Statutory Amendment Trumps “Law of the Case”

In re Denial of Regional Contribution Agreement Between Galloway Tp. and City of Bridgeton, 418 N.J. Super. 94 (App. Div. 2011).   The Council on Affordable Housing (“COAH”) denied approval of a regional contribution agreement (“RCA”) between Galloway and Bridgeton.  The basis for that decision was that after the two municipalities entered into the RCA, the Legislature amended the Fair Housing Act (“FHA”), which governs COAH, to prohibit RCA’s.  Galloway and a prospective developer under the RCA argued that the mandate of an Appellate Division decision that preceded the statutory amendment by ten days required approval of the RCA.  The Appellate Division, in an opinion by Judge Cuff disagreed.

The court noted that COAH was obligated to obey the mandate of the prior Appellate Division decision “precisely as it is written,” as it was the law of the case.  But law of the case, Judge Cuff stated, is not inflexible, and “does not apply when new law controls.”  That was the case here, where the Legislature had created new law by amending the FHA.

The parties argued at length about whether the amendment of the FHA was meant to be retroactive or prospective.  The court found that “the language of the statute leaves little doubt the Legislature intended to eliminate the use of RCAs and to do so immediately.”  Judge Cuff also found no “manifest injustice” in applying the amendment to the Galloway-Bridgeton RCA.

Finally, the court observed that all parties to the RCA “undertook considerable risk by effectuating the RCA while the appeal was pending.”  In doing that, they were acting “at their peril.”  That circumstance did not add any weight to the position of Galloway and the developer.