NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION v. R.A. REIFF, INC. et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4262-06T34262-06T3

NEW JERSEY DEPARTMENT OF

ENVIRONMENTAL PROTECTION,

Petitioner-Respondent,

v.

R.A. REIFF, INC. and EDWARD J.

SWEENEY & SONS, INC.,

Respondents-Appellants.

_________________________________________

 

Submitted October 3, 2007 - Decided October 22, 2007

Before Judges Wefing, Parker and Lyons.

On appeal from the New Jersey Department of Environmental Protection, Agency Docket No. PEA050001-246106.

David M. DeClement, attorney for appellants.

Anne Milgram, Attorney General, attorney for respondent (Lewis A. Scheindlin, Assistant Attorney General, of counsel; Scott B. Dubin, Deputy Attorney General, on the brief).

PER CURIAM

R.A. Reiff, Inc. (Reiff), a motor fuel hauler, and Edward J. Sweeney & Sons, Inc. (Sweeney), a motor fuel supplier, appeal from a final administrative order and penalty issued by the New Jersey Department of Environmental Protection (DEP) for violation of the Water Pollution Control Act (WPCA), N.J.S.A. 58:10A-1 to -20, the Underground Storage of Hazardous Substances Act (USHSA), N.J.S.A. 58:10A-21 to -35, and regulations promulgated thereunder. The following factual and procedural history is relevant to our consideration of the issues advanced on appeal.

On November 15, 2004, DEP representatives inspected Egg Harbor Gas & Go (Gas & Go), a gas station which operates with on-site underground storage tanks for the retail sale of motor fuels. They determined that the registration of all five of the underground storage tanks had expired on September 30, 2001. In addition, the DEP inspectors found that Sweeney had shipped and Reiff had delivered 5000 gallons of unleaded gas to the Gas & Go storage tanks on November 13, 2004. As a result of this inspection, on February 1, 2005, the DEP issued an administrative order and notice of civil administrative penalty assessment to Reiff and Sweeney. The administrative order and notice of civil administrative penalty assessment found, in paragraph six, that "[a]t the time of inspection, a Gas & Go representative provided documentation to [DEP] representatives that as recently as November 13, 2004, Sweeney shipped and Reiff delivered 5000 gallons of unleaded gasoline to the unregistered USTs at Gas & Go." Reiff and Sweeney were cited for violating N.J.A.C. 7:14B-1.8(b) (subsequently recodified at N.J.A.C. 7:14B-5.9(b)), which provides that "[n]o person or business firm shall introduce hazardous substances into a regulated underground storage tank which is not properly registered with the [DEP] pursuant to N.J.A.C. 7:14B-2.1." A fine in the amount of $15,000 was assessed.

Reiff and Sweeney responded with a hearing request, and the case was transmitted as a contested case to the Office of Administrative Law. An initial decision, based on the submission of pleadings by the parties, was rendered by Administrative Law Judge John R. Tassini on February 22, 2007. In a detailed, thorough, and comprehensive opinion, Judge Tassini concluded that Reiff and Sweeney were subject to N.J.A.C. 7:14B-1.8(b); that the DEP was authorized to assess civil administrative penalties; that appropriate regulations would indicate the violation was one of moderate seriousness and involved moderate conduct, such that the fine should be between $10,000 and $20,000; that the DEP has discretion to move from the mid-point of that penalty range based on specific factors; that based on those factors, the penalty should be at the low-end of the penalty range, that is $10,000; and that the grace period law does not provide relief with respect to the assessment of this penalty.

On March 30, 2007, the Commissioner of the DEP concluded that Judge Tassini's decision was well supported by the factual record and the applicable legal authorities and adopted it. This appeal ensued.

On appeal, Reiff and Sweeney present the following arguments for our consideration:

POINT I

RESPONDENT IS NOT LIABLE UNDER N.J.A.C. 7:14B-1.8(b) BECAUSE HE IS NOT AN INCLUDED CLASS SUBJECT TO THE REQUIREMENTS.

POINT II

LEGAL ANALYSIS OF PENALTY ASSESSMENT.

Reiff and Sweeney argued below and repeat their argument here that the language of N.J.A.C. 7:14B-1.8(b) is not applicable to them since they are not owners or operators of underground storage tanks. The regulation at issue provides that "[n]o person or business firm shall introduce hazardous substances into a regulated underground storage tank which is not properly registered with the [DEP] pursuant to N.J.A.C. 7:14B-2.1." Reiff and Sweeney argue that since Chapter 14B of the administrative regulations deals with underground storage tanks, the persons or business firms referred to in N.J.A.C. 7:14B-1.8(b) must be within the class of the regulated group, that is, owners and operators of underground storage tanks. We do not agree.

The Legislature clearly found that it was "necessary to provide for the registration and systematic testing and monitoring of underground storage tanks" to protect the state's natural resources. N.J.S.A. 58:10A-21. It further found that it was necessary to authorize the DEP to adopt a regulatory program to protect the environment against hazardous substances leaking from underground storage tanks into the state's groundwater. Ibid. It is important to note that the USHSA specifically defines "person" to mean "any individual, partnership, company, corporation, consortium, joint venture, commercial or any other legal entity, the State of New Jersey, or the United States Government." N.J.S.A. 58:10A-22(k). Moreover, the USHSA authorizes the DEP to promulgate rules and regulations which establish standards for, among other things, the "operation" of new and existing underground storage tanks. N.J.S.A. 58:10A-25(a)(2). The DEP regulations that address the operation of underground storage tanks, therefore, are consistent with the underlying legislative mandate. See In re Twp. of Warren, 132 N.J. 1, 26 (1993).

It is "axiomatic that a rule of an administrative agency is subject to the same canons of construction . . . as a statute." Essex County Welfare Bd. v. Klein, 149 N.J. Super. 241, 247 (App. Div. 1977). It is equally axiomatic that the language of a statute must be construed according to its plain meaning, so long as that meaning comports with a statute's legislative intent. Chasin v. Montclair State Univ. 159 N.J. 418, 426 (1999).

The regulatory language is clear. It applies to any person or business firm. Moreover, in adopting the regulation, the DEP explained that it was doing so "to ensure that underground storage tank systems which are known or suspected to be leaking or discharging hazardous substances or are not properly registered with the [DEP] do not get filled with hazardous substances." 29 N.J.R. 1593(a) (May 5, 1997). Further, in adopting revisions to the definitions applicable to N.J.A.C.

7:14B-1.8 in 2003, the DEP stated, "N.J.A.C. 7:14B-1.8 specifically places liability upon tank owners, tank operators and firms which supply facilities which are not registered or are known to be leaking." 35 N.J.R. 2304(a) (May 19, 2003) (emphasis added). It is clear, therefore, that the DEP did not want others to be supplying owners and operators of unregistered underground storage tanks with hazardous substances. Consequently, Reiff and Sweeney's argument that they are not within the purview of the regulation lacks merit.

Next, Reiff and Sweeney argue that the fine and penalty is excessive and should be considered minor. We disagree. An appellate court will not upset the ultimate determination of an agency unless shown that it was arbitrary, capricious, or unreasonable, or that it violated legislative policies expressed or implied in the act governing the agency, or where the findings on which the decision was based are not supported by the evidence. Campbell v. Dep't. of Civil Serv. 39 N.J. 556, 562 (1963).

N.J.S.A. 58:10A-32 states that a person violating the provisions of the WPCA is liable to the penalties pursuant to N.J.S.A. 58:10A-10. That statute authorizes penalties of not more than $50,000 for each violation and for each day during which a violation continues, and provides that the Commissioner is to set by regulation a range for violations of similar type, seriousness and duration. N.J.S.A. 58:10A-10. The DEP, therefore, implemented a regulation to fulfill that charge at N.J.A.C. 7:14-8.5. A matrix is used to determine the range of the penalty to be assessed. N.J.A.C. 7:14-8.5(f). The matrix requires the DEP to determine the "seriousness" and the "conduct" of the violator to arrive at a penalty range. Ibid.

In the DEP's initial notice, it assessed a penalty of $15,000 based upon a matrix determination that the "seriousness" and "conduct" were both "moderate." The Administrative Law Judge, in reviewing the factors involved in this case, found that a decrease in the penalty from the mid-point to the bottom of the range was appropriate and the Commissioner affirmed that determination.

N.J.A.C. 7:14-8.5(g)(2) sets forth that a violation is to be deemed one of moderate seriousness when it has the potential to cause harm to human health or the environment, which substantially deviates from the requirements of the WPCA or the USHSA, or which violates certain DEP rules. We agree with the DEP that delivering 5000 gallons of fuel oil to an unregistered tank has that potential. Therefore, there is adequate factual and legal support to find the "seriousness" of Reiff and Sweeney's violation was moderate.

N.J.A.C. 7:14-8.5(h)(2) provides that conduct is deemed moderate if there is "any unintentional but foreseeable act or omission by the violator." That was the case here. The fact finder determined that there was no intentional violation, but it was foreseeable that if a supplier does not check to see if the owner or operator of fuel tanks has registered the tanks, a violation of N.J.A.C. 7:14B-1.8(b) may well occur. Consequently, there is adequate support in the record to conclude that the range arrived at using the regulatory matrix was appropriate. The determination to utilize the mitigating factors in N.J.A.C. 7:14-8.5(i) to arrive at the lower end of the range was also appropriate.

Reiff and Sweeney also argue that the violation was "minor" pursuant to N.J.S.A. 13:1D-129 and a grace period should have been afforded to them rather than a fine. We disagree. N.J.S.A. 13:1D-129 requires all six conditions in the statute to be met to designate a violation as "minor." We agree with the Administrative Law Judge that that was not the case. For instance, providing motor fuel to an unregistered tank clearly undermines and impairs the goals of the underground tank regulations. N.J.S.A. 13:1D-129(b)(3).

We are satisfied, that given the comprehensive findings of fact and conclusions of law and the statutory and regulatory framework against which they were reviewed, that Reiff and Sweeney's arguments on appeal lack merit. Accordingly, we affirm.

In the DEP's brief, it asserts that it exercised discretion by "assessing only one penalty to cover multiple fuel deliveries as well as in lowering the penalty from the mid-point of the range." The record, however, does not support a factual finding that there was a long term course of conduct by Reiff and Sweeney as only one invoice for a shipment on November 13, 2004 was included in the record.

(continued)

(continued)

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A-4262-06T3

October 22, 2007