NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION VS. RADIATION DATA, INC. (DEPARTMENT OF ENVIRONMENTAL PROTECTION)
This text of NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION VS. RADIATION DATA, INC. (DEPARTMENT OF ENVIRONMENTAL PROTECTION) (NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION VS. RADIATION DATA, INC. (DEPARTMENT OF ENVIRONMENTAL PROTECTION)) is published on Counsel Stack Legal Research, covering New Jersey Superior Court Appellate Division primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.
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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ."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-1777-17T3
NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION,
Petitioner-Respondent,
v.
RADIATION DATA, INC.,
Respondent-Appellant, ___________________________________
Argued October 9, 2018 – Decided November 2, 2018
Before Judges Sabatino, Haas and Sumners.
On appeal from the New Jersey Department of Environmental Protection, Docket Nos. ECE 9903-10, ECE 9904-10, ECE 9905-10, ECE 9908-10, EER 8829- 10, EER 8833-11, EER 1216-13, EER 15876-14, and EER 0798-15.
David J. Singer argued the cause for appellant (Vella, Singer and Associates, PC, attorneys; David J. Singer and Lisa M. Leili, of counsel and on the brief).
William R. Lamboy, Deputy Attorney General, argued the cause for respondent (Gurbir S. Grewal, Attorney General, attorney; Jason W. Rockwell, Assistant Attorney General, of counsel; William R. Lamboy, on the brief).
PER CURIAM
Radiation Data, Inc. ("RDI") appeals from a November 1, 2017 final
agency decision of the Commissioner of the Department of Environmental
Protection ("DEP"), which found RDI liable for violating several DEP
regulations that govern radon measurement and mitigation activities in New
Jersey. RDI is the largest radon measurement business in the State. The
Commissioner's final decision followed proceedings before two successive
Administrative Law Judges ("ALJs").
On appeal, RDI principally argues the DEP Radon Section, which
administers the State's radon program, is wrongfully imposing regulatory
standards upon RDI without adopting those standards through a formal
rulemaking process as prescribed by the Administrative Procedure Act ("APA"),
N.J.S.A. 52:14B-1 to -15.
Among other things, RDI contends the DEP has deviated in recent years
from the text and original stated intent of the radon measurement regulations.
RDI asserts the DEP has done so by: (1) deeming RDI responsible for
approximately 450 so-called "affiliate" technicians in the field whom RDI does
not employ, pay, or control; and (2) refusing to hold accountable the home
A-1777-17T3 2 inspection businesses and perhaps other companies who actually employ such
field workers. RDI contends it is impossible, or at least infeasible, for it to
adhere to the DEP's mandates, given its lack of effective control over the field
workers as well as the constraints of market competition.
RDI further argues the DEP is impermissibly enforcing a "Guidance
Document" concerning quality assurance and control plans as a mandatory rule,
without undertaking necessary public notice and comment.
RDI asserts a wide range of other factual and legal arguments contesting
the agency's findings of violations.
For the reasons that follow, we affirm the Commissioner's final agency
decision in part, reverse and remand it in part, and urge the DEP to engage in
appropriate prospective rulemaking in accordance with the APA and
Metromedia, Inc. v. Dir., Division of Taxation, 97 N.J. 313, 329 (1984).1
I.
Our analysis of this appeal first requires a preliminary discussion of radon
gas detection and mitigation, and the State's overall regulatory scheme.
1 In a companion interlocutory appeal, A-0707-17, we issued an opinion today reversing a trial court's denial of qualified immunity to the DEP and its officials who have been named as defendants in a civil action brought by RDI alleging improper treatment. That matter is remanded to adjudicate the remaining claims in that case that are not predicated on alleged constitutional deprivations. A-1777-17T3 3 A. Radon Background
Radon is a colorless, odorless, radioactive gas that derives from the
natural breakdown of uranium in soils. Radon gas can infiltrate homes and other
buildings through their foundations and then accumulate. It is recognized as the
second leading cause of lung cancer.
No level of radon exposure is considered entirely safe. The United States
Environmental Protection Agency ("EPA") has set 4.0 picocuries per liter (pCi/l)
as the "action level" for radon, meaning the level at which mitigation of the gas
should be considered. Radon tests are often conducted in connection with
residential real estate sales, commonly as part of the home inspection process.
If necessary, mitigation systems can be installed to decrease the level of
radon in a building. This is typically done by drilling a hole in the building's
foundation and installing a pipe, which, as one witness described it, is "extended
either up through the house, through the attic and then through the roof or that
pipe would be curved out on an outside wall . . . draw[ing] all of the gases that
are underneath the slab and venting them to the outside."
B. Statutory and Regulatory Background
In order to ensure that radon testers "use procedures and equipment which
would provide scientifically accurate results," the Legislature in 1986 enacted
A-1777-17T3 4 the Radiation Protection Act (the "RPA" or the "Act"), N.J.S.A. 26:2D-1 to -89.
See S. Energy and Env't Comm., Statement to S. 1797 (Mar. 6, 1986). The Act
requires the DEP to "establish a program for the certification of persons who
test for the presence of radon gas and radon progeny in buildings," and a
certification program for "persons who mitigate, and safeguard buildings from,
the presence of radon gas and radon progeny." N.J.S.A. 26:2D-70, -71.
The RPA forbids uncertified persons from testing for or mitigating radon
gas unless they are performing testing or mitigation on a building they own or
are performing a radon test without remuneration. N.J.S.A. 26:2D-72. The
statute also requires certified persons to disclose the results of the tests
performed to the DEP. N.J.S.A. 26:2D-74. The Act includes a confidentiality
provision barring disclosure of the address or owner of a nonpublic building,
with some exceptions, outside of the DEP, and the State Department of Health.
N.J.S.A. 26:2D-73.2
Notably for this appeal, the Act authorizes the DEP to "adopt rules and
regulations to implement the provisions of [the Act]." N.J.S.A. 26:2D-76.
Persons performing radon testing or mitigation without the required
2 Consistent with this confidentiality mandate, we have sealed the portions of the record identifying specific buildings tested for radon and the names of their owners. A-1777-17T3 5 certifications or failing to report results to the DEP and keep them confidential
are guilty of a crime of the third degree. N.J.S.A. 26:2D-77. The statute allows
the DEP to levy penalties of up to $2,500 for each violation of provisions of the
Act or any rule, regulation or order promulgated pursuant to the Act. N.J.S.A.
26:2D-13. The DEP can settle claims or penalties, or collect them "in a civil
action by a summary proceeding under 'the penalty enforcement law.'" Ibid.
(citing N.J.S.A. 2A:58-1 to -12).
Since the Act does not specify regulatory penalties, the present case only
involves whether RDI is liable for violations of the regulations, and does not
concern the amount of any penalties.
Free access — add to your briefcase to read the full text and ask questions with AI
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-1777-17T3
NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION,
Petitioner-Respondent,
v.
RADIATION DATA, INC.,
Respondent-Appellant, ___________________________________
Argued October 9, 2018 – Decided November 2, 2018
Before Judges Sabatino, Haas and Sumners.
On appeal from the New Jersey Department of Environmental Protection, Docket Nos. ECE 9903-10, ECE 9904-10, ECE 9905-10, ECE 9908-10, EER 8829- 10, EER 8833-11, EER 1216-13, EER 15876-14, and EER 0798-15.
David J. Singer argued the cause for appellant (Vella, Singer and Associates, PC, attorneys; David J. Singer and Lisa M. Leili, of counsel and on the brief).
William R. Lamboy, Deputy Attorney General, argued the cause for respondent (Gurbir S. Grewal, Attorney General, attorney; Jason W. Rockwell, Assistant Attorney General, of counsel; William R. Lamboy, on the brief).
PER CURIAM
Radiation Data, Inc. ("RDI") appeals from a November 1, 2017 final
agency decision of the Commissioner of the Department of Environmental
Protection ("DEP"), which found RDI liable for violating several DEP
regulations that govern radon measurement and mitigation activities in New
Jersey. RDI is the largest radon measurement business in the State. The
Commissioner's final decision followed proceedings before two successive
Administrative Law Judges ("ALJs").
On appeal, RDI principally argues the DEP Radon Section, which
administers the State's radon program, is wrongfully imposing regulatory
standards upon RDI without adopting those standards through a formal
rulemaking process as prescribed by the Administrative Procedure Act ("APA"),
N.J.S.A. 52:14B-1 to -15.
Among other things, RDI contends the DEP has deviated in recent years
from the text and original stated intent of the radon measurement regulations.
RDI asserts the DEP has done so by: (1) deeming RDI responsible for
approximately 450 so-called "affiliate" technicians in the field whom RDI does
not employ, pay, or control; and (2) refusing to hold accountable the home
A-1777-17T3 2 inspection businesses and perhaps other companies who actually employ such
field workers. RDI contends it is impossible, or at least infeasible, for it to
adhere to the DEP's mandates, given its lack of effective control over the field
workers as well as the constraints of market competition.
RDI further argues the DEP is impermissibly enforcing a "Guidance
Document" concerning quality assurance and control plans as a mandatory rule,
without undertaking necessary public notice and comment.
RDI asserts a wide range of other factual and legal arguments contesting
the agency's findings of violations.
For the reasons that follow, we affirm the Commissioner's final agency
decision in part, reverse and remand it in part, and urge the DEP to engage in
appropriate prospective rulemaking in accordance with the APA and
Metromedia, Inc. v. Dir., Division of Taxation, 97 N.J. 313, 329 (1984).1
I.
Our analysis of this appeal first requires a preliminary discussion of radon
gas detection and mitigation, and the State's overall regulatory scheme.
1 In a companion interlocutory appeal, A-0707-17, we issued an opinion today reversing a trial court's denial of qualified immunity to the DEP and its officials who have been named as defendants in a civil action brought by RDI alleging improper treatment. That matter is remanded to adjudicate the remaining claims in that case that are not predicated on alleged constitutional deprivations. A-1777-17T3 3 A. Radon Background
Radon is a colorless, odorless, radioactive gas that derives from the
natural breakdown of uranium in soils. Radon gas can infiltrate homes and other
buildings through their foundations and then accumulate. It is recognized as the
second leading cause of lung cancer.
No level of radon exposure is considered entirely safe. The United States
Environmental Protection Agency ("EPA") has set 4.0 picocuries per liter (pCi/l)
as the "action level" for radon, meaning the level at which mitigation of the gas
should be considered. Radon tests are often conducted in connection with
residential real estate sales, commonly as part of the home inspection process.
If necessary, mitigation systems can be installed to decrease the level of
radon in a building. This is typically done by drilling a hole in the building's
foundation and installing a pipe, which, as one witness described it, is "extended
either up through the house, through the attic and then through the roof or that
pipe would be curved out on an outside wall . . . draw[ing] all of the gases that
are underneath the slab and venting them to the outside."
B. Statutory and Regulatory Background
In order to ensure that radon testers "use procedures and equipment which
would provide scientifically accurate results," the Legislature in 1986 enacted
A-1777-17T3 4 the Radiation Protection Act (the "RPA" or the "Act"), N.J.S.A. 26:2D-1 to -89.
See S. Energy and Env't Comm., Statement to S. 1797 (Mar. 6, 1986). The Act
requires the DEP to "establish a program for the certification of persons who
test for the presence of radon gas and radon progeny in buildings," and a
certification program for "persons who mitigate, and safeguard buildings from,
the presence of radon gas and radon progeny." N.J.S.A. 26:2D-70, -71.
The RPA forbids uncertified persons from testing for or mitigating radon
gas unless they are performing testing or mitigation on a building they own or
are performing a radon test without remuneration. N.J.S.A. 26:2D-72. The
statute also requires certified persons to disclose the results of the tests
performed to the DEP. N.J.S.A. 26:2D-74. The Act includes a confidentiality
provision barring disclosure of the address or owner of a nonpublic building,
with some exceptions, outside of the DEP, and the State Department of Health.
N.J.S.A. 26:2D-73.2
Notably for this appeal, the Act authorizes the DEP to "adopt rules and
regulations to implement the provisions of [the Act]." N.J.S.A. 26:2D-76.
Persons performing radon testing or mitigation without the required
2 Consistent with this confidentiality mandate, we have sealed the portions of the record identifying specific buildings tested for radon and the names of their owners. A-1777-17T3 5 certifications or failing to report results to the DEP and keep them confidential
are guilty of a crime of the third degree. N.J.S.A. 26:2D-77. The statute allows
the DEP to levy penalties of up to $2,500 for each violation of provisions of the
Act or any rule, regulation or order promulgated pursuant to the Act. N.J.S.A.
26:2D-13. The DEP can settle claims or penalties, or collect them "in a civil
action by a summary proceeding under 'the penalty enforcement law.'" Ibid.
(citing N.J.S.A. 2A:58-1 to -12).
Since the Act does not specify regulatory penalties, the present case only
involves whether RDI is liable for violations of the regulations, and does not
concern the amount of any penalties. If the violations are upheld, the DEP will
need to pursue a penalty action in the trial court to collect any penalties.
The DEP promulgated regulations initially in 1990 governing the
certification of persons for radon testing and mitigation pursuant to this statutory
mandate. N.J.A.C. 7:28-27.1 to -27.35. See 22 N.J.R. 3516(a) (Nov. 19, 1990).
The regulations have been periodically renewed, most recently in 2013. 45
N.J.R. 1400(a) (June 3, 2013). The regulations are structured so that persons 3
conducting radon testing must be approved by the DEP as either certified radon
3 The regulations define "person" to include businesses as well as individuals. N.J.A.C. 7:28-27.2. In this opinion, "person" only refers to an individual. A-1777-17T3 6 measurement "specialists" or certified radon measurement "technicians."
N.J.A.C. 7:28-27.9 to -27.14. Similarly, persons performing mitigations must
be approved by the DEP as either certified radon mitigation specialists or a
certified radon mitigation technicians. N.J.S.A. 7:28-27.15 to -27.20.
Generally, specialist certification requires more education and is more difficult
to obtain than technician certification. Compare N.J.A.C. 7:28-27.9 with
N.J.A.C. 7:28-27.12. Certification as a specialist qualifies an individual as a
technician. N.J.A.C. 7:28-27.9(b); -27.15(b). Specialists can perform
additional functions which technicians cannot perform. See e.g., N.J.A.C. 7:28-
27.5(a)(1), -27.7(d).
A company such as RDI offering both measurement and mitigation
services must be approved by the DEP as a certified measurement business and
as a certified mitigation business. 4 See N.J.A.C. 7:28-27.5, -27.7. Certified
measurement and certified mitigation businesses are "responsible for any
violation of the ACT committed by an employee in the scope of his or her
4 RDI is also a certified radon environmental laboratory. The DEP regulates laboratories under a different set of regulations. See N.J.A.C. 7:18-1.1 to -1.9. RDI asserts that some of the violations in this case involving the measurement business regulations concern the work of its laboratory, which it contends is not subject to those regulations. A-1777-17T3 7 employment. This responsibility shall be joint and several." N.J.A.C. 7:28-
27.29 (emphasis added).
The DEP's Radon Section administers this regulatory system. The
regulations require certified parties to remain in compliance with the Act and
regulations set forth in N.J.A.C. 7:28-27.1 to -27.35. N.J.A.C. 7:28-27.3(b).
Parties can appeal the DEP's certification denial, refusal to renew, or revocation
by requesting an adjudicatory hearing. N.J.A.C. 7:28-27.27(a). For all of these
certification categories, the business or person must reapply for certification
annually. N.J.A.C. 7:28-27.22.
C. Radon Measurement Businesses, Specialists, and Technicians
A certified radon measurement business is a commercial business
enterprise certified "to sell devices or test for radon and/or radon progeny."
N.J.A.C. 7:28-27.2. In order to be certified, a measurement business must
"maintain on staff or retain as a consultant a certified radon measurement
specialist." N.J.A.C. 7:28-27.5(a). This specialist is charged, among other
things, with directing the measurement activities of the business, and "shall sign
and be responsible for the review, approval, and verification of the reports" on
radon tests. N.J.A.C. 7:28-27.5(a)(1). The business must also at all times have
a certified mitigation technician on staff. N.J.A.C. 7:28-27.5(i).
A-1777-17T3 8 Certified radon measurement specialists are persons certified "to perform
and/or evaluate radon and/or radon progeny measurements for a certified radon
measurement business." N.J.A.C. 7:28-27.2 (emphasis added). In their
application to the DEP for certification, specialists must include "[a] list of all
certified radon measurement businesses for which the applicant will be a
certified radon measurement specialist." N.J.A.C. 7:28-27.10(a)(7) (emphasis
added). If specialists wish to function individually as a measurement business,
they must be certified as one. N.J.A.C. 7:28-27.9(c).
By comparison, a certified measurement technician is a person certified
"to perform radon and radon progeny measurement activities." N.J.A.C. 7:28-
27.2 (emphasis added). Measurement technicians must also include "[a] list of
all certified radon measurement businesses for which the applicant will be a
certified measurement specialist" in his or her certification application.
N.J.A.C. 7:28-27.13(a)(5). The responsibilities of a measurement technician are
a subset of those of a specialist. See 22 N.J.R. at 3519.
Only certified radon measurement specialists or technicians may perform
radon or radon progeny testing, unless an exception applies. See N.J.A.C. 7:28-
27.3(a), -27.31. Moreover, only a certified measurement business can report the
results of a radon or radon progeny test to property owners. See N.J.A.C. 7:28-
A-1777-17T3 9 27.28 (b) (stating that measurement businesses "shall report test results for radon
and radon progeny directly to the owner of the building and the [DEP]").
Measurement businesses are required to develop and adhere to a plan of
quality assurance and quality control ("QA/QC plan") for each type of
measurement equipment they use, so as to ensure reliability and validity of radon
measurements. N.J.A.C. 7:28-27.5(c). The QA/QC plan must contain certain
elements required in N.J.A.C. 7:28-27.33, must "be submitted and approved by
the [DEP] and, at a minimum, include the requirements of the authorized
measurement protocols." 5 N.J.A.C. 7:28-27.5(c).
A certified measurement business must also "develop and comply with a
radiological safety plan [("RSP")] designed to keep each employee's exposure
to radon and radon progeny as low as reasonably achievable." N.J.A.C. 7:28 -
27.5(d). The DEP reviews and approves these plans, and the plans must include
the requirements set forth in N.J.A.C. 7:28-27.34. Ibid.
When applying to the DEP for certification, a measurement business must
include, among other things: the types of radon measurement equipment for
5 The authorized measurement protocols are "the 'Interim Indoor Radon and Radon Decay Product Measurement Protocols', E.P.A. 520/1-86-04, amendments thereto, or its latest revision; and 'Interim Protocols for Screening and Follow-up Radon and Radon Decay Product Measurements', EPA 520/1-86- 014-1; page 4 and 13, and 15." N.J.A.C. 7:28-27.2. A-1777-17T3 10 which it seeks certification; identification of certified radon measurement
specialists and technicians "employed by the business as staff members or
consultants to be utilized by the applicant"; and copies of the QA/QC plan, RSP,
and forms used to report results to clients. N.J.A.C. 7:28-27.6. The yearly
application for recertification requires submission of these materials, as well as
additional information. N.J.A.C. 7:28-27.22(b).
Radon measurement businesses are subject to various reporting
requirements specified in N.J.A.C. 7:28-27.28. Such measurement businesses
must also keep certain records for five years including: records of all tests
performed and required reporting information for the tests, records of all
instrument calibration and quality control, and copies of certifications for all
measurement specialists and technicians "employed by the business." N.J.A.C.
7:28-27.21(a).
In addition, radon measurement businesses are required to train their
employees yearly, and must also train them when they are newly hired. N.J.A.C.
7:28-27.34(a), (c). The DEP may conduct inspections of certified businesses.
N.J.A.C. 7:28-27.24. Certified businesses must submit in writing to the DEP
changes in information from their original application at least thirty days in
advance of their use, and changes in certified personnel at least fourteen days in
A-1777-17T3 11 advance of their use. N.J.A.C. 7:28-27.3(f). Certified businesses are
responsible for reporting results of all measurement or mitigation activity to the
DEP. N.J.A.C. 7:28-27.3(j).
D. Radon Mitigation Businesses, Specialists, and Technicians
The DEP has also established certification requirements for radon
mitigation businesses, specialists, and technicians. N.J.A.C. 7:28-27.7 to -27.8,
-27.15 to -27.20. A certified mitigation business is a business certified "to
design and/or install systems in buildings to mitigate and safeguard against
radon contamination." N.J.A.C. 7:28-27.2.
Such a business is required to have a mitigation specialist on staff or
serving as a consultant. N.J.A.C. 7:28-27.7(a). The mitigation specialist "shall
perform a visual inspection and diagnostic tests, as appropriate, prior to system
installation to determine the appropriate mitigation system to be installed."
N.J.A.C. 7:28-27.7(d). The specialist must document these observations and
results. Ibid. A mitigation business "shall assure that radon mitigation system
installations are performed under the direct supervision of a certified radon
mitigation specialist or certified radon mitigation technician." N.J.A.C. 7:28-
27.7(c).
A-1777-17T3 12 The business must also develop and follow a RSP. N.J.A.C. 7:28-27.7(i).
The regulations detail minimum requirements for the safety plan. See N.J.A.C.
7:28-27.34.
Mitigation businesses are subject to reporting requirements set forth in
N.J.A.C. 7:28-27.28. The businesses must maintain certain records for five
years, including: records of all mitigation work performed; records of mitigation
plans developed, utilized, and signed by a mitigation specialist; records of all
instrument calibration; copies of all certification applications and all
correspondence with the DEP; and a copy of each mitigation contract. N.J.A.C.
7:28-27.21(b).
E. RDI's Business and An Industry Overview
RDI was founded in 1986. Its principal place of business is in Skillman,
New Jersey. RDI is certified by the DEP as, respectively, a radon measurement
business, a radon mitigation business, and a radon measurement laboratory.
According to its President, RDI is involved in more than half of the radon testing
conducted in this State. Since 1987, RDI has processed more than one million
radon tests. In addition, RDI is heavily involved in the radon mitigation
business. DEP records apparently show that RDI installed 658 mitigation
systems in this State in 2013 and another 627 in 2014.
A-1777-17T3 13 According to its organizational chart included as an exhibit in the
administrative record, RDI had, at that time, only five employees apparently
involved in the radon measurement and mitigation aspects of the business: RDI's
then President, a quality assurance and lab officer, two laboratory technicians,
and a clerical staff member. RDI's current employees include RDI's current
President, who is a certified radon measurement and mitigation specialist , and
RDI's Director of Operations, who became certified as a measurement specialist
in June of 2014 and as a mitigation specialist in September of 2014 . At oral
argument on the appeal, RDI's counsel was unable to specify exactly how many
of its employees currently work in the laboratory. In any event, the record
reflects that RDI only employs a small number of employees who take part in
the radon measurement and mitigation aspects of its business.
F. "Affiliates"
As will be discussed, infra, within our legal analysis, RDI depends upon
numerous certified measurement technicians who are either employed by other
businesses or self-employed but who have been "affiliated" with RDI.
According to the testimony of RDI's witnesses, the regulatory scheme originally
contemplated that all businesses who employ radon measurement technicians
would themselves need to obtain certification from the DEP. However, at some
A-1777-17T3 14 unspecified point in time, the DEP began to allow individual certified
measurement technicians "affiliate" with a certified radon measurement
business without being employed by that certified entity. In the instance of RDI,
such an affiliate relationship is documented by a form letter from RDI to the
DEP's Radon Section, representing that the particular technician, identified by
his or her certification number, is "affiliated" with RDI. The record contains
several examples of such form letters.
According to RDI, an individual radon measurement technician is
permitted to affiliate with more than one certified radon measurement
businesses. The second ALJ found from the evidence there are "roughly 720
affiliated technicians in the radon measurement field." The second ALJ also
found that "roughly 400" of those technicians are affiliated with RDI, and that
RDI's next largest competitor has "around 200 affiliated technicians."
The proofs reflect that RDI does not employ the "affiliated" measurement
technicians on its payroll. Nor is there evidence that RDI pays the affiliated
technicians any money for their services. Instead, the affiliated measurement
technicians appear to typically work for a home inspection company. The
business or technician frequently purchases a measurement device from RDI.
RDI apparently is also paid to conduct the laboratory testing or data analysis on
A-1777-17T3 15 radon tests. These charges are typically paid by the property owner or contract
purchaser of the building being tested, usually as part of a real estate transaction.
RDI contends that it does not control the technicians who leave the
sampling devices in buildings, as it neither pays those persons wages nor any
other form of compensation. 6 RDI asserts it does not supervise those individuals
who, in some instances, are also affiliated with one or more of RDI's competitor
measurement business.
RDI contends that it began "affiliating" with individual technicians only
because the DEP ceased requiring their respective employers to be certified, and
because the DEP has insisted on RDI accepting responsibility for the affiliates'
work in the QA/QC criteria. According to RDI, as a result of the DEP's change
in regulatory approach, there used to be about 300 certified radon measurement
business in New Jersey, whereas there are now only about twenty-nine.
6 In a certification submitted before the administrative hearings, RDI's President, who is not an attorney, inaccurately alluded to the existence of "contractual relationships" between RDI and the affiliated technicians. However, in testimony at the hearings, another RDI witness clarified that the term "contractual relationships" was "a poor choice of words." According to that witness, there are no contracts between the affiliated home inspectors and RDI. The record shows that those individuals merely purchase test kits from RDI, and RDI analyzes the samples, or data, and produces the results.
A-1777-17T3 16 G. Sampling Devices
This case involves four different kinds of devices used to measure radon
levels: (1) continuous radon monitors ("CRMs"); (2) charcoal canisters; (3)
electrets; and (4) Alpha Track devices. At the time of the administrative
hearings, RDI processed tests conducted with CRMs and charcoal canisters.
RDI had previously processed tests conducted with E-PERM brand electrets.
Most test results reported to the DEP are derived from the charcoal
canisters. With regard to those canisters, RDI commonly sells them to home
inspectors; the inspectors place the canisters in buildings, and send the samples,
along with a customer data sheet, to RDI. RDI's laboratory then analyzes the
tests. A measurement specialist at RDI verifies the test results and reports them
to the client and the DEP.
With regard to CRMs and electrets, the home inspectors generally own
their own instruments. They send the test data to RDI, whose measurement
specialist then calculates and certifies the results and reports them to the client
and the DEP.
H. RDI's QA/QC Plan
RDI has been subject to the same DEP-approved QA/QC plan since 2005,
which includes the plans for each device it is certified to use. In particular, RDI
A-1777-17T3 17 obtained the DEP's approval to use charcoal canisters, CRMs, and E-PERMS,
pursuant to the plan.
RDI's QA/QC plan represents that the company's "affiliated measurement
technicians are all licensed by [the State of New Jersey], and have received the
standard two-day course, plus annual continuous education." The QA/QC plan
further asserts the technicians' New Jersey licenses "are maintained up to date,
or their affiliation is terminated." The plan also states that RDI "will maintain
records of the current licenses status of all home inspectors for whom the
company reports radon tests to [the] DEP," because "it is company and . . .
[S]tate policy for home inspectors to be licensed and to operate as agents of
licensed Radon Measurement Businesses." The plan certifies that RDI "will
refuse to process any radon test kit submitted by a home inspector whose license
has expired."
I. The Alleged Violations and the Administrative Proceedings
The DEP issued nine Administrative Orders and associated Notices of
Prosecution ("AO/NOPs") to RDI between August 2009 and December 2014.
They allege violations of various requirements for certified radon measurement
businesses and mitigation businesses.
RDI appeals the following charges brought against them for:
A-1777-17T3 18 Measurement Violations
Selling radon measurement devices without the required certification.
Allowing uncertified persons to test for radon/radon progen y.
Failing to comply with various provisions of their QA/QC Plan including, calibration procedure violations, measurement procedure violations, and recordkeeping violations.
Failing to keep records of the current license status for "affiliated" testers.
Processing tests with incomplete and/or incorrect reports and data sheets, and reporting tests marked invalid to the DEP.
Failing to submit all test results to the DEP.
Mitigation Violations
Allowing uncertified persons to perform mitigation jobs, and allowing a mitigation technician, not specialist, to troubleshoot and make design alterations on a mitigation system.
Allowing mitigation technicians, not specialists, to perform visual inspections for a possible mitigation system.
General Violations
Failing to provide documentation on new employee and yearly training for affiliates.
The DEP issued the first six AO/NOPs between August 2009 and June
2010. RDI requested a hearing on the AO/NOPs and the DEP moved for
A-1777-17T3 19 summary decision. RDI was not represented by counsel at this stage of this
proceeding.
On March 14, 2013, the first ALJ issued an order granting partial summary
decision in favor of the DEP on all but two of the charged violations.
The DEP thereafter issued three more AO/NPs between February 2011
and December 2014. RDI requested a hearing on these three AO/NOPs. The
matter was transferred to the Office of Administrative Law ("OAL") and
consolidated with the initial six appeals. This consolidated case was reassigned
to a different ALJ ("the second ALJ"). The second ALJ denied the DEP's request
to sever the first six AO/NOPs and convert the first ALJ's partial summary
decision into a final decision. The second ALJ also denied RDI's request 7 to
reopen/reconsider the first ALJ's partial summary decision.
The second ALJ held seven non-consecutive days of hearings from
October 2015 to February 2016. Ibid. The ALJ heard testimony from: a
radiation physicist from the DEP's Radon Section; a research scientist (now
deceased) from the DEP's Radon Section; and another research scientist who is
7 By this point, RDI was represented by counsel.
A-1777-17T3 20 the supervisor of the DEP Radon Section. The second ALJ also heard testimony
from RDI's President and its Director of Operations.8
After considering the testimony and other evidence, the second ALJ found
that RDI violated the various provisions of the Act and regulations, as alleged
by the DEP in the three AO/NOPs, with the exception of two allegations in the
AO/NOP docketed at EER 07985-15, which the second ALJ dismissed. RDI
then filed exceptions with the DEP Commissioner.
J. The Commissioner's Decision
In his ensuing November 2017 final agency decision, the Commissioner
agreed with and adopted, with certain modifications, the findings and
conclusions of both the first ALJ's partial summary decision and the second
ALJ's post-hearing decision. The Commissioner's modifications primarily
involved addressing discrete points that RDI had raised in its exceptions.
Among other things, the Commissioner emphasized that RDI could not allow
radon testers to affiliate with its business and reap the presumed benefits, while
disclaiming "the responsibility inherent in that relationship."
8 During the course of the hearing, the DEP withdrew several allegations. A-1777-17T3 21 K. RDI's Appeal
RDI raises several arguments on appeal. Most broadly, RDI asserts the
Commissioner's decision is arbitrary and capricious. RDI contends the decision
will harm the radon industry, is dangerous to public health, and is ini mical to
the goals of the RPA.
RDI argues the DEP engaged in improper rulemaking without following
APA requirements. In particular, RDI alleges the DEP impermissibly changed
its interpretation of the regulations from requiring all businesses offering radon
testing services to obtain certification, to a contrary policy that now allows
testers to simply affiliate with a certified measurement business, such as RDI.
Many of the charged violations against RDI were related to radon tests
conducted by such affiliates. According to RDI, the DEP held RDI liable for
violations based on a mistaken interpretation that certain references in the
regulations to "employees," "contractors," and "workers" include so-called
"affiliates." RDI asserts that the DEP should have adopted this material change
in regulatory responsibility through proper rulemaking procedures, in
compliance with the APA.
Further, RDI maintains the DEP has improperly required radon
measurement businesses, such as RDI, to include commitments in their QA/QC
A-1777-17T3 22 plans that were not duly promulgated through rulemaking. Instead, those
commitments allegedly have been extracted through an informal DEP "Guidance
Document."
RDI additionally contends that some of the violations concern the work of
its certified laboratory, which are outside of the alleged purview of the DEP's
Radon Section.
Lastly, apart from these points, RDI disputes various individual violations
and certain discrete findings of the ALJs and the Commissioner.
II.
A. Scope of Review
"The 'core value[] of judicial review of administrative action is the
furtherance of accountability.'" In re Proposed Quest Acad. Charter Sch. of
Montclair Founders Grp., 216 N.J. 370, 386 (2013) (alteration in original)
(citations omitted). To assure such accountability, appellate courts are
empowered to set aside the decisions of administrative agencies when they are
shown to be "arbitrary, capricious, or unreasonable, or . . . lack[ing] in fair
support in the record." In re Herrmann, 192 N.J. 19, 27-28 (2007) (citing
Campbell v. Dep't of Civil Serv., 39 N.J. 556, 562 (1963)).
A-1777-17T3 23 As we exercise this important function of judicial review, we recognize
the "final determination of an administrative agency . . . is entitled to substantial
deference." In re Eastwick Coll. LPN–to RN Bridge Program, 225 N.J. 533, 541
(2016). A "strong presumption of reasonableness must be accorded [to an]
agency's exercise of its statutorily delegated duties." In re Certificate of Need
Granted to the Harborage, 300 N.J. Super. 363, 380 (App. Div. 1997). "The
burden of demonstrating that the agency's action was arbitrary, capricious or
unreasonable rests upon the [party] challenging the administrative action." In
re Arenas, 385 N.J. Super. 440, 443-44 (App. Div. 2006).
The heart of this appeal involves the DEP's application of the radon statute
and regulations the agency has adopted to carry out the Legislature's objectives
under the RPA. In that context, "'[a]n administrative agency's interpretation of
statutes and regulations within its implementing and enforcing responsibility is
ordinarily entitled to our deference.'" Wnuck v. N.J. Div. of Motor Vehicles,
337 N.J. Super. 52, 56 (App. Div. 2001) (alteration in original) (quoting In re
Appeal by Progressive Cas. Ins. Co., 307 N.J. Super. 93, 102 (App. Div. 1997)).
However, despite that general deference to the agency's interpretations, we are
not bound by them. In re N.J.A.C. 7:1B-1.1 et seq., 431 N.J. Super 100, 114
(App. Div. 2013). Indeed, "[w]hile we must defer to the agency's expertise, we
A-1777-17T3 24 need not surrender to it." N.J. Chapter of Nat'l. Ass'n of Indus. and Office Parks
v. N.J. Dep't of Envt'l Prot., 241 N.J. Super. 145, 165 (App. Div. 1990). We
therefore do not automatically accept an agency's interpretation of a statute or a
regulation, and we review strictly legal questions de novo. Bowser v. Bd. of
Trs., Police & Fireman's Ret. Sys., 455 N.J. Super. 165, 170-71 (App. Div.
2018).
B. The Metromedia/Rulemaking Issues
RDI fundamentally argues that the DEP is attempting, in this regulatory
compliance case, to enforce rules against RDI without appropriately
promulgating them through public notice and comment rulemaking as required
by the APA. First, RDI contends the DEP's expansive use of the term "affiliates"
– a term that neither appears in the RPA nor in the text of the radon regulations
– amounts to de facto rulemaking. Further, RDI argues that the DEP has been
enforcing a "Guidance Document" concerning QA/QC plans as a rule, without
conducting proper rulemaking procedures. In that regard, RDI contends it is not
responsible for failing to adhere to its QA/QC plan because the DEP forced RDI
to include in its plan components set forth in the informal Guidance Document
not required by the regulations.
A-1777-17T3 25 The APA generally requires state administrative agencies to adopt rules
in accordance with the public notice and comment procedures prescribed by
N.J.S.A. 52:14B-4(a). In re Highlands Master Plan, 421 N.J. Super. 614, 623-
24, 630 (App. Div. 2011). These requirements likewise apply when a state
agency "revises, rescinds, or replaces . . . any . . . existing rule." Ibid. (alteration
in original) (quoting N.J.S.A. 52:14B-4.9). As we have already noted, in the
RPA the Legislature expressly delegated to the DEP the authority and
responsibility to adopt administrative rules to carry out the radon statutory
scheme. See N.J.S.A. 26:2D-76.
In Metromedia Inc. v. Dir., Div. of Taxation, 97 N.J. 313, 329, 338 (1984),
the Supreme Court held that an administrative agency must conduct formal
rulemaking before imposing new standards upon the parties that it regulates.
The Court determined six factors, which guide the analysis of whether such
formal rulemaking is necessary:
(1) [the decision] is intended to have wide coverage encompassing a large segment of the regulated or general public, rather than an individual or a narrow select group; (2) [it] is intended to be applied generally and uniformly to all similarly situated persons; (3) [it] is designed to operate only in future cases, that is, prospectively; (4) [it] prescribes a legal standard or directive that is not otherwise expressly provided by or clearly and obviously inferable from the enabling statutory authorization; (5) [it] reflects an
A-1777-17T3 26 administrative policy that (i) was not previously expressed in any official and explicit agency determination, adjudication or rule, or (ii) constitutes a material and significant change from a clear, past agency position on the identical subject matter; and (6) [it] reflects a decision on administrative regulatory policy in the nature of the interpretation of law or general policy.
[Id. at 331-32.]
These factors, "either singly or in combination," determine whether agency
action amounts to the promulgation of an administrative rule. Id. at 332.
As we now explain, both the DEP's imposition of liability upon RDI for
the conduct of "affiliates," and certain mandates for QA/QC plans as set forth in
a Guidance Document, meet these Metromedia criteria. Formal rulemaking as
to these matters was required, but not performed.
1. "Affiliate" Liability
A core premise affecting many of the measurement violations the DEP
cited against RDI is whether RDI is responsible for the licensure and conduct of
"affiliate" technicians who perform sampling out in the field. The Act itself
does not mention, in regards to the certification program, the term "affiliate,"
nor any arguable synonym of the term, such as "representative," or "agent."
As we have already noted, the statute does require the DEP to establish a
program for the "certification of persons who test for the presence of radon gas
A-1777-17T3 27 and its progeny in buildings," N.J.S.A. 26:2D-70, and also for the certification
of "persons who mitigate, and safeguard buildings from, the presence of radon
gas and radon progeny," N.J.S.A. 26:2D-71. The statute further declares that
"no person who is not certified" shall perform such mitigation or testing on a
building, unless he or she owns the building or is doing the work without
remuneration. N.J.S.A. 26:2D-72. The Act does not delineate the employment
or contractual status of such certified "persons," or expressly indicate they must
be "affiliated" with a certified radon measurement or mitigation business.
As we also have already stated, the text of the DEP's lengthy regulations
governing radon measurement and mitigation does not include the word
"affiliate" at all or any cognate term in reference to certified persons and
businesses. The regulations do say that sampling must be performed by either a
certified radon measurement specialist or technician. N.J.A.C. 7:28-27.9 to -
27.14. A company providing measurement services must be approved by the
DEP as a certified measurement business. N.J.A.C. 7:29-27.5. As we have
noted, the measurement business must "maintain on staff or retain as a
consultant a certified radon measurement specialist," N.J.A.C. 7:28-27.5
(emphasis added), who must "sign and be responsible for the review, approval,
and verification" of reports on radon tests. N.J.A.C. 7:28-27.5(a)(1). The
A-1777-17T3 28 regulations do not define the term "consultant" or delineate what his or her
business relationship must be to the certified measurement business. For
instance, the regulations do not make clear whether the consultant, who is not
"on staff," can be an independent contractor, agent, or representative of the
certified measurement business.
With respect to liability for regulatory compliance, the regulations declare
that certified measurement and mitigation businesses are
responsible for any violation of the Act committed by an employee in the scope of his or her employment. This responsibility shall be joint and several.
[N.J.A.C. 7:28-27.29 (emphasis added).]
By choosing to use the term "employee," rather than non-employee terminology
such as "independent contractor," the regulations appear to contemplate the
existence of an employment relationship between the technician in the field and
the certified measurement business, which is possibly only involved in
supplying the testing devices and in testing the submitted samples.
The term "scope of employment" is defined in the regulations as
acts carried out which are so closely connected with what a servant is employed to do and so fairly and reasonably incidental to it that they may be regarded as methods, even though improper, of carrying out the objectives of the employment and furthering the interest of the employer.
A-1777-17T3 29 [N.J.A.C. 7:28-27.2 (emphasis added).]
This definition lends further support to RDI's argument that the literal phrasing
of the regulations limit the term "employee" to traditional employer/employee
relationships.9 In response to a comment at the time of the 1990 rulemaking
about the scope of employment concept, the DEP stated, "[a]nything a
professional does to accomplish a job for which he or she is certified or to further
the interest of an employer are [sic] considered the scope of employment." 22
N.J.R. at 3519 (emphasis added). The agency response suggests a broad notion
of the kinds of activities that a certified measurement technician or specialist
may perform that are subject to compliance, but it does not clearly express that
a certified measurement business can be vicariously liable for the licensure and
conduct of professionals whom do not literally "employ."
As written, the regulations appear to contemplate that the certified radon
technicians and specialists who gather samples in the field must be either
9 Because we conclude the regulations, as written, cover only the acts of employees of RDI and other certified measurement businesses, we need not discuss here the various legal tests that describe in other contexts the characteristics of an independent contractor, as opposed to an employee. See e.g., Basil v. Wolf, 193 N.J. 38, 62-63 (2007) (quoting Baldasarre v. Butler, 132 N.J. 278, 291 (1993)). It will suffice to note that the DEP does not argue and has not proven that the individual technicians who serve as "affiliates" are RDI's employees. A-1777-17T3 30 employed by a certified measurement business or, alternatively, be specialists
who are self-employed and have certified business status. This key premise of
the original regulatory scheme is substantiated by the DEP's November 1990
Response to a Comment submitted in reaction to the proposed regulations:
Comment: If a business places charcoal canisters which they [sic] purchase from a certified laboratory and the laboratory sends the results directly to the customer, the business placing the canister should be exempt from certification.
Response: The certification process enables the Department to regulate a business to ensure that all sampling and analysis requirements are being adhered to and gives the Department legal authority to require the business to follow standard guidelines. The Department will be unable to determine if only certified persons are placing devices or that only certified laboratories are being utilized unless sampling businesses are monitored through certification. The Department finds no compelling reason to exempt businesses which only place devices from the certification process.
[22 N.J.R. at 3520 (emphasis added).]
This critically-relevant comment indicates that the regulations, as written and
duly adopted, were designed so that home inspection companies which merely
purchase radon tests, place them in buildings, and send the samples to a
laboratory, still need to be certified as measurement businesses.
A-1777-17T3 31 Further support for RDI's position is revealed by the DEP's 1990 Response
to a Comment raising concerns about small businesses and sole proprietors who
place radon test equipment in buildings. See 22 N.J.R 3517 (Nov. 19, 1990)
(responding to a Comment that "most radon businesses are two or three man
operations, operated out of individual homes," the DEP stated, "Since all radon
businesses will be subject to compliance with these rules, all businesses will be
required to employ certified individuals. Some operator/owners of small radon
businesses will qualify as certified individuals[.]").
The APA mandates that an administrative agency "shall consider fully all
written and oral submissions respecting [a] proposed rule," N.J.S.A. 52:14B -
4(a)(3), and prepare for the public a report containing the agency's response to
the comments submitted. N.J.S.A. 52:14B-4(a)(4). The agency's responses
must be meaningful, reasoned and supported. See Animal Prot. League of N.J.
v. N.J. Dep't of Envtl. Prot., 423 N.J. Super. 549, 573-74 (App. Div. 2011). "The
purpose of the APA rulemaking procedures is 'to give those affected by the
proposed rule an opportunity to participate in the process, both to ensure fairness
and also to inform regulators of consequences which they may not have
anticipated.'" In re Provision of Basic Generation Serv. for Period Beginning
June 1 2008, 205 N.J. 339, 349 (2011) (quoting In re Adoption of 2003 Low
A-1777-17T3 32 Income Hous. Tax Credit Qualified Allocation Plan, 369 N.J. Super. 2, 43 (App.
Div. 2004)).
Despite these published responses and the plain text of the regulations, the
DEP's witnesses at the administrative hearing contended that it has been the
agency's "long-standing practice" to treat non-employee "affiliates" of certified
measurement businesses as falling within the scope of those entities' oversight
obligations and, for whom those certified businesses are, in essence, vicariously
liable. The record suggests that the DEP has not, at least in recent years,
required home inspection firms and other companies who employ radon
technicians and specialists to obtain certification from the agency as a certified
measurement business. Perhaps the practical reason for this non-enforcement is
the economic burden that certification places upon such businesses, such as
keeping a certified specialist on staff or under contract as a consultant, the
various record-keeping obligations, and so on.
The DEP argues that it has made a reasonable regulatory choice in seeking
to hold certified measurement businesses accountable for the work of "affiliate"
technicians, rather than requiring such field workers to be employed by a
certified business. That approach may well be allowable under the broad
A-1777-17T3 33 umbrella of the RPA. But there are several critical legal flaws with the manner
in which the DEP has implemented that approach.
First and foremost, the DEP has failed to undertake formal rulemaking,
including public notice and comment, in compliance with the APA to codify its
"affiliate" concept and announce to the regulated community and the public in a
transparent manner exactly what persons and businesses will be expected to have
which obligations. The agency has done nothing formally to retract its published
responses to the 1990 comments concerning the regulations. As Metromedia
and other case law instructs, an administrative agency must adhere to these APA
requirements. 97 N.J. at 331-32, 338. The absence of proper revised regulations
addressing vicarious liability for affiliates is not a mere housekeeping chore.
We are persuaded that the balance of the Metromedia factors compel the
conclusion that the DEP's "affiliate" approach requires rulemaking. First, the
DEP intends its "affiliate" requirements to have "wide coverage encompassing
a large segment of the regulated or general public." 97 N.J. at 331. The DEP's
definition of "affiliate" affects all measurement businesses who report tests not
conducted by their own employees, even though RDI is allegedly the only such
business that the DEP has sanctioned on this basis. Second, the DEP clearly
intends to apply these "affiliate" responsibilities "generally and uniformly " to
A-1777-17T3 34 similarly situated entities. Ibid. There is no indication that similarly-situated
certified measurement business other than RDI would face different
requirements.
Third, the affiliate concept amounts to "a legal standard or directive that
is not otherwise expressly provided by or clearly and obviously inferable from
the enabling statutory authorization." Ibid. To be sure, the RPA gives the DEP
broad regulatory powers. However, the regulations the DEP promulgated in
1980 and has periodically renewed, pursuant to that authority, do not clearly
spell out a vicarious liability obligation with respect to the conduct of affiliates.
Fourth, while the second ALJ reasonably found DEP's interpretation of
"affiliate" to be long-standing, there is no evidence that the DEP's interpretation
of "affiliates" was "previously expressed in any official and explicit agency
determination, adjudication or rule." Ibid. As the DEP's witnesses' testimony
shows, the affiliate concept represents a post-rule adoption revised agency
policy decision interpreting the meaning and application of regulations and
therefore constitutes an interpretation of "law or general policy." Id. at 331-32.
Lastly, although the DEP is attempting to apply the affiliate obligation
retrospectively in this case to RDI as a basis for many claimed violations, the
affiliate concept appears to have prospective force as well. See Id. at 331.
A-1777-17T3 35 In sum, the Radon Section's "affiliate" policy is not expressed or readily
inferable from the text of the existing statutes, regulations, and the DEP's own
Responses to Comments published in the New Jersey Register. As such, the
standards have been impermissibly adopted by the DEP without appropriate
rulemaking, in violation of Metromedia.
An additional reason for rejecting the DEP's attempt in this case to impose
vicarious responsibility on RDI for the conduct of affiliates stems from what
RDI contends is the impossibility or impracticability of RDI vouching for the
services of individual technicians whom it does not employ, compensate, or
contractually bind through written agreements documented in the record .
"A regulation which in practice is illusory or impossible to comply with
is arbitrary and oppressive and would violate due process." Group Health Ins.
v. Howell, 43 N.J. 104, 112 (1964) (citations omitted). Comparably, the
Supreme Court has also stated that "[s]tatutory provisions which are unworkable
and impossible to comply with may be invalidated on the ground that they
constitute a denial of substantive due process" and "[u]nworkable municipal
ordinances may also be invalidated on the grounds that they are arbitrary a nd
unreasonable." Brunetti v. New Milford, 68 N.J. 576, 599 (1975) (citations
omitted).
A-1777-17T3 36 As RDI points out, some technicians may choose to affiliate with more
than one certified measurement business. The regulations do not specify how
those multiple businesses are to control the activities of such "multi -affiliated"
field workers. Nor is it clear how the measurement businesses are to coordinate
and exercise responsibility for the required training and re-certification of such
persons. In effect, what the DEP appears to be doing, to some extent, is to
delegate its own direct regulatory functions to a private entity as, in effect, a
"junior regulator." That delegation of a regulatory responsibility is not
permissible under the law. Absent statutory authority, agencies cannot delegate
their regulatory responsibilities to private entities. See e.g., N.J. Soc. for
Prevention of Cruelty to Animals v. N.J. Dep't of Agric., 196 N.J. 366, 400
(2008) (finding a Department of Agriculture regulation, in effect, impermissibly
subdelegated its mandate to establish humane practices to entities that could be
described as private interests); State v. Bd. of Health, 208 N.J. Super. 415, 416
(App. Div. 1986) (finding "[b]y its contract the Board [of Health] has sought to
delegate its governmental responsibility to a private entity. Absent statutory
authority, there can be no such delegation. 'This is especially true when the
agency attempts to subdelegate to a private person or entity, since such person
or entity is not subject to public accountability.'" (citations omitted)).
A-1777-17T3 37 Apparently, the DEP envisions that private certified measurement
businesses such as RDI will insist on its affiliates providing them with record s
documenting their status as certified technicians. 10 But that does not assure that
such persons are actually doing their tasks correctly out in the field. It is not
obvious how RDI, which pays the measurement technicians no money for their
activities, would have the economic leverage to control the quality of their work.
Hypothetically, RDI might "de-affiliate" with certain individual technicians
upon learning they are not complying with regulatory standards. But, as RDI
points out, doing so might not prevent such persons from affiliating instead with
one of RDI's competitors. Likewise, RDI asserts that it cannot feasibly restrict
its measurement reports to only samples collected by its own employers, because
other competitors would utilize "affiliates" unless the DEP took regulatory
action against those competitors as well. The Commissioner's final agency
decision presumes RDI derives a commercial "benefit" from its use of affiliates,
but it is not clear whether the DEP itself has adopted a regulatory approach that
makes such reliance an economic necessity. We need not resolve these
questions here, and they are best developed and resolved through a rulemaking
10 According to RDI, the DEP keeps a database of certification status and used to inform RDI when an individual's certification lapsed and/or expired, but has ceased doing so. A-1777-17T3 38 process in which the practicalities can be explored in a public, comprehensive,
and transparent fashion, and on remand (as we discuss infra) concerning RDI in
particular.
The DEP argues that RDI cannot be surprised by its position concerning
affiliates because such responsibilities are reflected in the QA/QC plans that
RDI periodically has agreed to follow. Yet that begs the important question of
whether the DEP has a sound legal basis in the statute and regulations to insist
on those requirements in the first place. Absent proper rulemaking, the
violations dependent on such requirements cannot stand.
2. The QA/QC Guidance Document
We turn to the DEP's attempt to enforce the terms of its QA/QC "Guidance
Document," which was issued without public notice-and-comment. We
conclude the Guidance Document likewise suffers, to some extent, from a
Metromedia rulemaking infirmity.
The APA allows administrative agencies to issue "regulatory guidance
document[s]" defined as "any policy memorandum or similar document used by
a State agency to provide technical or regulatory assistance or direction to th e
regulated community to facilitate compliance with State or federal law or a rule
adopted pursuant to [the APA]." N.J.S.A. 52:14B-3a(d). These guidance
A-1777-17T3 39 documents cannot "(1) impose any new or additional requirements that are not
included in the State or federal law or rule that the regulatory guidance document
is intended to clarify or explain; or (2) be used by the State agency as a substitute
for the State or federal law or rule for enforcement purposes." N.J.S.A. 52:14B-
3a(c).
This court has invalidated agency guidance documents that have imposed
obligations and standards beyond those expressed in duly-promulgated
regulations. See, e.g., In re Adoption of Reg'l Affordable Hous. Dev. Program
Guidelines, 418 N.J. Super. 387 (App. Div. 2011); In re N.J.A.C. 7:1B-1.1 et
seq., 431 N.J. Super. 100. "[A]n agency determination must be considered an
administrative rule when all or most of the relevant features of administrative
rules are present and preponderate in favor of the rule-making process."
Metromedia, 97 N.J. at 331.
By illustration, in In re Adoption of Regional Affordable Housing
Development Program Guidelines, 418 N.J. Super. at 389, the Council on
Affordable Housing ("COAH") adopted "guidelines" for the implementation of
an amendment to the New Jersey Fair Housing Act. We concluded these
guidelines "set forth specific standards and conditions for regional planning that
A-1777-17T3 40 COAH will find acceptable in its administration of [the applicable statute]" and
therefore constitute rules. Id. at 395.
We similarly invalidated DEP guidance documents in In re N.J.A.C. 7:1B-
1.1 et seq., 431 N.J. Super. 100, relating to the "waiver" rules excusing certain
regulatory compliance.11 In doing so, we noted the invalidated guidance
document "lists specific procedures and instructions that waiver applicants
should follow to prove and satisfy each of the four bases for waivers[.]" Id. at
136. We held that all six of the Metromedia factors applied to these guidance
documents and much of the DEP’s website postings concerning the waiver rules.
Id. at 137.
Here, the DEP’s QA/QC Guidance Document plainly contains certain
mandatory language. While some features of the Guidance Document merely
restate the requirements of N.J.A.C. 7:28-27.33 and the authorized measurement
protocols, other provisions add requirements not found in the regulations or set
forth specific requirements where the regulations otherwise are broadly written.
For example, the Guidance Document lists "[r]equired data tracking information
11 We note that the parties agreed in the present case that the DEP waiver regulations, N.J.A.C. 7:1B-1.1 to -2.4, could not be beneficial to RDI since some of the violations pre-date those regulations and also due to the exemption for licensure and certification issues. See N.J.A.C. 7:1B-2.1(b)(9). A-1777-17T3 41 [that] . . . must be on all chain of custody forms and mail order information
cards," including test location, client information, device model number,
floor/location, and so on. The radon regulations, by contrast, merely require a
"description of sample tracking/chain of custody procedures" including "names
and duties of the detector custodians . . . data tracking information required to
be entered . . . and . . . [s]amples of tracking forms." N.J.A.C. 7:28-27.33(a)(6).
Further, the Guidance Document requires specific provisions on school testing,
but the regulations for QA/QC Plans do not mention school testing at all. A
DEP witness at the hearing testified that the DEP would not approve RDI's
QA/QC plan without the school testing requirements. She candidly agreed that
the DEP’s guidance in this respect was "more of a directive."
The balance of Metromedia factors reflect that the Guidance Document is
intended by the DEP to operate as an unpromulgated rule. See 97 N.J. at 331-
32. First, the Guidance Document appears intended to apply to all certified
measurement businesses. Id. at 331. The document states "[a]ll sections in this
guidance document and the accompanying checklist must be included and
discussed in your QA/QC Plan." (Emphasis added). Second, this language in
the Guidance Document indicates its wide application as well as its intention "to
be applied generally and uniformly to all similarly situated persons." Ibid.
A-1777-17T3 42 Third, the Guidance Document appears intended to act prospectively to all
certification and yearly recertification applications of certified measurement
businesses. Ibid. Fourth, the Guidance Document prescribes requirements that,
while potentially valid if enacted through rulemaking, are not "clearly and
obviously inferable" from the RPA's grant of power to the DEP to create a
system of certification of businesses and persons conducting radon testing. Ibid.
The fifth Metromedia factor is not as clear in its application because, except for
the school requirements, the Guidance Document is not flatly contrary to
requirements expressed in the regulations. Ibid. Nevertheless, the Guidance
Document goes beyond the regulations in the mandates it conveys. 12 Finally,
the binding nature of the Guidance Document "reflects a decision on
administrative regulatory policy in the nature of the interpretation of law or
general policy." Id. at 331-32.
3. The Impact of the Agency's Metromedia Violations on This Case
Our legal determinations that DEP deviated from the APA and
Metromedia by its failure to promulgate valid rules concerning its "affiliate
liability" policy, and with respect to certain portions of its QA/QC Guidance
12 We recognize certain portions of the Guidance Document appear to relate back to federal standards imposed by the EPA. A-1777-17T3 43 Document does not mean that all of the measurement-related violations found
against RDI in this case must be vacated. Some of the violations are unaffected
by the Metromedia issue. In particular, certain violations relating to RDI's
measurement functions do not depend on vicarious liability for the licensure
status or activities of "affiliate" technicians, and may well be within RDI's
realistic ability to control through the work of its own employees. RDI should
not, for example, be certifying to the DEP and property owners that radon results
are accurate if it knows, or has sufficient reason to know, those results are
flawed. Moreover, as we note, infra, some of the violations adjudicated in the
administrative case have nothing to do with "affiliate" liability or the QA/QC
plan, such as the violations concerning mitigation-related inspections, and the
sale of alpha track testing devices.
As to the enumerated violations concerning RDI's QA/QC plan, we do not
set them aside wholesale because of the Metromedia problems. Rather, a
violation-by-violation analysis is necessary, tied to whether the specified
QA/QC violation is reasonably based on a fair application of the express terms
of a particular regulation rather than comprising a mandate founded upon the
unpromulgated language of the Guidance Document.
A-1777-17T3 44 Given the highly technical features of these subject matters, we are not in
the best position to perform a comprehensive violation-specific assessment in
the first instance. Although we recognize the considerable time and expense the
agency and RDI have already incurred in this administrative litigation, and the
efforts devoted by the two ALJs who presided over the lengthy hearings, we
conclude it preferable for this matter to be remanded to the OAL for further
proceedings in light of our Metromedia holdings.
As a predicate to the remand, and as an aid to the ALJ who will preside
over the remand proceedings, we direct the DEP to make a proffer to RDI within
forty-five days of this opinion as to which specific proven measurement
violations the DEP believes are unaffected by our Metromedia nullification, and
which ones are not. Indeed, at oral argument on appeal, the DEP's counsel
acknowledged that certain violations would need to be set aside in the
hypothetical event we were to conclude the agency's affiliate liability policy and
QA/QC Guidance Document had infirmities under Metromedia. RDI shall
respond to the DEP's proffer within thirty days, and the matter should then be
promptly scheduled for a case management conference before an ALJ.
On remand, the ALJ shall have discretion to hear additional testimony
germane to the issues, including: (1) the impact, if any, of our Metromedia ruling
A-1777-17T3 45 on specific violations; and (2) RDI's contention that certain violations are
founded upon a mistaken premise that it is possible and feasible for RDI to
control the acts of third parties that may underlie the claimed violation. The
ALJ on remand should also address in more detail RDI's arguments that certain
alleged "measurement" violations instead supplant the separate regulations
governing RDI's laboratory activities.
Upon completion of the ALJ's remanded findings, either party may file
timely exemptions with the Commissioner and, thereafter, a new appeal may be
filed with this court arising from the new final agency decision.
We further note that our decision to remand this matter does not require
the OAL or the agency to reconsider credibility findings on factual matters
already addressed by the second ALJ in her comprehensive written decision.
We reject RDI's argument that those credibility findings on factual issues should
be set aside. Those findings are entitled to our deference and are supported by
substantial credible evidence in the record. See H.K. v. State, 184 N.J. 367, 384
(2005). They need not be revisited. Of course, any new relevant factual
testimony adduced at the remand proceeding will need to be evaluated by the
ALJ for its credibility and probative worth.
A-1777-17T3 46 In sum, we hold the DEP's "affiliate" position is invalid under
Metromedia, and that those portions of its QA/QC Guidance Document that are
not expressed or fairly inferable from the published regulations are likewise not
a proper basis for enforcement. We remand for a further violation-by-violation
assessment in light of our ruling, as well as a more in-depth evaluation of RDI's
contentions of impossibility and impracticability of performance relating to the
activities of persons it does not employ, compensate, or control. More broadly,
we also urge the DEP to engage in prospective rulemaking in compliance with
the APA with respect to both its "affiliate" policy and QA/QC plans, so that the
published regulations accurately set forth the applicable standards to the public
and the regulated community.
III.
Lastly, we address the findings of violations by RDI that do not concern
its measurement functions, i.e., those involving radon mitigation and its sales of
radon detection devices. Upon reviewing the extensive record developed
concerning those particular violations, and the meticulous determinations of the
ALJs as upheld by the Commissioner, we are satisfied those findings are amply
supported by credible proof in the record and are neither arbitrary nor capricious.
Applying our limited scope of appellate review, we affirm those findings,
A-1777-17T3 47 substantially for the sound reasons expressed in the respective ALJ decisions
and in the Commissioner's final decision. RDI's arguments seeking to set aside
those determinations lack sufficient merit to warrant discussion here. R. 2:11-
3(e)(1)(D) and (E). Nonetheless, we add a few brief comments.
We are persuaded by the proof of RDI's nine violations of N.J.A.C. 7:28-
27.7(c), which requires certified radon mitigation businesses to "assure that
radon mitigation system installations are performed under the direct supervision
of a certified radon mitigation specialist or certified radon mitigation
technician." We agree with the agency that the term "directly supervise," as
expressed in the regulation, logically and reasonably requires the physical
presence of a specialist or technician to oversee the installations. Requiring
such physical presence is consistent with the overall objectives of public safety
reflected in the RPA. The requirement is neither arbitrary nor capricious. In
addition, we note and defer to the second ALJ's finding that RDI's contrary
interpretation was advanced by a witness who the ALJ found less credible than
the DEP's witnesses.
We likewise uphold the DEP's determination that RDI violated N.J.A.C.
7:28-27.7(d), which requires mitigation specialists to "perform a visual
inspection and diagnostic tests, as appropriate, prior to system installation to
A-1777-17T3 48 determine the appropriate mitigation system to be installed." The specialist also
must document the observations and test results from these inspections.
N.J.A.C. 7:28-27.7(d). The record shows that in, at least two instances, RDI
permitted mitigation systems to be installed by a mitigation technician without
"appropriate" visual inspection by a mitigation specialist. The agency has
reasonably rejected RDI's asserted justification that the individual deployed to
the buildings in question was merely acting as a "salesman," and was only
gathering data for an off-site mitigation specialist to evaluate.
Although the regulations do envision a degree of discretion by the
specialist in choosing what, if any, mitigation systems are "appropriate" for a
particular building, see 22 N.J.R. at 3521, the agency acted within its regulatory
prerogatives to disapprove of the manner in which RDI handled the cited
situations. Likewise, we upheld the determination of the DEP and the second
ALJ that RDI's use of "stock drawings" of mitigation systems was an
unacceptable practice.
RDI was also appropriately held liable for having two uncertified persons
conduct an initial on-site inspection of a mitigation project and install mitigation
systems. This is a proven violation of N.J.A.C. 7:28-27.7(d) and -27.3(e), and
supported by the evidence in the record.
A-1777-17T3 49 Finally, we note the record adequately supports the findings of both ALJs
and the agency with respect to RDI's multiple sales of "Alpha Track" testing
systems without proper certification to sell those items. See N.J.A.C. 7:28-
27.3(d). The agency reasonably rejected RDI's reliance upon an exemption that
only applies to businesses such as hardware stores that, unlike RDI, are retail
outlets not certified radon measurement businesses. See N.J.A.C. 7:28-
27.31(a)(4). Given that RDI is, and holds itself out as, a certified radon
measurement business, it is reasonable that customers would expect that RDI
had certification and expertise in all of the products it sells, as contrasted with a
mere retail store.
In sum, we affirm all of the non-measurement violations, which now may
be the subject of a penalty enforcement action.
IV.
For all of the foregoing reasons, we affirm the DEP Commissioner's final
agency decision in part and reverse and remand it in part for additional
administrative proceedings. The DEP is also urged to engage in prospective
rulemaking as mandated by the APA and Metromedia. We do not retain
jurisdiction.
A-1777-17T3 50
Related
Cite This Page — Counsel Stack
NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION VS. RADIATION DATA, INC. (DEPARTMENT OF ENVIRONMENTAL PROTECTION), Counsel Stack Legal Research, https://law.counselstack.com/opinion/new-jersey-department-of-environmental-protection-vs-radiation-data-inc-njsuperctappdiv-2018.