THE FALLS GROUP LLC THE FUNPLEX v. TOWNSHIP OF MOUNT LAUREL (2011)

In this declaratory judgment and prerogative writs action, defendant Township of Mt. Laurel (Township) appeals from a March 9, 2010 judgment of the Law Division compelling the Township to adopt an ordinance declaring plaintiff's property a

“recognized amusement park” under the Amusement Games Licensing Law, N.J.S.A. 5:8-l00 to -130 (the Act) for licensure purposes, and an April l9, 2010 order denying reconsideration.   We affirm as modified.

The facts and procedure of this case are not in dispute.   On November 3, 1959, Township voters approved by referendum the public question authorizing the Act to become operative in the Township and thereby approving of the municipality's authority to grant licenses thereunder.   See N.J.S.A. 5:8-116 (requiring approval by public referendum for the Act “authorizing the conducting, operating and playing of certain amusement games, whether of chance or skill, or both, where the prizes or awards to be given shall be of merchandise only” to become operative in the municipality);  N.J.S.A. 5:8-115 (stating the action of the voters of the municipality “shall be deemed to be an approval of the authority to the municipality to grant licenses” under the Act, and such approval cannot be repealed except by means of another referendum).

The Act provides for a two-step, joint municipal and state procedure for licensing.   See N.J.A.C. l3:3-2.1. Licensees must first file a state-prescribed application with the municipal clerk but municipal approval of a license does not become effective unless and until a state license certificate is issued by the Legalized Games of Chance Control Commission (Commission).   Ibid.;  N.J.S.A. l3:3-1.1.

Plaintiff owns and operates a twenty-five acre indoor and outdoor amusement facility on Route 38 known as “The Funplex.”   The Funplex is located in the Township's “I-Industrial” zone, which permits “recreation[al] structures and uses” under Section l54-56(C)(11) of the zoning code.¹  Outdoors there is a food concession, a miniature golf course, a sixteen-tee driving range, batting cages, a swimming pool, and eight amusement rides plus a “pad” for a replacement ride on a site that contained a ferris wheel.   Indoors there is an arcade with about fifty or more video and other mechanical redemption games of chance which are not dependent upon result, a food concession, a sixteen-lane bowling alley, and six amusement rides.

All of the Funplex amusement rides are licensed by the New Jersey Department of Community Affairs under the Carnival Amusement Rides Act (CARSA), N.J.S.A. 5:3-31 to -59.   CARSA requires State licensure for amusement rides located in an “amusement area or park.”  N.J.S.A. 5:3-32a.

In 2003, plaintiff filed a complaint against the Township in Superior Court seeking a declaratory judgment that CARSA preempted the Township's site plan jurisdiction in ride safety regulation.   At that time, the Township's zoning code did not forbid outdoor amusement parks.   On June 20, 2003, Judge Sweeney granted judgment in favor of plaintiff, reversing the Township's refusal to permit plaintiff's operation of a ferris wheel.   In his findings, the judge found the Funplex facility was an amusement park under CARSA.²

On December l5, 2003, the Township passed Ordinance 2003-20 prohibiting outdoor amusement facilities ³ anywhere within its borders.   See Township Zoning Code § l54-77(K).  By letter of December 4, 2007, the Township zoning officer recognized the Funplex site as a “pre-existing non-conforming” use.

In 2009, plaintiff desired to replace about fifty of its existing indoor games of chance, which it represented do not require State licensure under the Act, with skill-based redemption games, which require a State license under the Act.⁴ Plaintiff represented that the new games would not exceed the number of games they were replacing and, in most cases, would require only a modification of software.   Following lengthy discussions between plaintiff's and the Township's representatives, plaintiff's counsel requested the Township Council enact whatever ordinance it deemed necessary for plaintiff to obtain a municipal license for the new skill-based redemption games pursuant to N.J.A.C. l3:3-1.5.⁵

When unsuccessful, plaintiff filed a formal application with the Township for the game licenses.   The application was denied on December l8, 2009.   Plaintiff then filed a complaint and order to show cause against the Township, alternatively seeking the following declaratory judgment and prerogative writs relief:  (1) a declaration that the Act is operative and in effect in the Township;  (2) an order compelling the Township to grant plaintiff a hearing pursuant to N.J.S.A. 5:8-104;  (3) a declaration that plaintiff's property is a recognized amusement park within the meaning of the Act;  and (4) an order compelling the Township to implement the Act and adopt an ordinance permitting skill-based redemption games at the Funplex.⁶

Following oral argument, the trial court issued a written opinion on March 2, 2010, requiring the Township to adopt an ordinance declaring Funplex to be a “recognized amusement park” and stating that Funplex would then have the right to apply to the Township for a license to replace the games.   A memorializing judgment was entered on March 9, 2010.   On April l6, 20l0, the trial court denied the Township's motion for reconsideration or, alternatively, a stay pending appeal, memorialized in an order of April l9, 2010.

On April 21, 2010, the Township filed an application for emergent relief seeking leave to file an interlocutory appeal and a stay pending appeal, which we granted.   On May l3, 2010, we granted the Township's motion for leave to appeal and request for a stay pending appeal.   On June 29, 20l0, the Supreme Court denied plaintiff's motion to vacate the stay.

On appeal, the Township seeks reversal, arguing:  (1) the regulatory scheme of N.J.A.C. 13:3-1.l(b) and N.J.A.C. 13:3-1.5(a)(l) mandates a legislative adoption of an enabling ordinance by the Township Council, which has not occurred;  (2) the trial court did not have judicial authority to compel the Township Council to legislate and adopt an enabling ordinance to permit games of chance and skill-based redemption in the absence of a constitutionally protected right or matter of compelling public interest;  and (3) the trial court did not have jurisdiction to adjudicate plaintiff's complaint because the “Commissioner is delegated statutory authority to hear and adjudicate appeals from the denial of licensure of games of chance and skill based redemption” pursuant to N.J.S.A. 5:8-l09 and its implementing regulation N.J.A.C. 13:3-6.l.

We address the Township's final argument first, which we do not find to be persuasive.  N.J.S.A. 5:8-109 states that an applicant for a license issued under the Act, “aggrieved by any action of the municipal governing body of the municipality to which such application has been made ․ may appeal to the Amusement Games Control Commissioner from the determination of said governing body ․“ (emphasis added).  N.J.A.C. l3:3-6.l outlines the method of appeal to the Commissioner, primarily the time frame and the required form.   Neither of these provisions contain a requirement that appeal to the Commissioner must be exhausted before the aggrieved entity pursues judicial remedies.   The word “may” in the statute connotes an optional method of review.   Moreover, the regulations only address the “method” of appeal to the Commissioner and contain no language restricting the review to an administrative one.

Typically, a suit in lieu of prerogative writs is not maintainable before a court “as long as there is available a right of review before an administrative agency which has not been exhausted.”   R. 4:69-5.   However, where questions of law are involved, exhaustion is not an “absolute requirement and may be dispensed with.”   Pressler & Verniero, Current N.J. Court Rules, comment on R. 4:69-5 (2011).   The issues in plaintiff's lawsuit involve an interpretation of the Act and its implementing regulations, which are questions of law suited for judicial analysis.

At oral argument, plaintiff's attorney informed us that in lieu of affirming the court order directing the Township to adopt an ordinance, plaintiff would be satisfied with a judicial declaration that the indoor arcade is a “recognized amusement park” pursuant to N.J.A.C. 13:3-l.l. As we are convinced the record supports such a finding, we need not address the Township's first two arguments.

N.J.A.C. l3:3-1.1(b) restricts municipal licensing of amusement games to a municipality that has authorized the licensing of such games by referendum and where the licensed premises are situated at a “recognized amusement park” or two other classifications not applicable here.   As previously discussed, Township voters approved by referendum the operation of the Act in the municipality and the Township's resulting authority to grant licenses thereunder.

N.J.A.C. l3:3-l.l(a) defines a “recognized amusement park,” requiring it meet four criteria:

(l) it is a commercially operated permanent business;

(2) it is open to the public at least thirty-one consecutive days annually;

(3) its acreage is designed and themed for the primary purpose of providing participatory amusements incorporating rides or water slides licensed under CARSA;  and

(4) it has food and merchandise concessions in permanent structures.

As the trial court noted, there seems to be no dispute that Funplex is a “recognized” amusement park within the above definition.   At the hearing on the Township's motion for reconsideration, the court stated, “in this particular circumstance ․ there's no dispute that they're an amusement park.”   The Township attorney responded that the Township was “not going to dispute that.”   The Township's position is that a “recognized” amusement park means an “accepted one,” i.e., expressly declared to exist by ordinance pursuant to N.J.A.C. 13:3-1.5. That requirement is not within the definition of a “recognized amusement park” under N.J.A.C. l3:3-1.1(a).

There is ample basis in the record to support the trial court's finding that “[a]ll of the uncontested exhibits, including an aerial photograph attached to the Funplex brief, compounded with a lack of any demonstrable evidence to the contrary, clearly establish there is no material dispute that Funplex is an amusement park.”

Funplex is undisputedly “a commercially operated permanent structure.”   Funplex has existed on this site since at least 2000 when it was purchased by plaintiff.   The aerial photograph of the property shows permanent structures on the site.   Commercial operation is also evidenced in a number of ways.   First, the resolution of the Township Zoning Board dated June 4, 2008, allowing plaintiff to open an after-school child care program at Funplex noted the fees plaintiff would collect, thereby demonstrating a commercial operation.   The Township attorney also implicitly recognized the commercial nature of plaintiff's site in his November 9, 2009 letter to the governing body opining that the adoption of a “township-wide skill based redemption ordinance ․ specifically to meet the business needs of The Funplex” might lead to a lawsuit against the Township from “potential business competitors seeking to compete.”   Additionally, there are multiple letters from Funplex representatives to the Township discussing Funplex's economic problems given the current recession, the improved revenue and economic benefit the skill-based ordinance would have for Funplex, and the disadvantage it had in competing with other facilities with redemption gaming in neighboring municipalities.

The second prong, “open to the public at least thirty-one consecutive days annually,” is also undisputed.   Although no proofs were presented by plaintiff as to this prong, the Township has never taken issue with the representation of plaintiff's counsel at the motion hearing that Funplex's operation satisfies this requirement.

There is also no doubt the primary purpose of the site is to “provide participatory amusements incorporating rides or water slides licensed under CARSA.”   The Township Engineer's May 27, 2003 report to the Township Planning Board states that Funplex is “a family entertainment center/amusement park.”   Additionally, Judge Sweeney ruled in June 2003 that the Funplex was an amusement park under CARSA.   The April 9, 2009 resolution of the Planning Board granting minor site plan approval to plaintiff for certain renovations and reconfiguring of the site expressly referenced an existing go-kart track, outdoor driving tees, Tilt-A-Whirl, and a proposed bowling alley.   There is also no question that, as found by the trial court, the indoor arcade contains, among other items, fifty or more video and other mechanical redemption games of chance and six amusement rides.

As to the last prong, the Township does not dispute there are food concessions inside the arcade building and also outdoors.   Although nothing in the record mentions merchandise, we can infer there is an area inside the arcade where tickets are redeemed for prizes based on the existence of mechanical redemption games of chance.

We are thus satisfied plaintiff's indoor facility constitutes a “recognized amusement park” both within the literal language of the Act's regulatory provision defining that term and within the intendment of the Act and regulations.

Affirmed as modified.   We do not retain jurisdiction.

FOOTNOTES

FN1. “Recreational facilities” are defined under the Township code, § 154-5B, as “[a]ny commercial or noncommercial facility open to the public, which provides for and offers active sports entertainment and activities, such as, but not limited to ․ indoor video games;  indoor games of chance ․ and food services and retail sales which are related to the principal recreation activity.   It may also include amusement facilities, provided that they are established within a building and are not located outdoors.”  [Added 12-15-2003 by Ord. No.2003-20]..  FN1. “Recreational facilities” are defined under the Township code, § 154-5B, as “[a]ny commercial or noncommercial facility open to the public, which provides for and offers active sports entertainment and activities, such as, but not limited to ․ indoor video games;  indoor games of chance ․ and food services and retail sales which are related to the principal recreation activity.   It may also include amusement facilities, provided that they are established within a building and are not located outdoors.”  [Added 12-15-2003 by Ord. No.2003-20].

FN2. Judge Sweeney's order is in the record but his findings are not.   The reference to his findings is contained in the trial court's opinion and does not appear to be in dispute..  FN2. Judge Sweeney's order is in the record but his findings are not.   The reference to his findings is contained in the trial court's opinion and does not appear to be in dispute.

FN3. Section 154-5B defines “amusement facilities” as “[a]ny outdoor commercial facility or business open to the public which provides for and offers entertainment activities, such as arcade games and ․ booths for games of skill and chance․  [Added [12]-15-2003 by Ord. No.2003-20].”.  FN3. Section 154-5B defines “amusement facilities” as “[a]ny outdoor commercial facility or business open to the public which provides for and offers entertainment activities, such as arcade games and ․ booths for games of skill and chance․  [Added [12]-15-2003 by Ord. No.2003-20].”

FN4. According to the trial court, games of chance “award fixed merchandise redemption prizes, regardless of outcome” while skill-based redemption games award prizes based “solely upon outcome.”.  FN4. According to the trial court, games of chance “award fixed merchandise redemption prizes, regardless of outcome” while skill-based redemption games award prizes based “solely upon outcome.”

FN5. N.J.A.C. 13:3-1.5, Requisites for municipal license, states, in pertinent part:(a) No license shall be issued in any municipality unless and until an ordinance shall have been adopted by the municipal governing body:l. Declaring that a recognized amusement park exists in the municipality ․;2.  Fixing an annual fee or fees ․ for licenses to be issued in such amount or amounts as may be determined․Section 63-1 of the Township code, entitled “Amusement Devices,” defines a “mechanical amusement device,” in pertinent part, as any machine operated mechanically, electronically, or otherwise by insertion of a coin or token for amusement “whether or not registering a score.”   Section 63-3 establishes the application procedure for obtaining a license and sets the annual licensing fee..  FN5. N.J.A.C. 13:3-1.5, Requisites for municipal license, states, in pertinent part:(a) No license shall be issued in any municipality unless and until an ordinance shall have been adopted by the municipal governing body:l. Declaring that a recognized amusement park exists in the municipality ․;2.  Fixing an annual fee or fees ․ for licenses to be issued in such amount or amounts as may be determined․Section 63-1 of the Township code, entitled “Amusement Devices,” defines a “mechanical amusement device,” in pertinent part, as any machine operated mechanically, electronically, or otherwise by insertion of a coin or token for amusement “whether or not registering a score.”   Section 63-3 establishes the application procedure for obtaining a license and sets the annual licensing fee.

FN6. Plaintiff also raised federal civil rights claims and asked the motion judge to nullify Ordinance 2003-20.   These claims were not addressed by the trial court and are not raised on appeal..  FN6. Plaintiff also raised federal civil rights claims and asked the motion judge to nullify Ordinance 2003-20.   These claims were not addressed by the trial court and are not raised on appeal.

PER CURIAM