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In an unpublished decision just released, the New Jersey Appellate Division gave a resounding blow to the Rockleigh Country Club, a popular wedding hall in Rockleigh, New Jersey, who sued Governor Murphy to recoup funds for lost business revenue during his covid-ordered shutdowns.

In response to health-related emergencies caused by the spread of the COVID-19 coronavirus, in March 2020, Governor Phil Murphy issued numerous executive orders, including EO 107 which, effective March 21, 2020, implemented "social mitigation strategies" requiring "every effort to reduce the rate of community spread of the disease," including by canceling social events.

In-person gatherings were not permitted to resume until June 9, 2020.

The Rockleigh filed a lawsuit alleging that EO 107 resulted in an "uncompensated regulatory or per se taking taking" of its property in violation of its right to just compensation under the State and Federal Constitutions.

The lawsuit was filed in Superior Court. They transferred the case to the Appellate Division, saying that they were without subject-matter jurisdiction to adjudicate the cause.

Appellate Division Judges Vernoia and Natali have now dismissed the complaint, saying that the State is relieved of its duty to pay just compensation damages for a regulatory or per se taking if the regulation at issue "merely asserts a 'pre-existing limitation upon the landowner's title'.

One such "pre-existing limitation" inheres in exercises of the State's police power is apparently when the State acts to "abate the danger posed" by an imminent threat to public safety. 

A pre-existing limitation on a property owner's right to use and enjoy its property is "the subordination of individual . . . property rights to the collective interest" when a public exigency, such as an imminent public danger, demands the State exercise its police power to abate the threat to public safety. ("The right of property . . . must yield to the common good and general welfare . . . whenever necessary for the preservation of the public health, morals, comfort, order, and safety."). 

"Governor Murphy's emergency action embodied in EO 107, which resulted in the temporary closure of plaintiff's venue, "constituted an exercise of [the State's] police power that did not require just compensation."

"Therefore, the State has no duty to compensate plaintiff for the taking because EO 107 constitutes an exercise of the State's police power that was reasonably necessary to abate an imminent public danger and preserve public safety," the judges concluded.

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