NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-5696-18
IN RE GEORGE TRUESDALE C/O POINT PLEASANT PROPERTIES, INC., CAFRA INDIVIDUAL PERMIT NO. 1524-05-0005.1 CAF 150001 CHALLENGED BY PETER GAPP AND LISA PERRETTO. ____________________________
Argued March 22, 2021 – Decided July 29, 2021
Before Judges Messano and Suter.
On appeal from the New Jersey Department of Environmental Protection.
Ira E. Weiner argued the cause for appellants (Beattie Padovano, LLC, attorneys; Ira. E. Weiner, of counsel and on the briefs; Martin R. Kafafian, on the briefs).
Michael J. Gross argued the cause for respondent George Truesdale c/o Point Pleasant Properties, Inc. (Giordano, Halleran & Ciesla, attorneys; Michael J. Gross and Afiyfa H. Ellington, on the brief).
Patrick S. Woolford, Deputy Attorney General, argued the cause for respondent New Jersey Department of Environmental Protection (Gurbir S. Grewal, Attorney General, attorney; Melissa H. Raksa, Assistant Attorney General, of counsel; Patrick S. Woolford, on the brief).
PER CURIAM
In November 2015, Point Pleasant 847 Properties, Inc. (the Developer),
applied to the New Jersey Department of Environmental Protection (DEP) for
an individual permit under the Coastal Area Facility Review Act (CAFRA),
N.J.S.A. 13:19-1 to -51. The application sought a permit for "the reconstruction
of an existing one-story structure with a new two-story banquet hall facility" at
Clark's Landing Marina in Point Pleasant (the Project).
Appellants Peter Gapp and Lisa Perretto own residential property in the
nearby Clark's Landing Condominium complex. They retained Thonet
Associates, Inc. (Thonet), an engineering firm that filed a lengthy report
objecting to the issuance of the permit. The report noted that while the new
facility would be built essentially on the footprint of an existing structure, it
would result in a three-story, not two-story, building. Among numerous other
objections, Thonet explained that the Project's ground floor would be below the
regulatory "100-year flood" levels set by regulations issued under the Flood
Hazard Area Control Act (the FHA), N.J.S.A. 58:16A-50 to -103.
In May 2016, DEP issued the CAFRA permit (the Permit) and on June 1,
2016, published public notice of its issuance. Appellants did not file an appeal
A-5696-18 2 to this court, but rather filed a request for an adjudicatory hearing. See N.J.A.C.
7:7-28.1(a) and (b) (permitting a person to request an adjudicatory hearing "to
contest a Department decision to approve or deny a coastal permit" within
"[thirty] calendar days after public notice of the decision published in the DEP
Bulletin"). Appellants' request included additional comments made by Thonet
that included the substance of emails between DEP reviewers and the
Developer's experts, which appellants obtained through OPRA. Thonet again
noted that the Project anticipated a three-story structure with its ground floor
below regulatory flood-area levels.
There were additional submissions to DEP by the Developer which were
not provided to appellants. In February 2019, nearly three years after the
issuance of the Permit, DEP's Division of Land Use issued a written
"Amplification and Supplementation of the Record" (the Amplification). DEP
noted that in "[t]he . . . application, [the Developer] represented . . . a proposed
renovation of the ground floor of the building was not a 'substantial
improvement.'" 1 DEP noted that appellants had challenged that characterization
1 "'Substantial improvement' means any reconstruction, rehabilitation, addition, or other improvement of a structure, the cost of which equals or exceeds [fifty] percent of the market value of the structure as determined before the start of construction of the improvement." N.J.A.C. 7:13-1.2 (2013). The
A-5696-18 3 of the Project in their request for an adjudicatory hearing and, as a result, DEP
"requested additional information from the [Developer] . . . to supplement the
public record." The Amplification further stated that the Developer "still did
not present enough information for [DEP] to determine if the project is a
'substantial improvement,'" and therefore the agency was applying "the more
stringent regulations assuming the [P]roject is a 'substantial improvement.'"
The Amplification then considered FHA regulations in existence at the
time of the application, specifically N.J.A.C. 7:13-11.5(g)(4) (2013). Those
provided that the applicant demonstrates "it is not feasible to construct the
lowest floor of any or all portions of the building at least one foot above the
flood hazard area design flood elevation[,]" and "the lowest floor . . . is
constructed as close as feasible to one foot above the flood hazard area design
flood elevation." N.J.A.C. 7:13-11.5(g)(4)(i) and (ii) (2013).
Based solely upon the Developer's submissions, DEP concluded the
estimated costs to raise the building several feet was approximately $1.4 million,
making regulatory compliance "infeasible." DEP concluded that the Project
Amplification "applied the FHA Regulations in effect at the time of the application submittal." Since then, many of these regulations have been updated and renumbered multiple times.
A-5696-18 4 complied with FHA regulations, whether viewed as "a substantial improvement
of a lawfully existing building, . . . or a modification of a lawfully existing
building that does not result in a substantial improvement."
More than five months later, on July 25, 2019, DEP's Commissioner
issued an order denying appellant's request for an adjudicatory hearing. Citing
N.J.A.C. 7:7-28.1(e) and decisions from the Supreme Court and our court, the
Commissioner concluded appellants "failed to make the requisite showing to
establish their right to a hearing or to demonstrate what particularized property
interest entitles them to an adjudicatory hearing in this matter." She noted that
appellants "due process rights have been well protected by the repeated
opportunities afforded to present written objections and reports from their
consultants."
Appellants filed this appeal, challenging both the denial of their request
for an adjudicatory hearing and DEP's 2016 issuance of the Permit. They
contend they were entitled to an adjudicatory hearing under CAFRA, the Public
Trust Doctrine, and because the unusual procedural circumstances denied them
the right to participate in the review process. Appellants also advance several
arguments that DEP's grant of the Permit was arbitrary, capricious, and
unreasonable.
A-5696-18 5 The Developer and DEP counter by arguing appellants were not entitled
to an adjudicatory hearing because they lacked a "particularized property
interest sufficient to require a hearing on constitutional or statutory grounds."
N.J.S.A. 52:14B-3.2(c). DEP argues appellants' challenge to the Permit should
be rejected as untimely. The Developer contends DEP properly evaluated its
application and granted the Permit.
We have considered these arguments in light of the record and applicable
legal standards. We affirm DEP's denial of an adjudicatory hearing. However,
"[i]t should go without saying that turning . . . square corners is minimally what
citizens should be able to expect from their government." Klumpp v. Borough
of Avalon, 202 N.J. 390, 413 (2010). We conclude that DEP did not do so in
this matter. We therefore remand the matter to DEP for further proceedings
consistent with this opinion.
I.
Pursuant to the Administrative Procedure Act (the APA), N.J.S.A.
52:14B-1 to -31, no State agency may promulgate a regulation "that specifically
allows a third party to appeal a permit decision," unless "otherwise required by
federal law or by . . . statute." N.J.S.A. 52:14B-3.3(a). A third party is defined
as any person other than:
A-5696-18 6 a. An applicant . . . .
b. A State agency; or
c. A person who has a particularized property interest sufficient to require a hearing on constitutional or statutory grounds.
[N.J.S.A. 52:14B-3.2.]
As a result, the Court has clearly held that non-applicants are entitled to an
adjudicatory hearing only where they can demonstrate: (1) a right to a hearing
under an applicable statute; or (2) a "particularized property interest of
constitutional significance that is directly affected by an agency's permitting
decision." In re NJPDES Permit No. NJ0025241, 185 N.J. 474, 481–82 (2006).
"[T]hird parties generally are not able to meet the stringent requirements for
constitutional standing in respect of an adjudicatory hearing." Id. at 482.
These limitations are "intended to prevent the processing of permit
applications by State agencies from being bogged down by time-consuming and
costly formal hearings" that "consume substantial public and private resources."
In re Riverview Dev., LLC, 411 N.J. Super. 409, 424 (App. Div. 2010). The
Legislature found that giving third parties the right to hearings would "give rise
to a chaotic unpredictability and instability that would be most disconcerting to
A-5696-18 7 New Jersey's business climate and would cripple economic development."
N.J.S.A. 52:14B-3.1(c).
"[L]andowners objecting to the development of neighboring property" do
not, by proximity alone, "have a particularized property interest warranting an
adversarial hearing before an administrative law judge." In re Freshwater
Wetlands Gen. Permits, 185 N.J. 452, 470 (2006) (citing Spalt v. DEP, 237 N.J.
Super. 206, 208–11 (App. Div. 1989)). Collateral economic impacts, traffic,
views, quality of life, recreational interest, and property values, are insufficient
to establish a third-party right to an adjudicatory hearing. Ibid.
Given these compelling precedents, nothing in appellants' arguments
supporting their right to an adjudicatory hearing warrants discussion in a written
opinion. R. 2:11-3(e)(1)(E). We affirm DEP's final decision denying appellants
an adjudicatory hearing.
II.
Under the particular facts presented, we do not agree with DEP or the
Developer that our consideration of the merits of appellants' challenge to the
Permit is procedurally barred. We acknowledge that our Court Rules require
any appeal from a final agency decision must be filed within forty-five days
"from the date of service of the decision or notice of the action taken." See R.
A-5696-18 8 2:4-1(b). DEP contends that despite the more than three-year delay in the
agency's determination of their request for an adjudicatory hearing, appellants
were required to challenge the Permit within forty-five days of DEP's public
notice. We disagree.
First, DEP's own regulations require that anyone seeking an adjudicatory
hearing file the request within thirty days, not forty-five days, of the public
notice. N.J.A.C. 7:7-28.1(b). To avoid the "consum[ption of] substantial public
and private resources," In re Riverview Dev., 411 N.J. Super. at 424, DEP
should have determined whether appellants had standing rather quickly and not
have inordinately delayed that decision for more than three years before denying
the request. Critically in this case, it was during this more than three-year delay
that DEP was considering additional information submitted by the Developer.
DEP's regulations require that if it grants an adjudicatory hearing, it refers
the matter to the Office of Administrative Law (OAL) "for a contested case
hearing" under the APA. N.J.A.C. 7:7-28.1(f). Only the final decision issued
by the Commissioner after the hearing "shall be subject to judicial review."
N.J.A.C. 7:7-28.1(g). The regulations are silent regarding the time within which
one must appeal the denial of the request for an adjudicatory hearing. DEP
suggests, and we agree, that Rule 2:4-1(b) governs; however, it logically follows
A-5696-18 9 that until the request for an adjudicatory hearing is denied, requestors do not
know if they will have the ability to contest the grant of a permit in the OAL or
not.
The logical endpoint of DEP's argument regarding the timeliness of
appellants' challenge to the Permit on its merits is simple: to avoid the time
constraints of Rule 2:4-1(b), appellants should have contemporaneously filed
both an appeal of the issuance of the Permit and a request for an adjudicatory
hearing. Based on the particular facts of this case, we disagree.
It goes without saying that had appellants done what DEP suggests, an
appeal would have been pending in our court, and quite possibly have been
decided prior to the denial of their request for an adjudicatory hearing nearly
three years later. Alternatively, we might have delayed resolution of the appeal
pending DEP's decision, but certainly no agency should have the ability to delay
this court's disposition of an appeal simply because of an untoward delay in its
administrative review processes. Lastly, what should happen if DEP decides a
requestor should receive an adjudicatory hearing while the appeal is pending?
How could we conduct a fulsome review of the issuance of the permit in those
circumstances not knowing the result of the administrative hearing? In short,
DEP's argument is unpersuasive.
A-5696-18 10 We recognize that requestors who lack standing under the APA could
delay the finality of the issuance of a permit by filing meritless requests for an
adjudicatory hearing, but that is not for us to address, particularly under the facts
of this case. More importantly, there is a difference between standing under the
APA and, in a more general sense, standing by members of the public to
challenge DEP's actions. See, e.g., N.J. Dept. of Env't Prot. v. Exxon Mobil
Corp., 453 N.J. Super. 272, 298–99 (App. Div. 2018) (discussing standing to
challenge agency action in a variety of contexts). That a person lacks standing
to request an adjudicatory hearing does not compel the same result for a
challenge to the merits of the issuance of a permit.
Turning to the arguments made regarding the issuance of the Permit, we
reject appellants' claim that the Developer's notice was insufficient because its
description of the Project was inadequate; we also reject their contention that
DEP's public notice of its approval of the Permit was inadequate. Neither
argument requires discussion in a written opinion. R. 2:11-3(e)(1)(E).
Appellants claim that the Project further impeded the public's physical and
visual access to the riverfront and violated both the Public Trust Doctrine and
N.J.A.C. 7:7-16.9. "Development that does not comply with N.J.A.C. 7:7-16.9,
A-5696-18 11 Public access, is discouraged in lands and waters subject to public trust rights."
N.J.A.C. 7:7-9.48(b). However,
For existing marina development where the proposed activity consists of . . . renovation, redevelopment, or expansion that remains entirely within the parcel containing the existing development, no public access is required if there is no existing public access onsite . . . . Any existing public access shall be maintained.
[N.J.A.C. 7:7-16.9(p)(1) (2015).2]
In the Developer's revised compliance statement, it addressed the public access issue:
In accordance with [N.J.A.C. 7:7-16.9(p)(1)], any existing public access at an existing marina shall be maintained. Due to the nature of the daily operations of the marina use, including operating machinery, boat storage and the presence of fueling stations, there is limited existing public access on site. The site functions as a private marina and therefore does not permit any types of public recreational activities such as swimming, sunbathing or diving due to safety concerns. The proposed development consists of the removal and reconstruction of an existing structure in the same location entirely within the parcel containing the existing development. The reconstruction of the structure will have no impact on the existing access. Boat owners will still be able to park and walk safely from their vehicles to their boat slips.
The prior public access requirements from the 2006 Waterfront Development permit and subsequent 2007
2 Now N.J.A.C. 7:7-16.9(m)(1). A-5696-18 12 permit modification are not applicable as the approved improvements were never completed.
DEP placed special conditions on the Permit requiring "[a]ny existing
public access on the project site must be maintained in accordance with Public
Access rule at [N.J.A.C. 7:7-16.9(n)(1)(i).]" 3 DEP clearly considered the public
access issue prior to issuing the Permit.
However, given what occurred after the Permit was issued, it is unclear
on this record if DEP comprehended the actual scope of the Project. Indeed, the
amplification fails to state definitively whether the Project is or is not a
"substantial improvement." Because we are remanding for other reasons we
3 That regulation provided:
For existing commercial development . . . where the proposed activity consists of maintenance, rehabilitation, renovation, redevelopment, or expansion that remains entirely within the parcel containing the existing development, no public access is required if there is no existing public access onsite. Any existing public access shall be maintained or equivalent public access shall be provided onsite. Equivalent public access shall include access that provides for opportunities to participate in the same activities, such as fishing, swimming and passive recreation, in the same manner and by the same number of people as in the existing public access area.
[N.J.A.C. 7:7-16.9(n)(1)(i) (2015).]
A-5696-18 13 explain below, we leave resolution of the merits of appellants' argument in this
regard to DEP as part of the remand.
Appellants also argue that we should consider the merits of their appeal
without regard to the reasoning DEP employed and described in the
Amplification. In other words, appellants argue DEP issued the Permit by
erroneously concluding that the Project did not involve a "substantial
improvement," and only after appellants objected and submitted a request for an
adjudicatory hearing did DEP change course and decide that requiring the
Project to comply with FHA rules was infeasible.
We disagree with appellants that the proper recourse is for us to
completely ignore the Amplification. It is axiomatic that our review of agency
determinations is limited, and "[i]t is settled that '[a]n administrative agency's
interpretation of statutes and regulations within its implementing and enforcing
responsibility is ordinarily entitled to our deference.'" Seigel v. N.J. Dept. of
Env't Prot., 395 N.J. Super. 604, 613 (App. Div. 2007) (quoting Wnuck v. N.J
Div. of Motor Vehicles, 337 N.J. Super. 52, 56 (App. Div. 2001)). In particular,
"[e]ach agency decision involving an application for development under
CAFRA invokes . . . competing policy considerations." Id. at 615 (quoting In
Re Cape May Cnty. Mun. Util. Auth., 242 N.J. Super. 509, 516 (App. Div.
A-5696-18 14 1990)). We would stray from our responsibilities, and it would be unfair to all
parties, especially the Developer and DEP, if we simply ignored the
Amplification by accepting appellants' argument that it is outside the agency
record.
However, appellants' objection to the Amplification on procedural
grounds has merit. Initially, the "entire application" for an individual CAFRA
permit shall be provided to DEP and the municipal clerk where the development
is located. N.J.A.C. 7:7-24.3(a). There are specific, comprehensive public
notice requirements when individual CAFRA permits are sought. N.J.A.C. 7:7-
24.3(b); N.J.A.C. 7:7-24.4. Notably, if an applicant submits a "revised
application at any time during the . . . review process," it must file the revisions
with the municipal clerk and provide the "revisions to any person listed in
N.J.A.C. 7:7-24.3(b), whom [DEP] determines would likely be affected by the
revised application." N.J.A.C. 7:7-26.1(d).
In this case, the Permit application contained significant information
which, by regulation, was accessible for public review. The Developer's notice
specifically advised that the "package" could be reviewed at DEP's offices in
Trenton or at the municipal clerk's office. The Permit itself provided no
explanation for its grant, except that it complied with CAFRA and Coastal Zone
A-5696-18 15 Management Rules. The Permit "authorize[d] the reconstruction of the existing
one-story building with a two-story banquet hall facility," along with other
improvements to the "existing two-story banquet hall."
Although it is unclear when and where Thonet reviewed the application
file, the comments it made on behalf of appellants caused DEP to re-examine
the situation. This is borne out by the emails in the record, as well as the fact
that DEP felt compelled to issue the Amplification. Critically, DEP then
accepted additional documentation from the Developer's expert regarding the
costs of compliance with FHA regulations. Although the Developer's
submissions may not technically be "revisions" to the application, the
undisputed record demonstrates that it supplied significant, critical information
to justify exceptions to the FHA regulations, and neither appellants nor members
of the public were privy to this information either at the time of the original
application or afterwards.
Certainly, had the Developer intended to rely on the infeasibility of
compliance, rather than solely on whether the Project was a substantial
improvement or not, the information supporting DEP's decision, i.e., the
estimated costs of compliance, would have been subject to challenge by
appellants and others. It never was. Moreover, the specific details of the costs
A-5696-18 16 of compliance are nowhere in the appellate record or in the Amplification. In
other words, DEP's conclusion that compliance with FHA regulations was
infeasible is not supported by credible evidence in this record. See Tlumac v.
High Bridge Stone, 187 N.J. 567, 573 (2007) (noting we defer to an agency's
findings of facts if "supported by substantial credible evidence in the record and
[if they] are not so wide off the mark as to be manifestly mistaken"); Matter of
Thomas Orban/Square Props., LLC, 461 N.J. Super. 57, 77 (App. Div. 2019) ("It
. . . is a fundamental of fair play that an administrative judgment express a
reasoned conclusion. A conclusion requires evidence to support it and findings
of appropriate definiteness to express it." (quoting N.J. Bell Tel. Co. v.
Commc'ns Workers of Am., 5 N.J. 354, 375 (1950))).
"[W]henever an administrative agency acts, be that act mandatory or
strictly voluntary, it must do so reasonably and in a manner calculated to achieve
the policies expressed in the agency's organic statute." In re State & Sch. Emps.'
Health Benefits Comm'ns' Implementation of Yucht, 233 N.J. 267, 281 (2018)
(citing 37 Steven L. Lefelt et al., N.J. Practice: Administrative Law & Practice
§ 7.17 (2d ed. 2000)). "[L]ike the means an agency chooses for purposes of
meeting a public need contemplated by a statute the agency is charged with
implementing, the means of notice in fulfillment of that statutory policy
A-5696-18 17 similarly must be designed to reasonably achieve its intended purpose. " Id. at
282.
Ironically, if we were to adopt DEP's argument that appellants' challenge
to the Permit is untimely, and they were required to have filed an appeal to this
court within forty-five days of publication of the Permit's issuance, the following
scenario was likely. DEP would have sought a remand to supplement the record
so it could provide its rationale for now deciding compliance was infeasible, i.e.,
the Amplification. R. 2:5-5(b). We would have likely granted that motion, and
appellants would have had the right to appear for purposes of the remand, sought
access to the information the Developer submitted to DEP, and submit their own
information to supplement the agency record so it was complete for our review.
See In re State & Sch. Emps.', 233 N.J. at 285 (requiring remand hearing to
develop "a proper record to permit meaningful judicial review," and permitting
examination of both "the form and substance" of contested notice to
beneficiaries). We conclude that is the appropriate remedy here.
We affirm the final agency decision denying appellants an adjudicatory
hearing. We vacate the issuance of the Permit and remand the matter to DEP
for a hearing to allow for the development of a full record as to: 1) whether the
Project is a "substantial improvement"; and, 2) if DEP concludes it was a
A-5696-18 18 "substantial improvement," whether the Project complied with Public Access
regulations and its compliance with FHA regulations was infeasible. DEP shall
provide appellants with the information supplied by the Developer supporting
the conclusion the agency reached in the Amplification; appellants shall be
permitted to submit information to DEP on the issue. We leave it to DEP's
discretion whether additional information, submissions, or testimony is
appropriate.
Affirmed in part; reversed and remanded in part. We do not retain
jurisdiction.
A-5696-18 19