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In re Application for A Declaratory Ruling Pursuant to N.J.S.A. 48 3-10 and N.J.A.C. 14 3-10.13

Decided: June 9, 1989.

IN THE MATTER OF THE APPLICATION FOR A DECLARATORY RULING PURSUANT TO N.J.S.A. 48:3-10 AND N.J.A.C. 14:3-10.13(A)


On appeal from the New Jersey Board of Public Utilities.

J. H. Coleman and Baime. The opinion of the court was delivered by Baime, J.A.D.

Baime

Appellants National Solid Wastes Management Association, New Jersey Waste Management Association and Zajac Disposal appeal from a declaratory ruling rendered by the Board of Public Utilities (BPU) and a subsequent determination denying their motion for reconsideration. We affirm.

The salient facts are not in dispute and are essentially a matter of public record. On August 18, 1978, the BPU issued its formal opinion in In the Matter of the Petition of Twin County Disposal, Inc. for Approval of Stock Transfer, Docket No. 782-138 (BPU August 18, 1978 (Twin County), holding that only utility stock transfers which result in the vesting of a majority interest in one person or entity requires prior Board approval under N.J.S.A. 48:3-10.*fn1 The BPU's decision was

without reference to N.J.S.A. 48:3-7(a)*fn2 and N.J.A.C. 14:3-10.13.*fn3 Approximately eight years later, on April 25, 1986, the BPU rendered its opinion in Matter of Inter County Refuse Serv., Docket No. 3312-114, (Inter County) where it held that transfers of utility stock to one or more shareholders which result in a change in majority interest require Board approval under N.J.S.A. 48:3-7(a), N.J.S.A. 48:3-10, and N.J.A.C. 14:3-10.13(a).

On February 5, 1987, appellants filed a petition with the BPU requesting a declaratory ruling that Inter County 's requirement of prior Board approval could not be applied retroactively. Although ambiguously phrased, appellants also sought a ruling that Inter County 's change of policy concerning the need for

Board approval could be effectuated only by rule-making consistent with the requirements of the Administrative Procedure Act (N.J.S.A. 52:14B-1 et seq.). Because the BPU's determination in Inter County was pending appeal, appellants' petition was placed on the inactive list.

On January 21, 1988, we upheld the BPU's opinion in Inter County. Matter of Inter County Refuse Serv., 222 N.J. Super. 258 (App.Div.1988), app. dism. 114 N.J. 485 (1989). There, we held that N.J.S.A. 48:3-7(a) and N.J.A.C. 14:3-10.13(a) require prior Board approval as a prerequisite to the transfer of a majority interest in a utility even where the shares are distributed to more than one person or entity. 222 N.J. Super. at 264. While we found that N.J.A.C. 14:3-10.13(a) was consistent with and statutorily authorized by N.J.S.A. 48:3-7, -9 and -10, 222 N.J. Super. at 267, we declined to decide whether N.J.S.A. 48:3-10, standing alone, required Board approval in such a case. 222 N.J. Super. at 268. In the course of our opinion, we specifically considered and rejected the proposition that the BPU could not depart from its holding in the Twin County case. 222 N.J. Super. at 264. We noted that an administrative interpretation of a statute or rule was entitled to respect, but was "not binding on us." 222 N.J. Super. at 265. Following our opinion, the Supreme Court granted certification. 111 N.J. 618 (1988). However, the appeal was subsequently dismissed at the request of the parties. 114 N.J. 485 (1988).

After reinstating appellants' petition on active status, the BPU rendered its declaratory ruling on May 12, 1988. Citing our opinion in Matter of Inter County Refuse Serv., supra, and a similar unpublished Appellate Division decision, Piccini Sanitation, Inc. v. New Jersey Board of Public Utilities, A-227-86T6 (June 24, 1987), the BPU found "no bar to enforcement of . . . statutory and regulatory requirements [of Board approval] pertaining to utility stock transfers." However, the BPU recognized that "particular circumstances may present mitigating factors which will temper . . . enforcement actions." Because no specific facts were alleged, the BPU deemed it "inappropriate

to address hypothetical situations" but instead "reserve[d] the right to [consider] each case on its own merits as it arises." On July 13, 1988, the BPU ...


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