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John and Katherine Kliever v. New Jersey Department of Environmental Protection


August 10, 2012


On appeal from the New Jersey Department of Environmental Protection.

Per curiam.


Argued January 31, 2012 -

Before Judges Messano, Espinosa and Kennedy.

The Ridge at Saddle River, LLC (The Ridge), owner of real property located in Saddle River and Woodcliff Lake, appeals from the final agency decision of the Commissioner (the Commissioner) of the New Jersey Department of Environmental Protection (DEP).

The genesis of the dispute began on September 16, 2003, when DEP issued The Ridge a stream encroachment permit to build a storm water detention basin on its property, along with a storm water outfall structure within a drainage easement on property owned by respondents, John and Katherine Kliever (the Klievers). The Klievers appealed, and, on September 8, 2006, DEP granted their appeal request.

On January 22, 2008, the case was transmitted to the Office of Administrative Law (OAL) as a contested case pursuant to the Administrative Procedure Act, N.J.S.A. 52:14B-1 to -15.*fn1 The hearing took place before the ALJ over five days in early 2009. The ALJ found the following facts were undisputed.

The southwest corner of The Ridge property shares a common property line with the Kliever property, which historically suffered from drainage problems. In 2002, The Ridge received preliminary approval from the Saddle River Planning Board to construct a sixty-eight unit townhouse development on its property.

The Ridge property contained two storm water drainage areas denoted as Area A and Area B. Thirteen acres of the property, designated as Area A, drained into "Tice's Ditch," a drainage ditch running along the west side of The Ridge property. Area B drained the remaining portion of The Ridge property on the eastern side. The flows from these two areas passed through multiple plots of land before converging into a brook below the Kliever property.

As originally conceived, the development plan did not contemplate the use of the drainage easement on the Kliever property. However, the Planning Board requested this modification as an accommodation to the Klievers' concerns. The stream encroachment permit issued by DEP in 2003 permitted The Ridge to build a storm water detention basin on its property and an outfall structure within the drainage easement on the Kliever property.

In summer 2008, before the stream encroachment permit expired, The Ridge began construction of the detention basin and outfall structure. On October 3, 2008, DEP issued a compliance letter stating The Ridge had constructed the detention basin and outfall structure as permitted.

The central dispute before the ALJ was framed by the competing expert testimony regarding the proper location for measuring the development's storm water discharge. Before it was repealed,*fn2 N.J.A.C. 7:13-2.8(a)(1) provided:

If no regional [storm water] management plan has been developed, any [storm water] discharge within the jurisdiction of this chapter shall be controlled so that either

(i) The volume of [storm water] discharged from the site and the rate of runoff from the two, [ten], and [one-hundred-year] storm events for the post-construction site conditions does not exceed the pre-construction volume and rate of runoff; or

(ii) The post-construction peak runoff rate for the two[-]year storm event is [fifty] percent of the pre-construction peak runoff rate and the post-development peak runoff rate for the [ten] and [one-hundred-year] events are [seventy-five] percent of the pre-project construction peak runoff . .

Dr. Eugene Golub, the Klievers' expert, testified that, to establish compliance with N.J.A.C. 7:13-2.8(a)(1), the proper location, or "point of interest," to measure peak runoff rates would be the southwest corner of The Ridge property, where all of the flow from drainage area A converges. Golub opined that The Ridge's expert, Arthur Hanson, had selected an inappropriate point of interest upon which to base his measurements. Golub also claimed that he could not locate the exact point that Hanson had used for his calculations.

Hanson testified that he based his compliance calculations by taking measurements at a point "where the two drainage areas connect together into a common ditch." This was approximately one thousand feet south of The Ridge property line. Utilizing this point, Hanson opined that the two, ten, and one hundred year storm reduction rates required by DEP regulations "were met." Hanson conceded the regulatory reduction rates would not have been met at the point of interest adopted by Golub.

DEP's expert, Madhu Guru, disagreed with Hanson. She stated:

The point of interest that [Hanson's] referring to is much, much further downstream way passed the Klievers' property. And at that point they might meet the reductions, but there are a lot of properties in between that would not get the benefit of the reduction. The reduction should be met at [the stonewall outfall structure that comes out of the detention basin] unless the two streams had somehow met on [T]he Ridge's property. That would be the only case. But [i]n this case the two drainage areas do not meet. They're much further downstream, and, therefore, the reductions would have to be met at the point of discharge on to the easement on [the] Klievers' property.

Guru explained that using her point of interest, The Ridge did not meet either the ten- or one-hundred-year storm standard as required by N.J.A.C. 7:13-2.8(a)(1). She recommended that The Ridge "modify the detention basin so that the flow rate coming out of the detention basin is reduced." This would require The Ridge to apply for a "modification to the original permit . . . [but a] new permit would not be necessary."

The ALJ concluded that the Klievers "ha[d] not proven by a preponderance of the evidence that the issuance of the stream encroachment . . . permit[] was inappropriate." The only remaining issue, he reasoned, was "whether [T]he Ridge must now recalculate the peak-runoff rates and revise its permit using the point of interest . . . the DEP now requires." The ALJ viewed the choice as whether the regulatory standards were met by measurements taken at the convergence of drainage areas A and B, or by measurements made at "each and every discharge point from [The Ridge] property."

The ALJ observed that the regulation "d[id] not differentiate properties with one drainage area from properties with more than one drainage area and it d[id] not delineate properties with one discharge point from properties with more than one discharge point." Consequently, he "set aside" "Guru's new interpretation of the regulation," and determined "that the runoff calculations Hanson had originally submitted remained acceptable." The ALJ dismissed the Klievers' appeal and ordered that the permit "remain in effect without . . . modification or revision." DEP and the Klievers filed exceptions to the ALJ's initial decision, and The Ridge filed a reply.

Since "[t]here was no dispute regarding the lack of a regional [storm water] management plan or that [storm water] runoff post-construction would exceed pre-construction" runoff, the Commissioner concluded that the dispute appropriately "focused on whether [T]he Ridge's management of [storm water] met the stormwater reduction requirements of subparagraph (ii) [of N.J.A.C. 7:13-2.8(a)(1)]." The Commissioner further concluded that the ALJ's initial decision was "inconsistent with the plain reading of the regulation and conflict[ed] with the fundamental purpose of the FHACA."

He reasoned that "the term 'any [storm water] discharge within the jurisdiction of this chapter' . . . found in the opening sentence of N.J.A.C. 7:13-2.8(a)(1) . . . applies to both subparagraphs." Quoting N.J.S.A. 58:16A-50(b), the Commissioner noted that the purpose of the FHACA was to "protect the 'safety, health, and general welfare' of the public by 'delineat[ing] and mark[ing] flood hazard areas' and subjecting them to 'land use regulations.'" The Commissioner concluded the regulation did not permit measurement at "some potentially remote point after [storm water discharges] have swept through [properties located near the project]." Instead, considering both the purpose of the FHACA and the plain language of the regulation, the Commissioner concluded that "the regulation . . . require[d] . . . [storm water] reduction rates be met by each [storm water] runoff discharge from a site within the Department's flood hazard area jurisdiction." He noted that "only the discharge point of the detention basin on the Kliever property is within the jurisdiction of the [FHACA] rules."

The Commissioner rejected the ALJ's "conclusion of law" regarding interpretation of N.J.A.C. 7:13-2.8(a)(1), and the ALJ's "conclusion that the stream encroachment permit should remain in effect." He ordered The Ridge, within 90 days[,] . . . to submit an application to modify its stream encroachment permit so that it can revise its detention basin and outfall structure to meet the [storm water] reduction standards of N.J.A.C. 7:13-2.8(a)(1), in effect in 2003, at the detention basin outfall structure located in the easement on the Kliever property.

This appeal ensued.

Before us, The Ridge argues: the Commissioner cannot revoke a previously-issued permit, absent proof demonstrating the issuance was arbitrary, capricious or unreasonable; the Commissioner failed to acknowledge that DEP's "initial review engineer approved the design plans"; the Commissioner's findings were contrary to the evidence; and the Commissioner's legal interpretation of the regulation was erroneous. We have considered these arguments in light of the record and applicable legal standards. We affirm.

"In order to reverse an agency's judgment, an appellate court must find the agency's decision to be 'arbitrary, capricious, or unreasonable, or [ ] not supported by substantial credible evidence in the record as a whole.'" In re Stallworth, 208 N.J. 182, 194 (2011) (alteration in original) (quoting Henry v. Rahway State Prison, 81 N.J. 571, 580 (1980)). "The burden of demonstrating that the agency's action was arbitrary, capricious or unreasonable rests upon the person challenging the administrative action." Seigel v. N.J. Dep't of Envtl. Prot., 395 N.J. Super. 604, 613 (App. Div.), certif. denied, 193 N.J. 277 (2007). Our inquiry is restricted to (1) whether the agency's decision offends the State or Federal Constitution; (2) whether the agency's action violates express or implied legislative policies; (3) whether the record contains substantial evidence to support the findings on which the agency based its action; and (4) whether in applying the legislative policies to the facts, the agency clearly erred in reaching a conclusion that could not reasonably have been made on a showing of the relevant factors. [George Harms Constr. Co. v. N.J. Turnpike Auth., 137 N.J. 8, 27 (1994).]

We do "not substitute [our] own [fact-finding] for that of the agency," and we will "defer to the agency . . . if the findings of fact are supported by substantial credible evidence in the record and are not so wide off the mark as to be manifestly mistaken." Tlumac v. High Bridge Stone, 187 N.J. 567, 573 (2006).

Particularly germane to this appeal, we recently said:

When we review an "agency's interpretation of statutes within its scope of authority and its adoption of rules implementing its enabling statutes, we afford the agency great deference." N.J. Soc'y for the Prevention of Cruelty to Animals v. N.J. Dep't of Agric., 196 N.J. 366, 385 (2008) (citing In re Freshwater Wetlands Prot. Act Rules, 180 N.J. 478, 488-89 (2004)). As the Court noted, "[s]uch deference is appropriate because it recognizes that agencies have the specialized expertise necessary to enact regulations dealing with technical matters and are particularly well equipped to read . . . and to evaluate the factual and technical issues that . . . rulemaking would invite." In re Freshwater Wetlands Prot. Act Rules, supra, 180 N.J. at 489 (internal quotation marks and citations omitted). [Animal Prot. League of N.J. v. N.J. Dep't of Envtl. Prot., 423 N.J. Super. 549, 550 (App. Div. 2011) (parallel citations omitted), certif. denied, 210 N.J. 108 (2012).]

With these principles in mind, we consider the various arguments raised by the Ridge.

The Ridge asserts that the Commissioner ignored the fact that a permit had already been issued, and it contends the Commissioner lacked authority to order modification absent a finding that DEP acted in an arbitrary, capricious or unreasonable manner when it initially issued the permit. DEP counters by arguing that the Commissioner took the issuance of the permit into account. However, it contends that the agency erroneously issued the permit in 2003, and it has the inherent power to correct that mistake in the context of the appeal filed by the Klievers. We agree with DEP.

The final decision of the Commissioner clearly recognized that a stream encroachment permit had been issued because it specifically mentioned that fact. The only question is whether the issuance of the permit somehow precluded or restricted the Commissioner's consideration of whether the permit was based upon compliance with the regulation.

"In the absence of a legislative restriction, administrative agencies generally have the inherent power to reopen or to modify and rehear prior decisions." In re Trantino Parole Application, 89 N.J. 347, 364 (1982). Indeed, "the power to reconsider, to rehear and to revise determinations may be regarded as inherent in administrative agencies." Trap Rock Industries, Inc. v. Sagner, 133 N.J. Super. 99, 109 (App. Div. 1975), aff'd, 69 N.J. 599 (1976). We have specifically recognized that DEP has no obligation "to perpetuate an administrative construction . . . that the [Agency] now recognizes was erroneous." Doyal v. N.J. Dep't of Envtl. Prot., 390 N.J. Super. 185, 193 (App. Div. 2007).

The Klievers were permitted to challenge the initial agency decision; they filed an appeal and the contested matter was adjudicated in due course. Contrary to appellant's argument, the Commissioner was not required to defer to the agency's earlier decision.

The Ridge also argues that the following statement made by the Commissioner in his final decision was not supported by the evidence: "[T]he record reflects a mistake on the part of DEP in its issuance of the stream encroachment permit that, if left uncorrected, will cause the development to pose an unacceptable risk of increased flooding which will threaten life and property downstream of the site." The Ridge contends that since there was no evidence that the development increased the risk of flooding, the Commissioner's decision should be reversed.

The Commissioner's statement was premised on the conclusion that the permit was issued without meeting the regulatory requirements of N.J.A.C. 7:13-2.8(a)(1). The entire FHACA regulatory scheme as it existed in 2003 was intended "to minimize potential on and off site damage to public or private property caused by . . . flooding." N.J.A.C. 7:13-1.1(c) (repealed 2007). Hanson conceded that measurements at the outfall structure failed to meet the regulation's reduction standards. The argument lacks sufficient merit to warrant any further discussion in this opinion. R. 2:11-3(e)(1)(E).

In its remaining arguments, The Ridge essentially contends the Commissioner erroneously interpreted the regulation. We disagree.

"'Regulations are subject to the same rules of construction as a statute,' and 'should be construed in accordance with the plain meaning of [their] language' 'and in a manner that makes sense when read in the context of the entire regulation.'" Seigel, supra, 395 N.J. Super. at 618 (alteration in original) (quoting Medford Convalescent & Nursing Ctr. v. Div. of Med. Assistance & Health Servs., 218 N.J. Super. 1, 5 (App. Div.), certif. denied, 101 N.J. 245, 102 N.J. 385 (1985)). "In interpreting a statute courts should avoid a construction that would render any word in the statute to be inoperative, superfluous or meaningless, or to mean something other than its ordinary meaning." Ibid. (quoting Bergen Commercial Bank v. Sisler, 157 N.J. 188, 204 (1999)) (internal quotation marks omitted).

As noted above, before it was repealed, N.J.A.C. 7:13-2.8(a)(1) provided in relevant part: If no regional [storm water] management plan has been developed, any [storm water] discharge within the jurisdiction of this chapter shall be controlled so that . . .

(ii) The post-construction peak runoff rate for the two[-]year storm event is [fifty] percent of the pre-construction peak runoff rate and the post-development peak runoff rate for the [ten] and [one-hundred] storm events are seventy-five percent of the pre-project construction peak runoff rate. [Emphasis added.]

The Ridge contends that the regulation required only that the property as a whole satisfy the runoff reduction rates. Since the runoff from Areas A and B converged 1000 feet downstream from the property, the measurements were properly taken at that point. On the other hand, DEP and the Klievers assert that the phrase "any [storm water] discharge within the jurisdiction of this chapter" modifies subparagraph (ii). Since the outfall structure was admittedly the only discharge point within the jurisdiction of the flood hazard area rules, measurements were required to be taken at that point.

In our view, the Commissioner's interpretation of the plain language of the regulation was eminently reasonable, i.e., the outfall structure was the only "[storm water] discharge within the jurisdiction" of the FHACA statutory and regulatory scheme. Additionally, the FHACA's stated purpose is to enhance the "safety, health, and general welfare of the people of the State." N.J.S.A. 58:16A-50(b). One of the purposes of the rules was "to minimize potential on and off site damage to public or private property caused by development which, at times of flood, subject structures to flooding and increase flood heights and/or velocities both upstream and downstream."

N.J.A.C. 7:13-1.1(c) (repealed 2007). The potential for "on and off site damage" is not minimized when measurements to determine regulatory compliance are taken at a remote location separated from the discharge site by numerous third-party property owners.

The Commissioner's construction of the regulation is consistent with DEP's response to public comments made at the time of promulgation. See Bedford v. Riello, 392 N.J. Super. 270, 279-81 (App. Div. 2007) (using public comments and responses to elucidate the meaning of a regulation), aff'd and modified on other grounds, 195 N.J. 210 (2008). At the time the storm water management provisions of N.J.A.C. 7:13-2.8(a)(1) were amended to include the language in dispute, 27 N.J.R. 1251 (March 20, 1995), the following exchange took place:

COMMENT: N.J.A.C. 7:13-2.8(a)1 requires that the pre-project construction peak flow rate and velocity of receiving watercourse is not increased at or "downstream" of the point of discharge. The applicant has no control of points that are downstream of his or her discharge especially if there are other discharge points involved. . . . RESPONSE: The applicant does have control over the rate and volume of [storm water] that is discharged from his or her site and it is this flow which should be controlled so as not to increase flood elevations or velocities that could negatively impact other property owners downstream. Other dischargers will have to meet the same requirements. N.J.A.C. 7:13-2.8(a)1 has been revised on adoption to clarify the discharge requirements.

[27 N.J.R. 1228 (March 20, 1995) (emphasis added).]

In short, the Commissioner did not misconstrue the regulation.


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