Reid Development Corp. v. Township of Parsippany-Troy Hills
10 N.J. 229, 89 A.2d 667 (1952)
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Rule of Law:
A municipality operating a public water utility may not condition the extension of its water mains on a landowner's compliance with requirements unrelated to the water service, such as conforming to specific zoning or planning objectives.
Facts:
- Plaintiff was developing residential lands on Fairway Place within the defendant township.
- The township owned and operated the public water utility responsible for providing water to its inhabitants.
- In April and May of 1950, plaintiff formally requested that the township extend its water main 600 feet to service the new development.
- The township's governing body responded that it would provide the water main extension and assist with labor and material costs, but only on the condition that the plaintiff revise its development plan to feature lots with 100-foot frontages.
- The township's stated reason for the condition was to avoid potential issues with cesspools and septic tanks on smaller lots.
- Plaintiff rejected the township's condition regarding lot size.
- The township's general practice was to grant such extensions, with the developer bearing the initial cost and being reimbursed over time from water revenues.
Procedural Posture:
- Plaintiff filed a civil action in lieu of mandamus in the Superior Court (trial court) to compel the defendant township to extend its water mains.
- The Superior Court found for the township, ruling that the extension of a water main is a discretionary governmental function and that the township did not abuse its discretion.
- Plaintiff appealed the Superior Court's judgment to this court.
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Issue:
Does a municipality, when operating a public water utility, abuse its discretion by conditioning the extension of a water main on the landowner's agreement to increase lot sizes for a proposed development?
Opinions:
Majority - Heher, J.
Yes. A municipality abuses its discretion by conditioning a water main extension on wholly alien considerations related to planning and zoning. The distribution of water by a municipality is a proprietary function, and it is under a duty to serve all inhabitants in like circumstances on the same terms and conditions, without arbitrary discrimination. The township's power to provide water cannot be used as leverage to coerce a landowner into accepting a lot-size restriction, as this amounts to exerting planning and zoning powers by indirection. The refusal was not based on legitimate economic considerations or factors related to providing the water service itself, but rather on an improper attempt to enforce zoning policy. Such an action is an arbitrary and unreasonable abuse of discretion, making judicial intervention via mandamus appropriate.
Analysis:
This decision establishes a crucial limit on the power of municipalities when they act in a proprietary capacity, such as operating a public utility. It prevents a local government from leveraging its control over essential services to enforce its governmental powers, like zoning and planning, indirectly. The case reinforces the principle that distinct governmental powers must be exercised through their own prescribed statutory channels and not commingled to coerce landowners. This precedent protects developers and property owners from arbitrary conditions unrelated to the public service they are requesting, ensuring that access to utilities is not used as a bargaining chip for unrelated municipal objectives.
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