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Dep't of Environmental Protection v. ARFA Enterprises


July 31, 2007


On appeal from the Department of Environmental Protection, 02905-2005S.

Per curiam.


Submitted: January 30, 2007

Before Judges Kestin and Graves.

ARFA Enterprises, Inc. (ARFA), appeals from a final decision of the Commissioner of the Department of Environmental Protection (DEP) assessing a $15,000 penalty for violation of N.J.A.C. 7:14B-1.8(b) (since recodified as N.J.A.C. 7:14B-5.9(b)), promulgated pursuant to the Water Pollution Control Act (WPCA), N.J.S.A. 58:10A-1 to -20, and the Underground Storage of Hazardous Substances Act, N.J.S.A. 58:10A-21 to -35. We affirm.

The matter arose from an administrative order and notice of civil administrative penalty assessment issued by DEP asserting that ARFA had pumped petroleum product into four unregistered underground storage tanks (USTs). Upon ARFA's request for a hearing, the matter was transferred to the Office of Administrative Law as a contested case, pursuant to N.J.S.A. 52:14B-9 -10, sections of the Administrative Procedure Act.

The administrative law judge (ALJ) to whom the matter was assigned rendered an initial decision on cross-motions for summary decision, see N.J.A.C. 1:1-12.5, following a conference, in which he found that ARFA had committed the violation charged. The ALJ determined, however, pursuant to the terms of the Grace Period Law, N.J.S.A. 13:1D-125 to -133, that the violation was "minor" and, therefore, by reason of the criteria contained in N.J.S.A. 13:1D-129(b), ARFA was "exempt[] . . . from liability for a penalty for violation of the WPCA."

The Commissioner rendered a final decision adopting the portion of the initial decision that found a violation had occurred, but rejecting the portion of the initial decision that held no penalty should be imposed. Instead, the Commissioner determined that the $15,000 penalty was appropriate and should be assessed.

On appeal, ARFA argues that no violation of N.J.A.C. 7:14B-1.8(b) (now N.J.A.C. 7:14B-5.9(b)), may be found because ARFA is not a member of the class subject to the requirements of the regulation. ARFA also argues that the ALJ's evaluation of its non-amenability to a penalty assessment was correct and that the Commissioner's decision to the contrary "is not supported by the credible evidence and strips the trier of his findings of fact and application of the law to those facts."

We reject the arguments advanced by ARFA. The facts found by the ALJ and adopted by the Commissioner are well supported by substantial, credible evidence and are binding on appeal. See Close v. Kordulak Bros., 44 N.J. 589, 598-99 (1965). We see nothing arbitrary, capricious, unreasonable, or plainly incompatible with the governing statute in the agency's view that a supplier and wholesaler of petroleum products and other hazardous substances who introduces such substances into USTs is covered as a "person or business firm" by the regulation governing the subject matter area. See N.J.A.C. 7:14B-5.9(b). "[W]e are required to 'give considerable weight to an agency's interpretation of a statute the agency is charged with enforcing.'" Saint Peter's Univ. Hosp. v. Lacy, 185 N.J. 1, 17 (2005)(quoting G.S. v. Dep't of Human Servs., 157 N.J. 161, 170 (1999)). See also Aqua Beach Condominium Ass'n v. Department of Community Affairs, 186 N.J. 5, 15-16 (2006).

We also reject ARFA's second argument contending that the views of the ALJ should prevail over those of the agency head in determining the appropriate sanction for a violation of statutory and regulatory standards. It is the agency head who is clothed with final decision-making authority. See N.J.S.A. 52:14B-10(c); In re Petition of Public Service Electric & Gas Co., 304 N.J. Super. 247, 273-74 (App. Div. 1997); In re Orange Savings Bank, 172 N.J. Super. 275, 283-86 (App. Div. 1980). While due deference is to be accorded an ALJ's findings of fact, see In re Taylor, 158 N.J. 644, 659 (1999); Clowes v. Terminix Intern., Inc., 109 N.J. 575, 587 (1988), especially those based on credibility assessments, it is the agency head who is vested with the ultimate and exclusive authority to determine what remedy, e.g., sanction or penalty, applies in the circumstances found. See In re Kallen, 92 N.J. 14, 20-21, 29 (1983); In re Uniform Administrative Procedure Rules, 90 N.J. 85, 96 (1982). As long as the agency head's choice of remedy is not itself arbitrary, capricious or unreasonable, we are not at liberty to choose between the result recommended by the ALJ and the course elected by the agency head. See In re Taylor, supra, 158 N.J. at 655-658 (1999).



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