IN THE MATTER OF HAZARDOUS DISCHARGE SITE REMEDIATION FUND PUBLIC ENTITY GRANT APPLICATION FOR REMEDIAL INVESTIGATION AND REMEDIAL ACTION (DEPARTMENT OF ENVIRONMENTAL PROTECTION)

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

This opinion shall not "constitute precedent or be binding upon any court."

Although it is posted on the internet, this opinion is binding only on the

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-4439-15T2

IN THE MATTER OF HAZARDOUS DISCHARGE SITE

REMEDIATION FUND PUBLIC ENTITY GRANT

APPLICATION FOR REMEDIAL INVESTIGATION

AND REMEDIAL ACTION.

______________________________________________

Argued August 14, 2018 – Decided August 29, 2018

Before Judges Messano and Geiger.

On appeal from the New Jersey Department of

Environmental Protection.

George J. Tyler argued the cause for appellant

Barry Rosengarten (Tyler & Carmeli, PC,

attorneys; George J. Tyler, of counsel and on

the briefs; James Aversano, III, on the

briefs).

Mark S. Heinzelmann, Deputy Attorney General,

argued the cause for respondent New Jersey

Department of Environmental Protection

(Gurbir S. Grewal, Attorney General, attorney;

Melissa H. Raksa, Assistant Attorney General,

of counsel; Mark S. Heinzelmann, on the

brief).

PER CURIAM

Barry Rosengarten entered into a contract to sell certain

property he owned in Perth Amboy to the County of Middlesex (the

County) for $5.15 million (the contract). Perth Amboy had

previously designated the prior owner of the property, The Landings

at Perth Amboy, LLC, the "redeveloper" of the property under the

Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1 to -73.

Rosengarten, however, warranted in the contract that he had

successfully "de-designated" the property and was able to convey

it for use as open space.

Environmental testing revealed contamination on the property,

and the contract specifically required Rosengarten to remediate

the site, as well as three additional "Areas of Concern" (AOCs)

that were identified during "subsequent investigations." The

County escrowed monies to be deducted from the purchase price and

released to Rosengarten for remediation expenses he incurred. The

County also agreed to cooperate and assist in securing grants

through the Department of Environmental Protection (DEP) and

Economic Development Authority (EDA), available from the Hazardous

Discharge Site Remediation Fund (HDSRF), N.J.S.A. 58:10B-4, to

recompense Rosengarten's remediation costs.1 The contract,

1

The HDSRF is a "revolving fund" established "in the New Jersey

Economic Development Authority" (EDA) "dedicated for the provision

of financial assistance or grants to municipalities, counties,

redevelopment entities authorized to exercise redevelopment powers

pursuant to [N.J.S.A. 40A:12A-4], and persons, for the purpose of

financing remediation activities at sites at which there is, or

is suspected of being, a discharge of hazardous substances or

hazardous wastes." N.J.S.A. 58:10B-4.

2 A-4439-15T2

however, provided that with respect to grant funding, the County

had "no obligation to [Rosengarten] if" the costs were "not

recovered or recoverable."

Rosengarten's counsel submitted a grant application on the

County's behalf, seeking funding either as a Brownfield

Development Area Grant, see N.J.S.A. 58:10B-6a(2)(a)(i); N.J.A.C.

19:31-8.3(b)(6), or as a 75 % Recreation and Conservation Grant,

see N.J.S.A. 58:10B-6a(2)(a)(ii); N.J.A.C. 19:31-8.3(b)2). DEP

denied the application.

In his April 28, 2016 letter, DEP's Chief of the Office of

Brownfield Reuse, Timothy Bartle, noted Rosengarten was

responsible for remediating the AOCs and did so. Therefore, "it

was unclear" whether the County was eligible for funding. Bartle

noted the contract might "demonstrate . . . Rosengarten was hired

by the County to conduct remediation on the County's behalf," but,

despite DEP's request, no one had supplied the contract for review.

The record reveals that in fact the contract had been

forwarded to someone else in DEP. In a subsequent email to

Rosengarten's counsel dated May 26, 2016, Bartle acknowledged his

review of the contract, stating:

[T]here is no language that would constitute

a contract between [the] County and . . .

Rosengarten to conduct remediation services on

the County's behalf and certainly no language

about payment to be made to . . . Rosengarten

3 A-4439-15T2

for remediation services. . . . While my

office can find the work appropriate and costs

reasonable, we cannot recommend a grant to EDA

for past work when the entity applying did not

do the work nor pay for it. The denial of the

application submitted by [the] County stands.2

This appeal ensued.

Rosengarten contends DEP premised its decision on

misinterpretations of the applicable statutory provisions,

regulations, and the contract. Therefore, denial of the

application was arbitrary, capricious and unreasonable. DEP

argues we should dismiss the appeal because the county has not

appealed, and Rosengarten lacks standing to challenge the denial

of the County's application. Alternatively, DEP contends it

properly denied the application under N.J.S.A. 58:10B-6.

Initially, we dispense with DEP's argument that Rosengarten

lacks standing and only the County, the grant applicant, could

2

Rosengarten's notice of appeal seeks review of only the April

28, 2016 letter. We routinely limit our consideration to only the

judgment or order listed in the notice of appeal. R. 2:5-

1(f)(3)(A); Pressler & Verniero, Current N.J. Court Rules, cmt.

6.1 on R. 2:5-1 (2018) ("[I]t is only the judgments or orders or

parts thereof designated in the notice of appeal which are subject

to the appeal process and review."). Nevertheless, at oral

argument, Rosengarten clarified the sequence of events, and

respondent DEP has not objected to our consideration of the email

as its statement of reasons for the final agency decision denying

the grant.

4 A-4439-15T2

appeal its denial.3 We recently addressed a similar argument in

New Jersey Department of Environmental Protection v. Exxon Mobil

Corp., 453 N.J. Super. 272 (App. Div.), certif. denied, 233 N.J.

378 (2018).

There, we recognized the right of public interest citizens'

groups to intervene on appeal to challenge DEP's settlement of an

action brought under the Spill Act. Id. at 301-03. In particular,

we noted prior decisions that recognized the standing of parties

"affected by a judgment . . . to pursue an appeal if a party with

a similar interest who actively litigated the case in the trial

court has elected not to appeal." Id. at 297 (quoting CFG Health

Sys., L.L.C. v. Cty. of Essex, 411 N.J. Super. 378, 385 (App. Div.

2010)). We also recognized the right of third parties to challenge

DEP's decisions, id. at 299-300, if they have "a sufficient

'personal or pecuniary interest or property right adversely

affected by the judgement.'" Id. at 301 (quoting State v. A.L.,

440 N.J. Super. 400, 418 (App. Div. 2015)).

Simply put, the record is clear that the County agreed to use

its efforts to secure a grant to reimburse Rosengarten for

remediation and associated costs. DEP's denial of the grant

3

DEP moved to dismiss the appeal on this ground. We denied the

motion without prejudice to DEP's right to reassert the argument

before the merits panel.

5 A-4439-15T2

directly and adversely affected Rosengarten's pecuniary interests.

Rosengarten has standing, and we consider the merits of his appeal.

As DEP points out, grants to public entities under the HSDRF

are governed by N.J.S.A. 58:10B-6a(2)(a), which provides in

relevant part:

Moneys shall be allocated to:

municipalities, counties, or redevelopment

entities authorized to exercise redevelopment

powers pursuant to [N.J.S.A. 40A:12A-4], for:

(i) projects in brownfield development areas

pursuant to [N.J.S.A. 58:10B-5],

(ii) matching grants . . . of up to 75 percent

of the costs of the remedial action for

projects involving the redevelopment of

contaminated property for recreation and

conservation purposes, provided that the use

of the property for recreation and

conservation purposes is included in the

comprehensive plan for the development or

redevelopment of contaminated property

. . . .

[Ibid. (emphasis added).]

Rosengarten acknowledges that under the plain meaning of the

statutory terms, he is not eligible for a grant.

Instead, Rosengarten argues DEP's cramped interpretation of

the statute when applied to the facts of this case is contrary to

the overarching public purpose of the Brownfield and Contaminated

Site Remediation Act, of which the HDSRF is a part. See N.J.S.A.

58:10B-4 (stating purpose of fund is to finance remediation

6 A-4439-15T2

activities at sites where there is a discharge of hazardous

substances or wastes); see also TAC Assocs. v. N.J. Dept. of Envtl

Prot., 202 N.J. 533, 536-37 (2010) (explaining evolution of site

remediation legislation and legislative history of the HDSRF). 4

He argues that the County met the eligibility requirements to

receive grant monies from the HDSRF pursuant to N.J.S.A. 58:10B-

5(c) and -6(a) (allowing financial assistance to counties who, by

resolution, "acquire [(real property)] by voluntary

conveyance . . . for recreation . . . purposes"), and N.J.A.C.

19:31-8.3(e) ("[p]reconditions to eligibility" for public entity

grants).

Our standard of review of agency action is limited. In re

Carter, 191 N.J. 474, 482 (2007) (citing Aqua Beach Condo. Ass'n

v. Dep't of Cmty. Affairs, 186 N.J. 5, 15-16 (2006)). "An

appellate court affords a 'strong presumption of reasonableness'

to an administrative agency's exercise of its statutorily

delegated responsibilities." Lavezzi v. State, 219 N.J. 163, 171

4

Rosengarten cites to one of our unpublished decisions in support

of this proposition. Not only are unpublished decisions non-

precedential, see R. 1:36-3, but also the grant at issue in that

appeal was a so-called "innocent party grant," governed by an

entirely different section of the HDSRF, since repealed. L. 2017,

c. 353; see also TAC Assocs., 202 N.J. at 537 (explaining

eligibility for grants made to "persons" under former N.J.S.A.

58:10B-5(d) and -6(a)(4)).

7 A-4439-15T2

(2014) (quoting City of Newark v. Natural Res. Council, Dep't of

Envtl. Prot., 82 N.J. 530, 539 (1980)).

An agency decision should not be overturned unless there is

"a showing that it was arbitrary, capricious or unreasonable, or

that it lacked fair support in the evidence." Carter, 191 N.J.

at 482.

To determine whether an agency decision "is

arbitrary, capricious or unreasonable," an

appellate court must determine

(1) whether the agency's action

violates express or implied

legislative policies, that is, did

the agency follow the law; (2)

whether the record contains

substantial evidence to support the

findings on which the agency based

its action; and (3) whether in

applying the legislative policies

to the facts, the agency clearly

erred in reaching a conclusion that

could not reasonably have been made

on a showing of the relevant

factors.

[Lavezzi, 219 N.J. at 171-72 (quoting In re

Stallworth, 208 N.J. 182, 194 (2011)).]

"[O]ur task in statutory interpretation is to discern and

effectuate the Legislature's intent[,]" N.J. Dep't of Envtl. Prot.

v. Huber, 213 N.J. 338, 365 (2013), and we are not "bound by [an]

agency's interpretation of a statute or its determination of a

strictly legal issue." Norfolk S. Ry. Co. v. Intermodal Props.,

LLC, 215 N.J. 142, 165 (2013)). Nevertheless, we "defer to an

8 A-4439-15T2

agency's expertise and superior knowledge of a particular

field[,]" Greenwood v. State Police Training Ctr., 127 N.J. 500,

513 (1992), including its reasonable statutory "construction in

recognition of the agency's expertise." TAC Assocs., 202 N.J. at

544 (citation omitted).

We agree with DEP that the County did not qualify for the

public entity grant because it did not perform the remediation

work, incur the costs and expenses associated with the work, or

otherwise designate Rosengarten as a "redeveloper" or as its agent

responsible for remediation. Under the contract, Rosengarten was

required to remediate the site at his own expense and undertook

that obligation as a precondition to his ability to transfer the

property. Rosengarten argues his decision to forego potential

residential development of the site resulted in a financial loss,

suggesting DEP should have considered his alleged eleemosynary

motivation. There is nothing in the statute or its regulations

that suggest those considerations are relevant.

Moreover, under the regulations, it would appear that the

County was not eligible for a recreation and conservation grant.

N.J.A.C. 19:31-8.3(b)(2) provides public entities are eligible

for:

Matching grants of up to 75 percent of the

costs of remedial action on contaminated real

property to be used for recreation and

9 A-4439-15T2

conservation purposes, provided that such use

is included in the comprehensive plan for the

development or redevelopment of the real

property and a permanent restriction regarding

development and preserving such use is

recorded and indexed with the deed in the

registry of deeds for the county in which the

real property is located.

The record includes evidence that the County long ago adopted a

plan for open space, but there is no evidence that this property

was part of "a comprehensive plan for the development or

redevelopment of the real property" with "a permanent restriction

regarding development and preserving such use."

We acknowledge that under the regulations, a public entity

may be eligible for a Brownfield Development Area Grant even if

it does not own the property. N.J.A.C. 19:31-8.3(b)(6). However,

"[n]o [such] grant shall be awarded unless the public entity has

adopted a comprehensive plan for the development or redevelopment

of contaminated, or potentially contaminated real property."

N.J.A.C. 19:31-8.3(e)(1)(iii). This limitation is certainly

consistent with the statutory requirement that public entity

grants may only be made to "municipalities, counties, or

redevelopment entities authorized to exercise redevelopment powers

pursuant to [N.J.S.A. 40A:12A-4.]" N.J.S.A. 58:10B-6a(2)(a).

Affirmed.

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