COLUMBIA FRUIT FARMS, INC. VS. DEPARTMENT OF COMMUNITY AFFAIRS (DEPARTMENT OF COMMUNITY AFFAIRS) ( 2021 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-3155-19
COLUMBIA FRUIT FARMS, INC.,
PLEASANTDALE FARMS, INC.,
GLOSSY FRUIT FARMS, INC.,
MILL ROCK FARMS, LLC, JOE
DONIO FARMS, ATLANTIC APPROVED FOR PUBLICATION
BLUEBERRY, INC., WHALEN December 13, 2021
FARMS, LLC, WINSLOW APPELLATE DIVISION
JUNCTION PRODUCE, LLC,
STONEY CREEK BLUEBERRIES,
LLC, PASTORE ORCHARDS,
INC., BLUE BIRD FARM, LLC,
VARIETY FARMS, INC.,
CARMEN MERLINO T/A
OAKCREST FARMS, COUNTRY
BLUES, LLC., DACOSTA
BLUEBERRY FARMS, INC.,
RICHARDS AVENUE
HAMMONTON NJ LLC,
CONSALO FAMILY FARMS,
LLC, VACCARELLA FARMS
LLC, J. BERENATO FARMS,
LLC, CASSADAY FARMS, LLC,
BIG BUCK FARMS, LLC, BERRY
BROTHERS, CLARK FARMS,
LLC, SF SYSTEMS, LLC,
SHEPPARD FARMS, INC.,
KATONA FARMS, INC., SAND
FARMS, INC., MAUGERI
FARMS, LLC, STECHER FARMS,
LLC,
Plaintiffs-Appellants,
v.
DEPARTMENT OF COMMUNITY
AFFAIRS and LT. GOVERNOR
SHEILA Y. OLIVER, in her official
capacity as Commissioner of the
Department of Community Affairs,
Defendants-Respondents.
_______________________________
Argued December 2, 2021 – Decided December 13, 2021
Before Judges Alvarez, Haas, and Mawla.
On appeal from the New Jersey Department of
Community Affairs.
Corinne McCann Trainor argued the cause for
appellants (Fox Rothschild, LLP, attorneys; Michael J.
Malinsky, Christopher C. Fallon, and Corinne
McCann Trainor, of counsel and on the briefs; Allison
L. Hollows, on the briefs).
Dominic L. Giova, Deputy Attorney General, argued
the cause for respondents (Andrew J. Bruck, Acting
Attorney General, attorney; Sookie Bae, Assistant
Attorney General, of counsel; Susan M. Scott, Deputy
Attorney General, and Dominic L. Giova, on the
brief).
The opinion of the court was delivered by
HAAS, J.A.D.
Appellants are a group of twenty-nine, unaffiliated New Jersey farms
that plant, grow, and harvest a variety of crops each year. Appellants maintain
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"commercial farm buildings" 1 on their respective properties. During the
growing season, appellants employ and house a number of workers in these
structures. Despite this obvious change of use from structures intended to
store agricultural products and equipment to residences for human beings,
appellants refused to implement the additional fire safety measures required
for residences by the New Jersey Uniform Construction Code (UCC), N.J.S.A.
52:27D-119 to -141.
In May 2018, the Director of the Division of Codes and Standards
(Director) in the Department of Community Affairs (DCA) sent a letter to
local construction officials reminding them of their responsibility to issue
notices of violation when a farm failed to add fire suppression systems to the
buildings in which their workers lived as required by the UCC. In March
2019, the Director sent a similar letter to the construction officials and again
stated that the UCC regulations should be enforced. As a result, the offi cials
cited eighteen of the twenty-nine appellants for violating DCA's fire safety
regulations between 2018 and 2019. None of these farms challenged the
notices of violation.
1
A "commercial farm building" is defined as "any building located on a
commercial farm which produces not less than $2,500 worth of agricultural or
horticultural products annually which building's main use or intended use is
related to the production of agricultural or horticultural products produced on
that farm." N.J.A.C. 5:23-3.2(d)(1).
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On February 4, 2020, the Director sent a third letter to the construction
officials again instructing them to enforce the change-of-use regulation when a
farm converted a commercial farm building to residential living quarters for
workers. The Director also set forth the steps the officials should require the
affected farms to take in order to come into compliance with the UCC.
The Director forwarded a similar letter to the New Jersey Secretary of
Agriculture (Secretary) outlining the UCC requirements for residential
structures used to house farm workers, with particular emphasis on "the need
for the installation of an automatic sprinkler system." In turn, the Secretary
distributed that letter to an unknown number of farms. Appellants thereafter
filed a notice of appeal alleging that the Director's February 4, 2020 inter -
agency letter to the Secretary constituted a "new agency rule" that DCA did
not adopt in accordance with the rulemaking procedures required by the
Administrative Procedure Act (APA), N.J.S.A. 52:14B-1 to -31.
However, the Director's February 4, 2020 letter merely conveyed
information to the Secretary about the local construction officials'
responsibility to enforce the UCC's existing change-of-use regulation and
recommended actions the officials should require non-compliant farms to take
to avoid future violations. The letter also "lacked the basic earmarks of a
rulemaking, an administrative quasi-legislative exercise[,] [and] it bore few of
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the qualities that characterize a rulemaking activity subject to the procedural
requirements of the APA." N.J. Educ. Ass'n v. Librera, 366 N.J. Super. 9, 16
(App. Div. 2004) (citing Metromedia, Inc. v. Dir., Div. of Tax'n, 97 N.J. 313,
331-32 (1984)). Because the letter was not a new agency rule, we dismiss
appellants' appeal.
I.
We begin by reviewing the statutes and regulations the Director relied
on in instructing the local construction officials to ensure that farms complied
with fire safety requirements if they housed workers in structures formerly
used as barns and storage facilities. The Uniform Construction Code Act (the
Act) "provides for promulgation by the DCA Commissioner of a uniform
construction code to establish unitary up-to-date construction standards . . . ."
DKM Residential Props. Corp. v. Twp. of Montgomery, 182 N.J. 296, 303
(2005) (citing N.J.S.A. 52:27D-122(b), -122.1(a), and -123.1). Pursuant to the
Act, the DCA Commissioner adopted the UCC, which regulates all buildings
and structures. N.J.A.C. 5:23-2.2(a).
The UCC classifies buildings into a number of "use groups" and applies
different safety requirements upon these structures depending on the category
in which they are classified. See N.J.A.C. 5:23-1.4 (defining a "use group" as
"the classification of an occupancy" of any given structure). Commercial farm
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buildings fall under the "S-2 use group" classification, which covers barns and
storage facilities "used for the storage of agricultural or horticultural products,
farm machinery and farm equipment, or farm materials . . . ." N.J.A.C. 5:23 -
3.2(d)(2).
Buildings used as residential structures do not fall under the S-2 use
group and, instead, are included in "the R-2 use group." N.J.A.C. 5:23-
3.2(d)(9)(i). A building is considered as having a residential use when it
contains sleeping units or more than two dwelling units where occupants are
primarily permanent. International Building Code (IBC) §310.3 (2018);
N.J.A.C. 5:23-3.14(a) (adopting IBC for New Jersey). Residential structures
are subject to heightened safety requirements and standards because they
present higher safety risks compared to buildings in the S-2 use group. See
N.J.A.C. 5:23-6.31(g) (Table G). Among other things, owners of buildings in
this category must install automatic sprinkler systems, smoke alarms, and other
safety equipment. See N.J.A.C. 5:23-6.26; N.J.A.C. 5:23-6.31(g).
II.
The issue presented in this case concerns appellants' decision each year
to change the use of their commercial farm buildings, barns, and storage
facilities to residential housing for farm workers. Under the UCC, it is
"unlawful to change the use [group] of any structure or portion thereof without
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the prior application for and issuance of a certificate of occupancy . . . ."
N.J.A.C. 5:23-2.6(b). The certificate of occupancy is conditioned upon
compliance with the UCC's rehabilitation subcode. N.J.A.C. 5:23-6.1 to -6.33;
N.J.A.C. 5:23-2.6(b)(1).
When a building's use is changed, the owner must bring the building into
compliance with N.J.A.C. 5:23-6.31(a)(1),2 which establishes specific
requirements for each potential use of a structure. For example, if a building's
use is changed from commercial to residential, the additional safety
requirements for this use group require that automatic sprinkler systems be
installed pursuant to this change-of-use regulation. See N.J.A.C. 5:23-
6.31(g)(1).
Local construction officials enforce the UCC in municipalities across the
State, and DCA oversees that enforcement. N.J.S.A. 52:27D-124(k). See
generally N.J.A.C. 5:23-4.3. These officials may issue a notice of violation if
they find the owner's use of a building violates the UCC. The cited individual
or entity may contest the violation by filing a written application with the
Construction Board of Appeals (Board) within fifteen days of receiving the
2
N.J.A.C. 5:23-6.31(a)(1), also known as the "change-of-use regulation,"
states in part that "[w]hen the use of a building is changed, then the building
must be brought into compliance with the requirements of this section."
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notice. N.J.A.C 5:23A-2.1(a)(1). Once the Board renders a decision, the party
may seek further relief in the Law Division. N.J.A.C. 5:23A-2.3(d).
DCA is authorized "[t]o monitor the compliance of local enforcing
agencies . . . [and] to order corrective action as may be necessary where a local
enforcing agency is found to be failing to carry out its responsibilities under
th[e] [A]ct . . . ." N.J.S.A. 52:27D-124(k). We have previously observed "that
the Legislature clearly intended that this statute be interpreted so as to enable
the DCA to take effective action to assure proper enforcement of the [UCC],
for which it is ultimately responsible, when a local enforcing agency does not
carry out its responsibilities under the Act." In re Dep't of Cmty. Affs. Order
of Mar. 15, 1989 Regarding Burlington Cty. Recycling Facility, 232 N.J.
Super. 136, 142 (App. Div. 1989).
Sometime prior to May 2018, the Director learned "that in many cases[,]
farm buildings that were intended for other purposes, usually storage, [were]
being used to house farm labor[ers]." Because these structures were
commercial farm buildings classified in the S-2 use group, the Director
determined that the UCC's change-in-use regulation required the farm owners
to upgrade the buildings' safety features before using them as residential units
for their workers.
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On May 11, 2018, the Director wrote a letter to local construction
officials advising that "[a] notice of violation must be issued where there has
been an illegal change of use group." The Director's letter suggested that the
officials "obtain compliance in stages" and set forth the requirements the farms
needed to meet in order to comply with the UCC. When some of the officials
did not issue notices of violation, the Director sent a second letter on March 7,
2019, reminding them of the need to do so.
As a result of the letters, the officials cited eighteen of the twenty -nine
appellants for violations of the UCC's change-of-use regulation because the
farms had converted barns and other storage buildings to housing for farm
workers. None of the cited appellants contested these notices and, therefore,
the violations are deemed to be established.
On February 4, 2020, the Director sent a third letter to the construction
officials and again stated that under the UCC, "[e]xisting pole barns, sheds, or
similar structures that are being used as temporary farm labor housing must
meet" the automatic sprinkler requirement. The Director explained:
By way of background, it is necessary to understand
the UCC requirements for an existing building being
converted, or that has already been converted, to
temporary farm labor housing. When a structure built
for the storage of farm equipment and/or supplies is to
be used as living quarters, it is considered a change of
use per the UCC at N.J.A.C. 5:23-6.31. It is also a
change of use when a single-family home is utilized to
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house more than five roomers or lodgers who are
unrelated. All such buildings are classified as
Residential Group R-2 structures, and must meet all of
the requirements of the UCC rehabilitation subcode,
N.J.A.C. 5:23-6.1 [to -6.33.]
The Director instructed the officials to initiate steps to ensure
compliance with the change-of-use provisions before the start of the 2020
growing season. He recommended the officials and the farm owners agree to a
compliance schedule for the installation of the required safety equipment.
On February 4, 2020, the Director sent a virtually identical letter to the
Secretary "outlin[ing] the [UCC] requirements" applicable to changes of use
from farm product and equipment storage structures to farm worker housing
units. The next day, the Secretary forwarded the Director's letter, together
with a letter of his own, essentially repeating the information set forth in the
Director's correspondence to a number of "growers." 3
On April 10, 2020, appellants filed a notice of appeal to this court. They
argue that the Director's February 4, 2020 letter to the Secretary "was improper
rulemaking and invalid under the [APA]."
III.
Before turning to the merits of appellants' claim, we first address DCA's
argument that the appeal should be dismissed because appellants are actually
3
The Secretary did not further identify the letter's recipients.
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challenging the eighteen notices of violation the local construction officials
issued to them in 2018 and 2019. DCA asserts appellants failed to exhaust
their administrative remedies in connection with those notices and, therefore,
their appeal should be dismissed. This argument lacks merit.
In general, "[e]xhaustion of administrative remedies before resort to the
courts is a firmly embedded judicial principle." K. Hovnanian Cos. of N. Cent.
Jersey, Inc. v. N.J. Dep't of Env't Prot., 379 N.J. Super. 1, 8 (App. Div. 2005)
(quoting Garrow v. Elizabeth Gen. Hosp. & Dispensary, 79 N.J. 549, 558-59
(1979)). This rule is "designed to allow administrative bodies to perform their
statutory functions in an orderly manner without preliminary interference from
the courts." Brunetti v. Borough of New Milford, 68 N.J. 576, 588 (1975)
(citing Ward v. Keenan, 3 N.J. 298, 302 (1949)). However, the Supreme Court
has noted "that the preference for exhaustion of administrative remedies is one
'of convenience, not an indispensable pre-condition.'" Abbot v. Burke, 100
N.J. 269, 297 (1985) (quoting Swede v. City of Clifton, 22 N.J. 303, 315
(1956)).
Here, the eighteen cited appellants had an administrative remedy; they
each could have filed a written application for a hearing before the
Construction Board of Appeals (Board) within fifteen days of receiving the
notice of violation. N.J.A.C 5:23A-2.1(a)(1). None of them took advantage of
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this available remedy and the time to do so expired long ago. Thus, the
change-of-use violation set forth in each of the notices has been established
and appellants can no longer challenge them. As a result, these appellants
have no administrative remedies left to exhaust.
The local construction officials did not issue notices of violation to the
remaining appellants and, therefore, they also have no administrative remedies
to exhaust. Accordingly, we reject DCA's contention on this point.
IV.
In their brief, appellants contend the Director's February 4, 2020 letter to
the Secretary was invalid as a matter of law because this inter-agency
correspondence constituted improper rulemaking in violation of the APA. We
disagree.
Our review of an administrative agency's final determination is limited.
In re Adoption of Amends. to N.E., Upper Raritan, Sussex Cnty. & Upper Del.
Water Quality Mgmt. Plans, 435 N.J. Super. 571, 582 (App. Div. 2014) (citing
In re Carter, 191 N.J. 474, 482 (2007)). We "afford[] a 'strong presumption of
reasonableness' to an administrative agency's exercise of its statutorily
delegated responsibilities." Lavezzi v. State, 219 N.J. 163, 171 (2014)
(quoting City of Newark v. Nat. Res. Council, Dep't of Env't Prot., 82 N.J.
530, 539 (1980)). We interfere only if we "conclude that the decision of the
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administrative agency is arbitrary, capricious[,] or unreasonable, or is not
supported by substantial credible evidence in the record as a whole." J.D. v.
N.J. Div. of Developmental Disabilities, 329 N.J. Super. 516, 521 (App. Div.
2000).
Our review is therefore limited to three questions: 1) whether the
decision is consistent with the agency's governing law and policy; 2) whether
the decision is supported by substantial evidence in the record; and 3) whether,
in applying the law to the facts, the agency reached a decision that could be
viewed as reasonable. In re Adoption of Amends., 435 N.J. Super. at 583
(quoting Mazza v. Bd. of Trs., 143 N.J. 22, 25 (1995)). Implicit in the scope
of our review is a fourth question: whether the agency's decision offends the
State or Federal Constitution. George Harms Constr. Co. v. N.J. Tpk. Auth.,
137 N.J. 8, 27 (1994). The burden of proof is on the party challenging the
agency's action. Lavezzi, 219 N.J. at 171.
Additionally, an administrative agency is afforded considerable
discretion in selecting the appropriate manner of fulfilling its statutory
obligations, Nw. Covenant Med. Ctr. v. Fishman, 167 N.J. 123, 137 (2001),
but its "discretion to act formally or informally is not absolute." In re N.J.A.C.
7:1B-1.1 et seq., 431 N.J. Super. 100, 133 (App. Div. 2013) (citing Airwork
Serv. Div. v. Dir., Div. of Tax'n, 97 N.J. 290, 303-04 (1984)). "Agencies
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should act through rulemaking procedures when the action is intended to have
a 'widespread, continuing, and prospective effect,' deals with policy issues,
materially changes existing laws, or when the action will benefit from
rulemaking's flexible fact-finding procedures." In re Provision of Basic
Generation Serv. for Period Beginning June 1, 2008, 205 N.J. 339, 349-50
(2011) (quoting Metromedia, 97 N.J. at 329). Formal rulemaking "allows the
agency to further the policy goals of legislation by developing coherent and
rational codes of conduct 'so those concerned may know in advance all the
rules of the game, so to speak, and may act with reasonable assurance.'" Gen.
Assembly of N.J. v. Byrne, 90 N.J. 376, 385-86 (1982) (quoting Boller
Beverages, Inc. v. Davis, 38 N.J. 138, 152 (1962)).
The APA "provides the necessary starting point for any analysis of an
agency's chosen pathway for action." Provision of Basic Generation Serv., 205
N.J. at 347-48. The APA defines an "administrative rule" as an "agency
statement of general applicability and continuing effect that implements or
interprets law or policy, or describes the organization, procedure or practice
requirements of any agency." N.J.S.A. 52:14B-2. That definition does not
include: "(1) statements concerning the internal management or discipline of
any agency; (2) intra-agency and inter-agency statements; and (3) agency
decisions and findings in contested cases." Ibid.
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Where the agency action satisfies the definition, "its validity requires
compliance with the specific procedures of the APA that control the
promulgation of rules." Airwork Serv., 97 N.J. at 300 (citing Metromedia, 97
N.J. at 334); see also N.J.S.A. 52:14B-4(d) (stating a rule must be adopted in
"substantial compliance" with APA). These procedures require the agency to,
among other things, publish notice of the proposed rule and inform "interested
persons" and "all persons who have made timely requests of the agency for
advance notice of its rule-making proceedings[,]" N.J.S.A. 52:14B-4(a)(1),
"[a]fford all interested persons a reasonable opportunity to submit data, views,
comments, or arguments, orally or in writing[,]" N.J.S.A. 52:14B-4(a)(3), and
"[p]repare for public distribution . . . a report . . . providing the agency's
response to the data, views, comments, and arguments contained in the
submissions." N.J.S.A. 52:14B-4(a)(4).
Whether an agency must undertake formal rulemaking for a
contemplated action depends on the extent to which the action:
(1) is intended to have wide coverage encompassing a
large segment of the regulated or general public,
rather than an individual or a narrow select group; (2)
is intended to be applied generally and uniformly to
all similarly situated persons; (3) is designed to
operate only in future cases, that is, prospectively; (4)
prescribes a legal standard or directive that is not
otherwise expressly provided by or clearly and
obviously inferable from the enabling statutory
authorization; (5) reflects an administrative policy that
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(i) was not previously expressed in any official and
explicit agency determination, adjudication or rule, or
(ii) constitutes a material and significant change from
a clear, past agency position on the identical subject
matter; and (6) reflects a decision on administrative
regulatory policy in the nature of the interpretation of
law or general policy.
[Metromedia, 97 N.J. at 331-32.]
A court's determination whether rulemaking is required under that
standard entails a qualitative evaluation, rather than a quantitative one. State
v. Garthe, 145 N.J. 1, 7 (1996). Not all criteria need be satisfied. In re
Request for Solid Waste Util. Customer Lists, 106 N.J. 508, 518 (1987).
These factors, "either singly or in combination," determine whether the
agency's action amounts to the promulgation of an administrative rule, so long
as they preponderate in favor of the formal rulemaking process. Metromedia,
97 N.J. at 331-32.
Applying the Metromedia factors, we are satisfied the Director's
February 4, 2020 letter outlining the UCC's existing change-of-use regulation
and recommending the corrective actions the construction officials needed to
require the farms to take was not an administrative rule. Beginning with the
first factor, this correspondence was not intended to have wide coverage
encompassing a large segment of the regulated public. The Director sent the
letter to apprise the Secretary of the request he made to the construction
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officials to enforce existing UCC requirements. Because the letter merely
reiterated existing law, it had no impact on the farms. See Librera, 366 N.J.
Super. at 15 (explaining that an agency memorandum outlining a new
requirement implemented by the Legislature did not actually create the impact
the requirement had on the school system).
The second Metromedia factor is met because the permissible
enforcement actions outlined in the letter were intended to apply to all
similarly situated farms. However, the third factor was not met because these
enforcement actions were not intended to apply only in future cases. Indeed,
the Director previously sent similar letters to the construction officials in 2018
and 2019, and these officials had already issued a number of notices of
violation based on the existing UCC requirements.
As noted above, the change-of-use regulation was already a part of the
UCC and, therefore, the Director's letter did not "prescribe[] a legal standard
or directive that [was] not otherwise expressly provided by or clearly and
obviously inferable from the enabling statutory authorization . . . ."
Metromedia, 97 N.J. at 331. The letter did not prescribe the standards the
farms had to implement in order to house their workers because these
requirements were already codified in N.J.A.C. 5:23-6.31(g). Therefore, the
fourth Metromedia factor is not present.
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The fifth factor is also not met. The details contained in the February 4,
2020 letter were previously set forth in the similar letters the Director sent to
the local construction officials in 2018 and 2019. Those officials acted on the
information in these letters by citing farms for violating the change-of-use
regulation by converting their storage barns and sheds into housing for farm
workers. Thus, the February 4 correspondence did not "constitute[] a material
and significant change from a clear, past agency position on the identical
subject matter . . . ." Metromedia, 97 N.J. at 331.
Finally, the Director's letter to the Secretary does not satisfy the sixth
Metromedia factor because the letter does not "reflect[] a decision on
administrative regulatory policy in the nature of the interpretation of law or
general policy." Id. at 331-32. The Director merely pointed to the existing
UCC provisions that required farms wishing to house workers to upgrade their
buildings to satisfy the UCC's fire safety and other requirements before
implementing the new residential use.
The APA specifically states that the term "[a]dministrative rule . . . does
not include . . . intra-agency and inter-agency statements . . . ." N.J.S.A.
52:14B-2. The Director's letter to the Secretary and his other letters to the
local construction facilities were all intra-agency or inter-agency statements of
existing law. The Metromedia factors also do not weigh in the favor of a
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formal rulemaking requirement. Therefore, DCA did not have to comply with
the APA's notice and comment procedures before the Director provided
guidance to the local construction officials. We therefore dismiss appellants'
appeal.
Dismissed.
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