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In administrative law, there is the concept of the relatively unprotected third party. The third party is not the applicant, nor necessarily the subject of a contested action before the Office of Administrative Law. Rather, the third party is anybody else who may have an interest in the outcome of a particular administrative agency dispute. While standing to challenge an action or inaction before the Superior Court of the State of New Jersey is broadly construed, certainly the same cannot be said about the rights of third parties in administrative agency law. If there is any question that third parties have diminished rights, that question was conclusively resolved in 1993, when the New Jersey Legislature amended the Administrative Procedure Act. See P.L. 1993, Chapter 359, Amending the Administrative Procedure Act, N.J.S.A. 52:14 B-1 et. seq. In that year, the Legislature declared that it is “fitting and proper, and within the public interest, to prohibit state agencies from promulgating rules and regulations which would allow third party appeals of permit decisions unless specifically authorized to do so by federal law or state statute.” The amendment went on to provide that a permit decision means a decision by a state agency to grant, deny, modify, suspend or revoke any agency license, permit, certificate, approval, chapter, registration or other form of permission required by law, other than a license or certificate issued to an individual for the practice of a profession or occupation. In other words, almost everything that an administrative agency does falls within this very broad definition of permit decision. This is a very troubling statutory provision. The reason it is so troubling is that in environmental law, there are many times when an improper approval of a permit by the Department of Environmental Protection affects innocent third parties. There are many occasions when third parties want to respond to an improperly issued permit. For example, a third party should be allowed to challenge an improperly issued wetlands permit, one allowing a developer to fill wetlands. Individual fresh water wetland permits allowing the filling of wetlands are by design supposed to be rarely granted. Environmental lawyers refer to these as the difficult kinds of permits to obtain, contrasted with “general permits,” which are relatively easy to secure. When individual wetlands permits are improperly granted, wetlands that should be protected become filled, wetlands that should be protecting neighboring properties from flooding become ruined, wetlands that should be preserving groundwater in a community become lost. Clearly, neighbors and surrounding residents have a very strong and legitimate interest when the DEP improperly grants a wetlands permit. Yet, because of this 1993 amendment, they are helpless. When third parties attempt to secure a hearing from the DEP, two things almost invariably occur. First, the application is denied no matter what kind of proof of a particularized harm is set forth. Second, the denial occurs as much as a year after the application is made. This is well after the permit is issued and well after the undesirable filling of wetlands or whatever other contested action that concerns the neighbors takes place. The DEP can effectively proceed in this matter because the Legislature has given the DEP this authority through the 1993 amendment. Of course, the neighbors are not without remedy. For example, the amendment does allow those who can demonstrate a “particularized property interest” or those who are “directly affected by a permitting decision” to request a hearing. And again, when the aggrieved party learns of the department’s decision, generally the aggrieved activity has already taken place. However, there is also the right to appeal the decision to the Appellate Division. Final agency actions, such as the denial of third party hearing requests, are appealable as of right to the Appellate Division of the Superior Court. However, if the agency stonewalls and takes an extraordinarily lengthy time to decide the appeal, the Appellate Division has demonstrated on more than one occasion that it will not intervene. This may require the filing of emergent applications, perhaps up to the Supreme Court, the type of actions that are reserved to only the most extreme environmental infractions. Of course, wetlands in New Jersey are a wholly delegated program, the authority of which originally stems from Section 404 of the Federal Clean Water Act. This means that when wetlands decisions are at issue, another option might be to seek relief in federal district court. This too provides a window of opportunity for relief in cases where both the Legislature, through the 1993 amendment, and of the DEP, through its costs of action and dealings, have deprived individuals of the ability to prevent ongoing violations of land use regulation laws. The rules promulgated by the DEP incorporate the limitations on the rights of third parties to file a hearing request. NJAC 7:7-5.1 and Section 82 provides:
If the Hearing Request is submitted by someone other than the applicant, in addition to submitting the information requested above, the person requesting the hearing shall submit additional evidence including the following: i. Evidence of notice to the permit applicant; ii. Information regarding the participation of the person requesting the hearing in the application review process; iii. Information necessary for the Department to determine whether the applicant has a legal right to a hearing.

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.

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