Woodland Utility Co. v. Department of Environmental Protection
Court: New Jersey Superior Court Appellate Division; March 1, 1979; New Jersey; State Appellate Court
King, J. A. D. delivered the court's opinion regarding an appeal by a utility company seeking sewerage services for a senior citizens’ development involving 5,000 units. The company contested the revocation of a "conceptual approval" for sewer construction previously granted by the Division of Water Resources (DWR) under the Department of Environmental Protection (DEP). The project is situated entirely within the drainage area of the South Branch Rancocas Creek in the Central Pine Barrens.
In December 1973, the utility company applied to the DWR for preliminary approval of its wastewater treatment facilities, which was governed by N. J. A. C. 7:9.1.7. After discussions and field investigations, the DEP granted "conceptual approval" for a 300,000 gallons per day (gpd) waste treatment facility in November 1974, subject to five conditions. However, the company did not pursue final construction approval from 1974 until September 1977, largely due to zoning litigation affecting the housing project, which concluded with the New Jersey Supreme Court’s decision in Shepard v. Woodland Tp. Comm. and Planning Bd. on September 28, 1976.
On September 23, 1977, the DEP declared the prior conceptual approval "null and void" for two reasons: a significant delay with no further plans or communications from the company, and the introduction of upgraded environmental standards following the Water Pollution Control Act of 1977. The DEP's new regulations designated the South Branch Rancocas Creek as part of the critically designated Central Pine Barrens, emphasizing that any activities causing degradation to water quality would not be approved. While the DEP’s new regulations allowed some pollution, it was unclear whether the anticipated pollution levels from the conceptual approval would exceed permissible limits under these standards. The utility company did not assert that its project complied with the new regulations, and during oral arguments, its counsel could not confirm whether the project could be constructed per the updated standards. On October 3, 1977, the company submitted an application for final approval based on the original conceptual approval, which the DEP rejected, returning the application and fees.
On October 19, the appellant’s attorney informed the Department of Environmental Protection (DEP) of the intention to request a hearing regarding the revocation of a conceptual approval for a sewage plant. After unsuccessful negotiations, a formal demand for a hearing was made on February 22, 1978. The DEP denied this request on March 10, 1978, citing that there is no right to an administrative hearing on the denial or revocation of a conceptual approval as per the new 1977 regulations. The appellant argues that due process and the Administrative Procedure Act necessitate a hearing, although they do not challenge the validity of the 1977 regulations.
The relevant DEP regulations allow for the revocation of approvals for various causes, including violations of approval terms or misrepresentation. However, there is no statutory or regulatory requirement for a hearing in such cases. The appellant claims a vested right to proceed with construction based on a 1974 approval, but the court disagrees, noting that no final construction approval was obtained before the regulations were updated and no construction had commenced prior to revocation. The appellant's reliance on planning costs and legal expenses was deemed insufficient to establish a property right requiring a hearing.
The court concluded that granting greater rights to conceptual approvals than those afforded to construction approvals would be illogical, given that approvals to build expire if construction does not begin within two years. The court found no basis for a hearing based on the alleged delay, as the facts did not support an open-ended vested right to conceptual approval that would circumvent upgraded ecological standards. Furthermore, the Administrative Procedure Act does not create a substantive right to a hearing. Ultimately, the court affirmed the DEP's denial of the hearing, concluding that it did not violate the appellant's constitutional, statutory, or regulatory rights.
