New Jersey Supreme Court Refuses To Hear Challenge To Waiver Rule

by:  Peter J. Gallagher

The New Jersey Supreme Court has denied a request by a group of challengers to the so-called Waiver Rule (N.J.A.C. 7:1B-1.1, et seq.) — which allows the New Jersey Department of Environmental Protection (”DEP”) to waive certain environmental regulations on a case-by-case basis — to review an Appellate Division decision upholding the rule.  On behalf of amicus New Jersey Business and Industry Association, Porzio helped to defend the Waiver Rule before the Appellate Division.     

As we previously reported here, the Waiver Rule is not a blanket waiver of all regulations. Instead, a waiver will only be available when one of four criteria are met: (1) a public emergency has been formally declared; (2) conflicting rules between Federal and State agencies or between State agencies are adversely impacting a project or preventing an activity from proceeding; (3) a net environmental benefit would be achieved; and/or (4) undue hardship is being imposed by the rule requirements. N.J.A.C. 7:1B-2.1.  Moreover, the Waiver Rule identifies 13 rules and requirements that cannot be waived under any circumstances.

A group of Appellants challenged the Waiver Rule on several grounds, but the Appellate Division rejected the challenge and held that the Waiver Rule was a proper exercise of the DEP's rule-making authority.  The New Jersey Supreme Court has now refused to hear the case, which leaves intact the Appellate Division's decision. 

Appellate Division Endorses “Waiver Rule:” DEP Allowed To Waive Regulations In Limited Circumstances

  by: Peter J. Gallagher

On March 21, 2013, the Appellate Division rejected a challenge to the so-called Waiver Rule (N.J.A.C. 7:1B-1.1, et seq.), which allows the New Jersey Department of Environmental Protection (”DEP”) to waive certain environmental regulations on a case-by-case basis. On behalf of amicus New Jersey Business and Industry Association, Porzio had argued that the Waiver Rule represents a common sense and measured approach to regulation. In its decision, the Appellate Division appears to have agreed.

The history of the Waiver Rule is not long. On January 20, 2010, Governor Christie issued Executive Order No. 2, which sought to better leverage New Jersey’s “enormously valuable assets” by, among other things, “establishing ‘Common Sense Principles’ for State rules and regulations that will give this State the opportunity to energize and encourage a competitive economy to benefit businesses and ordinary citizens.” One of these “Common Sense Principles” required State agencies to “[a]dopt rules for ‘waivers’ which recognize that rules can be conflicting or unduly burdensome,” and further required these agencies to “adopt regulations that allow for waivers from the strict compliance with agency regulations,” provided that “such waivers shall not be inconsistent with the core missions of the agency.”

Although it did not identify Executive Order No. 2 as the source of its authority to do so, shortly after Governor Christie issued the Order, the DEP began developing rules and regulations designed to address the concerns regarding the impact of excessive regulation on New Jersey’s economy. The result was the Waiver Rule, which was only adopted after the DEP solicited public comments to the proposed Waiver Rule through an open public comment period, during which DEP received comments from more than 500 interested parties, and during a public hearing.

Notwithstanding its name, the Waiver Rule is not a blanket waiver of all regulations. Instead, a waiver will only be available when one of four criteria are met: (1) a public emergency has been formally declared; (2) conflicting rules between Federal and State agencies or between State agencies are adversely impacting a project or preventing an activity from proceeding; (3) a net environmental benefit would be achieved; and/or (4) undue hardship is being imposed by the rule requirements. N.J.A.C. 7:1B-2.1.  Moreover, the Waiver Rule identifies 13 rules and requirements that cannot be waived under any circumstances.

A group of Appellants, led by the American Littoral Society Association of New Jersey challenged the Waiver Rule on several grounds.  Today, the Appellate Division rejected that challenge.  First, the court held that the Waiver Rule was a proper exercise of the DEP's rule-making authority.  Specifically, the court held:

"[T]he power to promulgate a regulation implies the incidental authority to suspend or waive its application on certain limited, well-defined circumstances provided such exemption does not circumvent any legislative enactment or purpose, or federal law, is consistent with the agency's statutory core mission and objectives, is accomplished through a properly adopted regulation pursuant to the [Administrative Procedures Act], and establishes appropriate and clear standards for the exercise of agency discretion . . ."

Second, the court held that the Waiver Rule satisfied all of the caveats set forth above — it was limited in its application, was based on well-defined standards, and was not inconsistent with the DEP's core mission. 

The court did agree with Appellants that certain "guidance documents" posted by the DEP on its website in connection with the Waiver Rule were improper.  The court held that these documents went beyond “merely facilitating administrative  implementation of the rules . . . and actually, to some extent, announce[d] new substantive requirements.” As a result, they amounted to the DEP effectively announcing new rules without following the procedures set forth in the Administrative Procedures Act.  Accordingly, the “guidance” documents were struck down.  But, the court was careful to explain that this did not in any way change its conclusion that the Waiver Rule was proper.

Victory For Commercial Affordable Housing

by:  Katharine A. Muscalino

Private commercial developers have struggled to install affordable housing in New Jersey’s municipalities for decades, facing opposition from communities, local governments, and the municipal zoning boards.  The Appellate Division has just eased the burden of private developers by holding, for the first time explicitly, that affordable housing built by a commercial developer (as opposed to a non-profit or public entity) qualifies as an “inherently beneficial use” in Conifer Realty LLC v. Township of Middle Zoning Board of Adjustment (September 9, 2011).  By being categorized as an inherently beneficial use, commercial affordable housing is subject to a less stringent standard for obtaining use variance relief.  In support of this holding, the Appellate division noted that the courts have previously recognized that affordable housing is an inherently beneficial use in a “variety of circumstances” and that housing needs are “clearly related to the general welfare under the zoning laws.”

The Appellate Division found that the zoning board construed previous opinions holding that affordable housing is an inherently beneficial use too narrowly.  The board had maintained that because all existing caselaw had addressed affordable housing constructed by public of non-profit entities, a commercial developer’s affordable housing could not qualify as an inherently beneficial use.  The Court directed that in analyzing whether a proposed use is inherently beneficial, “the focus of the inquiry is whether the proposal furthers the general welfare, not whether the undertaking is one that is not-for-profit or a commercial enterprise.”

In addition to remanding the application to the Board for consideration under the less stringent inherently beneficial use standard (the Sica test), the Appellate Division found the Board’s concerns regarding the negative criteria to be arbitrary, capricious, and unreasonable.  The Appellate Division noted that the Board’s rejection of the application, base on density and environmental concerns, was contradicted by the Township’s Fair Share plan, which included the project, minimized the environmental impact, and promised to amend the zoning and density for the project.

New Jersey Department Of Environmental Protection Announces New Rules For Site Remediation

by: Thomas Spiesman 

 
On August 15, 2011, the New Jersey Department of Environmental Protection ("NJDEP") published proposed rules that represent the final step in the implementation of the 2009 Site Remediation Reform Act ("SRRA"). The SRRA completely overhauls the way environmental investigations and remediations are conducted in New Jersey and introduced the Licensed Site Remediation Professional ("LSRP") program.

The proposed final rule package completes the transformation of the site remediation process from one of NJDEP command-and-control to one that allows for decision-making to be placed in the hands of LSRPs hired on behalf of the remediating party.  LSRPs are responsible for overseeing remediations in accordance with NJDEP regulations, making the day-to-day decisions regarding the remediation of sites, and determining when a cleanup is complete.  Although the NJDEP maintains oversight of remediations and reviews documents submitted by responsible parties and their LSRPs, the responsible parties and their LSRP are allowed to continue with the remediation without waiting for NJDEP approval.

The proposed new Technical Requirements are intended to ensure that remediation is conducted in a way that is protective of human health and the environment, while allowing the party responsible for cleaning up the site and the LSRP flexibility in addressing the different types of sites, contaminants, potential exposure pathways, and geographic settings within the State.  In addition to the proposed Technical Requirements, the NJDEP is producing multiple guidance documents.

Comments on the new rules may be submitted to the NJDEP until October 14, 2011 and the Department anticipates adopting the final rule package by May 2012.