This matter was tried before the court as a result of a complaint filed by plaintiff Bayshore Sewerage Company, appealing from an order of the Department of Environmental Protection of the State of New Jersey dated February 3, 1971 issued to the plaintiff. The appeal is taken under the provisions of N.J.S.A. 58:12-2 which, at the time of the institution of this action, provided in part as follows:
Any person, corporation or municipality aggrieved by the finding of the department may bring a civil action in the Superior Court at any time within three months after being notified thereof, and said court may hear and determine such action in which the court may proceed in a summary manner or otherwise, and thereupon may affirm the finding of the department or reverse or modify the finding in whole or in part as the court shall deem just and reasonable.
It is to be noted that by chapter 44 of the Laws of 1972 this section was amended, effective June 1, 1972, to delete the provision for the bringing of a civil action in the Superior Court and providing instead that any person aggrieved by such order of the Department would be entitled to a hearing before the Department upon notice, rather than to bring an action such as the one herein. Motion was made on behalf of all defendants at the close of plaintiff's case, and the defense was previously raised, that plaintiff had not exhausted its administrative remedies and therefore was not entitled to relief in this action. However, no application was made to have the matter heard by the Department. The court reserved decision on the motion and proceeded to a full hearing, so that now a complete record is available. It is the court's determination that such motions should be denied and that the defenses are without merit for the reason that at the time the action was instituted this was the legislatively directed action and procedure to be taken, and under all the circumstances of this case, taking into consideration the position of the State Department of Environmental Protection, to require plaintiff to go before the Department for a hearing would be a useless procedure. The Court should assume
and does assume jurisdiction. The argument made that the original order here involved was issued without hearing is now without merit by reason of the present litigation.
The background of the incidents giving rise to this litigation is of the utmost importance to a full understanding of the issues involved. The following determination of facts is hereby made, although for the most part practically all of these facts have been conceded in some fashion or other and are not really in dispute. Plaintiff is the owner of a sewage treatment plant and a collection system within a franchised area located in the Township of Hazlet in the County of Monmouth and State of New Jersey serving approximately 2200 customers. Most of its customers are within the franchised area but approximately 300 are located outside of the franchised area. It is a public utility corporation employing rates and franchises as have been heretofore granted by the State Board of Public Utility Commissioners since its original inception in 1957. The State Department of Health, predecessor to defendant Department of Environmental Protection, issued the original permit for the construction of the plant and approved the plans for the construction thereof on February 1, 1957, and thereafter issued and granted subsequent permits which in effect authorized additional connections to be made and additional sewage to be treated. The initial plant as constructed had the capacity to serve 1500 homes. The original permit for construction contained certain conditions in the permit issued which allowed the construction of the treatment plant for "the purpose of releasing the sewage into 'Flat Creek' a tributary of Raritan Bay." The pertinent conditions, among others, are the following:
(1) That the permit is revocable or subject to modification or change at any time when in the judgment of the State Department of Health of the State of New Jersey such revocation, modification or change shall be necessary.
(2) That the issuance of this permit shall not be deemed to effect in any way action by the State Department of Health of the State of New Jersey on any future applications that may be made for permission to discharge additional sewerage or industrial
wastes into the waters of the State.
(9) That this permit to construct a sewerage treatment plant herein referred to does not exempt or shall not be construed to exempt the applicant Bayshore Sewerage Company Inc., 250 Mechanics Street, Red Bank, New Jersey, from complying with the rules or regulations and policies or laws lodged in any agency or division in this state having legal jurisdiction.
In addition to these stated provisions there were certain requirements in regard to the amount, type and quality of effluent that was to be discharged into Flat Creek, and there were certain requirements with regard to the biochemical oxygen of the effluent, referred to as B.O.D. With the issuance of the building permit there was also issued a use permit which contained identical conditions. As before stated, several permits were thereafter issued from time to time for construction and use permitting additional sewage to be processed, beginning on May 22, 1957 and down to and including August 27, 1964, totaling 12 in all. All of these contain the same conditions set forth in the original permit. The permit of August 27, 1964 was issued pursuant to an application made to construct additions and alterations to the existing treatment plant which, if completed, would have provided facilities for the treatment of approximately 3000 homes instead of the 1500 homes originally authorized. This permit had a provision, as had all the other building permits referred to, providing "the approval of plans and/or other engineering data for the above work shall remain in force for a period of only two years from the date of approval unless the said works are constructed or the contract awarded for the construction of such works."
I find that admittedly the work under this permit was never completed at any time although some minor work was done in order to keep the plant functional which did not however constitute any enlargement of the facilities. In 1965, the Legislature enacted L. 1965, c. 121, and this law is known as "State Public Sanitary Sewerage Facilities Act of 1965." A statement of intent is included in the act which
provided that it was the "public policy of the State of New Jersey to encourage and support, as hereinafter provided, the promotion, planning, development and construction of public sanitary sewerage facilities, including sewage collection, transmission, treatment and disposal works on a regional or multi-unit basis." N.J.S.A. 26:2E-2. In the interim, and going back to about the year 1962 or 1963, as was conceded by plaintiff's witnesses, Nero and Kinkade, the plant was not able to efficiently treat the sewage it was collecting and admittedly was then and is now in violation of the conditions of the permits issued with respect to the quality of the effluent being discharged into Flat Creek.
Flat Creek empties into Raritan Bay. Raritan Bay is a tidal body of water and Flat Creek is tidal for about half its distance from Raritan Bay to plaintiff's treatment plant, which is located approximately 1 I/2 miles from the Bay. On April 6, 1966, the State Department of Health issued an order to plaintiff to improve its plant by the construction of certain additions for which a permit had been issued, as before stated, in 1964 and which additions, as before stated, have not in fact ever been constructed. On April 19, 1967 the State Department of Health revoked the building permit it had issued on August 27, 1964, and reference was made in the letter of revocation that sewage would now be handled by the regional plant in the area under the now state-wide policy of regionalization.
In the meantime, it appears that in 1966 the Township of Hazlet had created a municipal sewerage authority, and negotiations were going on with this authority, which had succeeded to the township committee of the Township of Hazlet (formerly known as Raritan Township) in arranging for the disposition of sewage in the township. It appears from the testimony presented, and I find, that during this period of time efforts were made by the local township authority to have the State Department of Health rescind its permit given in 1964 so as to permit enlargement of plaintiff's plant, for the reason that it was negotiating to purchase
it and, among other things, did not want to have the extra burden of cost involved in any addition.
About two years later, in 1968, the Townships of Holmdel and Hazlet and the Borough of Union Beach, pursuant to N.J.S.A. 40:14A-1 et seq. , created by adoption of parallel ordinances what is known as the Bayshore Regional Sewerage Authority. This authority is named as one of the defendants in this case, along with the Hazlet Township Committee, the Hazlet Township Sewerage Authority and the State Department of Environmental Protection. The adopted ordinances by their language limited the power of the authority to installing, maintaining and operating trunk lines and sewage treatment plants for the processing, collecting and treating of the effluent from sewer lines and mains installed, maintained, operated and controlled by the participating municipalities or local sewerage authority counterparts. It also appears during this time period that the Township of Hazlet Sewerage Authority purchased the facilities and plant of another existing privately owned sewerage company serving about 500 customers in Hazlet Township, known as the Raritan Valley Sewerage Company, which it still owns.
The order herein appealed from, dated February 3, 1971, among other things recites in the preambles a determination that plaintiff "discharged improperly, inadequately and insufficiently treated sewage into Flat Creek, a tributary of Raritan Bay, thereby causing or threatening injury to the inhabitants of this state either to their health, comfort or property in violation of N.J.S.A. 58:12-2. "The order further recites that the master sewage plan had been developed by the Bayshore Regional Sewerage Authority which establishes the method for providing sewage facilities for the area of Hazlet Township presently being served by plaintiff. It further makes a determination that the State Department of Environmental Protection is of the opinion that in order for the sewage to be properly, adequately and sufficiently treated, treatment and disposal facilities must be provided in the manner approved by the Department. The order of
April 6, 1966 is specifically rescinded and plaintiff ordered to cease the discharge of sewage and other polluting matter except in a manner approved by the State Department in accordance with the master sewage plan of the Bayshore Regional Sewerage Authority when such facilities become available. Plaintiff herein is further ordered to submit to the Department, on or before March 15, 1971, its program for ceasing such pollution.
The order of April 6, 1966 referred to was an order of the Department to plaintiff requiring that on or before August 15, 1966 plaintiff improve the sewage treatment works. As before related, that order was followed by the order of April 19, 1967 revoking the building permit which had been issued on August 27, 1964. Plaintiff replied to the order of February 3, 1971 by letter written through its attorney on March 12, 1971, indicating that it would improve its plant and, as an alternate, suggested that sewage be treated by the Bayshore Regional Sewerage Authority, but that this would be subject to ...