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In re NJPDES Permit No. NJ0025241 Issued to Asbury Park City

January 11, 2006

IN RE NJPDES PERMIT NO. NJ0025241 ISSUED TO ASBURY PARK CITY


On certification to the Superior Court, Appellate Division.

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).

[NOTE: This is a companion case to IMO Freshwater Wetlands Statewide General Permits, A-115-04, also filed today]

This appeal involves the Water Pollution Control Act (WPCA), N.J.S.A. 58: 10A-1 to -43, and the hearing rights that it confers in respect of pollution discharge permits issued by the New Jersey Department of Environmental Protection (DEP). Specifically, we are called on to examine a hearing-right claim advanced by an entity, not the WPCA permit applicant, requesting "party" status pursuant to N.J.S.A. 58: 10A-7e.

The WPCA governs the process for issuance of pollution discharge permits, thereby providing a comprehensive water pollution control and enforcement program for the protection of the State's waters. The WPCA makes unlawful the discharge of any pollutant into the State's surface or ground waters without either a valid New Jersey Pollutant Discharge Elimination System (NJPDES) permit or an exemption from the permit requirement. Asbury Park held NJDES permit no. 25241 (Permit). It was due to expire on August 31, 2000. Asbury Park applied for the Permit's renewal. The DEP published a draft permit consistent with N.J.A.C. 7: 14A-15.10, thus commencing a thirty day period within which the public could comment on DEP's proposed action.

Clean Ocean Action (COA) is an organization devoted to environmental interests. It applied for party status under N.J.S.A. 58: 10A-7e in connection with Asbury Park's permit renewal application. COA submitted lengthy negative comments on the proposed Permit that, on the whole, characterized the Permit as not adequately protective of the ocean ecosystem and as violative of the federal Clean Water Act. COA sought an administrative hearing to challenge the DEP's proposed determination. The Commissioner of the DEP denied COA's hearing request, concluding that because COA had failed "to demonstrate the existence of a significant issue of law or fact that is likely to [a]ffect the permit decision," it had not met the statutory requirements for party status and, therefore, COA could not compel an administrative hearing. The Permit issued in final form on May 30, 2002.

COA appealed and sought from the Appellate Division an order transferring the matter to the Office of Administrative Law (OAL) either for an adjudicatory hearing on the substance of COA's issues., or to have an administrative law judge (ALJ) assigned to make the threshold determination whether COA had met the requirements to a hearing. The panel rejected both applications by COA and concluded that the Commissioner's denial of the hearing request was not arbitrary or capricious.

We granted COA's petition for certification and now affirm the judgment of the Appellate Division.

HELD: Based on our review of the Department of Environmental Protection's responses to Clean Ocean Action's comments it is clear that there are no adjudicative facts in issue, and that COA's reasons for requesting party status do not merit the grant of an adjudicatory hearing.

1. The New Jersey Administrative Procedures Act (APA), N.J.S.A. 52: 14B-1 to -24, "prescribes the procedure to be followed in the event an administrative hearing is otherwise required by statutory law or constitutional mandate." In re Application of Modern Indus. Waste Serv., Inc., 153 N.J. Super. 232, 237 (App. Div. 1977). The APA and its implementing regulations afford enhanced notice and hearing procedures to "contested case" litigants, but it does not confer the right to such a hearing, except in the sole instance recognized in N.J.S.A. 52: 14B-11 (governing license revocations and renewals.). Generally, constitutional and statutory rights and remedies are reserved for persons directly affected by a permitting decision. A hearing right also may exist for a non-applicant to a permit if that third party can demonstrate a particularized property interest of constitutional significance that is directly affected by an agency's permitting decision. In this State there has been legislative recognition of the benefits derived from a rigorous review standard when inquiring into the existence of a particularized property interest that generates a third-party hearing right. Accordingly, state agencies are prohibited from granting third-party hearing rights through promulgation of a regulation unless a hearing right exists as a matter of federal law or state statute. (Pp. 6-9)

2. In 1990, the WPCA was amended to expand party status to challenge a discharge permit issued by the DEP. The hearing right added by amendment dispensed with any requirement that a challenger demonstrate a particularized property right that would be directly affected by a permit's issuance and, instead, conferred "party" status when specified criteria were met. More specifically, to obtain a hearing right as a "party" under the WPCA, the requestor procedurally must have raised its objections to the DEP's permitting decision during the applicable public comment opportunity and, substantively, must present a significant issue of law or fact that is "likely to affect the permit determination." N.J.S.A. 58: 10A-7e (3). The WPCA amendment ultimately enacted appears congruent with prior decisions addressing when a trial-type adjudicatory hearing is appropriate in administrative law settings, i.e. when there is a triable dispute involving adjudicative facts. (Pp. 9-17)

3. We are convinced, upon review of COA's comments and DEP's responses, that COA's reasons for requesting party status do not merit the grant of an adjudicatory hearing. In the future, however, the agency is on notice that it must prepare an integrated hearing denial decision. That document must explain the reasons why the DEP Commissioner has concluded that a third party's hearing request does not meet the statutory standard for a hearing in respect of the specific grounds raised. Reliance on DEP's earlier consideration and rejection of those grounds is insufficient. The denial document must present the basis for the Commissioner's decision. A conclusory response neither informs the third party adequately nor provides a proper basis for judicial review. In this instance, based on our review of the DEP's responses to COA's comments, it is clear that there are no adjudicative facts in issue. (Pp. 17-20)

The judgment of the Appellate Division is AFFIRMED.

CHIEF JUSTICE PORITZ and JUSTICES LONG, ZAZZALI, ALBIN, WALLACE and RIVERASOTO join in JUSTICE LaVECCHIA's opinion.

The opinion of the court was delivered by: Justice LaVECCHIA

Argued September 27, 2005

This appeal involves the Water Pollution Control Act (WPCA), N.J.S.A. 58:10A-1 to -43, and the hearing rights that it confers in respect of pollution discharge permits issued by the New Jersey Department of Environmental Protection (DEP). Specifically, we are called on to examine a hearing-right claim advanced by an entity, not the WPCA permit applicant, requesting "party" status pursuant to N.J.S.A. 58:10A-7e. That statute entitles those with such status to an administrative hearing to contest the grant of a WPCA pollution discharge permit.

Clean Ocean Action (COA) is an organization devoted to environmental interests. It applied for party status under N.J.S.A. 58:10A-7e in connection with a WPCA permit application submitted by the City of Asbury Park (Asbury Park). COA sought an administrative hearing to challenge the DEP's proposed determination renewing the pollution discharge permit for Asbury Park's wastewater treatment facility. Because the DEP denied COA's hearing request and granted the permit, actions which were affirmed by the Appellate Division, COA sought relief from this Court. We granted the petition for certification to review COA's claim of DEP noncompliance with the WPCA standard for ...


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