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State of New Jersey, Department of Environmental Protection, Bureau of v. Magic Disposal

May 3, 2011

STATE OF NEW JERSEY, DEPARTMENT OF ENVIRONMENTAL PROTECTION, BUREAU OF SOLID WASTE COMPLIANCE AND ENFORCEMENT, PETITIONER-RESPONDENT,
v.
MAGIC DISPOSAL, INC. AND STEVEN WASZEN, SR., RESPONDENTS-APPELLANTS.



On appeal from the Department of Environmental Protection, Bureau of Solid Waste Compliance and Enforcement, Agency Docket No. PEA050004-135866.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted December 15, 2010

Before Judges Axelrad, Lihotz and J. N. Harris.

Appellants Steven Waszen, Sr. and his solely-owned waste management corporation, Magic Disposal, Inc. (Magic), appeal from a final agency decision, issued by the Department of Environmental Protection (the DEP), which (1) revoked Magic's Certificate of Public Convenience and Necessity (CPCN) issued under the Solid Waste Utility Control Act (SWUCA), N.J.S.A. 48:13A-1 to -13; (2) denied renewal of Magic's A-901 approval to perform waste management services as provided by the Solid Waste Management Act (the Act), N.J.S.A. 13:1E-1 to -223; and (3) barred Waszen from continued employment in the solid waste management and hauling industry. This action followed the DEP's closure of Magic's waste management transfer station accompanied by an assessment of $700,000 in penalties for the corporation's repeated violations of the Act and related environmental regulations. Magic did not contest the violations; rather, it challenged the amount of the imposed penalties, which was affirmed by the agency and by this court on appeal.

The current action, to revoke Magic's CPCN and debar Waszen, was reviewed by an administrative law judge (ALJ), who recommended the entry of the requested relief. Appellants filed exceptions to the ALJ'S decision and the Director of Operations of the DEP accepted the ALJ's findings and made the determination final. On appeal, appellants argue their due process rights were violated by the ALJ's summary decision, made without benefit of an evidentiary hearing; they were subjected to double punishment for the same offenses; and Waszen was wrongfully debarred despite a history free of hauling violations. We affirm.

I.

The facts and procedural history of the underlying matters are detailed in the forty-two page Initial Decision of ALJ Jeff S. Masin and the twelve-page final decision of the agency, which we incorporate into our opinion by reference. We set forth only those particularized elements of the history of the administrative and Superior Court environmental enforcement actions necessary to provide the context for appellants' arguments on appeal.

Waszen is Magic's President, sole officer and shareholder. Magic was first licensed as a registered solid waste transporter in 1989. It received its CPCN in 1990 and on June 7, 1996, was issued a DEP permit to accept specified types of solid waste at its Egg Harbor Township solid waste transfer station for processing and transfer.

Appellants' violations of the Act and related environmental statutes, regulations, and ordinances commenced in late 1996. By July 2000, the DEP issued an administrative order and notice of civil administrative penalty assessment after appellants ignored administrative regulations governing the Egg Harbor facility. Appellants did not file a timely appeal and the assessment, along with additional penalties, was incorporated into the DEP's administrative order. After this was ignored by appellants, the DEP filed a Superior Court complaint for injunctive relief. The DEP's action sought compliance with its administrative order, payment of the assessment and curtailment of appellants' continued prohibited practices at the Egg Harbor transfer station. Some of the most egregious included the storage of waste, the failure to implement an effective rodent control program, combining recycling and solid waste activities, and the acceptance of more than the facility's daily permitted tonnage of solid waste and at impermissible hours. The DEP included in its complaint a total of 196 recorded violations which occurred between 1996 and 2001, none of which were denied by appellants. The court entered orders requiring compliance pending final disposition.

In August and October 2003, Waszen acquired two parcels of realty in Mullica Township (Block 10802 Lots 1 and 2), which he sought to use as a trans-load facility where solid waste would be delivered by truck pending its loading onto railcars for shipment to a landfill. Atlantic County filed a municipal court complaint citing Waszen for illegally dumping construction debris on the site, see N.J.A.C. 7:26 (prohibiting the operation of an open dump), and ignoring requests for satisfaction of a $324,500 lien encumbering the property. Penalties and assessments were issued for the illegal activities and Waszen was ordered to remediate the site. These orders also were ignored, generating further penalties. The myriad of assessments and penalties against Waszen remained unchallenged and unpaid.

Also in 2003, another action was filed by the county seeking appellants' observance of the prior DEP orders, including the removal of solid waste debris stockpiled on the Egg Harbor property and otherwise conforming the facility's operations to the conditions of its solid waste permit. An order requiring compliance and assessing penalties was entered.

Appellants' regulatory and statutory infringements continued unabated. At the request of the DEP and Atlantic County, additional enforcement orders were entered by the court in 2004 and 2005. As noted below, the DEP declined to renew Magic's operation permits, yet Magic continued to accept solid waste at the Egg Harbor facility, which was transported and delivered by Magic's trucks. Then, on June 7, 2005, the court ordered Magic to cease and desist all operations at the Egg Harbor facility and legally remove all solid waste then at the facility. Magic did not appeal this determination.

While the litigation was pending, but not concluded, the DEP initiated another agency action on January 27, 2005. Relying on N.J.S.A. 13:1E-134(a) and N.J.S.A. 52:14B-1, it issued an administrative order and notice of civil administrative penalty assessment of $700,000 for almost 250 violations at Magic's Egg Harbor transfer station between 2002 and 2004. Additionally, the DEP declined to renew Magic's solid waste permit.

Appellants appealed the amount of the assessments, but not the underlying violations. The matter was transferred to the Office of Administrative Law for a hearing.

Following a seven-day administrative hearing before a different ALJ, W. Todd Miller, the penalty assessment was affirmed. The ALJ found Waszen ignored simple and basic safety regulations in favor of business volume, which was his primary focus and noted the sums were reasonable in light of the numerous violations and the need to deter the conduct. Noting the DEP could have imposed daily penalties that would have exceeded the $700,000 assessed, ALJ Miller concluded the penalties and their amounts were moderate and more than justified. N.J.A.C. 7:26-5.5. The Commissioner affirmed the ALJ's initial decision; appellants appealed and we affirmed. N.J. Dept. of Envir. Prot. v. Magic Disposal, Inc., No. A-1590-07 (App. Div. Aug. 10, 2009).

During this period, appellants also failed to file tax returns and pay Federal and State corporate and personal income or business taxes for the period 1999 to 2006. By November 9, 2006, appellants owed over $4.5 million in federal and state income taxes, environmental penalties assessed by the DEP and Atlantic County and civil obligations. On that date, pursuant to N.J.S.A. 48:13A-9, the DEP revoked Magic's CPCN and its solid waste transport registration. It additionally sought Waszen's debarment from the solid waste and recycling industry. Appellants' requested an administrative hearing.

In the agency action, the DEP moved for summary decision, relying on the opinion of ALJ Miller in the waste transfer facility proceeding. Appellants argued they had never been cited for a waste hauling violation, charged with organized crime activity, and otherwise had fully complied with the A-901 permit for transporting solid waste.

The matter was reviewed by ALJ Masin, who denied appellant's request for an evidentiary hearing and relied on the findings made by ALJ Miller in the related proceeding. ALJ Masin issued comprehensive findings and concluded the evidence overwhelmingly established Magic's poor performance in the "collection, transportation, treatment, storage, transfer or disposal of solid waste" and Waszen failed to exhibit "sufficient integrity, reliability, expertise and competency" in the field. The ALJ found the DEP had demonstrated by overwhelming evidence that Magic and Waszen "must be stripped of the CPCN and A-901 approval," concluding their presence in the "solid waste industry would be inimical to the public interest and they must be debarred."

Appellants filed exceptions to the ALJ's Initial Decision. This appeal followed. The DEP adopted the ALJ's findings and issued a final order granting partial summary decision, revoking Magic's CPCN and debarring Waszen from the solid waste industry. The matter was remanded to the OAL for further determination regarding whether Waszen should be debarred from the recycling industry. The DEP ordered that issue to be bifurcated, making its determination a final order. This appeal followed.

II.

A.

We start with well-settled principles. We are obliged to afford substantial deference to decisions of state administrative agencies. Cooper Univ. Hosp. v. Jacobs, 191 N.J. 125, 140 (2007); Saint Peter's Univ. Hosp. v. Lacy, 185 N.J. 1, 13-15 (2005). Generally, the actions of administrative agencies are entitled to a presumption of reasonableness. East Orange Bd. of Educ. v. N.J. Sch. Constr. Corp., 405 N.J. Super. 132, 143 (App. Div.) (citing City of Newark v. Natural Res. Council, 82 N.J. 530, 539 (1980)), certif. denied, 199 N.J. 540 (2009);

In re Holy Name Hosp., 301 N.J. Super. 282, 295 (App. Div. 1997). We afford substantial deference to an agency's interpretation of the statute it is charged with enforcing. R & R Mktg., L.L.C. v. Brown-Forman Corp., 158 N.J. 170, 175 (1999). Further, we are not authorized to substitute our judgment for that of the agency. Division of Alcoholic Beverage Control v. Maynards, Inc., 192 N.J. 158, 183 (2007).

When an error in the factfinding of an administrative agency is alleged, our review is limited to assessing whether sufficient credible evidence exists in the record from which the findings made could reasonably have been drawn. Tlumac v. High Bridge Stone, 187 N.J. 567, 573-74 (2006). This review must encompass "the proofs as a whole" and must take into account "the agency's expertise where such expertise is a pertinent factor." Close v. Kordulak Bros., 44 N.J. 589, 599 (1965). We will not upset the ultimate determination of an administrative agency unless it is shown to be arbitrary, capricious or unreasonable, or to have violated legislative policies expressed or implied in the enabling legislation. Hemsey v. Bd. of Trs., Police & Fireman's Ret. Sys., 198 N.J. 215, 223-24 (2009). Consequently, our role in reviewing a final decision of an administrative agency is limited to four inquiries: (1) whether the agency's decision comports with Federal and State constitutional requirements; (2) whether the agency's action is supported by express or implied legislative policies; (3) whether the factual findings that provide a foundation for the agency's decision are based on substantial evidence; and (4) whether the legislative policies, when applied to the facts, show that the agency clearly erred in reaching a conclusion that could not reasonably have been made on a showing of the relevant factors. In re Taylor, 158 N.J. 644, 656 (1999).

B.

Appellants challenge the procedural fairness of the administrative proceedings. Appellants maintain the process employed impinged on their constitutional due process rights because the ALJ considered the DEP's request for revocation and debarment without an evidentiary hearing, essentially stripping them of a protected property interest in the affected license without an ...


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