Court Opinion

ID: 7324271
Source: CourtListenerOpinion
Date Created: 2022-07-25 21:54:25.380629+00
Date Added: 2024-06-11T16:20:01.466264
License: Public Domain

GARIBALDI, J.,
concurring in part, and dissenting in part.
The issue is not whether the New Jersey Department of Environmental Protection (“DEP”) or this Court believe that to expand a property-owner’s liability to include off-site contamination is good policy. The issue is whether the Legislature, in enacting the Environmental Cleanup Responsibility Act, N.J.S.A. 13:lK-6 to -13 (“ECRA” or “Act”), intended and authorized such extensive liability. I conclude that by imposing liability on the property-owner for off-site contaminated property, the DEP has substantially expanded its authority under the *463Act. Such a sweeping change must be made by the Legislature, not an administrative agency.
Everyone recognizes that a clean environment is best for the public health and for the economy. The question is how that goal can most efficiently be reached in view of limited private and public resources and the need for communities, particularly the urban areas in this state, to be economically viable. That issue is best addressed by the Legislature. The Legislature can seek advice from and synthesize the views of all interested parties, including the DEP, the New Jersey Department of Commerce and Economic Development, the business community, labor unions, environmentalists, and leaders of urban communities, all of whom have a vital stake in a sound environment and a sound economy.
I agree with the Appellate Division’s determination that the DEP exceeded its statutory authority under ECRA by promulgating N.J.A.C. 7:26B-1.3 (Regulation 1.3), the regulation that defines a “cleanup plan” as a plan addressing off-site as well as on-site contamination. See 250 N.J.Super. 189, 243-46, 593 A.2d 1193 (1991). In reversing the Appellate Division, the majority ignores the Act’s plain language and circumvents the legislative intent behind the Act. The Court’s ruling contravenes the Legislature’s intent because it will generate litigation delaying cleanup and will chill the real-estate transactions designed to trigger the cleanup requirement. As a result, more rather than fewer sites will remain contaminated. Meanwhile, the State and its communities will be deprived of the economic benefits of a healthy real-estate market.
I
“Construction of any statute necessarily begins with consideration of its plain language.” Merin v. Maglaki, 126 N.J. 430, 434, 599 A.2d 1256 (1992); Kimmelman v. Henkels & McCoy, 108 N.J. 123; 128, 527 A.2d 1368 (1987). Such language should be given its “ordinary and well understood meaning.” Levin v. *464Township of Parsippany-Troy Hills, 82 N.J. 174, 182, 411 A.2d 704 (1980). Moreover, “[t]he words chosen by the legislature are deemed to have been chosen for a reason.” Merin v. Maglaki, supra, 126 N.J. at 435, 599 A.2d 1256.
The statutory language is clear and unambiguous. Regulation 1.3 elaborates on the statutory definition of “cleanup plan” established by § 13:lK-8a, which states:
“Cleanup plan” means a plan for the cleanup of industrial establishments, approved by the department, which may include a description of the locations, types and quantities of hazardous substances and wastes that will remain on the premises; a description of the types and locations of storage vessels, surface impoundments, or secured landfills containing hazardous substances and wastes; recommendations regarding the most practicable method of cleanup; and a cost estimate of the cleanup plan. [Emphasis added.]
“Industrial establishment” is defined in the Act to mean a “place of business engaged in operations * * * having a Standard Industrial Classification number * * N.J.S.A. § 13:lK-8f (emphasis added). The Legislature’s definition of an “industrial establishment” is based on the Standard Industrial Classification Manual (“SIC”) prepared by the Office of Management and Budget of the United States. As the Appellate Division notes, the Manual defines an “industrial establishment” as “‘an economic unit, generally at a single physical location, where business is conducted or where services or industrial devices [sic] are performed.’ ” 250 N.J.Super. at 251, 593 A2d 1193 (quoting appellant’s brief citing SIC Manual). When read together, the Act’s definitions of “cleanup plan” and “industrial establishment” demonstrate that the cleanup plan required by ECRA covers only the physical location where the industrial establishment conducts its business or where its services or operations are performed. They do not encompass off-site properties.
Other provisions of ECRA verify that the cleanup plan required by the statute covers only the on-site property that is being closed, sold, or transferred, and that it was not intended to address off-site contamination.
*465N.J.S.A. § 13:lK-9c, which directs the owner or operator of an industrial establishment to implement a cleanup plan, states:
The cleanup plan and detoxification of the site shall be implemented by the owner or operator, provided that the purchaser, transferee, mortgagee or other party to the transfer may assume that responsibility pursuant to the provisions of this act. [Emphasis added.]
Although the Legislature could have referred to the cleanup of the contamination, it explicitly referred to the cleanup of the site. Similarly, N.J.S.A. § 13:1K-10, which authorizes the DEP to establish detoxification standards for the review of cleanup plans, specifically refers to their application to the “site of an industrial establishment” and not to the contamination generally. Ibid.
N.J.S.A. 13:lK-8g defines a “negative declaration” as
* * * a written declaration, submitted by an industrial establishment and approved by the department, that there has been no discharge of hazardous substances or wastes on the site, or that any such discharge has been cleaned up in accordance with procedures approved by the department, and there remain no hazardous substances or wastes at the site of the industrial establishment. [Emphasis added.]
The majority interprets the definition of a “negative declaration” to require the absence of off-site as well as on-site contamination. The majority, however, fails to reconcile that interpretation with the last sentence of the definition as quoted above, which specifically refers to the absence of “hazardous substances or wastes at the site of the industrial establishment.”
In sum, the Act speaks solely of on-site property; nowhere does the Act speak of “off-site” property or otherwise extend liability to the premises or property of an industrial establishment that is not being closed, sold, or transferred. As the Appellate Division determined, both statutory provisions defining “cleanup plan” and “negative declaration” expressly “focus on the conditions of the industrial site itself, not discharges off-site.” 250 NJ.Super. at 244, 593 A.2d 1193. Had the Legislature intended to expand the Act to include off-site property, it would have drafted the statute accordingly. It did not.
*466The majority declares that we should give deference to the DEP’s interpretation of the statute that it is obliged to enforce, ante at 449-451, 608 A. 2d at 291-292, and that the DEP has consistently interpreted the statute to extend liability off-site. Ante at 453-454, 608 A2d at 293-294. Interestingly, the majority’s assertion notwithstanding, the DEP has not consistently interpreted ECRA to extend liability to off-site property. Indeed, DEP’s initial position was to the contrary. In its 1984 Guide to the Environmental Cleanup Responsibility Act (“Guide”), DEP provided:
ECRA attempts to place that cleanup responsibility where it belongs by requiring Industrial Establishments to clean up their facilities as a precondition to closure, sale or transfer of their operations. [Guide at 1 (emphasis added).]
The Guide further states:

Cleanup Plan

A Cleanup Plan is a proposal developed by the owner or operator of the Industrial Establishment that describes in detail the method and operations that will be used to return the site to an environmentally acceptable condition. [Guide at 6 (emphasis added).]
Moreover, DEP chose to compare the ECRA program to Home Buyer Protection Programs instituted by many municipalities. Guide at 1. Those programs require inspections of homes offered for sale. Such inspections are limited to the premises. Hence, at least in 1984, DEP interpreted ECRA to impose liability solely for cleaning up the property being closed, sold, or transferred and not for the contamination of off-site property-
Even if DEP had consistently extended liability to off-site property, deference to the agency’s interpretation cannot be stretched to condone DEP’s exercise of unauthorized power. Although ECRA is a remedial statute and should be liberally construed, there are limits to liberality. We have held that “[a]n administrative agency may not under the guise of interpretation extend a statute to include persons not intended, nor may it give the statute any greater effect than its language allows.” Kingsley v. Hawthorne Fabrics, 41 N.J. 521, 528, 197 A.2d 673 (1964). Accordingly, we have repeatedly held that *467“ ‘administrative regulations * * * will fall if a court finds that the rule is inconsistent with the statute it purports to interpret * * ” Last Chance Dev. Partnership v. Kean, 119 N.J. 425, 432-433, 575 A.2d 427 (1990) (quoting Smith v. Director, Div. of Taxation, 108 N.J. 19, 26, 527 A.2d 843 (1987), in turn citing Airwork Serv. Div. v. Director, Div. of Taxation, 97 N.J. 290, 296, 478 A.2d 729 (1984)). This is not a case in which an agency is seeking incidental powers reasonably necessary to effectuate its specific delegation. DEP is seeking far-reaching substantive authority not given in the statute that will have a profound effect on the people of New Jersey, particularly those who live in urban areas.
Despite the deference normally given to agency regulations, this case does not mark the first time that our courts have criticized DEP for expanding its authority beyond the express terms of a statute. As the Appellate Division noted, Regulation 1.3’s extension of authority is “analogous to the regulation invalidated in Matter of Freshwater Wetlands Rules * * 250 N.J.Super. at 245, 570 A.2d 435. In In re Freshwater Wetlands Rules, the court found that DEP’s imposition of a time limit on a statutory exemption went beyond the power accorded by the Freshwater Wetlands Protection Act, N.J.S.A. 13:9B-1 to -30, which did not incorporate a time limit. 238 N.J.Super. 516, 527-30, 570 A.2d 435 (App.Div.1989). See also Last Chance Dev. Partnership v. Kean, supra, 119 N.J. 425, 575 A.2d 427 (1990) (holding that DEP regulations extending geographic reach of DEP’s jurisdiction were inconsistent with Waterfront Development Act, N.J.S.A. 12:15-1 to -11).
The majority argues that the expertise of an administrative agency is necessary to resolve “the delicate balance of environmental protection with concerns for the State’s economy and public health.” Ante at 451, 608 A.2d at 292. On the contrary, that balance involves a political, not a technical, determination, and is thus better left to the Legislature. In writing ECRA, the Legislature established what it considered the optimal balance. DEP’s regulation shifts that balance. In this instance, *468in which DEP’s regulation expands the plain language of the statute, the Court should not be bound to that misconceived interpretation out of an undue deference to the administrative agency.
II
I believe that the DEP regulation is inconsistent not only with the plain language of the statute but with the indicia of the Legislature’s intent in enacting it. The majority justifies its departure from the plain meaning of the statute by stating that it is bridging “the apparent gap between the Legislative intent and the expression of that intent in the statute.” Ante at 448, 608 A. 2d at 291. I perceive no such gap. The majority has created the gap through a misconception of the Legislature’s intent.
First, in enacting ECRA the Senate used language that limited cleanup liability to on-site property. The Senate Energy and Environment Committee Statement that accompanied the successful bill states that the Bill
imposes a precondition on the closure, sale or transfer of certain properties associated with the manufacture, refining, transportation, treatment, storage, handling, or disposing of hazardous substances or wastes. The precondition is the execution of an approved cleanup plan which details the measures necessary to detoxify the property, or the approval by the Department of Environmental Protection of a declaration that there has been no discharge of hazardous substances or wastes on the property or that any such discharge has been cleaned up in accordance with procedures approved by the department and there remain no hazardous substances or wastes on the property. [Senate Energy and Environment Committee Statement, Assembly Bill No. 1231, L. 1983, c. 330 (June 23, 1983) (emphasis added).]
That the Legislature did not intend ECRA to apply to off-site contamination is also indicated by the fate of subsequent legislation specifically designed to impose off-site liability. On September 10, 1987, Senator Orechio, the President pro tempore of the Senate, introduced Senate Bill No. 3625, which proposed amending ECRA to provide that
“Cleanup plan” means a plan for the cleanup of industrial establishments and, where necessary, land affected by hazardous waste or hazardous substances originating at industrial establishments, approved by the department, which may include a description of the locations, types and quantities of hazardous substances and wastes that will remain on the premises; a description and *469evaluation of any hazardous substances or hazardous waste on land off the premises of the industrial establishment which originated at the industrial establishment; * * *. [Senate Bill No. 3625 (1987) (emphasis denotes proposed amendment).]
Senator Orechio thus thought the passage of new legislation was necessary to give the DEP the power it now asserts under the original ECRA. The Senate failed to act on the bill. Although I recognize that the introduction of the bill and the Senate’s failure to act on it are not dispositive of legislative intent, the events undisputably demonstrate that at a minimum the President of the Senate, who was also President at the time ECRA was enacted in 1983, did not believe that the original ECRA had given DEP the authority to require the cleanup of off-site property.
In ascertaining the Legislature’s intent “we consider not only the particular statute in question, but also the entire legislative scheme of which it is a part.” Kimmelman, supra, 108 N.J. at 129, 527 A. 2d 1368. In construing legislation “every effort should be made to harmonize the law relating to the same subject matter.” Superior Air Prods. Co. v. NL Indus., 216 NJ.Super. 46, 63-64, 522 A.2d 1025 (App.Div.1987). By noting the state of hazardous-waste regulation at the time ECRA was passed, and the contrasts between it and other hazardous-waste statutes, we can discern the role the Legislature intended ECRA to fulfill.
Prior to ECRA’s enactment in 1983, the primary New Jersey law governing hazardous-waste cleanup was the New Jersey Spill Compensation and Control Act (“Spill Act”), N.J.S.A. 58:10-23.11 to -23.11(o). Once DEP becomes aware of contamination, the Spill Act gives DEP the authority to order a discharger of hazardous substances to remove that discharge. N.J.S.A. § 58:10-23.llf(a). DEP may also choose to undertake cleanup itself, using the limited resources in the New Jersey Spill Compensation Fund. N.J.S.A. 58:10-23. However, “[a]ny person who has discharged a hazardous substance or is in any way responsible for any hazardous substance” being cleaned up *470by DEP is liable for the cleanup and removal costs expended by DEP.
Because only actual dischargers can be required to clean up and DEP can recover its costs only from those responsible for a discharge, the Spill Act is fundamentally fault-based. Because ascertaining who is at fault in causing the discharge is often extremely difficult, there has been much litigation under the Spill Act resulting in costly delays that impede the clean-up of contaminated property. As the majority also notes, ante at 446-447, 608 A.2d at 290, the Legislature passed ECRA to avoid the delays occasioned by the Spill Act’s fault-based liability and to establish an additional trigger for hazardous-waste cleanup.
ECRA imposes liability regardless of the property-owner’s responsibility for the contamination in order to avoid the litigation that had previously delayed the initiation of cleanup. As the Appellate Division stated in Superior Air Prods. v. N.L. Industries, supra, 216 N.J.Super. at 63, 522 A.2d 1025,
it is clear that ECRA was intended to avoid the delay in perfecting cleanup inherent in the determination of liability through litigation. Responsibility for the contamination plays no part in the ECRA process.
The “simple aim of ECRA is swift and thorough cleanup through a regulatory process.” Id. at 65, 522 A. 2d 1025. ECRA should thus be interpreted to preserve the legislative goal of minimizing delays in initiating cleanup. As will be discussed further in Part III, Regulation 1.3 will create the types of time-consuming disputes over responsibility for off-site contamination that the Legislature sought to avoid.
The Legislature also designed ECRA to provide an additional means for discovering contamination and triggering cleanup. As the Court recently stated in Dixon Venture v. Joseph Dixon Crucible, 122 N.J. 228, 231-32, 584 A.2d 797 (1991), “ECRA is quite unlike other environmental regimes in that it uses market forces to bring about the reversal of environmental pollution.” In contrast, DEP must be aware of the contamination before cleanup occurs under the Spill Act. ECRA prompts the discovery and amelioration of contamination by requiring investí*471gation and cleanup as a precondition to a property transaction. The Legislature intended the owner’s desire to sell its property to act as the catalyst for cleanup. The sale gives the owner not only the incentive to sell but the financial resources to be able to conduct the cleanup. The Legislature could not have intended an interpretation of ECRA that unnecessarily discourages the market transactions that trigger the sought-after cleanup. As will be discussed further in Part III, Regulation 1.3 will discourage market transactions.
The majority supports its ruling by painting a dire picture of environmental disaster if DEP does not have the authority under ECRA to compel a property owner to clean up off-site contamination. Ante at 455-456, 608 A. 2d at 294-295. It implies that legislative intent will be frustrated if all actions necessary to avert that disaster are not permissible under ECRA. Although the Legislature recognized the danger to the public of hazardous substances and wastes in enacting ECRA, N.J.S.A. 13:lK-7, that does not mean that the Legislature intended any action addressing that danger to be justified under the Act. The Legislature intended ECRA to supplement, not replace, the other forms of statutory authority available to achieve cleanup.
DEP has a formidable arsenal of environmental statutes providing the requisite authority. As the Appellate Division properly observed, “a property owner can be compelled under the Spill Act to remedy any discharge onto land which threatens the natural resources of the State.” 250 N.J.Super. at 245, 593 A.2d 1193 (citing Summit Assocs. v. Liberty Mut. Fire Ins. Co., 229 N.J.Super. 56, 65, 550 A.2d 1235 (App.Div.1988)). When DEP deems it necessary, it can also use its own resources to clean up environmental hazards. N.J.S.A. § 58:10-23.11f(a). Other statutes provide additional authority for responding to specific forms of hazardous discharges. See Water Pollution Control Act, N.J.S.A. § 58:10A-10 (when discharger violates Water Pollution Control Act or permit issued thereunder, Commissioner of Environmental Protection can, inter alia, seek injunctive relief and recover costs expended on remediat*472ing effects of discharge); Safe Drinking Water Act, N.J.S.A. § 58:12A-10 (when facility violates Safe Drinking Water Act, DEP can sue for injunction); Solid Waste Management Act, N.J.S.A. § 13:lE-9 (when facility violates Solid Waste Management Act, Commissioner of Environmental Protection can, inter alia, seek injunctive relief and recover costs expended on remediating the effects of noncompliance).
When the ECRA process has alerted DEP to off-site as well as on-site contamination, DEP can address that off-site contamination under other relevant statutes without impeding the transaction triggering ECRA. The Legislature intended the State’s environmental statutes to complement one another. It certainly would not have wanted ECRA’s goals of speedier cleanups triggered by frequent market transactions to be undermined when alternative means for remedying environmental threats exist.
Ill
The majority’s interpretation of Regulation 1.3 does not take into account the practical effects of its application. An analysis of those effects makes apparent the regulation’s inconsistency with legislative intent.
The requirement that a property owner clean up off-site contamination traceable to on-site discharges sounds so straightforward — just follow the discharge from on-site to off-site. However, the source of pollution is often both extremely difficult and extremely expensive to ascertain. Contamination from the discharge of hazardous substances can migrate off-site through the soil, air, surface water, or groundwater. Particularly in highly-urbanized areas, once hazardous wastes have migrated from the original discharge they are likely to mingle with contamination stemming from other industrial facilities. The adjacent property may be used in activities that are equally or even more environmentally dangerous than those engaged in by the proposed seller.
*473Paced with Regulation 1.3’s requirement to clean up off-site contamination, the seller will contest what proportion of the off-site pollution stems from the original discharge on its property, and will understandably resist cleaning up any contamination associated with discharges that do not emanate from its site. Regulation 1.3 thus converts ECRA’s quick and simple determination of liability into a time-consuming and controversial analysis about the source of off-site contamination. The result is litigation over fault and its consequent delays — the very evils ECRA was designed to prevent.
Implementation of the regulation will result not only in delayed cleanups. It will also discourage property transactions altogether, thus undermining ECRA’s triggering mechanism. The delay forces sellers and purchasers to operate under uncertainty for a considerable period of time. Sellers will be deterred from selling because of the potential liability at stake, while purchasers will be deterred from seeking new property by the potentially-significant delays and uncertainties associated with the transaction.
Businesses need predictability and certainty concerning cost and timing. They do not want to wait for years to know the cost or time when they can occupy the property. A purchaser will be willing to undertake the transaction only when it desperately needs or wants the site. I suspect that in most cases the purchaser will look for other property.
If the cleanup is limited to on-site property, property owners will be more willing to transfer and clean up their properties. ECRA will produce clean sites achieved with a minimum of delay. Even if the discharge has leaked off-site, at least one source of the contamination will have been extinguished. If the sale of property is discouraged, neither of these beneficial effects will occur. Instead, both the on- and off-site property will continue to be polluted, the property owner will be unable to sell its property, and the cities will be deprived of new businesses. As a consequence, no cleanup will have occurred, *474inefficient businesses will continue in operation, and the potential for new jobs will have been lost without any commensurate environmental benefit.
Regulation 1.3’s expansion of liability raises all the delay and cost problems inherent in fault statutes. Those are the problems that the Legislature perceived and the problems that ECRA with its no-fault approach was designed and enacted to avoid. Such an expansion of liability is best left to the Legislature and not to an administrative agency.
IV
I concur in the majority’s affirmance of the Appellate Division’s decision upholding N.J.A.C. 7:26B-1.3. Indeed, the definition of “industrial establishment” in N.J.S.A. 13:lK-8f offers further support that the Legislature intended to limit cleanup plan to the on-site property of an industrial establishment and did not intend to extend it to property not owned or used by such industrial establishment.
Justice Stein joins in this dissent.
For affirmance in part and reversal in part — Chief Justice WILENTZ and Justices POLLOCK, CLIFFORD and O’HERN — 4.
For affirmance — Justices GARIBALDI and STEIN — 2.