NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION OVERSIGHT RESOURCE ALLOCATION v. NANAK AUTO FUEL, INC

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0127-10T2

NEW JERSEY DEPARTMENT OF

ENVIRONMENTAL PROTECTION,

OVERSIGHT RESOURCE ALLOCATION,

Petitioner-Respondent,

v.

NANAK AUTO FUEL, INC. and

ROSS FOGG ENTERPRISES,

Respondents-Appellants.

_______________________________

December 19, 2012

Argued May 30, 2012 - Decided

Before Judges Espinosa and Kennedy.

On appeal from the New Jersey Department of Environmental Protection.

Joanna E. Grayer, Deputy Attorney General, argued the cause for respondent (Jeffrey S. Chiesa, Attorney General, attorney; Melissa H. Raksa, Assistant Attorney General, of counsel; Ms. Grayer, on the brief).

Jeffrey H. Sutherland argued the cause for respondents-appellants.

PER CURIAM

Defendants appeal from the final agency decision of the New Jersey Department of Environmental Protection (NJDEP) assessing a civil penalty against them of $20,000 for failure to sample potable wells, in violation of N.J.A.C. 7:26E-4.4(h)3vi, and $20,000 for failure to maintain and sample a "point of entry" treatment unit (POET) at a residence adjacent to their property, in violation of N.J.A.C. 7:26E-6.3(a). These requirements had been imposed upon defendants pursuant to the NJDEP's "field directive" of March 31, 2005, which required monthly monitoring, maintenance and sampling of the POET on the water supply at the neighboring residence, and regular sampling of neighboring potable wells. After considering the arguments presented in light of the record and applicable law, we affirm.

Ross Fogg Enterprises (Ross Fogg)1 operated a gas station at the intersection of Route 322 and Paulsboro Road in Swedesboro. In September 2000, Ross Fogg reported to the NJDEP that hazardous substances had been discharged from its underground storage tanks into the groundwater. A remedial investigation report submitted in 2001 confirmed the presence of hazardous substances in the groundwater in concentrations exceeding State standards under N.J.A.C. 7:26D-2.2.

On January 8, 2002, the NJDEP issued a directive to Ross Fogg requiring it to conduct a remedial investigation; to identify the source of the contamination; to establish and sample monitoring wells; and to delineate the scope of the contamination. On June 13, 2002, Ross Fogg submitted a remedial investigation report addendum stating that the hazardous substances in the groundwater still exceeded State standards and identifying three potable water supply wells and two domestic water supply wells within 1000 feet of its property.

On June 27, 2002, Nanak Auto Fuel, Inc. (Nanak) purchased the property from the estate of Ross G. Fogg.2 In January 2003, Nanak submitted quarterly monitoring well sample results to the NJDEP, again confirming hazardous substances in the groundwater in concentrations many hundreds of times greater than State standards permit.

In April 2003, the NJDEP advised both Ross Fogg and Nanak that their investigation reports were deficient and required them to delineate the scope of the contamination and to continue to sample the potable wells. After several other deficiency notices were issued by the NJDEP, on October 15, 2003, Ross Fogg and Nanak submitted a modified workplan "to completely address NJDEP requirements." The workplan included, among other things, the regular sampling of monitoring wells and "nearby potable wells." By a March 18, 2004 letter to Ross Fogg and Nanak's principal, the NJDEP conditionally approved the proposed modified workplan.

In early 2005, groundwater sampling still showed the presence of hazardous substances in excess of State standards. Also, sampling at a nearby residential well revealed the presence of hazardous substances in concentrations exceeding "safe drinking water" standards. Consequently, on March 31, 2005, the NJDEP issued a field directive to Ross Fogg and Nanak's principal requiring them, among other things, to conduct monthly monitoring and sampling of the POET unit at the residential premises well and monthly monitoring and sampling of three other potable wells.

Because neither Nanak nor Ross Fogg completed all the sampling and reporting required by the March field directive, the NJDEP notified them in July 2005, and again in November 2005, that they were out of compliance. On September 8, 2006, the NJDEP issued a notice of violation to Ross Fogg and Nanak for, among other things, their failure to sample potable wells as required by N.J.A.C. 7:26E-4.4(h)3vi and their failure to comply with the March field directive. The NJDEP further advised it would not assess penalties if Ross Fogg and Nanak undertook corrective actions by specified dates. They did undertake some efforts thereafter to meet NJDEP requirements, but consistently failed to sample and report sampling results as mandated by the NJDEP.

On February 7, 2007, the NJDEP issued an administrative order and notice of civil administrative penalty assessment (AONOCAPA) to Ross Fogg and Nanak and assessed a $5000 penalty for their failure to delineate soil and groundwater contamination. Nanak and Ross Fogg challenged the AONOCAPA, and the penalty was sustained.

Finally, on July 1, 2008, the NJDEP issued a notice of civil administrative penalty assessment against Ross Fogg and Nanak for, among other things, their failure to sample the potable wells, as required by N.J.A.C. 7:26E-4.4(h)3vi, and their failure to maintain and sample the POET unit at the residential premises, as required by N.J.A.C. 7:26E-6.3(a). A penalty of $20,000 was assessed for each violation. Nanak requested a hearing, and Ross Fogg joined in that request. The matter was then transferred to the Office of Administrative Law.

On June 7, 2010, the administrative law judge (ALJ) issued a decision in which he sustained the penalty assessment. Nanak and Ross Fogg had argued that repairs made by Nanak to the underground storage tanks in 2004, as well as its installation of a vapor recovery system, resolved the leakage of hazardous substances from the tanks. Further, sampling conducted in 2009 no longer detected any gasoline by-products.

The ALJ held that the "process was greatly elongated and marked by marginal compliance" and that the defense raised "misses the point." He found that Ross Fogg and Nanak undertook belated action "to avoid the [NJDEP] taking control of the project and imposing additional costs. They did not, however, move expeditiously or comprehensively prior to that time." He added that the amount of the penalties was "well below amounts that might have been charged" pursuant to N.J.A.C. 7:26C-10 and thus were "within reason."

Exceptions were taken to the ALJ decision and on July 22, 2010, the NJDEP Commissioner issued a final agency decision adopting the ALJ decision in its entirety. This appeal followed. On appeal, Ross Fogg and Nanak contend that the NJDEP decision was arbitrary and capricious and that the penalties assessed were excessive. They argue that the failure to report sampling results was due to noncompliance by their environmental consultants and that the contamination levels have now been found to be "de minimus." We reject these arguments.

The scope of review of an administrative agency's final determination is limited. In re Carter, 191 N.J. 474, 482 (2007) (citing Aqua Beach Condo. Ass'n v. Dep't of Cmty. Affairs, 186 N.J. 5, 15-16 (2006)). We accord an agency's exercise of its statutorily delegated responsibilities a strong presumption of reasonableness. City of Newark v. Natural Res. Council, 82 N.J. 530, 539, cert. denied, 449 U.S. 983, 101 S. Ct. 400, 66 L. Ed. 2d 245 (1980). The burden of showing the agency's action was arbitrary, unreasonable, or capricious rests upon the appellant. See Barone v. Dep't of Human Servs., Div. of Med. Assistance & Health Servs., 210 N.J. Super. 276, 285 (App. Div. 1986), aff'd, 107 N.J. 355 (1987).

The reviewing court "should not disturb an administrative agency's determinations or findings unless there is a clear showing that (1) the agency did not follow the law; (2) the decision was arbitrary, capricious, or unreasonable; or (3) the decision was not supported by substantial evidence." In re Application of Virtua-West Jersey Hosp. Voorhees for a Certificate of Need, 194 N.J. 413, 422 (2008) (citations omitted); see also Circus Liquors, Inc. v. Governing Body of Middletown Twp., 199 N.J. 1, 9-10 (2009) (citations omitted).

The court "may not vacate an agency determination because of doubts as to its wisdom or because the record may support more than one result," but is "obliged to give due deference to the view of those charged with the responsibility of implementing legislative programs." In re N.J. Pinelands Comm'n Resolution PC4-00-89, 356 N.J. Super. 363, 372 (App. Div.) (citing Brady v. Bd. of Review, 152 N.J. 197, 210 (1997)), certif. denied, 176 N.J. 281 (2003).

Guided by these principles, we find nothing in the record to suggest that the NJDEP Commissioner, in issuing the final agency decision at issue, acted arbitrarily, unreasonably or capriciously, or that the decision was not supported by evidence in the record. Moreover, the argument by Ross Fogg and Nanak that their former environmental consultant erred by not reporting well sampling as required by the NJDEP is utterly unpersuasive. As owners and operators of the underground storage tanks, Ross Fogg and Nanak were responsible to remediate discharges, N.J.A.C. 7:14B-8.2 and N.J.A.C. 7:26E-4, and to sample potable wells in accordance with N.J.A.C. 7:226E-4.4(h)3vi, and the POET unit in accordance with N.J.A.C. 7:26E-6.3(a). They are, therefore, the responsible parties for non-compliance with legitimate NJDEP requirements.

Additionally, the fact that the leak source has been eliminated does not absolve Ross Fogg and Nanak from properly monitoring, sampling and reporting on the levels and spread of the existing contamination in the groundwater. The NJDEP repeatedly warned both Ross Fogg and Nanak that their actions were inadequate, and their responses to those warnings were inadequate, as well.

The remainder of the arguments advanced on appeal are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).

Affirmed.

1 It appears that the actual name of this entity is Ross Fogg Gas Co., a New Jersey corporation. One of the principals of the company identified the entity as Ross Fogg Enterprises, and in the proceedings before the NJDEP at issue here, that name was utilized.

2 Appellants advise in their brief that "[b]ased on contractual agreements . . . Nanak assumed all NJDEP liabilities and indemnified . . . Ross Fogg." We have not been provided a copy of any contracts, however. Nonetheless, the NJDEP still considered Ross Fogg to be a "responsible party" with respect to the groundwater contamination at issue.