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govinfo:USCOURTS-njd-2_21-cv-12501-0

U.S. District Court for the District of New Jersey · 2022-03-23

· GavelSight synced 2026-09-06 03:48:03

UNITED STATES DISTRICT COURT 
FOR THE DISTRICT OF NEW JERSEY 
 
OM 309-311 6TH STREET, LLC, OM 
1101-1109 PALISADE AVENUE, LLC, 
THE STELLA ON PARK, LLC, 
GOLDEN CREST 3347 PARK 
AVENUE, LLC, OM 422-426 5TH 
STREET, LLC, OM-309-315 11TH 
STREET, LLC, AND OM 812 NEW 
YORK AVENUE, LLC, 
Plaintiffs, 
v. 
THE CITY OF UNION CITY, UNION 
CITY RENT STABLIZATION BOARD 
AKA THE CITY OF UNION CITY 
RENT LEVELING BOARD, KENNEDY 
NG, NILDA MERCADO, YOELIS 
MARTE, ROSANNA COLON, NORMA 
GUEVARA, YAMIRYS HOLGUIN, 
SANDRA VASQUEZ, JUAN MILAN, 
ANANCY JAFARGIAN BOLIVAR 
CARDENAS, MICHAEL LOPEZ, 
HECTOR ROSARIO, MAYOR BRIAN 
P. STACK, JOHN V. SALIERNO, and 
NEIL D. MAROTTA, 
Defendants. 
 
Civ. No. 21-12051 (KM) (JRA) 
OPINION 
KEVIN MCNULTY, U.S.D.J.: 
Plaintiffs, landlord LLCs, allege that the actions of the City of Union City, 
the Union City Rent Stabilization Board (the “Board”), its members, the city’s 
mayor, and other city officials constituted an uncompensated taking of 
property and violated their constitutional rights to substantive and procedural 
due process. Plaintiffs also bring actions in lieu of prerogative writs to 
challenge two specific decisions of the Board.  
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Defendants move to dismiss Counts 1–4 in their entirety and to dismiss 
several plaintiffs and defendants from the case. For the following reasons, 
defendants’ motions (DE 30, 31, 32)1 are DENIED in part and GRANTED in 
part. 
I.  BACKGROUND 
Plaintiffs allege that their rights were violated on three separate 
occasions: First, when the Board arbitrarily reduced the rent of a tenant of OM 
309-311 6th Street, LLC (“6th Street LLC”) and ordered the LLC to pay back the 
rent that the tenant had allegedly been overcharged by the prior owner (Am. 
Compl. ¶ 42–148); Second, when the Board arbitrarily reduced the rent of a 
tenant of OM 1101-1109 Palisade Avenue LLC (“Palisade Avenue LLC”) (Id. ¶¶ 
149–216); and Third, when Union City Mayor Brian Stack allegedly retaliated 
against plaintiffs by sending letters to the tenants residing at properties owned 
by The Stella on Park, LLC, Golden Crest 3347 Park Avenue, LLC, OM 422-426 
5th Street, LLC, OM-309-315 11th Street, LLC, and OM-812 New York Avenue, 
LLC, informing the tenants that plaintiffs had filed a fraudulent lawsuit and 
that the rent controlled tenants had a right to challenge their rents before the 
Board (Id. ¶ 217–225). There are numerous additional details, but these three 
events form the heart of the case.  
Union City, New Jersey first adopted a rent control ordinance in 1973. 
(Id. ¶ 38.) That ordinance set a base rent, and calculated subsequent rent 
increases from that base rent. (Id.) The ordinance was amended many times 
over the years. In 1996, the city amended the ordinance to decontrol rents, and 
allow the base rent to be reset to the market-rate rent if any rent-controlled 
 
1  Certain citations to the record are abbreviated as follows: 
 DE = docket entry in this case 
Am Compl. = Amended Complaint (DE 17) 
Mot. = City of Union City’s Brief in Support of its Motion to Dismiss (DE 30-1) 
Opp. = Plaintiffs’ Omnibus Opposition to Motions to Dismiss (DE 37) 
 
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unit became vacant. (Id. ¶ 39–41.) The ordinance also required landlords to file 
“rent registrations” with the city, which allowed the city to monitor the rent 
paid by tenants and prevent illegal rent increases. (Id. ¶ 92.)  
A. 6th Street LLC 
In 2018, plaintiff 6th Street LLC began negotiations to purchase 
properties in Union City, including Property #1. (Id. ¶ 47.) 6th Street LLC 
numerous times requested that the city provide it with the rent registration and 
other documents related to the properties so that it could determine the rents 
that the tenants would pay and assess the profitability of its investment. (Id. ¶ 
48–56.) 6
th Street LLC did not receive a full response from the city but 
nevertheless closed on Property #1 on May 7, 2019. (Id. ¶ 57.) Even after 
closing, 6th Street LLC still struggled to obtain the requested information from 
the city. (Id. ¶ 58–62.)  
On August 30, 2019, defendant Nilda Mercado, the Secretary of the 
Board, informed 6th Street LLC for the first time that Emilio Puente, a tenant of 
Property #1, had complained that the rent he had been paying since moving 
into the unit in 2014, $996.05 per month, was an illegal overcharge.
2 (Id. ¶ 63.) 
The rent-controlled unit in which Mr. Puente lives changed hands in 1999 and 
was then rented by a new tenant for $487.33. (Id. ¶ 42–45.) Under the then-
operative 1996 ordinance, $487.33 thus became the base rent from which any 
future increases should have been calculated. (Id. ¶ 46.) Mercado, however, 
calculated that Puente’s 2019 rent should have been $764.72 per month, and 
that he had been overcharged $16,133.08 between 2014 and 2019. (Id. ¶ 63.) 
6
th Street LLC alleges that Mercado improperly calculated Puente’s rent 
because she used a lower base rent from 1987, rather than the $487.33 base 
rent from 1999. (Id. ¶ 67.) What is more, for most of the period during which 
Puente was allegedly overcharged, the building was owned by the prior owner, 
 
2  Apparently, a communication about Puente’s complaint dated June 18, 2019 
was meant for 6th Street LLC but was instead sent to the prior owner of the property. 
(Id. ¶ 69, 72.) 
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not by 6th Street LLC. Nevertheless, Mercado informed 6th Street LLC that it 
was required to pay the full $16,133.08 to Puente within ten days. (Id. ¶ 68.) 
6th Street LLC disputed that decision with the city but received no substantive 
response until a letter dated December 12, 2019, confirmed that as of October 
1, 2019, the legal rent for Puente’s unit was $764.73.3 (Id. ¶ 70–77.) 
6th Street LLC then appealed that determination to the full Board, which 
held a hearing on February 10, 2020. (Id. ¶ 78–79.) Present at that meeting 
were Board members Rosanna Colon, Nancy Jafargian, Hector Rosario, Sandra 
Vasquez, and Juan Milan; Neil D. Marotta, the Board’s attorney; John V. 
Salierno, the tenant advocate attorney; and Kennedy Ng, the city’s rent leveling 
administrator. (Id. ¶ 80.) At the hearing, 6
th Street LLC presented evidence that 
the apartment had changed hands in 1999, that therefore the appropriate base 
rent was the 1999 rent of $463.86, and that calculating from that base rent, 
Mr. Puente’s legally permissible 2019 rent was $904.23, somewhat lower than 
what he had been paying but much higher than what Mercado had calculated. 
(Id. ¶ 81–84.) Tenant Advocate Salierno and Board attorney Marotta however, 
took the position that in order to prove the rent in 1999, 6
th Street LLC needed 
to produce the 1999 lease, not merely the rent registration that had been filed 
with the city, although nothing in the ordinance required 6th Street LLC do so. 
(Id. 85–90.) Secretary Mercado, who had performed the rent calculation, 
testified that she had disregarded the 1999 rent registration which showed the 
unit had changed hands because some rent registrations contain mistakes. (Id. 
¶ 91.) The Board therefore set aside the evidence presented by 6
th Street LLC 
and concluded that Mercado had correctly calculated the rent. The Board 
decided, however, that it would waive the prior determination that 6th Street 
LLC owed Puente back the $16,133.08 in overpayments for the period 2014–
19, because 6th Street LLC had only recently acquired the property. (Id. ¶ 94–
 
3  The Amended Complain contains no explanation for the one cent discrepancy 
between the calculated rent in the August 30 and December 12 letters. For current 
purposes, I ignore it. 
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99.) Five months later, on July 13, 2020, the Board issued its resolution 
endorsing Mercado’s rent calculation and waiving the overcharge payment. (Id. 
¶ 100–03.) A week later the resolution was sent to both Salierno and 6th Street 
LLC. (Id. ¶ 104.)  
6th Street LLC, relieved not to owe the overcharge payment, decided not 
to appeal the decision of the Board. (Id. ¶ 108.) On September 30, 2020, 
Salierno informed 6th Street LLC that Puente elected to take the $16,113.08 
overcharge – which the Board had waived – as a credit against future rent. (Id. 
¶ 109.) 6th Street LLC reminded Salierno that the Board had waived the 
overcharges, but Puente stopped paying rent and on November 25, 2020, 
Salierno requested that the Board reconsider its decision and hold 6
th Street 
LLC liable for the refund. (Id. ¶ 111–14.) Parties have 45 days to appeal the 
decision of the Board, and thus any appeals should have been filed by 
September 3, 2020. (Id. ¶ 107.) Technically Salierno did not appeal but rather 
requested that the Board reconsider its decision. The ordinance in effect at that 
time stated that the Board may reconsider decisions “on its own motion… upon 
a finding that there is new evidence not readily available at the time of the prior 
determination.” (Id. ¶ 117.) Although it was Salierno, not the Board, who moved 
for reconsideration, and although there was no new evidence, the Board 
scheduled a second hearing, which took place on March 8, 2021. (Id. ¶ 121.)  
At that second hearing, Board members Colon, Norma Guevara, Yamirys 
Holguin, Vasquez, and Milan were present, in addition to Marotta, Salierno and 
Ng. (Id. ¶ 122.) At the hearing, Salierno argued that the rent control ordinance 
specifically required that any overcharge shall run with the property and that a 
successor owner would therefore be responsible for refunding it. (Id. ¶ 123.) 6
th 
Street LLC argued that nothing in the ordinance prevented the Board from 
using its discretion to waive fees, that the section of the ordinance stating that 
an overcharge shall run with the property was not in effect when the property 
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was purchased, and that the rehearing was procedurally improper.4 (Id. ¶ 124–
27, 140.) Puente also testified and informed the Board that he had met with 
Mayor Stack to discuss the overcharge. (Id. ¶ 134.) Although Puente himself 
testified that, through his interpreter, he had understood what happened at the 
first hearing, Salierno claimed that Puente did not understand. (Id. ¶ 137–38.) 
After this testimony, the Board reversed its previous decision and determined 
that 6
th Street LLC was required to refund the full overcharge to Puente. (Id. ¶ 
145.) A second resolution, memorializing the result of the second hearing, was 
sent on April 28, 2021. (Id. ¶ 147.) 
B. Palisade Avenue LLC 
Palisade Avenue LLC purchased a property, Property #2, in Union City 
on January 22, 2019. (Id. ¶ 149.) Palisade Avenue LLC made requests for 
information similar to those made by 6
th Street LLC but also received no 
response from the city. (Id. ¶ 150.) One tenant in Property #2 at the time of 
purchase was Ramon Gracesqui, who had signed a lease with the previous 
owner that began on May 1, 2018, with a monthly rent of $1,650.00. (Id. ¶ 
151.) On June 18, 2020, at the suggestion of city officials, Gracesqui filed a 
complaint about his rent with the Board. (Id. ¶ 155.) On August 11, 2020, 
Palisade Avenue LLC received a letter from the city, informing it that in 
response to Gracesqui’s complaint, Yoelis Marte, the new Board Secretary, had 
calculated that Gracesqui’s rent should have been $1,041.49 per month, 
effective October 1, 2019. (Id. ¶ 157–58.)  
Attempting to formulate a response to this rent reduction, Palisade 
Avenue LLC again requested the records relevant to Property #2, and on 
August 25, 2020, received the rent control file for Gracesqui’s unit. (Id. ¶ 161–
62.) A letter from June 7, 2016 in the file revealed that as of 2015, the Board 
had calculated that the correct rent was $1,472.93, which, given the allowable 
annual increases, should have led to a 2020 rent of $1640.46 per month, ten 
 
4  Salierno claimed that he had not received the resolution that was emailed to 
him on July 20, 2020. (Id. ¶ 129.) 
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dollars lower than the rent set in Gracesqui’s lease, but six hundred dollars 
higher than the rent calculated by the Board. (Id. ¶ 164-65.) When 
recalculating the allowable rent at $1,041.49 per month, Board Secretary 
Marte had taken a 2011 rent calculation, rather than the 2015 calculation, as 
a base. (Id. ¶ 167.)  
Palisade Avenue LLC appealed the recalculation of Gracesqui’s rent, and 
a hearing was held before the Board on May 24, 2021. (Id. ¶ 170.) Palisade 
Avenue LLC argued that the rent control ordinances required the Board to rely 
on the most recent rent calculation (here, the 2015 calculation) when 
performing a recalculation. (Id. ¶ 172–73.) Salierno, however, argued that the 
2015 calculation was potentially incorrect, and that the lower rent would better 
serve the rent stabilizing purposes of the ordinance. (Id. ¶ 176.) Marte testified 
that she had concededly disregarded the 2015 rent calculation because she 
believed it was not actually for Gracesqui’s apartment but for a different 
apartment in the building. (Id. ¶ 186.) Marte also testified that she frequently 
disregarded rent registrations in favor of leases, and that she had spoken to Ng 
before determining that the 2015 rent calculation was a mistake. (Id. ¶ 197–99, 
208.) The Board then denied Palisade Avenue LLC’s appeal and, on July 8, 
2021, served it with the resolution denying the appeal and stating that the 
2015 rent calculation was not for Gracesqui’s apartment but for a different 
unit. (Id. ¶ 213–15.)  
C. Letters to other plaintiffs 
After this lawsuit was filed, plaintiffs allege, Mayor Stack sent a letter to 
“the majority of plaintiffs’ tenants” which referred to this lawsuit as 
“fraudulent” and encouraged tenants to complain to the Board about the 
calculation of their rents. (Id. ¶ 218–21.) During the week of August 10, 2021, 
Mayor Stack allegedly used unnamed city employees to distribute that letter to 
the tenants of properties owned by plaintiffs The Stella on Park, LLC, Golden 
Crest 3347 Park Avenue, LLC, OM 422-426 5th Street, LLC, OM-309-315 11th 
Street, LLC, and OM-812 New York Avenue, LLC. (Id. ¶ 222.) It appears, 
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however, that the letter was not distributed to the tenants of 6th Street LLC or 
Palisade Avenue LLC.  
D. Claims and Procedural History 
The Amended Complaint includes six Counts. The first four Counts are 
pleaded under 42 U.S.C. § 1983. Count 1 alleges deprivation of substantive 
due process by all defendants, who are alleged to have arbitrarily interfered 
with plaintiffs’ constitutionally protected property rights under color of law. (Id. 
¶ 226–36.) Count 2 alleges deprivation of procedural due process by all 
defendants, who are alleged to have deprived plaintiffs of their property 
interests under color of law without an opportunity to be heard. (Id. ¶ 237–44.) 
Count 3 alleges that all defendants conspired and engaged in a collective 
campaign to deprive plaintiffs of their property interests in violation of the 
Constitution. (Id. ¶ 245–52.) Count 4, brought against the City of Union City, 
alleges that the arbitrary rent recalculations took plaintiffs’ property without 
compensation in violation of the Takings Clause of the Fifth Amendment. (Id. ¶ 
253–57.) Finally, Counts 5 and 6 are actions in lieu of prerogative writs 
brought solely against the Board.
5 Count 5 seeks review of the denial of 6th 
Street LLC’s appeal while Count 6 seeks review of the denial of Palisade Avenue 
LLC’s appeal. (Id. ¶ 258–261.)  
Plaintiffs first filed this lawsuit on June 14, 2021 and filed an Amended 
Complaint on August 21, 2021. (DE 1, 17.) Defendants filed their motions to 
dismiss on October 21 and 22, 2021. (DE 30, 31, 32.) Plaintiffs filed an 
omnibus brief in opposition to the motions (DE 37), and defendants filed three 
replies (DE 44, 45, 46.) The motions are fully briefed and ripe for decision.  
II. LEGAL STANDARDS 
A. Standing 
Under Rule 12(b)(1), a defendant may move to dismiss on the grounds 
that the court lacks subject matter jurisdiction over the dispute. Fed. R. Civ. P. 
 
5  An action in lieu of prerogative writs is the means by which a plaintiff can have 
a court review the actions of a New Jersey municipality. N.J. Ct. R. 4:69-1. 
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12(b)(1). A Rule 12(b)(1) motion is the vehicle for a motion to dismiss for lack of 
standing. Const. Party of Pa. v. Aichele, 757 F.3d 347, 357 (3d Cir. 2014). A 
Rule 12(b)(1) attack can be facial where the defendant “attacks the complaint 
on its face without contesting its alleged facts.” See Hartig Drug Co. v. Senju 
Pharms. Co., 836 F.3d 261, 268 (3d Cir. 2016). In such a case, the court 
considers only the allegations of the complaint and documents referred to 
therein, construed in the light most favorable to the plaintiff. Gould Elecs., Inc. 
v. United States, 220 F.3d 169, 176 (3d Cir. 2000). 
B. Failure to State a Claim  
Federal Rule of Civil Procedure 8(a) does not require that a pleading 
contain detailed factual allegations but “more than labels and conclusions.” 
Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The allegations must raise 
a claimant’s right to relief above a speculative level, so that a claim is “plausible 
on its face.” Id. at 570. That standard is met when “factual content [] allows the 
court to draw the reasonable inference that the defendant is liable for the 
misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). Rule 12(b)(6) 
provides for the dismissal of a complaint if it fails to state a claim. The 
defendant bears the burden to show that no claim has been stated. Davis v. 
Wells Fargo, 824 F.3d 333, 349 (3d Cir. 2016). I accept facts in the complaint 
as true and draw reasonable inferences in the plaintiffs’ favor. Morrow v. 
Balaski, 719 F.3d 160, 165 (3d Cir. 2013) (en banc). 
III. DISCUSSION 
A. Standing 
To properly allege standing, a plaintiff must allege that he or she “(1) 
suffered an injury in fact, (2) that is fairly traceable to the challenged conduct 
of the defendant, and (3) that is likely to be redressed by a favorable judicial 
decision.” Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1547 (2016). The alleged 
injury in fact “is an invasion of a legally protected interest that is (a) concrete 
and particularized, and (b) actual or imminent, not conjectural or 
hypothetical.” Winer Fam. Tr. v. Queen, 503 F.3d 319, 325 (3d Cir. 2007). The 
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plaintiff, as the party invoking federal jurisdiction, bears the burden of 
establishing these elements.” Spokeo, 136 S. Ct. at 1547.  
Here, only two of the seven plaintiffs have alleged that they suffered a 
concrete injury. The bulk of the complaint describes the experiences of 6th 
Street LLC and Palisade Avenue LLC before the Board. Those two plaintiffs 
clearly allege concrete injuries because, as to them, the Board allegedly ordered 
that a tenant pay less in rent than the landlord was entitled to. In addition, in 
6
th Street LLC’s case, the Board ordered the landlord to pay the tenant 
approximately $16,000 in overcharges. (Am. Compl. ¶ 42–216.) The concrete 
monetary injuries suffered by 6
th Street LLC and Palisade Avenue LLC are fairly 
traceable to the defendants and could be redressed, if appropriate, by a 
decision of this Court. 6
th Street LLC and Palisade Avenue LLC have therefore 
properly alleged standing.  
Allegations related to the other five plaintiffs are scant. All that is alleged 
is that the tenants of The Stella on Park, LLC, Golden Crest 3347 Park Avenue, 
LLC, OM 422-426 5th Street, LLC, OM-309-315 11th Street, LLC, and OM-812 
New York Avenue, LLC received letters from Mayor Stack asserting that this 
lawsuit was fraudulent and that the tenants had a right to have the Board 
recalculate their rents.
6 (Id. ¶ 219–21.) The complaint alleges that in an 
attempt to retaliate against 6th Street LLC and Palisade Avenue LLC, the Mayor 
sent letters to the tenants of five other landlords, but not—for some reason—to 
the tenants of 6
th Street LLC or Palisade Avenue LLC themselves. The Amended 
 
6  The Amended Complaint is unclear about which tenants received the letters. It 
lists, by name, only five plaintiffs, The Stella on Park, LLC, Golden Crest 3347 Park 
Avenue, LLC, OM 422-426 5th Street, LLC, OM-309-315 11th Street, LLC, and OM-
812 New York Avenue, LLC, but also states that tenants who lived in properties #3–#9 
received the letters. Properties #3 and #4, however, are owned by Palisade Avenue 
LLC. (Am. Compl. ¶ 6.) I read inclusion of properties #3 and #4 as an error, and read 
the Amended Complaint as alleging that only the tenants of the five other plaintiffs 
received the letter. Regardless, whether or not Palisade Avenue LLC’s tenants received 
the letter is unimportant at this stage because Palisade Avenue LLC has establishing 
standing based on the actions of the Board, even if the letters were never sent. 
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Complaint also states that the letters were “defamatory” (though it does not 
include a claim for defamation), but if anyone was defamed it was 6th Street 
LLC and Palisade Avenue LLC, not any of the other five plaintiffs. (Id. ¶ 218.) In 
short, all that is alleged is that those five landlords’ tenants received letters 
from the city informing them of their legal rights under the rent control 
ordinance and allegedly “defaming” 6th Street LLC and Palisade Avenue LLC. 
There is no allegation that any of these tenants complained to the Board about 
their rent or that the city took any other action in relation to The Stella on 
Park, LLC, Golden Crest 3347 Park Avenue, LLC, OM 422-426 5th Street, LLC, 
OM-309-315 11th Street, LLC, or OM-812 New York Avenue, LLC. These 
plaintiffs, then, have suffered no concrete injury. The letters cost them no 
money, deprived them of no property, and did not violate any of their 
Constitutional rights. The implication that the letters may have encouraged 
tenants to bring complaints before the Board, and that as a result the 
landlords could have suffered a deprivation of rights, is purely hypothetical and 
conjectural. It cannot support standing. See Winer Queen, 503 F.3d at 325. 
Because they have not alleged that they suffered an injury in fact, 
plaintiffs The Stella on Park, LLC, Golden Crest 3347 Park Avenue, LLC, OM 
422-426 5th Street, LLC, OM-309-315 11th Street, LLC, and OM-812 New York 
Avenue, LLC must be dismissed from this case for lack of standing.  
B. Individual Defendants 
Plaintiffs bring Counts 1, 2, and 3, against thirteen individual 
defendants.  
• Brian Stack, Mayor of Union City. (Am. Compl. ¶ 19.) 
• Kennedy Ng, Rent Leveling Administrator of the City of Union City. 
(Id. ¶ 20.)  
• Nilda Mercado, Rent Leveling Board Secretary until 2020. (Id. ¶ 
21.) 
• Yoelis Marte, Rent Leveling Board Secretary after Mercado until 
August 2021. (Id. ¶ 22.) 
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• Juan Milan, Rent Leveling Board Chairman. (Id. ¶ 23.) 
• Sandra Vasquez, Rent Leveling Board Vice Chairwoman. (Id. ¶ 24.) 
• Rosanna Colon, Rent Leveling Board member. (Id. ¶ 25.) 
• Nancy Jafargian, Rent Leveling Board member. (Id. ¶ 26.) 
• Hector Rosario, Rent Leveling Board member. (Id. ¶ 27.) 
• Norma Guevara, Rent Leveling Board member. (Id. ¶ 28.) 
• Yamirys Holguin, Rent Leveling Board member. (Id. ¶ 29.) 
• Neil D. Marotta, attorney for the Rent Leveling Board. (Id. ¶ 30.) 
• John V. Salierno, Tenant Advocate Attorney for the City of Union 
City. (Id. ¶ 31.) 
The Amended Complaint does not specify if the individual defendants are sued 
in their official or personal capacities, so I read the Amended Complaint to 
allege both. As discussed below, however, I dismiss Counts 1, 2, and 3 for 
failure to state a claim. Thus, no claims against the individual defendants 
remain. I nevertheless briefly discuss in the alternative certain clear-cut 
immunity issues related to the Board members, Marotta, and Salierno, that 
should be taken into account in any proposed amended complaint.
7 
i. Board Members 
“Few doctrines were more solidly established at common law than the 
immunity of judges from liability for damages for acts committed within their 
judicial jurisdiction.” Cleavinger v. Saxner, 474 U.S. 193, 199 (1985). To 
determine if judicial immunity applies, a court must determine: (1) whether the 
judge’s conduct was within his or her judicial capacity; and (2) whether the 
judge acted with general subject matter jurisdiction. Mireles v. Waco, 502 U.S. 
9, 11–12 (1991). If both prongs are satisfied, absolute judicial immunity will 
not be disturbed. See Figueroa v. Blackburn, 208 F.3d 435, 445 (3d Cir. 2000).  
Here, the Board members have argued not that they are judges but that 
they exercised a quasi-judicial power in adjudicating rent disputes, and are 
 
7  I do not discuss the potential immunity of Mayor Stack, Ng, Marte, or Mercado. 
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therefore entitled to quasi-judicial absolute immunity. (Mot. at 24.) Such 
immunity “attaches when a public official’s role is ‘functionally comparable’ to 
that of a judge. Hamilton v. Leavy, 322 F.3d 776, 785 (3d Cir. 2003) (quoting 
Butz v. Economou, 438 U.S. 478 (1978). New Jersey courts have had little 
difficulty in concluding that “[r]ent control boards, like adjustment and zoning 
boards, exercise quasi-judicial power.” Roth v. Rutherford Rent Bd., 239 N.J. 
Super. 378, 391 (Law Div. 1989); see also JSM at Edison Terrace, LLC v. Edison 
Fair Rental Hous. Bd., No. A-4079-17T1, 2019 WL 1503972, at *2 (N.J. Super. 
Ct. App. Div. Apr. 5, 2019); Doric Realty Co. v. Union City Rent Leveling Bd., 182 
N.J. Super. 486, 493 (Law. Div. 1981).
8 
Because the members of the Board exercise quasi-judicial power, all that 
is left is to determine if the conduct complained of in this lawsuit was taken 
within their quasi-judicial capacity and whether they acted with subject matter 
jurisdiction. The only facts pleaded in the Amended Complaint regarding these 
Board members involve their having attended adjudicatory meetings and voted 
in ways unfavorable to plaintiffs. (E.g., Am. Compl. ¶ 80, 99, 122, 171.) The 
Amended Complaint contains no allegations the Board members in their 
individual capacities took bribes, conspired with one another or anyone else, or 
violated plaintiffs’ rights in any way. Thus, I find that all actions taken by the 
Board members were within their quasi-judicial capacity in matters over which 
 
8  Because precedent settles the point, I do not independently analyze the Butz 
factors as they relate to the Board. In general, however, the “touchstones” of quasi-
judicial immunity are: “(a) the need to assure that the individual can perform his 
functions without harassment or intimidation; (b) the presence of safeguards that 
reduce the need for private damages actions as a means of controlling 
unconstitutional conduct; (c) insulation from political influence; (d) the importance of 
precedent; (e) the adversary nature of the process; and (f) the correctability of error on 
appeal.” Keystone Redevelopment Partners, LLC v. Decker, 631 F.3d 89, 95 (3d Cir. 
2011) (quoting Cleavinger, 474 U.S. at 202.). In addition, the Appellate Division of the 
New Jersey Superior Court has recently stated that “In determining whether an 
agency’s decision is a quasi-judicial act, the key question is whether the fact finding 
involves a certain person or persons whose rights will be directly affected.” JSM at 
Edison Terrace, 2019 WL 1503972, at *2 (quoting Nw. Covenant Med. Ctr. v. Fishman, 
167 N.J. 123, 136 (2001)) (cleaned up). 
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they had subject matter jurisdiction. The Board members are therefore entitled 
to absolute quasi-judicial immunity. 
ii. Neil D. Marotta and John V. Salierno 
Like judicial immunity, the litigation privilege has deep roots in the 
common law. Loigman vs. Twp. Comm. of Twp. Of Middletown, 889 A.2d 426, 
433 (N.J. 2006). The privilege ensures that “[s]tatements by attorneys, parties 
and their representatives made in the course of judicial or quasi-judicial 
proceedings are absolutely privileged and immune from liability.” Peterson v. 
Ballard, 679 A.2d 657, 659 (N.J. Super. Ct. App. Div. 1996) (citing Erickson v. 
Marsh & McLennon Co., Inc., 569 A.2d 793 (N.J. 1990)). The privilege has four 
elements. It is applicable to any communication “(1) made in judicial or quasi-
judicial proceedings; (2) by litigation or other participants authorized by law; (3) 
to achieve the objects of the litigation, and (4) that have some connection or 
logical relation to the action.” Hawkins v. Harris, 661 A.2d 284, 289 (N.J. 
1995). The litigation privilege is not limited to statements made in a courtroom 
during a trial; “it extends to all statements or communications in connection 
with the judicial proceeding.” Id. 
All of the facts pleaded with regard to Salierno and Marotta connected to 
the plaintiffs’ constitutional claims fall squarely within the litigation privilege.
9 
The Amended Complaint includes facts related to Marotta’s communication 
with plaintiff before and during the appeals and his statements before the 
Board during the appeals. (Am. Compl. ¶ 88, 96, 119, 120, 137, 200, 201, 
207.) All of Marotta’s statements were made in or in relation to the quasi-
judicial proceedings of the Board and are therefore protected by the litigation 
 
9  Marotta also claims that he possesses quasi-judicial and legislative capacity 
immunity. (DE 31-1 at 15–26.) Both of those claims fall flat. Marotta was the attorney 
for the board. His position was not adjudicatory, and he therefore cannot claim to 
have quasi-judicial immunity. In addition, although it is unclear whether the Board 
and Marotta ever act in a legislative capacity, they did not do so in relation to the facts 
of this case. Marotta also claims that he is protected by qualified immunity (id. at 30–
33), but I do not reach this issue because I find that the claims against him are 
covered by the litigation privilege.  
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privilege. The allegations related to Salierno are a bit more wide-ranging, but 
the vast majority relate to his statements and actions representing tenants 
before the Board. (Id. ¶ 85–86, 123–25, 129, 137–38, 176, 201) His other 
actions, such as requesting the reconsideration of Puente’s appeal, are 
nevertheless connected to his representation and are covered by the litigation 
privilege. Hawkins v. Harris, 661 A.2d at 289.  
Plaintiffs claim that the litigation privilege should not apply to Marotta 
and Salierno because they “were not acting in their role as attorneys but rather 
were playing the role of attorneys in connection with proceedings which were 
not fair adversarial proceedings but rather a kangaroo court generating pre-
ordained results.” (Opp. at 30 (emphasis in original).) Whatever the difference 
between “acting in their role” and “playing the role” may be, the fact remains 
that they acted as attorneys in a quasi-judicial proceeding and therefore their 
statements in connection with those proceedings are protected by the litigation 
privilege. Even if the proceedings were unfair, reached erroneous results, or 
violated plaintiffs’ constitutional rights, that is not sufficient to override the 
litigation privilege and hold Marotta or Salierno liable in their individual 
capacities. I therefore find that Marotta and Salierno are immune from liability 
under the litigation privilege.    
C. Protected Property Interest 
Before considering the allegations of deprivation of due process and 
uncompensated taking, I briefly discuss the preliminary issue of the property 
interests claimed by the remaining plaintiffs, 6
th Street LLC and Palisade 
Avenue LLC. Both plaintiffs purchased properties that are governed by the rent 
control ordinance; they admit, as they must, a preexisting limit on the use and 
enjoyment of their property, in that they cannot claim an unfettered right to 
lease apartments at a market rate. What they do possess, however, is a right to 
contract with tenants to charge the maximum legal rent, as determined by the 
rent control ordinance. Lynch v. United States, 292 U.S. 571, 579 (1934) (“Valid 
contracts are property, whether the obligor be a private individual, a 
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municipality, a State or the United States.”) Generally, such “[l]ease rights are 
recognized property rights that are subject to the Takings Clause.” Cebe Farms, 
Inc. v. United States, 116 Fed. Cl. 179, 191 (2014).10 A wrongful reduction of 
the rent that the landlords can charge, in violation of the provisions of the rent 
control ordinance, could thus represent a deprivation of a recognized property 
interest. Similarly, the uncompensated taking of such a property interest could 
violate the Fifth Amendment. Defendants concede as much; they acknowledge 
that plaintiffs have a property interest in collecting the legal rent for occupied 
units, but claim they were not deprived of that right and that the property 
interest was not taken by the city. (Mot. at 31, 46.) 
D. Substantive Due Process 
Plaintiffs 6
th Street LLC and Palisade Avenue LLC allege in Count 1 that 
the decisions of the Board violated their right to substantive due process under 
the Fourteenth Amendment. “Substantive due process is a component of the 
[Fourteenth Amendment] that protects individual liberty against certain 
government actions regardless of the fairness of the procedures used to 
implement them.” Newark Cab. Ass'n v. City of Newark, 901 F.3d 146, 155 (3d 
Cir. 2018) (alteration in original) (cleaned up). The Third Circuit has 
“recognized that two very different threads make up the fabric of substantive 
due process: substantive due process relating to legislative action and 
substantive due process relating to non-legislative action.” Id. (cleaned up). 
Plaintiffs here attempt to state a non-legislative substantive due process claim. 
To state such a claim, a plaintiff must allege he has “a property interest 
protected by the substantive due process clause, and the government's 
deprivation of that protected interest shocks the conscience.” Joey’s Auto 
Repair & Body Shop v. Fayette Cnty., 785 F. App’x 46, 49 (3d Cir. 2019) 
(cleaned up).  
 
10  For a lengthy discussion of the relationship between contract and property 
rights in the context of landlord/tenant law see Thomas W. Merrill & Henry E. Smith, 
The Property/Contract Interface, 101 COLUM. L. REV. 773, 820–33 (2001). 
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I find that although plaintiffs have alleged that they have a property 
interest protected by the substantive due process clause, they have not alleged 
a deprivation of that interest that shocks the conscience.  
Defendants, in their brief in opposition, argue that plaintiffs’ property 
interests lack that “certain quality” that makes them worthy of protection 
under the substantive due process clause. (Mot. at 31.) This, whatever it may 
mean, is incorrect. In fact, the case upon which defendants rely to make this 
argument, Nichols v. Pennsylvania State University, emphasized that the one 
area to which substantive due process clearly applied was the area of land 
ownership. 227 F.3d 133, 141 (3d Cir. 2000) (“one would be hard-pressed to 
find a property interest more worthy of substantive due process protection than 
[land] ownership” (quoting DeBlasio v. Zoning Bd. of Adjustment for Twp. of W. 
Amwell, 53 F.3d 592, 601 (3d Cir. 1995), abrogated on other grounds by United 
Artists Theatre Cir., Inc. v. Twp. of Warrington, PA, 316 F.3d 392 (3d Cir. 
2003))); see also Trotta v. Borough of Bogota, No. 12-CV-2654 (KM)(MAH), 2016 
WL 3265689, at *6 (D.N.J. June 6, 2016). The property right here was directly 
related to the plaintiffs’ ownership of apartment buildings in Union City. That 
is a right protected by the substantive due process clause against a deprivation 
that shocks the conscience.  
Plaintiffs, however, fail to plausibly allege that the deprivation of their 
property right in charging tenants the legal rent shocks the conscience. The 
Supreme Court has set a high bar for such claims and, as the Supreme Court 
of New Jersey has noted, “the collective conscience of the United States 
Supreme Court is not easily shocked.” Rivkin v. Dover Twp. Rent Leveling Bd., 
143 N.J. 352, 366 (1996); see also Cty. of Sacramento v. Lewis, 523 U.S. 833 
(1998). A government action that is merely “arbitrary” or made with “improper 
motive” does not, necessarily implicate the substantive due process clause; 
rather, the “shocks the conscience” standard encompasses only “the most 
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egregious official conduct.”11 United Artists Theatre, 316 F.3d at 400-02 (“Land-
use decisions are matters of local concern, and such disputes should not be 
transformed into substantive due process claims based only on allegations that 
government officials acted with ‘improper’ motives.”).  
Courts have generally been hesitant to find conscience-shocking behavior 
in the land use context.
12 The Third Circuit has provided examples of 
wrongdoing in the land-use context that might rise to the level of shocking the 
conscience. These include wrongdoing that was “permeated” with corruption, 
self-dealing, and bias against an ethnic group. Giuliani v. Springfield Twp., 238 
F. Supp. 3d 670, 696–97 (E.D. Pa. 2017), aff’d, 726 F. App’x 118 (3d Cir. 
2018); see also Chainey v. Street, 523 F.3d 200, 220 (3d Cir. 2008). Here, 
plaintiffs do not allege that there was ethnic or racial bias or self-dealing, but 
they imply that the mayor and Board are “corrupt” in some general sense of 
their decisions being politically biased in favor of tenants. Although the opening 
line of their opposition brief claims “This is a case about government 
corruption” (Opp. at 1), plaintiffs do not allege corruption plausibly, 
specifically, or factually. The brief provides two pages worth of allegations that 
plaintiffs allege demonstrate a “concerted, premeditated, coordinated, and 
calculated effort by multiple municipal officials to use improper and illegal 
means to deny Plaintiffs of their constitutionally-protected rights.” (Id. at 15–
 
11  Government actions that have been found to shock the conscience include 
forced stomach pumping, Rochin v. California, 342 U.S. 165 (1952); destroying a 
business by creating a fake tax liability, Conroe Creosoting Co. v. Montgomery Cnty., 
249 F.3d 337 (5th Cir. 2001); selective enforcement of zoning ordinances solely to 
prevent citizens from exercising their right to obtain an abortion, Associates in 
Obstetrics & Gynecology v. Upper Merion Township, 270 F.Supp.2d 633 (E.D.Pa.2003); 
and an illegal scheme to force plaintiff to provide low-cost housing to a specific 
individual, Singh v. Twp. of Weehawken, 2019 WL 13098594 at *1-2 (D.N.J. Aug. 21, 
2019). 
12  Cases in the Third Circuit that have found that government actions in the land 
use context did not shock the conscience include Tucker Indus. Liquid Coatings, Inc. v. 
Borough of E. Berlin, 656 F. App’x 1, 5 (3d Cir. 2016); Locust Valley Golf Club, Inc. v. 
Upper Saucon Twp., 391 F. App’x 195, 199 (3d Cir. 2010); Skiles v. City of Reading, 
449 Fed. App’x. 153, 158 (3d Cir. 2011); Highway Materials, Inc. v. Whitemarsh Twp., 
386 Fed. App’x. 251, 258 (3d Cir. 2010). 
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17.) The actions outlined in that section are summarized above, but despite 
plaintiffs’ claims, there is no indication that money was exchanged for political 
favors, or that any corrupt bargain caused the Board’s actions.  
The centerpiece of plaintiffs’ corruption allegation in the Amended 
Complaint is the meeting between Puente (the rent-controlled tenant of 6th 
Street LLC) and Mayor Stack at Stack’s residence. (Am. Compl. ¶ 134; Opp. at 
32.) The implication, it appears, is that Puente somehow influenced Mayor 
Stack in his own home and Stack then ordered the Board to reconsider 
Puente’s case. The Amended Complaint, however, does not specifically allege 
how Puente influenced Stack in any manner beyond that of persuasion. Nor 
does it directly allege that Mayor Stack exerted influence on the Board. Rather 
the Amended Complaint states that Puente and Stack spoke, and then, “not 
coincidentally,” Salierno sent the letter to 6
th Street LLC demanding payment.  
“This,” the complaint alleges, “made clear that Mayor Stack orchestrated and 
directed the events set forth herein, including the Second Hearing, by which 
Plaintiff OM 309-311 6th Street was deprived of its due process rights.” (Am. 
Compl. ¶ 134.) These allegations seem at most to suggest arbitrariness, not 
conscience-shocking corruption. Even if Mayor Stack did act as a go-between 
to the Board (which is not specifically alleged), it appears from the Amended 
Complaint that he did so at the request of a constituent. A scenario in which 
city government takes the side of a $900-per-month tenant against a 
substantial property owner and landlord does not exactly cry out “corruption”; 
more facts are needed.  
The allegations of corruption relating to Palisade Avenue LLC’s 
experience before the Board are even less clear. Those allegations center on the 
fact that Board Secretary Marte admitted that she conferred with Kennedy Ng, 
the Rent Leveling Administrator for the city, in the process of calculating the 
legal rent for Gracesqui’s unit. (Am. Compl. ¶ 208.) The Amended Complaint 
alleges that Marte’s testimony made clear that Ng instructed Marte to ignore 
the 2015 rent calculation and instead lower Gracesqui’s rent based on the 
2011 base figure. (Id. ¶ 209.) While this process may be criticized, it is not 
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“corrupt” in the ordinary sense for a Rent Board member to communicate with 
the Rent Leveling Administrator; nor is there any indication of a corrupt motive 
(or of mayoral involvement). The Amended Complaint contains no allegation 
that Gracesqui improperly met with or exercised influence over Mayor Stack, 
Administrator Ng, or any other city official.  
In short, the plaintiffs’ intimations that corruption, rather than 
incompetence, arbitrariness, or a general political bias in favor of tenants, fall 
flat. Without specific and plausible allegations of corruption, plaintiffs cannot 
demonstrate that defendants’ actions “shock the conscience,” and thus cannot 
state a claim for deprivation of substantive due process. I will therefore dismiss 
Count 1. 
E. Procedural Due Process 
In Count 2, plaintiffs allege that the “kangaroo court” proceedings of the 
Board deprived them of their right to procedural due process. (Opp. at 1.) 
“Procedural due process imposes constraints on governmental decisions which 
deprive individuals of ‘liberty’ or ‘property’ interests within the meaning of” the 
Fourteenth Amendment's Due Process Clause. Mathews v. Eldridge, 424 U.S. 
319, 332 (1976).  
Procedural due process claims are subject to a two-stage analysis: (1) are 
“the asserted individual interests . . . encompassed within the fourteenth 
amendment’s protection of ‘life, liberty, or property?’” and (2) do the procedures 
available provide a plaintiff whose interests are deprived “due process of law?” 
Robb v. City of Philadelphia, 733 F.2d 286, 292 (3d Cir. 1984). As for the first 
stage, as discussed supra, Sec. III.C., I have found that plaintiffs properly allege 
that they were deprived of a constitutionally relevant property interest: their 
interest in receiving the legal rent that they contracted for with their tenants. 
Thus, the inquiry must focus on whether the procedures available to plaintiffs 
were sufficient.  
Remedial procedures are constitutionally inadequate if they “contain a 
defect so serious [as to] characterize the procedures as fundamentally unfair.” 
Giuliani v. Springfield Twp., 238 F. Supp. 3d, 670, 690 (E.D. Pa. 2017). It is not 
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just the proceedings before the Board that must be analyzed, however. “[A] 
state provides constitutionally adequate procedural due process when it 
provides reasonable remedies to rectify a legal error by a local administrative 
body.” Giuliani v. Springfield Twp., 726 Fed. App’x. at 122. Thus, “when a state 
affords a full judicial mechanism with which to challenge the administrative 
decision in question, it provides adequate procedural due process, whether or 
not the plaintiff avails himself or herself of the provided appeal mechanism.” Id. 
(cleaned up); see also Custin v. Wirths, 2020 WL 1466352 at *20 (D.N.J. Mar. 
25, 2020); DeBlasio, 53 F.3d at 597, abrogated on other grounds by United 
Artists Theatre, 316 F.3d 392. 
Many procedural due process cases, including Matthews v. Eldridge, 
focus on whether a pre-deprivation remedy is required or whether post-
deprivation processes are sufficient. Here, plaintiffs explicitly state that they do 
not intend to challenge Union City’s rent control ordinance, which contains no 
pre-deprivation remedies. (Opp. at 12 n.5, 25 n.13.) I thus interpret their 
position not as arguing that a pre-deprivation remedy is necessary but that the 
post-deprivation remedies provided by the Board are insufficient.
13 Plaintiffs 
allege numerous unlawful actions by the Board, and the Amended Complaint 
describes the Board’s blatant unwillingness or inability to follow the relevant 
laws. There is one key problem with plaintiffs’ procedural due process claim: 
they have not yet finished pursuing the state-provided remedies that can 
correct the errors of the Board. In fact, they are pursuing those remedies in 
this very case, in Counts 5 and 6 (action in lieu of prerogative writs). It is thus 
 
13  Defendants describe the appeals before the Board as “pre-deprivation” 
proceeding but it seems that characterization was incorrect. The action that caused 
plaintiffs to appeal to the Board was the prior receipt of the letter informing them that 
the tenants’ rents had been lowered. (Mot. at 37.) I thus view both the Board appeals 
and the action in lieu of prerogative writs as post-deprivation remedies. Although 
plaintiffs briefly allude to the idea that it would be practical for the Board to provide a 
pre-deprivation process (Opp. at 32), they do not pursue their argument and claim 
that they do not seek to challenge the rent control ordinance. I thus understand the 
plaintiffs’ position as a challenge to the adequacy of the post-deprivation procedures.  
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impossible to conclude, at this point, that there has been a deprivation of 
procedural due process.  
I first outline the post-deprivation process that Union City and the state 
of New Jersey have provided to landlords. When the Board adjusts a tenant’s 
rent, both the tenant and landlord have the right to appeal to challenge the 
new rent calculation. (Am. Compl. ¶ 78.) On appeal, the Board sits as a quasi-
judicial body, and, as described in the Amended Complaint, the appellant is 
able to present both documentary and testimonial evidence to the Board as 
well as cross examine witnesses. (Id. ¶ 42–216.) After the hearing, the Board 
issues a “resolution,” i.e., a decision, resolving the appeal. (Id. ¶ 101, 147) The 
Board can, on its own motion, reconsider a resolution if new evidence comes to 
light. (Id. ¶ 117.) In theory, at least, this process seems to comport with due 
process, but plaintiffs argue that in practice the Board is a lawless entity which 
discounts probative evidence and reaches preordained conclusions, thus 
depriving plaintiffs of due process. Board reconsideration, however, is not the 
end of the road. The New Jersey Constitution and New Jersey court rules allow 
parties dissatisfied with the decisions of a municipal board to bring an “action 
in lieu of prerogative writs” in New Jersey Superior Court to review the decision 
of the municipal board.
14 The action in lieu of prerogative writs is not an appeal 
as such. Rather it is part and parcel of the post-deprivation remedy provided by 
the state. Rivkin, 143 N.J. at 378 (“The post-deprivation remedy that the State 
furnished to the Rivkins was an action in lieu of prerogative writs.”) In short, 
defendants are correct to argue that plaintiffs must complete the action in lieu 
of prerogative writs before claiming that they were deprived of due process. 
(Mot. at 37.) 
Here, plaintiffs decided to partially forgo the usual procedure of filing asn 
action in lieu of prerogative writs in state court. Instead, they filed this case in 
federal court alleging Constitutional violations by defendants and also 
 
14  Actions in lieu of prerogative writs can also be brought in federal court as 
discussed at Sec. III.H, infra. 
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including two Counts of action in lieu of prerogative writs that ask this court to 
review the decisions of the Board in 6th Street LLC and Palisade Avenue LLC’s 
cases. Because I have not yet ruled on the actions in lieu of prerogative writs, 
the plaintiffs are effectively still in the midst of the processes provided by the 
state. A decision by this court in plaintiffs’ favor could rectify whatever 
procedural deficiencies occurred at the Board. If I rule in their favor on the 
actions in lieu of prerogative writs (or if they had filed an action in Superior 
Court and the Superior Court ruled in their favor), then—from the plaintiffs’ 
perspective—the system worked: the procedures put in place by the state 
remedied an incorrect decision by a municipal Board and thus the plaintiffs 
received due process.  
It is important to note that the invocation of error-correction procedures 
provided by the state does not imply an exhaustion requirement. Rather, it is 
inherent to the concept of procedural due process. One cannot properly allege 
that the procedures the state provides were defective and fundamentally unfair 
if those procedures have not yet been tried. Because their actions in lieu of 
prerogative writs are still before this court (and will not be dismissed, see infra), 
plaintiffs are receiving and will receive due process.
 15  
Other similar cases in which plaintiffs stated a claim for deprivation of 
procedural due process are easily distinguished. In Johnson v. Paterson Hous. 
Auth., the court held that the plaintiff was not required to file an action in lieu 
of prerogative writs in order to state a claim for deprivation of procedural due 
process. No. CV177514ESMAH, 2019 WL 1439118, at *4 (D.N.J. Apr. 1, 2019). 
 
15  In this way, the due process analysis is different from the exhaustion 
requirement for takings claims that the Supreme Court eliminated in Knick v. Twp. of 
Scott, Pennsylvania, 139 S. Ct. 2162 (2019), as discussed infra, Sec. III.G. And there is 
no general exhaustion prerequisite to bringing a section 1983 action in federal court. 
See Patsy v. Bd. of Regents of State of Fla., 457 U.S. 496, 500–01, 516 (1982). 
Plaintiffs have not, by the way, articulated any reason why they would not receive due 
process if they brought actions in lieu of prerogative writs in New Jersey Superior 
Court. But as this court possesses jurisdiction, they have the option to pursue such 
actions here. 
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That case, however, was about a tenant who was evicted and not given the 
required pre-deprivation hearing, despite her requests for one. Id. at *1. 
Because the state had failed to provide the required pre-deprivation process, 
the violation was complete; the plaintiff did not also need to challenge the post-
deprivation remedy or file an action in lieu of prerogative writs. Here, plaintiffs 
do not challenge the lack of a pre-deprivation remedy by the Board, but rather 
the adequacy of post-deprivation remedies; in effect they challenge the 
adequacy of a procedure that is still ongoing.  
Similarly in Romspen Robbinsville, LLC v. Twp. of Robbinsville, the 
plaintiff was able to state a claim for deprivation of procedural due process 
without respect to the availability of an action in lieu of prerogative writs 
because the township refused to consider its development application and 
therefore never provided a final decision that could be reviewed by the Superior 
Court. No. CV203248MASZNQ, 2021 WL 794786, at *6 (D.N.J. Mar. 1, 2021). 
Here, in contrast, the Board issued resolutions in the cases of both 6
th Street 
LLC and Palisade Avenue LLC that are currently being challenged by plaintiffs 
in Counts 5 and 6.  
Perhaps the Board’s decision was erroneous; perhaps not. But because 
the plaintiffs are still pursuing the procedures put in place by the state to 
remedy an erroneous decision of the Board, they have not been deprived of 
procedural due process. I will therefore dismiss Count 2, without prejudice, in 
order to give the actions in lieu of prerogative writs priority. 
F. Conspiracy  
In Count 3, plaintiffs allege that the defendants conspired to violate their 
constitutional rights under 42 U.S.C. § 1983. To prevail on a conspiracy claim 
under § 1983, a plaintiff must prove that two or more persons acting under 
color of state law “reached an understanding” and took “concerted action” to 
deprive him of his constitutional rights. Adickes v. S.H. Kress & Co., 398 U.S. 
144, 150–52 (1970); Jutrowski v. Township of Riverdale, 904 F.3d 280, 295 (3d 
Cir. 2018). Such rights include those protected by the Due Process Clause of 
the Fourteenth Amendment, such as, relevant here, the “right to be heard in an 
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impartial forum,” Great W. Mining & Mineral Co. v. Fox Rothschild LLP, 615 F.3d 
159, 161 (3d Cir. 2010), and the “right of access to the courts,” Monroe v. 
Beard, 536 F.3d 198, 205 (3d Cir. 2008).  
Here, plaintiffs fail to plausibly allege a conspiracy because they plead no 
facts that suggest the defendants reached an understanding or agreement to 
deprive plaintiffs of their constitutional rights. Instead, all suggestions of 
conspiracy between any of the defendants is purely speculative. As discussed 
supra, Sec. III.D., there is only one concrete allegation of any of the defendants 
meeting with one another and potentially agreeing to anything: Marte admitted 
that she had spoken to Ng regarding Gracesqui’s rent calculation. (Am. Compl. 
¶ 208.) It is plausible that Ng told Marte to ignore the 2015 rent calculation 
and thus provide Gracesqui with a lower rent, and it is plausible that such an 
instruction would be incorrect under the rent control ordinance. Plaintiffs do 
not plead any facts, however, suggesting that Ng and Marte reached an 
agreement to violate their constitutional right to be heard in an impartial 
forum.  
Similarly, the Amended Complaint’s discussion of the meeting between 
Puente (who is not a defendant) and Mayor Stack does not include any facts 
indicative of a conspiracy. Puente gave testimony that in May 2020 he asked 
Mayor Stack for assistance (id. ¶ 134), but there is no concrete accusation in 
the complaint that Mayor Stack took any action at all on Puente’s behalf. 
Plaintiffs try to paper over their lack of specificity by claiming that “not 
coincidentally” Salierno sent his letter stating that Puente would take his 
overcharge as a credit toward future rent “after” Puente spoke to the mayor. (Id. 
¶ 109, 135.) The Amended Complaint, however, obfuscates the fact that 
Salierno’s September 30 letter was sent to 6
th Street LLC approximately four 
months after the May 2020 meeting between Puente and Mayor Stack. Salierno 
then requested reconsideration of the decision two months later on November 
25, 2020. (Id. ¶ 114.) Plaintiffs’ theory of the conspiracy is not quite clear, but 
it is implied that Mayor Stack, after meeting with Puente, set out to convince or 
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cajole other members of city government to violate plaintiffs’ constitutional 
rights. Aside from the fact that this story lacks any clear motive on behalf of 
the defendants that would lend it plausibility, the months-long gap between 
Mayor Stack’s meeting with Puente and Salierno’s subsequent letters renders 
the claims of conspiracy implausible.  
To make up for the Amended Complaint’s lack of specifics, plaintiffs 
attempt to lump all of the bad behavior of various officials, including even the 
lack of response to plaintiffs’ open records requests, into an overarching 
conspiracy. (Am. Compl. ¶ 248.) Such conclusory statements of conspiracy, 
however, are not sufficient to state a claim. Although at this stage I make all 
possible inferences in favor of plaintiffs, I must make those inferences only 
from the pleaded facts. Iqbal, 556 U.S. at 678. Here, facts tending to 
demonstrate an agreement between the defendants to deprive plaintiffs of their 
constitutional rights are lacking. I must therefore dismiss Count 3. 
G. Taking 
In Count 4, plaintiffs allege that the actions of the Board constitute a 
taking of 6
th Street LLC and Palisade Avenue LLC’s property by the City of 
Union City without compensation in violation of the Fifth Amendment.16 As a 
preliminary matter, the Supreme Court has held that there are no longer state 
court exhaustion requirements for plaintiffs who wish to pursue a taking claim 
in federal court. Rather, “because a taking without compensation violates the 
self-executing Fifth Amendment at the time of the taking, the property owner 
can bring a federal suit at that time.” Knick v. Twp. of Scott, Pennsylvania, 139 
S. Ct. 2162, 2172 (2019). Thus, assuming that the Board illegally lowered the 
rents of Puente and Gracesqui, the taking was accomplished at that time. 
Plaintiffs could then sue in federal court and attempt to state a claim. I find 
that although it is a close question, plaintiffs have plausibly alleged an 
uncompensated taking.  
 
16  It is somewhat unclear whether the city or the Board is the proper defendant in 
the takings claim, but both remain as defendants in the case.  
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The Takings Clause of the Fifth Amendment provides that “private 
property [shall not] be taken for public use, without just compensation.” U.S. 
Const. amend. V.17 Under that provision, I am tasked with a two-step process: 
First, I must determine if the plaintiffs have asserted a “legally cognizable 
property interest.” Park Restoration, LLC v. Erie Ins. Exch., 855 F.3d 519, 526 
(3d Cir. 2017) (quoting Prometheus Radio Project v. FCC, 373 F.3d 372, 428–29 
(3d Cir. 2004)). That requirement, based on property ownership, is 
uncontroversial. Second, I evaluate the plaintiff’s claim that their property was 
taken from them, asking: “(1) was there a taking?; (2) was that taking for public 
use?; (3) did the claimant receive just compensation?” Id. at 525. Though “[t]he 
paradigmatic taking requiring just compensation is a direct government 
appropriation or physical invasion of private property,” government regulation 
“may, in some instances, be so onerous that its effect is tantamount to a direct 
appropriation or ouster,” and “such ‘regulatory takings’ may be compensable 
under the Fifth Amendment.” Lingle v. Chevron U.S.A., Inc., 544 U.S. 528, 537 
(2005).  
No physical invasion has taken place here; the claim is clearly one of a 
regulatory taking. For a regulatory taking, there are two distinct tests. The first 
is the so-called “per se” taking identified in Lucas v. South Carolina Coastal 
Council, 505 U.S. 1003, 1015 (1992), pursuant to which “a regulation which 
‘denies all economically beneficial or productive use of land’ will require 
compensation under the Takings Clause” unless the challenged limitations 
“inhere . . . in the restrictions that background principles of the State’s law of 
property and nuisance already placed upon land ownership.” Murr v. 
Wisconsin, 137 S. Ct. 1933, 1937 (2017) (emphasis added); see also Lucas, 505 
U.S. at 1015, 1029. This is a difficult test to satisfy: the court must find that 
the regulation forces the plaintiffs to “leave [their] property economically idle.” 
 
17  The Takings Clause applies to state and local governments through the 
Fourteenth Amendment. Chicago, B & Q R., Co. v. City of Chicago, 166 U.S. 226, 241 
(1897). 
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505 U.S. at 1019. Here, plaintiffs do not, and cannot, allege that their 
properties have been rendered economically idle because all tenants, including 
Puente and Gracesqui, will continue to pay rent and thus generate revenue for 
the plaintiffs. 
i. Penn Central Factors 
Rather, plaintiffs allege a regulatory taking under the more fluid 
evaluation known as the Penn Central test, which evaluates the alleged taking 
based on “a complex of factors,” including “(1) the economic impact of the 
regulation on the claimant; (2) the extent to which the regulation has interfered 
with distinct investment-backed expectations; and (3) the character of the 
governmental action.” Murr, 137 S. Ct. at 1937 (quoting Palazzolo v. Rhode 
Island, 533 U.S. 606, 617 (2001)); see Penn Central Transp. Co. v. New York 
City, 438 U.S. 104, 124 (1978). 
The function of the Penn Central test is to “identify regulatory actions 
that are functionally equivalent to the classic taking in which government 
directly appropriates private property or ousts the owner from his domain. 
Accordingly, each of these tests focuses directly upon the severity of the burden 
that government imposes upon private property rights . . . . the Penn Central 
inquiry turns in large part, albeit not exclusively, upon the magnitude of a 
regulation’s economic impact and the degree to which it interferes with 
legitimate property interests.” Lingle v. Chevron U.S.A. Inc., 544 U.S. 528, 539–
40 (2005). 
The government’s regulatory authority is broad, and the availability of 
relief under Penn Central is correspondingly narrow. “[A] regulatory limitation 
on the right to use and receive profits from property will not necessarily or even 
usually establish that there has been a taking.” Pinewood Estates of Michigan 
v. Barnegat Township Leveling Bd., 898 F.2d 347, 351 (3d Cir. 1990) (quoting 
Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 434–35 (1982)).  
“[T]he submission that appellants may establish a ‘taking’ simply by 
showing that they have been denied the ability to exploit a property interest 
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that they heretofore had believed was available for development is quite simply 
untenable.” Penn Central, 438 U.S. at 130. Thus, courts tend to reject takings 
claims where a law imposes restrictions “substantially related to the promotion 
of the general welfare” and which, while ruling out some uses, nevertheless 
“permit reasonable beneficial use.” Rogin v. Bensalem Township, 616 F.2d 680, 
691 (3d Cir. 1980). In particular, states are afforded “broad power to regulate 
housing conditions in general and the landlord-tenant relationship in 
particular without paying compensation for all economic injuries that such 
regulation entails.” Yee v. City of Escondido, 503 U.S. 519, 528–29 (1992). I 
take the three Penn Central factors in order. 
 Economic impact 
There is no single test to determine the degree of economic impact that 
will cross the line to a “taking.” Courts have generally held that the diminution 
of value of the claimant’s property must usually be “drastic,” Rogin, 616 F.2d at 
692, and that it must deny the claimant the opportunity to make a “reasonable 
return” on its investment, see Penn Central, 438 U.S. at 136. Still, the 
economic impact of the government action must be balanced against the 
action’s effect on the claimant’s investment-backed expectations and the 
character of the government action. See infra. 
Plaintiffs do not quantify the overall impact of the Board’s actions on the 
value of their properties, but assert in their opposition brief that the Board’s 
“illegal actions resulted in a distinct diminution of the value of the properties at 
issue.” (Opp. at 23.) The economic impact of the Board’s actions on the 
properties as a whole may be characterized as fractional. Puente, the tenant of 
6
th Street LLC, occupies one unit of a 41-unit apartment building. (Am. Compl. 
¶ 4.) Gracesqui, the tenant of Palisade Avenue LLC, occupies one unit of a 14-
unit apartment building. (DE 30-2, Ex. C.) In each case, the relevant property 
is the “parcel as a whole” which in this case would yield the legal rental 
payments made by all of the tenants in the buildings, not just Puente or 
Gracesqui’s rental payments alone. See Dist. Intown Properties Ltd. P’ship v. 
D.C., 198 F.3d 874, 880 (D.C. Cir. 1999) (holding that the relevant property 
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was the parcel as a whole, even though it had been subdivided into nine lots); 
Tahoe-Sierra Pres. Council, Inc. v. Tahoe Reg’l Plan. Agency, 535 U.S. 302, 327 
(2002). Thus, even if the revenue generated by each unit was reduced to 
nothing, which it was not, the amount of revenue that each property could 
generate for its owner would be reduced, at the very most, by less than ten 
percent.
18  
Plaintiffs fear a situation in which the tenants act collectively and ask the 
Board to recalculate the rent for every apartment in the building and the 
Board, arbitrarily and lawlessly slashes rents for all tenants. That possibility, 
which would lead to a much greater reduction in the value of the property, is 
speculative at this point. Nevertheless, there is force to the argument that 
plaintiffs have a property interest in their entitlement to charge the maximum 
allowable rent under leases entered into with tenants. The city cannot 
necessarily avoid a taking by arbitrarily cutting rents in a piecemeal fashion, so 
that no single diminution of value is “drastic.” Thus, even if the diminution of 
value of the properties as a whole was relatively small, it weighs somewhat, if 
not strongly, in favor of finding that a taking has been alleged and must still be 
weighed alongside the other two Penn Central factors.  
 Investment-backed expectations.  
Next, I consider the factor of plaintiffs’ reasonable, investment-backed 
expectations in connection with the properties.19 This factor, too, presents a 
 
18  The record does not reveal the rent paid by the other occupants of the 
buildings. It is possible that the other rent-controlled tenants have lived in their units 
for decades and consequently pay extremely low rents and that Puente and 
Gracesqui’s higher rents make up an unexpectedly high proportion of the total rent for 
the building. Plaintiffs do not argue that this is the case, however, so I assume that 
the other tenants in each building pay rents similar to Puente and Gracesqui’s rent.  
19  Plaintiffs assert that this factor “takes precedence” in the Penn Central analysis 
(Opp. at 21), but “[i]nvestment-backed expectations, though important, are not 
talismanic under Penn Central.” Palazzolo v. Rhode Island, 533 U.S. 606, 634 (2001) 
(O’Connor, J., concurring). They are but “one factor that points toward the answer to 
the question whether the application of a particular regulation to particular property 
‘goes too far.’” Id. 
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close question, but I conclude that, at least at the motion to dismiss stage, it 
adequately suggests a taking. 
It is axiomatic that laws and regulations change, and there is no general 
right to governmental consistency over time. “[D]istinct, investment-backed 
expectations are reasonable only if they take into account the power of the 
state to regulate in the public interest.” Pace Res., Inc. v. Shrewsbury Twp., 808 
F.2d 1023, 1033 (3d Cir. 1987). As Justice O’Connor once put it in in a 
concurrence, however, “the regulatory regime in place at the time the claimant 
acquires the property at issue helps to shape the reasonableness of those 
expectations.” Palazzolo v. Rhode Island, 533 U.S. 606, 633 (2001) (O’Connor, 
J., concurring). Here, however, unlike in many takings-clause cases, plaintiffs 
do not claim that the law changed, defeating their expectations. Rather, they 
say that their investment was made in the expectation that the Board would 
follow the law as it existed, then and now. In short, the taking inhered in the 
Board’s application of the law, not in the law itself. 
Plaintiffs purchased the properties at issue, knowing they were subject to 
the rent control ordinance. They attempted to find out what the current 
tenants’ permissible rents were, but the city failed to respond to their inquiries 
before they closed on the properties. (Am. Compl. ¶ 46–64.) Plaintiffs, however, 
were familiar with the city’s rent control ordinances and presumably calculated 
that their investment would be profitable if they were able to charge the legal 
rents for the units. It should go without saying that one of any property owner’s 
reasonable investment-backed expectations is the expectation that the 
government will follow the law. It is plausibly alleged that by refusing to follow 
the law, the Board interfered with plaintiffs’ investment-backed expectations 
and thereby reduced the value of their properties. This second factor thus 
weighs more heavily in favor of a taking.  
 Character of the government action 
“A taking may be more readily found when the interference with property 
can be characterized as a physical invasion by government . . . than when the 
interference arises from some public program adjusting the benefits and 
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burdens of economic life to promote the common good.” Penn Central, 438 U.S. 
at 124; Midnight Sessions, Ltd. v. City of Philadelphia, 945 F.2d 667, 676 (3d 
Cir. 1991), abrogated on other grounds by United Artists Theatre Cir., 316 F.3d 
392. Thus, “in instances in which a state tribunal reasonably concluded that 
‘the health, safety, morals, or general welfare’ would be promoted by 
prohibiting particular contemplated uses of land, this Court has upheld land-
use regulations that destroyed or adversely affected recognized real property 
interests.” Penn Central, 438 U.S. at 125. This factor flows from the underlying 
principle that “fairness and justice” require that public burdens be borne by 
the public as a whole, rather than shifted to individuals. Armstrong v. United 
States, 364 U.S. 40, 49 (1960). In addition, “if the law at issue ‘applies 
generally to a broad class of properties,’ a court is likely to find that no taking 
has occurred.” Sutton v. Chanceford Twp., 186 F. Supp. 3d 342, 349 (M.D. Pa. 
2016) (quoting Rogin, 616 F.2d at 690). 
Here, plaintiffs argue that defendants acted unlawfully and in bad faith. 
The challenged actions were not duly enacted changes to a generally applicable 
regulatory scheme, but adjudications that applied specifically to defendants, 
and indeed to particular apartments. The Amended Complaint does allege a 
pattern of lawlessness and a refusal by the Board to accept clear evidence and 
to follow the applicable regulations. The actions of the Board, it is alleged, did 
not aim to protect the public interest, but rather to slash the rents of two 
individual tenants. (Opp. at 24.)  
The defendants, for their part, entirely ignore this element of the Penn 
Central test in their briefing. The Amended Complaint, however, quotes 
Salierno as stating that lowering Gracesqui’s rent would serve the public 
interest by stabilizing rents in the city. (Am. Compl. ¶ 176.) It is not clear, 
however, how ignoring the terms of the rent control ordinance to lower 
Gracesqui and Puente’s rent helps anyone other than Gracesqui and Puente. 
The defendants put forward no argument that these actions—as opposed to the 
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rent control ordinance in general—operate at the level of protecting the public 
interest.  
The Supreme Court has recognized that bad faith on behalf of the 
government can weigh in favor of a taking. See Tahoe-Sierra Pres. Council, 535 
U.S. at 333 (citing City of Monterey v. Del Monte Dunes at Monterey, Ltd. 526 
U.S. 687, 698 (1999); see also Wyatt v. United States, 271 F.3d 1090, 1098 
(Fed. Cir. 2001) (noting that bad faith is usually required to find that a 
permitting delay amounted to a taking). At this stage I must take the facts 
pleaded in the Amended Complaint as true, and those facts tend to show that 
the Board acted in bad faith and without regard for the law. Thus, the 
character of the government action weighs in favor of finding a taking.  
Regulatory takings jurisprudence is characterized by “essentially ad hoc, 
factual inquiries.” Tahoe-Sierra, 532 U.S. at 322 (quoting Penn Central, 438 
U.S. at 124.) Much fact finding remains to be done in this case, but at this 
point I find that plaintiffs have plausibly alleged a taking under the Penn 
Central test. Although the diminution of the properties’ value is not dramatic, 
the alleged bad faith of the Board weighs strongly in favor of denying 
defendants’ motion to dismiss. To do otherwise would be to allow local 
governments to ignore the law and take property, so long as they only took a 
small amount each time. I therefore decline to dismiss Count 4.  
H. Actions in Lieu of prerogative writs 
Plaintiffs’ two remaining claims are actions in lieu of prerogative writs, 
brought solely against the Board to review its actions. The claim is derived from 
the New Jersey State Constitution, which preserved the substance of common 
law prerogative writ review by permitting parties to seek “review, hearing and 
relief” in the Superior Court of all actions of municipal agencies. N.J. Const. 
Art. VI, § 5, ¶ 4; Rivkin, 143 N.J. at 378. (“A court may set aside a municipal 
board decision if it is shown to be arbitrary, capricious or unreasonable, not 
supported in the evidence, or otherwise contrary to law.”) This provision is 
implemented by New Jersey Court Rule 4:69-1 which provides “[r]eview, 
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hearing and relief heretofore available by prerogative writs … shall be afforded 
by an action in the Law Division, Civil Part, of the Superior Court.”  
Although such actions are usually brought in New Jersey Superior 
Court, as contemplated in the Court Rule, federal courts have occasionally 
heard them under their supplemental jurisdiction. See, e.g., Nat’l Amusements, 
Inc. v. Borough of Palmyra, 843 F. Supp. 2d 538, 546–47 (D.N.J. 2012), aff’d, 
716 F.3d 57 (3d Cir. 2013); Mendez v. Port Auth. of New York & New Jersey, No. 
CV 14-7543 (ES), 2017 WL 1197784, at *10 (D.N.J. Mar. 31, 2017). Defendants 
do not move to dismiss the actions in lieu of prerogative writs. I will maintain 
supplemental jurisdiction over them, as they form part of the same case or 
controversy as the plaintiffs’ taking claim. 42 U.S.C. § 1367(a). Indeed. They lie 
at the heart of what this case is truly about, and may be prioritized for 
purposes of discovery and trial, if appropriate.  
IV. CONCLUSION 
For the reasons set forth above, defendants’ motions to dismiss are 
GRANTED in part and DENIED in part. First, defendants’ motion (DE 30) is 
GRANTED with regard to Plaintiffs The Stella on Park, LLC, Golden Crest 3347 
Park Avenue, LLC, OM 422-426 5th Street, LLC, OM-309-315 11th Street, LLC, 
and OM-812 New York Avenue, LLC and they are dismissed entirely from the 
case for lack of standing. In addition, defendants’ motion (DE 30) is GRANTED 
with regard to Counts 1, 2, and 3, but DENIED with regard to Count 4, 5, and 
6. Because only Counts 1, 2, and 3 are pleaded against the individual 
defendants, all individual defendants are also dismissed from the case. 
Salierno and Marotta’s motions to dismiss (DE 31, 32) are therefore DENIED as 
moot because they have been dismissed from the case as a result of my 
decision on the primary motion to dismiss (DE 30).  
Of the three remaining claims, Count 4 is pleaded against the City of 
Union City and Counts 5 and 6 are pleaded against the Board. Thus, the 
remaining plaintiffs are 6
th Street LLC and Palisade Avenue LLC and the 
remaining defendants are the City of Union City and the Union City Rent 
Leveling Board, all other parties are terminated. 
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A separate order will issue. 
Dated: March 23, 2022 
/s/ Kevin McNulty 
___________________________________ 
Hon. Kevin McNulty 
United States District Judge 
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