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In re Allegations of Violations of Law and Administrative Code

Decided: July 23, 1990.

IN THE MATTER OF ALLEGATIONS OF VIOLATIONS OF LAW AND ADMINISTRATIVE CODE BY FIORILLO BROS. OF N.J., INC., TRI-COMPACTION SALES, INC., AND JOSEPH FIORILLO, MICHAEL FIORILLO, ANTHONY FIORILLO, MATTHEW IANNIELLO AND BENJAMIN COHEN, INDIVIDUALLY AND AS OFFICERS, DIRECTORS, SHAREHOLDERS, EMPLOYEES, AND/OR ADMINISTRATORS OF FIORILLO BROS. OF N.J., INC., RESPONDENTS-APPELLANTS


On appeal from the State of New Jersey Board of Public Utilities.

Michels, Deighan and R.s. Cohen. The opinion of the court was delivered by Michels, P.J.A.D.

Michels

[242 NJSuper Page 671] Appellants Fiorillo Bros. of N.J., Inc. (Fiorillo Bros.), Tri-Compaction Sales, Inc. (Tri-Compaction), and Joseph Fiorillo, Michael Fiorillo, Anthony Fiorillo, Matthew Ianniello and Benjamin Cohen, individually and as officers, directors, shareholders, employees, and/or administrators of Fiorillo Bros. of N.J., Inc. appeal from a final administrative action of respondent New Jersey Board of Public Utilities (Board) dated January 25, 1989, that, in part (1) revoked Fiorillo Bros.' certificate of convenience and necessity effective February 27, 1989; (2) ordered Tri-Compaction to cease and desist from engaging in the solid waste industry effective February 27, 1989; (3) debarred Fiorillo

Bros., Tri-Compaction, Anthony Fiorillo, Michael Fiorillo, Joseph Fiorillo, Matthew Ianniello and Benjamin Cohen from the solid waste industry; (4) fined Fiorillo Bros., Tri-Compaction, Anthony Fiorillo, Michael Fiorillo and Joseph Fiorillo $323,000 for waste flow violations pursuant to N.J.S.A. 48:13A-12 and $1,000 for operating Tri-Compaction without a certificate of public convenience and necessity; (5) ordered Fiorillo Bros. to provide the Board with access to all customer billings from June 1987 to March 1988 so that it can calculate penalties for tariff violations; (6) ordered Fiorillo Bros. and Tri-Compaction to provide their customer list to the Board to arrange for alternative service for Fiorillo Bros. and Tri-Compaction customers; (7) directed the Board to convene a collections meeting to provide alternative service for Fiorillo Bros. and Tri-Compaction customers; (8) prohibited Fiorillo Bros., Tri-Compaction, Anthony Fiorillo, Michael Fiorillo and Joseph Fiorillo from arranging for the provision of service to former Fiorillo Bros. or Tri-Compaction customers, and (9) prohibited Fiorillo Bros., Tri-Compaction, Anthony Fiorillo, Michael Fiorillo and Joseph Fiorillo from disposing of or encumbering Fiorillo Bros. or Tri-Compaction property without Board approval.

Briefly, by way of background, on March 24, 1988, the Board issued an order to show cause directed to Fiorillo Bros. and its principals, alleging violations of applicable emergency solid waste flow orders and a collection of excessive fees from its customers in violation of its tariffs. The order sought revocation of the certificate of public convenience and necessity to operate as a solid waste collection utility held by Fiorillo Bros. and debarment of the individuals from the solid waste industry. On March 5, 1988, Fiorillo Bros. and its principals moved to transfer the case to the Office of the Administrative Law. Appellants also moved to dismiss the case because the Board failed to join Tri-Compaction, which they claimed was an indispensable party. Fiorillo Bros. also moved for additional discovery and a stay of all proceedings pending resolution of an action pending in the Federal court, which it had filed attacking

the validity of the Board's emergency solid waste flow orders. Except to permit appellants to engage in limited discovery, the Board on May 10, 1988, denied all motions. Thereafter, on May 31, 1988, the Board amended the order to show cause to add Tri-Compaction and its principals as parties to the action and to include as an additional ground for revocation of licensure and for debarment the convictions of its principals, Matthew Ianniello and Benjamin Cohen for federal crimes.

The hearings commenced in May, 1988 and continued through November, 1988. On July 29, 1988, the Board prohibited Fiorillo Bros. and Tri-Compaction from transferring ownership interests to customer accounts during the pendency of the proceedings. Additionally, on September 15, 1988, the Board denied appellants' motions to dismiss the matter as to Tri-Compaction and to consolidate this action with another matter commenced by the Department of Environmental Protection against Fiorillo Bros. At the conclusion of the lengthy hearings, the Board issued a thorough written decision of January 25, 1989, in which it found, among other things, that Fiorillo Bros. and Tri-Compaction were integrated, interrelated enterprises that had violated emergency waste flow orders by directly disposing of New Jersey generated solid waste in out-of-state facilities and that Tri-Compaction was operated without proper permits. The Board also found that Fiorillo Bros. had charged excessive fees in violation of applicable tariffs. The Board therefore imposed the sanctions and penalties that gave rise to this appeal.

We granted appellants leave to appeal and stayed the Board's order pending appeal, thus permitting Fiorillo Bros. to continue operations. However, we expressly barred Ianniello and Cohen from participating in Fiorillo Bros.' enterprises. We also barred the Board from convening a meeting of waste haulers to take over Fiorillo Bros.' customers pending the appeal and we stayed payment of the penalties on the condition that appellants post a supersedeas bond. Finally, we denied appellants' motion to stay the prosecution of this appeal pending final computation

by the Board of the tariff penalty. The Board's motion to vacate our stay was denied by the Supreme Court.

Appellants seek a reversal of the final administrative action of the Board, contending generally that the action is not supported by sufficient credible evidence. Specifically, they contend that (1) the Board erred in refusing to transfer the matter to the Office of Administrative Law; (2) the emergency waste flow orders violate (a) the commerce clause of the United States Constitution, (b) the contract clause of the United States and the New Jersey Constitutions, (c) procedural due process, (d) the Sherman Antitrust Act, and (e) New Jersey Public Contract law; (3) the emergency waste flow orders are revenue raising laws and are invalid since they did not originate in the General Assembly; (4) the Board erred in finding that Tri-Compaction was a recycling facility; (5) the penalties imposed by the Board for waste flow violations are contrary to N.J.S.A. 48:4-12b; (6) the Board's finding that Fiorillo Bros. violated its tariff is not supported by sufficient credible evidence on the record; (7) the Board's failure to act on their application to transfer the stock constituted a gross abuse of discretion, and (8) the revocation of their certificates of public convenience and necessity and debarment of the principals from the solid waste industry constituted excessive sanctions.

We are satisfied from our careful study of the voluminous record in light of the arguments presented that the final administrative action of the Board was not arbitrary, capricious or unreasonable, that it was supported by the evidence, and that it did not violate legislative policies expressed or fairly implied in the statutory scheme administered by the Board. See Henry v. Rahway State Prison, 81 N.J. 571, 579-580, 410 A.2d 686 (1980); Campbell v. Department of Service, 39 N.J. 556, 562, 189 A.2d 712 (1963); In re Waste Disposal Agreement, 237 N.J. Super. 516, 526-529, 568 A.2d 547 (App.Div.1990). See also Public Advocate Dep't v. Public Utilities Bd., 189 N.J. Super. 491, 499, 460 A.2d 1057 (App.Div.1983); In re Boardwalk Regency Casino License Application, 180 N.J. Super. 324, 333-335,

434 A.2d 1111 (App.Div.1981), mod. 90 N.J. 361, 447 A.2d 1335, app. dism. sub. nom. Perlman v. Attorney General of New Jersey, 459 U.S. 1081, 103 S. Ct. 562, 74 L. Ed. 2d 927 (1982). Moreover, all of the issues of law raised are clearly without merit. R. 2:11-3(e)(1)(E). However, further comment is appropriate with respect to some of the contentions.

I.

First, we emphasize that our role in reviewing the Board's findings and conclusions is to determine "'whether the findings made could reasonably have been reached on sufficient credible evidence present in the record', considering 'the proofs as a whole,' with due regard to the opportunity of the one who heard the witnesses to judge of their credibility . . . and . . . with due regard also to the agency's expertise where such expertise is a pertinent factor." Mayflower Sec. v. Bureau of Sec., 64 N.J. 85, 92-93, 312 A.2d 497 (1973) (quoting Close v. Kordulak Bros., 44 N.J. 589, 599, 210 A.2d 753 (1965)). See also In re Suspension of Heller, 73 N.J. 292, 309, 374 A.2d 1191 (1977); Jackson v. Concord Company Co., 54 N.J. 113, 117-118, 253 A.2d 793 (1969). We are satisfied that such evidence appears in the record.

Furthermore, it is not our function to substitute our independent judgment for that of an administrative agency, such as the Board, where there may exist a difference of opinion concerning the evidential persuasiveness of the relevant proofs. First Sav. & Loan Ass'n v. Howell, 87 N.J. Super. 318, 321-322, 209 A.2d 343 (App.Div.1965), certif. den., 49 N.J. 368, 230 A.2d 400 (1967). As a reviewing court, we will not weigh the evidence, determine the credibility of witnesses, draw inferences and conclusions from the evidence, or resolve conflicts therein. De Vitis v. New Jersey Racing Comm'n, 202 N.J. Super. 484, 489-490, 495 A.2d 457 (App.Div.), certif. den. 102 N.J. 337, 508 A.2d 213 (1985). See In re Grossman, 127 N.J. Super. 13, 23,

316 A.2d 39 (App.Div.), certif. den., 65 N.J. 292, 321 A.2d 253 (1974).

II.

We are satisfied also that there was no impropriety in the proceeding by virtue of the fact that a Deputy Attorney General advised the Board during the hearings while another Deputy Attorney General prosecuted the case before the Board. The law is clear that there is no legal impropriety in a Deputy Attorney General acting as both advisor to and prosecutor for an agency, so long as such representation does not preclude the prosecutor's independent judgment and does not result in actual bias or prejudice or violate due process. In re Polk License Revocation, 90 N.J. 550, 576-577, 449 A.2d 7 (1982); Matter of Cole, 194 N.J. Super. 237, 246-247, 476 A.2d 836 (App.Div.1984). If one Deputy Attorney General, acting in a dual capacity is acceptable, then it follows that two deputies acting in the separate roles of advisor and prosecutor are beyond reproach. Moreover, there was no evidence that the prosecuting attorney's independent judgment was in any way compromised or that bias, prejudice, or even a due process violation emanated from the dual legal representation in this case.

III.

Appellants claim that the Board's impartiality was undermined by the prosecuting attorney's communicating ex parte with the Board concerning their settlement offer. The Board rejected this argument when raised initially on a motion for reconsideration and we reject it now. The record strongly suggests that appellants' attorney authorized Deputy Attorney General Fisher to communicate the second settlement offer directly to the Board. Deputy Attorney Fisher states that such authorization was expressly given and appellants' attorney admits that comparable authority was given at the initial settlement conference in May, 1988. Consequently, Deputy Attorney

General Fisher's communication with the president of the Board was not done ex parte; rather, it was essentially a joint communication by Deputy Attorney General Fisher and appellants' attorney to the Board concerning the possible settlement. In this respect, this matter is clearly ...


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