On October 29, 2024 in Dawson v. Murphy, et al., the New Jersey Superior Court Appellate Division affirmed the trial court’s order denying Plaintiffs leave to amend their complaint to assert a claim that New Jersey’s investment of state pension funds into oil and gas companies which allegedly harm the environment constitutes a violation of plaintiffs’ rights under the New Jersey Civil Rights Act (“NJCRA”).  No. A-3083-22, 2024 WL 4601708 (N.J. Super. App. Div. Oct. 29, 2024).  In an unpublished opinion, the Court held that that the New Jersey Constitution does not guarantee a right to a stable environment and therefore the state’s investments did not violate Plaintiffs’ constitutional rights. 

Plaintiff beneficiaries of the New Jersey Pension Fund brought suit in the New Jersey Superior Court, Law Division against the New Jersey governor, treasurer and director of investments, alleging that the state’s investment of pension funds in “the 200 largest oil and gas producing companies” constitutes a violation of New Jersey’s Public Trust Doctrine.  Plaintiffs’ complaint referenced a prior suit brought by the New Jersey Attorney General and New Jersey Department of Environmental Protection against numerous large oil and gas producing companies seeking damages for harm allegedly caused to New Jersey’s environment.  Plaintiffs claimed that by investing state pension funds into the same entities that the state claims threaten New Jersey’s environment, the state breached the Public Trust Doctrine and its duty to pension beneficiaries. 

Defendants moved to dismiss the action or in the alternative, to transfer the action to the appellate division.  Plaintiffs opposed and cross-moved for leave to amend their complaint to bring a claim under the New Jersey Constitution through the NJCRA, claiming that the investment of pension funds in the oil and gas companies constituted a substantive due process violation.  The trial court denied leave to amend, holding plaintiffs could not establish that a “right, privilege, or immunity secured” by the constitution was violated “in some way that shocked the conscience or offended notions of fairness and human dignity” because there is “no right to a stable climate [] affirmatively granted in the New Jersey Constitution” and no such right has been recognized by the courts.  The court further held that “passive investments in oil and gas companies do not rise to the level of a substantive due process violation under the standard of shocking the conscience.”  The court transferred the action to the appellate division finding the appellate court had exclusive jurisdiction to review actions of any state administrative agency or officer pursuant to New Jersey Rule 2:2-3(a)(2) and Plaintiffs appealed, arguing they should have been permitted to bring their NJCRA claim which would be heard in the Law Division.

To state a claim under the NJCRA, plaintiffs must show a violation of a “substantive right.”  Where the state constitution does not clearly enumerate a substantive right, the court may find such that such a right exists only where 1) the fundamental liberty interest is clearly identified, and 2) the liberty interest is objectively and deeply rooted in the traditions, history and conscience of the people of New Jersey.  Plaintiffs argued that they should have been granted leave to add their NJCRA claim because the New Jersey Constitution provides a fundamental right to a stable environment.  While they conceded that such a right was not expressly provided, Plaintiffs argued that such a right is implied in New Jersey’s Public Trust Doctrine. 

New Jersey’s Public Trust Doctrine acknowledges that public lands are held by the state in trust for the benefit of the public.  Initially a common law creation, the Public Trust Doctrine has since been codified in various New Jersey statutes.  See, e.g., N.J.S.A. 58:10-23.11 (“the State is the trustee, for the benefit of its citizens, of all natural resources within its jurisdiction.”). The Doctrine has primarily been utilized to protect the public right of access to beaches and coastal waterways. See N.J.S.A. 13:1D-150(1) (providing that the public has the right to tidal lands and waters for navigation). 

The Court rejected Plaintiffs’ argument that under the Public Trust Doctrine Plaintiffs have an implied fundamental right to a stable environment, finding that New Jersey courts “have limited an overbroad application of the Public Trust Doctrine, especially where state agency action is at issue[.]”  Noting that the Public Trust Doctrine has typically been applied only in disputes over access to natural resources such as the shoreline rather than “to scrutinize, and perhaps regulate, the State’s pension fund investment decision because those decisions are alleged to harm the State’s natural resources,” the Court held that “relying on the Public Trust Doctrine to find a fundamental substantive due process right to a stable environment takes us far afield from our historic applications of the Public Trust Doctrine.”

Further, the Court held that even if the Public Trust Doctrine “did relate to purported harm and danger to natural resources, and not ownership and access of those resources, plaintiffs would still need to articulate . . . a clearly defined liberty interest.”  The court rejected plaintiffs’ position that there is a fundamental right “to a stable environment,” holding “[s]uch an ill-defined formulation of a fundamental right cannot serve as a basis for a NJCRA claim.”  Accordingly, the court affirmed the trial court’s denial of leave to amend the complaint because adding “a claim of a violation of a fundamental right to a stable environment would have been a fruitless endeavor[.]” 

Pursuant to Dawson, New Jersey courts will not read a broad fundamental right to “a stable environment” into the New Jersey Constitution.  Further, the case demonstrates that New Jersey courts narrowly apply the Public Trust Doctrine to disputes regarding ownership and access to public resources and have rejected attempts by plaintiffs to apply the Doctrine as a catch-all provision guaranteeing broad environmental rights to individual citizens.

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