IN THE MATTER OF THE NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION'S 2/28/11 DECISION REGARDING FRESHWATER WETLANDS STATEWIDE GENERAL PERMIT #23 LEE BROTHERS, INC

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

IN THE MATTER OF THE NEW JERSEY

DEPARTMENT OF ENVIRONMENTAL PROTECTION'S

2/28/11 DECISION REGARDING FRESHWATER

WETLANDS STATEWIDE GENERAL PERMIT #23

LEE BROTHERS, INC.

_______________________________________________

May 21, 2014

Argued January 7, 2014 Decided

Before Judges Messano, Hayden and Rothstadt.

On appeal from the New Jersey Department of Environmental Protection, No. 0300-10-004.1.

Gary J. Ruckelshaus argued the cause for appellant Pineland Preservation Alliance and New Jersey Conservation Foundation (Reed Smith, L.L.P., attorneys; Mr. Ruckelshaus, on the brief).

JoanM. Scatton,Deputy AttorneyGeneral, argued the cause for respondent New Jersey Departmentof EnvironmentalProtection (JohnJ. Hoffman,Acting AttorneyGeneral, attorney;Melissa H.Raksa, AssistantAttorney General, of counsel; Ms. Scatton, on the brief).

Paul H. Schneider argued the cause for respondent Lee Brothers, Inc. (Giordano, Halleran & Ciesla, attorneys; Mr. Schneider and Afiyfa H. Ellington, on the brief).

PER CURIAM

On June 22, 2010, Lee Brothers, Inc. (Lee Brothers) applied to the New Jersey Department of Environmental Protection (DEP) for an authorization under General Permit 23 (GP23), see N.J.A.C. 7:7A-5.23, to expand an existing cranberry bog located within an area governed by the New Jersey Pinelands Protection Act, N.J.S.A. 13:18A-1 to -29. Lee Brothers owns 1895 acres in Washington Township, Burlington County, of which 183 acres was devoted to cranberry farming.

GP23 "authorizes the expansion of certain cranberry growing operations in the Pinelands." N.J.A.C. 7:7A-5.23(a). DEP must limit the number of authorizations issued to a single cranberry growing operation, as well as the authorizations issued statewide, to ensure that the loss or disturbance of freshwater wetlands meet certain criteria. N.J.A.C. 7:7A-5.23(h), (i). As they relate to a single cranberry growing operation, the criteria restrict the loss or disturbance of "freshwater wetlands and/or State open waters" to no more than ten acres in any one year, of forested freshwater wetlands to no more than ten acres over the five year term of the permit, and no more than four of the ten acres lost or disturbed can be populated by Atlantic white-cedar (AWC) trees. N.J.A.C. 7:7A-5.23(h). Pursuant to N.J.A.C. 7:7A-5.23(d), "State open waters and wetland types are ranked in the order that they shall be considered for use for the expansion of a cranberry growing operation." Lowest in priority are AWC wetlands. Ibid.

Lee Brothers proposed an expansion of its existing Cranberry Bog No. 15, creating a total disturbance of 3.4 acres that included 1.14 acres of AWC forest. Upon review, DEP requested that Lee Brothers submit additional information, including an alternatives analysis mandated by N.J.A.C. 7:7A-5.23(j). That subsection provides:

If an applicant proposes activities under general permit 23 that will result in the loss and/or disturbance of [AWC] wetlands, the applicant shall, in addition to meeting all other requirements, demonstrate that there is no suitable upland area available, which is owned by the applicant, which the applicant could use in order to eliminate or minimize impacts to [AWC] wetlands.

[Ibid.]

Lee Brothers submitted its revised application on January 6, 2011.

DEP granted Lee Brothers a GP23 authorization on February 28, 2011. Among other conditions, DEP required Lee Brothers to contribute 0.75 Pinelands Development Credits (PDCs) to the Natural Lands Trust (NLT) no later than ninety days after receipt of the permit. See N.J.A.C. 7:7A-5.23(m) (requiring the permittee to "transfer any PDCs . . . to the Department, or to a nonprofit or governmental agency designated by the Department, prior to beginning activities authorized under general permit 23, and no later than [ninety] days after receiving the general permit authorization").

On April 13, 2011, appellant Pinelands Preservation Alliance (PPA) filed this appeal challenging the GP23 authorization issued to Lee Brothers; we granted the motion of the New Jersey Conservation Foundation (NJCF) to intervene.1 PPA and NJCF alleged that the NLT was incapable of meeting the mitigation requirements that were a condition of the permit. On May 24, 2011, DEP wrote to Lee Brothers requesting that it transfer the PDCs to DEP, which Lee Brothers did the next day.

Over appellants' objection, we granted DEP's motion seeking a partial remand to amplify the record of its decision. On November 18, 2011, DEP completed the remand and forwarded copies of the revised authorization to the court, appellants and Lee Brothers. As part of the revised authorization, DEP accepted the PDCs, stating it was exploring whether the State Forestry Service could accomplish the necessary AWC restoration. DEP published notice of the revised authorization in its Bulletin on March 7, 2012. After DEP filed its statement of items comprising the record on appeal on July 17, 2012, appellants moved to compel DEP to supplement the record with information regarding 1) any sale of the PDCs surrendered by Lee Brothers, and 2) mitigation efforts undertaken by DEP either before or after the authorization was issued. We denied that motion.

Before us, appellants contend DEP's decision to approve the GP23 authorization was arbitrary, capricious and unreasonable because DEP failed to address the necessary mitigation of the AWC habitat when it issued the permit. In particular, they argue that DEP's plan to sell or otherwise use the transferred PDCs was insufficient to fund the necessary mitigation. Appellants contend the permit should be revoked, or alternatively, suspended as a result. They also argue DEP has failed to abide by its own regulations that require a departmental finding and public notice whether the regulatory scheme has resulted in a proportional mitigation of AWC habitats.

DEP counters that appellants' arguments are thinly-veiled attacks on the regulatory scheme governing the issuance of GP23 authorizations in the first instance, and the Court has already stated that the regulatory scheme complies with its enabling legislation. See In re Freshwater Wetlands Prot. Act Rules, Statewide General Permit, Cranberry Expansion, 180 N.J. 415 (2004). DEP argues that its decision to issue the authorization was "authorized and reasonable," and any "proportionality" review was unnecessary because "no other [GP23 authorizations] have been issued."

Lee Brothers joins in DEP's argument that the authorization was properly issued. It contends that appellants' challenges are actually a generalized attack on the agency's implementation of its regulatory obligations, and irrelevant to any consideration of whether the GP23 authorization was properly issued to Lee Brothers.

We have considered these arguments, in light of the record and applicable legal standards. We affirm the grant of the GP23 authorization to Lee Brothers. However, we remand the matter to DEP for further proceedings consistent with this opinion.

I.

We initially set forth some well-known guideposts that inform our review. "Our role in reviewing an administrative agency's final decision is limited." Univ. Cottage Club of Princeton N.J. Corp. v. N.J. Dep't of Envtl. Prot., 191 N.J. 38, 48 (2007) (Cottage Club) (citing In re Taylor, 158 N.J. 644, 656 (1999)). 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. "The fundamental consideration 'is that a court may not substitute its judgment for the expertise of an agency so long as that action is statutorily authorized and not otherwise defective because arbitrary or unreasonable [or not supported by the record].'" In re Authorization for Freshwater Wetlands Gen. Permits, 372 N.J. Super. 578, 593 (App. Div. 2004) (alteration in original) (quoting In re Dist. of Liquid Assets, 168 N.J. 1, 10 (2001)).

"Courts extend substantial deference to an agency's interpretation of its own regulations." In re Freshwater Wetlands Gen. Permit No. 16, 379 N.J. Super. 331, 341 (App. Div. 2005) (citation omitted). This encompasses traditional deference "to an agency's expertise in cases involving technical matters within the agency's special competence." In re Freshwater Wetlands Gen. Permits, supra, 372 N.J. Super. at 593. "This deference is even stronger when the agency, like DEP in regard to wetlands, 'has been delegated discretion to determine the specialized and technical procedures for its tasks.'" Ibid. (quoting 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)). However, our consideration is "'in no way bound by the agency's interpretation of a statute or its determination of a strictly legal issue.'" Cottage Club,supra, 191 N.J. at 48 (quoting Taylor,supra, 158 N.J. at 658).

II.

The GP23 regulations construct a complex scheme designed, in part, to finance mitigation of any lost or destroyed AWC wetlands resulting from expansion of cranberry bogs in the Pinelands. Initially, the amount of PDCs that must be conveyed by the applicant is calculated pursuant to N.J.A.C. 7:7A-5.23(l)(1). Those PDCs must then be transferred to DEP "or to a nonprofit or governmental agency designated by [DEP], prior to beginning activities authorized under general permit 23, and no later than [ninety] days after receiving the general permit authorization." N.J.A.C. 7:7A-5.23(m). DEP or its designee then conveys the PDCs to the Pinelands Development Credit Bank pursuant to a memorandum of understanding (MOU), and the resulting funds must then be used "to establish and/or restore [AWC] wetlands in the Pinelands." Ibid.

Here, DEP calculated that Lee Brothers needed to submit .75 PDCs in mitigation of the impacts caused by expansion of its bog. Lee Brothers conveyed .75 PDCs as a condition of its permit. Appellants do not challenge the calculation as to the amount of PDCs required, nor do they contest that the PDCs were in fact conveyed to DEP.

Instead, appellants argue that the Freshwater Wetlands Protection Act (the FWPA), N.J.S.A. 13:9B-1 to -30, explicitly requires that DEP address the adequacy of any mitigation plan as a condition of the permit. See N.J.S.A. 13:9B-13(a) ("[DEP] shall require as a condition of a freshwater wetlands permit that all appropriate measures have been carried out to mitigate adverse environmental impacts[.]"). However, after thoroughly considering the regulatory scheme, the Court held that "the mitigation provisions of GP23 are consistent with the FWPA." In re Freshwater Wetlands Prot. Act Rules, supra, 180 N.J. at 433. Because Lee Brothers complied with the regulations, we reject the assertion that DEP acted arbitrarily, capriciously or unreasonably in issuing the authorization.

Appellants contend, however, that the Court did not confront the specific issue now raised by this appeal. They argue DEP's regulations that condition approval on the transfer of PDCs are inadequate and unlikely to mitigate deleterious effects to the AWC habitat caused by the expansion of Lee Brothers' cranberry operations, because any sale of the PDCs is unlikely to fully fund reforesting of the AWC habitat. As we see it, appellants are asking us to set aside the regulations because they are ineffective. We refuse to do so.

The regulations must be accorded a presumption of validity. Id. at 430 (citations omitted). "[E]xecutive branch rulemaking" must be sustained "unless it was clear that the agency action was inconsistent with the legislative mandate, or the challenged regulation alter[ed] the terms of a legislative enactment or frustrate[d] the policy embodied in the statute." Id. at 431 (citations omitted) (alterations in original). As the Court has noted, the FWPA gave DEP broad discretion as to how to address its mitigation responsibilities. See id. at 432 ("[A] review of the legislative history supports DEP's assertion that the creation or restoration of wetlands to compensate for adverse impacts attributable to a permitted activity is by no means mandatory, but merely a weapon in DEP's larger mitigation arsenal.").

Appellants claim that the necessary mitigation will never occur because of the "collapse of the PDC resale market." They point to the fact that, in nearly three years since the transfer, DEP has failed to demonstrate that the PDCs have been sold or put to use. However, we are in no position to conclude on this record that DEP's intricate regulatory scheme, to which we owe particular deference, In re Freshwater Wetlands Gen. Permits, supra, 372 N.J. Super. at 593, must be stricken because appellants claim it is inconsistent with, or frustrates the purposes of, the FWPA. In re Freshwater Wetlands Prot. Act Rules, supra, 180 N.J. at 431.

In sum, we affirm DEP's decision to issue the GP23 authorization to Lee Brothers.2

III.

Lastly, in urging us to suspend the permit issued to Lee Brothers, appellants argue that DEP has failed to make the required annual "finding as to whether the pace of impacts under the general permit is proportional to the pace of [AWC] restoration efforts." N.J.A.C. 7:7A-5.23(q). In opposition to appellants' motion to compel DEP to supplement the record and supply specific information regarding its mitigation efforts at the Lee Brothers' site, the agency specifically acknowledged its obligation under this regulation. However, it contended then and does now that, since no other GP23 authorizations have been issued, it need not comply. We disagree.

The regulation provides in its entirety,

Each year, the Commissioner shall make a finding as to whether the pace of impacts under the general permit is proportional to the pace of [AWC] restoration efforts. The Commissioner shall consult with the Pinelands Commission, and shall consider, among other factors, whether restoration efforts are making reasonable progress towards the goals in the Department's overall plan for [AWC] restoration. The Department shall publish the Commissioner's finding as a public notice in the New Jersey Register by October 31 of each year:

1. If the Commissioner finds that the pace of impacts is proportional to the pace of restoration efforts, the Department shall publish a finding of continuance of the general permit. A finding of continuance shall remain in effect until the next October 31 following the publication of the finding; or

2. If the Commissioner finds that the pace of impacts is out of proportion to the pace of [AWC] restoration efforts, the Department shall publish a finding of temporary hold of general permit authorizations, and shall stop issuing authorizations under general permit 23. A finding of temporary hold shall remain in effect until the Commissioner determines that the pace of impacts under the general permit has again become proportional to restoration efforts, and the Department publishes a finding of continuance.

[N.J.A.C. 7:7A-5.23(q).]

Nothing in the regulation relieves DEP of its obligations to provide public notice simply because it had issued only one GP23 authorization.

More importantly, this regulation speaks directly to appellants' earlier contention that the regulatory regime itself is inadequate. Requiring DEP to annually perform an assessment of whether "the pace of impacts under [GP23 authorizations] is proportional to the pace of [AWC] restoration efforts," and publish those findings so that concerned citizens have that information, strikes us as critical to consideration of whether the permitting process continues to be consistent with the overall goals of the FWPA. Without this information, the citizenry has no way of knowing whether DEP's plan for complying with the FWPA is in fact working.

We realize, as DEP argues, that appellants did not specifically raise this issue before the agency and we do not necessarily accept appellants' argument that each GP23 authorization implicates DEP's obligations under subsection (q). Nevertheless, we view DEP's obligations in this regard to be compelling and in the public interest.

It is beyond cavil that we have jurisdiction to review both agency action and inaction. See, e.g., Twp. of Neptune v. State, Dept. of Environmental Protection, 425 N.J. Super. 422, 432 (App. Div. 2012) ("The Appellate Division's jurisdiction under [Rule 2:2-3(a)(2)] extends to State agency action and inaction."). Relief is "appropriate where the party seeks to compel a governmental agency to perform a 'duty [that] is ministerial and wholly free from doubt' or 'to compel the exercise of discretion, but not in a specific manner.'" Id. at 434 (quoting Loigman v. Twp. Comm. of Middletown, 297 N.J. Super. 287, 299 (App. Div. 1997)).

Here, DEP's regulations clearly set forth its mandatory obligation to make an annual finding and publish same. We remand the matter to the agency for further proceedings so that it complies with N.J.A.C. 7:7A-5.23(q). DEP shall comply within the regulatory requirements with ninety days of this opinion. We do not retain jurisdiction.

Affirmed; remanded for further proceedings consistent with this opinion.

1 PPA is a private, non-profit environmental organization that advocates for preservation in the Pinelands. NJCF is a private non-profit environmental organization whose mission is to preserve land and natural resources throughout New Jersey. NJCF owns property immediately adjacent and contiguous to the Lee Brothers property. Respondents have not challenged appellants' standing to bring this appeal.

2 In Point III, appellants argue that DEP failed to apply proper minimization standards because, in its decision, the agency referenced Lee Brothers' alternative site submissions, N.J.A.C. 7:7A-5.23(j), and seemingly misconstrued the total area of disturbance permitted by the regulations. It is clear that DEP considered the alternative areas submitted by Lee Brothers and rejected them. The statement in DEP's written decision appears to be erroneous, but we fail to see what importance it has beyond that. Appellants' argument in this regard lacks sufficient merit to warrant further discussion. R. 2:11-3(e)(1)(E).