Railroad Can Take Private Property if “Not Incompatible With the Public Interest” and as “The Exigencies of Business May Demand”

Norfolk Southern Railway Co. v. Intermodal Properties, LLC, 210 N.J. 261 (2013).  New Jersey law allows railroads and public utilities to take private property by eminent domain.  N.J.S.A. 48:3-17.7 requires that any such taking be “not incompatible with the public interest,” and N.J.S.A. 48:12-35 limits takings to what “the exigencies of business may demand.”  This opinion by Justice Hoens, for a unanimous Court, addresses the meaning of those terms in the context of a taking by the plaintiff railroad.

The railroad sought to expand its freight facility in Secaucus.  At that location, plaintiff transfers freight containers from incoming trains to tractor-trailers for delivery to their ultimate destinations.  The yard in which the tractor-trailers accept the containers needed to be expanded due to growth in the business and the need to minimize the tractor-trailers’ waiting and turnaround time in the yard.  Accordingly, plaintiff sought to acquire an adjacent property owned by defendant. 

Defendant rejected the railroad’s purchase offers, so the railroad began condemnation proceedings before the New Jersey Department of Transporation.  Because defendant contested the case, the matter was transferred to the Office of Administrative Law.  The railroad prevailed there, in the Appellate Division on defendant’s appeal and, today, in the Supreme Court.

Defendant contended that because it wanted to use the subject property as parking for the Secaucus train station, which would advance the public interest, the railroad’s proposed taking was incompatible with the public interest.  But there was no one who was willing to enter into an agreement to develop the property for such parking, and any such venture, if it ever came to fruition, would be a private enterprise, not a public one.  Defendant had relied on the “prior public use” doctrine, but the rail parking scheme was “neither a prior use nor a public one, but is instead a speculative, future plan for a profit-making venture.” 

More importantly, as Justice Hoens concluded, the statute “demands that the focus be on the proposed use identified by the condemnor … in the absence of a previously existing public use, it does not permit a comparative analysis of a competing public purpose that an owner proposes.”  Thus, because “railroads and related terminal facilities meet the requirements for being a public use,” any potential competing use of the property was immaterial, and the railroad’s condemnation was “not incompatible with the public interest.”   

On the second issue, the meaning of what “the exigencies of business may demand,” Justice Hoens set the stage by summarizing the standard of review.  Courts “give substantial deference to the interpretation gives to a statute that the agency is charged with enforcing …. [but are] in no way bound by the agency’s interpretation of a statute or its determination of a strictly legal issue.”  Justice Hoens also reiterated the familiar principle that the Court must “understand and give effect to the intent of the Legislature.”

Here, that task required the Court to look back to the 19th century, when the phrase “exigencies of business” was first used in this context.  Though more recent cases, especially in the Fourth Amendment search and seizure arena, have used the term “exigent” to signify an emergent need, and there are dictionary definitions that cite that meaning of “exigent,” other “modern day definitions are inconsistent and lead to contrary conclusions.” 

Justice Hoens exhaustively traced the origin and evolution of “exigencies of business” in railroad-related statutes back to 1873 and through 1903.  She then analyzed the caselaw discussing that term in connection with those enactments, as well as other caselaw using that phrase.  The result was that “exigencies of business” was regarded as a term of art, “to describe generally the needs of business, or the ordinary course of business, rather than to allude to an emergent, urgent, immediate, or pressing need.”  Thus, there was no need for the railroad to show an urgent need for the property to be condemned. 

“Long-term planning is critical to rail transport, and we detect no basis on which to conclude that the Legislature intended to demand that railroads prove urgency, immediacy or emergency of their need for land as a prerequisite to exercising their statutory condemnation power.”  Since the condemnation was both “not incompatible with the public interest” and in accordance with what “the exigencies of business may demand,” the Cour affirmed the decisions below that had approved the condemnation.