Opinion
DOCKET NO. A-5818-10T2
02-19-2013
INTELLECT REAL ESTATE DEVELOPMENT, Petitioner-Appellant, v. NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION, DIVISION OF LAND USE REGULATION, Respondent-Respondent.
A. Michael Rubin argued the cause for appellant. Jill Denyes, Deputy Attorney General, argued the cause for respondent (Jeffrey S. Chiesa, Attorney General, attorney; Lewis A. Scheindlin, Assistant Attorney General, of counsel; Ms. Denyes, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Messano and Ostrer.
On appeal from the New Jersey Department of Environmental Protection, 1601-02-001.1.
A. Michael Rubin argued the cause for appellant.
Jill Denyes, Deputy Attorney General, argued the cause for respondent (Jeffrey S. Chiesa, Attorney General, attorney; Lewis A. Scheindlin, Assistant Attorney General, of counsel; Ms. Denyes, on the brief). PER CURIAM
Intellect Real Estate Development (Intellect) appeals from the July 14, 2011, final administrative decision of the Department of Environmental Protection (DEP). DEP adopted the initial decision of the administrative law judge (ALJ), that concluded Intellect's appeal from DEP's cancellation of its application for a freshwater wetlands permit and transition area waiver (FWP) was moot, because Intellect's application was not exempt from the requirements of the Highlands Water Protection and Planning Act (the Act), N.J.S.A. 13:20-1 to -35.
After consideration of the issues presented in light of the record and applicable legal standards, we affirm in part, reverse in part and remand the matter for further proceedings consistent with this opinion.
I.
The facts and procedural history are largely undisputed. Intellect is the contract purchaser and prospective developer of Block 4, Lot 4 (the property), in Bloomingdale Borough (Bloomingdale), Passaic County. The nature of the property and the intended development required Intellect to submit applications to both DEP and the Bloomingdale Board of Adjustment (the Board).
Municipal Approvals
On June 21, 2002, Intellect filed an application for preliminary site plan approval and a use variance with the Board. The application was bifurcated, and, after conducting ten hearings, the Board granted the use variance on October 23, 2003. On September 14, 2004, Bloomingdale's Municipal Council (the Council) reversed the Board's decision. Intellect appealed. Based upon violations of the Open Public Meetings Act, N.J.S.A. 10:4-6 to -21, the Law Division vacated the Council's action and remanded the matter to the Council. (Pa120). Intellect appealed, arguing the Law Division should have reinstated the grant of the use variance without remand. We affirmed the Law Division's order. See Intellect Real Estate Dev. v. Bloomingdale, No. A-0265-05 (App. Div. Nov. 14, 2006), certif. denied, 189 N.J. 650 (2007).
The initial development plan was for ten residential units but was reduced in May 2003 to eight units.
On April 10, 2007, based upon Intellect's decision to "no longer . . . seek[] an eight lot subdivision" and use variance, but, rather, submit a development plan for five lots, the Council approved a resolution terminating any further remand proceeding or appeal. Intellect then submitted an application for preliminary subdivision and site plan approval for five residential units with the Board. On November 13, 2008, the Board adopted a resolution memorializing approval of the modified development plan, noting that, because the property was "located in the Highlands Preservation Area," the approval was "expressly subject to and conditioned upon approval . . . by the Highlands Council."
DEP Approval Process
Seeking a determination as to the nature and extent of designated wetlands and wetlands transition areas on the property, in April 2002, Intellect requested a letter of interpretation (LOI) from DEP's Land Use Regulation Program (LURP). However, before receiving the LOI, on June 28, 2002, Intellect submitted its application for an FWP. In September 2002, Intellect's environmental consultant, Linda Gloshinski, contacted LURP supervisor Diane Dow "and requested that the [permit] application be put on hold to allow [Intellect] time to work with [Bloomingdale] because local approvals had been denied." Dow, in turn, notified Gloshinski that "the project did not meet DEP's water quality standards."
On November 1, 2002, LURP issued the LOI, finding that "the wetlands on the subject property [were] of exceptional resource value." After Intellect's request for reconsideration, on January 27, 2003, LURP modified its classification, determining the wetlands to be of "intermediate and exceptional resource values." Intellect revised its development plans and submitted them to LURP on November 18, 2003.
On February 2, 2004, DEP adopted new stormwater management regulations. In March, Dow notified Gloshinski that, although Intellect's application remained on hold, its water quality calculations no longer conformed to the new regulations. Intellect submitted revisions, and, in late July 2004, LURP's staff reviewer notified Intellect that the revised plans "[met] stormwater rules" and were ready for approval once Intellect submitted "signed and sealed" copies of the plans. Intellect submitted those plans on July 30, making its application for a permit "complete and . . . ready for final review." At around the same time, Intellect performed some site preparation on the property, drilling a well and constructing an access road.
On August 10, 2004, the Act became effective. On October 12, Dow sent Intellect a letter explaining that, "[b]ased upon [DEP's] preliminary review[,]" the new law would affect the "pending permit application." Dow gave Intellect two options: resubmit the application "in accordance with the environmental standards contained in the new law"; or, submit written documentation that the "proposed activity is exempt under the new law."
In response, on January 24, 2005, Intellect's new consultant, Connolly Environmental, Inc. (Connolly), advised LURP that Intellect would not withdraw its permit and waiver application. Additional correspondence was exchanged during the ensuing months, and, on August 1, 2006, LURP notified Intellect that its permit application was cancelled. Intellect requested a hearing to contest the cancellation, and the matter was transferred to the Office of Administrative Law.
In May 2010, both parties filed cross motions seeking summary decision of the dispute by the ALJ. Intellect argued that DEP lacked authority to cancel its application; DEP "deliberately and unreasonably" delayed its approval; and Intellect had acquired "vested rights" based upon LURP's approval of the plans and Intellect's subsequent site preparation done in reliance thereon.
DEP argued that the Act "changed the type of approvals required" for Intellect's development, making the "pending application . . . no longer valid," and cancellation was appropriate. DEP also argued that it did not "inappropriately delay[] its review" because any delay was attributable to Intellect's request to put the application "on hold" while it worked with Bloomingdale. Lastly, DEP contended the matter was moot because, "regardless of the outcome, [Intellect] will be required to obtain a Highlands-specific approval for its proposed development."
In its reply to Intellect's motion, DEP also argued that, because Intellect had not received municipal approval prior to March 29, 2004, it was not exempt from the requirements of the Act. In its reply to DEP's motion, Intellect challenged several of the alleged facts regarding its contacts with DEP, including the claim that any delays were Intellect's fault.
In a written decision dated March 1, 2011, the ALJ granted DEP's motion for summary decision. He concluded:
The Legislature intended that to be exempt from the Highlands Act . . . , major Highlands developments . . . must have received certain municipal approvals prior to March 29, 2004, regardless of what DEP approvals were applicable to the development. As such, [Intellect's] Development is not exempt from the regulations imposed by the Highlands Act, and no effective relief can be granted.On July 14, the Commissioner of DEP adopted the ALJ's initial decision, concluding
[T]he matter [was] moot because . . . even if [DEP] was required to grant the permit application, [Intellect]'s failure to have also obtained municipal approval for the development prior to March 29, 2004, would make issuance of the permit meaningless, as [Intellect] would have still failed to meet the requirements of the Highlands Act for purposes of project approval.This appeal followed.
II.
Intellect argues DEP misconstrued those provisions of the Act that "grandfathered" certain developments and exempted them from the Act's restrictions and regulatory requirements. Pursuant to the statutory construction it urges, Intellect was eligible for an exemption under the Act because its FWP application was timely-made and should have been approved before March 29, 2004, the date used in the Act to accord "grandfathered" status. Therefore, Intellect argues DEP erred by not deciding the merits of its appeal.
DEP contends that Intellect was not entitled to an exemption under the Act because it failed to obtain municipal approvals prior to March 29, 2004. As a result, it did not matter whether the FWP application was properly cancelled because Intellect was required to submit its application for review under the processes DEP adopted after passage of the Act. DEP argues, therefore, that the dispute was moot.
Generally, the scope of our review of administrative agency action "is narrow," and we "will not upset a determination by [an administrative agency] in the absence of a showing that it was arbitrary, capricious or unreasonable, or that it lacked fair support in the evidence, or that it violated legislative policies expressed or implicit in the [enabling legislation]." Aqua Beach Condo. Ass'n v. Dept. of Cmty. Affairs, 186 N.J. 5, 15-16 (2006). "Because the grant of authority to an administrative agency is to be liberally construed to enable the agency to accomplish the Legislature's goals," we generally defer to the agency's statutory interpretation. In re Public Serv. Elec. & Gas Co.'s Rate Unbundling, 167 N.J. 377, 384 (2001) (internal quotation, citation and alteration omitted). However, as the Court recently stated,
because questions of law are the province of the judicial branch, [the appellate court is] in no way bound by an agency's interpretation of a statute or its determination of a strictly legal issue, particularly when that interpretation is inaccurate or contrary to legislative objectives. Like all matters of law, we apply de novo review to an agency's interpretation of a statute or case law.We have said that any exemption from a comprehensive legislative "policy designed to protect environmental interests" must be "strictly construed." M. Alfieri Co. v. N.J. Dep't of Envtl. Prot. & Energy, 269 N.J. Super. 545, 554 (App. Div. 1994), aff'd o.b., 138 N.J. 642 (1995). We now turn to the relevant statutory provisions.
[Russo v. Bd. of Trs., Police and Firemen's Ret. Sys., 206 N.J. 14, 27 (2011) (internal quotation marks and citations omitted).]
The stated purpose of the Act was to set "forth a comprehensive approach to the protection of the water and other natural resources of the New Jersey Highlands" through adoption of "stringent water and natural resource protection standards, policies, planning, and regulation," as well as "stringent standards governing major development" in the preservation area. N.J.S.A. 13:20-2. The Act "established a state agency, called the Highlands Water Protection and Planning Council . . . , N.J.S.A. 13:20-4, which was delegated responsibility for land use planning in the Highlands Region, consisting of nearly 800,000 acres in eighty-eight municipalities located in parts of Morris, Sussex, Passaic, Bergen, Warren, Hunterdon and Somerset Counties, N.J.S.A. 13:20-7(a)." OFP, L.L.C. v. State, 395 N.J. Super. 571, 576 (App. Div. 2007), aff'd o.b., 197 N.J. 418 (2008).
N.J.S.A. 13:20-28a provides exemptions "from the provisions of th[e] act, the regional master plan, [and] any rules or regulations adopted by [DEP] . . . ." Subsection (3) "grandfathered" certain developments by providing an exemption to:
[A] major Highlands development that received on or before March 29, 2004:
(a) one of the following approvals pursuant to the "Municipal Land Use Law," . . . :
(i) preliminary or final site plan approval;(b) at least one of the following permits from [DEP], if applicable to the proposed major Highlands development:
(ii) final municipal building or construction permit;
(iii) minor subdivision approval where no subsequent site plan approval is required;
(iv) final subdivision approval where no subsequent site plan approval is required; or
(v) preliminary subdivision approval where no subsequent site plan approval is required; and
(i) a permit or certification pursuant to the "Water Supply Management Act," . . . ;
(ii) a water extension permit or other approval or authorization pursuant to the "Safe Drinking Water Act," . . . ;
(iii) a certification or other approval or authorization issued pursuant to the "The Realty Improvement Sewerage and Facilities Act (1954)," . . . ; or
(iv) a treatment works approval pursuant to the "Water Pollution Control Act," . . . ; or(c) one of the following permits from [DEP], if applicable to the proposed major Highlands development, and if the proposed major Highlands development does not require one of the permits listed in . . . subparagraph (b) of this paragraph:
(i) a permit or other approval or authorization issued pursuant to the "Freshwater Wetlands Protection Act," [FWPA] . . . ; or[N.J.S.A. 13:20-28a(3) (emphasis added).]
(ii) a permit or other approval or authorization issued pursuant to the "Flood Hazard Area Control Act," . . . .
"'Major Highlands development' means . . . any residential development in the preservation area that requires an environmental land use or water permit or that results in the ultimate disturbance of one acre or more of land or a cumulative increase in impervious surface by one-quarter acre or more . . . ." N.J.S.A. 13:20-3. It is apparently undisputed that Intellect's was a major Highlands development.
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Intellect argued before the ALJ, as it does before us, that it was exempt from the Act if its application for an FWP was approved prior to March 29, 2004, regardless of whether it received municipal approvals before that date. Under Intellect's construction of the Act, an applicant is entitled to an exemption if it satisfied both subsections (a) and (b), or if it satisfied subsection (c).
DEP contends that in order to be exempt, an applicant must satisfy subsection (a), and satisfy either subsection (b) or subsection (c), if applicable. Since it is undisputed that Intellect did not receive the necessary municipal approvals prior to March 29, 2004, Intellect was not exempt from the Act's requirements. We agree with DEP.
The regulations promulgated by DEP reflect this construction of the Act. N.J.A.C. 7:38-2.3(a)(3) provides an exemption for:
[A] major Highlands development that received the following municipal and State approvals on or before March 29, 2004:DEP has construed the requirements for the exemption in this manner since at least December 2005, when it proposed re-adoption of the regulation. See 37 N.J.R. 4767(a) (Dec. 19, 2005) ("N.J.A.C. 7:38-2.3(a)3 exempts development based upon receipt of a combination of local and State approvals.") (emphasis added). Therefore, Intellect should have known when it reached agreement with the Council to submit a new application for development and terminate all remands and appeals that DEP would not exempt any development from the Act's requirements unless municipal approvals were secured prior to March 29, 2004.
i. One of the following approvals issued pursuant to the Municipal Land Use Law, N.J.S.A. 40:55D-1 et seq.:ii. At least one of the following Department permits, if applicable to the proposed project:
(1) Preliminary or final site plan approval;
(2) Final municipal building or construction permit;
(3) Minor subdivision approval where no subsequent site plan approval is required; or
(4) Preliminary or final subdivision approval where no subsequent site plan approval is required; and
(1) A permit or certification pursuant to the Water Supply Management Act, N.J.S.A. 58:1A-1 et seq.;
(2) A water extension permit or other approval or authorization pursuant to the Safe Drinking
Water Act, N.J.S.A. 58:12A-1 et seq.;iii. If none of the Department permits in (a)3ii above are required for the proposed project, one of the following Department permits, if applicable to the proposed project, shall be required, in addition to an approval under (a)3i above:
(3) A certification or other approval or authorization issued pursuant to The Realty Improvement Sewerage and Facilities Act (1954), N.J.S.A. 58:11-23 et seq.; or
(4) A treatment works approval pursuant to the Water Pollution Control Act, N.J.S.A. 58:10A-1 et seq.
(1) A permit or other approval or authorization issued pursuant to the [FWPA]; or[(Emphasis added).]
(2) A permit or other approval or authorization issued pursuant to the Flood Hazard Area Control Act, N.J.S.A. 58:16A-50 et seq.
Although the issue was not squarely before us in either case, we recognized in two published opinions that, in order to qualify for a "grandfathered" exemption, a development must have received a municipal approval under N.J.S.A. 13:20-28a(3)(a) and a DEP approval under either N.J.S.A. 13:20-28a(3)(b) or (c) if applicable, prior to March 29, 2004. In Lakeside Manor v. State Dept. of Envtl. Prot., 421 N.J. Super. 362, 364 (App. Div. 2011), we said that the Act "contains a number of exemptions from its regulatory provisions, including one for any major Highlands development project that received one of a specified list of municipal land use approvals under the Municipal Land Use Law . . . and at least one of a specified list of permits issued by the [DEP] before March 29, 2004." (Emphasis added). In OFP, supra, 395 N.J. Super. at 590-91, we said "N.J.S.A. 13:20-28[a](3) provides an exemption from the . . . Act for any major development project that received the land use and environmental approvals specified therein on or before March 29, 2004 . . . ." (Emphasis added).
N.J.S.A. 13:20-28a(3)(b) requires that the applicant secure DEP permits in the stated categories, if applicable, and, if those permits were not required, then, under subsection (c), the applicant must secure one of those two listed permits, but only if they were applicable. Thus, if none of the listed DEP permits applied, the applicant would be eligible for an exemption only if the municipal approvals had been secured prior to March 29, 2004.
A developer who secures municipal approval of its project is inured with "important vested rights" under the Municipal Land Use Law. MCG Assocs. v. Dep't. of Envtl. Prot., 278 N.J. Super. 108, 127 (App. Div. 1994). In our minds, N.J.S.A. 13:20-28a(3) reflects recognition of this fact, and the extensive, and sometimes expensive, efforts that may have accompanied securing such municipal approvals. It follows that the Legislature intended only projects that received municipal approvals before March 29, 2004, to be eligible for "grandfathering" under the Act. This is the only logical construction of the plain language of the Act, and the only interpretation that serves both the broad purposes of the Act and the narrow focus of the exemption. We therefore affirm DEP's decision that Intellect was not exempt from the Act's requirements.
The only remaining issue is whether our conclusion renders moot Intellect's challenge to the cancellation of its FWP application. "An issue is moot when the decision sought in a matter, when rendered, can have no practical effect on the existing controversy." Greenfield v. New Jersey Dep't of Corr., 382 N.J. Super. 254, 257-58 (App. Div. 2006) (internal quotation marks omitted). Administrative action addressing only some of an applicant's requested relief may not moot the other issues in dispute. Hosp. Ctr. at Orange v. Guhl, 331 N.J. Super. 322, 331 (App. Div. 2000).
At oral argument before us, the Deputy Attorney General representing DEP conceded that securing a FWP might benefit Intellect, even if its development were subject to the Act. Although neither side briefed the issue in any detail, our cursory review of DEP's regulations demonstrate several cross-references between the two statutory and regulatory schemes, although we cannot tell, on the record presented, whether those cross-references are relevant or significant in this case.
For example, N.J.S.A. 13:20-33a provides that the Act's "permitting review program . . . provide for the coordinated review of any major Highlands development . . . based upon the rules and regulations adopted by the department" and the review program "shall consolidate the related aspects of other regulatory programs which may include . . . the "[FWPA]"[.] See also N.J.A.C. 7:38-8.1 (requiring that, in order to secure a Highlands Preservation Area Approval (HPAA), the applicant must demonstrate compliance with the FWPA). When an applicant seeks "a footprint of disturbance [Highlands Resource Area Determination]," it may submit "a currently valid approved Freshwater Wetlands [LOI]" in lieu of any "proposed delineation of . . . Highlands open waters." N.J.A.C. 7:38-9.4(c)1; and see N.J.A.C. 7:38-9.5(a)5 (permitting submission of a current, validly-approved LOI for other purposes in the HPAA process).
As noted, we cannot decide whether, under the facts presented in this case, Intellect could have benefited from a hearing on the merits of its argument that cancellation of its FWP application was improper. Given the scaled-back version of the development, whatever Intellect previously submitted to DEP may be irrelevant.
However, we take the Deputy Attorney General at her word. If Intellect may benefit from a favorable decision on its FWP application, whether DEP properly cancelled the application is not a moot issue. We express no opinion on the merits of the dispute. However, under the circumstances, we are compelled to remand the matter to DEP.
Affirmed in part, reversed in part, and remanded. We do not retain jurisdiction.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION