SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION DOCKET NO. A-2308- 21

IN THE MATTER OF NICOLEKIRSTIE LLC, Plaintiff-Appellant,

v. NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION, Defendant-Respondent.

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Argued February 27, 2024

– Decided Ju ly 18, 202 4 Before Judges Gooden Brown and Natali. On appeal from the New Jersey Department of Environmental Protection. Marty M. Judge argued the cause for appellant (Flaster/Greenberg, PC, attorneys; Franklin J. Riesenburger, Marty M. Judge and Daniel C. Epstein, on the briefs). Willis A. Doerr, Deputy Attorney General , argued the cause for respondent (Matthew J. Platkin, Attorney

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court. " Although it is posted on the internet, this opinion is binding only on the parti es in the case and its use in other cases is limite d. R. 1:36- 3.2 A- 2308

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. PER CURIAM In this appeal, plaintiff Nicole-Kirstie, LLC (Nico le-Kirstie) requests we reverse a purported final agency decision of the Ne w Jersey Department of Environmental Protection (NJDEP), related to the sc ope of its environmental investigatory and remedial responsibilities at the former Dorchester Shipyard, an industrial site located along the Maurice River. Th e matter returns after we dismissed Nicole-Kirstie's previous appeal without prejudice , concluding the challenged email from NJDEP was not a final agency action pursuant to Rule

2:2 -3(a)(2) and directing NJDEP to issue a further decision adopting or rejecting the position set forth therein. See In re Nicole-K irstie, LLC v. N.J. Dep't. of Env'tl. Prot., No. A- 2695 -20 (App. Div. Sept. 29, 2021). Because we conclude NJDEP's subsequent decision lacks the necessary fac tual findings to permit thorough appellate review, we remand for further pr oceedings in accordance with this opinion.

I. Dorchester Industries, Inc. (Dorchester) owned and operated a ship building facility (Site) at which it ceased operations in June 1998, triggering "notification and remediation requirements" under t he Industrial Site Recovery3 A- 2308

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Act, N.J.S.A. 13:1K-6 to -14 (ISRA). In March 1999 , Paul R. Porreca was appointed assignee for the benefit of Dorchester's creditors in the probate matter involving the disposition of the estate of Dorchester's principal. Throughout 2000, Porreca and NJDEP corresponded regarding the investigation and remediation plans for the Site. NJDEP filed a verified complaint in the probate matter seek ing to compel remediation in 2001, alleging Dorchester had failed to comply with ISRA and the Site was a "suspected source[] of soil, groundw ater, and surface water pollution." One year later, the court entered a consent order requiring Porreca to investigate and begin remediation of specific ar eas of the property. In the following years, Porreca worked to remediate the Si te with NJDEP's oversight. In 2004, NJDEP issued a remedial investigation work plan approval letter which identified specific areas of concern, includi ng the potential need for sampling of the sediment of the Maurice River. The letter confirmed NJDEP's acceptance of Porreca 's p osition that "no further ecological investigations are needed" as "there [was] no indication that contamin ants of concern have migrated off-site." NJDEP noted, however, "[i]f fu ture ground water [remedial investigation] activities indicate that groundwater contaminants are migrating4 A- 2308

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toward the river at concentrations above their resp ective NJ Surface Water Quality Standard, then surface water sampling may b e required." In 2005, Nicole-Kirstie entered negotiations to pur chase the Site. To facilitate the sale, Porreca and NJDEP entered a re mediation agreement which

noted the sale to Nicole-Kirstie but named Porreca as the "[r]esponsible [p]erson[] executing this [r]emediation [a]greement and responsible for conducting the remediation" of the S ite and referr ed to the 2004 workplan approval to detail Porreca's responsibilities. The agreement also stated "[e]xcept as otherwise se t forth herein, . . . the NJDEP does not release any person from any liabilit ies or obligations such person may have pursuant to ISRA and the ISRA regul ations, or any other applicable authority, nor does the NJDEP waive any of its rights or remedies pursuant thereto." The agreement further provided it w as "binding, jointly and severally, on each signatory, its successors, assig nees and any trustee in bankruptcy or receiver appointed pursuant to a proc eeding in law or equity." Following finalization of the sale in March 2006, N JDEP "demanded that [Porreca] conduct sampling in the Maurice River." It reasoned "[g]iven the nature of the discharge, there is no reason to beli eve that the areas between and potentially beyond the contaminated samples are [no t] also contaminated."5 A- 2308

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Porreca expressed he was reluctant to conduct the sampling based on "th e enormity of the costs if contaminants were found . . . the historic dredging of the river by the United States Army Corps of Engine ers (which it is undisputed in the past placed spoils on the shipyard site ), [and] known contamination by numerous other industries located along the river." In June 2006, Porreca filed a Verified Complaint fo r Settlement of Sixth Interim Account and Further Relief in the probate m atter, in which he alleged NJDEP "introduced new demands namely sampling in th e Maurice River itself . . . which not only are unreasonable and unnecessa ry, but are impossible to perform at this juncture because [Porreca] simply d oes not have the funds and has no way of generating the same." Porreca sought to compe l NJDEP to waive

its demand for sediment sampling. NJDEP responded the relief requested "would run counter to [ISRA]," the 2002 consent ord er, and the 2005 remediation agreement. It noted sampling of the ri ver sediments was first raised in October 2004, and the remediation agreement expr essly reserved NJDEP 's right to order further remediation. Significantly, NJDEP also filed a counterclaim in w hich it asserted Porreca failed to fully remediate the Site in viola tion of ISRA and the New Jersey Spill Compensation and Control Act, N.J.S.A. 58:10-23.11 to -23.246 A- 2308

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(Spill Act), and request ed the court compel Porreca to conduct the requested sampling and pay certain penalties and costs. NJDE P did not join Nicole-Kirstie despite its knowledge Nicole-Kirstie had purchased the Site. In October 2006, following a two-day bench trial, t he court issued an order discharging Porreca as assignee and dismissing NJDEP' s counterclaim "as to its exceptions to plaintiff's final account and also as to its request for the imposition of costs and penalties." The order does not reflec t the court's rationale, nor did it address Porreca's and NJDEP's requests for injun ctive relief. The parties have advised the transcript from the hearing is no longe r available , but they did not submit a statement of proceedings in lieu of a trans cript, or otherwise attempt to reconstruct the record pursuant to Rule 2:5 -3(f). NJDEP failed to appeal the October 17, 2006 order. According to the parties, there was no further comm unication between NJDEP and Nicole-Kirstie or any other party associa ted with the Site until June

2010. 1 Following passage of the 2009 Site Remediation Refo rm Act, N.J.S.A.

58:10C -1 to -29 (SRRA), Nicole-Kirstie engaged a Licensed Site Remediation Professional (LSRP), Timothy Mangold, as required b ecause the Site's remediation was "technically still ongoing." Mangold s ubsequently "conducted

1 The 2010 communication is not included in the reco rd before us.7 A- 2308

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continued investigations into groundwater and other areas of concern." In May 2016, he submitted a remedial investigation report indicati ng the investigation was complete. NJDEP and Mangold corresponded throu ghout 2016 and 2017 regarding the alleged need for further sediment sam pling. As Mangold explained in a 2021 certification, he sampled the M aurice River's water and sediment and submitted the results to NJDEP in May 2016, but NJDEP continued to demand additional sampling and evaluat ion. NJDEP initiated direct oversight of the remediation after determini ng the investigation was incomplete due to the lack of sampling. In February 2019, and despite the order entered aft er the probate trial,

NJDEP and Nicole-Kirstie entered an Administrative Consent Order. The consent order required Nicole-Kirstie to "remediate . . . all hazardous substances, hazardous wastes, and pollutants discha rged at the Site," complete the remedial investigation by June 2020, and pay a $12,500 civil penalty. The order does not specifically mention or discuss sedi ment sampling, or any effect of the 2006 probate litigation on Nicole-Kirstie's responsibilities. Following entry of the consent order, the parties continued to dispute

whether the 2006 court order determined the investi gation of impacts to the Maurice River was complete and whether that order a pplied to Nicole-Kirstie.8 A- 2308

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According to Mangold's 2021 certification, the clai m for further investigation of the Maurice River was the sole issue outstanding pr eventing him from issuing a

site -wide Response Action Outcome to close the case. Mangold certified he investigated his and NJDEP's file regarding the Site, consistent wit h his responsibilities under the SRRA, and located an int ernal memorandum written by NJDEP Assistant Commissioner for Site Remediatio n Mark Pedersen which stated, in discussing the 2006 litigation, "[t]he S uperior Court absolved the responsible party of the requirement to test the se diments in the Maurice River." 2 That, in turn, sparked further unsuccessful attempt s at discussion between Nicole-Kirstie and NJDEP regarding the effect of th e 2006 order.

NJDEP sent Nicole-Kirstie a letter in November 2020 formally advising the remedial investigation was still not complete, as required by the 2019

consent order. It asserted:

Nicole- Kirstie, LLC’s position with respect to the 2006 Court Order is without merit. Nicole-Kirstie, LLC is not a party to the 2006 Court Order entered into so lely between the [NJDEP] and Dorchester and the 2006 Court Order is not binding or have any other impact [sic] on future property owners. Nicole-Kirstie, L LC remains fully responsible under the [2019 consent order] and applicable environmental statutes.

2 This memo too , although listed in the Statement of Items Compris ing the Record on Appeal, was not included in the record be fore us.9 A- 2308

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In response, Mangold sent an email to NJDEP outlini ng his and NicoleKirstie's position that the 2006 order controlled a nd did not require any additional investigation of the Maurice River. Spe cifically, he argued the order finally resolved the ISRA case for the Site, includ ing "[t]he issue of any requirement to sample the Maurice River and its sedime nts, and the remediation of same," and stressed NJDEP 's failure to appeal that order. Mangold also note d Nicole-Kirstie actively participated in the proceed ings culminating in the 2006 order despite being specifically excluded as a resp onsible party by NJDEP. NJDEP replied April 14, 2021 with a one -paragraph email providing its "final thoughts on the matter." It explained "[t]he applicability of the 2006 [c]ourt [o]rder to [Nicole-Kirstie] is an issue tha t has been carefully considered by" NJDEP and reasoned "the 2006 [o]rder does not o perate as a final remediation document (i.e. a No Further Action Lett er or Response Action Outcome), and does not provide language stating that it shou ld be considered as

such." NJDEP concluded the order resolved "a remed iation agreement and litigation between [NJDEP] and [Dorchester], neithe r of which was NicoleKirstie a party to," and nothing in that order provided it would be binding on parties other than NJDEP and Dorchester. It noted Nicole-Kirstie was not joined in the litigation because "it was not a necessary p arty under R[ule] 4:28."10 A- 2308

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On May 28, 2021, Nicole-Kirstie filed a Notice of A ppeal challeng ing the NJDEP's April 2021 email. On our own motion, we dismissed the appeal and concluded "the email does not constitute an appeala ble final agency decision of the NJDEP under Rule 2:2-3(a)(2)." Nicole-Kirstie, No. A- 2695 -20. We also

remanded the matter "for the Commissioner to issue a decision either adopting or rejecting the position espoused in the [Deputy A ttorney General (DAG)]'s April 14, 2021 email, without prejudice to the NJDE P arguing on any future appeal from the Commissioner's disposition that the appeal is time barred and

should have been filed before the DAG's email." In response to our order, NJDEP issued a February 1 6, 2022 letter in which it explained its "final decision relevant to this m atter is encapsulated by the February 19, 2019 Administrative Consent Order . . . which outlines NicoleKirstie's remedial obligations" under various statu tes, including ISRA, SRRA, and the Spill Act. It stated the 2021 email "merel y reiterates that the [consent order] is a final order and does not convey [NJDEP] 's 'final thoughts on this matter' or affect the underlying [consent order]." Because Nicole-Kirstie never appealed that order, NJDEP concluded it "remained i n full force and effect." This appeal followed.11 A- 2308

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NJDEP subsequently moved to dismiss the appeal as t ime-barred. In support, it argued Nicole-Kirstie 's appeal actually sought to challenge the 2019 consent order, the "only final agency decision rega rding the property," and as such was untimely. Additionally, NJDEP contended N icole-Kirstie was aware of the 2006 litigation and resulting order at the time it oc curred but never raised it during negotiations leading to the 2019 consent order, or in the two years following its issuance. Nicole-Kirstie responded its appeal was "manifestly timely" as it was filed within forty-five days of the February 2022 letter "issued in response to an Order of this Court expres[s]ly remanding the matter to t he NJDEP for the purpose of making what amounts to its final agency action dete rmination." We denied NJDEP's motion on June 14, 2022, with directions fo r the merits panel to "consider, among any other issues presented, the ap pealability of the alleged agency action(s) and the timeliness of the appeal."

II. Before us, Nicole-Kirstie reprises its argument tha t the 2006 probate matter and resulting orders bar NJDEP from requirin g it to take samples of the Maurice River sediment under res judicata and the e ntire controversy doctrine. In response, NJDEP maintains neither preclusive doc trine applies as Nicole-12 A- 2308

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Kirstie was not a party to the 2006 litigation nor the underlying 2005 remediation agreement between Porreca and NJDEP. A dditionally, it asserts this case involves Nicole-Kirstie's obligations und er the 2019 consent order, while the 2006 probate matter involved Porreca's re quest to be relieved from the 2005 remediation agreement. NJDEP also renews its contention that the appeal

is time-barred. For the reasons that follow, we are convinced the r ecord before us is insufficient to permit a proper analysis and resolution of these issues. A final agency action is "characterized by findings of fact , conclusions of law, a definitive ruling, and a clear statement tha t the interested party may seek

review of the decision and the manner in which that may be accomplished." Silviera-Francisco v. Bd. of Educ., 224 N.J. 126, 1 39 (2016) (citing De Nike v. Bd. of Trs., Emps. Ret. Sys. of N.J., 34 N.J. 430, 435-36 (1961)). "A state agency rendering a final agency decision must expla in the specific reasons for its determination." In re Orban/Square Props., LLC , 461 N.J. Super. 57, 77 (App. Div. 2019). A decision lacking "a reasoned e xplanation based on specific findings of basic fact . . . does not enable us to properly perform our review function." Blackwell v. Dep't. of Corrs., 348 N.J. Super. 117, 122-23 (App. Div. 2002) (quoting Lister v. J.B. Eurell Co., 234 N.J. Super. 64, 73 (App. Div. 1989)).13 A- 2308

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The basis for the agency's action "must be discerni ble from the record," and where "the absence of particular findings hinde rs or detracts from effective appellate review, the court may remand the matter t o the agency for a clearer statement of findings and later reconsideration." In re Renewal Application of TEAM Acad. Charter Sch., 247 N.J. 46, 75 (2021) (qu oting In re Red Bank Charter Sch., 367 N.J. Super. 462, 476 (App. Div. 2 004) and In re Vey, 124 N.J. 534, 544 (1991)). In this regard, Rule 2:5 -5(b) provides:

At any time during the pendency of an appeal from a state administrative agency, if it appears that evi dence unadduced in the proceedings below may be material to the issues on appeal, the appellate court, on its o wn motion . . . may order, on such terms as it deems appropriate, that the record on appeal be supplemen ted by the taking of additional evidence and the making of findings of fact thereon by the agency below or, in exceptional instances, by a judge of the Superior C ourt especially designated for that purpose. As our Supreme Court recently explained, "the Appella te Division retains the discretion, in an appropriate case, to retain j urisdiction in an appeal from the action of a state agency, but to refer the matter t o the Law Division or to the agency for such additional fact-finding as it deems necessary to a just outcome." In re Protest of Cont. for Retail Pharm. Design, Co nstr., Start-Up & Operation , 257 N.J. 425, ___ (2024) (slip op. at 14-15) (quoti ng Infinity Broad. Corp. v. N.J. Meadowlands Comm'n, 187 N.J. 212, 227 (2006)). And we, as well as the14 A- 2308

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Supreme Court, have in fact remanded to various agencies for fact finding and further development of the record in accordance wit h the Rule. See, e.g. , Am. Civil Liberties Union of N.J. v. Hendricks, 233 N.J . 181, 201 (2018) (remanding to State Secretary of Higher Education to develop a record "through the crucible of an adversarial process" regarding nature of reli gious schools' curriculum and how grant fund projects would be applied in those s chool s) ; Atl. City Showboat, Inc. v. Dep't of Cmty. Affairs, 331 N.J. Super. 40, 42 (App. Div. 2000) (remanding challenge to casino design regulations t o Casino Control Commission and Department of Community Affairs for joint hearing). After a thorough review of the record before us, we are convi nced several outstanding factual questions exist which preclude our determination of whether res judicata and/or the entire controversy doctrine apply to bar NJDEP from requiring Nicole-Kirstie to sample and remediate th e Maurice River sediments , and of whether the 2022 letter or the 2019 consent order represents NJDEP's final agency action on that point. As noted, neith er the letter nor the consent order contain factual findings regarding the 2006 l itigation or its effect on Nicole-Kirstie's responsibilities. A lthough its April 2021 email indicated

NJDEP had "carefully considered" the issue, the record d oes not explain which15 A- 2308

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facts supported that consideration, or whether NJDE P considered them before

or after the 2019 consent order was entered. Simply put, the record is devoid of certain crucial facts related to the 2006 litigation. Specifically, it does not appear the NJ DEP made any factual findings at any time as to the following: (1) the outcome o f Porreca's request for an order "[c]ompelling the NJDEP to waive and relinquish its new demands" for sediment sampling; (2) the outcome of NJDEP's counterclaim r equesting an order "[c]ompelling [Porreca] to conduct sampling"; (3) t he basis for the court's October 17, 2006 order "dismiss[ing] the [c]ounterc laim filed by the [NJDEP] as to its exceptions to [Porreca]'s final account a nd . . . its request for the imposition of costs and penalties" ; and (4) why, given NJDEP's knowledge of the dispute regarding sediment sampling and its participation in the 2006 litigation, it did not specifically require Nicole- Kirstie to sample and remediate

the Maurice River sediments in the 2019 consent ord er. We conclude these "unadduced" facts are "material t o the issues on appeal," R. 2:5 -5(b), and "necessary to a just outcome, " In re Protest, 257 N.J. at ___ (slip op. at 14-15) (quoting Infinity Broad. Corp., 187 N.J. at 227 ). The court's rationale, the outcomes of Porreca's and NJDEP's requests for inj unctive

relief in 2006 , and the parties' actions in response to that litiga tion may directly16 A- 2308

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bear upon whether NJDEP's demand for sediment sampl ing in the Maurice River was "finally determined on the merits" by the proba te court and thus "cannot be relitigated . . . in a new proceeding," Velasquez v . Franz, 123 N.J. 498, 505 (1991) (discussing res judicata), and whether precl usion based on NJDEP's failure to bring its claim against Nicole-Kirstie i n 2006 would be "unfair in the totality of the circumstances," Bank Leumi U SA v. Kloss, 243 N.J. 218, 2 27 (2020) (discussing the entire controversy doctrine) . We cannot determine whether the 2006 litigation should be given preclus ive effect without a full understanding of its outcome. Similarly, we cannot determine whether NicoleKirstie's appeal is timely without a full understan ding of precisely what NJDEP considered in its determination of the issue, and w hen it did so. We therefore remand this matter to NJDEP pursuant t o Rule 2:5 -5(b) for it to make the factual findings detailed above

. The proceedings on remand shall be completed within ninety days and NJDEP shall fil e its decision with the Clerk's Office as soon as practicable thereafter. Remanded to the NJDEP for further proceedings. We retain jurisdiction.