NJ – Measures Taken to Assist Business Due to COVID-19

March 19, 2020Alerts

New Jersey Gov. Phil Murphy declared a state of emergency on March 9, 2020 forcing many courts, municipalities and businesses to take drastic measures to minimize the spread of COVID-19. The governor has required all non-essential businesses to close at 8 p.m., while allowing businesses that play a direct role in response efforts or are necessary for the public welfare to remain open, such as supermarkets and grocery stores, health care offices (other than for non-emergent dental procedures), pharmacies and gas stations. Restaurants and bars may remain open until 8:00 p.m. for takeout and delivery orders only. Movie theaters, gyms, casinos and racetracks are effectively closed. There have already been expanded directives issued by state and local officials in New Jersey, which will likely increase in the coming days based on the extended closings in New York and Pennsylvania. 

New Jersey Courts

New Jersey federal and state courts started taking precautionary measures last week.  However, due to the escalation of the COVID-19 situation, New Jersey state courts are closed to the public through March 27, 2020 except for extremely limited emergent matters. To the extent possible, case management conferences, motions and hearings are being handled by telephone or video conference.

The New Jersey Supreme Court also has relaxed and supplemented the court rules concerning discovery deadlines to permit extensions. In the computation of time periods under the Rules of Court and under any statute of limitations for matters in all courts, for purposes of filing deadlines, March 16 through March 27, 2020 will be deemed a legal holiday. Each judge is handling matters on a case-by-case basis so, in an abundance of caution, it is important to check directly with the court.

The extended closure of the courts will create ramifications in cases that require public notice and participation. For example, a recent influx of settlements between developers and municipalities settling affordable housing litigation that has been ongoing for the past five years are scheduled and waiting for Fairness Hearings. These delays have broader implications when one considers that the court orders that result from the hearings are contingencies in various contracts and loan transactions. 

New Jersey Municipal Proceedings

The New Jersey Senate passed Bill No. S2294, which allows public bodies to conduct meetings and provide notice by electronic means during periods of emergency. The bill was necessary because municipalities have cancelled council, planning board and zoning board meetings because gatherings of 50 people and larger are prohibited, and some board members are older, and thus at greater risk. Like courts, municipalities are exploring technologies that will allow them to continue to hold open public meetings. The difficulty is that the technology must allow for public participation to comply with the Open Public Meetings Act, N.J.S.A. 10:4-6, et seq., (OPMA), which is New Jersey’s Sunshine Law. Pursuant to the OPMA, public meetings may be held in person or by means of communication equipment, N.J.S.A. 10:4-8(b), such as via streaming services. Moreover, for notice to comply with the OPMA, municipalities are required to provide a means of public comment even if a meeting is held remotely.

While in the short term that will enable certain meetings to continue, the more troubling aspects of the crisis will be the potential standstill of land use applications due to limitations on the ability to present and cross-examine expert witnesses. As do the delays with the courts, the broader implications are that land use approvals and redevelopment designations serve as conditions precedent and/or triggering events in certain real estate contracts and/or loan transactions.

New Jersey Legislature

In addition to the federal aid initiatives, the New Jersey legislature is also taking action to assist businesses in this state. The New Jersey Senate passed several bills on Thursday, March 19 to address the negative economic impact of COVID-19 upon businesses.

Certain bills that passed will also infuse capital into small and mid-sized businesses to ensure their ability to remain viable for the next several months. The New Jersey Economic Development Authority has been authorized to make grants and loans during any declaration of emergency, including the current one, to help businesses to meet the obligations imposed by the emergency to slow the spread of COVID-19 (such as unprecedented curfews and business closures) by ensuring that businesses have working capital and are able to meet payroll requirements. Among other bills, the Senate made a supplemental appropriation of $10 million for increased sanitation of healthcare and residential facilities due to the outbreak.

Even before the Senate passed the bill, the New Jersey Economic Development Authority had already responded by reviewing procedures and policies related to all of its support programs, with an eye toward waiving certain requirements related to its employment-based incentive programs.

The Senate also passed a measure that automatically extends the time to file gross income tax or corporate business tax returns if the federal government extends filing or payment dates (which the IRS has). In addition, corporations are permitted to hold shareholder meetings in part or solely by means of remote communication during a state of emergency. Also notary publics are authorized to perform certain notarial acts remotely.

With the need to shelter in place, the Senate also passed a measure that prohibits enforcement of residential tenant evictions and evictions due to residential foreclosure during emergency circumstances, such as the COVID-19 pandemic. While filings for evictions are not curtailed, the measure does not allow the enforcement of any such order. The Senate also introduced a bill that if passed would prohibit rent increases and permit application for mortgage forbearance during emergency circumstances.

Another piece of legislation, Assembly Bill A3844, if passed by the Senate, would provide a mechanism by which businesses could recover losses caused by interruption resulting from the COVID-19 pandemic if they had a business interruption insurance policy as of March 9, 2020. However, the bill will only apply to businesses covered by such a policy with less than 100 full-time employees in New Jersey. The fate of that bill remains unknown.