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In re Freshwater Wetlands Protection Act Rules

July 20, 2004

IN THE MATTER OF FRESHWATER WETLANDS PROTECTION ACT RULES, STATEWIDE GENERAL PERMIT, CRANBERRY EXPANSION, PROMULGATED BY NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION.


On certification to the Superior Court, Appellate Division, whose opinion is reported at 351 N.J. Super. 362 (2002).

Justices Verniero, LaVECCHIA, Albin and Wallace join in Chief Justice PORITZ's opinion.

SYLLABUS BY THE COURT

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

IMO Freshwater Wetlands Protection Act Rules, Statewide General Permit, Cranberry Expansion (A-44-02)

The Court determines whether General Permit 23 (GP23), N.J.S.A. 7:7A-5.23, which permits the limited expansion of existing cranberry growing operations in the Pinelands National Reserve (Pinelands), violates the Federal Water Pollution Control Act Amendments of 1972 (Clean Water Act or CWA), 33 U.S.C.A. § 1344, the Freshwater Wetlands Protection Act (FWPA), N.J.S.A. 13:9B-1 to -30, or the State's Surface Water Quality Standards (SWQS), N.J.A.C. 7:9B-1.1 et seq. The United States Army Corps of Engineers (Corps) and the United States Fish and Wildlife Service classify cranberries as a"wetland crop species" that"must be grown in wetlands or areas altered to create a wetlands environment." The fruit requires easy access to large amounts of clean water, at least 227 gallons per minute per acre of bog. The bogs are flooded with water in winter and early spring to protect against frost, during the summer for irrigation purposes, and at harvest time.

The Pinelands overlies the vast, seventeen-trillion gallon Cohansey aquifer, one of the largest virtually untapped sources of pure water in the world. The high water table and sandy acidic soils of the Pinelands are essential to the growth of the cranberry. Due to a confluence of favorable variables, farmers have been harvesting cranberries in the Pinelands for almost two centuries. The Pinelands also harbors a wide variety of rare, threatened and endangered plant and animal species. Stringent federal and state regulations have been passed to protect this resource.

Building or expanding a cranberry growing operation in a wetland implicates a complex permitting scheme. Under the CWA, parties seeking to discharge dredged or fill material into wetlands may do so only if they have secured a"section 404" permit from the Corps. The CWA, however, specifically allows states to assume permitting authority for waters within their jurisdictions so long as the state's program is at least as stringent as the federal 404 program. New Jersey's FWPA was approved in 1994 as satisfying the federal assumption requirements. Under the FWPA, an applicant seeking to engage in regulated activities in State open waters or wetlands must secure either a general or an individual permit from the New Jersey Department of Environmental Protection (DEP). General permits, such as GP23, are designed to streamline the permitting process for certain activities that have only a minimal impact, individually and cumulatively, on the environment. In part, the FWPA provides that the DEP may issue general permits for activities that it has determined will have no significant adverse environmental impact on freshwater wetlands, provided that the issuance of the general permit for any such activities is consistent with the provisions of the federal statute and has been approved by the United States Environmental Protection Agency (EPA). Draft general permits proposed by the State must be forwarded to the Regional Administrator of the EPA, who may approve or interpose objections that, if not resolved, will prevent the adoption of the permit.

The DEP's first two drafts of GP23 were not adopted because of objections by the EPA. DEP modified the permit to accommodate the EPA's recommendations. Those modifications included defining"loss" and"no net loss of wetlands," creating a hierarchy of various wetlands types to protect high value wetlands, and providing the Commissioner with broad discretionary power to modify, suspend or revoke authorizations. The EPA withdrew its objections based on the DEP's modifications and determined that GP23 would have no more than minimal environmental effect on the aquatic environment. The permit was adopted on September 13, 1999. Although GP23 theoretically authorizes individual operators to expand up to fifty acres during the five-year life of the permit, a statewide cap of 300 acres limits the growers' activities in the aggregate.

A coalition of environmental organizations (coalition) challenged the validity of GP 23 under the federal and state statutes. A unanimous panel of the Appellate Division rejected the challenge. 351 N.J. Super. 362 (2002).

HELD: General Permit 23, N.J.A.C. 7:7A-5.23, permitting the limited expansion of existing cranberry growing operations in the Pinelands National Reserve, does not violate provisions of the Federal Water Pollution Control Act Amendments of 1972, 33 U.S.C.A. § 1344, the Freshwater Wetlands Protection Act, N.J.S.A. 13:9B-1 to -30, or the State's Surface Water Quality Standards, N.J.A.C. 7:9B-1.1 et seq.

1. As with any administrative regulation, GP23 must be accorded a presumption of validity. The coalition bears the heavy burden of demonstrating that the regulatory requirements found in GP23 are arbitrary, capricious or unreasonable. Deference to DEP's interpretation is justified by the fundamental maxim that the opinion as to the construction of a regulatory statute of the administrative agency charged with the enforcement of that statute is entitled to great weight. This Court has sustained executive branch rulemaking unless it was clear that the agency action was inconsistent with the legislative mandate. (Pp. 20 -- 21).

2. In respect of the FWPA, DEP has the authority to issue permits allowing the discharge of dredged or fill material into wetlands situated in the Pinelands. The coalition argues, however, that compulsory mitigation is required under the FWPA for all adverse environmental impacts attributable to activities requiring a general permit or an individual permit, and that the mitigation and"no net loss" provisions of GP23 are insufficient to meet this requirement. The coalition contends that the mitigation requirements of the FWPA and its implementing regulations can be met only through the creation or restoration of wetlands to compensate for any damage done pursuant to GP23 at a one-to-one ratio for all wetland impacts, including disturbances. Although N.J.S.A. 13:9B-13a requires"all appropriate measures" by way of mitigation, restoration, and minimization of"adverse environmental impacts" and"wetland disturbances," section (b) is permissive and states only that the DEP"may require creation or restoration" of wetlands of equal value and, then, only when wetlands have been"lost" through a permitted activity. A review of the legislative history reveals that the creation or restoration of wetlands to compensate for adverse impacts attributable to permitted activity is by no means mandatory, but merely a weapon in DEP's larger mitigation arsenal. The Court finds, therefore, that the mitigation provisions of GP23 are consistent with the FWPA. (Pp. 16 -- 23).

3. The Court rejects also the coalition's claim that GP23 is impermissibly less stringent than the comparable federal permit for the expansion of cranberry growing operations. The Court affirms the Appellate Division's findings that, on balance, the state restrictions are as stringent as the federal, and that the mitigation, protection for endangered species, and upland alternatives requirements for GP23 meet federal standards. In respect of amendments to the mitigation requirements for nationwide permits found in General Condition 19 that were implemented after GP23 was adopted, the Court adds that General Condition 19 mandates compensatory mitigation when necessary to ensure that the adverse effects to the aquatic environment are minimal. When the EPA dropped its objections to the final draft of GP23, the agency informed the DEP by letter that the permit would have no more than minimal environmental effects on the aquatic environment. (Pp. 23--28).

4. Finally, the Court finds that the State's antidegradation policy was not violated by the adoption of GP23. In 1987, the CWA was amended to require the State's Surface Water Quality Standards (SWQS) to include an antidegradation policy to ensure that existing instream water uses and the level of water quality necessary to protect the existing uses would be maintained and preserved. The State's antidegradation policy must be at least as stringent as the federal program and it is subject to EPA approval. Under the State's policy, N.J.A.C. 7:9B-1.5(d), no irreversible changes may be made to existing water quality that would impair or preclude attainment of the designated uses of a waterway. To effectuate that mandate, New Jersey established four categories of state waters receiving differing levels of protection. The waters of the Pinelands are considered nondegradation waters, and are afforded the highest level of protection from changes in existing water quality. However, the SWQS also state that the antidegradation policy is not intended to interfere with water control in the operation of cranberry bogs. Moreover, cranberry bog water supply and other agricultural uses are included among the designated uses of Pinelands waters. A broad reading of the exemption is consistent, therefore, with the goals of the SWQS -- to maintain and protect the existing uses of the waters of this State. Given the favored status accorded both agriculture generally and cranberry agriculture in particular, the DEP's broad interpretation of the exemption is reasonable. (Pp. 28 -- 36).

The judgment of the Appellate Division is AFFIRMED.

JUSTICE ZAZZALI, concurring, agrees with the Court's legal conclusion that N.J.A.C. 7:9B-1.5(d) exempts GP23 from antidegradation review, but he considers the coalition's interpretation more consistent with the goals of the State's antidegradation policy. He believes it is for the Legislature to take corrective action, however.

The opinion of the court was delivered by: Chief Justice Poritz

Argued September 8, 2003

JUSTICE ZAZZALI filed a separate concurring opinion.

JUSTICE LONG did not participate.

This case raises questions in respect of the validity of General Permit 23 (GP23), N.J.A.C. 7:7A-5.23, adopted by the New Jersey Department of Environmental Protection (DEP) in 1999.*fn1

Appellants*fn2 claim that GP23, which permits the limited expansion of existing cranberry growing operations in the Pinelands National Reserve, violates provisions of the Federal Water Pollution Control Act Amendments of 1972, commonly known as the Clean Water Act (CWA), 33 U.S.C.A. § 1344, the Freshwater Wetlands Protection Act (FWPA), N.J.S.A. 13:9B-1 to -30, and the State's Surface Water Quality Standards (SWQS), N.J.A.C. 7:9B-1.1 et seq. A unanimous panel of the Appellate Division rejected appellants' challenge in its entirety. In re Freshwater Wetlands Prot. Act Rules, Statewide General Permit, Cranberry Expansion, Promulgated by the New Jersey Dep't of Envtl. Prot. (In re FWPA), 351 N.J. Super. 362 (2002). We granted certification on December 16, 2002, 175 N.J. 171, and now affirm.

I.

This Court previously has had occasion to discuss the "unique ecological, economic, and cultural features of the New Jersey Pine Barrens, or Pinelands." Gardner v. New Jersey Pinelands Comm'n, 125 N.J. 193, 198 (1991). Gardner described the pinelands and discussed the purpose of the regulatory programs designed to protect them:

A "wilderness" of pine-oak forests and wild and scenic rivers, the Pinelands harbors a "wide variety of rare, threatened and endangered plant and animal species," and encompasses "many other significant and unique ecological, historical, recreational, and other resources." The region overlies the vast, seventeen-trillion gallon Cohansey aquifer, "one of the largest virtually untapped sources of pure water in the world." There has been very little development in the Pinelands; there are no major retail centers, and developed property comprises only one or two percent of the land in most areas. Agriculture in the Pinelands, especially the cultivation of cranberries and blueberries is particularly important both nationally and locally.

In recent years, anxiety over the loss of farming and the fragile ecology of the Pinelands has produced increasingly stringent federal and state regulation.... [T]he New Jersey Pinelands Protection Act (Act), L. 1979, c. 111; N.J.S.A. 13:18A-1 to 29, declares that its goals are, among others, to protect, preserve, continue, and expand agriculture and horticulture and to discourage piecemeal and scattered development within the Pinelands.

[Id. at 199-200 (citations omitted).]

In this case, we focus on the unique role of cranberry agriculture in the history of the pinelands and the methods used to produce the fruit.

A. Cranberry Agriculture in New Jersey

The high water table and sandy, acidic soils of the pinelands render the cultivation of most field crops difficult. Those same ingredients, however, are essential to the growth of the cranberry. Due to a confluence of favorable ecological and climatological variables, farmers have been harvesting cranberries in the pinelands for almost two centuries. See 30 N.J.R. 3721 (Oct. 19, 1998) (noting cranberries have been harvested in pinelands since early 1800s).

By the early 1900s, cranberry production was the region's principle industry. In the 1930s, approximately 13,000 acres of the pinelands were dedicated to cranberry agriculture. 28 N.J.R. 4145 (Sept. 16, 1996). More recently, market conditions and other factors have conspired to reduce the number of cranberry growing operations and the amount of acreage in production. Thus, in 1999, there were approximately forty-seven active operations in the pinelands, 31 N.J.R. 1571 (June 21, 1999), whereas the amount of acreage in production has fluctuated between 3100 and 4000 acres.*fn3 Nat'l Agric. Statistical Serv., U.S. Dep't of Agric., 2001 National Rankings, Cranberries (2001), available at http://www.nass.usda.gov/nj; Nat'l Agric. Statistical Serv.; U.S. Dep't of Agric., Cranberry Statistics by State and U.S., Total Acres Harvested, 1990-2000 (2000), available at http://www.nass.usda.gov/nj. Despite that decline, the State is the third-largest producer of cranberries in the country, behind only Massachusetts and Wisconsin, and the value of the 1999 harvest was approximately $7.4 million.

Although cultivation techniques have improved considerably over the years, one factor continues to dictate the location of cranberry growing operations: the fruit requires easy access to large amounts of clean water, at least 227 gallons per minute per acre of cranberry bog. 31 N.J.R. 1570 (June 21, 1999). Through an extensive network of reservoirs, dikes and canals, farmers use the water "to flood the bogs in winter and early spring to protect against frost, to flood the bogs during harvest, and to irrigate the bogs during the summer." Ibid. Most cranberry operations are situated in wetland areas where water is readily available. Indeed, the fruit is classified by the United States Army Corps of Engineers (Corps) and United States Fish and Wildlife Service as a "wetland crop species" that "must be grown in wetlands or areas altered to create a wetlands environment." U.S. Army Corps of Engr's, Regulatory Guidance Letter 92-2, 57 Fed. Reg. 32523, 32524 (July 22, 1992) (citing U.S. Fish & Wildlife Serv., 1988 National List of Plant Species that Occur in Wetlands (1989)).

Finding suitable wetland locations for cranberry operations is only the first step. Converting the wetlands for use as a cranberry bog requires removal of the indigenous vegetation and excavation of the soil to a depth of up to three feet. After the dikes and other water control structures are built, a layer of organic soil is placed on the bottom of the bog. The soil is covered with between one and two feet of sand and, finally, the cranberry vines are planted. A newly constructed bog can take more than three years to produce its first crop. 31 N.J.R. 2967 (Oct. 4, 1999).

B. Regulatory Environment

Building or expanding a cranberry growing operation in a wetland implicates a complex permitting scheme. Under the CWA, generally parties seeking to discharge dredged or fill material into wetlands may do so only if they have secured a "section 404" permit from the United States Army Corps of Engineers.*fn4 33 U.S.C.A. § 1344(a). The CWA, however, specifically allows states to assume permitting authority for waters within their jurisdictions so long as the state program is at least as stringent as the federal 404 program. 33 U.S.C.A. § 1344(g), (h); 40 C.F.R. § 233.1(d). In 1987, the New Jersey Legislature enacted the FWPA, N.J.S.A. 13:9B-1 to -30, to satisfy federal assumption requirements, although it was not until March 2, 1994, that the State's application was approved. 40 C.F.R. § 233.71; see N.J.S.A. 13:9B-2; Oliver A. Houck & Michael Rolland, Federalism in Wetlands Regulation: A Consideration of Delegation of Clean Water Act Section 404 and Related Programs to the States, 54 Md. L. Rev. 1242, 1276-79 (1995) (detailing New Jersey's efforts to assume permitting authority).

An applicant seeking to engage in regulated activities*fn5 in State open waters or wetlands must apply for and secure either a general or an individual permit from the DEP. N.J.S.A. 13:9B-9a. As the name implies, individual permits are project-related and are required for activities that will have substantial wetlands impacts. General permits, such as GP23, are designed to streamline the permitting process for certain activities that have only a minimal impact, individually and cumulatively, on the environment. N.J.S.A. 13:9B-23c. Specifically, the FWPA provides:

The department shall issue additional general permits on a Statewide or regional basis for the following categories of activities, if the department determines, after conducting an environmental analysis and providing public notice and opportunity for a public hearing, that the activities will cause only minimal adverse environmental impacts when performed separately, will have only minimal cumulative adverse impacts on the environment, will cause only minor impacts on freshwater ...


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