Petition for Writ of Certiorari — Jersey Carting, Inc. v. Board of Regulatory Commissioners

TILED

A BH1283 Fee 1 21996

No. OFFICE OF THE CLERK

In The

Supreme Court of the Wnited States

an

October Term, 1995

JERSEY CARTING, INC., ANGELA MORIANO and MARIO

MORIANO,

Petitioners,

vs.

BOARD OF REGULATORY COMMISSIONERS,

Respondent.

Petition for a Writ of Certiorari to the Superior Court

of New Jersey, Appellete Division

PETITION FOR A WRIT OF CERTIORARI

ROBERT E. LEVY

Counsel of Record

MAURA B. JOHNSON

SCARINCI & HOLLENBECK

Attorneys for Petitioners

500 Plaza Drive

P.O. Box 3189

Secaucus, New Jersey 07096-3189

(201) 392-8900

8253

(800) 3 APPEAL « (800) 5 APPEAL « (800) BRIEF 21

ervices, inc.

i

QUESTIONS PRESENTED FOR REVIEW

The State of New Jersey Board of Public Utilities

commenced this action and revoked the Certificate of Public

Convenience and Necessity of Petitioner, Jersey Carting, Inc. and

permanently barred its principals, Petitioners Angela and Mario

Moriano from the New Jersey Solid Waste Industry. Due to the

fact that a related criminal action with identical issues was

pending, Petitioners requested a stay of the civil matter, which

was denied. At the hearings, Petitioners exercised their Fifth

Amendment privileges and did not testify. State action compelled

Petitioners to elect between twoconstitutionally protected rights,

the privileges of the Fifth Amendment and the right to redress in

the Courts under the Fourteenth Amendment. Petitioners

challenge tothe New Jersey waste flow control scheme in light of

this Court’s recent decision in C &A Carbone Inc. v. Clarkstown,

114 S. Ct. 1677 (1994) which held analogous waste flow

regulations to be a violation of the Commerce Clause, was

rejected.

The questions presented by this case are as follows:

1. Did the denial of the stay pending resolution of the

related criminal proceeding constitute State action denying

Petitioners substantive and procedural due process by forcing

Petitioners to elect between their Fifth Amendment privileges

and their right to effective redress in the Courts as protected by

the Fourteenth Amendment to the Constitution of the United

States?

2 Did the State of New Jersey deprive Petitioners of their

property and livelihood by enforcing statutes and regulations

which per se violate the dormant Commerce Clause of the

Constitution of the United States?

ii

LIST OF PARTIES

Petitioner, Jersey Carting, Inc. does not own or otherwise

possess an interest in any parent company or any wholly owned

subsidiary.

iii

TABLE OF CONTENTS

Page

Questions Presented forReview ................... i

ETD ae rn i ee Gc ii

ee cs ook vac eedils iii

EE ee ea 60 sy il bbe bub iedelee lik. iv

is SE ae ]

Statement of Jurisdiction ....................0005. ]

Constitutional and Statutory Provisions Involved ..... l

ea a aes eee noe ay aan 3

ES ps eee 3

B. The Decision of the Office of Administrative Law :

C. The Decision of the Commissioner of the New

Jersey Department of Environmental Protection ,

D. The Decision of the Appellate Division ....... 5

E. The Decision of the Supreme Court of New Jersey ’

iv

Contents

Page

CORGIRIIEE 6 cc dccvdreccsactuveceeelekebe see veteus 17

TABLE OF CITATIONS

Cases Cited:

Am. Civil Liberties Union v. Mabus, 719 F. Supp. 1345

+3) RC Pepe re rrr vorere rr yr ores yrs 9

Atlantic Coast Demolition and Recycling, Inc. v. Bd. of

Chosen Freeholders of Atlantic County, et al., 48 F.3d

701 (3d Cir. 1995), remanded, 893 F. Supp. 301

D.C. IB. RR nk v0 ne weed advan naa Cheeeed> 13,14

Bounds v. Smith, 430 U.S.817(1977) ...........406- 10

C &ACarbone, Inc. v. Clarkstown, 1148. Ct. 1677 (1994)

a done Coded bined dhe eh Ree eee i, 6,7, 13,14, 15

Chambers v. Baltimore & Ohio Railrcad, 207 U.S. 142

CPUNEL cc nk0kcebandcckiensuyeeeeksnsan ence 9

Compiaint of Bankers Trust Co., 752 F.2d 874 (3rd Cir.

SONGS sv ccndcovscessisdecewnieesassceecnaerees 10

Ryland v. Shapiro, 708 F.2d 967 (Sth Cir. 1983) ....... 9,10

Sec. and Exch. Comm’n v. Dresser Indus., 628 F.2d 1368

(D.C. Cir. 1980) (en banc), cert. denied, 101 S.Ct.529

by SPOOR eT eee rts Sherrer eR Aare 11,12

EE a ci aa

Vv

Contents

Page

State v. Korbin Sec., Inc., 111N.J.307(1988) ........ 11,12

Wolff v. McDonnell, 418 U.S.539(1974) ............ 10

Statutes Cited:

N.J. Admin. Code tit. 7 § 26-6.1 .......ccccccceccees 2

eS i a ea 2

N.J. Admin. Cude tit. 7 § 26-6.5 ................ Oe 2

N.J. Admin. Code tit. 7 § 26-6.6 ...........ccccceece 3

N.J. Admin. Code tit. 7 § 26-6.7 ..........ccceeccecs 3

N.J. Stat. Ann. §48:13A-l,etseg. .........00.ceeeee 3,7

eR ee 2s 2 ANDES ne eo eee ee ee l

United States Constitution Cited:

PINE B55 Sy bv ik'd ovo dare bn kon 405 0 Keke 9

POUUMNUIIL, has ceccvsccccesecevcs i, 1,4, 7,10, 16,17

FourteenthAmendment .................... i, 2,8,9, 16,17

U.S. Const. art.1,86,61.3. .....2060% 2,6, 7,13, 14, 15, 16, 17

Other Authority Cited:

Cong. Globe, 39th Congress, Ist Sess. 133-134 (1866) . 8

vi

Contents

APPENDIX

Appendix A— Order of the Supreme Court of New Jersey

Fu POCUNNEN BA, CUED 6 cb es iccnuvesusndoeaaas

Appendix B — Initial Decision of the State of New Jersey,

Office of Administrative Law Dated January 7, 1992

eevee eeveeveeeeeeeeveeeeeeeeaeeveeeeeeveeeeeveeeeaeeeweeneneee

Appendix C — Final Decision of the Commissioner of the

New Jersey Department of Environmental Protection

Dated December 11,1992 ....cccccccserccsssves

Appendix D — Opinion of the Superior Court of New

Jersey Appellate Division Dated August 31,1994...

Appendix E— Relevant Statutes ...................

Page

la

2a

54a

66a

]

Petitioners Jersey Carting, Inc., Angela Moriano and Mario

Moriano (“Petitioners”) respectfully pray that a writ of certiorari

issue to review the Final Judgment of the Superior Court of New

Jersey, Appellate Division. On November 14, 1995, the Supreme

Court of New Jersey denied Petitioners’ Petition for

Certification.

OPINIONS BELOW

The denial of Petitioners’ Petition for Certification by the

Supreme Court of New Jersey (App. 1a), is not reported. The

opinion of the Superior Court of New Jersey, Appellate

Division,(App. 66a-87a), is not reported. The final decision of

the Commissioner of the Department of Environmental

Protection and Energy (“DEPE”) (App. 54a-65a), is reported at

93 N.J. A.R. 2d (EPE) 56 (1992). The initial decision of the

Office of Administrative Law (App. 2a-53a), is not reported.

STATEMENT OF JURISDICTION

The Petition to Review the Final Judgment of the Superior

Court of New Jersey, Appellate Division, was denied by the

Supreme Court of New Jersey on November 14, 1995. The

jurisdiction of this Court is invoked under 28 U.S.C. § 1257.

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

The Fifth Amendment to the Constitution of the United

States of America provides in pertinent part:

No person shall ... be compelled in any

criminal case to be a witness against himself,

nor be deprived of life, liberty, or property,

without due process of law...

2

The Fourteenth Amendment to the Constitution of the

United States of America provides in pertinent part:

[NJor shall any State deprive any person of

life, liberty or property, without due process

of law.

Article I, § 8,cl. 3 of the Constitution of the United States of

America provides in pertinent part:

Congress shall have the power ... [t]o

regulate Commerce .. . among the several

states.

N.J. Admin. Code tit. 7 § 26-6.1 sets forth the statutory

authority for the subchapter (App. 88a); N.J. Admin. Code tit. 7

§ 26-6.2 sets forth the purpose of regulatory scheme (App. 88a);

N.J. Admin. Code tit. 7 § 26-6.5 sets forth the district waste flow

planning requirements and disposal facility designations for:

(b) [Bergen County District]

(g) [Essex County District]

(i) [Hackensack Meadowlands District]

(j) [Hudson County District]

(m) [Middlesex County District]

(o) [Morris County District]

(q) [Passaic County District]

(App. 89a-97a).

3

N.J. Admin. Code tit. 7 § 26-6.6 sets forth the procedure for

modification of waste flows pursuant to an amendment to a

District Solid Waste Management Plan (App. 98a); N.J. Admin.

Code tit. 7 § 26-6.7 sets forth the procedure for emergency

direction or redirection of solid waste flow (App. 98a-99a).

STATEMENT OF THE CASE

A. The Facts

Between March and June 1988, the State of New Jersey

Boardof Public Utilities (“Board”)! issued two Orders to Show

Cause against Petitioners Jersey Carting, Inc. (“Jersey Carting”)

and its principals, Angela Moriano and Mario Moriano

(“Morianos”) alleging violations of the Solid Waste Utility

Control Act, N.J. Stat. Ann. § 48:13A-1, ef seq., various waste

flow directives issued by the Board and the New Jersey

Department of Environmental Protection (“NJDEP”) and tariff

violations. These matters were then designated contested

matters and transferred for hearings to the Office of

Administrative Law (“OAL”), where they were consolidated.

The penalties of an adverse ruling by the OAL included the

revocation of Petitioners’ Certificate of Public Convenience and

Necessity, and therefore, the taking of Petitioners’ livelihood.

Subsequent to the issuance of the Orders to Show Cause, but

prior to the OAL hearings which were held between September

24, 1990 to October 4, 1990, a State Grand Jury returned

1. Pursuant to Reorganization Plan No. 002 (1991), which became

effective on August 19, 1991, all responsibility and authority formerly vested

in the Board for the economic regulation of solid waste utilities was transferred

to the newly reorganized Department of Environmental Protection and

Energy. Subsequently, both agencies were reorganized and all enforcement

responsibility was vested with the New Jersey Department of Environmental

Protection.

4

Indictments against Petitioner Jersey Carting charging theft by

deception, a crime of the third degree. The charges carry

maximum penalties of five years imprisonment and $7,500 fine.

After the return of the Indictment, Petitioners Angela Moriano

and Mario Moriano wished to exercise their Fifth Amendment

privileges not to testify against themselves. They also knew that

only from their own testimony at the OAL could they effectively

defend the allegations brought by the State in its Orders to Show

Cause. As the pending criminal and civil charges involved

identical issues of fact, Petitioners requested a stay of the civil

hearings pending the completion of the criminal proceedings.

This request for a stay was summarily denied by the

Administrative Law Judge (“ALJ”). Due tothe pendency of the

criminal matter, Petitioners, Angela Moriano and Mario

Moriano, asserted their Fifth Amendment privileges and did not

testify atthe OAL hearings. Subsequent to the conclusion of the

OAL hearings, the criminal charges were tried and a guilty

verdict returned by a jury. After appellate review, this verdict

was reversed and the underlying charges dismissed. Petitioners

sought to reopen the OAL hearing to present testimony. This

request was not granted.

B. The Decision of the Office of Administrative Law

The initial decision rendered by the ALJ concluded that

Petitioners violated the emergency waste flow directives and

certain tariff and interim rate relief orders. (App. 41a-45a).

Monetary fines were imposed in the amount of $109,000. (App.

48a-49a). Additionally, the ALJ recommended the revocation of

Jersey Carting’s Certificate of Public Convenience and

Necessity and the permanent debarment of Angela Moriano and

Mario Moriano from the solid waste industry. (App. 49a).

5

C. The Decision of the Commissioner of the New Jersey

Department of Environmental Protection

Following this initial decision, the Commissioner of the

New Jersey Department of Environmental Protection

(“Commissioner”) issued a Summary Order which substantially

adopted the ALJ decision. Included in the Commissioner’s Order

was a revocation of Jersey Carting’s Certificate of Public

Convenience and Public Necessity and permanent debarment of

the principals of Petitioner Jersey Carting from the solid waste

industry. In addition to the monetary penalty of $109,000, a

$77,000 penalty was also imposed on Jersey Carting for its

alleged violations of the provisions of its tariff setting forth

waste generation site-specific disposal rates.

On December 14, 1992, a Notice of Appeal was filed by

Petitioners with the Superior Court of New Jersey, Appellate

Division, challenging the Commissioner’s Order.

Notwithstanding the fact that the Commissioner had objected to

an issuance of a stay of the OAL proceedings pending the

resolution of the criminal charges, the Commissioner

voluntarily agreed to issue a stay of his final decision pending

Petitioners’ appeal. This stay remains in place as of the date of

this filing, more than three years later.

On January 25, 1993, after the dismissal of the criminal

indictment, Petitioners filed a request with the Commissioner to

remand the proceeding to the OAL for consideration of

Petitioners’ testimony regarding (i) defenses to the underlying

allegations and (ii) mitigation of the penalties and sanctions

imposed. Petitioners’ request for remand was not granted.

D. The Decision of the Appellate Division

Despite the fact State action compelled Petitioners to elect

6

between two constitutionally protected rights, when the single

issuance of a stay would have protected both rights, the New

Jersey Superior Court, Appellate Division, held “it was not

fundamentally unfair to require appeilants to participate in the

administrative proceedings.” (App. 75a). Moreover, despite the

fact that the United States Supreme Court decision in C & A

Carbone Inc. v. Clarkstown, 1148. Ct. 1677 (1994), (which held

analogous waste flow control ordinances to be a violation of the

Commerce Clause of the United States Constitution), had not yet

been rendered at the time of the OAL hearings, the New Jersey

Superior Court, Appellate Division dismissed Petitioners’

arguments challenging deprivation of their livelihood by reason

of violation of the Commerce Clause, stating they had not been

raised below. (App. 83a). The Appellate Division further

determined that even if New Jersey’s waste flow control

regulations are found to be in violation of the Commerce Clause,

Petitioners would still be subject to the various fines and

penalties imposed, including the loss of their livelihood. (App

84a-87a).

E. The Decision of the Supreme Court of New Jersey

On or about November 4, 1994, Petitioners filed a Petition

for Certification to review the Final Judgment of the Superior

Court of New Jersey, Appellate Division. On November 14,

1995, the petition was denied. (App. 1a).

The Commissioner has continued to stay enforcement of the

penalties pending the outcome of this appeal.

REASONS FOR GRANTING THE WRIT

Petitioners Jersey Carting, Angela Moriano and Mario

Moriano seek to have this Court review the decision of the

Superior Court of New Jersey, Appellate Division, affirming the

7

Administrative Law Judge’s decision to deny a stay of the OAL

hearing pending resolution of the related criminal proceedings,

and refusing toconsider Petitioners’ claim that the subject waste

flow control regulations are per se invalid as violative of the

Commerce Clause.

Denial of the stay by the Administrative Law J udge, and the

affirmation of the decision by the Superior Court of New Jersey,

Appellate Division, violated Petitioners’ substantive and

procedural rights of due process, as protected by the Fourteenth

Amendment to the Constitution of the United States, by forcing

Petitioners to elect between their Fifth Amendment privileges

and their right to effective redress in the Courts. Additionally, it

was fundamentally unfair for the Appellate Division not to

consider Petitioners arguments regarding the New Jersey waste

flow control scheme being violative of the Commerce Clause of

the Constitution of the United States of America in light of the

clear applicability of the United States Supreme Court decision

in C & A Carbone v. Clarkstown, 114 S. Ct. 1677 (1994). The

Appellate Division was also incorrect in holding that even if the

New Jersey waste flow control scheme was held to be per se

invalid in light of Carbone, Petitioners’ loss of property interest

(including their loss of livelihood) would be not affected. In so

holding the Court failed to consider that the most serious

asserted violations (i.e. waste flow control violations) would be

subject to dismissal.

Prior to the OAL hearing respecting alleged violations by

Petitioners of the Solid Waste Utility Control Act N.J. Stat. Ann.

48:13A-1, et seq., and certain various asserted tariff and waste

flow control directives, Petitioner Jersey Carting was indicted

by a State Grand Jury alleging Theft by Deception, acrime of the

third degree. Arguing that participation by Petitioners in the

administrative proceedings would be fundamentally unfair in

light of the interrelated criminal proceedings, Petitioners sought

8

a stay in the OAL of the civil hearings until completion of the

criminal matter. Despite the fact that the criminal and civil

charges involved identical issues and events, Petitioners’

request for a stay was summarily denied by the ALJ. (App. 4a).

The Superior Court of New Jersey, Appellate Division, affirmed

the decision of the ALJ, holding that “[s)ince the public interest

in preventing illegal dumping was substantial and the scope of

the criminal case limited in comparison to the civil proceeding,

... it was not fundamentally unfair to require appellants to

participate in the administrative proceedings.” (App. 4a).

Petitioners disagree. The State of New Jersey, in two

separate but related actions, sought potentially to deprive

Petitioners of their liberty by way of a criminal action, and

sought to deprive Petitioners of their property and livelihood by

way of acivil action. In order to protect their liberty, Petitioners

wished to exercise their privilege not to testify against

themselves. In order to protect their property and livelihood,

however, they wished to testify and present themselves as

witnesses in the civil proceeding. The identical stay to which the

State has consented throughout the appeal process would have

protected both fundamental rights. Failure of the State to have

granted the stay of the OAL hearings pending resolution of the

criminal matter has deprived Petitioners of their most

fundamental of civil rights, effective redress in the Courts.

During the Congressional debates of the Reconstruction

Amendments, not all legislators were in agreement as to what

rights would be protected by the Fourteenth Amendment (which

had been introduced by Representative Bingham of Ohio).

Agreement existed, however, as to a core of protected rights

including the right to own property, the right tocontract and the

right to effective redress in the courts, with the ability to testify

and call witnesses. Cong. Globe, 39th Congress, Ist Sess. 133-

134 (1866). These three protected rights were fundamental to

9

life, liberty and happiness. The State of New Jersey, in two

separate but related proceedings, was attempting to deprive

Petitioners of fundamental rights when Petitioners sought relief

by issuance of a stay. The State denied Petitioners these

fundamental rights when the stay was objected to and denied.

The right of access to the courts is well established and

clearly is “one of the fundamental rights protected by the

Constitution.” Ryland v. Shapiro, 708 F.2d 967, 971 (Sth Cir.

1983). This court recognized the significance of this right to

access in Chambers v. Baltimore & Ohio Railroad, 207 U.S. 142

(1907) when it declared:

The right to sue and defend in the courts is the

alternative of force. In an organized society if

is the right conservative of all other rights,

and lies at the foundation of orderly

government. Itis one of the hi ghest and most

essential privileges of citizenship . . .

Chambers, 207 U.S. at 148 (citations omitted) (emphasis added).

The right to effective redress in the courts is grounded in several

Constitutional sources, including the right to petition the

government for redress pursuant to the First Amendment, the

privileges and immunities provided by Article Four, and the due

process clause of the Fourteenth Amendment. Am. Civil

Liberties Union v. Mabus, 719 F. Supp. 1345, 1358 (S.D. Miss.

1989) (quoting Ryland, 708 F.2d at 967)).

What does effective redress in the Courts mean? Petitioners

contend that it means more than the right to be a named party to

an action. Rather, the right to access to the courts “mandates that

a judicial proceeding give all parties an opportunity to be heard

on the critical and decisive allegations which go to the core of

the parties’ claims or defense and to present evidence on the

10

contested facts.” Complaint of Bankers Trust Co., 752 F.2d 874

(3rd Cir. 1984) (emphasis added). See also, Wolff v. McDonnell,

418 U.S. 539 (1974). Moreover, such access to the courts must

be “adequate, effective and meaningful.” Ryland, 708 F.2d at 972

(quoting Bounds v. Smith, 430 U.S. 817 (1977)). It is a

guaranteed fundamental Constitutional right which is protected

from state interference, absent a showing of acompelling state

interest. Ryland, 708 F.2d at 972. Itis also aright which ought not

be denied by reason of the exercise of other fundamental rights.

An equally meaningful Constitutional right is provided by

the Fifth Amendment to the Constitution which guarantees:

No person shall ... be compelled in any

criminal case to be a witness against himself,

nor be deprived of life, liberty, or property,

without due process of law...

For ‘adividuals seeking redress in the courts regarding

protection of a property interest, this amendment provides

critical protections against both self incrimination and unlawful

State interference of one’s due process rights. The State of New

Jersey, in two separate actions, compelled Petitioners to elect

between these two fundamental protections. Undoubtedly, given

the significance of the interests protected by these Constitutional

provisions, each must be regarded as being of equal importance.

Petitioners contend that in light of the interrelated civil and

criminal matters brought against them by the State, it was

fundamentally unfair to require them to participate in the

administrative hearing until resolution of the criminal action.

Moreover, Petitioners argue that the denial of the stay pending

the resolution of the related criminal proceeding constitutes

State action which denied Petitioners’ substantive and

procedural due process by forcing them to elect between two

fundamental, yet equally important, Constitutional rights.

1]

Although Petitioners recognize that the Constitution does

not require a stay of all civil proceedings pending the outcome of

criminal proceedings, a court may nevertheless within i's

discretion grant a stay in the interest of justice. Sec. and Exch,

Comm'n v. Dresser Indus., 628 F.2d | 368, 1375 (D.C. Cir. 1980)

(en banc), cert. denied, 101S.Ct.529 (1980). Failure properly to

exercise this discretion is at the core of Petitioners’ claim.

Petitioners claim that when both a civil action and criminal

action is brought by the State, special consideration should be

exercised. Thus, it is recognized that:

[o)ther than where there is specific evidence

of agency bad faith or malicious

governmental tactics, the strongest case for

deferring civil proceedings until after

completion of criminal proceedings is where

@ party under indictment fora serious offense

is required to defend acivil or administrati ve

action involving the same matter. The

noncriminal proceeding, if not deferred,

might undermine the party’s Fifth

Amendment privilege against self

incrimination, expand right of criminal

discovery beyond the limits of Federal Rule

of Criminal Procedure 16(b), expose the

basis of the defense to the prosection in

advance of criminal trial, or otherwise

prejudice the case.

Dresser, 628 F.2d at 1376 (emphasis added).

In State v. Korbin Sec., Inc., 111 NJ. 307 (1988), the

Supreme Court of New Jersey recognized that “[t}here may be

cases where the requirement that a criminal defendant

Participate in acivil action, at peril of being denied some portion

ili aaah A RF Nh Oe -

12

of his worldly goods, violate[s] concepts of elementary fairness

in view of the defendant’s position in an inter-related criminal

prosection.” Korbin, 111 N.J. at 314 (citations omitted).

In deciding Petitioners’ claims, the Superior Court of New

Jersey, Appellate Division, analyzed the following Korbin

factors which it determined to be sufficient to consider when

determining whether to grant a stay pending the resolution of

concurrent civil and criminal proceedings:

(1) whether in the civil proceeding the

government seeks only monetary penalty

against the defendant;

(2) whether the two actions are nearly

identical in scope;

(3) whether relief sought in the civil

proceeding is intended to prevent continued

injury to the public.

Korbin, 111 N.J. at 313-315.

Although the Superior Court of New Jersey, Appellate

Division, examined the Korbin factors set forth above, its

analysis was incorrect and a stay of the civil proceeding should

have been granted pending the resolution of the criminal matter.

In addition, the Korbin analysis does not adequately safeguard

Petitioners’ federally protected rights and is contrary to a

broader, more judicious approach announced by the Second

Circuit in Dresser. Korbin simply does not promote the

protections guaranteed by the United States Constitution.

Petitioners contended throughout this litigation that their rights

to protect and defend their property interests outweighed the

public interest. Conversely, the State argued that a greater public

13

interest required denial of the stay. The Superior Court of New

Jersey, Appellate Division, held that the public interest in the

proper disposal of solid waste was more substantial than

Petitioners’ liberty and property. (App. 75a).

However, despite the State’s assertion of the existence of a

greater public interest, itis apparent that such an interest did not

exist. Following Petitioners’ loss of their property interests

through the debarment and revocation of their licenses, the State

then voluntarily agreed to a stay of execution of the judgment

against Petitioners until the completion of the appellate process.

Thus, although the State previously argued that the greater

public interest required that Petitioners no longer participate in

the solid waste industry, it is apparent that once Petitioners’

flawed and constitutionally defective hearing process that

resulted in the elimination of Petitioners’ property interests

came to its predictable conclusion, this alleged crucial State

interest dissipated, and Petitioners were allowed to continue to

participate in the industry. Under any standard, this is State

action which is disingenuous, wrong and the procedure deprived

Petitioners of their most fundamental of rights.

A simple action by the State, that is, the issuance of the stay,

would have provided Petitioners the constitutional protections

to which they were entitled. Failure by the State to do so deprived

them of property without due process.

The Superior Court of New Jersey, Appellate Division, also

failed properly to consider Petitioners’ claims that in light of this

Court’s decision in Carbone, 114 S. Ct. 1677, the New Jersey

waste flow control scheme is per se invalid under the Commerce

Clause of the Constitution of the United States of America.

Following Carbone, the United States District Court for the

District of New Jersey in Atlantic Coast Demolition &

Recycling, Inc., etal. vs. Bd. of Chosen Freeholders of Atlantic

14

County, et al., 48 F.3d 701 (3rd Cir. 1995), remanded, 893 F.

Supp. 301 (D.C. N.J. 1995) (additional injunction granted, CIV.

A. 93-2669, 1995 WL 739072 (D.C. N.J. November 28, 1995)),

issued injunctive relief against enforcement of elements of New

Jersey’s waste flow control regulations upon a determination of

the likelihood of success on the merits by the plaintiffs in that

case which challenged the regulations as being violative of the

Commerce Clause of the Constitution of the United States.

Issuance of this injunction in the presently ongoing proceeding

on remand followed the determination of the United States Court

of Appeals for the Third Circuit that the New Jersey waste flow

control scheme, in effect and design, discriminated against

interstate commerce.

Based on the foregoing, and in light of the severe penalties

imposed upon Petitioners, (including, most significantly,

deprivation of their right to pursue their livelihood) due to their

alleged violations of these constitutionally infirm regulations,

the Appellate Division erred in failing to consider Petitioners’

claims in a post-Carbone environment.

In Carbone, this Court held that a similar waste flow control

ordinance was discriminatory against interstate commerce, as it

excluded both out-of-state and in-state competitors from local

markets, and “hoard[ed] solid waste, and the demand to get rid of

it, for the benefit of the preferred processing facility.” Carbone,

114S.Ct. at 1683. Due to this discrimination against interstate

commerce, this Court determined the flow control measure in

Carbone to be per se invalid unless it is established by “the

clearest showing” that there were “no other means to advance a

legitimate local interest.” Jd. Under this strict level of scrutiny,

the Carbone waste flow control ordinance could not stand.

Furthermore, this Court declared that environmental and public

health interests regarding the proper handling of solid waste

were inadequate to sustain the regulations, as there were clearly

15

“any number of nondiscriminatory alternatives for addressin g

[such] health and environmental problems [,]. . . .” The use of

the restriction of solid waste flow as a “finance measure” was

also rejected as a constitutionally permissible justification to

maintain a solid waste facility.

In light of Carbone, the Appellate Division erred in failing

to consider Petitioners challenges to the New Jersey waste flow

control scheme as being violative of the Commerce Clause. As

the New Jersey waste flow control scheme requires that all waste

originating within the State be processed at in-state designated

facilities prior to leaving the State, it is clear such regulations

“deprives out-of-state businesses of access to a local market.”

Carbone, 114S.Ct. at 1681. Moreover, as the violation of these

waste flow control regulations are the primary basis for the

penalties assessed against Petitioners, including the loss of their

livelihood, it was fundamentally unfair for the Appellate

Division not to consider Petitioners claims.

The Appellate Division also erred in declaring that even if

the New Jersey waste flow scheme is found to be per se invalid,

the penalties imposed on Petitioners, including their loss of

livelihood, remain enforceable despite the fact these harsh and

extreme sanctions emanate from these unconstitutional

regulations. It is clear that should the New Jersey waste flow

control regulations be held unconstitutional, the penalties

imposed upon Petitioners should not be enforced. At the very

least the Court should have recognized that any remaining

violations would incur less severe penalties, if any. Thus, the

Superior Court of New Jersey, Appellate Division, erred by

failing to consider Petitioners constitutional challenges to the

New Jersey waste flow control scheme, and thus deprived

Petitioners of their property and livelihood through the

enforcement of statutes and regulations which per se violate the

dormant Commerce Clause of the Constitution of the United

States.

16

The Petition for the Writ of Certiorari should be granted for

the following reasons:

1. The denial of the stay of a civil action by the

Administrative Law Judge pending the completion of related

criminal proceedings and the affirmation of the decision by the

Superior Court of New Jersey, Appellate Division, violated

Petitioners’ substantive and procedural rights of due process, as

prohibited by the Fourteenth Amendment to the Constitution of

the United States, by forcing Petitioners to elect between their

Fifth Amendment privileges and their right to effective redress

in the Courts.

2. The Superior Court of New Jersey, Appellate Division,

erred by failing to consider Petitioners’ constitutional

challenges to the New Jersey waste flow control scheme, and

thus deprived Petitioners of their property and livelihood

through the enforcement of statutes and regulations which per se

violate the dormant Commerce Clause of the Constitution of the

United States.

17

CONCLUSION

This case squarely presents the question of whether State

action in denying the stay of the civil action pending the

resolution of an interrelated criminal matter, was a denial of

Petitioners’ substantive and procedural due process by forcing

Petitioners to elect between two equally important constitutional

rights: their Fifth Amendment privileges and their right to

effective redress in the Courts, as protected by the Fourteenth

Amendment to the Constitution of the United States.

Furthermore, this case clearly presents the question of whether

the State of New Jersey deprived Petitioners of their property and

livelihood by enforcing statutes and regulations which per se

violate the dormant Commerce Clause of the Constitution of the

United States.

Accordingly, this petition for a writ of certiorari should be

granted.

Respectfully submitted,

ROBERTE. LEVY

Counsel of Record

MAURAB. JOHNSON

SCARINCI & HOLLENBECK

Attorneys for Petitioners

500 Plaza Drive

P.O. Box 3189

Secaucus, New Jersey 07096-3189

(201) 392-8900

la

APPENDIX A — ORDER OF THE SUPREME COURT OF

NEW JERSEY FILED NOVEMBER 15, 1995

SUPREME COURT OF NEW JERSEY

C-357 September Term 1995

39,251

BOARD OF REGULATORY COMM..,

Petitioner-Respondent,

v.

JERSEY CARTING, INC., etal.,

Respondents-Petitioners.

ON PETITION FOR CERTIFICATION

To the Appellate Division, Superior Court:

A petition for certification of the judgment in A-1803-92

having been submitted to this Court, and the Court having

considered the same;

Itis ORDERED that the petition for certification is denied,

with costs and it is further

ORDERED that the appeal filed in the within matter is

dismissed pursuant to Rule 2:12-9.

WITNESS, the Honorable Alan B. Handler, Presiding

Justice, at Trenton, this 14th day of November, 1995.

s/ Stephen W. Townsend

CLERK OF THE SUPREME COURT

2a

APPENDIX B — INITIAL DECISION OF THE STATE

OF NEW JERSEY, OFFICE OF ADMINISTRATIVE

LAW DATED JANUARY 7, 1992

STATE OF NEW JERSEY

OFFICE OF ADMINISTRATIVE LAW

INITIAL DECISION

OAL DKT. NOS. ESW 4898-88 and

ESW 3363-88 (CONSOLIDATED)

AGENCY DKT. NOS. SS88030449

and SS88050695

BOARD OF REGULATORY COMMISSIONERS,

Petitioner,

Vv.

JERSEY CARTING, INC., ANGELA MORIANO, AND

MARIO MORIANO,

Respondents.

Kevin Auerbacher, Deputy Attorney General, and D’ Andre

Workman, Deputy Attorney General, for the Staff of the Board of

Regulatory Commissioners (Robert J. Del Tufo, Attorney

General of New Jersey, attorney)

Eric A. Somerville, Esq., for respondent

(Somerville, Radding & Campbell, attorneys)

Record Closed: June 27, 1991 Decided: January 7, 1992

3a

Appendix B

BEFORE DIANA C. SUKOVICH, ALJ:

PROCEDURAL HISTORY

On March 24, 1988, the Board of Public Utilities! issued an

Order to Show Cause directed to Jersey Carting, Inc. (Jersey

Carting or respondent), Angela Moriano (A. Moriano or

respondent), and Mario Moriano (M. Moriano or respondent).

Petitioner transmitted the matter to the Office of Administrative

Law (OAL) on June 29, 1988 for determination as a contested

case pursuant to N.J.S.A. 52:14F-1 et seg. The Board

subsequently issued an Order of Investigation and Order to Show

Cause directed to respondents on June 15, 1988. Petitioner

transmitted the latter order to the OAL on May 6, 1988, with a

request that the two cases be consolidated. This request was

granted. 2

Numerous conferences were held throughout the

proceedings. A prehearing conference was held on July 13,

1988, and a prehearing order issued on July 28, 1988. Hearings

were not scheduled at that time because a substantial amount of

discovery remained uncompleted. Hearings were subsequently

scheduled to commence on December 13, 1988.

Motions to compel discovery were filed by respondent and

1. By Executive Order No. 38 dated August 14, 1981, the Board of Public

Utilities, redesignated as the Board of Regulatory Commissioners, and the

Department of Environmental Protection were, in effect, transferred to the

newly created Department of Environmental Protection and Energy (DEPE).

All references to the “Board” hereinafter are made, without distinction, to the

Board of Public Utilities or the Board of Regulatory Commissioners as

appropriate. Similarly, no distinctions are made hereinafter between the DEP

and the DEPE.

4a

Appendix B

the Board’s Staff (Staff) on October 1, 1988 and October 31,

1988, respectively. Orders Denying and Granting the Motions in

Part were issued on December 5, 1988. The hearings previously

scheduled for December 1988 were adjourned because

discovery had not been completed. Aconference was conducted

on December 13, 1988, on which date additional discovery

deadlines were established.

A conference was subsequently conducted on January 20,

1989, at which time hearings were scheduled for March 1989.

These hearing dates were adjourned because of illness of

respondents’ counsel. Hearings were rescheduled for July 1989,

which hearings were adjourned on the basis of representations by

the parties that a settlement had been reached. Communications

were conducted among the parties and the judge, but an executed

stipulation was not filed. Counsel for respondents was

substituted in October 1989. Communications between counsel

for the Staff and new counsel for respondents were conducted,

and respondents determined not to execute a stipulation

ostensibly reflecting the previously agreed upon settlement.

Ultimately, in March 1990, the Staff advised counsel for

respondents that it was revoking its consent to a stipulation

which had been forwarded to prior counsel for respondents on

July 24,1989.

Hearings were thereafter scheduled to commence on

September 24, 1990. On September 18, 1990, respondents filed

a motion to dismiss the current matter or, alternatively, to stay it

until pending criminal charges were resolved. ! denied this

motion in its entirety on September 24, 1990. Hearings were held

on September 24, 25, 26 and 27 and October 1, 2 and 4,1990.

At the close of hearings, a schedule for the filing of initial

Sa

Appendix B

and reply briefs was established, incorporating requirements for

the filing of detailed proposed findings of fact. Counsel for

respondents was substituted a second time on November 16,

1990. The briefing schedule was extended because of the

substitution of counsel, a delay in receipt of hearing transcripts,

and a delay in service of respondents’ initial brief on counsel for

the Staff.

Both the Staff and respondents filed initial briefs. In areply

brief, the Staff moved to strike certain portions of respondents’

initial brief. Respondents subsequently filed a reply brief

incorporating a response to this motion. An order granting the

Staff’s motion was issued on April 10,1991.

This judge subsequently requested that the Staff clarify and

amplify certain areas addressed in its briefs. The Staff did so by

a supplemental brief filed on June 24,1991. One area addressed

an initial Staff position that recommended monetary penalties be

stayed pending the disposition of State of New Jersey v. Jersey

Carting, Inc. (Law Div., Bergen County, Docket No. 40-05-

00089-S). In this respect, it is noted that the referenced criminal

proceeding involved an indictment, charging Jersey Carting of

theft by deception and, more specifically, alleging that Jersey

Carting obtained monies exceeding $500 from United Parcel

Services (UPS) and Haywood Pools Company (Haywood

Pools), creating and reinforcing the false impression that, solid

waste removed from premises operated by those entities by

Jersey Carting was transported to and dumped at county transfer

stations authorized by the Department of Environmental

Protection (DEP) to accept such waste when Jersey Carting

knew that such waste was transported to and dumped at HUB

Recycling, Inc. (HUB) in the City of Newark. The Staff filed a

letter on June 27, 1991 advising that the Superior Court action

6a

Appendix B

resulted in a finding of guilt of the offense of theft by deception

as charged and forwarding a copy of the opinion of the presiding

judge. On October 31, 1991, the Staff filed a motion to reopen the

record to take judicial notice of the judgment of conviction for

theft by deception against Jersey Carting. This motion was

denied. The deadline for the issuance of an initial decision was

ultimately extended until January 10, 1992.

NATURE OF THE CASE

As noted hereinabove, this matter concerns two orders

issued by the Board. These Orders are directed to Jersey Carting

in its status as a solid waste collector holding a Certificate of

Public Convenience and Necessity (Certificate) and to A.

Moriano and M. Moriano, individually and as officers, directors,

and shareholders of Jersey Carting.

The March 24, 1988 Order to Show Cause alleges generally

that on certain specified dates, Jersey Carting violated waste-

flow orders issued jointly by the DEP and the Board and that

Jersey Carting was not using the Morris County Transfer Station

(MCTS) to which it had been directed. Specifically, petitioner

alleges that:

1. OnDecember30, 1987, Jersey Carting picked up

a 40-yard container of solid waste at Haywood

Pools in Elizabeth, New Jersey (Union County)

and disposed of such waste at the Solid Waste

Transfer and Recycling Company (SWTR)

facility in Newark, New Jersey (Essex County),

not the Edgeboro Landfill (Edgeboro), to which

the waste was directed.

7a

Appendix B

2. OnFebruary 24, 1988, Jersey Carting picked upa

roll-off container of solid waste at Haywood

Pools and disposed of such waste at Hub in

Newark, not at the Automated Modular Systems,

Inc. (AMS) Transfer Station in Linden, New

Jersey (Union County).

3. InJanuary 1988, Jersey Carting picked up a total

of 28 containers of solid waste from Haywood

Pools and did not dispose of such waste at the

AMS Transfer Station, to which it was directed.

4. Jersey Carting was not utilizing the MCTS

facilities, to which Morris County-generated

waste was directed, and was instead mixing

Morris County waste collected by Jersey Carting

with solid waste collected by it in Essex County

and disposing of such waste at the “Site F”

Transfer Station? and/or HUB, both located in

Newark In the Matter of Allegations of Law and

Administrative Code by Jersey Carting, Inc. and

Angela Moriano and Mario Moriano,

individually and as officers, directors and

shareholder of Jersey Carting, Inc. respondent

(Docket No. $S88030449), Order to Show Cause,

dated March 24, 1988, p. 2.

In the June 15, 1988 Order of Investigation and Order to

Show Cause, the Board alleges that Jersey Carting violated joint

DEP/Board waste-flow orders on certain dates, that Jersey

2. As the parties recognize, the SWTR facility is also referred to as the

Avenue F Transfer Station.

Appendix B

Carting was granted various rate relief based upon inaccurate

data as a consequence of such violations, and that Jersey Carting

had not submitted bills to certain customers in the required

format. More specifically, the Board alleges that:

1. OnDecember 23, 1987, Jersey Carting disposed

of waste originating in Springfield, New Jersey

(Union County), at the Bergen County Utilities

Authority (BCUA) Kingsland Landfill

(Kingsland).

2. OnMarch 2, 1988, Jersey Carting collected waste

at Steak & Ale, located in Clark, New Jersey, the

Holiday Inn, located in Springfield, New Jersey,

Federal Pacific Electric Company (Federal

Pacific), located in Hillside, New Jersey, and

Testrite Opticians (Testrite) and Palmer Video

(Palmer), located in Hillside, all in Union County,

and disposed of such waste at the SWTR facility

and that the DEP waste origin/waste disposal

(O&D) forms submitted to SWTR regarding such

waste stated that 100 percent of it originated in

Fairfield, New Jersey (Essex County).°

3. Jersey Carting did not dispose of any waste at the

Union County Transfer Stations prior to March

24, 1988.

4. OnJanuary 19, 1988, the Board issued an Order

3. Solid waste permittees are required to maintain a daily record of waste

received, including waste type and place of origin. N.J.A.C. 7:26-2.1(a). The

specified information is required to be maintained and recorded by the facility

operator and is supplied by the transporter to the facility on an O&D form,

Id $(c).

9a

Appendix B

Approving Interim Rates reflecting a solid waste

collection rate increase for Jersey Carting to

recover increased disposal costs because of the

redirection of Morris and Union County waste

from Edgeboro to the MCTSs and the Union

County Transfer Stations, respectively, and that

the underlying petition incorporated false and

misleading data because Jersey Carting failed to

utilize the disposal sites upon which the requested

rate adjustment was based. The Order to Show

Cause and Order of Investigation also alleges in

this respect that Jersey Carting’s failure to utilize

the disposal sites upon which its rate adjustments

were based represent noncompliance with, and

disregard of, Board orders in the following

proceedings:

a. Inre Labor Contract Increases (Docket No.

SR87070550), Interim Order dated July 14,

1987;

b. In re Union County Transfer Stations

(Docket Nos. SE87070709 and

SE87070588), Order dated Aug. 6,1987;

c. In re Union County Utilities Authority

(Docket Nos. SE87111308, et al),

Preliminary Order dated December 31,

1987;

d. In re Morris County Transfer Stations

(Docket Nos SE8711170 and SE87121391),

Preliminary Order dated December 31,

1987; and

10a

Appendix B

e. In re Expedited Petitions (Docket No.

$R87121430 etal), Order Adopting Interim

Rates dated January 19, 1988.

5. Jersey Carting failed to include on customer

billings to UPS, Haywood Industrial Products

(Haywood Industrial) and Haywood Pools the

type and frequency of service, tariff rate applied,

and number and size of containers, where

applicable, in violation of N.J.A.C. 14:3-7 et seq.

and certain specified Board orders.

Both orders directed respondents to show cause why certain

penalties should not be imposed, including revocation of Jersey

Carting’s Certificate and prohibition of A. Moriano and M.

Moriano from owning, operating, managing or controlling or

having any interest in any solid waste business or organization

within the State and from serving in certain capacities with such

entities and owning any outstanding capital stock of, or

maintaining, directly or indirectly, any financial interest of any

nature in any solid waste business, corporation or association

doing business in the State. In addition, the Orders directed

respondents to show cause why the Board should not dismiss

then pending petitions for expedited rate relief for Jersey Carting

and why Jersey Carting’s referenced authorized interim rate

relief should not be declared null and void and refunded with

interest.

The Staff argues that A. Moriano and M. Moriano should be

barred from managing or owning any solid waste business

organization within the State and from serving in certain

positions and capacities regarding any solid waste business,

lla

Appendix B

including, but not limited to, businesses engaged in the

collection and disposal of solid waste. The Staff also argues that

Jersey Carting’s Certificate should be revoked and that monetary

penalties should be imposed upon respondents.

Respondents do not really dispute that violations occurred,

but argue that there are extenuating and mitigating

circumstances regarding each violation. Respondents do not

respond to the Staff’s argued position on penalties, including

calculation of specific monetary penalties. Respondents’

argument on the imposition of penalties can be summarized as

follows: “In view of the fact that the Boards (sic) Staff has

requested a death sentence, i.c., license revocation, it would

seem that you should be able to consider any matter tending to

argue for a lesser penalty.” (Respondents’ reply letter brief, p. 2).

FINDINGS OF FACT

Eight witnesses testified on behalf of the Staff. Board

investigators Edward Kozak (Kozak), Scott Shrader (Shrader),

and Edward Castellano (Castellano) testified regarding their

investigations pertaining to Jersey Carting. In support of the

allegations contained in the Board’s orders, the Staff also

presented the testimony of Frank Capone, a principal of AMS,

Tina McCabe, Staff Accountant at the MCTSs, Jeffrey Callahan,

Deputy Director of the Union County Utilities Authority

(UCUA), and, by subpoena, A. Moriano and M. Moriano. A.

Moriano and M. Moriano, exercising their Fifth Amendment

rights, essentially did not testify. The Staff also moved into

evidence numerous documents. Respondents did not present any

witnesses, but did proffer some documentary evidence.

12a

Appendix B

In general, I am persuaded by the evidence proffered on

behalf of the Staff in all respects except regarding specific tariff

violations. The Staff’s evidence in this respect focussed upon

alleged tariff violations concerning specific billings to Haywood

Pools and UPS, as well as several quarterly billings to Morris and

Union County customers generally. The evidence in this respect

was ambiguous and did not meet, in my judgment, the burden of

proof placed upon petitioner.

I am persuaded, based on a review of the entire record, that

the material facts are not in dispute. In addition, as requested by

the Staff, I have made negative inferences against respondents

based on the Morianos’ failures to testify. Based upon a review

of the record, including the briefs and proposed findings of fact

filed by the parties, I FIND the following to be FACTS:

1. A Certificate, Certificate SW330, was issued to

Jersey Carting in 1986, granting Jersey Carting

the authority to engage in the solid waste

collection business. More specifically, by Order

dated August 12, 1986, the Board approved the

merger of Mario’s Portable Service, Inc.

(Mario’s) into Jersey Carting and the transfer of

Mario’s Certificate to Jersey Carting. During the

period 1987 through at least March 1988, Jersey

Carting did not have authority from the Board or

the DEP to operate a solid waste transfer or

materials recovery facility.‘

4. A “Materials recovery facility” is “. . . solid waste facility such as a

transfer station which is designed, operated and permitted to process a non-

hazardous, solid waste stream by utilizing manual and/or mechanical methods

to separate from the incoming waste stream, categories of useful materials

which are then returned to the economic main stream in the form of raw

(Cont'd)

13a

Appendix B

2. From 1987 until at least November 29, 1988, A.

Moriano and M. Moriano were the President and

Vice-President, respectively, of Jersey Carting,

and A. Moriano was Jersey Carting’s sole

director. The outstanding stock of Jersey Carting

was owned in equal shares by A. Moriano and M.

Moriano. The Morianos were both actively

involved in Jersey Carting’s operations during the

relevant periods of the Orders to Show Cause in

question in this proceeding. A. Moriano’s

responsibilities included dictation of all

correspondence for all corporate officers,

checking of all invoices to insure correctness,

efforts expended to establish new business, and

involvement in negotiations with new customers

and settling problems with old ones. M. Moriano

became involved in all customer complaints not

satisfactorily addressed by the managers of

Jersey Carting, reviewed all bills with corporate

personnel, and reviewed all monthly dump bills.

A. Moriano and M. Moriano also met, together

with the accounting staff of Jersey Carting, to

review Jersey Carting’s books and had daily

meetings with dispatchers.

3. Pursuant to waste identification categories

adopted by the DEP, solid waste Type 10 is

(Cont'd)

materials or products for reuse.” N.J.A.C. 7:26-1.4. A “Transfer Station” is

defined in applicable regulations as “... a facility at which solid waste is

transferred from one solid waste vehicle to another solid waste vehicle for

transportation to a solid waste facility.” [bid.

l4a

Appendix B

deemed to be municipal waste consisting of

household waste from private residences,

commercial waste originating in wholesale, retail

or service establishments, and institutional waste

material originating in schools, hospitals,

research institutions and public buildings. Solid

waste Type 13 is bulky waste, which is defined as

large items of waste material, for example,

appliances, furniture, trees, branches, and tree

trunks and stumps. Included in Type 13 waste are

waste building materials and discarded

automobiles, trucks and trailer and large vehicle

parts and tires. Type 25 solid waste is animal and

food processing wastes, which is processing

waste materials generated in canneries,

slaughterhouses, packing plants or similar

industries, as well as dead animals. Type 27 waste

is dry industrial waste, which is defined as waste

materials resulting from manufacturing,

industrial research, development processes,

operations which are not hazardous, as well as

non-hazardous oil spill clean-up waste, dry non-

hazardous pesticides, dry non-hazardous

chemical waste, and asbestos and asbestos-

containing waste managed in accordance with

federal regulations. N.J.A.C. 7:26-2.13(g).

On June 12, 1987, the Board and the DEP issued

an order, effective immediately, which directed

waste generated in Union County to Edgeboro.

The order stated in pertinent part:

15a

Appendix B

Edgeboro shall accept Waste Types 10

(except newspapers, aluminum cans,

cardboard, corrugated, high-grade

office paper and glass), 13, 25 and 27

generated in the affected

municipalities in Middlesex, Morris,

Somerset and Union Counties, and

further detailed in Exhibit A, until

transfer stations become available to

those counties, or until DEP identifies

other alternative waste disposal

arrangements or until January 1, 1988,

whichever first occurs. ((Ex. P-12(i), p.

2)).

The affected Union County municipalities

included Elizabeth. Jd. Ex.A, p. 1. The content of

this order is as stated in Exhibit P-12(i).

A “pull ticket” is a term commonly used in the

solid waste industry as referencing a document or

receipt that the driver of a collection vehicle

leaves with a customer after picking up a

container. (Tr. 9/24/90, p. 56).

A pull ticket dated December 30, 1987 states that

a Jersey Carting collection driver picked up a 40-

yard closed roll-off container containing

commercial refuse at the premises of Haywood

Pools on that date. The identification number

stated on the applicable pull ticket is 83561. An

SWTR dump receipt dated December 30, 1987

states that at 9:30 a.m. on that date, Jersey Carting

deposited a 40-cubic yard container of Type 13

10.

11.

16a

Appendix B

waste at SWTR’s transfer station in Newark, New

Jersey (Essex County).

Jersey Carting billed Haywood Pools a total of

$1,705.05 for waste removal services on

December 30, 1987 pertaining to pull number

ticket No. 83561.

Haywood Pools is located in Elizabeth, New

Jersey, in Union County.

On December 30, 1987, a Jersey Carting

collection vehicle picked up a 40-yard closed roll-

off container containing Type 13 waste at the

premises of Haywood Pools in Elizabeth, New

Jersey, and disposed of such waste at

approximately 9:30 a.m. on December 30, 1987 at

the SWTR Transfer Station in Newark, New

Jersey.

By order dated December 27, 1987, the Board

granted an exclusive solid waste franchise to the

UCUA, the implementing agency for the Union

County Solid Waste Management Plan.

The DEP and the Board issued a joint Emergency

Redirection of Solid Waste Flow Order on

December 29, 1987. The content of this order is as

stated in Exhibit P-12(iv).

Pursuant to this order, all solid waste Type 10

generated within Hillside was directed to the

17a

Appendix B

Ellesor Transfer Station in Elizabeth (Union

County). All solid waste Types 10, 13, 23,25 and

27 generated within Clark and Springfield in

Union County was directed to the AMS Transfer

Station, DEP Facility No. 20091, in Linden,

Union County, for final disposal at a permitted,

out-of-State solid waste disposal facility. All

solid waste Types 13 and 23 generated within

Hillside, not directed to the Ellesor Transfer

Station, as also directed to the AMS facility in

Linden. All solid waste Types 25 and 27 generated

within Hillside was so directed. Finally, the Order

provided that all solid waste Types 10, 13, 23, 25

and 27 generated in every municipality in Union

County was directed as detailed in the Order until

the proposed Union County resource recovery

facility became operational, at which time all

such solid waste would be directed to that facility.

The emergency waste-flow order was effective

January 2, 1988 and was to remain in effect until

approval by the Commissioner of the DEP of

amendments to the Union County District Solid

Waste Management Plan, which would adopt

those or other waste-flows, and subsequent

amendment of relative portions of the New Jersey

Administrative Code. This Order contained the

notice to solid waste collectors/haulers and

facility operators detailed hereinafter as

contained in other waste-flow directives. (See

Findings of Fact No 15 hereinafter.)

12. During the morning of February 24, 1988, a

18a

Appendix B

Jersey Carting roll-off vehicle driven by Robert J.

Pasquali (Pasquali) picked up a roll-off container

containing non-source separated solid waste and/

or Type 13 solid waste from Haywood Pools’

premises in Elizabeth and deposited such waste in

the afternoon on February 24, 1988 at HUB in

Newark. When Pasquali was exiting HUB, he was

informed by Kozak that he (Pasquali) was

violating waste-flow directives and that the load

should have gone to AMS. Pasquali generally

responded that “... we are bringing our stuff

here.” (Tr. 9/24/90, p. 101).

13. The AMS Transfer Station became operational

January 2, 1988. Jersey Carting did not open an

account with the AMS Transfer Station until

February 22, 1988 and did not tip any solid waste

at the facility between January 2,1988 and March

25,1988.

14. During January 1988, Jersey Carting picked up 28

loads (containers of commercial solid waste)

which was not source separated from Haywood

Pools in Elizabeth. These 28 loads were not taken

by Jersey Carting to the AMS Transfer Station.

15. The Board and the DEP issued an Emergency

Redirection of Solid Waste Flow Order on

December 29, 1987, redirecting solid waste Types

10, 13,23, 25 and 27 generated in Morris County,

with the exception of Mt. Arlington Borough,

from Edgeboro to one of two transfer stations

located in the Township of Mt. Olive and the

—_ ——_ — ——_ eee

16.

17.

19a

Appendix B

Township of Parsippany-Troy Hills, effective

January 2, 1988. Waste Types 10, 13 and 23

generated within Mt. Arlington Borough were

continued to be directed to the Mt. Arlington

Landfill. The content of this Order is as stated in

Exhibit P-12(ii).

The Order noticed all solid waste collectors/

haulers and facility operators licensed by the

Board and/or registered by the DEP and operating

within Morris County of required operations and

compliance with the Order and all other approved

provisions of the Statewide and District

Management Plan. The Order also stated that any

collector/hauler failing to comply with the

provisions of the Order would be deemed in

violation of N.J.S.A. 13:1E-1 et seg. and N.J.A.C.

7:26-1 et seq. and subject to the provisions and

penalties of all applicable laws and regulations.

By Order dated December 31, 1987, the Board

approved an exclusive solid waste franchise, as

well as a Certificate, for the Morris County

Transfer Station, Inc. for the transfer stations

located in Mt. Olive and Parsippany-Troy Hills

for Morris County-generated solid waste. The

content of this order is as stated in Exhibit P-

10(iv).

The MCTSs, located in Parsippany-Troy Hills

and Mount Olive, commenced operations on

January 2,1988.

18.

19.

20.

21.

22.

20a

Appendix B

Jersey Carting billed 57 customers with service

locations in Morris County for collection services

provided between January and March 1988.

Thirty-five of the pertinent invoices issued by

Jersey Carting for solid waste collection services

provided to customers located in Morris County

for the period January through March 1988

contain notations indicating billing for service,

closure, recovery, host community, and

importation taxes. The content of these bills is as

stated in Exhibit P-14(b). Itis reasonable to infer

that the billings reflected in Exhibit P-14(b) were

for solid waste collection services.

Jersey Carting opened an account with the

MCTSs on March 18, 1988 and dumped its first

load of solid waste at the facilities on March 22,

1988.

Jersey Carting provided solid waste collection

services to the customers reflected on the bills in

Exhibit P-14(b) for services rendered from

January through March 1988 and did not deposit

the waste collected at the MCTSs.

A rear-loading solid waste container is one that is

picked up by a “leech type garbage truck” and

dumped in the packer or back of the truck. (Tr.

9/26/90, p. 17).

As of January 19, 1988, Jersey Carting was

providing solid waste collection service to two

rear-loading containers located at the premises of

21a

Appendix B

Paramedical Supply Company (Paramedical) in

Pinebrook, a part of Montville, New Jersey, in

Morris County. Service was provided in January

1988 and continued as of February 8, 1988. The

waste contained in the rear-end containers on

February 8, 1988 was a mixture of different waste

types, including styrofoam, plastic tubing, glass

and plastic bottles, pharmaceutical bottles, wood

waste and scraps, and plastic bags containing

lunch and food scraps. The lunch and food scraps

constituted what is referred to as “putrescible

waste.” Id. p. 18.5 They were not “source

separated.” Jd. p. 19. The containers located at

Paramedical’s premises on February 8, 1990 were

not taken to the MCTSs.

23. From January 1988 until at least February 9,1988,

Jersey Carting serviced a 30-yard roll-off

container for “garbage only” at UPS’ site in

Parsippany, New Jersey. Id. p.47 & Ex. P-2(a), p.

5. UPS separated all recyclables and s old them to

recyclers without Jersey Carting’s assistance.

UPS had its own cardboard bailer, gave away used

pallets, and sold scrap metals. In effect, UPS

separated their own recyclables, bailed their

5. “Putrescible waste” is defined in the applicable regulations as“. . . any |

waste liable to enter into a state of putrefaction, the typically anaerobic splitting |

of proteins by bacteria and fungi with the formation of foul-smelling and ,

completely oxidized products.”

6. Source separation is“. . . the process of separating recyclable materials

from the solid waste stream at the point of waste generation.” /bid.

22a

Appendix B

cardboard, and separated their own metals and

some glasses. The waste collected by Jersey

Carting generally consisted of mixed, office-type

and lunch-type waste, the latter consisting of food

scraps, food bags, paper cups, etc, some of which

would be putrescible waste. The waste collected

by Jersey Carting was not source separated and

was not taken to the MCTSs.

24. On January 19, 1988, Shrader visited Jersey

Carting’s offices in East Rutherford, New Jersey,

and spoke with an individual who identified

himself as “Bill.” Bill indicated that he was a

dispatcher and informed Shrader that Jersey

Carting was dumping Morris County waste at

HUB. ((Ex. P-2(a), p. 1, & Tr., 9/26/90, p. 25)).

Later that day, Shrader spoke by telephone with

M. h.oriano, who informed Shrader that Jersey

Carting had not dumped at the MCTSs as of that

date because it did not pick up enough waste fora

full truckload in Morris County and it would be

too costly to send a man out with a truck for only

those stops. M. Moriano aiso indicated that rear-

loading containers of customers in Morris,

approximately 20, were being mixed with Essex

waste and dumped at the SWTR facility. He

further informed Shrader that Jersey Carting had

only two roll-off customers in Morris County,

UPS and AT&T in Parsippany, that those loads

were being dumped at HUB, and that they

contained no ‘wet’ garbage. Shraderinformed M.

Moriano that Morris County waste had to goto the

MCTSs because they had a franchise for all

Morris County garbage, and Moriano indicated

25.

23a

Appendix B

that he was aware of the franchise. M. Moriano

also indicated that he would begin taking some of

the Morris County waste to the transfer station.

((Ex. P-2(a), p. 3, & Tr. 9/26/90, pp. 26-28)).

On or about July 24, 1987, the Board and the DEP

issued an Emergency Redirection of Solid Waste

Flow Order pertaining to Union County —

generated solid waste. The content of this order is

as stated in Exhibit P-12(iii).

Pursuant to this redirection order, solid waste

Types 10, 13,23 and 27 generated in Springfield,

Union County, were redirected from HMDC

landfills to an AMS transfer station, which

facility is also known as the Madaluna Disposal

Transfer Station (Madaluna), in Linden, New

Jersey, (Union County), reflecting the fact that a

facility known as the Madaluna Transfer Station

was located at the site during 1987 at which time

a portion of Union County-generated waste was

deposited at the facility. Springfield-generated

waste was directed to the Madaluna Transfer

Station effective August 1, 1987, until the

commencement of operations at the AMS

Transfer Station. Some Union County waste was

also directed at that time to the Ellesor Transfer

Station, Madaluna was located in Linden. As of

January 2, 1987, the Madaluna operation

essentially merged with the AMS Transfer

Station.

The July 24, 1987 redirection order noted that an

ae ep eee

26.

24a

Appendix B

emergency existed because of the cessation of

solid waste disposal privileges for Union County

municipalities at HMDC landfills subsequent to

July 31, 1987 and that the redirection reflected

therein was intended as an interim measure for the

period from August 1, 1987 until December 31,

1987, in light of the anticipated operation of the

Union County Transfer Station program effective

January 1, 1988.

At approximately 10:00 a.m. on December 23,

1987, a Jersey Carting collection truck exited the

parking lot of the former Boston Sea Party

Restaurant (Boston Sea Party), located on the

easterly side of Route 22 in Springfield, New

Jersey, and proceeded to the SWTR Transfer

Station in Newark. At approximately 1:00 p.m.

the same day, a Jersey Carting tractor picked upa

30-yard roll-off container at the same site, which

container was loaded with demolition waste,

Type 13 waste, and dumped said waste at the

Kingsland Landfill in Lyndhurst, New Jersey,

Bergen County. This Type 13 waste emanated in

Springfield, New Jersey. The O&D form

submitted for this waste by the driver of the Jersey

Carting vehicle, Rinaldo Garcia (Garcia), to the

BCUA, the operator of Kingsland, stated that 100

percent of the load emanated in Carlstadt, New

Jersey (Bergen County). After being dumped, the

waste in question was mixed, almost

immediately, with putrescable waste dumped by

other vehicles, ground up and buried, along with

all the other waste that was being disposed of at

the time, by a bulldozer operating at the landfill.

The load was dumped in the general area of the

27.

28.

29.

25a

Appendix B

landfill where trucks were dumping garbage.

Garcia told Kozac on the day in question that the

load could go to Kingland because it was used for

road service in the dump.

In general, landfills attempt to fill roads leading to

landfills with certain types of material to cover

dirt in order to prevent mud from accumulating

when it rains. Vehicles which bring fill which is

being used to cover waste on any given day

generally proceed to separate areas, away from

the dumping site. O&D forms are generally not

used when waste is taken to a landfill for such

purposes.

A rear-packer truck is a “typical garbage type

truck.” Waste is thrown into the “hopper” of the

vehicle, where it is compressed by a blade located

in the rear of the vehicle. (Tr. 9/25/90, p. 166).

Costellano conducted a waste-flow investigation

on March 2, 1988. On that date, at approximately

9:43 a.m., he observed a Jersey Carting rear-

packer truck fill a rear-loading container behind

the Steak & Ale, which is located at 1139 Raritan

Road in Clark, New Jersey, and empty the

contents of the container into the truck. The waste

collected at Steak & Ale was restaurant waste.

The truck then proceeded to Route 22 in

Springfield to a Holiday Inn, where the driver,

Clement Rivers (Rivers), picked up two

additional containers.

26a

Appendix B

After emptying these two containers, the truck

proceeded to a building ostensibly occupied by

Federal Pacific, located at 475 Mundet Place in

Hillside, at which site the driver emptied

cardboard drums and some loose debris,

including pieces of wood, into the rear of the

vehicle.

Federal Pacific occupied the building in question

prior to March 2, 1988, but had vacated it as of that

time. As of the date in question, Federal Pacific’s

name remained on the building so that it would not

appear to be empty. Anentity by the name of Viho

Trucking (Viho) occupied part of the building.

Jersey Carting provided solid collection service

to Viho on March 2, 1989, which waste was taken

to Solid Waste, Transfer’s facility. Viho was a

solid waste collection customer of Jersey Carting.

Subsequent to leaving the Federal Pacific site, the

Jersey Carting truck proceeded to the rear of a

small shopping mall located in Hillside in

proximity to Testrite and Palmer, at which site the

driver emptied a container into the truck. An

entity known as Liberty Service was under

contract by the property owner of the mall,

Everest Realty, to clean the parking lot. The

container in question was used by Liberty

Service; Jersey Carting billed Liberty Service for

collection services. It is reasonable to infer that

Palmer’s container contained floor sweepings.

The truck then traveled east on Route 22 to Route

30.

31.

27a

Appendix B

21 north, where it entered the SWTR facility in

Newark at approximately 11:07 a.m. and

deposited the waste collected on that date.

Castellano spoke to Rivers after the Jersey

Carting truck exited the transfer station. In

response to questions, Rivers informed

Castellano that the entire load had been picked up

in Fairfield, New Jersey. The certified O&D

forms submitted by Rivers to the SWTR Transfer

Station stated that 100 percent of the waste in

question emanated in Fairfield, New Jersey,

which is located in Essex County, and that the

waste deposited was solid waste Type 13, bulky

waste.

Although Jersey Carting was registered with the

UCUA authority as of March 2, 1988, it had not

dumped any waste there as of that date.

During the period January through March 1988,

Jersey Carting provided solid waste collection

services to at least eight customers located in

Elizabeth, Union, Springfield, Hillside, and

Clark, New Jersey, all of which are located in

Union County. These customers are as stated in

Exhibit P-14(a). Ten of the invoices issued by

Jersey Carting to the customers located in Union

County between January and March 1988 contain

notations of billings pertaining to service,

closure, recovery, host community, and

importation taxes. All of the pertinent invoices

are as stated in Exhibit P-14(a).

32.

33.

34.

28a

Appendix B

Every hauler using the AMS Transfer Station

must maintain a minimum balance. Those

collectors utilizing only packer trucks must

maintain a balance of $1,500; a minimum balance

of $750 is required for haulers which generally

deposit roll-off trucks. The minimum balance

applicable to Jersey Carting is $1,500. Jersey

Carting made a deposit payment to the AMS

facility prior to March 24,1988 in the amount of

$5,000.

Jersey Carting did not dispose of any waste at the

AMS Transfer Station until March 25, 1988, at

which time it deposited Type 10 waste. The load

delivered on that date totaled 68 tons and was

generated from two municipalities.

A solid waste services tax is levied upon the

owner or operator of every sanitary landfill

facility located in New Jersey, with an exception

pertaining to the acceptance for disposal of waste

products resulting from the operation of a

resource recovery facility. N.J.S.A. 13:1E-

138(a)(B). Aresource recovery investment tax is

also levied upon the owner or operator of every

sanitary landfill facility pertaining to all solid

waste accepted for disposal at such facility, with

an exception pertaining to the acceptance for

disposal of waste products resulting from the

operation of aresource recovery facility. Jd. § (b).

A solid waste importation tax is levied upon every

sanitary landfill facility which accepts solid

waste emanating from outside of the Solid Waste

29a

Appendix B

Management District in which the landfill is

located, with an exception pertaining to resource

recovery facilities. Jd. §(7). A recycling tax is

levied upon every solid waste facility pertaining

to solid waste accepted for disposal or transfer at

the facility. This tax is not imposed upon resource

recovery facilities pertaining to the acceptance of

solid waste disposal at the facility or upon solid

waste transfer facilities designed and operated

solely for receiving and transferring solid waste

from collection vehicles to haulage vehicles for

the purposes of facilitating the transportation of

solid waste, upon the acceptance of solid waste

for transfer to an in-state solid waste facility for

permanent disposal. Jd. §95(a). Host community

benefits are available to any municipality within

which a solid waste facility, including a transfer

station, landfill or resource recovery facility, is

located. N.J.S.A. 13:1E-28, 13:1E-28.1 &

48:13A-5.1.

For purposes of these provisions, ‘solid waste’ is

generally defined as garbage, refuge, and other

discarded materials resulting from industrial,

commercial and agriculture operations and from

domestic and community activities, as well as all

other waste materials, including liquids; ‘solid

waste collection,’ the activity related to pick-up

and transportation of solid waste from its source

or location toa transfer station or other authorized

solid waste facility; ‘solid waste facility,’ the

plant, structures and other real and personal

property pertaining generally to facilities

35.

30a

Appendix B

operated pursuant to N.J.S.A. 13:1E-1 and

48:13A-1 et seq. or any other statute, including

transfer stations, resource recovery facilities,

sanitary landfill facilities, and other plants for the

disposal of solid waste; ‘resource recovery,’ the

collection, separation, recycling and recovery of

metals, glass, paper and other materials for reuse,

or the incineration of solid waste for energy

production and the recovery of metals and other

materials for reuse; ‘sanitary landfill facility,’ a

solid waste facility at which solid waste is

deposited on or in the land as fill for permanent

disposal or storage for a period exceeding six

months, not including hazardous waste; and

‘transfer station,’ a solid waste facility at which

solid waste is transferred from a solid waste

collection vehicle to a licensed solid waste

haulage vehicle for transportation to an off-site

sanitary landfill facility, resource recovery

facility or other designation for disposal,

excluding transfer stations at which solid

waste is received for on-site transfer. N.J.S.A.

13:1E-3. (Supp. 1991-1992). See, also, N.J.S.A.

48:13A-3.

It is reasonable to infer that A. Moriano and M.

Moriano instructed Jersey Carting waste

collection vehicles to by-pass the Morris County

and Union County designated transfer stations

and that the Morianos determined to by-pass these

transfer stations during the periods in question.

36. By orders dated December 31, 1987, the Board

37.

3la

Appendix B

authorized, expedited rate proceedings for

collectors affected by waste-flow redirections in

Morris and Union Counties. The proceedings

allowed solid waste collectors to promptly

recover increased disposal costs resulting from

the redirection of Morris and Union County

waste-flows from Edgeboro to solid waste

transfer stations in each respective county. The

expedited rate procedures provided that if interim

expedited rate relief were granted and acollector

were found not to have utilized the disposal site

upon which the rate adjustment was based, any

authorized interim rate relief would become

immediately null and void and would be refunded

with interest and other consequences.

On approximately January 11, 1988, Jersey

Carting filed a petition with the Board requesting

an expedited rate increase for solid waste

collection services based upon Board approval of

closure of Edgeboro to Union County waste on

December 31, 1987 and the redirection of such

waste, commencing January 1, 1988, tothe Union

County Transfer Stations. The content of this

petition is as stated in Exhibit P-34(a). The

petition asserted that the referenced redirection of

waste would impact significantly upon Jersey

Carting’s operating costs and that such

redirection might place Jersey Carting in the

position of not being able to comply with various

waste-flow orders of the DEP. Jersey Carting

requested an interim increase to reflect increased

costs of dumping effective January 1, 1988.

7

.

a

q

—— ?

38.

ae.

32a

Appendix B

On approximately January 11, 1988, Jersey

Carting filed a petition with the Board seeking a

rate increase for solid waste collection services

based upon approval by the Board of closure of

Edgeboro to Morris County waste on December

31, 1987 and redirection of such waste to the

MCTSs commencing January 1, 1988. The

content of this petition is as stated in Exhibit P-

34(b). This petition alleged that the referenced

redirection would impact significantly upon the

operating costs of Jersey Carting and might place

Jersey Carting in the position of not being able to

comply with various waste-flow orders of the

DEP. Jersey Carting requested that its rates be

increased in an amount equal to its total increase

in costs as a result of such redirection and that the

Board approve an interim increase to reflect the

increased costs of dumping effective January

1,1988.

As part of Jersey Carting’s expedited rate filings,

M. Moriano submitted signed certifications

pertaining to each perspective petition in which

he acknowledged that the expedited procedures

constituted an experiment designed to respond to

collector complaints concerning higher disposal

charges and agreed, more specifically that:

Therefore, in consideration of my

authorization by. the BPU to

expeditiously impose upon my

customers an increase which reflects an

appropriate amount of increased

40.

41.

33a

Appendix B

disposal expenses as computed through

these procedures, rather than

proceeding through the regular rate

case process, I agree on behalf of my

company to all the conditions set forth

in these new procedures (incorporated

herein by reference) adopted for use in

my case, including, but not limited to,

the provisions calling for the automatic

refund with interest, of rates found to be

too high ... and all provisions

regarding the consequences of my

company’s charging rates incorrectly,

or my company’s noncompliance with

any time requirement or disposal site

requirements provided for in the

procedures, regardless of costs. ((Ex.

P-35(m), p. 1 & Ex. P-35(v), p. 1)).

At an agenda meeting held on November 14,

1988, the Board approved Jersey Carting’s

request for expedited rate relief pertaining to the

redirection of Union and Morris County waste.

The Board subsequently issued an Order

Adopting Interim Rates on January 19, 1988. The

content of this Order is as stated in Exhibit P-

10(v).

On July 14, 1987, the Board issued an Interim

Order, in Docket No. SR87070550, in which it

granted interim rates and established an

expedited rate case procedure to allow solid waste

collectors located in northern and central New

Jersey to increase rates to reflect a labor contract

34a

Appendix B

agreement between Teamsters Local 945 and

solid waste utility collectors. The content of this

order is as stated in Exhibit P-10(i).

42. The Board issued an Order on August 6, 1987, in

Docket Nos. SE870709 and SE87070588, in

which it authorized expedited rate procedures,

similar to those used for the labor contract for

collectors, for collectors affected by the

establishment of rates for the Union County

transfer stations located in Linden and Elizabeth,

New Jersey, the content of this order is as stated in

Exhibit P-10 (ii).

43. On January 19, 1988, the Board issued an Order

Adopting Interim Rates in Docket Nos.

SR87121430 et al, approving interim expedited

rate relief pursuant to the above-referenced

procedures to allow solid waste collectors to

recover costs effectuated by increased disposal

costs at the Passaic County Transfer Station, the

Cumberland County Landfill, the Morris County

Transfer Stations, the Somerset County Transfer

Stations, and the Union County Transfer Stations

(Dkt. Nos. SE87111308, SE87121457 and

$087121407). The Board approved in this order

rate increases for Jersey Carting pertaining to the

Union County Transfer Stations (Dkt. No.

SR88010179) and the Morris County Transfer

Stations (Dkt. No. SR88010171). The content of

this order is as stated in Exhibit P-10(v).

44. Jersey Carting’s tariff, which was initially issued

45.

35a

Appendix B

June 15, 1981, and was effective November 29,

1982, applicable during the time periods relevant

to this proceeding is as stated in Exhibit P-30. The

tariff generally authorizes respondent to provide

solid waste collection services at specified rate

levels.

On September 14, 1984, the Board issued a

Decision and Order in BPU Dkt. No. 8311-1032

approving a stipulation executed in that

proceeding, which proceeding involved alleged

tariff violations committed by Jersey Carting.

The content of this Decision and Order is as stated

in Exhibit P-1. The Board directed Jersey Carting

to charge and provide service to its customers

according to the terms of its filed tariff and

ordered respondent to bill all customers as

required by N.J.A.C. 14:3-7 et seq., including the

provision of the following information on all

bills: (1) type of service (residential, commercial,

industrial), (2) frequency of service, (3) rate

applied, (4) number and size of containers, where

applicable, (5) total quantity of waste collected

during the billing period, (6) a separate line item

showing the surcharge applied pursuant to the

Recycling Act, N.J.S.A. 13:1E-92 et seq., and the

Sanitary Landfill Facility Closure and

Contingency Fund Act, N.J.S.A. 13:1E-100 er

seq., and (7) a sepatate line item showing any

applicable surcharge pursuant to Chapter 438,

Laws of 1981 to fund county health department

enforcement activities.

46.

47.

36a

Appendix B

On August 29, 1986, the Board issued an Order

Adopting an Initial Decision, in which it

approved a stipulation, in a proceeding

concerning an application by the HMDC for an

adjustment of District solid waste disposal rates,

in BPU Dkt. No. SR8504-372 and SE8601-93.

The content of this order is as stated in Exhibit P-

11(i). The Board ordered the HMDC and all

specified collectors to bill customers as required

by N.J.A.C. 14:3-7 et seq. and to include the

following information on billings: (1) type and

frequency of service, (2) tariff rate applied, (3)

number and size of containers, where applicable,

(4) total quantity of waste collected, (5) a separate

line item showing the surcharge applied as

required by the Recycling Act, N.J.S.A. 13:1E-92

et seq. and the Sanitation Landfill Facility

Closure and Contingency Fund Act, N.J.S.A.

13:1E-100 et seg., (6) a separate line item

showing any applicable surcharge pursuant to

N.J.S.A. 13:1E-9 and 9.1 to fund county health

department enforcement activities and (7)

separate line items showing the solid waste

service, resource recovery investment, and if

applicable, solid waste importation taxes,

N.J.S.A. 13:1E-136 et seq. Jersey Carting was one

of the collectors specified (case number 845-

361).

On December 24, 1986, the Board issued an Order

Adopting Interim Rates in Dkt. No. SR86111288,

approving on an interim basis an increase in rates

for Jersey Carting to recover increased disposal

48.

49.

37a

Appendix B

costs arising from an increase in rates approved

for the HMDC. The content of this Order is as

stated in Exhibit P-11(ii). The Board ordered

Jersey Carting to bill all customers as required by

N.J.A.C 14:3-7 et seq. and to include the seven

categories of specified information on billings as

detailed in Finding of Fact No. 46 hereinabove.

On September 9, 1987, the Board issued an Order

Adopting Interim Rates in BPU Dkt. No.

SR8707064 et al., approving interim rate relief to

certain specified solid waste collectors, including

Jersey Carting. The Board ordered all solid waste

collection utilities listed in the order to bill all

customers as required by N.J.A.C. 14:3-7 et seq.

and, to additionally include on all billings the

information as specified in Finding of Fact No. 46

hereinabove. Interim rate increases were

approved for Jersey Carting in relation to labor

contract increases (BPU Dkt. SR87070662), rates

effectuated at the Essex County Transfer Station

(BPU Dkt. No. SR87080929), and rates

effectuated at Edgeboro (BPU Dkt. No

SR87080930).

On January 4, 1988, the Board issued an Order

Adopting Interim Rates, in BPU Dkt. No.

SR87111276 et al., approving interim increases

in rates for certain specified solid waste

collection utilities, including Jersey Carting. All

solid waste collection utilities listed in the order

were directed to bill all customers as required by

N.J.A.C. 14:3-7 et seq. and to additionally include

50.

3 8

38a

Appendix B

on all billings the information as specified in

Finding of Fact No. 46 hereinabove. Interim rate

increases were approved for Jersey Carting

pursuant to rates effectuated for the Passaic

County Transfer Stations (BPU Dkt. No.

SR87121385).

On January 19,1988, the Board issued an Order

Adopting Interim Rates, in Dkt. No. SR87121430

etal., approving interim increased rates for solid

waste collection utilities, including Jersey

Carting. The Board ordered all solid waste

collection utilities specified in the order to bill all

customers as required by N.J.A.C. 14:3-7 et seq.

and to additionally include on all billings the

information specified in Finding of Fact No. 46

hereinabove. The Board approved interim rate

increases for Jersey Carting reflective of rates

approved for the Union County Transfer Stations

(Dkt. No. SR8801010179) and the Morris County

Transfer Station (Dkt. No. SR88010171). The

content of this order is as stated in Exhibit P-

10(v).

Jersey Carting issued 12 invoices for solid waste

removal services in January 1988 to eight

customers located in Union County. The content

of these invoices is as stated in Exhibit P-14(a).

These invoices were for services rendered and to

be rendered in January, February and March

1988. Each invoice contains total billing for

waste removal services. None of the invoices

contains a breakdown of billings for service,

52.

>

54.

39a

Appendix B

closure, recovery, host community and

importation taxes, although several, on their face,

appear to contain billings for host community

taxes.

Jersey Carting issued 59 invoices in January 1988

for waste removal, services to 55 customers

located in Morris County. The content of these

invoices is as stated in Exhibit P-14(b). These

invoices were quarterly billings for the period

January through March 1988. None of the

invoices contains breakdowns for services and

closure, recovery, host community and

importation taxes completely, although several

on their face, contains billing notations for host

community taxes. None of the bills contains

notations regarding a specific service billed for,

including the frequency and volume of service

and rate schedule applied.

Itis not possible to determine, based on the record

in this proceeding, the extent, if any, to which

rates charged to its customers by Jersey Carting

deviated from its filed tariff because the pertinent

bills do not contain disclosure notations

regarding specific service, frequency and volume

of service, and rate schedule applied. It is also not

possible to determine whether or not the rates

charged by Jersey Carting were reflective of

expedited rate relief awarded by the Board.

In the March 16,1988 Order to Show Cause and

the June 15, 1988 Order of Investigation and

40a

Appendix B

Order to Show Cause issued by the Board in this

proceeding, the Board directed that Jersey

Carting file with the Board within 30 days, to

allow the Board to determine the extent of

respondents’ noncompliance with the rules,

regulations and orders of the Board, the following

information: (1) a list of current customers

served, including each customer’s name and

billing address, addresses of all service locations,

if different from billing address, municipality and

county, type of service, size of container,

frequency of service, total monthly cubic

yardage, if applicable, tariff rate and applicable

rate schedules used for services to each customer,

total monthly charges without applicable taxes,

and applicable taxes charged; (2) copies of any

and all service contracts with its customers,

including any municipal contracts; (3) copies of

all customer billings from December 1986

through May 1988; and (4) copies of all disposal

receipts from December 1986 through May 1988.

Respondents were ordered, pending a final

determination regarding the matter, to include on

billings to all customers, in addition to separate

line items showing the surcharges pursuant to the

Recycling Act, N.J.S.A. 13:1E-92 et seq., the

Sanitary Landfill Facility Closure and

Contingency Fund Act, N.J.S.A. 13:1E-100 et

seq., the solid waste service tax, the resource

recovery investment tax, and if applicable, the

solid waste importation tax, N.J.S.A. 13:1E-136

et seq., and regarding said surcharges and taxes,

the following information: (1) type of service

(residential, commercial, industrial, etc.), (2)

4la

Appendix B

frequency of service, (3) tariff rate applied, (4)

number and size of containers, where applicable,

and (5) total quantity of waste collected.

Similarly, in the Order to Show Cause issued on

March 16, 1988 in this proceeding, the Board

ordered that respondents file a customer list

within 20 days. The content of these orders is as

stated in Exhibit P-11.

CONCLUSIONS

The Board has general supervisory and regulatory

jurisdiction over solid waste collection utilities pursuant to both

its general grant of jurisdiction, N.J.S.A. 48:2-13 (Supp. 1991-

91), and the Solid Waste Utility Control Act of 1970 (Act), /d.

§§13A-1 etseqg. TheAct reflects a legislative determination that

the collection, disposal and utilization of solid waste is a matter

of grave public concern and thoroughly affected with the public

interest, Jd. §13A-2.

Pursuant to the Act, no person shall engage, or be permitted

to engage, in the business of solid waste collection until found by

the Board to be qualified by experience, training or education

and holds a Certificate issued by the Board, Jd. §6. The Board, on

its own initiative, or upon complaint by the DEP, shall revoke,

suspend or grant a temporary continuance for up to one year of

the Certificate issued to any person engaged in the solid waste

collection business upon a finding that such person has violated

any provision of the Act or any rule, regulation or administrative

order promulgated thereunder, has violated any provision of any

laws related to pollution of the air, water or lands of the State, has

refused or failed tocomply with any lawful order of the Board, or

has had its registration revoked by the DEP, /d. §9.

42a

Appendix B

The Board was also given specific authority pursuant to the

Act to promulgate rules, regulations and administrative orders

pertaining to the regulation of rates and the public utility aspects

of the solid waste collection and disposal industries, Jd. In

addition, the Board has the authority to set just and reasonable

rates for solid waste utilities pursuant to the Act, Jd. §7, as well

as pursuant to its general regulatory powers over public utilities,

Id. §2-21.

Any person who violates any provision of the Act or any

rule, regulation or administrative order adopted or issued

thereunder, including an interdistrict waste-flow order issued in

conjunction with the DEP, or under any applicable provision of

Title 48, shall be liable for a penalty of not more than $10,000 for

a first offense, not more than $25,000 for a second offense, and

not more than $50,000 fora third and every subsequent offense.

Each day during which the violation continues constitutes an

additional and separate and distinct offense. Jd. §12(b).

The Board has the implied authority pursuant to the Act to

exclude individuals from the solid waste business. Matter of

Intercounty Refuse Serv.,222 Super 258 (App. Div. 1988), cert

gr., 111 N.J.618 (1988) (Intercounty). Matter of Scioscia, 216

N.J. Super 644 (App. Div. 1987), cert den. 107 N.J. 652 (1987)

(Scioscia). This authority exists without the necessity of the

promulgation of a prior written regulation to that effect,

Intercounty, supra, Scioscia, supra. In determining whether to

revoke an existing Certificate, the Board is not restricted to

considering whether the entity in question has violated the Act or

implementing regulations but may also consider whether any

manager, officer, director or other principal has been guilty of

such a violation, Scioscia, supra. In practical terms, there is no

distinction between the denial of a Certificate and the exclusion

43a

Appendix B

of a principal from the business. /bid. Depending upon the

violations implicated, the imposition of an absolute prohibition

against an individual's involvement in the solid waste business

for an indefinite period is not an excessive sanction, Intercounty,

supra, Scioscia, supra.

Action by the Board revoking a collector's Certificate,

debarring the collector as well as its principals from engaging in

the solid waste business, and the imposition of substantial

monetary penalties because of the violation of emergency waste-

flow orders, as well as tariff rates, has specifically been upheld

by ourcourts, In addition, a calculation of penalties by the Board

based upon the treatment of each truckload hauled in violation of

waste-flow orders as a separate violation, rather than as one

ongoing offense, pursuant to N.J.S.A. 48:13A-12(b), is proper.

Matter of Fiorillo Bros. of New Jersey, 242N.J. Super 667 (App.

Div. 1990) (Fiorillo).

Itis clear, and I CONCLUDE, that Jersey Carting violated

the June 12, 1987 waste-flow redirection order pertaining to

Union County referenced in Finding of Fact No. 4 hereinabove

by picking up waste at Hayward Pools’ premises in Elizabeth and

disposing of such waste at the SWTR Transfer Station in

Newark; that Jersey Carting violated the December 29, 1987

redirection order pertaining to Union County referenced in

Finding of Fact No. 11 hereinabove on February 24, 1988 by

picking up a roll-off container of solid waste at Hayward Pools’

premises located in Elizabeth and disposing of such waste at Hub

in Newark; that Jersey Carting violated the December 29, 1987

waste flow redirection order pertaining to Union County

referenced in Finding of Fact No. 11 hereinabove a total of 28

times in January 1988 by picking up 28 containers of solid waste

at Hayward Pools’ premises in Elizabeth and not disposing of

44a

Appendix B

such waste at the AMS Transfer Station; that Jersey Carting

violated the December 29, 1987 emergency waste-flow

redirection order pertaining to Morris County referenced in

Finding of Fact No. 15 hereinabove at least 57 times between

January 2 and March 21,1988 by providing solid waste

collection service to at least 57 customers in Morris County

during that period and not disposing of such waste at the MCTSs;

that Jersey Carting violated the order referenced in Finding of

Fact No. 15 hereinabove by picking up rear-end containers at

Paramedical’s premises in Pinebrook on February 8, 1988 and

not disposing of such waste at the MCTSs; that Jersey Carting

violated the order referenced in Finding of Fact No. 15

hereinabove by picking up a 30 yard roll off container at UPS’

premises in Parsippany from January 1988 until February 9,

1988 and not disposing of the waste therein at the MCTSs; that

Jersey Carting violated the July 24, 1987 waste-flow order

regarding Union County referenced in Finding of Fact No. 25

hereinabove on December 23,1987 by disposing of waste

originating in Springfield at the BCUA Kingsland Landfill; that

Jersey Carting violated the December 29, 1987 waste-flow order

pertaining to Union County referenced in Finding of Fact No. 11

on four occasions by collecting solid waste at the premises of

Steak & Ale in Clark, the Holiday Inn in Springfield, Federal

Pacific in Hillside, and Testrite/Palmer in Hillside and disposing

of such waste at the SWTR transfer station in Newark on March

2, 1988; and that Jersey Carting violated the December 29, 1987

waste-flow order pertaining to Union County referenced in

Finding of Fact No. 11 during the period January 2, 1988 to

March 24, 1988 by providing solid waste collection services to

at least eight customers in Union County as referenced in

Finding of Fact No. 31 hereinabove, and not disposing of such

waste at the AMS transfer Station.

45a

Appendix B

As noted hereinabove, the Board is empowered to regulate

the rates of solid waste collectors through appropriate rules,

regulations and orders, N.J.S.A.48:13A-4. lalsoCONCLUDE

that Jersey Carting violated the expedited rate relief orders

issued by the Board, as referenced in Findings of Fact Nos. 36,

40, 41, 42 and 43, by not utilizing the transfer stations upon

which the rates approved therein were based and that Jersey

Carting violated the orders referenced in Findings of Fact Nos.

46 through 50 hereinabove by not including the type of service,

frequency of service, rate applied, number and size of

containers, and total quantity of waste on the invoices referenced

in Findings of Fact Nos. 51 and 52 hereinabove.

I am persuaded by the Staff’s arguments for the debarment

of A. Moriano and M. Moriano, the revocation of Jersey

Carting’s Certificate, and the imposition of monetary penalties

pursuant to the Board’s statutory authority, as generally

calculated by the Staff. The violations committed by Jersey

Carting were of a serious nature and continued for long periods

of time. There are no mitigating circumstances. Jersey Carting,

in essence, engaged in a flagrant disregard of waste-flow

directives and failure to comply with Board directives to provide

certain information on customer bills. Each occasion of

disposing of waste at other than the facility to which Jersey

Carting was directed is, as noted in Fiorillo, a separate and

distinct violation. The same reasoning is applicable to each

invoice which lacked the requisite information. The importance

of waste-flow orders to the integrity of the Board’s and the DEP’s

management of solid waste within the State of New Jersey

cannot be overstated. As noted by the court in Fiorillo:

... it is evident that a significant and

legitimate public purpose was served by the

46a

Appendix B

emergency waste flow orders. These orders

are a part of a comprehensive effort to deal

with New Jersey's garbage crisis. They

permit the coherent planning for the State’s

interim, as well as permanent, trash disposal

needs and provide for dependable disposal of

waste. These orders inhibit illegal dumping

which establishes the economy of the solid

waste facility and creates a health hazard.

Additionally, these orders enable the

counties to prepare for resource recovery and

are acritical component of the State’s efforts

to insure continued waste disposal. It is

uncontroverted that the safe and efficient

disposal of the State’s waste serves a

“significant legitimate” public purpose and

the means chosen to implement that purpose

are appropriate and reasonable. Fiorillo at

682.

As the Staff argues, although the failure to properly itemize

customers’ bills might not on its face appear to be a significant

violation, such failure undermines the Board's ability to exercise

its regulatory control over solid waste collectors. The lack of the

required information generally, and in this case in particular,

negatively impacts upon the Board’s ability to determine

whether a utility’s rates and charges are in accordance with its

approved tariff. Solid waste utilities are required by regulation

to file tariffs showing the territories served, the standard terms

and conditions and the rate schedules for various types of service

and contracts, N.J.A.C. 14:3-10.10. A utility’s approved tariff

has the force of law; a utility must charge the rate set forth

therein. Essex Cty Welfare Bd. v. N.J. Bell Tel. Co.,126N.J.Super

47a

Appendix B

417 (App. Div. 1974). The failure of Jersey Carting to provide the

required information on customer invoices, as well as to bill for

services provided pursuant to its filed tariff, are significant

violations.

A. Moriano and M. Moriano were, as found hereinabove,

principals of Jersey Carting active in all important aspects of its

operations during the time period in question. Debarment of

these individuals from participation in the solid waste industry,

in light of the flagrant disregard of Board directives by Jersey

Carting, is warranted. As the Staff argues, it has demonstrated

that they lack the requisite qualifications to engage in the solid

waste business in accordance with the requirements governing

that industry.

Similarly, the Staff has demonstrated by a preponderance of

the credible evidence that Jersey Carting’s Certificate should be

revoked and that monetary penalties should be imposed pursuant

to the Board's statutory authority. The Staff argues, in the latter

respect, that respondents should be ordered to provide the

precise number of loads collected from its Morris and Union

County customers during January to March 1988 that were

diverted from designated disposal facilities in order to allow the

calculation of a precise penalty based on loads diverted.

Alternatively, the Staff advances a specific calculation of

penalties based on the evidence in the record.

In light of the fact that respondents failed to provide he

information referenced, although ordered to do so by the Board

in both Orders to Show Causes issued within the context of this

proceeding, as well as early discovery orders of this judge, I am

persuaded that no additional time should be extended in

endeavors, although perhaps warranted, to obtain this data. The

48a

Appendix B

debarment of A. Moriano and M. Moriano, the revocation of

Jersey Carting’s Certificate, and the imposition of monetary

penalties are sufficient to protect the integrity of the Board’s

regulation of the solid waste industry. The revocation of Jersey

Carting’s Certificate and the debarment of M. Moriano and A.

Moriano from future participation in the State’s solid waste

industry are not excessive in light of the violations committed,

See, Fiorillo at 687-688.

The Staff proposes a total penalty of $198,000. The Staff’s

methodology for calculating penalties (Initial Brief, pp. 63-64

and Supplemental Brief) is, and Iso CONCLUDE, consistent

with N.J.S.A. 48:13A-12. This methodology is ADOPTED

herein. The Staff essentially calculates a $1,000 penalty foreach

separate violation, except for $5,000 penalties applicable to each

order wherein Jersey Carting was directed to provide

information on customer billings. It is noted that the treatment of

each individual invoice as a separate violation would result in a

substantially higher penalty calculation.

I CONCLUDE that penalties totaling $109,000 should be

imposed upon Jersey Carting for the violations determined

hereinabove. This figure is calculated as follows: $1,000

pertaining to the disposal of Haywood Pools’ waste on December

30, 1987 at the SWTR Transfer Station; $1,000, to the disposal

of Haywood Pools’ waste on February 24, 1988 at HUB;

$28,000, to the disposal of Haywood Pools’ waste during

January 1988; $57,000, to the collection of Morris County

customers’ waste between January and March 1988; $1,000, to

the collection of Paramedics’ waste on February 8, 1988; $1,000,

to the collection of UPS’ waste in January and February 1988;

$1,000, to the collection of the Boston Tea Party’s waste on

49a

Appendix B

December 23, 1987; $4,000, to the collection of waste at the

premises of the Steak and Ale, Holiday Inn, Federal Pacific, and

Testrite/Palmer on March 2, 1988; $8,000, to the collection of

waste of eight Union County customers between January and

March 1988; $2,000, to the violation of rate orders generally

pertaining to Union County ($1,000) and Morris County

($1,000) customers; and $5,000, to the violation of five orders

issued by the Board requiring that certain specified information

be included on Jersey Carting’s billings.

ORDERS

Based upon the above findings and conclusions, it is hereby,

ORDERED that A. Moriano and M. Moriano be debarred from

owning, operating, managing or controlling or having any

interest in any solid waste business organization within the State

of New Jersey and from serving as an officer, director, trustee,

member of any executive board or similar governing body, or as

a principal, manager, partner, employee, agent or in any other

capacity thereof, and from owning any outstanding capital stock

of, or maintaining directly or indirectly, any financial interest of

any nature in any solid waste business, corporation or

association doing business in the State of New Jersey; that Jersey

Carting’s Certificate, No. SW 330, be and is hereby revoked, and

that monetary penalties totaling $109,000 be imposed upon

Jersey Carting. Neither party addressed in their brief a payment

schedule for any imposed penalty. After considering the matter,

it is hereby ORDERED that Jersey Carting pay the penalty

imposed herein within 30 days of the effective date of this

decision.

I hereby FILE my initial decision with the BOARD OF

REGULATORY COMMISSIONERS for consideration.

50a

Appendix B

This recommended decision may be adopted, modified or

rejected by the BOARD OF REGULATORY

COMMISSIONERS, which by law is authorized to make a final

decision in this matter. If the Board of Public Utilities does not

adopt, modify or reject this decision within forty-five (45) days

and unless such time limit is otherwise extended, this

recommended decision shall become a final decision in

accordance with N.J.S.A. 52:14B-10.

Within thirteen (13) days from the date on which this

recommended decision was mailed to the parties, any party may

file written exceptions with the SECRETARY OF THE

BOARD OF REGULATORY COMMISSIONERS, 401 East

State Street, 7th Floor, West Wing, CN 402, Trenton, New

Jersey 08625-0402, marked “Attention: Exceptions.” Acopy of

any exceptions must be sent to the judge and to the other parties.

July 7, 1992 s/ Diana C. Sukovich

Date DIANAC. SUKOVICH, ALJ

Receipt Acknowledged:

[illegible] s/ illegible

Date BOARD OF REGULATORY

COMMISSIONERS

Mailed to Parties:

Jan 14 1992 s/ illegible

Date OFFICE OF ADMINISTRATIVE LAW

le/ms

Sla

Appendix B

APPENDIX

LIST OF WITNESSES

For Petitioner:

Edward Kozak

Frank Capone

Edward Castellano

Jeffrey Callahan

Shrader McCabe

Angela Moriano

Mario Moriano

Scott Shrader

LIST OF EXHIBITS IN EVIDENCE

P-1 Board Order 8311-1032

P-2(A) Investigative Report (Shrader )

P-2(B) Investigator Report (Castellano)

P-2(C) _Investigatory Reports (Kozak)

P-3 Certification Tina Graham (McCabe)

P-4 UCUA Tracking Report

P-S(A) Jersey Carting Customer List (Union County)

P-5(B) Jersey Carting Customer List (Morris County)

P-7 Certification J. D’ Angelo UCUA

P-8 Notice of Prosecution 8-88

P-9 Historical Tipping Report

P-10-(1) Board Order #SR87070550

P-10-(2) Board Order #SE87070709

P-10-(3) Board Order #SE87111308

P-10-(4) Board Order #SE87111370

P-10-(5) Board Order #SR87121430

52a

Appendix B

P-11-(1) Board Order #SR8504-372

P-11-(2) Board Order #SR86111288

P-11-(3) Board Order #SR870706647

P-11-(4) Board Order #SR87111276

P-11-(5) Board Order #SR87121430

P-12-(2) Waste Flow Directive {Morris 12/29/87)

P-12-(3) BPU/DEP Waste Flow Order (Union 8/1/87)

P-12-(4) BPU/DEP Waste Flow Order (Union 12/29/87)

P-12-(5) BPU/DEP Waste Flow Order (Union 8/5/88)

P-14(A) Jersey Carting Customer Bills (Union)

P-15 Responses to Staff Interrogatories

P-17 Certification J. Bocchion (BCUA)

P-18 Photo at Rajotti Construction

P-19 Photo at Rajotti Construction

P-20 Photo at Rajotti Construction

P-25 Photo at Hayward Pools

P-26 Photo at Hubb Recycling

P-27 Photo at Hayward Pools

P-28 Photo at Hayward Pools

P-29 Photo at Hayward Pools

P-30 Jersey Carting Tariff

P-31 Investigator Report 4/24/90

P-32 Contract AMS & UCUA 12/29/87

P-33 Photo Palmer Video

P-34 Photo Paramedical Home Support

P-34(A) Jersey Carting Expedited Petition (Union)

P-34(B) Jersey Carting Expedited Petition (Morris)

P-35 Photo Paramedical Support

P-35(M) Jersey Carting Certification of Mario Moriano

(Morris)

P-35(U) Jersey Carting Certification of Mario Moriano

(Union)

P-36 Photo UPS Parsippany

P-37

P-38

P-39

P-40

P-41

53a

Appendix B

Photo UPS Parsippany

MCTS Scale Ticket

Expedited Rate Procedures

Spread Sheet Jersey Carting

Tax Report-Jersey Carting

54a

APPENDIX C — FINAL DECISION OF THE

COMMISSIONER OF THE NEW JERSEY DEPARTMENT

OF ENVIRONMENTAL PROTECTION DATED

DECEMBER 11, 1992

BOARD OF REGULATORY COMMISSIONERS

Petitioner,

v.

JERSEY CARTING INC., ANGELA MORIANO, AND MARIO

MORIANO,

Respondents.

Environmental Protection and Energy

OAL Docket Nos. ESW 4898-88 and ES W 3363-88

(consolidated)

Agency Docket Nos. $S88030449 and SS88050695

Initial Decision: January 7, 1992

Final Agency Decision: December 11, 1992

SUMMARY

Environmental Law — Waste Disposal

Solid waste collector censured and penalized for repeatedly

violating site specific waste-flow orders

The Department of Environmental Protection and Energy

affirmed the Board of Public Utilities’ order of violations and

penalties, holding there was ample evidence to support the

55a

Appendix C

findings that a licensed solid waste collector violated its waste-

flow orders by failing numerous times to dispose of waste in

accordance with its authorized specific disposal sites and by not

charging certain customers the rate mandated by its approved

tariff.

In 1988, the Board of Public Utilities issued an order to show

cause to respondent Jersey Carting, Inc., alleging that it violated

its solid waste collector certificate by violating the Department

of Environmental Protection’s (DEP) and petitioner Board of

Regulatory Commissioners’ (Board) waste-flow orders. The

Board alleged that Jersey Carting was not using its disposal

station site as directed.

An administrative law judge (ALJ) was persuaded by the

evidence presented by the Board’s staff, except as to certain

specific tariff violations. The ALJ found the staff’s evidence

focused upon alleged tariff violations concerning specific

billings and several quarterly billings, which the ALJ found too

ambiguous to be actionable. The ALJ criticized Jersey Carting

for its principals’ failure to testify. The ALJ determined that

Jersey Carting violated its waste-flow redirection order many

times by picking up waste at various sites and disposing the

waste at inappropriate transfer stations. The ALJ also found that

Jersey Carting violated the expedited rate relief orders issued by

the Board by not including the type of service, frequency of

service, rate applied, number and size of containers, and total

quantity of waste on the invoices. The ALJ concluded that

penalties totalling $109,000 should be imposed. The ALJ also

concluded that Jersey Carting’s principals should be debarred

from owning, operating, managing, or controlling or having any

interest in any solid waste business organization within the state.

The Commissioner of the Department of Environmental

56a

Appendix C

Protection and Energy adopted the ALJ’s recommendation with

modification by adding in the tariff that the ALJ removed,

holding that the undisputed record amply supported the ALJ’S

findings of specific violations and sanctions recommended. The

record also supported the finding of tariff violations because

Jersey Carting violated the Board’s expedited rate relief orders

by not charging certain customers the rate mandated by its

approved tariff. The Commissioner ordered the payment of an

additional $77,000 in penalties for Jersey Carting’s failure to

dispose of waste in accordance with the site-specific disposal

sites established by its tariff.

Pages 57 through 67 of the Final Decision of

the Commissioner of the New Jersey

Department of Environmental Protection

dated December 11, 1992, are a verbatim

repetition of the Initial Decision of the Office

of Administrative Law, which appears at

pages 2a-53a of this appendix. As such, the

Initial Decision of the Office of

Administrative Law has been omitted from

the Final Decision of the Commissioner of

the New Jersey Department of

Environmental Protection as it appears in this

appendix.

57a

Appendix C

FINALAGENCY DECISION

WEINER, Commissioner:

This matter is before me' for Final Decision following the

Initial Decision by Administrative Law Judge Diana Sukovich

(ALJ). Init, after finding that Jersey Carting had violated waste

flow directives and interim rete relief orders, the ALJ

recommended that the certificate of public convenience and

necessity held by Jersey Carting, Inc. to operate as a solid waste

collector be revoked, that Angela Moriano and Mario Moriano

be debarred from the solid waste industry and that penalties in the

amount of $109,000 be assessed. After carefully considering the

record before the ALJ as well as the exceptions filed to the Initial

Decision, and after having given the parties ample opportunity

to try to achieve an amicable settlement of the matter, I am

satisfied that because of the seriousness of the violations found

to have been committed by Jersey Carting, Inc., and its

principals, Angela and Mario Moriano, that the undisputed

record amply supports the findings of specific violations and

sanctions recommended by the ALJ. I am also convinced for the

reasons set forth more fully below that the record supports the

finding of tariff violations such that the ALJ’s decision in that

regard will be modified. In view of my general acceptance of the

ALJ's decision, this order will only address that area where I am

modifying the ALJ's decision and issues raised since the

issuance of the Initial Decision.

Turning to the exceptions, Jersey Carting presented a

number of unpersuasive arguments. Jersey Carting first argues

that the ALJ erred by striking certain porions of the post-hearing

brief because these matters went to extenuation and mitigation.

Indeed, this theme of inability to present mitigation, particularly

58a

Appendix C

in relation to dumping at Hub,’ runs through most of Jersey

Carting’s exceptions. Jersey Carting begins with two orders in

connection with the Hub case entered by the bankruptcy court,

two letters of solicitation from Hub as well as settlement papers

in connection with another action brought against Jersey

Canting by the Union County Utilities Authority. Jersey Carting

had unsuccessfully moved for the admission of these materials

at trial and then simply appended them to its post-hearing brief

under the stated misapprehension that the hearing was narrowly

limited to a determination of liability. Staff successfully moved

to suppress these materials.

Clearly, both orders to show cause made it clear that the

issue of sanction was before the factfinder such that any evidence

in mitigation should have been presented at trial. As the ALJ

noted, the material consisted of “documents which are not

marked for identification during seven days of evidentiary

hearings conducted in this matter nor provided during

discovery.”

Jersey Carting’s basis for failure to offer mitigation is

obscure. No pleading or anything else in the record provides a

plausible basis for Jersey Carting’s theory of bifurcation.

Nonetheless, particularly in view of the seriousness of the

sanctions recommended, | HEREBY ORDER that the Hub

bankruptcy orders be judicially noticed for consideration here.’

For the same reason I further have determined to consider the

mitigating arguments presented by Jersey Carting.

Turning to these arguments in more detail, judicial notice is

appropriately taken of the Hub orders. Having included these

orders in the record, | find, however, that regardless of the orders,

and indeed of any solicitation, the applicable waste flow orders

—_aneeaipiiaciaaaiiiibign tat tiniiie aemas ea te

59a

Appendix C

unequivocally directed waste to the lawful county transfer

stations in compliance with solid waste franchises. These orders

and franchises are the linchpin of the State’s approach to

comprehensive solid waste planning.

Examining the other mitigating factors, all of these

arguments may be rejected. The argument that the company was

financially straitened by the change in disposal site falls before

the opportunity to obtain expedited rates, an opportunity

actually taken by Jersey Carting. Moreover, the strong public

policy reasons, such as long-range solid waste planning, behind

the waste flow orders more than offset the “difficulties” of being

in the solid waste business. Further, lawlessness by some haulers

has a severely deleterious effect on all law-abiding haulers and

their customers. Indeed, self-help disposal decisions harm

lawful haulers unable to compete with costs rendered artificially

low by unlawful dumping.

Continuing with Jersey Carting’s arguments in mitigation,

I expressly reject the contention that the Company's return to

lawful disposal sites should have an ameliorative effect on the

sanctions. Having opted to violate the law, Jersey Carting should

not now be given credit for finally acting as it should have from

the outset. Moreover, a more cynical explanation for the change

in heart might be found in the success of other enforcement

actions for violations of solid waste laws and regulations. See,

¢.g., Mater of Fiorillo Bros. of N.J.,242 NJ. Super. 667 (App.

Div. 1990), certif. den. 122 N_J. 363 (1990).

Turning to its other exceptions, Jersey Carting argues

against the ALJ's having taken an adverse inference against the

Morianos for their refusal to answer any questions based on the

Fifth Amendment's protection against self-incrimination. In

60a

Appendix C

rejecting this exception, I would note particularly that Jersey

Carting asserts this argument without the support of a single case

and without even attempting to distinguish the long line of cases

urged by the Staff which support this practice. Mahne v. Mahne,

66 N.J. 53 (1978). Thus, itis plain that this exception be rejected

in toto.‘

Jersey Carting’s arguments as to the principals are similarly

weak. Although not recited in the Initial Decision, Staff asked,

and the Morianos declined to answer, numerous questions

regarding their role in the company. Thus, these inferences stand,

as observed above, in addition tothe Morianos’ undisputedand ~

continuing role as officers and directors of the company. E.g.,

Matter of Scioscia, 216 N.J. Super,644 (App. Div. 1988). | would

also point to Francis v. United Jersey Bank 87 N.J. 15 (1981),

where the New Jersey Supreme Court held even the most inactive

directors to a high degree of culpability for corporate

misconduct.

Next, Jersey Carting excepts to various factfinding. Again,

it bears emphasis that the record shows essentially no disputes as

to the facts. Based on such facts, the ALJ made reasonable and

appropriate findings. Moreover, a single event may represent

more than one violation, ¢.g., violation of waste and tariff. The

exceptions themselves generally demonstrate Jersey Carting's

rather loose approach to tariffs. While it is black-letter law that

a tariff is a contract which must be followed strictly, e.g., Essex

Cty. Welfare Bd. v. N.J. Bell Tel. Co., 126 N.J. Super. 417, 421

(App. Div. 1974), Jersey Carting's argument appears to be that a

tariff is some sort of guidance to a ceiling price such that only

overcharges are violative of the law. This is plainly incorrect.

Finally, on the issue of mitigation, Jersey Carting’s view

6la

Appendix C

that it should be given yet more time to comply with promulgated

regulations and no less than two Board orders is firmly rejected.

Turning to Staff's exceptions, as noted at the outset, I am

persuaded that the record amply demonstrates tariff violations

for which penalties must be assessed. The ALJ did determine that

Jersey Carting did violate the expedited rate relief orders of the

then Board of Public Utilities.* The undisputed testimony of Pau!

Katz, the Board’s Chief Auditor, was that because Jersey

Carting’s expedited filings and resulting tariff rates for its Union

and Morris customers were predicated on the cost of a specific

disposal site, the waste collected by Jersey Carting in the

affected counties would have to be deposited at the disposal site

upon which the tariff rate was premised (Transcript. Sept. 27.

1990, at 18). Katz repeatedly testified that a hauler would violate

the Board-approved tariff if the hauler failed to deposit the waste

at the disposal site on which their tariff was premised. /d. at 18

to 22.

More specifically, Katz examined the appropriateness of

Jersey Carting’s tariff with regard to two customers: UPS and

Hayward Pools. Jd at 82. He then specifically determined,

without a scintilla of contradiction, that in both instances, Jersey

Carting did not charge these customers the rate mandated by the

Company's approved tariff (P-30 in Evid.). Regarding the rates

charged by Jersey Carting to its other 60 Morris County

customers and 10 Union customers reflected in Jersey Carting's

bills (P-14(a) and P-14(b) in Evid.), a more precise analysis of

the degree of deviation from tariff, beyond the failure to use the

authorized disposal site, could not be conducted because Jersey

Carting’s own billing structure failed to contain required billing

disclosures as to the specific service, including the frequency

and volume of service and rate schedule applied. /d. at 84, 127.

62a

Appendix C

Accordingly, having found these facts, and in that the record

includes 77 bills for customers for which Jersey Carting failed to

utilize the correct disposal site, I find a tariff violations therefor

and assess an additional $77,000 in penalties.

Accordingly, I HEREBY ACCEPT the Initial Decision

except insofar as the ALJ failed to find that Jersey Carting had

violated its tariff by failing to dispose of waste in accordance

with the site-specific disposal sites established by its tariff such

that I HEREBY MODIFY the Initial Decision to reflect the

findings above and HEREBY ORDER the payment of an

additional $77,000 in penalties.

Before addressing transition of service for Jersey Carting’s

customers, I would note that this decision and particularly the

sanctions of revocation of certificate of public convenience and

necessity and debarment of the principals make clear the

determination of the State of New Jersey to foster the long-

standing legislative goal of lawful competition in the solid waste

industry. That competition must occur within the framework of

solid waste franchises and solid waste flow regulations and

orders established by the Solid Waste Utility Control Act,

N.J.S.A. 48:13A-1 et seq., and the Solid Waste Management Act,

N.J.S.A. 13:1E-1 et seq. In view of upcoming consideration of

waste flow orders by the New Jersey Supreme Court in /n the

Matter of Certain Amendments to the Adopted and Approved

Solid Waste Management Pian of the Hudson County Solid Waste

Management District, 258 N.J. Super. 290 (App. Div. 1992),

certif. granted, NJ. (1992), I would emphasize the

significant financial and public policy considerations

underlying solid waste flow orders and compliance therewith by

haulers. This hauler opted on its own to ignore its lawful tariff

and waste flow orders as a business decision. This decision

plainly has a negative impact on the various counties and utilities

63a

Appendix C

authorities which have shouldered their solid waste

responsibilities by planning, financing, building and operating

solid waste facilities for which a constant flow must be

maintained to insure economic viability. Just as critically, this

type of decision gives a tariff-violator hauler an undue advantage

over tariff-observer haulers struggling to survive in a

challenging industry and indeed induces the latter to similarly

reject compliance with solid waste regulations.

In order to ensure the orderly provision of alternate service

for Jersey Carting, Inc. customers. 1 HEREBY DIRECT Staff to

convene a meeting of all solid waste haulers authorized to

provide service in the service territories in question. Staff shall

also provide Jersey Carting, Inc. customers with a list of those

collectors authorized to provide service. In the event any

customer shall be unable to obtain alternate service, a collector

may be directed to provide service pursuant to N.J.S.A. 48:2-23

and N.J.S.A. 48:13A-7.18.

Furthermore, Jersey Carting, Inc., Angela Moriano, Mario

Moriano or any employee of Jersey Carting, Inc. shall not

arrange for or take any action with regard to the provision of

service to Jersey Carting Inc.'s former customers by either

recommending possibly alternate collectors to customers, by

contracting with other collectors for the sale of customer

accounts, by providing a list of customers to another solid waste

collector or by any other means including but not limited to the

above.

Furthermore, Jersey Carting, Inc., Angela Moriano, Mario

Moriano are hereby prohibited from selling, assigning,

transferring, leasing, mortgaging, merging, loaning,

hypothecating or otherwise disposing of or encumbering Jersey

Carting, Inc. property, or any part thereof, without the written

64a

Appendix C

prior approval of the Department. This order shall apply to all

assets of every nature held or utilized by respondents in

connection with any solid waste business as definedin N.J.S.A.

48:13A-3 and shall specifically include, but shall not be limited

to, the following assets: customer accounts and routes;

commercial, municipal and residential solid waste collection

contracts; all tangible property, such as trucks and containers,

utilized in the collection and disposal of solid waste.

Itis further ORDERED that to ensure continued compliance

with this Order, Jersey Carting, Inc., Angela Moriano and Mario

Moriano shall submit to the Department for its review seven days

from the effective date of revocation, a sworn affidavit stating

that they have ceased all utility operations in the State of New

Jersey and specifying all actions taken, in compliance with the

within order. The affidavits shall also state that respondents have

not arranged for the provision of service to former Jersey

Carting, Inc. customers by other collectors, by either

recommending possible alternate collectors to its customers, by

contracting with other collectors for the sale of customer

accounts, by providing a list of customers to another solid waste

collector or by any other means including but not limited to the

above.

The certificate of public convenience and necessity issued

to Jersey Carting, Inc. is HEREBY ORDERED REVOKED ten

(10) days following the customer distribution meeting to be

convened by Staff. The debarment of Angela Moriano and Mario

Moriano from the solid waste industry is effective on the same

date as the effective date of the revocation. The penalty of

$186,000 is due thirty (30) days from the date of this Order.

SUBSEQUENT HISTORY

affirmed, No. A-1803-92 (App. Div. August 31, 1994)

OL ———

65a

Appendix C

1. Pursuant to Reorganization Plan No. 002 (1991), which became

effective on August 19, 1991, all responsibility and authority formerly vested in

the Board for the economic regulation of solid waste utilities has been

transferred to the newly-reorganized Department of Environmental Protection

and Energy. Accordingly, the within matter is appropriately before the

Department for review and decision. Occasional references to the Board reflect

this history.

2. Hub refers to the notorious unlicensed solid waste facility in Newark,

New Jersey. The solid waste on site caught fire in August 1989 leading to the

temporary closure of adjacent Route 78. This order does not attempt to recreate

the complete procedural history related to Hub.

3. While I have determined to take judicial notice of these orders,

inclusion of the letters of solicitation and the settlement is inappropriate as

argued in Staff’ s exceptions.

4. I would note that since the issuance of the Initial Decision, the criminal

proceeding which was the presumed basis for the assertion of the Fifth

Amendment has been reversed, State of New Jersey v. Jersey Carting Inc., 259

N.J. Super. 130 __ (App. Div. 1992), pet. for certif. pending. This does not

change the appropriateness of taking an adverse inference from silence under

the case law referenced above. Without commenting on the correctness of the

decision. I would note that the ALJ did, in fact, refuse to consider the conviction

in making her recommendation. Finally, the basis of the reversal of conviction

in no way disturbs the findings of the ALJ.

5. In reviewing this Initial Decision, I note that Staff did not seek voiding

of the expedited tariffs and refunds to customers as it might have done pursuant

to I/M/O A. Fiore & Sons. Order Adopcing Initial Decision in Part and

Modifying Initial Decision in Part, BPU Dkt. No. SR8809034. Nov. 28, 1989.

While the Initial Decision could be so modified to direct those actions, both in

view of the other sanctions herein imposed and the effective mootness of such

action, I will not do so.

1 would also note that I have adopted the penalty calculation methodology

urged by Staff below and essentially adopted by the ALJ. These penalties reflect

the then statutory penalty amounts which have subsequently been increased by

the Legislature.

66a

APPENDIX D — OPINION OF THE SUPERIOR COURT

OF NEW JERSEY APPELLATE DIVISION

DATED AUGUST 31, 1994

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE COMMITTEE ON OPINIONS

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

A-1803-92T2

BOARD OF REGULATORY COMMISSIONERS,

Petitioner-Respondent,

Vv.

JERSEY CARTING, INC., ANGELA MORIANO and MARIO

MORIANO,

Respondents-Appellants.

Argued April 18, 1994 — Decided Aug 31

1994

Before Juiges Muir, Jr., Thomas and Levy.

On appea from the Final Decision and Order

of the Commissioner of the New Jersey

Department of Environmental Protection

and Eneryy.

John T. Ambrosio argued the cause for

appellans (Gabriel M. Ambrosio, attorney

and of coinsel.)

67a

Appendix D

D’Andre Workman argued the cause for

respondent (Deborah T. Poritz, Attorney

General, attorney; Andrea M. Silkowitz,

Assistant Attorney General, of counsel).

PER CURIAM

Appellants Jersey Carting, Inc., Angela Moriano and Mario

Moriano, appeal from the final decision of the Commissioner of

the Department of Environmental Protection and Energy

(DEPE) which revoked the Certificate of Public Convenience

and Necessity (required to engage in solid waste collection and

disposal in New Jersey) of Jersey Carting, permanently barred its

principals, Angela and Mario Moriano, from further

participation in the solid waste industry in New Jersey and fined

Jersey Carting $186,000.

On appeal, appellants raise the following issues:

POINT ONE

IN VIEW OF INTER-RELATED

CRIMINAL PROSECUTION, IT WAS

FUNDAMENTALLY UNFAIR TO

REQUIRE THE APPELLANTS TO

PARTICIPATE IN THE ADMINISTRA-

TIVE ENFORCEMENT PROCEEDING;

THESE PROCEEDINGS SHOULD BE

REMANDED TO THE AGENCY TO

ALLOW APPELLANTS TO PRESENT

THEIR DEFENSE.

68a

Appendix D

POINT TWO

THE RECORD BELOW DOES NOT

SUPPORT THE FACTUAL FINDINGS

AND CONCLUSIONS OF LAW OF THE

COMMISSIONER.

A. THERE IS INSUFFICIENT

EVIDENCE ON THE RECORD TO

SUPPORT THE HAYWARD WASTE

FLOW AND TARIFF VIOLATIONS.

B. THERE IS NO EVIDENCE ON THE

RECORD TO SUPPORT THE 77

TARIFF VIOLATIONS FOUND BY

THE COMMISSIONER.

POINT THREE

THE SETTLEMENT WITH THE UCUA

PRECLUDES THE DEPARTMENT FROM

ASSESSING PENALTIES FOR ANY

UNION COUNTY WASTE FLOW

VIOLATIONS WHICH OCCURRED

BETWEEN JANUARY 2, 1988 AND

FEBRUARY 24, 1988.

POINT FOUR

THE EMERGENCY REDIRECTION

ORDERS WERE ADOPTED IN VIOLA-

TION OF THE ADMINISTRATIVE

PROCEDURES ACT; THEREFORE, THEY

ARE UNENFORCEABLE.

69a

Appendix D

POINT FIVE

THE SANCTIONS AND PENALTIES

IMPOSED BY THE COMMISSIONER

WERE ARBITRARY, UNREASONABLE

AND CAPRICIOUS; THEREFORE, THEY

SHOULD BE SET ASIDE.

A.

UNDER THE TOTALITY OF THE CIR-

CUMSTANCES, THE REVOCATION

OF JERSEY CARTING’S LICENSE

AND THE DISBARMENT OF

ANGELA AND MARIO MORIANO

WAS ARBITRARY, CAPRICIOUS

AND UNREASONABLE’ AND,

THEREFORE, SHOULD BE SET

ASIDE.

THE COMMISSIONER IMPRO-

PERLY ASSESSED SEPARATE

PENALTIES FOR THE UNION

COUNTY TRANSFER STATION

VIOLATIONS, THE MORRIS

COUNTY TRANSFER STATION

VIOLATIONS AND THE TARIFF

VIOLATIONS.

POINT SIX

THE EMERGENCY WASTE FLOW

ORDERS DIRECTING ALL SOLID

WASTE TO AUTHORIZED TRANSFER

STATIONS VIOLATE THE COMMERCE

70a

Appendix D

CLAUSE OF THE UNITED STATES

CONSTITUTION. (Raised for the first time

on this appeal.)

On March 24, 1988, the Board of Public Utilities (Board)!

issued an order to show cause against appellants alleging

violations of the Solid Waste Utility Control Act, N.J.S.A.

48:13A-1 to -13; the Solid Waste Management Act, N.J.S.A.

13: 1E-1 to-207; an order for termination of landfill operations;

two emergency redirection of solid waste flow orders, and rules

promulgated pursuant to the Acts. On June 15, 1988, the Board

issued a second order to show cause against appellants alleging

additional violations of waste flow directives, the two Acts, the

rules promulgated pursuant to the Acts, and certain tariffs.

These orders to show cause charged Jersey Carting with

illegally picking up and disposing of 102 containers of solid

waste and committing 84 tariff violations ‘or which the Board

sought civil penalties; sanctions; revocation or suspension of

Jersey Carting’s Certificate of Public Convenience and

Necessity; debarment of Angela and Mario Moriano from the

solid waste industry in New Jersey; compliance with solid waste

flow rules and redirection orders; collection of revised rates

from Jersey Carting’s customers; dismissal of petitions for

expedited rate relief; and a declaration that Jersey Carting’s

authorized interim rate relief be declared null and void. The

1. In 1991, the Board of Public Utilities was redesignated as the Board of

Regulatory Commissioners, and at the same time, the Department of

Environmental Protection became the Department of Environmental Protection

and Energy. See N.J.S.A. 13:1D-1 (sets forth in full Reorganization Plan No.

002-1991). The designation “Board” will be used in this opinion without

distinction to refer to both the Board of Public Utilities and the Board of

Regulatory Commissioners.

Tla

Appendix D

orders to show cause were consolidated but prior to the start of

hearings, appellants moved for a stay of the administrative

hearings, pending resolution of acriminal case involving Jersey

Carting. Their motions to stay were denied and hearings on the

alleged violations began.

By way of background, on June 12, 1987, the Board and the

DEPE issued a joint order which directed that waste generated

in Union County be sent to a landfill located in Middlesex

County. On July 24, 1987, the Board and the DEPE issued a joint

emergency waste flow order, effective August 1, 1987, directing

solid waste generated in Springfield Township, Union county, to

the Automated Modular Systems, Inc. Transfer Station (AMS) in

Linden, Union County.

On December 29, 1987, the Board and DEPE issued two

more emergency waste flow orders which became effective

January 2, 1988. The first order directed that certain types of

solid waste generated in Elizabeth and most other Union County

municipalities be taken to AMS. The second order directed that

Morris County solid waste be taken to two transfer stations

operated by the Morris County Transfer Station, Inc. (MCTS) in

Mount Olive Township and Parsippany-Troy Hills Township.

Simultaneously with these orders, the DEPE authorized

expedited rate-relief proceedings for solid waste collectors

affected by the redirection of solid waste in these two counties.

In the last week of December 1987, Jersey Carting prepared

and mailed advance bills to all of its customers for the first

quarter of 1988 based upon the old dumping regulations. When

the new dumping orders were issued, Jersey Carting filed

petitions for expedited rate relief and was granted interim rates

for its collection service in Union and Morris Counties effective

72a

Appendix D

January 1, 1988. In both of its expedited rate petitions, Jersey

Carting asserted that the redirection of waste flow in Union and

Morris Counties would significantly impact upon its operating

costs and that without arate increase, Jersey Carting might not be

able to comply with the waste flow orders. Jersey Carting

therefore requested an interim increase to reflect the increased

operating costs of dumping in those counties effective January

1, 1988.

Thereafter, a thorough and extensive investigation of Jersey

Carting’s actual waste disposal revealed widespread and

continued disregard of the amended dumping orders. During the

early part of 1988, it was determined that Jersey Carting

continually dumped waste at Hub Recycling, Inc. (HUB) in

Newark as well as other unauthorized locations.

At the hearings, the Board presented eight witnesses and

introduced into evidence fifty-two exhibits, investigative

reports and photographs, together with other records and

supporting documents. One of the witnesses, Frank Capone,

Vice President and Chief of Operations at AMS, and Jeffrey

Callahan, Deputy Director at the Union County Utility Authority

(UCUA), testified that AMS and UCUA records showed that

appellants failed to tip (dump) a single load of solid waste at

AMS from January 2, 1988, until March 25, 1988. Another

witness, Edward Kozak, also testified that Jersey Carting was

not tipping at AMS. Tina McCabe, staff accountant at MCTS,

testified that Jersey Carting did not dump at the MCTS facility

until March 22, 1988. At the hearings, Angela and Mario

Moriano did not testify and exercised their Fifth Amendment

rights refusing to respond to any questions posed by the Board.

They also did not present any witnesses on their behalf.

73a

Appendix D

The administrative law judge ultimately concluded: “It is

reasonable to infer that A. Moriano and M. Moriano instructed

Jersey Carting waste collection vehicles to by-pass the Morris

County and Union County designated transfer stations and that

the Morianos determined to by-pass these transfer stations

during the periods in question.” This conclusion was then

accepted by the Commissioner.

We find there was substantial credible and competent

evidence to support the Commissioner’s decision for what

amounted to the deliberate disregard to tariff directives and

emergency waste flow orders by appellants. We also find no

merit to the legal issues raised by appe!lants and affirm. In doing

so, we respond to each of appellants’ issues in the order raised.

ISSUE I

Appellants assert that in view of an interrelated criminal

prosecution, it was fundamentally unfair to require them to

participate in the administrative proceedings. They say a stay

should have been granted and request a remands to present their

defense. In doing so, appellants rely on the test set forth in State

y. Kobrin Sec., Inc., 111 N.J. 307 (1988), which establishes the

following criteria for determining whether to grant a stay when

there are concurrent civil and criminal charges. In such an

instance, the trial judge must determine: (1) whether in the civil

proceeding the government seeks only a monetary penalty

against the defendant; (2) whether the two actions are nearly

iden:ical in scope; and (3) whether the relief sought in the civil

proceeding is intended to prevent continued injury to the public.

Id. at 313-15.

In Kobrin, the Court addressed whether the State may

74a

Appendix D

proceed with a civil fraud action against several securities

dealers while some of them were subject to pending criminal

charges arising out of the same transaction. /d. at310. The Court

held that if the dealers could be found unqualified to serve in the

securities profession, the licensure proceedings against them

should not be stayed. /d. at 315. The Court emphasized that the

State had no burden to demonstrate its right to proceed with the

civil case. Jd. at 316. Instead, the burden was placed on the

dealers to show how their rights outweighed the public interest.

Ibid. In addition, the Court noted that particular civil

proceedings have been stayed only when their continuation

would expose a litigant to undue risk of losing the civil case or

initiation of criminal prosecution. /d. at 314.

In the proceeding at issue here, the Board did not only seek

a monetary penalty. The Board sought civil penalties; sanctions;

revocation of Jersey Carting’s Certificate of Public Convenience

and Necessity; debarment of Angela and Mario Moriano from

the solid waste industry, and other relief. in addition, the scope

of the two actions was not even close. The breadth of the criminal

indictment was very limited in comparison to the range of

violations alleged by the agency. The criminal indictment

against Jersey Carting simply charged it with third-degree theft

by deception, in violation of N.J.S.A. 2C:2-6, N.J.S.A. 1C:2-7

and N.J.S.A. 2C:20-4, for creating and reinforcing the false

impression that solid waste removed from premises operated by

United Parcel Service and Hayward Pool Products, Inc. by

Jersey Carting, Inc. was uwansported to and dumped at county

transfer stations authorized by the New Jersey Department of

Environmental Protection” when it was instead dumped at Hub

Recycling. While appellants concede that the underlying

administrative proceeding was broader than the concurrent

criminal action, they argue that Kobrin’s third factor (danger to

75a

Appendix D

the public) is missing. This argument is based on the fact that the

Board never sought emergent injunctive relief, which appellants

contend evidences the lack of on-going danger to the public.

Appellants had the burden to demonstrate how their rights

outweighed the public interest. Kobrin, supra, 111 N.J. at316. It

is well settled that New Jersey faces a solid waste disposal crisis

caused by the shortage of adequate solid waste disposal facilities

and a significant and legitimate public purpose is served by

waste flow orders. A.A. Mastrangelo, Inc. v. Environmental

Protec. Dep't, 90 N.J. 666, 670 (1982); In re Fiorillo Bros. of

N.J., 242 N.J. Super. 667, 682 (App. Div.), certif. denied, 122

N.J. 363 (1990). The public interest in enforcing a

comprehensive effort to deal with this crisis is strong and is

weakened by illegal dumping which destabilizes the economy

and creates a health hazard. bid. Since the public interest in

preventing illegal dumping was substantial and the scope of the

criminal case limited in comparison to the civil proceeding, we

hold that it was not fundamentally unfair to require appellants to

participate in the administrative proceedings.

ISSUE Il

Appellants argue that there was insufficient evidence to

support the findings and conclusions of the Commissioner as to

the waste flow and tariff violations. In doing so, “[a)ppellants

maintain that because the alleged tariff violations were

predicated on advance quarterly billings which were issued by

Jersey Carting prior to the effective date and signing of the

interim rate relief orders, the Department failed to offer evidence

of a violation.” According to appellants, “[t}his contractual

relationship [with its Union and Morris County customers]

prohibited Jersey Carting from applying the interim rates until

76a

Appendix D

after the advance billing period had expired.” That being the

case, appellants submit that “the Commissioner’s finding that

Jersey Carting violated its tariff on 77 occasions must be set

aside.”

Not so. “It is well established that a tariff required by law to

be filed . . . is not a mere contract; it is the law. As such, it is

binding upon subscribers whether the customer knows of the

regulation ornot.” Essex Cty. Welfare Bd. v. New Jersey Bell Tel.

Co., 126 N.J. Super. 417, 421-22 (App. Div. 1974) (citations

omitted). Accord In re Application of Saddle River, 71 N.J. 14,29

(1976); Valentine v. Eastern Airlines, Inc., 144 N.J. Super. 305,

308-09 (App. Div. 1976); New Jersey Bell Tel. Co. v. West

Orange, 188 N.J. Super. 455, 459 (App. Div. 1982), certif.

denied, 93 N.J. 283 (1983); Wave Electronics v. UPS, 254 N.J.

Super. 201, 203 (Law Div. 1991). After the tariff is filed, it is

“applicable equally to all customers.” Saddle River, supra, 71

N.J. at29 (emphasis supplied); see also New Jersey Bell, supra,

188 N.J. Super. at 458. Those customers who are already under

contract for a lower rate cannot complain because “ ‘[e]very

contract is made subject to the condition that its fulfillment may

be frustrated by a proper exercise of the police power.’ ” South

Hamilton Assoc. v. Mayor and Coun. of Morristown, 99 N.J. 437,

444-45 (1985) (quoting Albigese v. City of Jersey City, 127 N.J.

Super. 101, 113 (Law Div. 1974) (citing Veix v. Seneca B. & L.

Ass’n, 126 N.J.L. 314, 320 (E. & A. 1941); American Budget

Corp. v. Furman, 67 N.J. Super. 134, 144 (Ch. Div. 1961), aff'd,

36 N.J. 129 (1961)). Accord In re Fiorillo Bros. of N.J., supra,

242 N.J. Super. at 680-82 (which explains that substantial

impairment of existing contracts by the Board under N.J.A.C.

7:26-6.5 does not violate the contract clause of the federal

Constitution, U.S. Const., art. I, § 10, cl. 1, because such actions

are valid exercises of the inherent police power of the State to

77a

Appendix D

safeguard the vital interests of its residents as to waste disposal);

Vasquez v. Glassboro Svc. Ass'n, 83 N.J. 86, 98 (1980) (“No

contract can be sustained if it is inconsistent with the public

interest or detrimental to the common good”). Cf. 64Am. Jur. 2d

Public Utilities § 81 (1972) (“private contracts with. . . utilities

are regarded as entered into subject to reserved authority in the

state acting directly or through a public service commission or

municipal corporation, under the police power or express statute

or constitutional provision, to modify the contract rate in the

interest of public welfare”); Ibid. (“where aconsumer contracts

for a supply of gas from one not then acting as a public utility, but

under such conditions that it is evident that public service is

contemplated, the contract becomes subject to public regulation,

and the rate may be increased without constitutionally impairing

the obligation of the contract”).

While Jersey Carting was under contract for lower rates to

its Union and Morris County customers prior to the effective date

of the interim tariff rate orders, Jersey Carting applied for and

received interim rates, effective January 1, 1988, shortly after

the mailing of its advance quarterly bills. In support of that

application, Mario Moriano submitted a certification for rate

relief containing the following statements:

[I}n consideration of my authorization by the

BPU to expeditiously impose upon my

customers an increase which reflects an

appropriate amount of increased disposal

expenses as computed through these

procedures, rather than proceeding through

the regular rate case process, I agree on

behalf of my company to all the conditions

set forth in these new procedures

78a

Appendix D

(incorporated herein by reference) adopted

for use in my case, including, but not limited

to, the provisions calling for the automatic

refund with interest, of rates found to be too

high ... and all provisions regarding the

consequences of my company’s charging

rates incorrectly, or my company’s non-

compliance with any time requirements or

disposal site requirements provided for in the

procedures, regardless of costs. (Emphasis

added.) y

Jersey Carting did not charge its Union and Morris County

customers the interim tariff rates, effective January 1, 1988, for

waste disposal in those counties. The Commissioner’s finding of

seventy-seven violations was, therefore, well supported ard

reasonable upon the proofs, Zielenski v. Board of Review, Div. of

Emp. Sec., 85 N.J. Super. 46, 54 (App. Div. 1964), and is

affirmed.

ISSUE Ill

Appellants contend, based on the doctrine of res judicata,

that their settlement with the Union County Utilities Authority

(UCUA) precludes the DEPE from assessing penalties for any

Union County waste flow violations occurring between January

2, 1988 and February 24, 1988. We disagree.

On April 26, 1988, the UCUA brought an enforcement

action in the Chancery Division against Jersey Carting and other

haulers, alleging that since the commencement of operations by

AMS, the haulers had failed to obey a waste flow order requiring

them to haul refuse to the AMS facility. The UCUA alleged that

79a

Appendix D

from January 2 through February 24, 1988, Jersey Carting

removed solid waste from a Union County site, Hayward Pool,

and delivered it to dumping sites other than AMS. The UCUA

sought judgment against Jersey Carting, enjoining it from

transporting solid waste in Union County in violation of the

applicable emergency waste flow order and compelling it to

honor UCUA’s franchise and to transport solid waste to AMS.

The UCUA requested compensatory and punitive damages,

costs of suit, counsel fees, and interest.

On March 19, 1990, Jersey Carting and the UCUA entered

into a settlement of that action in which Jersey Carting agreed to

pay the UCUA$15,690.88. The settlement provided that it “shall

be deemed as full and complete satisfaction of all claims actual

and potential, in the above-cited case between the UCUA and

Jersey Carting arising out of any and all activity of Jersey Carting

in Union County within the jurisdiction of the UCUA.”

In order for res judicata to apply, three basic elements must

be met: (1) there must be a valid final judgment on the merits in

the prior action; (2) the parties in the later action must be

identical to or in privy with those in the prior action; and (3) the

claim in the later action must grow out of the same transaction or

occurrence as the claim in the earlier one. Watkins v. Resorts Int'l

Hotel & Casino, Inc., 124 N.J. 398, 412 (1991). Two of these

elements are not in place here; i.e., final judgment on the merits

and identity of parties. Accordingly, the doctrine does not apply.

ISSUE IV

Appellants next argue that certain emergency redirection

orders adopted by the Board were done so in violation of the

Administrative Procedure Act (APA), N.J.S.A. 52:14B-1 to-21,

80a

Appendix D

and are unenforceable. On December 29, 1987, pursuant to

N.J.A.C. 7:26-6.7, there were issued Emergency Redirection

Orders which, effective January 2, 1988, redirected solid waste

flows originating in Union and Morris Counties. The issue of

amended orders made in violation of the APA was addressed in Jn

re Certain Amendments to the Adopted and Approved Solid

Waste Management Plan of the Hudson Ct. Solid Waste

Management Dist., 258 N.J. Super. 290, 297-98 (App. Div.

1992), aff’din part, rev'din part, 133 N.J.206(1993). There, the

Supreme Court held that while a contested new waste flow order

was not adopted in a procedurally proper mamaer, it was adopted

based upon statutory authority. 133 N.J. at 222-23. The Court,

therefore, concluded that the order was not ultra vires, since any

procedural flaws or deficiencies could be remedied by the

agencies. /bid. The Court also held that the adoption of curative

regulatory measures to validate the plan amendment and

redirection order could be applied retroactively. /d. ai 223. Inthe

present case, the Board contends that the contested orders were

notultra vires and may be remedied. It further represents that “in

conformance with the Court’s holding, the Commissioner has

already validated all outstanding ‘emergency’ redirection orders

in conformance with the APA. See N.J.A.C. 7:26-6.5

(codification of redirection waste flow regulations.)”

It appears the regulation here, N.J.A.C. 7:26-6.5, was

amended effective March 1, 1993, to update and simplify waste

flow requirements for all counties. 25 N.J.R. 991 (March 1,

1993). This codification was in response to the opinion in Jn re

Certain Amendments, 25 N.J.R. at 992. The agency explained

that these rules, in place of the emergency redirection orders

used under the former rules, would have retroactive application

so there would be no violation of the APA’s emergency rule-

making procedures. /bid. Although this action precedes the final

8la

Appendix D

disposition in Jn re Certain Amendments, itis in accord with the

Supreme Court’s holding that the Commissioner could decide to

adopt corrective measures to validate redirection orders. Jn re

Certain Amendments, supra, 133 N.J. at 225. Thus, the

redirection orders here are enforceable.

ISSUE V

Next appellants maintain that the sanctions and penalties

imposed by the Commissioner were arbitrary, unreasonable and

capricious, and should be set aside. We disagree.

An administrative agency has broad discretion in

determining the sanctions to be imposed for violations of the

legislation it is charged with administering. Jn re Scioscia, 216

N.J. Super. 644, 660 (App. Div.), certif. denied, 107 N.J. 652

(1987). Sanctions will be set aside on appeal only if found to be

arbitrary, capricious, or unreasonable. /bid. In In re Polk License

Revocation, 90 N.J. 550 (1982), the Supreme Court said:

In exercising this authority to alter a

sanction imposed by an administrative

agency, the Court can do so only when

necessary to bring the agency’s action into

conformity with its delegated authority. The

Court has no power to act independently as an

administrative tribunal or to substitute its

judgment for that of the agency. It can

interpose its views only where it is satisfied

that the agency has mistakenly exercised its

discretion or misperceived its own statutory

authority.

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Appendix D

It has been stated that the test in reviewing

administrative sanctions is “whether such

punishment is ‘so disproportionate to the

offense, in the light of all the circumstances,

as to be shocking to one’s sense of fairness.’ ”

Pell v. Board of Education, Etc., 34 N.Y. 2d

222,313 N.E.2d 321, 356 N.Y.S.2d 833, 841

(1974) (citation omitted). This test was

specifically applied in the context of a

proceeding to revoke a medical license in

DiMarsico v. Ambach, 74 App. Div. 2d 960,

425 N.Y.S.2d 894, 895 (1980), in which the

court said that unless the penalty shocked the

conscience, it was “neither empowered nor

inclined to substitute [its] judgment” for that

of the Board.

[/d. at 578.]

Neither the license revocation nor penalties imposed shock

our conscience. Further, both the forfeiture and assessment of

fines are based upon statutory-authority. See N.J.S.A. 48:13A-9

for license revocation and N.J.S.A. 48:13A-12(b) for monetary

penalties.

ISSUE VI

Lastly, appellants claim that the emergency waste flow

orders directing all solid waste to authorized transfer stations

violate the Commerce Clause of the United States Constitution.

U.S. Const. art. 1, § 8, cl. 3. In making this argument, appellants

rely chiefly on the recent United States Supreme Court case of

C &A Carbone, Inc. v. Clarkstown, 511 U.S. __, 114 S. Ct. 1677,

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Appendix D

128 L. Ed. 2d 399 (1994). We note, however, that this

constitutional issue was not raised below. This defect is fatal to

appellants’ argument. See Deerfield Estates, Inc. v. East

Brunswick Tp., 60 N.J. 115, 120 (1972) (“the general rule of

appellate practice, that ordinarily no issue will be considered by

the reviewing court unless raised and argued below, is true of a

constitution

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