## Facts

- Davidson Bros., Inc. operated a supermarket on George Street in downtown New Brunswick and later bought and improved another supermarket on Elizabeth Street about two miles away.
- After the Elizabeth Street acquisition, George Street sales declined and Davidson closed the George Street supermarket in 1979.
- In 1980 Davidson sold the George Street property to D. Katz & Sons, Inc.; the deed imposed a recorded covenant prohibiting use of the land “as a supermarket or grocery store of a supermarket type” for forty years and stated the restriction would run with the land.
- The closure created hardship for downtown residents, many of whom lacked ready access to motor vehicles.
- The City of New Brunswick and the New Brunswick Housing Authority later acquired control of the George Street site and arranged for C-Town to operate a supermarket there under favorable lease terms tied to operating and improving the store.
- Davidson sued Katz, the City, the Housing Authority, and C-Town seeking specific enforcement of the restrictive covenant to prevent supermarket operations at the George Street site.

## Issues

1. Whether a deed covenant restricting use of land for forty years to prevent a supermarket may be enforced against successors.
2. Whether enforceability turns on traditional “touch and concern” analysis or on a broader reasonableness inquiry.
3. Whether the covenant is invalid because it unreasonably restrains trade or conflicts with the public interest.

## Decision

- The New Jersey Supreme Court rejected rigid reliance on “touch and concern” as a standalone requirement for enforceability of real-property covenants.
- The Court adopted a multi-factor reasonableness test (including consideration of public interest, restraint on trade, duration, notice, and changed circumstances).
- The Court reversed the prior disposition and remanded for factfinding and application of the reasonableness factors to determine whether the covenant was enforceable.

## Legal Principles

- Enforceability of a recorded restrictive covenant is assessed under a reasonableness standard rather than a single formalistic requirement.
- “Touch and concern” is relevant but not dispositive; courts consider multiple factors, including the parties’ intent, the covenant’s role in the original bargain, clarity, recording and notice, geographic and temporal scope, restraint on trade/monopoly effects, interference with the public interest, and changed circumstances.
- Even a clear, recorded, and noticed covenant may be unenforceable if it operates as an unreasonable restraint on trade or is contrary to public policy.

## Conclusion

The court replaced a rigid servitudes analysis with an eight-factor reasonableness framework and remanded to decide whether the forty-year supermarket prohibition should be enforced in light of competition effects and the public consequences of restricting grocery access in downtown New Brunswick.


Davidson Bros., Inc. v. D. Katz & Sons, Inc., 121 N.J. 196, 579 A.2d 288 (1990)