Evesham Municipal Utilities Authority v. New Jersey Department of Environmental Protection
Court: New Jersey Superior Court Appellate Division; April 18, 1989; New Jersey; State Appellate Court
The court opinion delivered by King, P.J.A.D., addresses an appeal regarding an October 24, 1986 administrative order from the Department of Environmental Protection (DEP) that established Water Supply Critical Area No. 2. This area includes most of Camden, Burlington, and Gloucester Counties, as well as parts of five neighboring counties. The DEP's order was issued under the Water Supply Management Act of 1981 and aims to mitigate threats to the Potomac-Raritan-Magothy (PRM) Aquifer System caused by excessive water use, salt-water intrusion, and industrial discharges.
The Critical Area is divided into two zones: an inner depleted area, where water purveyors must reduce pumping from the PRM Aquifer by 35% from 1983 levels, and an outer marginal area, where water usage is capped at 1983 levels. Additional withdrawals are generally prohibited unless users have alternative supply plans in place. DEP finalized the implementation procedures on October 31, 1986, and later issued a corrected version in December 1986, maintaining that mandatory reductions in groundwater withdrawals would not take effect until alternative sources were operational.
Affected users are required to develop an Alternative Water Supply Plan within fourteen months, ensuring contracts for alternative water sources or construction are established. Evesham Municipal Utility Authority (EMUA) appealed the order, and several entities, including Mt. Laurel Township Municipal Utilities Authority and Maple Shade Township, intervened. Oral arguments were heard on October 18, 1987, resulting in the denial of EMUA's motion for summary disposition and DEP's motion to dismiss. The court consolidated EMUA's appeal with a related appeal from Willingboro Municipal Utilities Authority. The appellants and an amicus curiae, the Builders’ League of South Jersey, argue that the DEP's severe cutbacks conflict with regional population growth and question the legal authority of the order, while DEP asserts that the cutbacks are necessary and within its statutory power.
The power of courts to review agency actions is limited, as administrative agencies operate within the executive branch, executing powers granted by legislative statutes. The administrative process integrates elements of law-making, enforcement, and interpretation, creating a "concentration of powers." Agencies are tasked with formulating policy, investigating, and adjudicating disputes, which allows them to develop expertise and in-depth knowledge in their specific fields. While political oversight is necessary, many theorists advocate for the day-to-day functions of administration to be managed by objective professionals.
In judicial reviews of administrative actions, courts recognize their role is constrained. The Supreme Court has delineated three key inquiries for reviewing agency actions: 1) whether the action aligns with legislative policies, 2) whether substantial evidence supports the agency's findings, and 3) whether the agency made a reasonable conclusion based on the relevant factors. A court may only reverse an agency's decision if it is found to be arbitrary, capricious, or unsupported by substantial credible evidence.
In this context, it was determined that the Water Supply Management Act of 1981 does not grant the Department of Environmental Protection (DEP) the authority to mandate reductions in water diversions without a declared state of emergency by the Governor. Consequently, DEP's directive from August 24, 1986, requiring reductions to specific levels, was deemed beyond its authority and thus invalid.
The Act authorizes the Commissioner of the Department of Environmental Protection (DEP) to mandate reductions in water use or distribution during a declared state of water emergency, contingent upon an executive order from the Governor. The Governor may declare such an emergency if a water supply shortage threatens public health, safety, or welfare, and can specify the affected water supplies or areas. There is no time limit imposed on the state of emergency; it remains in effect until terminated by the Governor.
In the current case, the DEP did not seek a gubernatorial declaration of emergency, issuing an order instead under specific Water Supply Management Act Rules related to water supply critical areas. These rules allow DEP to limit water withdrawals in such areas but were deemed invalid as they were enacted without the necessary statutory authority. The Water Supply Management Act aims to create a comprehensive regulatory framework for managing the state's water resources, including a uniform permit system and provisions for emergency planning.
The Act permits DEP to limit existing water diversion permits but only to the level currently exercised or to meet demonstrated future needs, following due process. Any reductions in diversion privileges must not fall below the quantities being diverted at the time of the order unless there is a declared emergency.
N.J.S.A. 58:1A-6 and 1A-7 do not explicitly prohibit a reduction in currently permitted water diversion, but such a prohibition is implied by the exceptions to the statute requiring the Department of Environmental Protection (DEP) to renew diversion permits. The DEP's authority to mandate a reduction in water usage is confined to situations where the Governor has declared a state of water emergency, as outlined in N.J.S.A. 58:1A-4. In such emergencies, the Commissioner can order reductions or reallocations of water supplies to protect public health and safety. The statute mandates that the Commissioner can only limit water usage to what is currently exercised or reasonably needed for future requirements, without the Governor's emergency proclamation. Legislative history supports the interpretation that the DEP does not possess discretionary power to reduce diversion permits outside of an emergency context.
Senate Bill S-1611, introduced on November 24, 1980, by Senator Dodd, initially granted the Department of Environmental Protection (DEP) extensive powers over water use and diversion, allowing it to impose limits and conditions on water diversion privileges broadly. The original bill stated that DEP could reduce diversion privileges as deemed necessary to fulfill the Act's purposes, without imposing additional restrictions. However, the adopted Act significantly narrowed these powers, permitting reductions in diversion only during emergencies declared by the Governor. This change indicates a clear legislative intent to limit DEP's discretion.
The sponsor's statement for the original bill highlighted the need for a comprehensive water supply management program to address issues like water shortages and contamination, proposing a system for permits, monitoring, and emergency planning. In contrast, the statement accompanying the adopted bill shifted focus to the Governor's emergency powers and the rights of diverters to retain previous privileges, reflecting a dilution of DEP's original authority. The comparison between these statements underscores the legislative intent to restrict the DEP's power compared to what was initially proposed.
The Statement to the Senate Energy and Environment Committee details the evolution of Senate Bills No. 1611 and 1613, which culminated in the Water Supply Act of 1981. Senate Bill No. 1611 aimed to reform the Department of Environmental Protection's authority regarding water diversion, while Senate Bill No. 1613 aimed to bring public water companies under the rate-making jurisdiction of the Board of Public Utilities. Following public hearings, the committee replaced the provisions of Senate Bill No. 1613 and made significant revisions to Senate Bill No. 1611, including:
1. Shifting oversight of public water company budgets to the Division of Local Government Services, ensuring adequate funding for necessary improvements.
2. Allowing the Governor to declare a water supply emergency in certain areas.
3. Granting the Department of Environmental Protection specific powers during emergencies, including the adoption of an Emergency Water Supply Allocation Plan.
4. Incorporating due process and compensation measures regarding the department's powers.
5. Increasing the threshold for diversion permits from 10,000 to 100,000 gallons per day.
6. Offering current diversion privilege holders a chance to register their rights and retain existing diversion amounts.
7. Establishing a 5-year water usage certification program for farmers instead of requiring diversion permits.
8. Mandating the creation and periodic revision of a New Jersey Statewide Water Supply Plan.
9. Forming a Water Supply Advisory Council to oversee the Water Supply Plan and related programs.
These revisions limited the Department of Environmental Protection’s authority to mandate reductions in water use, leading to the conclusion that an order from October 24, 1986, compelling reductions was invalid due to lack of legislative authority and absence of an executive proclamation. Consequently, the appeal was reversed, affirming the limitations on the DEP's power to order reductions without such a proclamation.
