indicate non-compliance with domestic normal sewage requirements, the Borough of Sayreville Sewer Department reserves the right to assign the use to a more appropriate category."
Because Winding Woods has its own individual meter indicating its sewage composition exceeds the Class A standards, the Borough classifies and bills Hillside as a Class B industrial user. By contrast, all of the other apartment complexes in the Borough's sewerage system are classified as Class A and billed at a lower rate. Single-family residential users are also all categorized as Class A users. No other apartment complex or single-family property has an individual meter. The sewerage outflow from the other apartment complexes and single-family users connects to the MCUA Interceptor sewer system at various locations, where the flow and characteristics of the wastewater from various properties is measured, en masse, to enable the MCUA to calculate the overall charges to the Borough.
Apart from Hillside, some of the other property owners classified as Class B industrial users in the Borough include a chemical manufacturing plant and numerous energy facilities. According to the Schedule A Sewer User Charges in the Code, the annual rates charged to Class B users are based on a ratio of each user's sewage flow and the composition of that flow compared to that of the rest of the Borough, using the billing rates prescribed by the MCUA at the beginning of the year.
In December 2009, Hillside filed an action in lieu of prerogative writs against the Borough in the Law Division, contending that it has repeatedly been overcharged for its sewage, based upon the Borough's allegedly unfair classification of Winding Woods as a Class B industrial property. Plaintiff relied upon various statutory provisions in seeking relief, and also alleged constitutional violations of equal protection and due process. The Borough denied liability, contending that it justifiably classified Hillside's apartment complex in Class B, since the data generated by Hillside's on-site meter shows that the content of its wastewater frequently exceeds the maximum standards required to be designated a Class A user. Both parties retained engineering experts in support of their opposing contentions.
Hillside's expert, Daniel J. Dougherty, P.E., issued a report concluding that the sewage output of Winding Woods has been improperly classified by the Borough as a Class B user. His conclusion was predicated on several key findings. First, Dougherty noted that Winding Woods's complex is entirely residential and therefore should logically be in Class A. Second, according to Dougherty, the average test results (i.e., metered readings) of Winding Woods wastewater "fall within the range of typical values expected for domestic/residential sewage," and did not indicate any non-domestic or industrial waste generation. Third, he noted that Winding Woods is being treated differently than all other residential users in the Borough solely because of its meter. According to Dougherty, Winding Woods was over-billed by the Borough $668,297.43 between the first quarter of 2005 and the third quarter of 2009. Such overcharging continues annually.
The Borough's expert, David J. Samuel, P.E., the Borough Engineer, meanwhile, concluded in his own report that Winding Woods's classification as a Class B user was appropriate. First, Samuel noted that the Code's definition of "domestic normal sewage" (relating to the discharged levels of BOD, SS, and CD) is consistent with that used by other municipalities, utilities authorities, and authoritative texts. Second, Samuel analyzed the figures upon which Dougherty's compliance summary was based, and he found that these figures demonstrate that the average quality of Winding Woods's wastewater exceeded the maximum parameters for BOD and SS in every quarter over the six years reported. Third, Samuel noted that Section 14-49.23(i) of the Code allows the Borough to consider the Winding Woods waste stream as "non-domestic" and to place it into User Class B. According to Samuel, the strength of the contents of the sewage discharged from Winding Woods demonstrates that the Borough's classification is correct and appropriate. Fourth, Samuel indicated that Section 14-49.25 of the Code allows the Borough to base charges on actual meter readings, when they are available. Finally, Samuel observed that the Borough could have chosen to place Winding Woods into User Class D, reserved for hotels, resulting in an even higher charge.
After these expert reports were exchanged, the parties each moved for summary judgment. On June 17, 2011, the trial court heard oral argument on those motions. That same day, the court issued a bench opinion, granting the Borough's motion for summary judgment dismissing Hillside's complaint and, reciprocally, denying Hillside's cross-motion.
In its oral decision, the trial court found it significant that the usage meter on Hillside's property had not been required by the Borough. Because data from that meter reflected that the Winding Woods apartment complex is "consistently dispensing more sewage" than other residential users, the court concluded that it was fair for the Borough to charge Hillside a higher rate than other residential properties, and to place it in Class B rather than in Class A.
Relying on Seton Company v. City of Newark, 194 N.J. Super. 499 (App. Div.), certif. denied, 99 N.J. 152 (1984), the trial court sustained the Borough's classification system, as applied to Hillside, because it is not "patently unreasonable." The court rejected Hillside's claims of inequitable treatment under both state law and constitutional law, finding that the Borough's rate structure advances an "appropriate state interest," and is "substantially related to furthering the governmental ends of charging the users that discharge [a] high amount of sewage at a higher rate[.]"
On appeal, Hillside contends that the trial court erred in rejecting its claims under both state and federal law. It contends that it has been unfairly singled out for disparate treatment, based upon the mere fact that it happens to have an individual meter on its property. Hillside further argues that the Borough's fee structure is invalid because it is not supported by adequate proof of its fair proportionality. Finally, Hillside contends that the Borough's classification of Winding Woods as an industrial user violates constitutional precepts of equal protection and substantive due process under the Fourteenth Amendment of the United States Constitution and Article 1, paragraph 1 of the New Jersey Constitution.
Hillside seeks a host of remedies to address its unfair treatment, including injunctive relief and a refund of past overcharges. Hillside also seeks remedies under 42 U.S.C. § 1983 and § 1988, and the New Jersey Civil Rights Act ("CRA"), N.J.S.A. 10:6-1 to -2, including compensatory damages, an award of counsel fees, and litigation costs.
The Borough maintains that the trial court correctly evaluated the substantive issues and that it rightly upheld the Borough's classification of Hillside as a Class B user. The Borough further argues that Hillside's lawsuit, particularly its claim for damages for past overcharges, is procedurally barred by the forty-five-day filing deadline prescribed by Rule 4:69-6(a), and also by the doctrines of laches and equitable estoppel.
II.
The Municipal and County Sewerage Act, N.J.S.A. 40A:26A-1 to -22 ("the Sewerage Act"), authorizes municipalities and counties, either separately or in combination, "to finance, acquire, construct, maintain, operate, or improve works for the collection, treatment, transport and disposal of sewage and to provide for the financing of [sewerage] facilities." N.J.S.A. 40A:26A-2. As part of its statutory powers, a municipality is authorized to "prescribe and, from time to time, alter rates or rentals to be charged to users of sewerage services." N.J.S.A. 40A:26A-10. In setting such rates, a municipality must adhere to certain standards set forth within N.J.S.A. 40A:26A-10, including the following:
Rates or rentals being in the nature of use or service charges or annual rental charges, shall be uniform and equitable for the same types and classes of use and service of the facilities, except as permitted by section 5 of P.L. 1994, c. 78 (C. 40A:26A-10.1). Rates or rentals and types and classes of use and service may be based on any factors which the governing body or bodies of that local unit or units shall deem proper and equitable within the region served.
[N.J.S.A. 40A:26A-10 (emphasis added).]
The exception under N.J.S.A. 40A:26A-10.1 (authorizing reduced sewerage rates for senior citizens and certain disabled persons) does not bear upon the issues in this case.
Although it is not directly applicable here because Sayreville has not created its own municipal utilities authority, Title 40 sets forth analogous principles for such authorities when they establish sewerage rates and user classifications:
Rents, rates, fees and charges, which may be payable periodically, being in the nature of use or service charges, shall as nearly as the sewerage authority shall deem practicable and equitable be uniform throughout the district for the same type class and amount of use or service of the sewerage system, except as permitted by section 1 of P.L. 1994, c. 78 (C.40:14A-8.2), and may be based or computed either on the consumption of water on or in connection with the real property, making due allowance for commercial use of water, or on the number and kind of water outlets on or in connection with the real property, or on the number and kind of plumbing or sewerage fixtures or facilities on or in connection
with the real property, or on the number of persons residing or working on or otherwise connected or identified with the real improvements on or connected with the real property, or on any other factors determining the type, class and amount of use or service of the sewerage system, or on any combination of any such factors, and may give weight to the characteristics of the sewage and other wastes and any other special matter affecting the cost of treatment and disposal thereof, including chlorine demand, biochemical oxygen demand, concentration of solids and chemical composition.
[N.J.S.A. 40:14A-8(b) (emphasis added).]
For purposes of the present appeal, the key statutory questions presented under the Sewerage Act are whether the Borough's rate structure, as applied to Hillside, is "uniform and equitable for the same types and classes" of users, and also whether the factors relied upon by the Borough in setting rates are "proper and equitable." N.J.S.A. 40A:26A-10. Those statutory requirements, essentially turning upon notions of what is "equitable," have been interpreted and applied in several reported decisions.
In general, courts have a limited role in reviewing such classifications and rate levels, only overturning such decisions if they have been shown to be "patently unreasonable." Meglino v. Twp. Comm. of Eagleswood, 103 N.J. 144, 152 (1986) (quoting H.P. Higgs Co. v. Borough of Madison, 188 N.J. Super. 212, 222 (App. Div.), certif. denied, 94 N.J. 535 (1983)); see also Piscataway Apt. Ass'n v. Twp. of Piscataway, 66 N.J. 106, 109 (1974) (similarly applying a "patent unreasonableness" standard); New Providence Apts. Co. v. Mayor of Council of Borough of New Providence, 42 3 N.J. Super. 210, 216 (App. Div. 2011) (same); Freehold Borough v. Freehold Twp., 193 N.J. Super. 724, 727-28 (App. Div. 1984) (same); Crowe v. Mayor & Council of Sparta, 106 N.J. Super. 204, 206 (App. Div.) (same), certif. denied, 55 N.J. 79 (1969); cf. WHS Realty v. Town of Morristown, 323 N.J. Super. 553, 562, 564 (App. Div.) (invalidating, despite the general deference accorded by courts to local governments when providing services, an ordinance that excluded all multi-family dwellings above three units from receiving free municipal trash collection, because the proofs there showed "nothing about the mechanics or costs of solid waste collection" that justified such a differentiation), certif. denied, 162 N.J. 489 (1999).
As this court recently noted in New Providence Apartments, supra, the "judicial deference to municipal decision-making relating to the funding of sewer service includes a governing body's determination of whether particular 'types and classes of use and service' are 'the same' within the intent of N.J.S.A. 40A:26A-10." 423 N.J. Super. at 216.
The zone of flexibility generally afforded municipalities was affirmed in Piscataway Apartment Association, supra, 66 N.J. at 109, in which the Supreme Court ruled that a municipality could lawfully set a uniform sewer charge for all single-family occupancy units, including large apartment complexes, smaller multiple-unit rental buildings, and single-family homes, even though such different kinds of housing generated differing average sewerage flows. The Court held that the municipality's decision to include such different forms of housing within the same rate class was "free from patent unreasonableness." Ibid.
In that same vein, in Phoenix Associates, Inc. v. Edgewater Park Sewerage Authority, 178 N. J. Super. 109, 117-22 (App. Div. 1981), aff'd o.b., 89 N.J. 2 (1982), we upheld a sewerage authority's refusal to place one and two-bedroom apartments in a different rate class than single-family residences with three or more bedrooms. We observed that the sewerage authority was not required to take those "apparent differences" among such dwelling categories into account when setting rates. Id. at 121.
These and other cases addressing the subject instruct that, in establishing sewerage rates, a municipality is free to charge each user a sum that represents "a fair contribution" towards the operating costs and debt service charges associated with the system on a whole. See, e.g., Airwick Indus. v. Carlstadt Sewerage Auth., 57 N.J. 107, 120-22 (1970) (applying the cognate "equitable" standard of N.J.S.A. 40:14A-8), app. dism. and cert. denied, 402 U.S. 967, 91 S. Ct. 1666, 29 L. Ed. 2d 132 (1971). The statute does not require "precise mathematical equality" in the calibration of sewerage rates, but only mandates "rough equality." Id. at 122.
Even bearing in mind the applicable deferential standard of review, we conclude that the Borough's decision in the present case to classify Winding Woods as a Class B industrial user — thereby requiring it to pay higher rates than other apartment complexes that use the sewerage system — is an exceptional instance of a patently unreasonable classification. Winding Woods has been singled out as the only apartment complex in the Borough that is charged Class B industrial rates for its sewage. The Borough's justification for that disparate treatment is inherently and completely tied to the fact that Winding Woods happens to have an outflow meter hooked up to its sewer line. The presence of that meter is essentially a historical anomaly. Although the trial court emphasized that the meter had not been installed at the behest of the Borough, the meter's origins do not resolve the disparity problem.
Despite the Borough's assertions that Winding Woods's sewage exceeds the Class A standards, there is no reason to presume that the other apartment complexes using the system generate sewage flow at rates less than that of appellant. The Borough's expert has not put forth a credible and logical explanation for why those other apartment complexes should be in a different rate classification than Winding Woods. If, hypothetically, the meter at Winding Woods were disconnected, there would be no more data to justify its ongoing differential treatment.
Although it would not be patently unreasonable for the Borough to place all apartment complexes — including appellant's — in a rate class distinct from single-family residences, the singular placement of Winding Woods in the industrial class lacks rational support in the record. We do not mean to suggest that the Code's use of sewage composition as a basis for distinguishing between rate classes is per se impermissible. However, in this instance, the Borough is essentially crediting the other apartment complexes with an unfounded assumption that their sewage is in compliance with the Code's Class A parameters. Although there may be evidence that the composition of Winding Woods's sewage exceeds the Class A parameters, there is no evidence that the other apartment complexes are in compliance with those standards. Consequently, we reverse the trial court's legal conclusion that the rate differential is reasonably supported. See Manalapan Realty v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995) (noting that a "trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference"). The Borough's present classification scheme, as applied to Hillside, cannot persist.
We address in Part III, infra, various considerations bearing upon the fashioning of an appropriate remedy.
The present case is factually distinguishable from Seton Company, supra, 194 N.J. Super. 499, the main case cited in the trial court's oral opinion. In that decision, we upheld an ordinance increasing the sewer charge to a flat rate intended to allow the defendant municipality to recoup the costs of its sewer system operation. The plaintiff-company, a high-volume water user, argued that the ordinance would have the improper effect of making heavy industrial users pay more than their fair share of the municipality's cost of providing the sewer services. Id. at 504.
In rejecting that claim in Seton Company, we observed that "an ordinance setting sewer rates is not patently unreasonable provided that those serviced and benefited by a sewer system finance the system in fair proportion to the cost of providing service to them." Id. at 507 (emphasis added). The plaintiff's arguments failed there because the ordinance fairly billed users "in direct proportion to the use of [the municipal] system." Id. at 508.
More recently, in New Providence Apartments, supra, 423 N.J. Super. at 220-23, we rejected the plaintiff's challenge to the defendant municipality's hybrid system for allocating sewer costs more heavily upon larger apartment complexes than upon single-family residences and smaller (one-unit and two-unit) apartment complexes. We found "nothing irrational" in the municipality's decision to impose a user fee, over and above property tax payments, upon the owners of apartment buildings with the larger units. Id. at 222. In reaching that determination, we stressed that the municipality's funding system "[was] not invidious or irrational because it maintains the availability of service 'to all persons in like circumstances upon the same terms and conditions.'" Id. at 223 (emphasis added) (quoting WHS Realty Co. v. Town of Morristown, supra, 323 N.J. Super. at 563.
The present case is distinguishable because the Borough's designation of Hillside as a Class B industrial user fails to treat apartment building owners in "like circumstances" upon the "same terms and conditions." The Borough unfairly designates Hillside as a Class B industrial user, forcing it to pay higher rates, while at the same time places all other apartment complexes in the lower-rate tier for Class A residential users. As we have already discussed, the idiosyncratic presence of an outflow meter on Hillside's property does not justify this disparity. The Borough's approach is not, as N.J.S.A. 40A:26A-10 requires, an "equitable" system insofar as it singularly classifies Winding Woods as the only apartment complex in the industrial rate category without data from the other complexes justifying this unique treatment.
III.
We now turn to the important questions of remedy. As a threshold matter, we recognize that the Borough has argued that no remedy should be imposed upon it here because Hillside could have complained about the rate differential years ago as each annual rate ordinance was adopted, but instead did nothing about it until filing the present lawsuit in 2009. Given that delay, the Borough contends that Hillside should be precluded from obtaining relief, regardless of a finding of the substantive merit of its claims, under principles of laches and equitable estoppel. In a similar vein, the Borough maintains that Hillside's claims for recoupment of alleged past overcharges are procedurally barred under Rule 4:69-6(a), because Hillside did not bring a lawsuit contesting those past charges within forty-five days of receiving notice from the Borough of the annual charges.
None of these predicate issues were reached by the trial court, as it concluded that the Borough's charges were legally justified, thereby obviating the need to say more than that. The issues of timeliness, laches, and estoppel now become significant because we have reversed the trial court's analysis of the merits. Rather than decide these issues in the first instance, we remand them to the trial court for its initial consideration. See Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973).
As part of its assessment of this matter on remand, the court may reopen the record to obtain additional proofs that relate to those issues. Such proofs may address, but are not limited to: the reasons why Hillside did not file suit until 2009; the prejudice to the Borough and to other interested parties, including other ratepayers; the impact upon municipal revenues of any court-ordered refunds; and, the overall interests of justice. As part of that analysis, the trial court should also resolve in the first instance whether, as Hillside argues, its monetary claims against the Borough are in the nature of a "quasi-contract" and thus subject to six-year statute of limitations pursuant to N.J.S.A. 2A:14-1.
See, e.g., R. 4:69-6(c), which allows the forty-five day filing period in an action in lieu of prerogative writs to be enlarged in the interests of justice.
Depending upon how the trial court resolves the open questions of timeliness and estoppel, the court should then fashion appropriate remedies. Any remedy ordered shall include a prospective injunction, that disallows the ongoing practice of placing Hillside in a different rate class from the other apartment complexes that participate in the sewerage system. The injunction should have an appropriate effective date that reasonably allows the Borough sufficient time to implement our decision nullifying its rate structure.
We do not foreclose the Borough in the future from making rate distinctions among the apartment complexes so long as those distinctions are based upon appropriate grounds and not based upon the presence or absence of an outflow meter.
The trial court also should consider whether any refunds or other damages should be paid to Hillside and, if so, the extent to which the calculation of such refunds should stretch back to billing periods preceding the 2009 filing of the lawsuit.
We further direct, as a precedural matter, that these remedial issues should all be explored and resolved by the trial court on notice to other interested parties. Such interested parties, at a minimum, shall include current rate payers in the Borough's system. They also conceivably might include other residents of the Borough who do not pay sewerage charges, but who may be adversely affected by the fiscal impact that a remedy may have upon the municipal budget and upon other municipal services. The precise manner in which notice of a remedial hearing is published or otherwise made known to interested parties is left to the trial court's sound discretion. Following such a remedial hearing and the trial court's disposition of all of the open issues, any aggrieved party may file a new timely appeal.
The notice concerns might potentially be addressed through public notice of an amended ordinance created in conformity with this opinion, an issue that we leave to the trial court.
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IV.
Based upon our ruling, there is presently no need to reach the constitutional issues posed by Hillside, nor its claims for relief under the CRA. As our Supreme Court has recognized, courts "strive to avoid reaching constitutional questions unless required to do so." Comm. to Recall Robert Menendez for the Office of U.S. Senator v. Wells, 204 N.J. 79, 95 (2010). "'[I]f a case may be decided on either statutory or constitutional grounds, [courts], for sound jurisprudential reasons, will inquire first into the statutory question.'" Ibid. (quoting Harris v. McRae, 448 U.S. 297, 306-07, 100 S. Ct. 2671, 2683, 65 L. Ed. 2d 784, 798 (1980)). The Court also has instructed that we "'should not reach a constitutional question unless its resolution is imperative to the disposition of litigation.'" Ibid. (quoting Randolph Twp. Ctr., L.P. v. Cnty. of Morris, 186 N.J. 78, 80 (2006)).
Because the issues of remedy and timeliness relating to the Borough's state-law violation of N.J.S.A. 40A:26A-10 have yet to be resolved, it is not "imperative" that we presently address Hillside's claims of a constitutional deprivation. Nor is there a present need to address Hillside's claims under the CRA, which essentially mirror claims and remedies under 42 U.S.C. § 1983. See Filgueiras v. Newark Pub. Sch., 426 N.J. Super. 449, 468 (App. Div.), certif. denied, _ N.J. _ (Nov. 5, 2012). Depending upon the outcome of the remand proceedings, a fair resolution of the matter could be attained under statutory and other non-constitutional legal principles. The remand process should be exhausted before any adjudication of the constitutional claims that, in essence, duplicate Hillside's endeavor in the other counts of its complaint to invalidate the Borough's classification of Winding Woods as an industrial user. Cf. Rezem Family Assocs. v. Borough of Millstone, 423 N.J. Super. 103, 116-20 (App. Div.) (requiring the exhaustion of judicial and administrative remedies before adjudicating claims that the municipality's action violated plaintiff's constitutional and civil rights), certif. denied, 208 N.J. 366 (2011); see also Seton Co., supra, 194 N.J. Super. at 508 (reaching the merits of the plaintiff's constitutional challenge to the municipality's rate scheme, but only after rejecting plaintiff's claims founded on non-constitutional grounds).
Reversed and remanded for further proceedings. We do not retain jurisdiction.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION