Gov. Murphy’s Order For Tenants To Pay Rent With Security Deposits Is Unconstitutional – Twice | De Seno

By Tom De Seno

The framers of the Constitution saw men like Governor Phil Murphy coming. They knew that once you grant government the power to do something you like, you risk the next person in office using that power to do something you don’t like.  Since power can’t be policed through generations, constitutions are written to limit government power in the first place.

Currently, executive power on both the Federal and State levels is out of control and leaping toward totalitarianism. These press conferences that take up all of TV with Trump, Murphy, Cuomo and DeBlasio would surely violate the Fairness Doctrine, if it still existed. Most of their words aren’t giving us needed information, rather emotional and political rhetoric designed to win votes by virtue signaling.

The virtue signal du jour from Governor Phil Murphy (D, NJ, CBS, NBC, ABC) is an executive order that allows tenants to use their security deposit to pay their rent.  That’s illegal for him to do, thanks to an obscure 1787 law that escaped Murphy’s attention called the US Constitution.

The Federal Constitution has a Contract Clause [Article 1, Section 10, Clause 1]. It holds that state governments can’t pass laws that impair private contracts. The framers found it so important to protect private contracts that they passed it even before passing the Bill of Rights.  Protecting private contracts is a foundational law without which society would completely breakdown into the crony capitalism of Central America, the evil authoritarian twin of planned economies like European socialism. 

What the Framers sought to avoid was Governors having the power to cancel contracts owed by their friends and powerful donors, as a way to win votes and secure power. It matters not that Phil Murphy wraps his private contract cancellation in a “feel good” executive order; he’s still running afoul of the Constitution.  As Madison said in The Federalist #44, cancellation of private contracts is “contrary to the first principles of the social compact, and every principle of sound legislation.”

Also escaping the Governor’s attention is that New Jersey has a Constitution as well, and it contains the exact same Contract Clause (Article 4, Section 7, Clause 3] found in the Federal Constitution.  I’m not being sarcastic when I say the Constitution escaped Murphy’s attention.  In a recent press conference Murphy was asked about the Constitutional provenance of his executive orders, and he said that the question was “above his pay grade” and that he “didn’t think about it.” That’s evident. Murphy is violating not one but two Constitutions.

None of this should be above the pay grade of Matthew J. Platkin, Murphy’s lawyer who drafted the executive order.  You may have heard of him in the news lately.  He managed to get a Coronavirus test without having symptoms; something Murphy has insisted no one should do. That is the classic politician’s credo, “What governs thee is not for me.”  Talk about privilege.  When asked how Matthew J. Platkin got tested, Murphy said, “We need him.”  You, dear readers, are not “needed.”

The purpose of a security deposit in a lease is not for rent but to pay for damage done to the apartment when the tenant leaves.  That concept has been enshrined in a New Jersey statute for decades, which forbids tenants from using security to pay rent [NJSA 46:8-19(c)].

Thanks to NJ’s obscenely high real estate taxes, landlords work on small profit margins.  Most are not giant companies, but your neighbor trying to scratch out a living like you.  When a tenant damages a property, the entire profit from a lease can be wiped out. 

The security does two things – it helps preserve the landlord’s revenue and it keeps the courts clear of thousands of cases that would have to be filed chasing tenants who destroyed a property and left without paying for it.  Removing security is a “substantial impairment of the contract,” the very first part of the test the Court uses to strike down such laws. The societal cost to losing security deposits is huge and therefore fails to serve substantial, legitimate state interests.

Murphy’s claims of using “emergency power” will fail. The US Supreme Court has held:

“Emergency does not create power. Emergency does not increase granted power or remove or diminish the restrictions imposed upon power granted or reserved. The Constitution was adopted in a period of grave emergency. Its grants of power to the Federal Government and its limitations of the power of the States were determined in the light of emergency, and they are not altered by emergency.”

Of course, when a Governor acts unconstitutionally, only the Courts can stop him and that takes time.  In the meantime, tenants are going to think they can get away with this, landlords will file suits to stop it, and even the ones who do not will end up filing lawsuits against tenants for damaging property without security.

Is Murphy planning to hire more judges? He’d better.

Governor Murphy needs to revoke that executive order. In fact, he needs to finally sit down and compare all his emergent orders against the constitution. Government is running afoul of rights including religion, speech, travel, assembly and now contracts and property. People will only be pushed so far for so long. With gathered protests already beginning, elected officials like Trump, Murphy, Cuomo and DeBlasio are laying the groundwork for a time of social upheaval unknown to modern Americans.


Tommy De Seno is an attorney and commentator residing in Asbury Park, New Jersey.

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