IN THE MATTER OF MODIFICATION OF FRESHWATER WETLANDS STATEWIDE GENERAL PERMITS

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4801-08T2

IN THE MATTER OF MODIFICATION

OF FRESHWATER WETLANDS STATEWIDE

GENERAL PERMITS, WATER QUALITY

CERTIFICATION AND WAIVER OF

TRANSITION AREA FOR ACCESS

April 20, 2011

Argued January 24, 2011 - Decided

Before Judges Lisa and Alvarez.

On appeal from a final decision of the Department of Environmental Protection, Division of Land Use Regulation, DEP Docket Nos. 0710-01-0005.1, 0710-01-0005.2, and 0710-02-0004.1.

Brian J. Levine argued the cause for appellant Preserve Old Northfield (Brenner & Levine, P.A., attorneys; Mr. Levine, of counsel and on the brief).

Kristen D. Heinzerling, Deputy Attorney General, argued the cause for respondent New Jersey Department of Environmental Protection (Paula T. Dow, Attorney General, attorney; Lewis A. Scheindlin, Assistant Attorney General, of counsel; Ms. Heinzerling, on the brief).

Thomas Spiesman argued the cause for respondent Daniel Markowitz c/o Maramark Builders LLC (Porzio, Bromberg & Newman, P.C., attorneys; Mr. Spiesman and Sarah M. Canberg, of counsel and on the brief).

Johnson, Murphy, Hubner, McKeon, Wubbenhorst, Bucco and Appelt, attorneys for amicus curiae Township of Livingston, join in the brief of appellant.

PER CURIAM

Preserve Old Northfield (POND) appeals from the April 8, 2009 issuance of a Modified General Permit No. 6 (GP6) by the New Jersey Department of Environmental Protection (DEP) to Daniel Markowitz c/o Maramark Builders, LLC (Maramark) on the basis that, in violation of its due process rights, it was excluded from the DEP's fact-finding process. It also contends the permit issued in error because the DEP failed to develop "a reasonable factual record" in support of the decision. We affirm.

A.

POND is a neighborhood association organized, as stated in its brief, "to preserve environmentally sensitive lands in the Township of Livingston." Litigation regarding this permit has spanned many years: a detailed background and procedural history may be found in two prior reported decisions. See In re Freshwater Wetlands Statewide General Permits, 185 N.J. 452 (2006) [hereinafter Maramark II]; In re Authorization for Freshwater Wetlands General Permits, 372 N.J. Super. 578 (App. Div. 2004) [hereinafter Maramark I].

The proceedings commenced February 21, 2001, when Maramark sought a letter of interpretation (LOI),1 a GP6, and a modified General Permit No. 10 (GP10), ancillary to its development of property located at Block 5100, Lots 32, 33, and 41, in Livingston Township. Maramark planned to subdivide the land, and construct an eleven-unit residential development and roadway with cul-de-sac on the triangle-shaped property, a total of 9.5 acres.

As can be inferred from ten years of litigation and two reported opinions, this permitting process has spawned a great deal of opposition from neighbors who alleged that if the DEP approved the project, significant harm would result. In addition to the generalized injury to the public from the loss of wetlands located on the site, POND and others feared adjoining landowners already affected by flooding would find those problems dramatically worsened.

It is undisputed the property contains isolated2 freshwater wetlands subject to the Freshwater Wetlands Protection Act (FWPA), N.J.S.A. 13:9B-1 to -30. An existing manmade ditch runs along the northwestern property line adjacent to contiguous Lots 37 and 38. A second ditch is located on Lot 33 generally perpendicular to the northwestern ditch and merges with it at the southern corner of Lot 37. DEP has verified the existence of the following isolated wetlands: (1) 0.064-acre wetland, (2) 0.136-acre wetland, (3) 0.178-acre wetland, (4) 0.071-acre wetland, (5) 0.132-acre wetland, (6) 0.081-acre wetland/swale, and (7) 0.138-acre wetland.

This appeal is from the remand proceedings conducted after Maramark I. There, we required the DEP to engage in a more comprehensive factual determination on the issues raised by POND as to the LOI, GP6, and GP10, specifically, its assertion that wetlands on the property in question were part of an inland surface water tributary system.

On remand, the DEP conducted a fact-finding meeting with Maramark and objecting parties on July 20, 2005. Thereafter, POND provided additional comments by letter on July 27, 2005. On September 7, 2005, DEP conducted an inspection of the property to identify and document on-site vegetation, and to determine if the on-site wetlands were indeed part of a surface water tributary system. On December 1, 2005, after two days of continuous rainfall, the DEP conducted a follow-up inspection. This site visit led to identification of an additional wetland, contiguous to one other isolated, and one other non-isolated, wetland. The classification of all three wetlands was changed to non-isolated.

These inspections generated a twenty-three-page fact-finding report, including a consolidated administrative history of the matter, responses to public comments, and a description of the site based not only on submitted materials but the DEP's own inspections. In the report, the DEP confirmed four of the wetlands were ecologically isolated, as there was no scarring, erosion, or concentrated flows from the source. See N.J.A.C. 7:7A-1.4.

The absence of erosion, scarring, or concentrated flows was crucial, as it indicated no connection to a surface water tributary system. The DEP did not observe water exiting two of the wetlands following two days of continuous rain, noted an impediment to the direct flow of water from one of the wetlands to the nearest drainage ditch,3 and determined that erosion and scarring found on one of the lots was unrelated to the wetlands. The DEP also found the wetlands on the property were of only intermediate, not exceptional, resource value, and were not State open waters or United States Environmental Protection Agency (EPA) priority wetlands. See N.J.S.A. 13:9B-7(c).

On March 23, 2006, however, the EPA determined that a 0.08-acre wetland on Lot 32, connected to an inlet, established a surface water connection to the Passaic River. That wetlands area was therefore considered a water of the United States subject to EPA oversight.

Applying the standards of N.J.A.C. 7:7A-5.6(b) to the property, the DEP concluded on April 25, 2006: (1) the wetlands at issue did not exceed the one-acre limitation; (2) they were eligible for an automatic transition area; and (3) the EPA's concurrence that the four isolated wetlands were not waters of the United States rendered an otherwise applicable one-half-acre limitation moot. See N.J.A.C. 7:7A-5.6(b)(2) (limiting issuance of a GP6 such that the "activities shall disturb no more than one-half acre of freshwater wetland and/or State open water, which is a water of the United States").

The DEP also explained discrepancies between its conclusions and the submitted materials, as well as discrepancies between its conclusions and the 1986 freshwater wetlands map. The 1986 freshwater wetland maps relied upon by POND were intended only to provide general guidance as to the location of wetlands, not to specifically delineate their boundaries. The DEP also confirmed that one of its earliest inspections of the property, performed on August 20, 2001, occurred during a heavy rain and that the December 1, 2005 inspection was conducted after two days of continuous rainfall.

Based on its inspections and collected data, the DEP determined water in these isolated wetlands was infiltrating into the ground, not exiting through overland flow. It recommended, however, that a new application for an LOI and statewide general permits be submitted as a result of the discovery of the additional wetland on December 1, 2005. Accordingly, on June 8, 2006, the DEP issued a notice of intent to terminate the previously issued permits and the LOI.

Pursuant to N.J.A.C. 7:7A-1.7, Maramark filed a request for a hearing with the Office of Administrative Law (OAL) on June 21, 2006. After discussions at a September 26, 2007 prehearing conference, Maramark presented revised development plans for the property.

On March 10, 2008, with the EPA's concurrence, the DEP conducted a dye test on the property to determine whether the non-isolated wetlands complex was in fact part of a surface water tributary system. Water and dye were poured into a storm drain located in one of the wetlands, and the surrounding areas observed for the presence of the dye. As the wetlands did not discharge to the surface, the DEP determined the wetlands were indeed isolated. Both it and the EPA modified their classifications accordingly. The DEP reconsidered its intention to terminate the LOI and permits, and entered into a settlement agreement with Maramark. Along with supporting documentation, notice of the proposed settlement was forwarded to affected property owners and persons who had previously submitted comments on September 18, 2008. The DEP published a notice of intent to settle in a bulletin on October 1, 2008, thereby triggering another public comment period.

In response to the received comments, the DEP issued a letter to "Interested Part[ies]" specifying the manner in which the dye test had been conducted and results collected. POND's engineering consultant and expert, Thonet Associates, Inc. (Thonet), filed written comments dated November 24, 2008. Thonet disputed the process employed by the DEP to gather data, challenged its conclusions as to the wetlands, and disagreed the dye test had been an adequate tool with which to gain the necessary information. The DEP also responded to comments by Maramark and the Township of Livingston.

DEP and Maramark entered into a proposed settlement agreement on February 27, 2009. Thereafter, on March 3, 2009, DEP and Maramark signed an addendum providing that the previously issued LOI and GP6 would be modified to conform with Maramark's revised plan, that no GP10 was required, and that all other terms of settlement remained in full force and effect.

On April 8, 2009, the DEP issued its decision to modify the original GP6, authorizing disturbance of the total 0.80 acres of freshwater wetlands for the construction of the eleven-lot residential subdivision, and terminating the existing GP10. The authorization noted that, as to the LOI, the wetland boundaries had been modified and were accurately depicted in the May 28, 2008 wetlands plan. A notice of settlement in the DEP bulletin followed on April 22, 2009. POND filed its notice of appeal on June 4, 2009.

B.

It is well-established that judicial review of an administrative agency's final decision is limited. Univ. Cottage Club of Princeton v. N.J. Dep't of Envtl. Prot., 191 N.J. 38, 48 (2007). An agency decision will not be reversed unless: "(1) it was arbitrary, capricious, or unreasonable; (2) it violated express or implied legislative policies; (3) it offended the State or Federal Constitution; or (4) the findings on which it was based were not supported by substantial, credible evidence in the record." Ibid. Generally, we do not "substitute" our "judgment for the expertise of an agency." In re Dist. of Liquid Assets, 168 N.J. 1, 10 (2001) (internal quotation omitted).

This deferential review is heightened when an agency's expertise involves highly technical subjects within its special competence, In re Freshwater Wetlands Protection Act Rules, 180 N.J. 478, 489 (2007), and when the agency has been delegated the "discretion to determine the specialized and technical procedures for its tasks." City of Newark v. Natural Res. Council, Dep't of Envtl. Prot., 82 N.J. 530, 540, cert. denied, 449 U.S. 983, 101 S. Ct. 400, 66 L. Ed. 2d 245 (1980).

This rule of review is particularly appropriate with regard to the DEP in relation to wetlands. Only the DEP has the "staff, resources and expertise to understand and solve those specialized problems." Bergen Pines County Hosp. v. N.J. Dep't of Human Servs., 96 N.J. 456, 474 (1984). The DEP's permitting authority has been previously determined to be neither strictly rulemaking nor adjudicatory. In re Issuance of a Permit to Ciba-Geigy Corp., 120 N.J. 164, 171 (1990). Agencies that operate within such a quasi-judicial capacity, like the DEP in this instance, must engage in fact-finding, In re Application of Howard Savings Inst., 32 N.J. 29, 52 (1960), and communicate results and conclusions to all interested parties. In re Issuance of a Permit to Ciba-Geigy Corp., supra, 120 N.J. at 173. This requirement is "far from a technicality and is a matter of substance." N.J. Bell Tel. Co. v. Commc'ns Workers of Am., 5 N.J. 354, 375 (1950).

C.

POND first claims the "objectors were denied due process because they were unable to meaningfully participate in the fact-finding analysis." Although excluded from direct involvement with the application, POND was found to have been accorded sufficient due process in the prior proceeding. Once again we conclude that POND has been accorded sufficient due process.

The amount of process due a given party is a flexible and fact-sensitive concept. Mathews v. Eldridge, 424 U.S. 319, 334, 96 S. Ct. 893, 902, 47 L. Ed. 2d 18, 33 (1976); Doe v. Poritz, 142 N.J. 1, 106 (1995). The Mathews test, applied in Maramark II, supra, requires us to first examine the nature of the private interest affected by the official action. 185 N.J. at 467. We then assess the risk of an erroneous deprivation through the procedures employed and the probable value of additional or substituted safeguards. Ibid. Lastly, we weigh the government's interest, including the specific function involved and the fiscal or administrative burdens additional or substituted procedural requirements would impose. Ibid.

We begin our discussion by acknowledging that POND is a party interested in the permit application. POND's rights as an interested party have been previously defined, and its status remains unchanged. See id. at 463. According to the Administrative Procedure Act (APA), "[a]ll interested [parties] are afforded reasonable opportunity to submit data, views or arguments, orally or in writing, during any proceedings involving a permitting decision." N.J.S.A. 52:14B-3.1(a).

POND fully participated by submitting its own analysis and supporting documentation during the notice and comment periods required by state regulation. Ultimately, POND is not a party to the permitting decision between DEP and Maramark, as the term "party" is defined in the APA. See N.J.A.C. 1:1-2.1 ("'Party' means any person or entity directly involved in a case, including a petitioner, appellant, complainant, respondent, intervenor, or State agency proceeding in any such capacity."). POND's status only entitles it to provide and obtain certain information.

Without citation to any statute, case, or rule, POND urges it was also entitled to notification of the on-site dye test. No authority has been provided because there is no support for the direct participation by, or presence of, non-parties to litigation in a data-gathering visit to an applicant's land. POND does not provide any authority for the proposition that it was entitled to direct involvement in the DEP's determination that a new permit application was necessary due to the discovery of the new wetland, and the significant discovery that two other wetlands thought to be connected to it were in fact isolated.

Only Maramark had the right to request an adjudicatory hearing contesting the DEP's decisions pursuant to N.J.A.C. 7:7A-1.7. POND has no basis for demanding it participate in settlement discussions, nor even to be advised such discussions were planned. Similarly, although POND has the right to be informed of all of the DEP's conclusions and the data upon which it reached those conclusions, it has no entitlement to piecemeal notification as the data is gathered, or to piecemeal challenges as the application moved forward.

Once the DEP and Maramark agreed to settle, Maramark was required to send notification to "each person who commented on the application." N.J.A.C. 7:7A-1.7(h)(1)(ii). The DEP was required to publish its intent to settle in a DEP bulletin. N.J.A.C. 7:7A-1.7(h)(2). Both notification obligations were satisfied. In this fashion, the second prong of the Matthews test was satisfied, as POND was noticed and as a result, submitted its position in writing to the agency and received agency responses.

N.J.A.C. 7:7A-1.7(h)(2) requires the DEP to accept comments on the published notice for at least thirty days. The DEP received comments from POND as well as other objectors. The DEP actually responded to POND's expert, Thonet, in detail, attaching its fact-finding analysis. After the comment period, the DEP appropriately executed the settlement agreement and addendum in late February and early March of 2009, as none of the comments changed its conclusions.

Maramark was required to provide POND with the notice of settlement at the close of the comment period, and did so. See N.J.A.C. 7:7A-1.7(h)(3). The DEP published the required notice of the final settlement on April 22, 2009. See N.J.A.C. 7:7A-1.7(h)(4). There is simply no basis in law supporting more than what was done here.

Additionally, analysis of the process accorded to POND in accord with Mathews leads us to conclude the DEP complied with relevant law. The nature of the private interest allegedly affected by official action, that the development of the subject property into residential units will result in flooding of the lands of adjacent property owners is highly speculative. See Maramark II, supra, 185 N.J. at 464.

Furthermore, contrary to POND's claim, the DEP actually administered the dye test and documented the test conditions, the procedures that were followed, and the results. The DEP provided POND with a two-page summary of the test and its findings, as well as a record of all written observations made in the field. Given the nature of the agency's expertise, nothing in the record supports POND's contention, advanced by its expert, that the dye test methodology was vulnerable to such risk of error that some other safeguards should have been implemented.

At this juncture, after the DEP met with interested parties in 2005, conducted additional site inspections, performed dye and other tests, and received and reviewed comments by objecting parties, it would be a substantial administrative burden for the matter to be remanded again. Under this last prong of the Mathews test, nothing more is due.

D.

POND also objects that the DEP did not develop an adequate record nor adequately explain its reasons for granting the GP6. In support of this claim, POND again attacks the dye test and the results obtained.

The newly discovered 0.081-acre wetland was tested because there was a storm drain present with a PVC pipe protruding from the ground and then into a ditch in a proximate area. It has been assumed that, if there were surface connections, the water in that wetlands complex, including the adjoining 0.138-acre and 0.064-acre wetlands, would enter the storm drain and then discharge to the ditch through the PVC pipe. Had that occurred during the dye test, the wetlands would be classified as part of a surface water tributary system under N.J.A.C. 7:7A-1.4. After dye and water from a garden hose were added to the storm drain for fifteen minutes, the ditch was checked for the presence of dye. Had the storm drain been connected to the PVC pipe, clearly there would have been a discharge because the PVC pipe was down gradient from the 0.081-acre wetland. There was no evidence of dye in the ditch. It was dry.

Ponded water was observed between the 0.081-acre wetland and the ditch, but there was no water absorbed in the ditch, nor was there evidence of recent water flow, even though approximately 1.25 to 2.5 inches of rain had fallen in the two days prior to the test. The DEP also examined other possible discharge points to ensure there was no evidence of dye in any other areas. Twenty minutes after the hose was turned off, water in the inlet dropped approximately six inches. Thus, it appears the water loss occurred through infiltration. As a result, the dye test confirmed that the storm drain in the 0.081-acre wetland did not discharge to a nearby surface water tributary system and the three relevant areas were classified as isolated.4

POND nonetheless attacks the administration of the dye test. Although this point was cleared up during oral argument, POND initially alleged the DEP itself had not conducted the test. Given our deferential review of agency action in this highly specialized area, we will not disturb the DEP's decision as to the test protocol and interpretation of results. See In re Freshwater Wetlands Protection Act Rules, supra, 180 N.J. at 489.

POND also complains that, because the 0.138-acre wetland drains in a southerly direction due to the downgrade of the property, the dye test cannot be conclusive. Although it is true the wetland is generally down-gradient, it was the 0.08-acre wetland with the storm drain that was the focus of the dye test. The characterization of the 0.138-acre and the 0.064-acre wetlands was affected by the outcome only because of the physical proximity between them. No surface connection was proven. POND has not identified any evidence of any connection through a surface tributary system or overland flow.

POND further attacks the DEP's designation of the extent and character of wetlands in the amended LOI. The LOI was amended to reflect the current plans and is therefore correct by virtue of the amendment. Because all the relevant wetlands were determined to be isolated, but for the 0.064- and the 0.138-acre wetlands which were noted as one, totaling 0.2 acres. In any event, this claim is not dispositive as it is the permit that authorizes disturbance and not the LOI. POND also attacks the DEP's role in delineating the wetlands. The authority, obviously, is vested solely in the Department and therefore this contention is without merit.

POND further contends the EPA's determination that the subject properties were no longer considered waters of the United States was made without adequate information; that the source of the EPA's change in position is actually unknown. POND was advised of the EPA decision on December 16, 2008, by way of the statement of items comprising the record on appeal, including the EPA's April 6, 2009 emailed decision. The EPA reached its findings as a result of a June 25, 2007 site visit. In any event, POND fails to present any convincing evidence that the EPA's conclusion lacks merit, and in any event, the basis of that determination is not germane to this appeal.

Finally, POND argues, based on Thonet's conclusions, that if no one claim of error is sufficient, the cumulative effects are a basis for issuance of the permit to be reversed. We do not agree as we see no error in the DEP's review or grant of the permit.

A

1 Our State's freshwater wetlands statutory scheme calls for a LOI prior to an application for a permit or waiver. N.J.S.A. 13:9B-8(a). Although these LOIs relate the presence or absence of wetlands, and assign a wetlands resource value classification to them, they are not the actual authorization for disturbance of the wetlands. In order to do so, a permit is necessary. Pursuant to N.J.S.A. 13:9B-23(b), a GP6 permit is required prior to any such activities in isolated wetlands. N.J.A.C. 7:7A-5.6(a).

2 These are wetlands "not 'part of a surface water tributary system[.]'" N.J.A.C. 7:7A-1.4.

3 The upland ground elevation west of the 0.136-acre wetland is higher than the wetland itself, thus creating the impediment to direct flow.

4 The DEP tested only those areas initially viewed as non-isolated, having previously determined the four remaining wetlands were isolated.