July 12, 2011
NORTH BERGEN I, LLC, APPELLANT,
NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION, RESPONDENT.
On appeal from the Department of Environmental Protection.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted June 21, 2011
Before Judges Carchman and Parrillo.
Appellant North Bergen I, LLC (North Bergen) appeals from a December 23, 2009 letter disposition of the New Jersey Department of Environmental Protection (DEP)*fn1 denying its application to have its oversight cost review request, i.e., billing dispute, transmitted to the Office of Administrative Law (OAL) for a hearing as a contested matter. Because this preliminary determination is not a final decision of a State administrative agency, we dismiss the appeal.
By way of background, in December 1999, North Bergen purchased industrial property formerly owned by Sier-Bath Co., Inc., later known as SBG Holding Corporation (SBG). At the time of purchase, the property was under an Administrative Consent Order (ACO) between its former owner and DEP. SBG requested that DEP terminate the ACO and allow North Bergen to proceed in cleaning up the property under a remediation agreement, which was permitted.*fn2 As part of the agreement executed in December 1999, North Bergen became subject to the Administrative Requirements for the Remediation of Contaminated Sites, N.J.A.C. 7:26C. This regulation allows DEP to assess upon all private entities that undertake site remediation projects DEP's costs to oversee such work. See N.J.A.C. 7:26C-4.1. For instance, to ensure the necessary remediation is being properly performed, DEP requires the responsible party to submit regular technical and progress reports, which DEP staff review and comment upon. See N.J.A.C. 7:26E-6.6.
Thus, DEP's oversight work is funded solely by the charges collected from the responsible parties pursuant to DEP regulations, which provide:
The person responsible for conducting the remediation shall pay the Department's oversight costs pursuant to this section whenever the Department assesses those costs against the person responsible for conducting the remediation . . . . [N.J.A.C. 7:26C-4.5(a).]
See also E.I. du Pont de Nemours & Co. v. State, Dep't of Env't Prot. & Energy, 283 N.J. Super. 331, 341-44 (App. Div. 1995).
The party responsible for the remediation is billed by way of an invoice and must pay by the date indicated on the invoice.
N.J.A.C. 7:26C-4.5(b). The invoice identifies the DEP staff members involved in the review and the number of hours expended thereon. N.J.A.C. 7:26C-4.5(c). Costs are based on a formula that includes direct costs determined using a salary additive and fringe benefit factor, and expenses. N.J.A.C. 7:26C-4.5(e).
Since execution of the remediation agreement, North Bergen has been conducting an environmental cleanup on its property and DEP, as required by statute, has been conducting periodic oversight of the cleanup, for which the agency has been billing North Bergen approximately twice per year through October 2010 based on the time required to review, among other things, all necessary plans, drawings and test results. The first invoice for these costs was approved by DEP on July 11, 2001, in the amount of $2,421.66. Since then, DEP has issued about twenty-seven oversight cost invoices to North Bergen, in ever increasing amounts, and the outstanding balance of oversight costs is presently $43,420.09.
North Bergen first challenged DEP oversight charges in a letter dated July 27, 2007. While paying a portion ($1,515.26) as uncontested, North Bergen refused to pay the remainder of the charges ($23,838.30) as being unreasonable and "excessive" and, pursuant to DEP regulations specifying how such a billing dispute is to be resolved, filed an "oversight cost review request," (request) with DEP, objecting to the June 24, 2007 oversight cost invoice. See N.J.A.C. 7:26C-4.6(a) (requiring an objector to submit a written request to DEP within thirty days of the billing date indicated on the oversight cost invoice received by the objector).
N.J.A.C. 7:26C-4.6(d) specifies the information that must be provided by the objector for an oversight cost review:
1. A copy of the invoice;
2. Payment of all uncontested charges, including salary, additives, and fringe and indirect rate calculations, as applicable, if not previously paid;
3. A list of the specific oversight cost charges contested;
4. The factual questions at issue in each of the contested charges;
5. The name, mailing address, email address, and telephone number of the person making the request; and
6. Information supporting the request or other written documents relied upon to support the request.
The regulations further provide that "[i]f any information or the payment required by (d) above is not included, [DEP] shall deny a request for an oversight cost review." N.J.A.C. 7:26C-4.6(e). If properly submitted, DEP is directed to resolve any factual dispute. N.J.A.C. 7:26C-4.6(f). If the billing dispute cannot be resolved informally, DEP may "determine the matter to be a contested case and transfer it to the [OAL] for an adjudicatory hearing." N.J.A.C. 7:26C-4.6(g).
At the time of the July 27, 2007 oversight cost review request, to which DEP responded that it would attempt to resolve informally, a dispute arose between North Bergen and DEP over the type of remediation necessary for the site. Consequently, on September 27, 2007, North Bergen submitted a Technical Review Panel (TRP) request outlining issues regarding the direction of the company's remediation effort. DEP's TRP reviewed the submission and, on November 10, 2008, advised North Bergen that no further action was needed for soils at the site, but that vapor intrusion testing and further ground water sampling was still required. North Bergen sought clarification of this finding, which it received via letter from DEP's Site Remediation Program on June 5, 2009. North Bergen was also advised that it was not being charged for the TRP's technical review because it was not billable as oversight.
North Bergen continued to receive oversight cost invoices and objected five more times, each by an oversight cost review request, repeating essentially the same language. DEP responded to each request by rejecting the objection, but inviting North Bergen to attempt to resolve the dispute with DEP staff. In response to North Bergen's penultimate request of June 9, 2009, DEP advised on July 8, 2009 that a March 19, 2008 telephone conference between the parties addressed all of North Bergen's concerns and questions regarding agency work performed for the oversight costs billed through September 28, 2007.
North Bergen's last oversight cost review request*fn3 was submitted on November 12, 2009, disputing all previously unpaid and present costs on the oversight bill. As in prior requests, North Bergen simply alleged, without specification, that the costs were excessive, unreasonable and duplicative, and that the agency's activity description was generic and inadequate to determine the work actually performed by DEP. North Bergen also claimed that DEP's approach to the remediation in this case wasted substantial DEP time and resources. By letter of December 23, 2009, DEP replied that North Bergen has "raised these same issues in the past[,]" and that:
If you have specific charges that you believe are either duplicative or excessive, you must pay the undisputed portion of the invoice prior to disputing the specific charges. To repeatedly contest the entire bill is unreasonable in that your client has submitted reports to the Department and has received responses and been involved in conference calls, emails, etc. As per our oversight rules, the person submitting remediation reports to the Department agrees to pay oversight costs.
Based on the fact that the disputed invoices have been repetitive and the oversight costs gone unpaid for numerous years, the Department will have no choice but to send this invoice to a collection agency and stop work on this case if payment is not received within 30 days of the date of this letter.
Despite the fact that DEP did not move in court for payment of the outstanding bill or to otherwise enforce North Bergen's obligations to the agency, appellant filed this appeal from the December 23, 2009 DEP letter disposition. Appellant essentially argues that DEP's refusal to send the matter of the billing dispute to the OAL for a contested hearing is arbitrary, capricious and unreasonable. DEP counters that its December 23, 2009 correspondence does not amount to final agency action and that, in any event, North Bergen has failed to exhaust its administrative remedies. We agree with DEP and dismiss the appeal.
As a threshold matter, we address the appealability of DEP's action and this court's jurisdiction. Rule 2:2-3(a)(2) mandates the exclusive allocation to the Appellate Division for review of "final decisions or actions of any state administrative agency or officer[.]" R. 2:2-3(a)(2) (emphasis added); Prado v. State, Dep't of Labor, 186 N.J. 413, 422-23 (2006); see also Vas v. Roberts, 418 N.J. Super. 509, 516 (App. Div. 2011). In order to constitute a final decision, it "should contain adequate factual and legal conclusions [and] should give unmistakable notice of its finality." In re CAFRA Permit No. 87-0959-5, 152 N.J. 287, 299 (1997).
Here, DEP's December 23, 2009 correspondence contains neither. To the contrary, DEP's letter itself contemplates further administrative action once appellant completes the cost review request submission with all the information required under the applicable regulation. Consequently, North Bergen's present appeal is premature for want of exhausting its administrative remedies which, in this instance, requires appellant to pursue available regulatory procedures to their appropriate conclusion and await their final outcome before seeking judicial intervention. See Garrow v. Elizabeth Gen. Hosp. & Dispensary, 79 N.J. 549, 558-59 (1979). In this case, that would require full compliance with the regulatory mandates of N.J.A.C. 7:26C-4.6, including payment of all uncontested charges, N.J.A.C. 7:26C-4.6(d)(2), specification of those costs being challenged, N.J.A.C. 7:26C-4.6(d)(3), and identification of the factual discrepancy related to each challenge, N.J.A.C. 7:26C-4.6(d)4. A general refusal to pay all charges does not qualify as a conforming submission. Nor does one that, as here, simply objects to the charges as "excessive and unreasonable" and to the work description as "generic and inadequate."
Such specification is necessary for the administrative agency to determine the existence of a factual dispute for transmittal to the OAL as a contested case. N.J.A.C. 7:26C- 4.6(f), (g). To warrant such a hearing under the Administrative Procedure Act (APA), N.J.S.A. 52:14B-1 to -30, the requestor must demonstrate a specialized property interest about which contested adjudicative factual issues are in dispute. Cunningham v. Dep't of Civil Serv., 69 N.J. 13, 23-24 (1975). In the absence of such, the relief requested may be denied outright. N.J.A.C. 7:26C-4.6(e). Here, the record is insufficient to determine on appeal whether appellant was lawfully assessed the oversight costs charged by DEP. DEP has identified the information required to make a final determination as to North Bergen's billing objection. Its failure to exhaust the administrative remedy so identified renders any interim agency decision preliminary and interlocutory in nature, and precludes informed review by this court.