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J.J. White, Inc v. New Jersey Department of Environmental Protection


September 29, 2011


On appeal from the Commissioner of the Department of Environmental Protection, Agency Docket No. 0329-06-0001.1 FWW060001.

Per curiam.


Submitted June 8, 2011 -

Before Judges Fisher, Sapp-Peterson and Fasciale.

Appellant, J.J. White, Inc., appeals from the final administrative agency decision of the Commissioner, New Jersey Department of Environmental Protection (DEP), affirming the denial of its application for exemption from the permitting requirements of the Freshwater Wetlands Protection Act (FWPA), N.J.S.A. 13:9B-1 to -30. The exemption would have enabled appellant to continue its restoration and modernization of three historic cranberry bogs on Cranbury Run Branch, currently located inside the Brendan T. Byrne State Forest in Pemberton Township (hereinafter referred to as "Cranberry Run Bogs"). We affirm.

The Cranberry Run Bogs comprise over fifty acres and are part of Whitesbog Village, a large farming operation appellant started in the mid-1850s. Whitesbog Village is listed on the New Jersey and the National Historic Registers and is run by the Whitesbog Preservation Trust (Trust). Through Green Acres*fn1

funding, the State acquired the Cranberry Run Bogs and approximately 200 acres.

Cranberries are a perennial crop and do not have to be planted every year to be productive, but do require periodic maintenance. By 1993, the Cranberry Run Bogs had lost their productivity, were "pock-marked with holes" from tundra swans, and were one to two feet out of level in comparison to other bogs that appellant had recently renovated. Consequently, appellant "decided . . . to quit trying to harvest them until [it] could modernize them and make them more productive." However, before appellant could make any physical changes to the Cranberry Run Bogs, it needed to get approvals from DEP's Division of Parks and Forestry, the Trust, the State Historic Preservation Office, and Ocean Spray Cranberries, which controlled the number of acres that its members, like appellant, could farm, harvest, and sell.

Appellant's last "regular, commercial harvest off of these bogs" was in 1993. Thereafter, appellant ceased "all horticultural activities, except for the winter flooding." It also maintained the water control structures, i.e., the floodgates and dams, and applied herbicide treatments.

Joseph Darlington, appellant's owner and president, explained that the "bogs were still producing cranberries, although on their own, not with our active help, other than the winter flooding and so forth[.]" After 1993, appellant allowed the Pinelands Institute for Nature and Environmental Studies (PINES), an educational organization, to use all three bogs. PINES organized field trips for groups of school children, allowing them to go into the Cranberry Run Bogs and hand-pick cranberries.

By 2004, the market for cranberries had improved, and appellant commenced renovation and modernization activities on the property, which initially involved burning cranberry vines and building some intermediate berms. As part of its modernization of the bogs, appellant intended to build new dams, subdivide the existing three bogs into nine smaller bogs, install a new irrigation system of underground pipes and overhead sprinklers, new drain tiles and four-inch diameter corrugated plastic pipes with slits every thirty feet and a foot underground, which would replace the Cranberry Run Bogs' historic, hand-dug, interior surface ditches. In 2006, DEP inspected the Cranberry Run Bogs and determined that appellant's renovation and modernization of the bogs were exempt from the FWPA's permitting requirements.

However, shortly thereafter, DEP ordered appellant to cease all activities pending further notice. By this time, appellant had already burned the vegetation in the bogs, started building the dams to subdivide them, cleaned out the peripheral drainage ditches, removed some of the organic soil, and received piles of new sandy soil.

DEP conducted a site visit with federal authorities and others on September 20, 2006. Following the site visit, on October 18, 2006, appellant submitted a letter to DEP requesting an exemption pursuant to "Section 404(f)(1) of the Federal Clean Water Act" [(FCWA)] and "Section 4(a) of New Jersey's [FWPA]" for the "'normal farming' activities" it was conducting "in connection with ongoing restoration" of the three Cranberry Run Bogs. Although appellant's letter indicated that it had separately attached a description of its activities, the document titled "Typical Modern Cranberry Bog Renovation Sequence" did not specifically relate to renovation and modernization at Cranberry Run Bogs. Rather, it described a typical modernization project for cranberry bogs, which the document described as an eight-year process. The author of the document was unidentified.

Appellant's exemption request also included letters from Peter V. Oudemans, Ph.D., an associate professor at Rutgers University's Philip E. Marucci Center for Blueberry and Cranberry Research and Extension; Maria M. Collazo, a resource conservationist with the United States Department of Agriculture's Natural Resources Conservation Service; and Jeffrey LaFleur, Executive Director of the Cape Cod Cranberry Growers' Association. All agreed that the Cranberry Run Bogs had been maintained over the years as cranberry bogs. Of the three, only LaFleur actually visited Cranberry Run Bogs, and his visit occurred in 2006, after some of the modernization and renovation had commenced. Oudemans' and Collazo's opinions were based upon their review of aerial photos.

DEP's Division of Land Use Regulation, in a letter dated February 1, 2007, denied appellant's "request for a farmland exemption." DEP based its denial on finding that the "bogs do not meet the definition of established, ongoing farming operation"; "the activities that were conducted fail to meet the exemption criteria at [N.J.A.C.] 7:7A-2.8(c)1[]v[] relative to minor drainage"; and appellant's activities "are regulated pursuant to Section 404 of the [FCWA]" permitting requirements and therefore required "a [f]ederal permit." The February 1 letter also referenced the June 7, 2006 Notice of Violation (NOV) issued by the Bureau of Coastal and Land Use Compliance and Enforcement to appellant "'for the discharge of fill material for installing ditching or other water control facilities for the cultivation of cranberries.'" The NOV ordered appellant to stop all work and obtain necessary permits, or "restore the site to its predisturbed conditions."

Appellant appealed the denial, and the matter was transferred to the Office of Administrative Law as a contested case requiring a full hearing. N.J.S.A. 52:14B-1 to -30. At the hearing, appellant produced LaFleur as its expert on the applicability of the CWA and Massachusetts regulations to cranberry farming. He opined that the Cranberry Run Bogs would "qualify as active land in agricultural use under our state regulations . . . and meet the requirements set forth by Region 1EPA*fn2 in . . . [the] Interim Final Guidance for Regulating Inactive Cranberry Bogs under Section 404 of the Federal Clean Water Act." LeFleur further opined that the "project should be exempt" from the permitting requirements under the CWA and Massachusetts regulations. LaFleur acknowledged that he visited the Cranberry Run Bogs on one occasion in 2006 and at that point, appellant had removed all of the vegetation.

Oudemans testified that based upon his review of the aerial photos, that the integrity and functioning of the bogs remained, notwithstanding the absence of commercial harvesting since 1993.

He acknowledged that 2002 photos of one bog depicted woody vegetation, although he could not tell how high it had grown.

Christian Bethmann, the Superintendent of the Brendon T. Byrne State Forest, testified that the Cranberry Run Bogs produced a "fairly good crop of cranberries" between 1999 and 2003. He indicated that the children who visited picked and carried off many cranberries.

Two witnesses from DEP also testified: Janice Arnett, a wetlands field inspector assigned to DEP's enforcement sections, and David Fanz, Assistant Director of DEP's Division of Land Use Regulation. Arnett lived near the Cranberry Run Bogs and often visited for recreational purposes in addition to visiting the site for official purposes. In 2001, she observed three well-defined bogs with a dividing road and dikes, a principal stream down center, and hand-dug ditches. In 2002 and 2003, she saw vegetation and trees that blocked access to one bog. By the spring of 2006, she observed that material had been removed from the ditches and the bogs, shrubs pulled and piled up, the installation of new water controls, and installation of a new stream channel.

In April 2006, she inspected the three bogs with another DEP inspector, and they saw non-cranberry vegetation in the bogs, water ponding, discharge of fill material from extensive grading and excavation, general disturbance to the original grade, and bulldozed sand and vegetation. She estimated that the ditches had been deepened, which constituted a change in the hydrologic regime that was not covered by the farming exemption. In fact, based on her experience, she opined that the "[d]itching and the deepening of the ditches," the discharges of dredged and fill material, and extensive grading were regulated activities and were not considered to be minor drainage exempt from an FWPA permit.

Arnett further opined that even if appellant's renovation and modernization activities were found to be part of an ongoing farming operation, those activities would require a permit, as they did not constitute minor drainage. She explained:

Minor drainage includes maintenance of existing drainage tile or other drainage tile. It does not include drainage associated with conversion of a wetland to a non-wetland or from one wetland use to another. In addition, minor drainage does not include construction of any new canal, ditch, dike, or waterway or structure.

So various new ditches were dug. That is not minor drainage. Minor drainage is to maintain. Maintaining doesn't mean changing. Maintaining means cleaning up, bringing it back to the -- I don't even want to say that. Maintaining does not mean enlarging, it doesn't mean moving it someplace else. It means you replace it in kind, in place, or clean it in kind. And to deepen a ditch is changing it, not maintaining it.

She also explained that bogs do not become uneven over the years from being flooded and drained. They stay "[r]easonably flat" if they are being cultivated and maintained.

Fanz testified that he visited the bogs in 2002 and 2003, and found them to be "inactive" or "abandoned." He visited the bogs again in July 2006 and determined that they did not meet the definition in N.J.A.C. 7:7A-1.4 of an "established, ongoing farming operation" because of inactivity and the growth of other species and because the last commercial harvest of cranberries had been in 1993, which was more than five years before appellant's exemption application.

He also opined that appellant's renovation activities would alter the hydrological regime, which he described as "how water enters and leaves a wetland or non-wetland." He explained that groundwater hydrology and the hydrological regime would be altered by appellant's removal of the organic soils that hold water throughout the year, absent drought conditions. He further noted that appellant's installation of perimeter ditches, tile drain systems, irrigation systems, and new water management control structures, which activities also did not meet the regulatory definition of minor drainage, would also alter the hydrology. "Where once there was a natural wetlands system that had an input of water from [groundwater] and surface water, they've modified that to where . . . [t]hey can effectively remove the groundwater at their whim and irrigate when they need to irrigate and flood when they need to flood."

The Administrative Law Judge (ALJ) issued his initial decision on June 15, 2009, finding DEP improperly denied the exemption. The ALJ based his decision upon his determination that: (1) the proposed renovations and modernizations were "an exempt activity under federal law and regulation because they are part of a normal ongoing farming operation"; (2) the renovations were exempt under the FWPA and its regulations because appellant's activities in the three bogs were part of an established ongoing farming operation, notwithstanding the discontinuation of commercial operation in 1993; and (3) the drainage activities constituted "exempt activities" as defined under N.J.A.C. 7:7A-2.8(c)1ii and iii.

The Commissioner issued his final decision rejecting the ALJ's findings and upholding the exemption denial. First, the Commissioner concluded that the cessation of farming activities, commercial or otherwise, in 1993, negated any finding that the bogs were an ongoing farming operation.

Second, he found that DEP presented "unrefuted expert testimony [from Arnett and Fanz] that [appellant's] renovation and modernization activities constitute a change in the hydrologic regime of the bogs." Specifically, the Commissioner noted:

Arnett observed a new stream channel to reroute a portion of the outer stream around the lowest bog. Fanz testified that cranberries in the bogs had previously been grown in saturated soil with no manipulation of groundwater and that the renovations would serve to remove and manipulate groundwater so new cultivars could be grown in sandy soil without wet roots. Darlington testified that the new drain tiles would keep the water table at a foot below the surface; as Fanz noted, the very purpose of the new drain tiles was to remove groundwater - which, along with the new sandy soil and the deeper trenches, among other things, would alter the hydrology. This altered hydrology was necessary for the new cultivar to thrive.

Also, the Commissioner discounted Oudemans' testimony, since he had not testified as an expert and had not given any testimony "regarding observations made as a result of site visits."

Further, the Commissioner found that the drainage activities were not drainage activities under the regulations. He concluded the ALJ's reliance upon subsection (c) of N.J.A.C. 7:7A-2.8(c)1 was misplaced because the bogs are wetland croplands and cranberries are wetland crops rather than "upland crops" to which subsection i applies.

In addition, the Commissioner concluded subsection ii was inapplicable because that paragraph deals with farming activities and discharges occurring "in wetlands and waters which are in 'established use for such agricultural . . . wetlands crop production'" and that the activities and discharges at the Cranberry Run Bogs "did not occur in wetlands in established use for cranberry crop production, as [appellant had] not used the Cranberry Run [B]ogs to produce a crop of cranberries since 1993." Moreover, he determined that subsection ii requires the discharge to be "'incidental to planting, cultivating, protecting, or harvesting . . . cranberries,'" and that appellant's activities "extend[ed] far beyond" incidental, as they "were a necessary step for [appellant] to produce an economically viable crop of cranberries in the first place and changed the hydrologic regime in the process." (emphasis removed).

The Commissioner also found subsection iii inapplicable because this subsection addresses "'existing impoundments which have been constructed in accordance with applicable requirements of the Federal Act[.]'" Accordingly, the Commissioner reasoned that it "does not relate to new construction or impoundments which, as here, are not in established use for production." He also noted that appellant offered no proof "to demonstrate that the 'existing impoundments' were constructed in accordance with applicable federal requirements."

The Commissioner, however, never addressed N.J.A.C. 7:7A-2.8(c)1v, governing minor drainage limitations, except to note that DEP and the ALJ had disagreed as to its applicability. He noted, nevertheless, that the ALJ had made no findings regarding appellant's proposed "installation of an underground irrigation system with a pump and overhead sprinklers, the clearing and reopening of an old canal to supply water to the bogs, the rerouting of a stream, or the rebuilding of a non-functioning dam."

Additionally, the Commissioner rejected any reliance on the Massachusetts regulations or the fact that appellant had performed past restoration and modernization activities on other bogs it owned. Finally, the Commissioner explained that the Federal CWA Program can be less stringent than New Jersey's program. Thus, he denied appellant's application for a farming exemption.

On appeal, appellant raises the following points for our consideration:










Our review of final administrative agency decisions is limited. In re Taylor, 158 N.J. 644, 656 (1999). "We will not reverse an agency decision unless: (1) it was arbitrary, capricious, or unreasonable; (2) it violated express or implied legislative policies; (3) it offended the State or Federal Constitution; or (4) the findings on which it was based were not supported by substantial, credible evidence in the record." Univ. Cottage Club of Princeton N.J. Corp. v. N.J. Dep't of Envtl. Prot., 191 N.J. 38, 48 (2007) (citing Taylor, supra, 158 N.J. at 656).

"The fundamental consideration in reviewing agency actions is that a court may not substitute its judgment for the expertise of an agency so long as that action is statutorily authorized and not otherwise defective because [it is] arbitrary or unreasonable." In re Distrib. of Liquid Assets Upon Dissolution of Union Cnty. Reg'l High Sch. Dist. No. 1, 168 N.J. 1, 10 (2001) (citation omitted) (internal quotation marks omitted). If, in reviewing an agency decision, we are satisfied that there is "sufficient credible evidence in the record to support the agency's conclusions," we will uphold the decision irrespective of our view that we may have reached a different result on the same set of facts. Taylor, supra, 158 N.J. at 657.

Moreover, we accord substantial deference to an agency's interpretation of a statute or regulation that it is charged to enforce. In re Freshwater Wetlands Gen. Permit No. 16, 379 N.J. Super. 331, 341 (App. Div. 2005); In re Adopted Amendments to N.J.A.C. 7:7A-2.4, 365 N.J. Super. 255, 264 (App. Div. 2003). We also defer to an agency in cases involving technical matters within the agency's special expertise. In re Authorization for Freshwater Wetlands Gen. Permits, 372 N.J. Super. 578, 593 (App. Div. 2004). "This deference is even stronger when the agency, like DEP in regard to wetlands, 'has been delegated discretion to determine the specialized and technical procedures for its tasks." Ibid. (quoting Newark v. Natural Res. Council, Dep't of Envtl. Prot., 82 N.J. 530, 540, cert. denied, 449 U.S. 983, 101 S. Ct. 400, 66 L. Ed. 2d 245 (1980)).

Underlying our deference is our recognition that the agency has the "staff, resources and expertise to understand and solve those specialized problems." Bergen Pines Cnty. Hosp. v. N.J. Dep't of Human Servs., 96 N.J. 456, 474 (1984); see also Essex Cnty. Bd. of Taxation v. Twp. of Caldwell, 21 N.J. Tax 188, 197 (App. Div.) (agency's interpretation owed considerable deference because agency drafted and promulgated the rule), certif. denied, 176 N.J. 426 (2003).

Our deference, however, is not unfettered and we are "'in no way bound by the agency's interpretation of a statute or its determination of a strictly legal issue.'" Univ. Cottage Club of Princeton N.J. Corp., supra, 191 N.J. at 48 (quoting Taylor, supra, 158 N.J. at 658).

Measured against these standards, we reject the Commissioner's conclusion that eligibility for a farming exemption under N.J.A.C. 7:7A-2.8(c) requires commercial harvesting. We also reject the Commissioner's determination that appellant's property must be eligible for a farmland tax assessment under the Farmland Assessment Act of 1964, N.J.S.A. 54:4-23.1 to -23.24, which in turn requires that the land be devoted to the production of "for sale" agricultural products.

First, there is no reference to any commercial harvest requirement in the definition of "[e]stablished, ongoing farming," "[f]armed wetland," or "[h]arvesting." Thus, in ascribing a commercial component to "ongoing farming" and "harvesting," DEP, in effect, improperly attempted to interpret its own regulations as a means of amending the FWPA implementing regulations without formal rulemaking. "'[A]n agency may not use its power to interpret its own regulations as a means of amending those regulations or adopting new regulations.'" In re Freshwater Wetlands Gen. Permit No. 16, supra, 379 N.J. Super. at 342 (quoting Venuti v. Cape May Cnty. Constr. Bd. of Appeals, 231 N.J. Super. 546, 554 (App. Div. 1989)).

Second, in Township of Andover v. Kymer, 140 N.J. Super. 399, 403 (App. Div. 1976), we found the fact that an entire tract of land was not devoted to farming was not a bar to a farmland assessment. We stated:

[W]et areas and other acreage having a marginal value for agricultural or horticultural use may also be given such tax advantage, as long as it is part of, appurtenant to, or reasonably required for the purpose of maintaining, the land actually devoted to farm use, particularly where it has been part of the farm for a number of years. See N.J.S.A. 54:4-23.11; N.J.A.C. 18:15-6.2. [Ibid. (footnote omitted).]

Of additional significance is evidence in the record that DEP assumed, during its investigation, that there was a farmland assessment for the property and the fact that its exemption denial was not based upon the absence of a farmland assessment.

Notwithstanding our conclusion that the Commissioner erred in upholding DEP's application of a commercial harvesting requirement in its review of appellant's exemption request under N.J.A.C. 7:7A-2.8(c) and the various definitions contained in N.J.A.C. 7:7A-1.4, we are satisfied the Commissioner properly upheld DEP's denial of appellant's exemption request. In his de novo review of the record, the Commissioner rejected the ALJ's finding that the activities at Cranberry Run Bogs were part of an established, ongoing farming operation, and the drainage activities constituted minor drainage as defined in N.J.A.C. 7:7A-2.8(c)(1).

The relationship between the findings and conclusions leading to a recommendation from an ALJ and the final decision reached by an agency head is set for in N.J.S.A. 52:14B-10(c), which provides:

In reviewing the decision of an administrative law judge, the agency head may reject or modify findings of fact, conclusions of law or interpretations of agency policy in the decision, but shall state clearly the reasons for doing so. The agency head may not reject or modify any findings of fact as to issues of credibility of lay witness testimony unless it is first determined from a review of the record that the findings are arbitrary, capricious or unreasonable or are not supported by sufficient, competent, and credible evidence in the record. In rejecting or modifying any findings of fact, the agency head shall state with particularity the reasons for rejecting the findings and shall make new or modified findings supported by sufficient, competent, and credible evidence in the record.

We are satisfied the Commissioner's decision complies with the above statutory requirements and establishes, with particularity, why the ALJ's finding that the activities at the Cranberry Run Bogs were part of a "normal ongoing farming operation" was not supported by sufficient, competent, and credible evidence in the record. Cavalieri v. Bd. of Trs. of Pub. Employees Ret. Sys., 368 N.J. Super. 527, 533-34 (App. Div. 2004).

First, the testimony of Arnett and Fanz, both wetland hydrology experts, was unrefuted. Arnett lived near the bogs and often visited for recreational purposes. She testified that in 2001, the three bogs were large and well-defined, but by April 2006, when she conducted an inspection of the three bogs, she observed non-cranberry vegetation in the bogs, water ponding, and discharge of fill material from extensive grading and excavation. Fanz conducted site visits in 2002 and 2003. He found the bogs to be inactive or abandoned. He testified the perimeter of the bogs was heavily vegetated with red maple and greenbriar and other species of plants that grow typically, succeed in those situations. The perimeters were also -- some of the perimeters of the bog, the upper bog, had a heavy cover of leatherleaf, which is a wetland shrub plant.

There [were] some sedges and brushes, pitch pine occasionally, some highbush blueberry.

But it appeared to me to be in a state that it was inactive or an abandoned cranberry operation.

Under DEP regulations, established, ongoing farming operations are activities on areas subject to a farming . . . use as of June 30, 1988, which use has been pursued continuously since June 30, 1988. Activities on areas lying fallow as part of a conventional rotational cycle that does not exceed five years are part of an established operation. . . . An operation ceases to be established when the area on which it was conducted has been converted to another use or has lain idle for so long that modifications to the hydrological regime are necessary to resume operations, or for more than five years, whichever is shorter. [N.J.A.C. 7:7A-1.4.]

The Commissioner credited the testimony of Arnett and Fanz, finding their testimony "persuasive and undisputed." Moreover, while noting the ALJ appeared to discredit Arnett's testimony because he found Arnett could not recall observing acres of cranberry vines, the Commissioner concluded this was a mischaracterization of Arnett's testimony. Additionally, the Commissioner referenced the ALJ's reliance upon Oudemans' report and testimony that the bogs had been in a holding pattern since 1993, to conclude that the bogs had been maintained and remained functional between 1993 and 2002. The Commissioner noted, however, that Oudemans never testified that his observations were based upon site visits. Rather, his testimony was based upon his review of aerial photographs.

The Commissioner's findings also noted writings and testimony from Darlington that there were no existing drainage tiles in the bogs, that he was constructing new dams and dikes in the three bogs, and would be discharging fill material into the wetlands. The Commissioner reasoned that it was clear the activities related to the three bogs were other than an "[e]stablished, ongoing farming operation" within the meaning of N.J.A.C. 7:7A-1.4.

The Commissioner specifically addressed testimony from Darlington and some of appellant's documents as further illustration that the Cranberry Run Bogs had been inactive or abandoned:

A review of [p]petitioner's documents and testimony demonstrates that it also considered its farming operation at the bogs to be inactive or abandoned. Darlington wrote about one of the bogs in 1993[,] that the "yield was insufficient to cover costs," and "we will have to abandon this bog" and "we will stop all horticultural activities except for the winter flooding." . . . Similarly, Darlington testified [p]petitioner could not keep the bogs "sufficiently productive to make them economically worth continuing to farm," so [p]petitioner decided "to quit trying to harvest [the bogs] until we could modernize them and make them more productive." . . . Most telling is

[p]petitioner's statement that alternatives to renovation "are not commercially feasible, and will not be undertaken by J.J. White Company, resulting in long term loss of these historic bogs." . . . Indeed, LaFleur also testified that if [p]petitioner resumed harvesting without changing the hydrologic regime, the crop would not have been "economically viable."

Further, the Commissioner found that Darlington's testimony confirmed Arnett's testimony that activities other than minor drainage activities were taking place. Darlington testified that there were no existing drainage tiles in the bogs, and that appellant would be discharging fill material into the wetlands to construct them. N.J.A.C. 7:7A-2.8(c)1v, which the Commissioner did not address, makes clear that "minor drainage" in wetlands "does not include the construction of any new canal, ditch, dike or other waterway or structure" and that "[a]ny discharge of dredged or fill material into the wetlands . . . incidental to the construction of any such structure or waterway requires a freshwater wetlands or State open water permit, and will not be considered minor drainage[.]"

In summary, the Commissioner's decision rejecting the ALJ's finding that the Cranberry Run Bogs was not an ongoing farming operation and that appellant's activities constituted minor drainage is supported by substantial, credible evidence in the record. Therefore, the Commissioner properly affirmed DEP's denial of appellant's exemption request. We discern no basis to disturb those findings.


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