IN RE STATE OF NEW JERSEY HIGHLANDS WATER PROTECTION AND PLANNING COUNCIL

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

IN RE STATE OF NEW JERSEY

HIGHLANDS WATER PROTECTION AND

PLANNING COUNCIL FEBRUARY 28,

2012 DECISION.

__________________________________

Telephonically argued April 11, 2013 Decided August 7, 2013

Before Judges Messano, Ostrer and Mantineo.

On appeal from the New Jersey Highlands Water Protection and Planning Council.

Jonathan E. Drill argued the cause for appellant Township of Greenwich (Warren County) (Stickel, Koenig, Sullivan & Drill, attorneys; Mr. Drill, on the briefs).

Dean Jablonski, Deputy Attorney General, argued the cause for respondent New Jersey Highlands Water Protection and Planning Council (Jeffrey S. Chiesa, Attorney General, attorney; Lewis A. Scheindlin, Assistant Attorney General, of counsel; Mr. Jablonski, on the brief).

John F. Casey argued the cause for respondent 189 Stryker Road Associates (Wolff & Samson, PC, and Law Offices of Robert S. Dowd, Jr., LLC, attorneys; Mr. Casey and Robert S. Dowd, on the brief).

PER CURIAM

In this appeal, we must decide when a municipality must comply with the regulatory framework of the Highlands Water Protection and Planning Act (Act), N.J.S.A. 13:20-1 to -35, if it has chosen to join the Highlands Region planning areas. At issue is compliance with the provision that requires a municipality to obtain prior approval of the Highlands Water Protection and Planning Council (Council) before amending its municipal land use ordinance.

Appellant Greenwich Township (Greenwich) argues that Lopatcong Township (Lopatcong) was subject to this prior approval requirement when it amended its land use ordinance to permit, as a conditional use, the siting of asphalt and concrete manufacturing facilities in Lopatcong, which borders Greenwich. Thus, Greenwich argues, the Lopatcong ordinance was invalid because Lopatcong did not seek or obtain prior approval.

However, the Council, interpreting the Act, determined that the relevant area of Lopatcong was not yet subject to the Regional Master Plan (RMP)1 when Lopatcong adopted its challenged land use ordinance. Therefore, prior approval was not required. Greenwich appeals the Council's decision.2 Having reviewed Greenwich's arguments in light of the facts and applicable law, we affirm.

I.

We begin with a summary of the Act, the RMP, and the plan conformance process, which is essential to understand the facts of the case. The Act was enacted in 2004, and "is premised on the need for coordinated land use planning and regulation to protect the important resources of the Highlands Region." N.J. Highlands Water Protection & Planning Council, Plan Conformance Guidelines (2008) (Conformance Guidelines) at 1.3 The Highlands Region includes Greenwich, Lopatcong and other municipalities in seven counties. N.J.S.A. 13:20-7. The Act promotes a comprehensive "regional approach to land use planning in the preservation area" and "replace[s] the existing uncoordinated system." N.J.S.A. 13:20-2. It established the Council to prepare a "regional master plan" for the Highlands Region. N.J.S.A. 13:20-6i; see also N.J.S.A. 13:20-8 (requiring Council to prepare and adopt RMP). The Council is located within, but independent of, the Department of Environmental Protection. N.J.S.A. 13:20-4.

The RMP must provide "a resource assessment" that determines sustainable development in the Highlands ecosystem, and a framework for developing policies in areas in which local governments conform to the RMP. N.J.S.A. 13:20-11. The Council adopted the RMP in 2008. The Council provides technical assistance and financial benefits to municipalities that conform their local master plans with the RMP. See, e.g., N.J.S.A. 13:20-13k, -18b.

The Act also established a "plan conformance" process, "by which Highlands Region counties and municipalities implement relevant aspects of the RMP and gain the benefits of Plan Conformance, such as grants, technical, and planning assistance[.]" RMP at 366. The Act recognizes that some municipalities may be partially in a preservation area, where conformance is mandatory, and partially in a planning area, where conformance is voluntary. See N.J.S.A. 13:20-14, -15.

The RMP refers to the Conformance Guidelines, which define the process for conformance in both preservation and planning areas. To obtain conformance in a preservation area, a municipality must first provide a notice of intent, by formal resolution, to petition the Council for conformance. Conformance Guidelines at 8. Jurisdictions were required to file notices of intent for preservation areas by February 2009. Ibid. Next, the municipality was to submit a revised municipal plan that incorporated changes to conform to the RMP. The Council would review the proposed municipal plan, and reject or conditionally approve it after a public hearing. For preservation areas, the Act compels municipalities to "adopt and enforce the plan or development regulations as so changed." N.J.S.A. 13:20-14a.

The Conformance Guidelines also detail the process for plan conformance within a municipality's planning areas, which is the subject of the instant appeal. For planning areas, a municipality may voluntarily submit a notice of intent by passing a formal resolution. Unlike in preservation areas, the notice of intent is non-binding for planning areas. After the municipality submits its petition, which includes proposed changes to the municipality's land use plan, the Council reviews it, and may reject or approve it subject to conditions. The municipality must then pass an ordinance formally "petition[ing] the [C]ouncil of its intention to revise its master plan and development regulations . . . to conform with the goals, requirements, and provisions of the regional master plan[.]" N.J.S.A. 13:20-15a(1). According to the Council, the process provides a municipality with the Council's preliminary assessment of how plan conformance would affect the municipality's planning areas, before the municipality binds itself to conform. The municipality can then decide whether to continue to pursue conformance in its planning areas.

Although a municipality's decision to conform its planning areas to the RMP is voluntary, it is implied the municipality must remain in compliance with the RMP after it is deemed in conformance. Such compliance is encouraged by financial and technical incentives. For instance, under N.J.S.A. 13:20-15a(3), "[a]ny municipality approved by the [C]ouncil to be in conformance with the regional master plan . . . shall be entitled to any financial or other assistance or incentives received by a municipality from the State as a benefit or result of obtaining council approval[.]" Similarly, N.J.S.A. 13:20-18 provides that a municipality whose master plan and development regulations "have been approved by the [C]ouncil to be in conformance with the regional master plan . . . shall qualify for State aid, planning assistance, technical assistance, and other benefits and incentives[.]"

The Council may also take legal action against a conforming municipality that fails to comply with the RMP. The Council may "institute an action or proceeding for injunctive relief for any violation of the regional master plan in the planning area" of a conforming municipality. N.J.S.A. 13:20-25. In addition, a conforming municipality is to reexamine its master plan every ten years. N.J.S.A. 13:20-15a(4); N.J.S.A. 40:55D-89. If the Council determines the reexamined master plan does not conform to the RMP, the Council may require the municipality to reimburse the Council or the State for financial benefits it received under the Act "as a benefit or result of obtaining council approval[.]" N.J.S.A. 13:20-15a(4).

Of significance to this appeal, the RMP provides that "[o]nce a municipality . . . has received Plan Conformance approval, it has an obligation to maintain the plans, ordinances and regulations that brought it into conformance." Under the Conformance Guidelines, the Council must approve any amendment to a conforming municipality's master plan.

II.

We turn now to the facts of the case, which involve the various steps Lopatcong took toward voluntary plan conformance, during which it amended its land use ordinance to permit asphalt plants as a conditional use.

On December 3, 2008, Lopatcong passed Resolution R08-130, providing the Council with a notice of intent to petition for plan conformance within Lopatcong's preservation and planning areas. The resolution stated the notice of intent "is not binding with respect to lands within the Planning Area." Lopatcong then passed Resolution R09-109 in November 2009 to "authoriz[e] the submission of [a] petition for plan conformance to the . . . Council for land in the preservation area and in the planning area."4 Again, Lopatcong expressly stated the resolution was not binding regarding its planning areas. In December 2009, Lopatcong submitted its petition by resolution for plan conformance of both planning and preservation areas in the township.

The Council reviewed the petition, provided recommendations, and created a Final Consistency Review and Recommendations Report in February 2011. That report required Lopatcong to "prepare and submit to the . . . Council a draft municipal ordinance petitioning the . . . Council for Plan Conformance with respect to the municipality's Planning area lands[.]" The report stated that once the Council approved the ordinance, it "shall be prepared for purposes of public review and adoption by the municipal Governing Body." But see N.J.S.A. 13:20-15a(1) (stating that a municipality must first pass an ordinance before obtaining conformance approval). On March 17, 2011, the Council adopted Resolution 2011-11 approving Lopatcong's petition "with conditions as set forth in the Final Consistency Review and Recommendations Report[.]"

In a "whereas clause," Council Resolution 2011-11 recognized that the Conformance Guidelines prohibited Lopatcong from amending its master plan or land use regulations without the Council's prior approval:

[N]o amendment to any master plan or development regulations applicable to the development and use of land in the Township of Lopatcong shall be effective until the Township of Lopatcong has submitted such amendment to the . . . Council and such amendment has been found by the Council to be in conformance with the Regional Master Plan, or the Executive Director has notified the Township of Lopatcong that such amendment does not affect the . . . Council's prior finding of Plan Conformance[.]

On November 2, 2011, Lopatcong adopted Ordinance 2011-15, which added asphalt and concrete manufacturing facilities as conditional uses on certain lands. Lopatcong Ordinance 2011-15 does not indicate it sought the Council's approval before its enactment. It is undisputed that Ordinance 2011-15 involved permitted uses in Highlands planning areas, and not preservation areas.

On December 29, 2011, Lopatcong adopted Ordinance 2011-19, titled "Ordinance to Petition the Highlands Council for Plan Conformance for the Planning Area." The ordinance recognized that Lopatcong had already petitioned the Council, which conditionally approved the petition. The ordinance stated that Lopatcong must conform its master plan within its planning areas "in accordance with the provisions of the . . . Highlands Council['s] approval of the municipality's Petition for Plan Conformance[.]"

Lopatcong Ordinance 2011-15 also reserved the municipality's rights pertaining to the planning areas. The ordinance indicated Lopatcong could "withdraw that portion of its Petition for Plan Conformance for the Planning Area," and that any approvals, rejections, or conditions of the revised municipal master plan were not binding upon Lopatcong. In January 2012, the Council approved Lopatcong's amended petition for plan conformance as set forth in the amended final consistent review and recommendations report.

On February 27, 2012, Greenwich's special land use counsel sent the Lopatcong Township Planning Board a letter arguing that Ordinance 2011-15 "is not in effect[.]" Greenwich copied the Council's attorney on the letter. First, Greenwich contended Lopatcong failed to submit Ordinance 2011-15 to the Council as required under Council Resolution 2011-11. Second, Greenwich argued the asphalt plants were "inconsistent" with Lopatcong's conformance petition. Therefore, Greenwich concluded, the proposed asphalt plant was not a permitted conditional use.

In response to Greenwich's letter, the Council issued a letter decision dated February 28, 2012, which is the subject of Greenwich's appeal. The Council disagreed with Greenwich's claim that Ordinance 2011-15 was invalid without the Council's prior approval. The Council emphasized that planning areas need not conform to the RMP. It also relied on N.J.S.A. 13:20-15a(4) to state that "the voluntary nature of Plan Conformance in the Planning Area under the . . . Act is a statutory provision that does not change after the submission of a Petition for Plan Conformance." The Council explained it had approved Lopatcong's petition in March 2011 on the condition that it submit a draft municipal ordinance petitioning for plan conformance regarding its planning areas. The Council noted that Lopatcong adopted its petition ordinance, Ordinance 2011-19, on December 29, 2011. Thus, Lopatcong adopted Ordinance 2011-19 after Lopatcong passed the disputed Ordinance 2011-15. Therefore, the Council concluded, its approval for Ordinance 2011-15 in November 2011 was unnecessary.

Greenwich presents the following points for our consideration:

POINT I

WHILE THE JUDICIARY GENERALLY AFFORDS SUBSTANTIAL DEFERENCE TO AGENCY ACTION, THE JUDICIARY IS IN NO WAY BOUND BY THE AGENCY'S INTERPRETATION OF A STATUTE OR ITS DETERMINATION OF A LEGAL ISSUE AND SHOULD REVERSE THE AGENCY IF IT BELIEVES THE AGENCY'S DETERMINATION TO BE IN ERROR.

POINT II

THE COUNCIL'S FEBRUARY 28, 2012 DECISION SHOULD BE REVERSED BECAUSE IT VIOLATES THE COUNCIL'S REGULATIONS AS CONTAINED IN THE REGIONAL MASTER PLAN AND THE HIGHLANDS PLAN CONFORMANCE GUIDELINES.

POINT III

THE COUNCIL'S FEBRUARY 28, 2012 DECISION SHOULD BE REVERSED BECAUSE IT HAS THE EFFECT OF AMENDING THE REGIONAL MASTER PLAN AND THE HIGHLANDS PLAN CONFORMANCE GUIDELINES.

We first address the standard of review. We recognize "[a]n appellate tribunal is . . . in no way bound by the agency's interpretation of a statute or its determination of a strictly legal issue." Mayflower Sec. Co. v. Bureau of Sec., 64 N.J. 85, 93 (1973). Nonetheless, we "give considerable weight to a state agency's interpretation of a statutory scheme that the legislature has entrusted to the agency to administer." In re Election Law Enforcement Comm'n Advisory Op. No. 01-2008, 201 N.J. 254, 262 (2010) (In Re Advisory Op.). "We do so because 'a state agency brings experience and specialized knowledge to its task of administering and regulating a legislative enactment within its field of expertise.'" U.S. Bank, N.A. v. Hough, 210 N.J. 187, 200 (2012) (quoting In re Advisory Op., supra, 201 N.J. at 262). Deference to agency decision-making is "'especially appropriate' when an agency is responsible for administering 'new and innovative legislati[on]' such as the Highlands Act." In re Adoption of Highlands Reg'l Master Plan, 421 N.J. Super. 396, 402-03 (App. Div. 2011) (quoting Van Dalen v. Washington Twp., 120 N.J. 234, 246 (1990)).

The Act delegates to the Council the power to create the RMP, develop model municipal land use ordinances, establish voluntary standards and guidelines for protection of planning areas for possible implementation by municipalities, and comment on any development applications before a local government adopts a master plan. N.J.S.A. 13:20-6. We therefore shall defer to the Council's conclusions regarding the Act, the RMP, and Conformance Guidelines unless we deem the Council's interpretation to be "plainly unreasonable." In re Advisory Op., supra, 201 N.J. at 262 (citation omitted).

Turning to Greenwich's substantive argument, the township contends that Lopatcong Ordinance 2011-15 was invalid as it lacked the Council's prior approval. Greenwich argues prior approval was required because plan conformance occurred when the Council adopted Resolution 2011-11 in March 2011, before Lopatcong adopted Ordinance 2011-15 in November 2011. The Council and Stryker respond that Lopatcong only sought plan conformance approval when Lopatcong adopted Ordinance 2011-19 in December 2011, and that the Council's approval was thus unnecessary for Lopatcong Ordinance 2011-15. We defer to the Council's interpretation because we do not find it to be unreasonable.

The RMP and Conformance Guidelines indicate that the Council must approve a municipal land use ordinance only for municipalities already deemed in conformance with the RMP. See RMP at 373 ("[o]nce a municipality . . . has received Plan Conformance approval . . . [j]urisdictions seeking to amend ordinances or regulations relating to the Highlands RMP must provide them to the Highlands Council for review and approval prior to adoption at the local level"); Conformance Guidelines at 17 ("[n]o amendment to any master plan or development regulations of a conforming county or municipality shall be effective until the county or municipality shall have submitted such amendment to the Highlands Council" (emphasis added)).

Under the Act, a municipality that wishes to conform to the RMP in its planning areas must "by ordinance, petition the [C]ouncil of its intention to revise its master plan and development regulations . . . to conform with the goals, requirements, and provisions of the regional master plan." N.J.S.A. 13:20-15a(1) (emphasis added). The statute does not specify when a municipality is deemed in conformance with the RMP. However, the clear import of the Act is that Lopatcong could not be in conformance with the RMP before it passed an ordinance petitioning the Council for conformance approval through Lopatcong Ordinance 2011-19. That occurred after Lopatcong adopted the challenged land use ordinance in November 2011.

We recognize that Council Resolution 2011-11, adopted in March 2011, may be read to imply that Lopatcong was already in conformance with the RMP. For instance, Council Resolution 2011-11 states in a "whereas clause" that "the Plan Conformance Guidelines provide[] that no amendment to . . . development regulations . . . in the Township of Lopatcong shall be effective" until Lopatcong submits the amendment to the Council "or the Executive Director has notified the Township of Lopatcong that such amendment does not affect the Highlands Council's prior finding of Plan Conformance[.]" (Emphasis added). Another "whereas clause" states, "according to the Highlands Act and the Plan Conformance Guidelines, the Township of Lopatcong's compliance . . . shall maintain the Township of Lopatcong's status as conforming to the Regional Master Plan[.]" (Emphasis added).

However, those statements are not dispositive. The Council's resolution was responding to the township's petition for conformance of both preservation areas, which the township was required to seek, and planning areas, which remained optional. With respect to conformance of planning areas, the Act plainly makes passage of an ordinance an essential pre-condition. Lopatcong's earlier adoption of a resolution does not suffice. The Act requires a municipality to petition the Council of its intention to conform with the RMP "by ordinance." N.J.S.A. 13:20-15a(1). In addition, the Conformance Guidelines state that any petition involving planning areas must include "a copy of the ordinance adopted pursuant to Section 15 of the Highlands Act[.]" Conformance Guidelines at 9. By contrast, a county petitioning the Council for conformance may do so by adopting an ordinance or a resolution. Ibid.

Finally, we reject Greenwich's argument that the Council's decision "has the effect of amending the RMP as well as the Highlands Guidelines through ad hoc agency interpretation rather than through adherence to the procedures prescribed in the Highlands Act for amending or updating the RMP." Simply put, we do not view the Council's decision to amend the RMP and Conformance Guidelines, as the prior approval requirement set forth therein is predicated on plan conformance, which, as we have stated, is contingent on adoption of the appropriate ordinance.

1 N.J. Highlands Water Protection & Planning Council, Highlands Reg'l Master Plan (2008), available at http://www. highlands.state.nj.us/njhighlands/master/rmp/final/highlands_rmp_112008.pdf.

2 On July 27, 2012, we granted the unopposed motion to intervene of 189 Stryker Road Associates, which seeks to operate a facility pursuant to Lopatcong's challenged ordinance.

3 The record includes portions of the Conformance Guidelines. The complete document can be found at http://www.highlands. state.nj.us/njhighlands/master/highlands_plan_conformance_guidelines.pdf.

4 Although the record includes evidence that the petition was submitted in November 2009, the Council's March 3, 2011, report and its subsequent resolution reflect a December submission. The discrepancy is inconsequential.