Chuck Kravitz, et al. v. Philip D. Murphy, et al.

CASE SUMMARY

NCLA filed the complaint, Chuck Kravitz, et al. v. Philip D. Murphy, et al., against Governor Murphy in the Cumberland County Superior Court of New Jersey, challenging Executive Order No. 128. The order, which NCLA is also challenging on federal constitutional ground in Johnson v. Murphy, also violates the New Jersey Constitution by re-writing private contracts and the state’s landlord-tenant laws.

NCLA represents New Jersey property owners who have been impacted by the order requiring them to use their tenants’ security deposits toward rent and criminalizing their failure to do so. Without statutory authority to do so, Governor Murphy has interfered with the contractual rights and obligations of private citizens under the Civilian Defense and Disaster Control Act. However, none of the authority granted to Governor Murphy by the Act during the pandemic includes any mandate even remotely connected to a power to modify the terms of residential leasehold contracts or to waive the statutory provisions relating to those leases. The specifically enumerated powers granted by the Act involve military defense, coordination between governments, and the taking of private property.

On its face, EO 128 claims to waive numerous state laws governing security deposits that were adopted by proper, constitutional legislative process. Targeting a single group—residential tenants—for relief in this manner undermines freedom of contract, due process, and equal protection of the laws. It also ignores the governor’s limited role and disregards the separation of powers among branches of New Jersey government.

The order is clearly picking winners and losers in duly established contractual relations between tenants and landlords. More than six months after Governor Murphy’s unlawful order was issued, the Kravitzes are still struggling to track down their former tenants to recover funds needed to repair their damaged property. NCLA is asking the court to issue a declaratory judgment that EO 128 was an unlawful waiver of law that violates the Contracts Clause, Due Process Clause, and Separation of Powers Clause of the New Jersey Constitution and to issue permanent injunctive relief prohibiting Governor Murphy from enforcing the unlawful order.

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CASE STATUS: Active

CASE START DATE: December 15, 2020

DECIDING COURT: New Jersey Superior Court, Appellate Division

ORIGINAL COURT: Superior Court of Cumberland County, New Jersey

CASE DOCUMENTS

August 19, 2021 | Petition for Certification of Appellants-Petitioners
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July 20, 2021 | Opinion of the Superior Court of New Jersey, Appellate Division
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May 13, 2021 | Appellants’ Reply Brief
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April 5, 2021 | Appellants’ Opening Brief in the Superior Court of New Jersey, Appellate Division
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December 15, 2020 | Complaint and Jury Demand
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PRESS RELEASES

August 19, 2021 | NCLA Petitions Supreme Court of New Jersey to Check Governor Murphy’s Emergency Powers

Washington, DC (August 19, 2021) – New Jersey Governor Phil Murphy used the Covid-19 public-health emergency to unilaterally and unlawfully modify the rights and obligations of housing providers and tenants who had mutually entered into contracts that explicitly required security deposits. Today, the New Civil Liberties Alliance, a nonpartisan, nonprofit civil rights group, filed a petition for certification with the Supreme Court of New Jersey in the lawsuit, Kravitz v. Murphy. NCLA asks the Supreme Court to reverse the Superior Court of New Jersey, Appellate Division’s ruling that Governor Murphy’s Executive Order 128 was a valid exercise of the Governor’s emergency powers under the Disaster Control Act.

Despite the New Jersey legislature being in session, on April 24, 2020, Governor Murphy issued EO 128, purporting to “waive[] provisions of statutory law that prohibit the use of security deposits for rental payments, enabling tenants to instruct landlords to use their security deposits to offset rent or back rent.” Petitioners sued to enforce their constitutional and contractual rights, challenging EO 128, which waived long-standing state law governing security deposits for residential leasehold contracts. Remarkably, Governor Murphy declared that any provision of the Security Deposit Act (SDA) that is inconsistent with EO 128 is no longer in force and effect until 60 days after the end of the Public Health Emergency.

The Appellate Division upheld EO 128’s unlawful executive overreach, wrongly permitting the Governor to rewrite duly enacted laws and contravening both existing case law and the New Jersey Constitution’s guaranteed separation of powers. The Court’s decision will have far-reaching implications beyond this current pandemic. Its reading of the Disaster Control Act extends an open-ended invitation for the current and future governors to suspend, amend, and repeal any statute by simply declaring an economic emergency under the Disaster Control Act.

NCLA represents small housing providers who have fallen victim to Governor Murphy’s unconstitutional mandate. When the petitioners leased their properties, they had every reason to rely upon the legally valid security deposits provided by their tenants and to expect that they would remain in place for the duration of their leases. Parties to residential leases in New Jersey necessarily account for and rely on these statutory provisions when crafting their contracts. By suspending them, EO 128 unlawfully stripped petitioners of their right to security deposits and substantially altered the terms of the leases and the parties’ rights and obligations. Even more troubling, Governor Murphy imposed criminal penalties not included in the SDA for any violations of EO 128.

The Appellate Division improperly blessed the concentration of unchecked power in the Executive Branch by finding that the existence of a “widespread economic emergency” was enough to permit the Governor to rewrite the SDA subject to a purported delegation of legislative power via the Disaster Control Act. The Appellate Division failed to recognize that the Governor’s power to invoke emergency authority is not boundless. The suspension of and changes to the SDA are unlawful and cannot be upheld under the Disaster Control Act’s limited legislative purposes. The Appellate Division’s contrary conclusion cannot withstand scrutiny under existing law.

NCLA released the following statements:

“It is disconcerting that the Appellate Division went to great lengths to uphold Executive Order 128. In doing so, it expanded the breadth of the Governor’s powers under the Disaster Control Act. Our challenge now is as much about the harm this Order caused our clients as it is about curbing executive overreach and abuses in future emergencies. The Governor’s power under the Disaster Control Act is not limitless, even if the Appellate Division’s opinion erroneously treats it so. We look forward to the New Jersey Supreme Court restoring constitutional limits to the Governor’s powers.”
— Kara Rollins, Litigation Counsel, NCLA

“The Appellate Division appeared to grant Governor Murphy the power to do literally anything he wants so long as he unilaterally decides that his executive actions are related to the pandemic and in the public’s interest. But the Governor’s emergency powers do not include the authority to waive statutory law and rewrite private contracts. Our clients simply want the Supreme Court to rule that Governor Murphy is still bound by law during an emergency.”
— Jared McClain, Litigation Counsel, NCLA

For more information visit the case page here.

ABOUT NCLA

NCLA is a nonpartisan, nonprofit civil rights group founded by prominent legal scholar Philip Hamburger to protect constitutional freedoms from violations by the Administrative State. NCLA’s public-interest litigation and other pro bono advocacy strive to tame the unlawful power of state and federal agencies and to foster a new civil liberties movement that will help restore Americans’ fundamental rights.

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April 5, 2021 | NCLA Asks NJ Appellate Court to Halt Governor’s Unlawful Interference with Rental Contracts

Washington, DC (April 5, 2021) – The New Civil Liberties Alliance, a nonpartisan, nonprofit civil rights group, filed its opening brief today in Kravitz v. Murphy in the Superior Court of New Jersey, Appellate Division. The lawsuit challenges Governor Murphy’s Executive Order No. 128 (EO 128), an unconstitutional mandate that unilaterally forces residential housing providers to use their tenants’ security deposits toward rent payments and criminalizes adherence to existing contracts. The order undermines property rights by suspending existing laws governing residential leasehold contracts and depriving property owners of security against property damage caused by tenants.

NCLA represents small property owners who have fallen victim to Governor Murphy’s unlawful order. The appellants in this case are ordinary people who are also struggling financially as a result of the pandemic. Without the contractually required security deposits, these housing providers are now forced to cover the costs of any tenant-caused property damage out of their own pockets rather than using the restitution guaranteed in the contracts they signed. In one instance, a landlord has been unable to track down former tenants who caused over $1,800 worth of damage to his rental property.

Using powers claimed under the COVID-19 public health emergency which he declared, Governor Murphy unilaterally modified the rights and obligations of housing providers and tenants who had mutually and voluntarily entered into contracts that required deposits to secure rental properties against the risk of damage. By interfering with these executed contracts that explicitly prohibited the use of security deposits to pay rent, EO 128 violates the Contracts Clause of the New Jersey Constitution.

The Governor has exceeded the emergency powers granted to him under the New Jersey Civilian Defense and Disaster Control Acts, which vest the Governor with certain enumerated authorities related to public health and the militia, having nothing to do with residential leases or security deposits. EO 128 also violates the Due Process Clause and the Separation of Powers Clause of the New Jersey Constitution. Despite the New Jersey legislature being available, Governor Murphy chose to act on his own, pursuing an approach that is neither legal nor warranted.

Governor Murphy has interfered with the contractual rights and obligations of private citizens. NCLA urges the court to restore the rule of law, on which both New Jersey housing providers and tenants depend, by declaring EO 128 unlawful.

NCLA released the following statements:

“Governor Murphy unilaterally decided that tenants were more likely than housing providers to be suffering economic hardship. So, with the single stroke of a pen, he re-wrote all the residential leases in New Jersey, depriving housing providers of the security they depend on. This order is exactly the kind of one-sided interference that the Contracts Clause forbids.”
— Jared McClain, Litigation Counsel, NCLA

“It is up to the New Jersey legislature, not the Governor, to write the State’s laws. If the Governor believes that the current emergency conditions warrant a change in state law, he should ask the legislature to change the law, not attempt to make the change unilaterally.”
— Richard Samp, Senior Litigation Counsel, NCLA

“It is critically important to protect both private property rights and the rule of law during times of economic and societal upheaval. Governor Murphy has admitted that he never even considered constitutional constraints when he began issuing his executive orders. EO 128 is the type of tyrannical heavy-handedness that occurs when our elected leaders ignore our constitutional framework and our individual liberties.”
— Harriet Hageman, Senior Litigation Counsel, NCLA

For more information visit the case page here.

ABOUT NCLA

NCLA is a nonpartisan, nonprofit civil rights group founded by prominent legal scholar Philip Hamburger to protect constitutional freedoms from violations by the Administrative State. NCLA’s public-interest litigation and other pro bono advocacy strive to tame the unlawful power of state and federal agencies and to foster a new civil liberties movement that will help restore Americans’ fundamental rights.

Download the full document

December 16, 2020 | NCLA Urges NJ Court to Nix Order Directing Landlords to Use Security Deposits to Offset Rent

Washington, DC (December 16, 2020) – The New Civil Liberties Alliance, a nonpartisan, nonprofit civil rights group, is taking its case challenging New Jersey Governor Philip Murphy’s Executive Order 128 to the Superior Court of New Jersey in Cumberland County. In the case, Chuck Kravitz, et al. v. Philip D. Murphy, et al., NCLA represents New Jersey property owners who have been impacted by the order requiring them to use their tenants’ security deposits toward rent and criminalizing their failure to do so. NCLA’s complaint filed today argues the order violates the New Jersey Constitution by re-writing private contracts and the state’s landlord-tenant laws.

Without statutory authority to do so, Governor Murphy has interfered with the contractual rights and obligations of private citizens under the Civilian Defense and Disaster Control Act. However, none of the authority granted to Governor Murphy by the Act during the pandemic includes any mandate even remotely connected to a power to modify the terms of residential leasehold contracts or to waive the statutory provisions relating to those leases. The specifically enumerated powers granted by the Act involve military defense, coordination between governments, and the taking of private property.

On its face, EO 128 claims to waive numerous state laws governing security deposits that were adopted by proper, constitutional legislative process. Targeting a single group—residential tenants—for relief in this manner undermines freedom of contract, due process, and equal protection of the laws. It also ignores the governor’s limited role and disregards the separation of powers among branches of New Jersey government.

The order is clearly picking winners and losers in duly established contractual relations between tenants and landlords. More than six months after Governor Murphy’s unlawful order was issued, the Kravitzes are still struggling to track down their former tenants to recover funds needed to repair their damaged property. NCLA is asking the court to issue a declaratory judgment that EO 128 was an unlawful waiver of law that violates the Contracts Clause, Due Process Clause, and Separation of Powers Clause of the New Jersey Constitution and to issue permanent injunctive relief prohibiting Governor Murphy from enforcing the unlawful order.

NCLA released the following statements: 

“Governor Murphy has unfairly scapegoated landlords, most of whom depend on their rental income to make ends meet. The pandemic and the business closures are hurting all New Jerseyans. But rather than seeking a legislative solution that treats everyone fairly, Governor Murphy circumvented the legislature and singled out landlords to take away their rights.”

—  Jared McClain, Litigation Counsel, NCLA 

“Almost eight months have passed since Governor Murphy issued his executive order, which effectively rewrites every lease agreement in the state. This unilateral action not only directly harms property owners like our clients, but it is also an affront to the carefully crafted separation of powers laid out in the state constitution.”  

—  Kara Rollins, Litigation Counsel, NCLA 

For more information visit the case page here

ABOUT NCLA 

NCLA is a nonpartisan, nonprofit civil rights group founded by prominent legal scholar Philip Hamburger to protect constitutional freedoms from violations by the Administrative State. NCLA’s public-interest litigation and other pro bono advocacy strive to tame the unlawful power of state and federal agencies and to foster a new civil liberties movement that will help restore Americans’ fundamental rights.

Download the full document

OPINION