Many other DEP programs have similar provisions. The DEP has taken an aggressive policy stance that appears to be aimed at reducing the number of third parties who have access to the OAL to challenge permit decisions. The first reported decision on these 1993 amendments came in the case of In RE: Amico Diagonal Line Tunnel Car Wash, an Appellate Division decision decided on July 15, 2004. The case demonstrates the breadth of this prohibition.

In late 2001, Paul Amico applied to the New Jersey Meadowlands Commission (NJMC) for three variances to construct a car wash off Route 3 in Secaucus, New Jersey. This portion of Secaucus falls within the jurisdiction of the NJMC. He requested three variances: one from a regulation requiring a 50-foot strip of wetland for any development that borders the Hackensack River or its tributaries; the second from a requirement that prohibits driveway entrances and exits within 50 feet of an intersection; and the third from a requirement restricting the maximum sign area on a building to 5 percent of the building’s front facade.

In early 2002, the NJMC’s chief engineer conducted a hearing on the variance application. At that time, John and Virginia Heldon, owners of an adjacent property, participated at the hearing and expressed opposition to the variance applications. Their attorney was actively involved in the process. The objectors, unable to find experts to testify on their behalf prior to the hearing, were allowed to submit two expert reports after the hearing date. In response, Amico submitted three expert reports.

In August 2002, the NJMC transmitted a 37-page decision approving the variance application. The letter granting the approval contained the following language:

Any person who claims to be aggrieved by this decision may request an appeal pursuant to NJAC 19:4-6.25 (B) . . . Upon grant of the request for an appeal, the executive director as designee shall transmit the matter to the [OAL] for a hearing.

On Aug. 30, 2002, the appellants requested a hearing challenging the approval of the variance request. While the NJMC transmitted the request to the OAL for hearing, the Attorney General’s office in September of 2002 advised the NJMC that this transmission was in contravention of the 1993 Amendments greatly limiting the rights of third parties to challenge the administrative approval of permit decisions. Thereafter, the NJMC concluded that its transmission of the case as a contested matter to the OAL was improper and requested that the OAL send back the hearing request. A notice of appeal followed. The Appellate Division affirmed the NJMC decision to effectively rescind its granting of the hearing request. It expressly relied upon the 1993 Amendments to the Administrative Procedure Act that in pertinent part provides that a state agency cannot promulgate a rule or regulation allowing a third party to appeal a permit decision. While the language speaks of “appealing” a decision, the Appellate Division made it clear that the purpose of the rule was not to limit the ability of third parties to seek redress from the Superior Court, but rather to limit access to the OAL.

The Court observed that the definition of a third party expressly excludes persons who have a “particularized property interest sufficient to require a hearing on constitutional or statutory grounds.” The Court further provided that in light of the 1993 Amendments, the appellants may only proceed to the OAL if they are able to demonstrate that they have a particularized property interest in Amico’s variance application sufficient to require a hearing on constitutional or statutory grounds.

Initially, the Court observed that the Hackensack Meadowlands Reclamation and Development Act, which governs the NJMC, does not grant an objector a right to a hearing for a variance application. Thus, the Court found that there is a statutory right to a hearing.

The Court regarded the constitutional question as a “more substantial question.” Previously, in the case of Spalt v. New Jersey Department of Environmental Protection, 237 N.J. Super. 206 (App. Div. 1989), cert. denied 122 N.J. 140 (1990), the Appellate Division concluded that owners of property located close to a proposed residential development do not have a particularized property interest giving rise to a constitutional right to a hearing to oppose a CAFRA permit. The Court held that simply because someone resides close to a site and is fearful of resultant injury does not mean that they are entitled to an adjudicatory hearing. “Fear of damage to one’s generalized property rights shared with other property owners is insufficient to demonstrate a particularized property right.” Thus, proximity and generalized fear do not seem to create a constitutional right to a hearing before the OAL.

The Court found the Spalt decision controlling in the Amico case as well. “Although appellants assert that the construction of a car wash on Amico’s property would increase traffic congestion in front of their property, this anticipated impact from Amico’s proposed development is similar to the impacts commonly experienced by owners of property in the vicinity of any proposed new development. It is also similar to the impact that we found insufficient to confer a constitutional right to a hearing in Spalt.”

What’s interesting in Amico is that the appellants did not just assert a generalized fear, but what seemed to be a particularized concern that their property would suffer from enhanced traffic flow if the variances were granted. Yet, despite what some might say was a demonstration of a particularized concern, the Court stated that this was not enough.

Without being able to participate before the OAL, without being able to cross examine the applicant’s experts or put on experts on behalf of the objector, the Appellate Division will not have a record upon which it can understand the issues that might give rise to this particularized interest. In other words, the procedure actually determines the substance because without a forum, the Appellate Division will have very little upon which it can act.

The 1993 Amendments are causing environmental harm in New Jersey. They are foreclosing many interested parties with substantial concern from being heard and from participating.

The Legislature understands what poor environmental permitting can do as evidenced by its recent passage of the Highlands Act. It is time for the Legislature to continue in this light and rescind the 1993 Amendments.

Lieberman and Blecher are partners in Lieberman & Blecher of Princeton. The firm represents private and municipal clients in environmental regulatory and litigation matters, land use, toxic torts and residential and commercial real estate matters.