Court: New Jersey Superior Court; September 7, 1989; New Jersey; State Appellate Court
The New Jersey Conservation Foundation and New Jersey Audubon Society appeal the adoption of regulations implementing the Freshwater Wetlands Protection Act by the Department of Environmental Protection (DEP). The appeal, argued by James P. Wyse for the appellants and Carol A. Blasi for the respondent, focuses on two specific regulations they allege are procedurally flawed and substantively inconsistent with the Act. The Freshwater Wetlands Protection Act distinguishes between three categories of wetlands: "exceptional resource value" wetlands, which support threatened or endangered species; "ordinary value" wetlands, including isolated wetlands and man-made ditches; and "intermediate resource value" wetlands, which encompass all others. Development of these wetlands requires various permits, with DEP waivers necessary for transition areas, which are adjacent lands that protect wetland integrity. The Act became effective on July 1, 1988, allowing certain grandfathered projects to proceed without new permits. While the appellants acknowledge that the majority of the regulations align with statutory definitions, they argue that significant changes in two adopted regulations necessitate new public hearings and comments, as stipulated by administrative law. The appellants also seek to recover reasonable attorneys' fees under the Environmental Rights Act, capped at $10,000.
N.J.S.A. 52:14B-4.9 mandates that any proposed rule by a State agency that revises, rescinds, or replaces a prior proposed rule is considered a new rule. N.J.A.C. 1:30-4.3 states that if substantial changes are made to a proposed rule that undermine the original notice's value, a new notice and public comment opportunity must be provided. The determination of "substantial" changes includes evaluating whether the changes alter the affected parties, modify the prescriptions or mandates, or change the rule's scope and burdens.
Appellants argue that the changes were substantial, citing Insurance Brokers Assn. of N.J. v. Sheeran, which clarifies that a new comment opportunity is not automatically generated by changes in the final rule. The court reviewed the challenges and dismissed the appellants' concerns regarding the definition of "swale" as unfounded, but found merit in their challenge to the DEP's regulation that eliminated transition areas for projects with preliminary municipal approval before July 1, 1989.
Originally, N.J.A.C. 7:7A-2.7(c) exempted projects approved before July 1, 1988 from requiring transition areas. However, after public comments, the regulation became N.J.A.C. 7:7A-2.7(f), changing the date to July 1, 1989, based on legislative provisions. DEP argued for two effective dates—one for wetland regulation and another for transition area requirements—citing legislative history. The law states that while the act takes effect one year post-enactment, transition area requirements would not be implemented until two years after enactment, allowing preparatory administrative actions prior to the act's effective date.
Appellants differentiate between "take effect" and "implement," arguing that developers with transition areas were not exempt from DEP regulations unless they received preliminary municipal approvals before specific dates outlined in N.J.S.A. 13:9B-4d. They contend that the additional year provided for implementation was intended for the DEP to finalize regulations and for developers to complete ongoing projects, not to extend the timeframe for obtaining preliminary approvals. In contrast, DEP claims that the effective and implementation dates are synonymous; if transition areas were established by July 1, 1988, but regulation could not begin until July 1, 1989, those areas would lack oversight in the interim. DEP cites N.J.S.A. 13:9B-30 to argue that the Act supersedes local regulation and that applicants in August 1988 would face uncertainty regarding construction in transition areas until after July 1, 1989. The review process acknowledges DEP’s expertise but emphasizes that regulations cannot deviate from statutory language. The law clearly outlines exemptions for projects with certain preliminary approvals, but DEP's regulation allowing approvals as late as July 1, 1989 exceeds statutory provisions. This interpretation contradicts legislative intent and historical context, as articulated in the Governor's executive order addressing environmental concerns related to wetland development. Additionally, while municipal plans for managing runoff are required, they may not fully consider the impact on adjacent wetlands, potentially undermining environmental protections.
Transition area regulations proposed by the Department of Environmental Protection (DEP) address various activities adjacent to wetlands, including excavation, dumping, construction, paving, and destruction of plant life. Notably, the construction of stormwater management facilities and linear development is specifically regulated. The DEP will assess the required distance from wetlands of exceptional resource value using a matrix based on "development intensity," defined as the percentage of impervious surfaces in a project.
If N.J.A.C. 7:7A-2.7(f) remains effective, developers granted municipal approval in 1988 would not need to comply with these environmental standards, regardless of their construction status or proximity to sensitive wetlands. Upon the regulations' implementation on July 1, 1989, projects would be subjected to both state and municipal regulations, but preliminary municipal approval would not exempt owners from future legislative changes.
Appellants, successful on appeal, seek up to $10,000 in attorney's fees under the Environmental Rights Act, claiming their action aimed to restrain violations of environmental statutes. The Act ensures citizens can access courts to address environmental abuses. However, appellants did not pursue enforcement of a law or restrain violations, focusing instead on appealing the adoption of regulations effective June 6, 1988. The court clarified that the Act primarily concerns citizens' relationships with polluters, indicating that appellants' challenge to DEP's wetlands regulations does not qualify as an action against polluters, as such a ruling could improperly allow public financing for all challenges to DEP regulations.
N.J.A.C. 7:7A-2.7(f) is invalidated as ultra vires, while other regulations under appeal are upheld. The application for counsel fees by the appellants is denied. Judge Skillman concurs in part and dissents in part, agreeing with the majority that modifications to the Department of Environmental Protection's (DEP) regulations under the Freshwater Wetlands Protection Act (N.J.S.A. 13:9B-1 et seq.) regarding "swale" definitions and "transition area" effective dates were not so substantial as to necessitate a new public notice. He also concurs that the "swale" definition aligns with N.J.S.A. 13:9B-7b. However, he disagrees with the majority's view that the transition area regulations should apply retroactively to projects approved before their adoption, leading to his dissent regarding the invalidation of N.J.A.C. 7:7A-2.7(f).
The Freshwater Wetlands Protection Act imposes strict regulations on activities in freshwater wetlands, defining a "transition area" as land adjacent to wetlands that minimizes adverse impacts and supports the wetlands ecosystem (N.J.S.A. 13:9B-3). Transition areas are essential for providing wildlife refuge, habitat, and controlling sediment and stormwater. They must be maintained adjacent to wetlands of exceptional or intermediate resource value (N.J.S.A. 13:9B-7). While the Act does not specify transition area parameters, it assigns this duty to the DEP, which must establish maximum and minimum widths (N.J.S.A. 13:9B-16b; N.J.S.A. 13:9B-17c). Certain activities, such as erecting structures or disturbing soil, are prohibited in transition areas, though DEP may grant waivers under specific conditions (N.J.S.A. 13:9B-18).
The legislative history reveals that the Act evolved from two Assembly Bills, with one proposing regulation of both wetlands and buffer zones, while the other focused solely on wetlands without adjoining areas and delayed implementation until federal permit jurisdiction was secured.
The Assembly Energy and Natural Resources Committee approved a substitute for two bills after extensive public hearings. This substitute maintained provisions for wetlands buffer zones from A-2342, renaming them "transition areas" and limiting their width to a maximum of 150 feet for wetlands of "exceptional resource value" and 50 feet for those of "intermediate resource value." It also included a provision from A-2499 stating that the Act would not become effective until the State obtained authorization to assume the wetlands permit jurisdiction from the Army Corps of Engineers. Subsequently, the Senate Energy and Environment Committee created its own substitute, which was passed and signed into law. While it kept most provisions regarding transition areas, it modified the effective date: the Act would take effect one year after enactment, except specific sections would take effect immediately, and the transition area requirements would be implemented two years post-enactment. The Senate committee clarified that the freshwater wetlands regulatory program would be phased in over two years, emphasizing the transition area requirements’ delay. Commentary noted the Act represents a "delicate compromise" between environmentalists and developers. Despite the Senate committee's clear intent, the majority interpretation concluded that the transition area requirements applied to projects approved after July 1, 1988, arguing that "implement" and "take effect" must signify different actions. It highlighted the imprecision of statutory language arising from legislative negotiations.
The language differences in section 34 suggest that the transition area requirements were intended to remain inactive until the Department of Environmental Protection (DEP) established implementing regulations, while other sections of the Act could take effect independently. Even if one assumes "implement" and "take effect" have different meanings, the interpretation of "implement" in section 34 is not straightforward. Statutory interpretation should focus on the legislation's overarching objectives and common sense, rather than strict literal meanings. The majority's view does not provide a reasonable explanation for the Legislature's decision to declare the transition area provisions "effective" on July 1, 1988, while deferring DEP's implementation until July 1, 1989. N.J.S.A. 13:9B-16 grants DEP authority to define transition area boundaries, making it unclear from the Act whether specific properties fall within those areas. Consequently, the majority acknowledges that the transition area sections did not become operative until DEP's regulations were adopted, implying that these regulations retroactively apply to development projects approved between July 1, 1988, and July 1, 1989. However, as established in case law, administrative regulations are typically viewed as legislative in nature and are generally prospective, not retroactive. The Supreme Court has noted that a key characteristic of administrative regulations is their prospective effect. Regulations usually do not apply retroactively, as individuals subject to such regulations deserve clear guidance before potential penalties are enforced based on post-hoc interpretations of the public interest. Therefore, it is unlikely that the Legislature intended for the initial regulations governing wetlands to retroactively impact projects approved prior to their adoption.
Regulations concerning transition areas have significant implications for property owners with development approvals between July 1, 1988, and July 1, 1989, who could not foresee the DEP's designations. Many approved plans may involve developments now categorized as transition areas. Key legal questions arise regarding whether property owners must demolish structures in these areas without a DEP waiver or if completed constructions are exempt from transition area requirements. Additionally, property owners who began but did not finish construction before the cut-off date may face uncertainty about compliance with these requirements and whether to halt work to seek waivers or litigate their rights.
N.J.S.A. 13:9B-4 provides complete exemptions from permit requirements, while section 34 outlines a phased implementation of regulations, including transition area requirements. Property owners who obtained site plan or subdivision approvals after June 8, 1987, and before July 1, 1988, are not exempt under N.J.S.A. 13:9B-4d(1) and (2) and must apply for a wetlands permit, although projects with local approval before the effective date of transition area requirements are exempt from these specific regulations. The interpretation of "effective date" should refer to July 1, 1989, aligning with the transition area requirements' implementation.
In resolving any ambiguity regarding the retroactive application of these regulations, it is prudent to favor the DEP's position that they apply only prospectively. Courts typically accord significant deference to an agency’s interpretation of statutes it enforces, and given the DEP's responsibility to manage waiver applications from affected property owners, this principle of judicial deference is particularly relevant in this context.
The court reiterates its previous ruling that the Wetlands Act of 1970's provisions on tidal and coastal wetlands only became effective after implementation by the Department of Environmental Protection (DEP). This is supported by the complexities in defining "coastal wetlands" and the administrative challenges in classifying wetlands, necessitating prior mapping and regulatory orders for enforcement. The appeal regarding regulations on endangered species habitats has been withdrawn.
Different classifications of waters are identified: "FW-1" refers to wildlife waters not exposed to human wastewater, while "FW-2, TP" pertains to freshwaters that support trout spawning. Challenges to DEP's regulations concerning these waters are addressed in a separate appeal. The DEP's dismissal of appellants' references to historical notes as lacking legal effect is characterized as misleading. At oral arguments, DEP could not identify any local regulations that would be superseded.
Legislative intent appears to discourage a rush for municipal approvals to secure permanent exemptions for future developments, highlighted by public commentary on impending regulatory limitations. An Executive Order from June 1987 tasked the DEP with establishing criteria for freshwater wetland buffer areas and regulating development within these zones, alongside mapping potential impacted wetlands.
The court acknowledges that while developers can be restrained from harming wetlands, this does not replace the DEP's authority to mandate adjustments to development plans to minimize environmental impact. The appellants did not initially invoke the Environmental Rights Act, which was only mentioned in their appellate brief, and failed to notify the Attorney General as required. The court does not need to address this claim further. Additionally, the author joins the majority in a related appeal concerning the Freshwater Wetlands Protection Act regulations.
