IN THE MATTER OF HAZARDOUS DISCHARGE SITE REMEDIATION GRANT APPLICATION, ETC. (DEPARTMENT OF ENVIRONMENTAL PROTECTION)

• Court: New Jersey Superior Court Appellate Division
• Decided: December 24, 2019
• Docket: A-3496-17T3
• Status: Unpublished

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ."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-3496-17T3

IN THE MATTER OF HAZARDOUS DISCHARGE SITE REMEDIATION GRANT APPLICATION – 50% INNOCENT PARTY GRANT. ________________________________

Submitted October 21, 2019 – Decided December 24, 2019

Before Judges Sabatino and Sumners.

On appeal from the New Jersey Department of Environmental Protection.

Lieberman & Blecher, PC, attorneys for appellant Pastor Enterprises (Michael George Sinkevich, Jr., of counsel and on the briefs).

Gurbir S. Grewal, Attorney General, attorney for respondent New Jersey Department of Environmental Protection (Melissa H. Raksa, Assistant Attorney General, of counsel; Bethanne Sonne Prugh, Deputy Attorney General, on the brief).

PER CURIAM

Pastor Enterprises (Pastor) appeals from the February 23, 2018 final

agency decision of the New Jersey Department of Environmental Protection (DEP) denying its August 9, 2017 innocent party grant (IPG) application for

reimbursement of a portion of its environmental remediation costs. DEP denied

the application because the Legislature eliminated the IPG program – funded

from the Hazardous Discharge Site Remediation Fund (HDSRF) established by

the Brownfield and Contaminated Site Remediation Act (Brownfield Act),

N.J.S.A. 58:10B-1 to -31 – through the enactment of Assembly Bill 1954 L.

2017, c. 353 (the amendment) into law. Because we conclude that Pastor

Enterprises's IPG application was not grandfathered under the amendment and

equity does not warrant its entitlement to funding, we affirm.

I.

Pastor is a New Jersey partnership formed in 1973 for the purpose of

purchasing 544-600 Lincoln Boulevard in Middlesex Borough (the property).

After purchasing the property, Pastor Enterprises became aware the property

was contaminated with hazardous waste discharge from previous owners. Thus,

on August 25, 1995, the partnership filed an IPG application to help defray its

costs to remediate the property.

At the time of the application, the Brownfield Act authorized grants to an

"innocent party," as the term was defined in N.J.S.A. 58:10B-6(a)(4) (2010). To

receive funding, an applicant had to establish, among other criteria, that the

A-3496-17T3 2 hazardous substances to be remediated were not used by the applicant at the

property and that the applicant did not discharge any hazardous substances at

the area where the discharge was discovered. Ibid. When DEP determined that

an IPG application was eligible for funding, it would recommend the grant to

the New Jersey Economic Development Authority (EDA) to be funded. See

N.J.A.C. 19:31-8.9. EDA had the discretion to take final action to issue the

grant. Ibid.

The DEP approved Pastor Enterprises's application five months later in

January 1996. Over the next twenty-one years, Pastor Enterprises applied for

and was granted supplemental IPG funding.

In fact, in April 2012, Pastor Enterprises received funding despite having

sold the property in February 2000. Recognizing our Supreme Court's decision

in TAC Assocs. v. N.J. Dep't of Envtl. Prot., 202 N.J. 533 (2010), the DEP noted,

"there has been a change in ownership since the original grant was awarded.

Despite this, since the applicant had been in accordance with N.J.S.A. 58:10B-

6 at the time of the original [IPG] award, and the same applicant is requesting

the supplemental grant, Pastor Enterprises … is therefore eligible for a

supplemental IPG."

A-3496-17T3 3 On August 9, 2017, Pastor Enterprises filed an application for IPG

funding, requesting fifty percent of $722,183.16 to cover further remediation

costs. Prior to filing the request, Pastor Enterprises had already incurred

$505,213.66 in costs related to the remediation; allegedly in reliance on the DEP

approving the request. While the application was pending, on January 16, 2018,

the Legislature passed the amendment, which, among other things, eliminated

the IPG program. Section 6 of the amendment states:

This act shall take effect immediately and shall apply to any application for financial assistance or a grant from the [IPG program] pending before [the DEP] on the effective date of this act, or submitted on or after the effective date of the act, but shall not apply to any application determined to be technically eligible and recommended for funding by [the DEP] and pending before the [EDA] on the effective date of this act.

[L. 2017, c. 353 § 6 (emphasis added).]

On February 23, 2018, five months after Pastor Enterprises's IPG

application was filed, the DEP denied the request, explaining that as of January

16, 2018, the amendment eliminated the IPG program "effect[ive] immediately,"

and "applies to any application for an [IPG] from the HDSRF pending before

the [DEP] as of January 15, 2018 . . . ." Thus, the DEP noted, "the above noted

[IPG] application can no longer be considered for grant funding." Pastor

A-3496-17T3 4 Enterprises subsequently sent a letter to the DEP requesting a reconsideration of

its denial; however, the partnership received no response.

II.

A.

Pastor Enterprises first argues the DEP's ruling misinterprets the

amendment's plain language, which dictates that its IPG application was

grandfathered and entitled to funding. In support, Pastor Enterprises cites our

Supreme Court's decision in TAC Assocs., 202 N.J. 533. There, the Court

interpreted the Brownfield Act's provisions to define ownership of a property to

determine eligibility to receive an IPG. Ibid. Under N.J.S.A. 58:10B-6(a)(4)

(2010), "[a] person qualifies for an [IPG] if that person acquired the property

prior to December 31, 1983 and continues to own the property until such time

as the authority approves the grant. . . ." The Court held that ownership at the

time of the application controlled. TAC Assocs., 202 N.J. at 543-44.

Pastor Enterprises explains that when it applied for supplemental IPG

funding in 2009, the DEP, in accordance with N.J.S.A. 58:10B-6(a)(4) and TAC

Assocs., approved the request in April 2012, despite its sale of the property,

because it owned the property at the time of the initial award in January 1996.

Pastor Enterprises maintains its funding eligibility therefore refers back to 1996,

A-3496-17T3 5 when its property was originally deemed technically eligible and granted

remediation funding and remains eligible for an IPG even though the amendment

eliminated IPG funding effective January 16, 2018.

To address Pastor Enterprises's grandfather clause contention, we examine

the DEP's interpretation and application of the amendment. It is well settled that

we "afford substantial deference to an agency's interpretation of a statute that

the agency is charged with enforcing." Richardson v. Bd. of Trs., Police &

Firemen's Ret. Sys., 192 N.J. 189, 196 (2007) (citing R & R Mktg., L.L.C. v.

Brown–Forman Corp., 158 N.J. 170, 175 (1999)). Nevertheless, "we are 'in no

way bound by the agency's interpretation of a statute or its determination of a

strictly legal issue.'" Utley v. Bd. of Review, Dep't of Labor, 194 N.J. 534, 551

(2008) (quoting Mayflower Sec. Co. v. Bureau of Sec., 64 N.J. 85, 93 (1973)).

Thus, our review of a question of law is de novo. Mount v. Bd. of Trs., Police

& Firemen's Ret. Sys., 233 N.J. 402, 419 (2018) (citation omitted).

The primary purpose of "statutory interpretation is to determine and

'effectuate the Legislature's intent.'" State v. Rivastineo, 447 N.J. Super. 526,

529 (App. Div. 2016) (quoting State v. Shelley, 205 N.J. 320, 323 (2011)). We

start with considering "the plain 'language of the statute, giving the terms used

therein their ordinary and accepted meaning.'" Ibid. And where "[t]he

A-3496-17T3 6 Legislature's chosen words lead to one clear and unambiguous result, the

interpretive process comes to a close, without the need to consider extrinsic

aids." Ibid. Hence, we do "not 'rewrite a plainly-written enactment of the

Legislature [or] presume that the Legislature intended something other than that

expressed by way of the plain language.'" Id. at 530 (quoting Marino v. Marino,

200 N.J. 315, 329 (2009) (alteration in original)).

Applying these rules of statutory interpretation, we conclude the DEP's

interpretation of the amendment is consistent to the statute's plain language. The

amendment grandfathered applications that met certain criteria. To receive IPG

funding after the amendment's effective date of January 16, 2018, the application

must: (1) have been previously submitted to the DEP; (2) be technically eligible;

(3) have been recommended by the DEP for funding; and (4) be pending before

the EDA. L. 2017, c. 353 § 6.

Pastor Enterprises, however, has not satisfied the amendment's criteria

that prior to January 16, 2018, its August 9, 2017 IPG application was

recommended for funding by the DEP and was pending before the EDA.

Moreover, there is no indication that the DEP's actions were arbitrary,

capricious, or unreasonable in not approving the application for funding and

recommending it to the EDA for funding before the IPG grant program was

A-3496-17T3 7 defunded effective January 16, 2018. See J.B. v. N.J. State Parole Bd., 229 N.J.

21, 43 (2017).

Further, Pastor Enterprises's reliance on TAC Assocs. is misplaced. In

TAC Assocs., the Court clarified the definition of "continuous" ownership, as

added in the Legislature's 2010 amendment, to determine IPG funding

eligibility. 202 N.J. at 544. There is nothing in TAC Assocs. requiring this

court to hold that Pastor Enterprises is grandfathered to continue to receive IPG

funding merely because it was initially awarded an IPG in 1996. In fact, Pastor

Enterprises's assertion is belied by the record, which shows that it was required

to submit a new IPG application for every supplemental funding request,

complete with cost estimates and other statutory requirements.

In granting Pastor Enterprises supplemental IPG funding even though it

sold the property in 2000, the DEP reasoned that, "since Pastor Enterprises …

has been in accordance with N.J.S.A. 58:10B-6 at the time of the original grant

reward, . . . Pastor Enterprises … is therefore eligible for a supplemental IPG."

This ruling merely indicates that Pastor Enterprises was eligible to receive a

supplemental grant despite no longer owning the property, it does not award a

supplemental grant or make the applicant technically eligible and recommended

for funding, retroactive to the initial award in 1995. If that was the case, there

A-3496-17T3 8 would be no reason for Pastor Enterprises to submit a new application each time

it requested supplemental funds.

Hence, Pastor Enterprises's IPG application for funding was not

grandfathered to entitle it for funding after the Legislature's amendment

eliminating funding for the IPG program.

B.

Pastor Enterprises next contends its application should have been granted

under equitable doctrines of fundamental fairness. As "a family partnership with

no assets," it stresses it has remediated the property continuously for twenty-one

years in reliance on IPG funding reimbursements; most recently spending

$505,213.66 in remediation costs from 2016-2017. See Miller v. Miller, 97 N.J.

154, 163 (1984). Pastor Enterprises avers DEP's decision should be reversed

because it had no control over the agency's delay in approving its August 9, 2017

IPG application. Thus, arguing it should not be unfairly penalized as a result

considering there has been no explanation why the application took five months

to be reviewed, or that it was not made aware there was pending legislation to

eliminate the IPG program. Under these circumstances, Pastor Enterprises

declares it is manifestly unjust to apply the amendment retroactively to deny its

A-3496-17T3 9 application. See Oberhand v. Dir., Div. of Taxation, 193 N.J. 558, 570-71

(2008).

Our consideration of Pastor Enterprises's arguments are guided by the

following well-settled equitable principles. The doctrine of equitable estoppel

"is designed to prevent injustice by not permitting a party to repudiate a course

of action on which another party has relied to his detriment." Knorr v. Smeal,

178 N.J. 169, 178 (2003) (citing Mattia v. N. Ins. Co. of N.Y., 35 N.J. Super.

503, 510 (App. Div. 1955)).

"To establish equitable estoppel, parties must prove that an opposing party

'engaged in conduct, either intentionally or under circumstances that induced

reliance, and that [they] acted or changed their position to their detriment.'"

Hirsch v. Amper Fin. Servs., LLC, 215 N.J. 174, 189 (2013) (alteration in

original) (quoting Knorr, 178 N.J. at 178). "There need not be evidence of

fraudulent intent for equitable estoppel to apply." Tasca v. Bd. of Trs., Police

and Fireman's Ret. Sys., 458 N.J. Super. 47 (App. Div. 2019) (citing Hendry v.

Hendry, 339 N.J. Super. 326, 336 (App. Div. 2001)). However, the doctrine is

"rarely invoked against a governmental entity, particularly when estoppel would

'interfere with essential governmental functions.' Nonetheless, equitable

considerations are relevant to assessing governmental conduct, and may be

A-3496-17T3 10 invoked to prevent manifest injustice[.]" In re Johnson, 215 N.J. 366, 378-79

(2013) (quoting O'Malley v. Dep't of Energy, 109 N.J. 309, 316-17 (1987)

(citations omitted)).

"The doctrine of fundamental fairness 'serves to protect citizens generally

against unjust and arbitrary governmental action, and specifically against

governmental procedures that tend to operate arbitrarily.'" State v. Saavedra,

222 N.J. 39, 67 (2015) (emphasis omitted) (quoting Doe v. Poritz, 142 N.J. 1,

108 (1995)). The Court has described this doctrine as "an integral part of due

process" that "is often extrapolated from or implied in other constitutional

guarantees." State v. Miller, 216 N.J. 40, 71, 76 (2013) (quoting Oberhand, 193

N.J. at 578). The doctrine is an "elusive concept" and its "exact boundaries are

undefinable." State v. Yoskowitz, 116 N.J. 679, 704–05 (1989). The doctrine

is applied "sparingly" and only where the "interests involved are especially

compelling[;]" if a defendant would be subject "to oppression, harassment, or

egregious deprivation," it is to be applied. Doe, 142 N.J. at 108 (quoting

Yoskowitz, 116 N.J. at 712).

With respect to retroactive legislation, our Supreme Court explained "'[i]t

is a fundamental principle of jurisprudence that retroactive application of new

laws involves a high risk of being unfair.' . . . Nevertheless, if the Legislature

A-3496-17T3 11 expresses an intent that the statute is to be applied retroactively, the statute

should be so applied." Oberhand, 193 N.J. at 570-71 (quoting Gibbons v.

Gibbons, 86 N.J. 515, 522 (1981)). A statute's retroactive application may be

curbed if it would result in a manifest injustice. Id. at 571.

Applying these principles, Pastor Enterprises has not established it was

treated unfairly by the DEP's denial of its IPG application, which was pending

at the time the amendment took effect to eliminate funding for the IPG program.

The Legislature's actions unfolded in the public eye, resulting in an end of the

program. It debated Assembly Bill 1954 for nearly three years prior to its

enactment. See A. 1954 (Jan. 27, 2016);1 A. 1954 (June 6, 2016); A. 1954 (Dec.

11, 2017); A. 1954 (Jan. 16, 2018). While the bill's third revision called for

reduced funding for the IPG program, the Legislature later decided to

completely eliminate the program. A. 1954 (Jan. 16, 2018). Despite DEP's

awareness of the pending bill, we know of no obligation on the agency to inform

Pastor Enterprises of the bill's status.

1 On January 26, 2016, Assembly Bill 1954 was introduced in the Legislature. A. 1954 (Jan. 26, 2016). The bill aimed to amend key sections of the HDSRF provisions of the Brownfield Act, N.J.S.A. 58:10B. Ibid. The proposed bill would make an overall reduction in the maximum total award an applicant could receive under the IPG. Ibid.

A-3496-17T3 12 The elimination of the IPG program was through legislative action, not

through the DEP's initiative. The agency had no control over the Legislature, a

separate branch of government, which authorized governmental subsidy to

clean-up environmentally contaminated property satisfying specific criteria.

N.J.S.A. 58:10B-6. As noted above, the record is devoid of any suggestion that

the DEP acted in bad faith and delayed its review of Pastor Enterprises's

application to conserve State remediation funds by not recommending and

submitting the partnership's request for reimbursement of remediation costs to

the EDA for funding due to the imminent ending or reduction of the IPG

program.

Moreover, as a separate branch of government, we have no authority to

second-guess the fiscal decisions of the Legislature, which has the sole power

and responsibility to raise revenue and direct funding for the operation of our

state government. N.J. Const. art. VIII, § 2, ¶ 2. See City of Camden v. Byrne,

82 N.J. 133, 149 (1980) (holding "[t]here can be no redress in the courts to

overcome either the Legislature's action or refusal to take action pursuant to its

constitutional power over state appropriations."); see also O'Neill v. State

Highway Dep't, 50 N.J. 307, 315 (1967).

A-3496-17T3 13 Even though Pastor Enterprises received the benefit of the IPG program

for over twenty-one years, it was never promised or entitled to continually

receive supplemental funding. There is no indication DEP advised Pastor

Enterprises it would receive IPG funding before it incurred the remediation costs

it sought in its August 9, 2017 application. Reimbursement of remediation costs

through the program was always restricted to the availability of public funds

coupled with DEP's statutory review. Thus, Pastor Enterprises and other

applicants seeking IPG funding were subject to the Legislature's determination

that limited public funds may be diverted from an eminently worthy program.

Based on the record before us, the Legislature's decision resulted in an

unfortunate financial repercussion to Pastor Enterprises that this court is without

the power to assuage.

Affirmed.

A-3496-17T3 14