Title: In re NJPDES Permit No. NJ0025241
Citation: N/A
Docket Number: a-116-04
State: new-jersey
Issuer: new-jersey Supreme Court
Date: January 11, 2006

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized). Argued September 27, 2005 -- Decided January 11, 2006 LaVECCHIA, J., writing for a unanimous Court. This appeal involves the Water Pollution Control Act (WPCA), N.J.S.A. 58: 10A-1 to -43, and the hearing rights that it confers in respect of pollution discharge permits issued by the New Jersey Department of Environmental Protection (DEP). Specifically, we are called on to examine a hearing-right claim advanced by an entity, not the WPCA permit applicant, requesting party status pursuant to N.J.S.A. 58: 10A-7e. The WPCA governs the process for issuance of pollution discharge permits, thereby providing a comprehensive water pollution control and enforcement program for the protection of the State s waters. The WPCA makes unlawful the discharge of any pollutant into the State s surface or ground waters without either a valid New Jersey Pollutant Discharge Elimination System (NJPDES) permit or an exemption from the permit requirement. Asbury Park held NJDES permit no. 25241 (Permit). It was due to expire on August 31, 2000. Asbury Park applied for the Permit s renewal. The DEP published a draft permit consistent with N.J.A.C. 7: 14A-15.10, thus commencing a thirty day period within which the public could comment on DEP s proposed action. Clean Ocean Action (COA) is an organization devoted to environmental interests. It applied for party status under N.J.S.A. 58: 10A-7e in connection with Asbury Park s permit renewal application. COA submitted lengthy negative comments on the proposed Permit that, on the whole, characterized the Permit as not adequately protective of the ocean ecosystem and as violative of the federal Clean Water Act. COA sought an administrative hearing to challenge the DEP s proposed determination. The Commissioner of the DEP denied COA s hearing request, concluding that because COA had failed to demonstrate the existence of a significant issue of law or fact that is likely to [a]ffect the permit decision, it had not met the statutory requirements for party status and, therefore, COA could not compel an administrative hearing. The Permit issued in final form on May 30, 2002. COA appealed and sought from the Appellate Division an order transferring the matter to the Office of Administrative Law (OAL) either for an adjudicatory hearing on the substance of COA s issues., or to have an administrative law judge (ALJ) assigned to make the threshold determination whether COA had met the requirements to a hearing. The panel rejected both applications by COA and concluded that the Commissioner s denial of the hearing request was not arbitrary or capricious. We granted COA s petition for certification and now affirm the judgment of the Appellate Division. HELD: Based on our review of the Department of Environmental Protection s responses to Clean Ocean Action s comments it is clear that there are no adjudicative facts in issue, and that COA s reasons for requesting party status do not merit the grant of an adjudicatory hearing. 1. The New Jersey Administrative Procedures Act (APA), N.J.S.A. 52: 14B-1 to -24, prescribes the procedure to be followed in the event an administrative hearing is otherwise required by statutory law or constitutional mandate. In re Application of Modern Indus. Waste Serv., Inc., 153 N.J. Super. 232, 237 (App. Div. 1977). The APA and its implementing regulations afford enhanced notice and hearing procedures to contested case litigants, but it does not confer the right to such a hearing, except in the sole instance recognized in N.J.S.A. 52: 14B-11 (governing license revocations and renewals.). Generally, constitutional and statutory rights and remedies are reserved for persons directly affected by a permitting decision. A hearing right also may exist for a non-applicant to a permit if that third party can demonstrate a particularized property interest of constitutional significance that is directly affected by an agency s permitting decision. In this State there has been legislative recognition of the benefits derived from a rigorous review standard when inquiring into the existence of a particularized property interest that generates a third-party hearing right. Accordingly, state agencies are prohibited from granting third-party hearing rights through promulgation of a regulation unless a hearing right exists as a matter of federal law or state statute. (Pp. 6-9) 2. In 1990, the WPCA was amended to expand party status to challenge a discharge permit issued by the DEP. The hearing right added by amendment dispensed with any requirement that a challenger demonstrate a particularized property right that would be directly affected by a permit s issuance and, instead, conferred party status when specified criteria were met. More specifically, to obtain a hearing right as a party under the WPCA, the requestor procedurally must have raised its objections to the DEP s permitting decision during the applicable public comment opportunity and, substantively, must present a significant issue of law or fact that is likely to affect the permit determination. N.J.S.A. 58: 10A-7e (3). The WPCA amendment ultimately enacted appears congruent with prior decisions addressing when a trial-type adjudicatory hearing is appropriate in administrative law settings, i.e. when there is a triable dispute involving adjudicative facts. (Pp. 9-17) 3. We are convinced, upon review of COA s comments and DEP s responses, that COA s reasons for requesting party status do not merit the grant of an adjudicatory hearing. In the future, however, the agency is on notice that it must prepare an integrated hearing denial decision. That document must explain the reasons why the DEP Commissioner has concluded that a third party s hearing request does not meet the statutory standard for a hearing in respect of the specific grounds raised. Reliance on DEP s earlier consideration and rejection of those grounds is insufficient. The denial document must present the basis for the Commissioner s decision. A conclusory response neither informs the third party adequately nor provides a proper basis for judicial review. In this instance, based on our review of the DEP s responses to COA s comments, it is clear that there are no adjudicative facts in issue. (Pp. 17-20) The judgment of the Appellate Division is AFFIRMED. CHIEF JUSTICE PORITZ and JUSTICES LONG, ZAZZALI, ALBIN, WALLACE and RIVERA-SOTO join in JUSTICE LaVECCHIA s opinion. Argued September 27, 2005 Decided January 11, 2006 On certification to the Superior Court, Appellate Division. Susan J. Kraham, Staff Attorney, Rutgers Environmental Law Clinic, argued the cause for appellant, Clean Ocean Action. A. Colleen Malloy, Deputy Attorney General, argued the cause for respondent, New Jersey Department of Environmental Protection (Peter C. Harvey, Attorney General of New Jersey, attorney; Patrick DeAlmeida, Assistant Attorney General, of counsel; Caroline K. Stahl, Deputy Attorney General, on the brief). JUSTICE LaVECCHIA delivered the opinion of the Court. This appeal involves the Water Pollution Control Act (WPCA), N.J.S.A. 58:10A-1 to -43, and the hearing rights that it confers in respect of pollution discharge permits issued by the New Jersey Department of Environmental Protection (DEP). Specifically, we are called on to examine a hearing-right claim advanced by an entity, not the WPCA permit applicant, requesting party status pursuant to N.J.S.A. 58:10A-7e. That statute entitles those with such status to an administrative hearing to contest the grant of a WPCA pollution discharge permit. Clean Ocean Action (COA) is an organization devoted to environmental interests. It applied for party status under N.J.S.A. 58:10A-7e in connection with a WPCA permit application submitted by the City of Asbury Park (Asbury Park). COA sought an administrative hearing to challenge the DEP s proposed determination renewing the pollution discharge permit for Asbury Park s wastewater treatment facility. Because the DEP denied COA s hearing request and granted the permit, actions which were affirmed by the Appellate Division, COA sought relief from this Court. We granted the petition for certification to review COA s claim of DEP noncompliance with the WPCA standard for entitlement to this statutorily created, third-party hearing right. In re NJPDES Permit No. NJ0025241, 183 N.J. 257 (2005). We now affirm the judgment of the Appellate Division. (2) the person demonstrates the existence of a significant issue of law or fact; (3) the person shows that the significant issue of law or fact is likely to affect the permit determination; (4) the person can show an interest, including an environmental, aesthetic, or recreational interest, which is or may be affected by the permit decision and that the interest fairly can be traced to the challenged action and is likely to be redressed by a decision favorable to that person; (5) the person submits the following information with the request to be considered a party to the action: (a) a statement of each legal or factual question alleged to be at issue and its relevance to the permit decision, together with a designation of the specific factual areas to be adjudicated and the hearing time estimated to be necessary for adjudication; (b) information supporting the request [for a hearing] . . . ; * * * * (g) specific references to the contested permit conditions, as well as suggested revised or alternative permit conditions, including permit denials, which, in the judgment of the requester, would be required to implement the purposes of [the WPCA]; and (h) in the case of application of control or treatment technologies identified in the statement of basis or fact sheet, identification of the basis for the objection, and the alternative technologies or combination of technologies which the requester believes are necessary to meet the requirements of [the WPCA]. [N.J.S.A. 58:10A-7e; see also N.J.A.C. 7:14A-17.3 (tracking statutory requirements generally and adding that issues not raised during public comment are waived).] Thus, to obtain a hearing right as a party under the WPCA, the requestor procedurally must have raised its objections to the DEP s permitting decision during the applicable public comment opportunity and, substantively, must present a significant issue of law or fact in the hearing request. N.J.S.A. 58:10A-7e(1) and (2). The significant issue of law or fact must be one that is likely to affect the permit determination. N.J.S.A. 58:10A-7e(3). The latter provisions, added by amendment during legislative passage, replaced earlier language in the bill that had allowed a hearing right to any person who raised objections to the permit action during the opportunity for public comment so long as the objections relate to a significant issue of law or fact that is likely to have a bearing on the determination. (emphasis added). See Senate Revenue, Finance and Appropriations Committee, Amendments to Senate Bill No. 2188 (rejecting bearing on language and instead inserting standard of likely to affect the permit determination (emphasis added), as well as other specific criteria that requestor must demonstrate); see also Senate Revenue, Finance and Appropriations Committee, Statement to Senate Bill No. 2188, at 7 (noting addition of [s]pecific criteria . . . which third parties requesting to appeal a permit decision by DEP must meet before an appeal hearing is granted ). Other criteria require delineation of permit conditions that the hearing requestor contends must be altered or revised, along with suggested revisions, in order to implement the purposes of the WPCA. N.J.S.A. 58:10A-7e(5)(g). The same specific delineation requirement pertains in respect of control or treatment technologies that the hearing requestor contends must be replaced or augmented. N.J.S.A. 58:10A-7e(5)(h). The specificity required in respect of alternative permit conditions and for control or treatment conditions, coupled with the requirement that the issue of fact or law must be likely to alter the permit determination, evince an overall effort to narrow the original bill in respect of the precise bases on which an adjudicative hearing will be allowed. The WPCA amendment ultimately enacted appears congruent with prior decisions addressing when a trial-type adjudicatory hearing is appropriate in administrative law settings, i.e. when there is a triable dispute involving adjudicative facts. See generally High Horizons Dev. Co. v. Dep t of Transp., 120 N.J. 40, 49-53 (1990) (tracking evolution of decisions addressing administrative hearing right in respect of administrative fairness and disputed adjudicatory facts). In High Horizons we said that the question of whether an adjudicatory hearing is required in any particular administrative context will often hinge on whether courts consider the facts in question to be adjudicatory in nature. Adjudicative facts have been defined by Professor Davis as facts pertaining to the parties and their businesses and activities. Adjudicative facts usually answer the questions of who did what, where, when, how, why, with what motive or intent; adjudicative facts are roughly the kind of facts that go to a jury in a jury case. In contrast, legislative facts, the determination of which will not normally require a trial-type hearing, do not usually concern the immediate parties, but are the general facts which help the tribunal decide questions of law and policy and discretion.[ ] As Professor Davis has explained, [a]n agency should engage in formal factfinding when, regardless of the role it is playing, the need for factual accuracy outweighs other considerations and trial-type procedures will effectively decrease uncertainty. [High Horizons, supra, 120 N.J. at 49-50 (quoting Friedman, Judicial Review Under the Superfund Amendments, 14 Colum. J. Envtl. L. 187, 201 (1989) (quoting 2 K. Davis, Administrative Law Treatise 12:3, at 413 (2d ed. 1979))). See also Cunningham, supra, 69 N.J. at 22.] The WPCA paradigm for when party status must be granted leads us to the conclusion that the statute s hearing requirement is triggered when there is a need for a quasi-judicial adjudicative hearing. Such hearings are appropriate when there exist adjudicative facts in dispute. The law clearly is, at a most elementary level, that because a trial is a process for taking evidence, subject to cross-examination, and because taking evidence is not appropriate except on disputed facts, trial procedure is not required on issues of law, policy or discretion. High Horizons, supra, 120 N.J. at 50 (quoting Davis, supra, 12:2, at 409-10). Thus, although the WPCA hearing right is conferred by operation of statute and is not based on generalized administrative fairness considerations, nevertheless, the same basis for the grant of an adjudicative hearing controls. There must exist a dispute about adjudicative facts that affects the permit decision. Stated otherwise, even [due] process [does not] require[] a trial on non-factual issues. What is needed on such issues is argument, written or oral, not evidence and not trial procedure. High Horizons, supra, 120 N.J. at 51 (quoting Davis, supra, 12:1, at 406). Under the WPCA, a third party s arguments about policy or discretion are entitled to reasoned consideration during the public comment period. On the other hand, to compel an administrative hearing under the WPCA, a proposed party must demonstrate the existence of a dispute about adjudicatory facts or about the application of the law to facts as found based on evidence presented in a trial-like proceeding. See High Horizons, supra, 120 N.J. at 50 (quoting Cunningham, supra, 69 N.J. at 21.). Disputes over policy or over the creation of a new discretionary regulatory standard are for the agency head to determine and do not compel the holding of a contested-case proceeding. In sum, the WPCA expanded the class of persons entitled to an administrative hearing. It is no longer necessary to articulate a particularized property interest that is affected by the agency s action in order to receive a hearing on a permitting determination. Nonetheless, to qualify for party status under the WPCA, one must demonstrate a significant issue of fact or law for which an adjudicative hearing is required because there is a triable dispute concerning adjudicative facts. See Cunningham, supra, 69 N.J. at 22-23; see also N.J.A.C. 7:14A-17.4(b) ( The [DEP] shall deny a request for an adjudicatory hearing if . . . [t]he request challenges duly promulgated regulations and not the [DEP s] application of the regulations. ). The specific criteria set forth in N.J.S.A. 58:10A-7e demonstrate a desire to have a focused disagreement between the DEP and the permit challenger seeking party status that is amenable to resolution through an adjudicatory hearing. The requirement of a dispute involving adjudicative facts keeps the resultant administrative hearing limited to issues resolvable by the application of evidential and procedural rules. Because a policy disagreement is not conducive to resolution in the same manner, such disagreements do not require that the DEP provide an administrative hearing. SUPREME COURT OF NEW JERSEY NO. A-116 SEPTEMBER TERM 2004 ON CERTIFICATION TO Appellate Division, Superior Court IN RE NJPDES PERMIT NO. NJ0025241 ISSUES TO ASBURY PARK CITY DECIDED January 11, 2006 Chief Justice Poritz PRESIDING OPINION BY Justice LaVecchia CONCURRING/DISSENTING OPINIONS BY DISSENTING OPINION BY