733 A.2d 1206 (1999) 323 N.J. Super. 553

WHS REALTY COMPANY, a New Jersey General Partnership, Plaintiff-Respondent and Cross-Appellant,
v.
TOWN OF MORRISTOWN; Mayor and Town Council of the Town of Morristown; Town of Morristown Health Department; Town of Morristown Public Works Department, Defendants-Appellants and Cross-Respondents.

Superior Court of New Jersey, Appellate Division.

Argued May 24, 1999. Decided July 27, 1999.

*1209 Herbert A. Vogel and David H. Soloway, Morristown, for appellants/cross-respondents (Vogel, Chait, Schwartz & Collins, attorneys; Mr. Vogel and Mr. Soloway, on the brief).

Gary D. Gordon, West Orange, for respondent/cross-appellants (Feinstein, Raiss & Kelin, attorneys; Mr. Gordon, on the brief).

William J. Kearns, Jr., for amicus curiae New Jersey State League of Municipalities (Kearns, Vassallo, Guest & Kearns, Willingboro and Mason, Griffin & Pierson, attorneys; Mr. Kearns and Kristina P. Hadinger, of counsel; F. Clifford Gibbons and Christopher H. DeGrezia, Princeton, on the brief).

Before Judges HAVEY, SKILLMAN and PAUL G. LEVY. *1207

*1208 The opinion of the court was delivered by HAVEY, P.J.A.D.

This appeal presents a challenge to Morristown's garbage collection ordinance which provides free collection service to all residential dwellings of three or less units as well as condominium developments where no more than 50% of the units are owned by one person or entity. Excluded from the ordinance are all multi-family dwellings of four or more units. Therefore, plaintiff's garden apartment complex, consisting of 140 units, does not receive collection service.

Plaintiff filed a complaint in the Law Division claiming that the ordinance violates its right to due process and equal protection of the laws guaranteed by the United States and New Jersey Constitutions. It demands the same garbage collection service provided to all other residents, and also makes a claim under 42 U.S.C.A. §§ 1983 and 1988 for compensatory damages, attorneys' fees, interest and costs of suit.

The trial court granted partial summary judgment to plaintiff, concluding that there was no rational basis for the Town to have excluded apartment complexes from the coverage of the ordinance. By leave granted, a divided panel of the Appellate Division affirmed. 283 N.J.Super. 139, 661 A.2d 320 (App.Div.1995). The dissent concluded that summary judgment should not have been granted because a plenary hearing was necessary to determine whether the Town's ordinance was rationally related to a legitimate state interest. Specifically, the dissent was of the view that a remand was necessary "for the development of a record on whether the ordinance's classification is rationally related to the legitimate state interest of promoting home ownership or to any other state interest defendants may assert." 283 N.J.Super. at 169, 661 A.2d 320.

By a four to three vote, the Supreme Court reversed, essentially for the reasons expressed by the dissent in the Appellate Division, and remanded to the trial court "to conduct an evidentiary hearing and *1210 determine whether Morristown's garbage collection ordinance is rationally related to any legitimate State interest." 146 N.J. at 628, 684 A.2d 1376.

After a four-day hearing, the trial court reaffirmed its prior determination that the ordinance was unconstitutional, finding it was not rationally related to the fostering of home ownership or any other legitimate state interest. The court ordered the Town to collect garbage and recyclable materials from plaintiff's apartment complex subject to the same terms and conditions as it collects from condominium complexes. It denied plaintiff's demand for damages under § 1983 and counsel fees under § 1988.

The Town defendants now appeal from the judgment invalidating the ordinance. Plaintiff cross-appeals from the denial of its claim for damages and counsel fees. We affirm the judgment invalidating the ordinance, but we reverse the dismissal of plaintiff's claim for damages and counsel fees, and remand for further proceedings.

I

If a legislative classification "`neither burdens a fundamental right nor targets a suspect class,'" we must uphold the constitutionality of legislation "`so long as it bears a rational relation to some legitimate end.'" Vacco v. Quill, 521 U.S. 793, 799, 117 S.Ct. 2293, 2297, 138 L.Ed.2d 834, 841 (1997) (quoting Romer v. Evans, 517 U.S. 620, 631, 116 S.Ct. 1620, 1627, 134 L.Ed.2d 855, 865 (1996)); see also 515 Assocs. v. Newark, 132 N.J. 180, 197, 623 A.2d 1366 (1993). Under the federal rational basis test, a classification made by legislation is presumed to be valid and will be sustained if it is "rationally related to a legitimate state interest." Cleburne v. Cleburne Living Ctr., 473 U.S. 432, 440, 105 S.Ct. 3249, 3254, 87 L.Ed.2d 313, 320 (1985); Drew Assocs. of N.J. v. Travisano, 122 N.J. 249, 264, 584 A.2d 807 (1991). Essentially the same type of analysis has been adopted respecting evaluation of equal protection claims under Article I, paragraph 1 of the New Jersey Constitution. Property Owners & Managers Ass'n v. Parsippany-Troy Hills, 264 N.J.Super. 538, 544, 624 A.2d 1381 (App.Div.), certif. denied, 134 N.J. 561, 636 A.2d 519 (1993).

A municipal ordinance is accorded the same presumption of constitutionality as all legislation. Strauss v. Township of Holmdel, 312 N.J.Super. 610, 619, 711 A.2d 1385 (Law Div.1997) (citing Pleasure Bay Apartments v. Long Branch, 66 N.J. 79, 93-94, 328 A.2d 593 (1974)). The challenger of the ordinance must "refute all possible rational bases for the differing treatment, whether or not the Legislature cited those bases as reasons for the enactment." League of Municipalities v. State, 257 N.J.Super. 509, 518, 608 A.2d 965 (App.Div.1992), certif. dismissed, 133 N.J. 423, 627 A.2d 1132 (1993).

The parties agree that, since the Town's ordinance does not implicate a suspect class or fundamental right, the rational basis test applies. Therefore, plaintiff has the burden of demonstrating that classification by the ordinance lacks a rational basis. A municipality's exercise of its police power in classifying by ordinance, must be sustained if it can be justified on any reasonably conceivable state of facts. Taxpayers Ass'n of Weymouth Township, Inc. v. Weymouth Township, 80 N.J. 6, 40, 364 A.2d 1016 (1976). However, a governmental agency "`may not rely on a classification whose relationship to an asserted goal is so attenuated as to render the distinction arbitrary or irrational.'" Doe v. Poritz, 142 N.J. 1, 92, 662 A.2d 367 (1995) (quoting Cleburne, supra, 473 U.S. at 446-47, 105 S.Ct. at 3258, 87 L.Ed.2d at 324). "Furthermore, some objectives ... are not legitimate state interests." Ibid.

II

A municipality is not mandated to provide for municipal garbage removal. Pleasure Bay, supra, 66 N.J. at 90, 328 A.2d 593. A municipality "may provide for the ... collection or disposal of solid waste, and may establish and operate a system therefor...." N.J.S.A. 40:66-1a *1211 (emphasis added). Also, when a municipality chooses to provide the service, it may, pursuant to its police power, impose reasonable restrictions by ordinance. Pleasure Bay, supra, 66 N.J. at 85, 328 A.2d 593. In Pleasure Bay, for example, the Court upheld municipal regulations limiting municipal service to curbside collection. Id. at 95, 328 A.2d 593; see also Property Owners, supra, 264 N.J.Super. at 543, 624 A.2d 1381 (holding that an ordinance limiting service to curbside collection "passes constitutional muster because it does not exclude any class of residents from receiving municipal solid waste collection").

However, once the service is provided by a municipality, "there can be no invidious discrimination" in limiting the service to certain classifications. Boulevard Apartments, Inc. v. Mayor of Lodi, 110 N.J.Super. 406, 411, 265 A.2d 838 (App.Div.), certif. denied, 57 N.J. 124, 270 A.2d 27 (1970). There is a violation of equal protection of the laws "unless the service is available to all persons in like circumstances upon the same terms and conditions. Persons situated alike shall be treated alike." Ibid. (citing Reid Dev. Corp. v. Parsippany-Troy Hills Township, 10 N.J. 229, 233, 89 A.2d 667 (1952)).

For example, in Boulevard, supra, we invalidated an ordinance which provided garbage collection service to single-family residents and multi-family dwellings ranging from two to eight family units, but excluded garden apartments. 110 N.J.Super. at 411, 265 A.2d 838. We found no reasonable justification for the municipality's classification, first because the garbage produced by a one-family unit in an apartment house and a one-family dwelling house is "substantially the same," id. at 412, 265 A.2d 838, and second because the cost of collection from family units in an apartment house where accumulated garbage is concentrated in one spot "is unquestionably less than the cost of collection from an equal number of family units residing in separate private dwellings." Ibid. In 399 Lincoln Assocs. v. Orange Township, 244 N.J.Super. 238, 581 A.2d 1364 (App.Div.1990), we adopted the reasoning of Boulevard in striking down an ordinance providing for garbage collection service to residential dwellings, but excluding services to "residential premises that contain five dwelling units or more," id. at 240, 581 A.2d 1364, concluding that under the ordinance "[p]ersons situated alike are not treated alike...." Id. at 245, 581 A.2d 1364.

Applying the Boulevard and 399 Lincoln Assocs. analysis here, the proofs adduced during the plenary hearing made clear that there is nothing about the mechanics or costs of solid waste collection that justifies differentiating between apartment complexes and other residents within the community. As the trial court observed during an early stage of the proceedings, "people are people," and the type and quality of solid waste generated by all types of residential dwellings is the same. In fact, the evidence demonstrated that because there are fewer residents living in individual apartment units than single-family or condominium units, apartment units generate less solid waste. Moreover, the Town's Director of Public Works conceded that it would be more cost-effective to pick up solid waste from four dumpsters serving 140 apartment units than picking up solid waste from 140 separate single-family residential units at curbside. He also acknowledged that the mechanics for collection from dumpsters is the same for apartment units and condominiums.

There is also no rational basis for differentiating between apartment units and other residential dwellings on the basis that apartment owners may realize a profit from their investment. Boulevard, supra, 110 N.J.Super. at 411, 265 A.2d 838. We observed in Boulevard:

The resolution in question makes no distinction between the owner-occupied dwellings and those rented for income. The evidence reveals that there are numerous rented multi-family dwellings containing from two to eight family units *1212 which are not precluded from receiving municipal garbage collection service. Moreover, the resolution on its face provides for collection from public housing projects and various places of business.

[Ibid.]

Here, the trial court accepted the reports of both parties' planners indicating that only 58% of the one, two and three-unit family dwellings which are provided garbage collection service are owner-occupied. Conversely, 42% of the units receiving the service are occupied by renters. The trial court found significant the more telling fact that only 27% and 11.7% of two and three-family structures respectively, are owner-occupied. The implication is that these nonoccupying owners are no less motivated by profit than owners of apartment complexes, and thus should not be treated differently. As we observed in 399 Lincoln Assocs., supra, 244 N.J.Super. at 245, 581 A.2d 1364:

A commercial landlord who rents a one, two, three or four-family building receives free garbage collection and thus does not have to factor into his rent a cost for that service, whereas, a commercial landlord with five or more units must pay for this service and thereby factor that cost into the rents charged. Persons situated alike are not treated alike under Ordinance # 5-89, and thus it is unconstitutional.

III

The Town defendants nevertheless argue that the proofs adduced during the plenary hearing support their claim that the Town's garbage collection ordinance is rationally related to fostering home ownership. They rely for the most part on our court's holding in League of Municipalities, supra, that the goal of fostering home ownership is a legitimate governmental objective. 257 N.J.Super. at 521, 608 A.2d 965. In League of Municipalities, we considered the constitutionality of the newly-adopted L. 1989, c. 299, codified as N.J.S.A. 40:67-23.2 to -23.8, the so-called Condominium Services Act. The Act mandates that municipalities provide certain municipal services or reimburse for such services condominiums, cooperatives and other private communities, but not apartment complexes.

In League of Municipalities, the Attorney General argued that there was a rational basis for the distinction made between residential communities covered by the Act and apartment complexes because such residential communities "foster the valid goal of individual home ownership." 257 N.J.Super. at 516, 608 A.2d 965. The League responded that the Act was over-inclusive and irrational if it intended to promote home ownership, since approximately 20% of the condominium owners covered by the Act rent their units to others and thus are in an identical position as apartment owners. Id. at 517-18, 608 A.2d 965.

Acknowledging that the benefit received by condominium owners who rent their property did not promote the policy of fostering home ownership, we nevertheless concluded that the statute need not be invalidated simply because it benefits some who are not members of the class the Legislature hoped to assist. Id. at 521, 608 A.2d 965. We observed that since "most condo owners do satisfy the Act's intended aim" by living in their unit, the fact that some do not share those traits "does not deprive the Act of all rational basis." Ibid.

During the plenary hearing in the present case, the Town's Mayor testified that Morristown has a policy of fostering home ownership. It was his view that "[s]trong residential neighborhoods [are] the fabric of the community." He testified that residents living in their own home have a "pride in their community," maintain their residences and have a long-term commitment to their neighborhood and the Town, whereas neighborhoods consisting of apartment dwellings tend to be in a declining condition, and house a highly "transient" population. It was his belief that the garbage collection ordinance "promote[s] the concept of ownership" because *1213 it provides a financial incentive to purchase a home within the community. He also cited the "psychological aspect" of free garbage collection. According to the Mayor, when a resident owns his or her own home, he or she "expect[s] garbage pickup," thereby providing "uniformity" which promotes "cleanliness for the neighborhood."

The Mayor and the Town's planner also referred to several provisions of the Master Plan in support of the Town's policy of fostering home ownership. For example, an objective of the Master Plan is to "preserve the single family residential character of Morristown by stabilizing existing neighborhoods and by rehabilitation of housing stock where necessary...."^[1] The Master Plan observes that:

[A]n owner occupier with a substantial investment in his property has considerable interest in and commitment to the wellbeing of the surrounding neighborhood. Renters, on the other hand, are generally more transient and are generally less likely to firmly establish community ties or to be inclined to participate in community action to improve the neighborhood.

The Master Plan also provides:

Consideration should be directed at the large existing single family homes in the Town which have become uneconomical to continue as single family homes and are falling subject to the speculative dollars used in converting these facilities into other uses. It can be seen that maintaining their function as residences is beneficial to the neighborhoods that they are a part of and further to maintain their exterior facades is just as advantageous to those areas. Therefore, some mechanism should be devised to provide incentives to the owners....

The Master Plan therefore recommends that "middle-income housing be expanded" and that "single-family houses must be retained."

Plaintiff's planner testified that he found no document or study submitted by the Town or available in the planning field at large supporting the notion that free garbage collection fosters home ownership. The planner knew of no study demonstrating that people make a decision on purchasing a home based on whether or not the municipality provides free garbage collection. He also rejected the Town defendants' claim that the Master Plan supports home ownership over the creation of a rental-unit inventory, noting that the Master Plan calls for the construction of a variety of housing types for all income levels.

The trial court found that the facts did not support the Town's claim that the ordinance fostered home ownership. The court observed that as a "conceptual matter," once a municipality provides garbage collection to residential dwellings, there is no rational basis to distinguish one resident from another. It concluded:

[W]hen you start collecting from a residence it really doesn't matter whether the ... homeowner lives in a ... single-family home or in a rental apartment or in a condominium unit. I really can't see the distinction.

....

I do not think that there is any meaningful promotion of home ownership by this scheme. There is, I suppose, some broad conceptual promotion of home ownership but it is not significant. I think [plaintiff's planner] ... was right when he said the ... promotion of home ownership was ... incidental and very minimal and ... in the sense that it really wouldn't make much of a difference to whether or not people were able to own homes or motivated to own homes and if they were motivated would have the capacity to do it. And the flip side was that a lot of people who aren't homeowners do get benefited by the *1214 present scheme and ... while people who live in large residential ... rental complexes are not.

....

The conclusion I reach is that the scheme does not promote any ... legitimate State interest. It's not rationally related to any legitimate State interest. The home ownership promotion is simply a rationale.

We agree with the trial court that the plenary hearing demonstrated no basis in fact for the Town's claim that the garbage collection ordinance fosters home ownership. First, League of Municipalities is clearly distinguishable. In that case, the notion that the Condominium Services Act was rationally related to promoting home ownership was presumed; no plenary hearing was conducted, as here, to test the proposition. Moreover, the discrete issue faced by the League of Municipalities was whether the classification excluding apartment complexes was irrational because a significant number of condominium owners rent their units. According to the 1980 Census, approximately one-fifth of New Jersey condominium owners rented their units to others. 257 N.J.Super. at 517-18, 608 A.2d 965.^[2] The court concluded that "we need not consider how large the deviating percentage may be before the law loses its rational basis," id. at 521, 608 A.2d 965, since "most condo owners do satisfy the Act's intended aim, in that they live in their units and in the view of the Legislature pay twice for some municipal services." Ibid.

In League of Municipalities, the "deviating percentage" was 20%. Here, as noted, the facts established that approximately 42% of the dwelling units receiving garbage collection service are not occupied by their owners. Only 27% and 11.7% of the two and three-family dwelling units are owner-occupied. If the disputed classification in fact promotes home ownership, particularly among the two and three-family owners, there is no question that the percentages of owner-occupancy would be significantly higher. The low percentages of owner-occupants necessarily indicates that the disputed classification is irrational.

Moreover, League of Municipalities, supra, 257 N.J.Super. at 515-16, 608 A.2d 965, involved the challenge to an Act which addressed the double taxation of condominium units "for some services which the residents ... now pay through property taxes and fees to their association." Statement to Senate Bill No. 2869 (1988) L. 1989 c. 299. Accordingly, the Act directs that municipalities provide services to condominiums and other qualified private communities including snow and ice removal, street lighting, collection of leaves, recyclable materials and other solid waste along the roads and streets. N.J.S.A. 40:67-23.3a. Here, the only service involved is collection of solid waste, which, according to the proofs, costs approximately $400 per residential unit per year. While this cost no doubt is not insignificant to those on the cusp of being able to afford the purchase of a home, the cost cannot be compared to the burden of double taxation sought to be relieved by the Legislature through enactment of the Condominium Services Act. The Town performed no studies or surveys indicating that people are more inclined to purchase a home if free garbage collection service is provided. No interviews of homeowners were conducted.

Moreover, we find no meaningful support in the Town's Master Plan for the proposition that a distinction, for garbage *1215 collection service purposes, should be made between homeowners and apartment dwellers. While the Master Plan recommends encouraging and maintaining residential neighborhoods, it also recommends that the Town "provide for a greater diversity of housing types to meet ... [the] needs of a wide range of incomes and age levels." The plan in fact predicts that "[m]ulti-family housing, particularly moderate density development, will constitute the major portion of new housing units in the Town." Notably, plaintiff's planner stated in his report that, from a sound planning viewpoint,

a more accurate planner's view of a varied housing stock is that it services households at different stages of the life cycle as well as different income groups. Young married couples often choose rental units as an affordable [entry] to the community. As family incomes rise and children appear, detached single-family homes become the shelter of choice. Toward the end of the cycle, senior citizens often return to rental units for reduced maintenance responsibilities and lower costs.

This trend underscores a clear countervailing policy to fostering home ownership: the provision of affordable housing to young married couples, senior citizens and other low and medium-income residents. As a constitutional and sound land use policy, its relevance here is unquestioned. See Southern Burlington County N.A.A.C.P. v. Township of Mount Laurel, 67 N.J. 151, 336 A.2d 713, appeal dismissed and cert. denied, 423 U.S. 808, 96 S.Ct. 18, 46 L.Ed.2d 28 (1975) (Mount Laurel I); Southern Burlington County N.A.A.C.P. v. Township of Mount Laurel, 92 N.J. 158, 456 A.2d 390 (1983) (Mount Laurel II); and see Taxpayers Ass'n of Weymouth, supra, 80 N.J. at 40, 364 A.2d 1016 (ordinance restricting occupancy of mobile home park to persons fifty-two years or older rationally related to governmental objective of providing needed housing to the aging population of the State). In view of this competing policy expressed in the Master Plan, we cannot say that the plan supports disparate treatment to apartment dwellers in the provision of garbage collection service.

In short, encouraging home ownership may be a permissible and even laudable legislative objective. However, based on the evidence adduced during the plenary hearing, we conclude that the garbage collection ordinance is an example of legislation "whose relationship to an asserted goal is so attenuated as to render the distinction arbitrary or irrational." Cleburne, supra, 473 U.S. at 446, 105 S.Ct. at 3258, 87 L.Ed.2d at 324. Simply put, fostering home ownership is not a rational basis for defendants' classification scheme.

IV

The Town defendants also advance, as a rational basis for the ordinance, the fact that condominiums are taxed differently than apartment units. The Town's real estate appraiser testified that residential condominium units generally sell for a substantially larger unit value than the equivalent value of rental type units. Therefore, the assessed value, based merely on the form of ownership, can be as much as two or three times greater for a condominium. The trial court rejected this rationale, and rightly so.

The proofs established that apartment complexes provide a positive tax ratable for the municipality. They in fact absorb part of the cost of garbage collection service provided to other property owners. Moreover, apartment complexes house approximately 1.6 persons less per unit than single-family detached homes and therefore demand less municipal services. The trial court therefore concluded that there was a "strong case for the equity of [apartment units] getting whatever services are made available to single-family residences because [apartment complexes] proportionately pay more than single-family residences, although condominium complexes pay even more than do rental apartment complexes." We agree.

Further, not a single case has been cited supporting the proposition that *1216 once a town decides to provide a municipal service to condominiums, it may exclude apartment complexes simply because the assessment methodology for apartment and condominium complexes is different. The Town concedes that the cost of collecting residential garbage is a component of the Town's property tax and that apartment complexes, condominium complexes, and single-family residences are all assessed at true value for taxation purposes. See Ford Motor Co. v. Township of Edison, 127 N.J. 290, 298, 604 A.2d 580 (1992). In other words, both apartment and s