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In re Adoption of N.J.A.C. 7 26B

Decided: July 7, 1992.

IN RE ADOPTION OF N.J.A.C. 7:26B; PUBLIC INTEREST RESEARCH GROUP OF NEW JERSEY, NEW JERSEY ENVIRONMENTAL LOBBY, AND KEITH ONSDORFF, AND SOCIETY FOR ENVIRONMENTAL ECONOMIC DEVELOPMENT, ASHLAND CHEMICAL COMPANY AND COOPER INDUSTRIES, INC., RESPONDENTS, AND CHEMICAL INDUSTRY COUNCIL OF NEW JERSEY, RESPONDENT AND CROSS-APPELLANT,
v.
NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION, APPELLANT AND CROSS-RESPONDENT.



On certification to the Superior Court, Appellate Division, whose opinion is reported at 250 N.J. Super. 189 (1991).

Pollock, Wilentz, Clifford, O'Hern, Garibaldi, Stein

Pollock

The opinion of the court was delivered by

POLLOCK, J.

This appeal is the most recent chapter in New Jersey's ongoing efforts to clean up hazardous waste emanating from industrial sites. The appeal concerns the Environmental Cleanup Responsibility Act (ECRA), N.J.S.A. 13:1K-6 to -13, which requires the owners and operators of industrial sites either to develop a cleanup plan for real property contaminated by hazardous waste or to certify in a "negative declaration," N.J.S.A. 13:1K-8g, as a condition precedent to the closing, sale, or transfer of a business or real property, that cleanup is unnecessary. More precisely, the appeal focuses on the definitions of "cleanup plan" and "industrial establishment" in N.J.A.C. 7:26B-1.3, which was adopted by the Department of Environmental protection (DEP) to implement ECRA.

As defined in that regulation, the term "cleanup plan" requires owners and operators of industrial establishments to include in their plans off-site wastes that have emanated from on-site sources. The Appellate Division found the definition to be beyond the scope of DEP's authority. 250 N.J. Super. 189, 243-46 (1991). The court granted a partial stay of this portion of its judgment "only as to existing cleanup orders, plans or agreements presently in force and relating to off-site contamination in force on May 6, 1991." It upheld the definition of "industrial establishment," which subjects to ECRA's requirements vacant land that is contiguous to the business plant of the industrial establishment and is controlled by the establishment's owner or operator.

We granted DEP's petition to review the Appellate Division's invalidation of the definition of "cleanup plan." 126 N.J. 387 (1991). We also granted the cross-petition of Ashland Chemical Company, Cooper Industries, Inc., the Chemical Industry Council of New Jersey, and the Society for Environmental Economic Development, ibid., which challenges the validity of the inclusion of adjoining lots in the DEP definition of "industrial establishment." We now hold that both definitions are within the statutory authority delegated to DEP.

-I-

Decades of industrial activity have left this state with a legacy of hazardous waste. That legacy now threatens the state's public health and ecology. In an affidavit filed by the DEP in support of its application for a stay of the Appellate Division judgment, Lance R. Miller, Assistant Commissioner in charge of DEP's Waste Management Program, states that "New Jersey has several thousand known or suspected sites contaminated by hazardous substances and wastes * * * ." He warns that the resultant risk "to human health and the environment * * * is compounded by the fact that almost half (49%) of New Jersey's population relies on ground water supplies for its drinking water." According to Assistant Commissioner Miller, ECRA "has been the mainstay of the State's hazardous waste cleanup program * * * . As a result of ECRA, more than 1,759 cleanups of industrial facilities have been completed or are underway throughout the State of New Jersey at an estimated cost of more than $478 million."

All parties acknowledge that ECRA's legislative history is meager. We gain some insight into the intent of the Legislature, however, by considering the background and purpose of the statute. The Legislature enacted ECRA in response to the inordinate time and money spent in determining fault and apportioning liability for the dumping of toxic wastes. See Superior Air Prods. v. NL Indus., 216 N.J. Super. 46, 63 (App. Div. 1987). The seven years consumed in litigating Department of Environmental Protection v. Ventron Corp., 94 N.J. 473 (1983), and the discovery of dioxin at the Newark site of Diamond Shamrock Corporation ten years after the closure of that site alerted the Legislature to the need for a more expeditious administrative response. See NL Indus., supra, 216 N.J. Super. at 62; Gregory Battista, Note, The Environmental Cleanup Responsibility Act (ECRA): New Accountability for Industrial Landowners in New Jersey, 8 Seton Hall Legis. J. 331, 332 (1985).

Senator Raymond Lesniak introduced the legislation believing it would "finally place full responsibility for rectifying damage done to New Jersey's environment on the generators of the toxic waste problem." Deborah L. Munt, State-Initiated Hazardous Waste Management Programs: New Jersey's Environmental Cleanup Responsibility Act, Innovations (Council of State Gov't, Lexington, Ky.) Jan. 1989, at 1, 3. When enacting ECRA, the Legislature described the purposes of the statute:

The Legislature finds and declares that the generation, handling, storage and disposal of hazardous substances and wastes pose an inherent danger of exposing the citizens, property and natural resources of this State to substantial risk of harm or degradation; that the closing of operations and the transfer of real property utilized for the generation, handling, storage and disposal of hazardous substances and wastes should be conducted in a rational and orderly way, so as to mitigate potential risks; and that it is necessary to impose a precondition on any closure or transfer of these operations by requiring the adequate preparation and implementation of acceptable cleanup procedures therefor.

[N.J.S.A. 13:1K-7.]

Thus, the essential goal of ECRA is to secure the cleanup of industrial sites at the earliest possible date. Dixon Venture v. Joseph Dixon Crucible Co., 235 N.J. Super. 105, 110 (App. Div. 1989), aff'd, 122 N.J. 228 (1991).

To this end, the statute requires as a precondition to closure, sale, or transfer that the property of an "industrial establishment" be in an environmentally appropriate condition. Owners and operators can satisfy the precondition by submitting either a negative declaration or a cleanup plan. In re Fabritex Mills, 231 N.J. Super. 224, 227 (App. Div. 1989). In brief, ECRA requires the owner or operator planning to close, sell, or transfer operations: (1) to notify the DEP within five days of its intention to engage in any of the triggering events; (2) on closure or within sixty days before the transfer or sale, to submit a cleanup plan or a "negative declaration" that there has been no hazardous discharge or that the discharge has been cleaned up; and (3) to obtain financial security guaranteeing performance of the cleanup plan. N.J.S.A. 13:1K-9.

The purpose of these obligations is to assure the cleanup of property even if the current owner or operator is not responsible for the contamination. In this sense, the statute focuses on the environmental wrong, not the wrongdoer. Identification of the polluter plays no part in the ECRA process, which imposes a "self-executing duty to remediate." NL Indus., supra, 216 N.J. Super. at 63-65.

Cross-appellants point out that the bare words of the statute emphasize on-site pollution. That emphasis, however, does not lead to the Conclusion that the Legislature intended to ignore pollution that migrates from one site to another. Nothing in the words or history of ECRA suggests that the Legislature intended that owners or operators should clean up the source of pollution and ignore its pernicious effects on adjoining lands. As DEP points out, the public concern arising from the discovery of dioxin in Newark was not just for the pollution of the Diamond Shamrock site, but for adjacent residential and commercial properties. Similarly, the environmental concern in our decision in Ventron, which preceded the adoption of ECRA by less than two months, was not just for the source of pollution, but for the surrounding land and waterways to which the pollution was migrating. In light of these facts, we would do a disservice to the Legislature to conclude that it took so myopic a view of environmental problems as to ignore off-site pollution. Our role is not so much to address a problem that the Legislature did not consider as to bridge the apparent gap between the legislative intent and the expression of that intent in the statute.

The overarching legislative imperative as set forth in N.J.S.A. 13:1K-10 is unmistakable:

a. The department [DEP] shall, pursuant to the "Administrative procedure Act," P.L.1968, c. 410 (C. 52:14B-1 et seq.) adopt rules and regulations establishing: minimum standards for soil, groundwater and surface water quality necessary for the detoxification of the site of an industrial establishment, including buildings and equipment, to ensure that the potential for Harm to public health and safety is minimized to the maximum extent practicable, taking into consideration the location of the site and surrounding ambient conditions; criteria necessary for the evaluation and approval of cleanup plans; * * * and any other provisions or procedures necessary to implement this act. * * *

b. The department shall, within 45 days of submission, approve the negative declaration, or inform the industrial establishment that a cleanup plan shall be submitted.

c. The department shall, in accordance with the schedule contained in an approved cleanup plan, inspect the premises to determine conformance with the minimum standards for soil, groundwater and surface water quality and shall certify that the cleanup plan has been executed and that the site has been detoxified.

Thus, the Legislature has directed DEP to identify the events that trigger ECRA and the amount of land or waste governed by the statute. Failure to comply with ECRA can result in the invalidation of the sale or transfer of the industrial establishment and in the imposition of liability for all cleanup and removal costs, including damages resulting from the failure to provide a cleanup plan. N.J.S.A. 13:1K-13.

-II-

Traditionally, we accord administrative regulations a presumption of reasonableness. Medical Soc'y of N.J. v. New Jersey Dep't of Law and Pub. Safety, 120 N.J. 18, 25-26 (1990); In re Amendment of N.J.A.C. 8:31B-3.31, 119 N.J. 531, 543 (1990); Smith v. Director. Div. of Taxation, 108 N.J. 19, 25 (1987); In re Barnert Memorial Hosp. Rates, 92 N.J. 31, 41 (1983); New Jersey Guild of Hearing Aid Dispensers v. Long, 75 N.J. 544, 561 (1978). A reviewing court "is not confined to consideration of the statutory authority for a particular regulation cited by the administrative agency but may consider the entire enabling legislation in order to ascertain 'if there is in fact sufficient underlying authority.'" Long, supra, 75 N.J. at 561 (quoting In re Weston, 36 N.J. 258, 263 (1960)).

Our deference does not go so far as to permit an administrative agency under the guise of an administrative interpretation to give a statute any greater effect than is permitted by the statutory language. See Kingsley v. Hawthorne Fabrics, Inc., 41 N.J. 521, 528 (1964) (Director of Taxation exceeded statutory authority by classifying brother who did not live in same household as "immediate family" under the statute). Accordingly, we have invalidated regulations that flout the statutory language and undermine the intent of the Legislature. See Medical Soc'y, supra, 120 N.J. at 25.

The ultimate question is whether the agency's interpretation is permissible under the broad language of the statute. In re Barnert Memorial Hosp. Rates, supra, 92 N.J. at 39-40. In answering that question, courts may look beyond the language of the statute to the circumstances and objectives surrounding its enactment. In re Amendment of N.J.A.C. 8:31B-3.31, supra, 119 N.J. at 545; Long, supra, 75 N.J. at 562; see Newark Firemen's Mut. Benevolent Ass'n v. City of Newark, 90 N.J. 44, 52-55 (1982) (upholding Public Employee Relations Committee Rule allowing arbitrator to accept revisions of parties' "final offers" throughout formal arbitration proceeding to facilitate statutory purpose of expeditious and mutually beneficial resolution of labor disputes). With matters that affect public health, we have readily implied such powers as are necessary to effectuate the legislative intent. See New Jersey Ass'n of Health Care Facilities v. Finley, 83 N.J. 67, 78-79 (1980) (sustaining implied power of Department of Health to determine "reasonable cost" requires nursing homes to provide sufficient bed space for indigents); Long, supra, 75 N.J. at 562. We have been similarly solicitous of the latitude delegated to DEP in devising remedies to combat pollution. See, e.g., In re Kimber Petroleum Corp., 110 N.J. 69, 74 (1988) (although DEP practice of requiring payment by responsible parties prior to DEP conducted cleanup not directly authorized under Spill Act, it was authorized by DEP's implied authority to do what was necessary to enforce Act); Public Serv. Elec. & Gas Co. v. Department of Envtl. Protection, 101 N.J. 95 (1985) (upholding DEP fee schedule under Water Pollution Control Act); A.A. Mastrangelo, Inc. v. Department of Envtl. Protection, 90 N.J. 666, 684 (1982) (authority for regulations concerning redirection of waste flow streams promulgated pursuant to Solid Waste Management Act found in incidental powers necessary to effectuate fully Act's legislative purpose); GATX Terminals Corp. v. Department of Envtl. Protection, 86 N.J. 46, 51-52 (1981) (although Spill Act specifically authorized DEP to provide availability standards only for "procedures, personnel, and equipment," authority for regulations affecting design, construction, and maintenance of facilities found in Act's liberal construction clause and general purpose of spill prevention).

The cleanup of hazardous wastes is a complex problem, involving the delicate balance of environmental protection with concerns for the State's economy and public health. As the Legislature has recognized, so complicated a subject calls for the expertise of an administrative agency. See City of Newark v. Natural Resource Council, 82 N.J. 530, 540 (1980) (Court relied on administrative expertise in upholding maps drawn by DEP); GAF Corp. v. Department of Envtl. Protection, 214 N.J. Super. 446, 452-53 (App. Div. 1986) (court upheld DEP's bioassay methodology to determine fee for pollution discharge permits). The presumed validity of administrative regulations is consistent with our traditional deference to an agency's interpretation of novel legislation, such as ECRA. See Newark Firemen's Mut. Benevolent Ass'n, supra, 90 N.J. at 55 (Court defers to commission's implementation of Employer-Employee Relations Act because of commission's experience with labor disputes); In re Freshwater Wetlands Protection Act Rules N.J.A.C. 7:7A-1, 238 N.J. Super. 516, 527 (App. Div. 1989) (judicial deference appropriate "when the case involves the construction of a new statute by its implementing agency"). Accordingly, we give due deference to DEP's interpretation of ECRA. In re Robert L. Mitchell Technical Ctr., 223 N.J. Super. 166, 173 (App. Div. 1988).

III

-A-

Cross-appellants contend that the requirement of N.J.A.C. 7:26B-1.3 requiring off-site cleanup is contrary to the definitions of both "cleanup plan" and "negative declaration" in N.J.S.A. 13:1K-8. They argue that the statute limits cleanup responsibility to toxic substances located on the site of an industrial establishment. We disagree.

The challenged regulation, N.J.A.C. 7:26B-1.3, defines "cleanup plan" as "a plan for the cleanup of an industrial establishment and any contamination, including any off-site contamination which has emanated or is emanating from the industrial establishment * * * ."

ECRA defines a "cleanup plan" as

a plan for the cleanup of industrial establishments, approved by the department, which may include a description of the locations, types and quantities of hazardous substances and wastes that will remain on the premises; a description of the types and locations of storage vessels, surface impoundments, or secured landfills containing hazardous substances and wastes; recommendations regarding the most practicable method of cleanup; and a cost estimate of the cleanup plan.

[N.J.S.A. 13:1K-8a.]

According to the statute, a "negative declaration" means

a written declaration, submitted by an industrial establishment and approved by the department, that there has been no discharge of hazardous substances or wastes on the site, or that any such discharge has been cleaned up in accordance with procedures approved by the department, and there remain no hazardous substances or wastes at the site of the industrial establishment.

[N.J.S.A. 13:1K-8g.]

The statutory language indicates that ECRA is primarily concerned with the cleanup of sites subject to specific transactions. That terminology, however, does not expressly prevent DEP from extending the statute to off-site wastes emanating from an industrial establishment. As defined, a "cleanup plan" may cover "substances and wastes that will remain on the premises" and may include "recommendations regarding the most practicable method of cleanup." That definition does not exclude off-site wastes. DEP apparently concluded that the most practicable method of cleanup need not stop at the border of the owner's ...


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