Court Opinion

ID: 4205038
Source: CourtListenerOpinion
Date Created: 2017-09-21 14:11:47.135399+00
Date Added: 2024-06-11T14:41:16.801406
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                   APPROVAL OF THE APPELLATE DIVISION
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      parties in the case and its use in other cases is limited. R.1:36-3.

                                     SUPERIOR COURT OF NEW JERSEY
                                     APPELLATE DIVISION
                                     DOCKET NO. A-2382-15T4

IN THE MATTER OF LANDIS
SEWERAGE AUTHORITY NJPDES
PERMIT NO. NJ0025364-46537
__________________________

            Submitted August 22, 2017 – Decided             September 21, 2017

            Before Judges Manahan and Gilson.

            On appeal from the New Jersey Department of
            Environmental Protection, Division of Water
            Quality, NJPDES Permit No. NJ0025364.

            Gruccio, Pepper, DeSanto & Ruth, PA, attorneys
            for appellant (A. Steven Fabietti, on the
            briefs).

            Christopher S. Porrino, Attorney General,
            attorney for respondent (Melissa H. Raksa,
            Assistant Attorney General, of counsel;
            Nicolas G. Seminoff, Deputy Attorney General,
            on the brief).

PER CURIAM

       Landis Sewerage Authority (Landis) appeals from a January 19,

2016 denial of its requests for administrative hearings concerning

fees   assessed   by   the   New    Jersey     Department    of   Environmental

Protection    (DEP).      The     fees   related   to    the   2014   and   2015

assessments    imposed    under    the   New    Jersey   Pollution    Discharge
Elimination     System     (NJPDES)   for    Landis'     operation   of     its

wastewater treatment plant.       Having considered the contentions of

the parties in light of the record and law, we affirm.

                                      I.

       The DEP regulates the discharge of pollutants to the surface

and ground waters of New Jersey under the Water Pollution Control

Act (the Act), N.J.S.A. 58:10A-1 to -43.         Any entity or person who

discharges wastewater in New Jersey is required to obtain an NJPDES

discharge permit from the DEP.        N.J.A.C. 7:14A-2.4(a).

       Landis   operates   a   wastewater    treatment    plant   located   in

Vineland, New Jersey. As part of its operations, Landis discharges

effluent to ground water through 130 acres of spray irrigation

fields and 125 acres of infiltration lagoons.              In 2014, Landis'

facilities were capable of discharging 8.2 million gallons per

day.    Accordingly, Landis is required to obtain and maintain an

NJPDES permit.

       The Act authorizes the DEP to "establish and charge reasonable

annual administrative fees, which fees shall be based upon, and

shall not exceed, the estimated cost of processing, monitoring and

administering the NJPDES permits."           N.J.S.A. 58:10A-9.      The DEP

has promulgated regulations governing how it calculates NJPDES

permit fees.     N.J.A.C. 7:14A-3.1.       At the beginning of each fiscal

year, the DEP receives an appropriation from the Legislature in

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an amount estimated for running the NJPDES program.      At the end

of the fiscal year, the DEP publishes an annual fee report and

assessment of fees representing the total cost for the year's

program activities and apportioning those costs among those who

discharge wastewater according to the fee calculation rules.

     The 2014 and 2015 annual fees were published in the New Jersey

Register on March 17, 2014, and March 16, 2015, respectively.

Those reports contained lists of the proposed NJPDES permit fees,

including the fees for Landis.       In each year, there was a one-

month comment period following the publication of the fee report.

In both years, Landis submitted written comments in opposition to

the fees and spoke at the public hearings held by the DEP on April

16, 2014, and April 15, 2015.

     On June 19, 2014, the DEP sent Landis an invoice for its

fiscal year 2014 fee of $104,667.11, of which $93,267.11 consisted

the fee for discharge to ground water.     On July 21, 2014, Landis

requested a recalculation of the portion of the discharge to ground

water fee, but paid $31,128.38, which constituted the uncontested

portion of the fee. On September 2, 2014, the DEP rejected Landis'

recalculation request.   Thereafter, on September 26, 2014, Landis

requested a hearing and a stay of its obligation to pay the

disputed amount of the fee.

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       On May 7, 2015, the DEP sent Landis an invoice for its fiscal

year   2015   NJPDES   permit    of   $85,319.72,   of    which    $73,919.72

consisted of the fee for discharge to ground water.                On May 29,

2015, Landis requested a recalculation of the portion of the fee

for discharge to ground water, but paid $56,400, which represented

the uncontested portion of the fee.            On July 28, 2015, the DEP

again rejected Landis' recalculation request.            On August 18, 2015,

Landis requested a hearing and a stay of its obligation to pay the

contested amount of the fee.              The DEP agreed to suspend the

invoices for the contested fee subject to its evaluation of the

request for a hearing.

       On January 29, 2016, the DEP denied Landis' 2014 and 2015

administrative hearing requests.           In its denial letter, the DEP

explained that it had reviewed Landis' 2014 and 2015 comments and

testimony in opposition to the fees.          The DEP then explained that

it had responded to Landis' comments and objections in April 2014,

and April 2015.    The DEP therefore reasoned that it had correctly

applied the rules and fee reports in determining Landis' permit

fees in 2014 and 2015. Accordingly, the DEP denied Landis' request

for    an   administrative      hearing     reasoning    that     Landis   was

essentially challenging duly promulgated regulations and not the

DEP's application of the regulations.            The DEP cited N.J.A.C.

7:14A-17.4(b)(5) for that position.

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       Landis now appeals from the January 19, 2016 denial of its

requests for administrative hearings.

                                   II.

       On this appeal, Landis makes two principal arguments.          First,

it contends that the DEP misapplied the governing regulations in

calculating the NJPDES permit fees for 2014 and 2015.             In making

that    argument,   Landis   contends    that   (a)   the   DEP   failed    to

recalculate the minimum fee since 2007; (b) the DEP failed to use

information reported by Landis in calculating Landis' fees; (c)

the DEP used inaccurate overhead factors in 2014; and (d) the DEP

included uncollected permit fees from prior years in calculating

the fees for 2014 and 2015.     Landis also contends that because its

permit fee increased by over 500% in 2014, it is entitled to an

administrative hearing to explore that increase.            Second, Landis

argues that the DEP failed to provide specific answers to questions

raised by Landis and that failure constitutes a violation of

procedural due process.

       After evaluating Landis' arguments in light of the law, the

record, and our scope of review, we reject them for two reasons.

Landis is seeking to challenge the 2014 and 2015 NJPDES permit

fees.    Those fees were adopted as rules, but Landis failed to

properly appeal those rules.      Second, the objections Landis raise

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do    not   present    material    facts      requiring       adjudication     at    an

administrative hearing.

       A. The 2014 and 2015 NJPDES Permit Fees

       "The New Jersey Administrative Procedure 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    NJPDES   Permit      No.

NJ0025241, 185 N.J. 474, 481 (2006) (quoting In re Application of

Modern Indus. Waste Serv., Inc., 153 N.J. Super. 232, 237 (App.

Div. 1977)).        Although the APA establishes the process for an

administrative hearing, "the right to an administrative hearing

generally must be found outside the APA in another statute or

constitutional provision[.]"             In re Fanelli, 174 N.J. 165, 172

(2002) (alteration in original) (quoting Christ Hosp. v. Dep't of

Health and Senior Servs., 330 N.J. Super. 55, 61 (App. Div. 2000)).

       Under N.J.S.A. 58:10A-7, "[a] determination to grant, deny,

modify, suspend, or revoke a permit shall constitute a contested

case . . . [and] [t]he permittee . . . shall have the opportunity

to contest the determination in an administrative hearing."                          In

all other cases, however, "the [DEP], in its discretion, shall

decide      the   extent   to   which,   if    at   all,      the   request   for    an

adjudicatory hearing shall be granted."              N.J.A.C. 7:14A-17.4.           The

regulation identifies six enumerated reasons for the DEP to deny

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a request for an adjudicatory hearing.           Among those reasons is

that if "[t]he request challenges duly promulgated regulations and

not the [DEP's] application of the regulations," then the DEP

"shall deny [the] request for an adjudicatory hearing."             N.J.A.C.

7:14A-17.4(b)(5).

     Here, the DEP properly applied its regulation in denying

Landis’ request for an administrative hearing.             The regulation

gives   the   DEP   the   power   to   decide   whether    to    provide    an

administrative hearing for matters other than a determination to

grant, deny, modify, suspend, or revoke a permit.               See N.J.S.A.

58:10A-7.     Further, a proceeding involving the amount of permit

fees is not adjudicative or quasi-judicial.               Instead, it is

legislative in nature and thus, in the absence of statutory or

regulation requirements, an adjudicative hearing need not be held.

See N.J. Builders Assoc. v. Sheeran, 168 N.J. Super. 237, 248

(App. Div.), certif. denied, 81 N.J. 293 (1979); see also N.J.A.C.

7:14A-3.1(b)(3) ("Upon publication of [the] Notice of Adoption in

the New Jersey Register, any adopted new or revised minimum fee(s)

identified in the Notice of Adoption shall be incorporated into

Table III as an administrative change.").

     DEP provided notice and gave interested parties, such as

Landis, an opportunity to voice their concerns prior to the

adoption of the permit fees in 2014 and 2015.             Moreover, Landis

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actively participated in those meetings and submitted written

objections to the fees.       The DEP then considered Landis' arguments

and submissions, but rejected the objections and adopted the fees.

At that point, Landis had forty-five days to object to the adoption

of the new permit fees, but it did not do so.              See R. 2:4-1(b).

As such, the DEP properly exercised its discretion in denying

Landis' request for an administrative hearing.

       B. The Lack of Material Factual Disputes

       "[A] presumption of reasonableness attaches to the action of

an administrative agency, and the one who challenges the validity

of that action has the burden of showing that it was arbitrary,

unreasonable or capricious."         Sheeran, supra, 168 N.J. Super. at

250.    Administrative hearings "are appropriate when there exist

adjudicative facts in dispute."           NJPDES Permit No. NJ0025241,

supra, 185 N.J. at 486. "[B]ecause 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."

Ibid. (quoting High Horizons Dev. Co. v. Dep't of Transp., 120
N.J. 40, 50 (1990)).          Here, Landis failed to carry its burden

of showing that there are material facts in dispute.

       Landis advances five arguments before us.           First, it argues

that the DEP had failed to raise the minimum NJPDES permit fee

                                      8                                A-2382-15T4
since 2007, as required by N.J.A.C. 7:14A-3.1(a)(9).              N.J.A.C.

7:14A-3.1(a)(9) sets forth a formula that the DEP must use in

calculating the annual fee for all discharges.        The regulation,

however, is silent with respect to whether such calculation must

be computed annually.    Landis is not challenging the accuracy of

the DEP's calculation in 2014 and 2015, instead it is objecting

to the application of a specific regulation.       We discern no abuse

of DEP's discretion in interpreting the regulation, and there are

no adjudicative facts in dispute requiring a hearing.

     Second, Landis claims that the DEP failed to utilize its

self-reported information in calculating the fee.          In making that

argument, Landis relies on N.J.A.C. 7:14A-3.1(a)(7), which states:

          [T]he [DEP], in calculating Environmental
          Impact, shall use information reported by the
          permittee on MRFs for the [twelve-month]
          period for which data is available on the
          [DEP’s] computer. . . . Where this information
          is not available, the [DEP] shall use permit
          limitations, information submitted in permit
          applications, technical reports prepared by
          the [DEP].

     N.J.A.C. 7:14A-3.1(a)(7) applies to "the general conditions

and applicability of the fee schedule for NJPDES permittees and

applicants.”    Here,    Landis   is   not   challenging    the   general

conditions, but instead the fee for discharges to ground water.

The calculation for annual fee for ground water is set forth in

N.J.A.C. 7:14A-3.1(d).    Landis is not disputing that any of the

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values used in calculating the fees are wrong.           As such, there are

no material facts in dispute with respect to the fees for ground

water discharges.

     Next, Landis contends that the DEP used an incorrect overhead

factor in 2014, which included an allegedly inaccurate fringe

benefit cost.     Specifically, Landis argues that the 2014 fringe

benefit cost failed to reflect a change in the New Jersey state

budget.    Fringe      benefit    cost   impacts   the   cost   per    hour    in

calculating minimum fees.         N.J.A.C. 7:14A-3.1(a)(9)(iii).          As we

have stated previously, the DEP is not required to calculate the

minimum fee on an annual basis.             As such, there was no need for

an administrative hearing on this issue.

     Landis then argues that the DEP incorrectly used uncollected

permit fees in 2014 and 2015 in its fee calculations.                  The 2014

and 2015 annual reports provided a clear breakdown of all factors

used in calculating the permit fees, and uncollected fees were not

part of that breakdown.          Landis failed to specify how and where

those uncollected fees were used in calculating the 2014 and 2015

fees.     As   such,   we   conclude     that   Landis   failed   to    present

sufficient evidence to support its allegation that there are

material facts in dispute as to whether the DEP used uncollected

fees in its fee calculations.

                                       10                               A-2382-15T4
      Lastly,   Landis      claims    that    an   adjudicative     hearing     is

necessary because its permit fee increased by over 500% in 2014,

and it has no other recourse to contest the drastic increase in

permit fee.     We have explained that Landis had forty-five days

after the publication of the annual fee report to challenge the

adoption of the fee and the data used to calculate that fee.

Further, in both 2014 and 2015, Landis requested a recalculation

of   its   permit    fee.    Landis    took    advantage    of   all   available

opportunities       and   exhausted   all     of   its   remedies   within    the

administrative process.        As such, we reject Landis' argument that

an adjudicative hearing is its only recourse to voice its concern.

      Affirmed.

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