TOWN OF KEARNY, et al. v. NEW JERSEY RAIL CARRIERS, LLC, ET AL.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1304-04T51304-04T5

TOWN OF KEARNY, and

TOWN OF KEARNY HEALTH

DEPARTMENT,

Plaintiffs-Appellants,

v.

NEW JERSEY RAIL CARRIERS, LLC,

ANTHONY RIZZO, JR., and

DARREN RIZZO,

Defendants-Respondents,

and

DMJ, INC. and MICHAEL COLUMBINO,

Defendants.

________________________________________________________________

 

Submitted September 13, 2005- Decided

Before Judges Lefelt and Hoens.

On appeal from the Superior Court of New

Jersey, Chancery Division, Hudson County,

Docket No. C-110-04.

Castano Quigley, attorneys for appellants

(Brendan J. McCartney, of counsel and on

the brief).

Edwards & Angell, attorneys for respondents

(Harold J. Ruvoldt, Jr. and Christopher B.

Turcotte, of counsel; Mr. Ruvoldt, on the brief).

PER CURIAM

Plaintiffs, Town of Kearny and the Kearny Health Department, sued the New Jersey Rail Carriers, LLC, (NJRC) and its sole members and managers, Anthony and Darren Rizzo, alleging that they operated a solid waste facility at 65 Central Avenue in Kearny without obtaining the approvals required by the Solid Waste Management Act (SWMA), N.J.S.A. 13:1E-1 to -225. Judge Edward O'Connor dismissed the complaint, finding that NJRC was a rail carrier and thus exempt from the SWMA pursuant to the Interstate Commerce Commission Termination Act (ICCTA), 49 U.S.C.A. 701 to 727 and 10101 to 16106. We affirm.

In August 2003, NJRC requested recognition as a "rail carrier" from the Federal Surface Transportation Board, which has exclusive jurisdiction over railroads pursuant to the ICCTA, 49 U.S.C.A. 10501. If recognized as a rail carrier, NJRC would be exempt from all state regulations that interfere with railroad operations, as the ICCTA preempts such state regulations. Ibid.

The New Jersey Department of Environmental Protection (DEP) intervened in the action before the Surface Transportation Board and requested a stay "to allow the Board to determine whether [NJRC] would be conducting operations as a bona fide rail carrier[.]" The DEP was concerned that NJRC intended to be merely a "shipper in the solid waste disposal industry whose primary intent [was] to utilize the [ICCTA] preemption . . . to evade [relevant] environmental safety and health statutes and regulations." The Surface Transportation Board granted the DEP request and directed NJRC to provide additional information regarding its proposed business.

NJRC assured the Board and the DEP that it intended to operate as an intermodal container facility and not as a solid waste transfer facility. Solid waste facilities store, process, and transport solid waste, which is generally "any garbage, refuse, sludge, or any other waste material." See N.J.A.C. 7:26-1.4 and 1.6(a). Intermodal container facilities transfer completely sealed "solid waste . . . from one mode of transportation . . . to another." N.J.A.C. 7:26-1.4.

After the DEP considered NJRC's supplemental information, the DEP and NJRC entered into a settlement in December 2003. The DEP withdrew its opposition to NJRC's request for rail carrier recognition, and NJRC agreed to "comply with all relevant [DEP] regulations" as an intermodal container facility and, in the event it decided to operate a solid waste transfer station, it agreed to waive exemption under ICCTA and obtain a solid waste permit.

In January, 2004, the Surface Transportation Board accepted the settlement agreement and recognized NJRC as a bona fide rail carrier. By May 2004, NJRC had begun its rail carrier operations as an intermodal container facility, transferring containers of solid waste from over-the-road trucks to railroad cars.

Shortly thereafter, construction code and health officials from Kearny and Hudson County began to investigate the nature of NJRC's business. The officials apparently believed that NJRC was operating a solid waste facility, and sought proof of compliance with all relevant state regulations. Kearny's Construction Code official allegedly observed numerous "truck trailers, some open and some covered . . . that appeared to be filled with debris that was protruding" out of the trailers at the site.

When NJRC failed to supply proof of compliance with the SWMA that satisfied the officials, Kearny and its Health Department filed a verified complaint and order to show cause against defendants NJRC, the Rizzos, an entity called DMJ, Inc., and its owner Michael Columbino, alleging that defendants were operating a solid waste facility without proper permits from the DEP and a certificate of occupancy from Kearny. NJRC and the Rizzos have "no relationship, business or otherwise," with DMJ and Columbino, who also lease space at 65 Central Avenue.

NJRC denied all allegations against it, asserting it operated an intermodal container facility and not a solid waste facility and had obtained the required township permits. Kearny apparently agrees with this latter assertion and does not claim on this appeal that NJRC failed to obtain a zoning permit and certificate of occupancy.

Four days after Kearny filed its complaint against NJRC, the DEP issued NJRC a notice of violation of N.J.A.C. 7:26-2.8(f), which prohibits one from "begin[ing] construction or operation of a solid waste facility without obtaining a SWF [solid waste facility] Permit unless exempt." NJRC disputed the violation notice, citing its settlement, and again contended that it operated an intermodal container facility, not a solid waste facility. About eight days after it had issued its violation, the DEP rescinded its notice, explaining "[c]learly on a re-read of the 'Settlement Agreement', the issuance of this violation notice was inappropriate."

In conjunction with its answer to Kearny's complaint, NJRC had also moved to dismiss the complaint, primarily on the basis of federal preemption. This motion came before Judge O'Connor on the return date of the order to show cause. The judge found that the ICCTA preempted the SWMA and granted NJRC's motion to dismiss Kearny's complaint. Kearny promptly appealed to this court.

On appeal, Kearny argues that Judge O'Connor erred because NJRC and the Rizzos failed to comply with the pertinent SWMA regulations, which they had agreed to abide by in the settlement agreement entered into with the DEP. Kearny cites the following specific regulations that it claims NJRC is violating: N.J.A.C. 7:26-2.1 to -2.14 (imposing preclearance permit requirements on solid waste facilities); N.J.A.C. 7:26-3.6 (requiring preclearance authorization to operate an intermodal facility); N.J.A.C. 7:26-3.2 (prohibiting one from transporting solid waste without an approved registration statement); and N.J.A.C. 7:26-16.1 to -16.23 (imposing preapproval procedures for operating a solid waste business).

All of the regulations Kearny alleges NJRC violated establish preclearance permit requirements. Considering Kearny's complaint liberally, generously, and hospitably, as we must, Printing Mart-Morristown v. Sharp Electronics Corp., 116 N.J. 739, 746 (1989), and assuming that there is a factual dispute regarding precisely how NJRC is conducting its business on the Kearny site, we nevertheless agree with Judge O'Connor that these regulations are preempted by the ICCTA.

The ICCTA became effective in 1996. "It was passed 'to abolish the Interstate Commerce Commission' and 'to reform economic regulation of transportation.'" Vill. of Ridgefield Park v. New York, Susquehanna & W.Ry. Corp., 163 N.J. 446, 453 (2000) (quoting H.R. Rep. No. 104-311, at 1 (1995), reprinted in 1 995 U.S.C.C.A.N. 793). To that end, the ICCTA replaced the Interstate Commerce Commission with the Surface Transportation Board, 49 U.S.C.A. 701, and provided the Board with exclusive jurisdiction over rail carriers. 49 U.S.C.A. 10501.

The ICCTA preempts any state or local regulation that interferes with or frustrates railroad operations, transportation-related activities, or interstate commerce. Vill. of Ridgefield Park, supra, 163 N.J. at 460-61. Although State regulations that protect the public health and safety and do not interfere with a railroad's ability to operate, generally are not preempted, id. at 460, preclearance permitting requirements, such as those cited by Kearny, are preempted. Ibid.; Borough of Riverdale Petition for Declaratory Order, The New York Susquehanna and W. Ry. Corp., 1 999 WL 715272, at 5-6 (S.T.B.).

In this case, Kearny does not challenge that the ICCTA preempts the preclearance permitting regulations it claims NJRC violated. Instead, Kearny relies on the settlement agreement, in which NJRC agreed to "apply for and obtain a solid waste permit prior to operating a solid waste transfer station, whether or not such permits are required of rail carriers[,]" and to "comply with all relevant [DEP] regulation[s]" "[a]s a rail carrier intermodal facility[.]"

The problem with Kearny's argument is that the settlement is a contract and must be interpreted pursuant to principles of contract law. Borough of Haledon v. Borough of North Haledon, 358 N.J. Super. 289, 305 (App. Div. 2003). Though the agreement is inartfully drafted, we interpret it as providing that the parties did not intend to create any rights in third-parties such as Kearny. A non-party cannot seek enforcement of a contract unless it "clearly appear[s] that the contract was made by the parties with the intention to benefit the third party" and that "the parties to the contract intended to confer upon [the third-party] the right to enforce it." First Nat'l State Bank v. Carlyle House, Inc., 102 N.J. Super. 300, 322 (Ch. Div. 1968), aff'd o.b., 107 N.J. Super. 389 (App. Div. 1969), certif. denied, 55 N.J. 316 (1970). This agreement specifically disavowed the creation of third-party beneficiary rights, and thus, Kearny, as a non-party to the settlement, has no standing to enforce the contract.

Finally, we note that the DEP obviously has standing to enforce its settlement with NJRC. The record reflects that various inspections of the site were made by the DEP. We construe its withdrawal of the violation notice as signaling its conclusion that NJRC has not, thus far, violated the settlement terms, including presumably its agreement "[a]s a rail carrier intermodal facility, . . . [to] comply with all relevant [DEP] regulations." Should circumstances change in any way, the DEP is obviously free to take whatever action it deems necessary and appropriate to protect the public health and safety.

 
Affirmed.

The judge further concluded that Kearny's contentions against DMJ and Columbino were meritorious. DMJ and Columbino apparently were operating a "solid waste hauling and/or other trucking business" at the site. The judge directed Columbino and DMJ to cease all business operations, as they had not obtained the requisite zoning permit and certificate of occupancy from Kearny. Neither DMJ nor Columbino appealed from this determination and consequently they are not parties to this appeal.

In its appellate brief, Kearny violated R. 2:6-2(4) and (5), as it made legal arguments in the "Statement of Facts" and merely concluded its position in a one-page "Legal Argument."

The agreement provides: "Third Party Rights. Nothing in this Agreement shall be construed to create any rights in any persons or entities other than the parties hereto as third party beneficiaries."

Although Kearny asserts in its reply brief that the standing argument was not made below, Kearny is mistaken as it was specifically argued before Judge O'Connor. In addition, Kearny argues that it does not seek to enforce the settlement, but is "only making factual assertions based upon the Agreement." We do not understand this argument. If Kearny is not seeking to enforce the agreement, then it has no rebuttal to NJRC's preemption argument.

(continued)

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A-1304-04T5

September 28, 2005