NJ App. Div. Upholds NJDEP Power to Waive Applicability of Rules
SteveK April 5th, 2013
The Appellate Division recently handed down its decision in In re N.J.A.C. 7:1B-1.1, et seq., a case upholding the validity of certain rules promulgated by NJDEP which permit it under limited circumstances to waive the applicability of its own rules as to particular scenarios. Further, the court invalidated certain forms and FAQs on the NJDEP website which purported to “fill in the gaps” in the aforementioned regulations on the basis that they constituted “de-facto rulemaking” in violation of the Administrative Procedures Act.
In response to Executive Order No. 2 (“EO2”), which mandated that State agencies adopt waiver rules “to ensure that regulations shall be efficient, consistent . . . , accessible and transparent to all interested parties,” the DEP adopted regulations entitled “Waiver of Department Rules,” designated at N.J.A.C. 7:1B-1.1 to -2.4. Thereafter, a group of environmental and labor organizations filed suit challenging this promulgation, arguing that the rules exceed DEP’s legislated authority and in any event are facially invalid due to the lack of adequate standards to guide the agency’s discretion and implementation. They further challenged DEP’s guidance documents and other postings on its website created exclusively for the waiver rules after their adoption on the basis that they constituted de facto rulemaking in violation of the APA.
The challenged rules purported to “set forth the limited circumstances in which the [DEP] may, in its discretion, waive the strict compliance with any of its rules
in a manner consistent with the core missions of the Department . . . .” N.J.A.C. 7:1B-1.1. To be successful in its application, it must comply with one of four threshold requirements: (1) “[c]onflicting rules”; (2) “strict compliance with the rule would be unduly burdensome”; (3) “net environmental benefit”; or (4) “public emergency,” as these terms are defined in N.J.A.C. 7:1B-1.2.
Next, the applicant must demonstrate that its waiver request does not fall within certain prohibitions expressed within the rules, largely pertaining to federal and state preemption, and various high-priority regulatory issues. Further, no waiver may be granted that would conflict with any of DEP’s “core missions . . . to maintain, protect, and enhance New Jersey’s natural resources and to protect the public health, safety, and welfare, and the environment.”
Third, the application must satisfy various specific evaluation criteria, which will be considered with respect to any prospective waiver. These criteria include (1) sufficient notice to the public; (2) sufficient information having been provided to DEP to support the waiver; (3) circumstances support the need for a waiver; (4) whether the applicant caused or contributed to the circumstances that resulted in the rule being unduly burdensome; (5) net environmental benefit; (6) consistency with core missions of the DEP; and (7) the existence of a public emergency. N.J.A.C. 7:1B-2.2.
After these rules were adopted, the DEP posted a waiver rule “homepage” on its
website which included links to subpages providing additional and specific
information concerning waiver rule prohibitions, waiver rule guidance, public
notice requirements, FAQs and DEP contact information. These pages also linked to information in a July 2012 “Guidance Document For Requests Pursuant to N.J.A.C. 7:1B” that provided specific instructions to waiver applicants, including what they should “consider,” and what statements, reports, demonstrations, or other evidence they needed to submit prior to DEP’s review and evaluation.
The appellants contended that these waiver rules are ultra vires because, although the Legislature has expressly authorized specific statutory exemptions in limited, “program specific” instances, there is no comprehensive legislative
scheme allowing for a broad, single-set relaxation rule of universal application. DEP countered that such authority is implied in various enabling laws the agency has been mandated to execute and is incidental to the extensive regulatory powers vested in the agency by those laws. Further, it was the DEP’s position that “[w]here the Department has the authority to promulgate rules, it also has the authority to modify or waive those rules, provided that the modification or waiver does not violate a statutory requirement or purpose.”
The court ultimately held that:
although specific enabling statutes direct DEP to promulgate rules for the regulatory program created therein, there can be no question, given the overall legislative scheme, that DEP is empowered to adopt regulations more ‘universal’ in nature and of more general applicability to deal comprehensively, in a single set of rules, with the sheer scope of overlapping statutory programs the agency must administer as well as with the volume of interconnected activities the Commissioner must coordinate amongst the agency’s various divisions.
Notably, however, the court was clear that
[t]he power to waive administrative rules may be used solely to deal with the unusual circumstances of an individual regulated party. It may not be invoked to implement wholesale changes in administrative rules, as applied to a large segment of regulated parties, which circumvent the rule-making requirements of the APA.
Accordingly, it is clear that “the power to promulgate a regulation implies the incidental authority to suspend or waive its application in certain limited, well-defined circumstances provided such exemption does not circumvent any legislative enactment or purpose, or federal law, is inconsistent with the agency’s statutory core mission and objectives, is accomplished through a properly adopted regulation pursuant to the APA, and establishes appropriate and clear standards for the exercise of agency discretion.”
With respect to the contents of the DEP’s waiver rule “homepage” on its website, however, the court held that this constituted an improper de facto rulemaking in violation of the APA. These postings were described as “collectively detail[ing] DEP’s plans to develop internal processes and procedures to ensure consistency in its waiver decision-making, to create a priority system for its consideration of waiver requests, to expand transparency in noticing the receipt of applications for waivers, and to develop standardized submission forms.” According to the court, these postings “go beyond merely facilitating administrative implementation of the rules,” and in fact to a certain extent “announce new substantive requirements.” These postings did more than implement the waiver rules – they actually “establish[ed] the rules of the game.” Because they were “integral, substantive components of the waiver
rules,” they were subject to the procedures required under the APA.
DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis, Lehrer & Flaum, PC (www.dbnjlaw.com ) is a full service law firm in New Jersey which provides a broad range of legal services, including the representation of clients in environmental and defense of toxic exposure matters. For additional information about the matters in this bulletin or in the firm’s environmental practice, please contactSteven A. Kunzman, Esq. who heads our Environmental and Latent Injury Litigation Department.
The information contained in this blog is intended solely for informational purposes; it is a advertising publication of DiFrancesco, Bateman, Coley, Yospin, Kunzman, Davis, Lehrer & Flaum P.C.This publication is intended to alert recipients of developments in the law and is not intended to provide legal counsel, advice or opinion on any specific facts or circumstances. The contents are intended as general information only. You are urged to consult a member of this firm or your own attorney concerning your particular situation and any specific legal questions you might have.
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