Governor Phil Murphy, his Attorney General (Mr. Gurbir S. Grewal) and Health Commissioner (Ms. Judith Persichilli) were recently named in a lawsuit filed on behalf of a group of landlords. The lawsuit challenges Executive Order 128, which was signed in April of 2020. Executive Order 128 allows tenants to use their security deposits to cover back rent during the pandemic, but does not require that they make another security deposit unless their underlying lease is extended. Landlords who violate the order may be fined up to $1,000.00 and / or sentenced to a prison term of up to 6 months. The preamble of Executive Order 128 explains that enabling individuals to pay portions of their rent with their security deposit will “mitigate the consequences regarding evictions and accumulation of interest and late fees…and thus is plainly in the public interest.”
The matter – Charles Kravitz, et. al. v. Phillip D. Murphy, et. al. (L-000774-20) – was initially filed in the Superior Court, Law Division of Cumberland County in December of 2020. Jurisdiction was subsequently transferred to the Appellate Division on January 26, 2021. According to the complaint, “this case focuses explicitly on whether the New Jersey Governor can rely on his own declared public health emergency to assume authority neither the state Constitution nor the legislature ever granted to waive or amend provisions in private contracts, as well as to override and amend explicit statutory provisions as he chooses.”
The landlords are being represented on behalf of the New Civil Liberties Alliance (“NCLA”). The NCLA’s website asserts that “without statutory authority to do so, Governor Murphy has interfered with the contractual rights and obligations of private citizens under the Civilian Defense and Disaster Control Act. However, none of the authority granted to Governor Murphy…includes any mandate even remotely connected to a power to modify the terms of residential leasehold contracts or to waive the statutory provisions relating to those leases.” The NCLA claims that Governor Murphy has unfairly scapegoated landlords in a manner that undermines freedom of contract, due process and equal protection of the laws.
Lawsuits of this sort have been filed in numerous jurisdictions nationwide and present interesting questions regarding the limit of gubernatorial authority during a declared public health emergency. The Appellate Division’s decision – which promises a heightened level of controversy regardless of its ultimate finding – is eagerly anticipated.