Case Title: CITIZENS FOR EQUITY AND THOSE INDIVIDUALS v. Dept. of Env. Protection

Citation: 126 N.J. 391, 599 A.2d 507

Docket Number: 

State: new-jersey

Court: New Jersey Supreme Court

Date: 1991-11-19T00:00:00Z

Document:
126 N.J. 391 (1991) 599 A.2d 507 CITIZENS FOR EQUITY AND THOSE INDIVIDUALS LISTED (SEE APPENDIX), PLAINTIFFS-APPELLANTS, v. NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION, DEFENDANT-RESPONDENT. IN THE MATTER OF THE ADOPTION OF N.J.A.C. 7:1I (SANITARY LANDFILL FACILITY CONTINGENCY FUND REGULATIONS). The Supreme Court of New Jersey. Argued September 23, 1991. Decided November 19, 1991. *393 Cynthia L. Samuels, Assistant Deputy Public Advocate, argued the cause for appellant Public Advocate of New Jersey (Wilfredo Caraballo, Public Advocate, attorney). Donna L. Cettei argued the cause for appellants Citizens for Equity, et al. (Klein, Cettei, Halden & Goldberg, attorneys). Mary C. Jacobson, Deputy Attorney General, argued the cause for respondent (Robert J. Del Tufo, Attorney General of New Jersey, attorney). PER CURIAM. We affirm the judgment of the Appellate Division substantially for the reasons set forth in the majority opinion below. 252 N.J. Super. 62, 599 A.2d 516 (1990). We add these observations to address two of appellants' contentions: (1) that the revised regulations adopted by the New Jersey Department of Environmental Protection (DEP) are unauthorized, arbitrary, and unfair, and (2) that the regulations cannot be applied to claims filed prior to their adoption because DEP failed to *394 disclose that it had stopped processing claims while it considered revising the regulations. It is undisputed that approximately 180 claimants, whose property was in the vicinity of the Gloucester Environmental Management Services (GEMS) landfill, have already received compensation for diminution in real property value pursuant to DEP's original regulations. Appellants observe that the new regulations, which require claimants to attempt to sell their homes as a prerequisite to compensation, are significantly more restrictive than the regulations originally promulgated, and are unfair to those property owners whose claims will be processed under the revised regulations. Appellants correctly assert that inevitable unfairness arises when a governmental agency applies standards to certain claimants that are more restrictive than standards it had previously applied to similarly-situated claimants. Acknowledging that unfairness, the reviewing court must determine whether the agency action is nevertheless authorized, reasonable, and supported by sufficient evidence. A.A. Mastrangelo, Inc. v. Department of Envtl. Protection, 90 N.J. 666, 687, 449 A.2d 516 (1982); New Jersey Guild of Hearing Aid Dispensers v. Long, 75 N.J. 544, 562-64, 384 A.2d 795 (1978). The enabling legislation, the Sanitary Landfill Facility Closure and Contingency Fund Act, N.J.S.A. 13:1E-100 to -116 (the Act), strongly supports the Appellate Division's conclusion that the revised regulations are authorized. Moreover, our reading of the Act suggests that DEP's initial regulations regarding reimbursement for loss of property value may have been too permissive. Thus, the issues raised by this case implicate the power of a governmental agency to change regulations that are unsound. The Act's purpose is to provide compensation for damages from the operation and closure of landfills. The Act taxes owners and operators of sanitary landfills and directs the revenue into a contingency fund administered by DEP. *395 N.J.S.A. 13:1E-104 to -105. The contingency fund is strictly liable "for all direct and indirect damages, no matter by whom sustained, proximately resulting from the operations or closure of any sanitary landfill." N.J.S.A. 13:1E-106. Compensable damages under the Act include but are not limited to Thus, the Legislature specifically designated as compensable the costs incurred from specific damage to property or natural resources, personal injuries, or the need to monitor or remediate damages created by the landfill. Although diminution of real-property value is qualitatively different from the kinds of damages enumerated by the Legislature, DEP's initial regulations specifically authorized compensation therefor by defining damages to include Those regulations also required that claimants "produce substantial evidence" of damage. N.J.A.C. 7:1I-1.7(a). As evidenced by the certification of the administrator of the Sanitary Landfill Contingency Fund (Fund), approximately eighty percent of all claims filed against the Fund through September 30, 1988, were filed by persons owning property in the vicinity of the GEMS landfill. DEP asserts that of the approximately $5.1 million in claims paid by the Fund as of that date, it awarded about $4.8 million to claimants alleging diminution *396 of property value based on proximity of their homes to the GEMS landfill. That experience, combined with the Fund's potential statewide liability for damages attributable to diminution of property value because of proximity to GEMS and other landfills, prompted DEP to consider revising its regulations. The administrator observed: The requirement that a property owner attempt to sell his or her home as a condition of compensation represents an attempt to verify that diminution of value attributable to the landfill has occurred. We have no doubt that DEP's delegated authority under the Act authorizes such a requirement, particularly in view of the Legislature's apparent intention to sanction compensation for specific and discernible damages. We also concur in the Appellate Division's conclusion that the sale requirement in the revised regulations is neither arbitrary nor unreasonable, considering DEP's experience with its original regulations. Government has a duty to correct itself, and courts should not stand in the way when a governmental agency, acting in the public interest, attempts to improve its procedures. We also agree with the Appellate Division's determination, 262 N.J. Super. at 77-79, 599 A.2d at 525-526 that the DEP's informal suspension of claims processing pending adoption of new regulations was an intra-agency statement, see N.J.S.A. 52:14B-2(e), and accordingly exempt from the "notice and hearing" requirements, see N.J.S.A. 52:14B-4, of the Administrative Procedure Act, N.J.S.A. 52:14B-1 to -15. In analogous *397 circumstances, several federal courts have concluded that an agency's decision to suspend the processing of applications pending adoption of revised regulations does not require compliance with the "notice and hearing" requirements of the federal Administrative Procedure Act, 5 U.S.C.A. §§ 551-59 (1991). See Kessler v. F.C.C., 326 F.2d 673, 682 (D.C. Cir.1963); Waste Management Inc. v. United States Envtl. Protection Agency, 669 F. Supp. 536, 539-40 (D.D.C. 1987). Although we agree with the Appellate Division that the law did not require public notice or hearing before DEP could suspend the processing of claims for compensation under the Act, neither did the law prohibit the agency from disclosing to claimants what it was doing. The due-process standards incorporated in the New Jersey Administrative Procedure Act provide a minimum standard for agency conduct, but do not preclude an agency from acting fairly and candidly in respect of those whose interests may be affected by agency action. In other contexts we have noted that "government has an overriding obligation to deal forthrightly and fairly with property owners," F.M.C. Stores Co. v. Borough of Morris Plains, 100 N.J. 418, 426, 495 A.2d 1313 (1985), and have insisted that "government must `turn square corners' rather than exploit litigational or bargaining advantages * * *." W.V. Pangborne & Co. v. New Jersey Dep't of Transp., 116 N.J. 543, 561, 562 A.2d 222 (1989) (quoting F.M.C. Stores Co., supra, 100 N.J. at 426, 495 A.2d 1313). Federal courts have recognized "that many merely internal agency practices affect parties outside the agency often in significant ways." Batterton v. Marshall, 648 F.2d 694, 707 (D.C. Cir.1980). Moreover, the federal Administrative Procedure Act mandates that an agency publish in the Federal Register "statements of the general course and method by which its functions are channeled and determined, including the nature and requirements of all formal and informal procedures *398 available." 5 U.S.C. § 552(a)(1)(B). Thus, a federal agency that adopts a "freeze order" suspending the processing of applications or permits ordinarily is required to notify the public. See Kessler, supra, 326 F.2d at 682. The policy objective of enhancing public awareness advanced by the federal law is compelling. We are persuaded that in these circumstances DEP, irrespective of its statutory exemption, should have notified all claimants that the processing of claims was being temporarily suspended while the agency considered the adoption of the new regulations. Affording claimants such notice is a matter of fairness. Instead, the record suggests that some DEP personnel did not respond forthrightly to inquiries about pending claims until DEP was prepared to publish the revised regulations. The statutory exemption from the requirement of public notice and hearing does not relieve DEP of its duty of candor to the public. Claimants insist that DEP's failure to be forthright about its decision to stop processing claims while it considered revising the original regulations should estop DEP from applying the new regulations to the pending claims. Our view of the record is that the absence of notice caused no substantial prejudice to claimants other than to delay their awareness that their claims would be governed by new rules. Moreover, in adopting revised regulations, DEP intended to apply them to claims previously filed but not processed. The absence of substantial prejudice to claimants and the likelihood that an estoppel against DEP would interfere with an otherwise valid and significant governmental objective impel our adherence to the general rule that "[e]quitable estoppel is rarely invoked against a governmental entity * * *." O'Malley v. Department of Energy, 109 N.J. 309, 316, 537 A.2d 647 (1987); Cipriano v. Department of Civil Serv., 151 N.J. Super. 86, 91, 376 A.2d 571 (App.Div. 1977). We are fully in agreement with the Appellate Division's conclusion, 252 N.J. Super. at 79, 80, *399 599 A.2d at 526, 527, that DEP should not be estopped from applying the revised regulations to pending claims. The judgment of the Appellate Division is affirmed. For affirmance Chief Justice WILENTZ and Justices CLIFFORD, HANDLER, POLLOCK, O'HERN, GARIBALDI and STEIN 7. For reversal None. STEVEN L. AND ANNE ACKERMAN JOHN AND MARIA ALEXANDER PAUL M. ALEXANDER ROBERT F. AND DIANNE K. ANDREOTTA DENNIS E. AND PATRICIA A. APICE MARY ANN ASTORE FRANK A. AVERSA ERNEST H. AND DOROTHY H. BAALS DOUGLAS J. AND LAURIE J. BAILEY ARTHUR A. AND KIMBERLY M. BARILOTTI JOSEPH W. JR. AND JANE M. BARTH ERNEST J. AND RAYLENE BASILE DONATO AND HARRY BASS JOSEPH AND KATHLEEN BAYBA RONALD D. BERGMAN JOSEPH AND MARIA BISIRRI DAVID L. AND PATRICIA A. BLANCHARD CHARLES JR. AND RUTH ANN BOEHMER MARGARET BOEHMER DENISE BONGIORNO GEORGE T. BOVA *400 W.R. AND MARIANNE R. BRITTON JOHN E. SR. AND GAIL L. BROOME FRANK R. AND ELAINE H. BUCKMAN BRIAN AND CATHY BURNS HUBERT E. CAMP, DDS, PA LESLIE AND LEE ANNE CAPELLA PAUL AND LINDA CARDAMONE CHARLES J. CARR AND MARIE A. ROWSON GEORGE AND ANNA CARR FRANK AND MARYBETH CHASLONG THEODORE M. AND FRANCES CIANFRANI GERALD AND PATRICIA CLARK WARREN A. JR. AND QUEN S. COLEMAN DAVID G. AND LYNN G. CONNOLLY JAMES AND CAROLE CONNOR SHARON A. AND MICHAEL W. CONTE ADELAIDE F. COOK (FILED UNDER RUTH CAMPANA, DECEASED) ROBERT H. AND HELEN COOK RICHARD A. AND PATRICIA A. CORATOLO PATRICIA AND PAUL COSSABOON JOHN J. AND JEANETTE M. COTTONE WILLIAM L. AND CHRISTINE CRAWFORD THOMAS AND JOANNE CRESONG DONNA CROCE ROBERT C. AND DEBORAH A. CURREY JOHN F. AND KAREN J. CUSACK RICHARD W. AND CAROLE E. DAHL ELIZABETH F. DAVENPORT *401 DEBRA A. DAVIS WILLIAM AND ANNA DAVIS JOSEPH B. AND SANDRA F. DEA EDWARD M. AND MARGARET M. DELLORCO SAMUEL A. JR. AND EDITH C. DeMAIO ROBERT J. AND ROCCHINA E. DESMARTES DIANE AND JOHN G. DiFILLIPO ANTHONY AND MARGENE DiLALLO JOANNE AND "TONY" DiMAURO RICHARD AND THELMA DONLEY PHILLIP R. AND LINDA S. DORN LAURENCE J. AND ANDREA L. DOUGHERTY ROBERT E. AND HELEN DOUGHERTY LORRAINE L. AND THOMAS DOWNEY JAMES AND CATHERINE DURNING HAROLD AND MARGARET FARLOW ALVIN AND JACQUELIN FERRIGNO GEORGE J. AND KAREN K. FLINN RICHARD M. AND JUDY FOGEL JOSEPH AND LORETTA FORTUNA EDWARD AND PATRICIA FOSTER JOHN AND CAROLYN FREDERICKS JOHN J. AND REGINA M. FRIEL RICHARD AND MAUREEN FRISCH CLEMENT A. FUSCELLARO, SR. STANLEY G. AND MICHALINE L. GALIK CHARLES T. AND BEVERLY A. GALLOWAY JOSEPH AND IRENE GARRAMONE JOHN AND KATHLEEN GARRISON *402 JOSEPH AND PATRICIA GENTILE JOSEPH J. AND PAT A. GEORGE CHARLES W. AND DELORES J. GIBBONS LOUIS E. AND DELORES GILBERT ROBERT J. AND CAROL ANN GILLETTI DAVID AND MARY GIORDANO GREGORY AND SUSANNE GLEASON RICHARD A. AND DENISE P. GRENDA JAMES AND MAUREEN HAMER CHARLES J. AND DIANA M. HAMMOND THOMAS J. AND LORELIEI HANS EUGENE M. AND CYNTHIA A. HARDY (FILED UNDER CYNTHIA SPAULDING) LAURA HARWANKO GREGORY AND BARBARA HAWRYLIW ROBERT AND GLORIA HENDERSON SANDRA HENGSTEBECK MICHAEL A. AND MARG. M.R. HENWOOD CHARLES AND GEORGIA HERR THOMAS AND ALICE HINDERLITER ORVILLE R. AND RUTH C. HOFFMAN MARIA B. HOUCK RONALD AND ROSEMARIE IACOVELLI CHARLES J. AND B. HENKEL IGNAS ARTHUR AND LINDA INTERLANTE FRANK AND DEBORAH IZZI RONALD AND CATHERINE JACOVINI RONALD J. AND MADELYN A. JANKOWSKI ANDREW J. JR. AND KATHLEEN A. JERECKI *403 SHERRON E. AND ROSEMARY C. JOHNSON ROY E. JONES AND GENEVIEVE JONES LINDA G. KANE THOMAS T. AND KAREN M. KEATING MARY KESSLER JAMES H. AND LYNN KING WALTER KING JANET KITSIOS EDWARD C. AND BERNICE R. KRAMER GARY KULICK PHYLLIS LaFRANCE LYNN LARSON TRUEPHENIA LAWRENCE MARK AND KAREN LEAHEY AND ERNEST REED WILLIAM AND JOANNE LEMAN MICHAEL AND ARLEEN LIBERI RICK AND KAREN L. LIBERTI JAMES E. AND PATRICIA E. LOGAN THOMAS W. AND KAREN A. LONGACRE SAMUEL A. AND MARY ANN LUCCI ARLENE AND AMIN MAHRAN CHARLES B. AND ROSE E. MAILAHN TOM AND RANDI MANACO ROBERT AND DONNA MARRAMA KAREN AND ROBERT MAULL ROBERT AND DELORES McBRIDE WILLIAM H. AND SHIRLEY McCALLEY GEORGE H. AND EMMA McCAUGHIN DOMINIC AND YOLANDA McDOWELL *404 JOSEPHINE AND WALTER McFARLAND DANIEL AND LINDA McGOVERN PATRICK AND DOROTHY McGUIRE STEPHEN AND DAWN McKILLOP KATHLEEN M. AND JOSEPH M. MEGARA, JR. KENNETH AND TERRY MEGARA CARLYLE AND BARBARA JO MELLEBY DORIS L. AND JOSEPH B. MENCHACA W.A. MENEWISCH OR C.A. PORRECA THOMAS III AND HOLLY MICHEL MICHAEL J. AND MARILYN M. MIDUSKI JAMES MILANO ROBERT AND ROSEMARY MILLER LARRY E. AND JOSEPHINE G. MILLNER GEORGE R. AND DONNA MILLS PAUL AND JANE MITCHELL KATHLEEN AND PLACIDO MOFFA ANTHONY C. AND CATHERINE MOORE DONALD L. AND CORAZON M. MOORE ARTHUR J. AND ROSELIE F. MORIN FRED J. AND KATHLEEN J. MULLER MICHAEL AND DIANNE T. MUNDIE GREGORY AND JO-ANNE MURPHY JOHN H. AND CHRISTINE MURRAY MARTIN AND JAMIE I. MURRAY ROBERT A. AND LINDA M. NAGE WILLIAM AND RITA NATOLI JAMES AND CYNTHIA NILAN CLEMENT J. AND NANCY C. ORACZEWSKI *405 THEODORE AND LUCY ORBACZEWSKI VINCENT ORR DENNIS O'SHAUGHNESSY CRAIG AND MARLENE PALMA NICHOLAS AND LINDA PALMA JOSE T. AND DEBRA PANTOJA BABU C. AND MADHY B. PATEL CHARLES R. AND MARY E. PAYLOR JOHN W. AND PATRICIA A. PEEPLES THOMAS AND MAUREEN PEYTON ALFRED AND NANCY A. PIERSON CAROL AND WILLIAM PINDER S.D.B. PODUFALY AND C.P. BARRACLIFF, SR. DAVID AND CHERYL POMIANEK NICK F. AND SUSAN M. POMPONIO FREDERICK J. AND BARBARA POPIOLEK RICHARD E. AND SUSAN PRINZ RAYMOND G. AND BEVERLY A. PROTICH DAVID B. AND SARA A. PYNE JOSEPH J. AND MARYANN QUINN DANIEL A. RADCLIFFE JOHN A. AND LINDA B. RAYMOND DOROTHY READ STEVEN AND JO-ANN M. RECH HARRY R. AND ELIZABETH M. REDMAN GARY L. AND DEBBIE REED ELIZABETH AND HARRY RESCIGNO LYNN RICEVUTO DEBORAH ROBINSON, n/k/a PYSZ *406 LARRY AND ARLENE ROSSI STEVEN P. ROTELLA SALVATORE D. AND ROSE ANNA RUSSO ROBERT AND MADELINE SALERNO FRANK W. JR. AND MARIE C. SARNE ROBERT W. AND LAURA F. SAWYER CAROL A. SCHMITZ ELEANORE AND WILLIAM SCHOLES EUGENE J. AND JACQUELYN SCHOOLS SHEILA B. SEGAL SUSAN SHANKO RICHARD H. AND DONNA L. SHANNON TIMOTHY G. AND BARBARA D. SHARPLEY JOSEPH J. AND MARIE C. SHERIDAN MARK E. SHERMAN HARRY S. AND JOANNA N. SHUTE JOSEPH G. AND HELEN SHWALUK MICHAEL AND SHARON SILVER JOHN A. AND MARTHA C. SIMON WILLIAM III AND MARLENE SIMON JANELLE AND HARRY SMITH STANLEY AND DOROTHY STEPHENS KATHLEEN STERN HARRY C. AND JOAN E. STRICKLER ROY M. AND DEBORAH L. STROUSE MELANIE J. SULLIVAN JOHN C. AND JOANN P. SYLVESTER THOMAS AND LORRAINE TAFT SCOTT AND JOAN TANENBAUM *407 WILLIAM AND CHARLENE TAYLOR ROBERT J. AND CAROLEE TEE EDWARD J. AND GEORGINE M. THOMPSON WILLIAM AND ETHEL TOLMAN IRENE TOPALIDIS ELAINE AND JOSEPH TRACY EDMUND AND ELEANOR TRYKOWSKI JAMES E. AND ARLENE G. TWILLEY MARGARET ULERICK ANNA URGO LOUIS VIZOCO ROBERT AND MILDRED WAGNER WATSON AND PHYLLIS J. WALDELL HARRY AND KAREN WALLACE CAROL J. WASHINGTON RUSSELL V. AND PATRICIA A. WATKINS MARTIN E. WAY ROBERT AND CHRISTINE WILD WILLIAM H. AND BEVERLY J. WILLIAMS JEFFREY AND LINDA WILSON MARTIN T. AND PATRICIA A. WILT JOSEPHINE A. WOODS MARK A. AND DENISE WRAY JOHN AND MARGARET YEACKEL CAROL A. ZUCCARELLI JOHN AND JANE DOE