In the Matter of the Challenge of the Town of Secaucus to Readoption of the N.J.A.C. 19:7 ( 2024 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0701-22
IN THE MATTER OF THE
CHALLENGE OF THE TOWN OF
SECAUCUS TO READOPTION OF
N.J.A.C. 19:7.
_______________________________
Argued April 16, 2024 – Decided July 30, 2024
Before Judges Rose, Smith and Perez Friscia.
On appeal from the New Jersey Sports and Exposition
Authority.
Kenneth A. Porro argued the cause for appellant
(Chasean, Lamparello, Mallon & Cappuzzo, PC,
attorneys; Kenneth A. Porro, of counsel and on the
briefs; Catherine R. Salerno, on the briefs).
Jennifer Hradil argued the cause for respondent
(Gibbons PC, attorneys; Frederick W. Alworth, on the
brief).
PER CURIAM
The Town of Secaucus (Secaucus) appeals the New Jersey Sports and
Exposition Authority's (NJSEA) readoption of its regulations on transportation
planning. Secaucus contends the NJSEA's readoption process was procedurally
deficient. Among other arguments, Secaucus further contends that the NJSEA
violated principles of procedural due process. Secaucus also contends the
NJSEA was arbitrary, capricious, and unreasonable when it readopted the
regulations over Secaucus's written objection. We find Secaucus's arguments
without merit, and we affirm.
I.
A.
As background, the NJSEA administers zoning and planning matters
within the Hackensack Meadowlands District (District), an area which
encompasses fourteen municipalities, including Secaucus. 1 Part of the NJSEA's
statutory authority 2 includes assessment and collection of developer fees,
designed to ensure adequate transportation infrastructure for new development
1
The Hackensack Meadowlands District is comprised of the following
municipalities: Carlstadt, East Rutherford, Jersey City, Kearny, Little Ferry,
Lyndhurst, Moonachie, North Arlington, North Bergen, Ridgefield, Rutherford,
Secaucus, South Hackensack, and Teterboro.
2
Hackensack Meadowlands Transportation Planning District Act of 2015,
N.J.S.A. 5:10A-69 to -81 (TPD Act).
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projects in the District. These fees are collected in the Meadowlands
Transportation Planning District (TPD) Fund (Fund).3 The Legislature amended
the TPD Act in 2015 with N.J.S.A. 5:10A-74(k), requiring that "[a]t least 30%
of any development fees collected in accordance with this section shall be used
for transportation related projects within the municipality where the
development for which a particular fee is collected, is located."
The Legislature delegated authority to the NJSEA to adopt and enforce
regulations to effectuate its master plan for physical development of the District.
See N.J.S.A. 5:10A-7(b). In 2022, the NJSEA sought readoption of one of those
regulations, N.J.A.C. 19:7, entitled, District Transportation Plan Rules for the
Hackensack Meadowlands District. Chapter 19:7 "establishe[d] the general
provisions for the assessment and collection of development fees . . . ." N.J.A.C.
19:7-2.1.
One section of the regulations, N.J.A.C. 19:7-6.1, provides for the
NJSEA's administration of transportation development fees collected by the
agency. It states:
(a) Transportation development fees shall be deposited
into the [Fund], an interest-bearing account.
3
N.J.S.A. 5:10A-77.
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1. The Fund shall be under the control of
the NJMC Chief Fiscal Officer.
2. Payments to and expenditures from the
Fund shall follow a first-in/first-out
methodology for transportation
development fees and expenditures.
(b) The Fund shall be appropriated as follows:
1. The Fund shall be used to defray the
costs of plan elements and allowable
administrative costs incurred by the
NJMC and Meadowlands
Transportation Planning Board for
administration, management,
development, update, amendment, and
supplement of the Meadowlands
District Transportation Plan and the
Meadowlands Transportation Planning
District.
2. Fund expenditures shall be subject to
appropriation by the NJMC Board of
Commissioners and certification by the
NJMC Chief Fiscal Officer.
N.J.A.C. 19:7-6.1, along with the rest of N.J.A.C. 19:7, was set to expire
on November 25, 2022. The NJSEA moved to readopt it in July 2022.
B.
We summarize the procedural history. On July 15, 2022, the NJSEA
issued its rulemaking schedule for the readoption of N.J.A.C. 19:7. The
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schedule outlined the lifecycle of the rule adoption process, from preparation of
the readoption notice through publication of the adopted rule in the New Jersey
Register.
On July 21, 2022, the NJSEA submitted a notice of readoption of N.J.A.C.
19:7 to the Governor’s Office, which approved the rule on July 27, 2022. The
NJSEA then notified the Hackensack Meadowlands Municipal Committee
(HMMC)4 of the proposed readoption of N.J.A.C. 19:7.5 The HMMC was
subject to a statutory thirty-day comment period within which to respond to the
notice. See N.J.S.A. 5:10A-9(b).
The HMMC timely responded. On August 29, it voted unanimously to
reject the NJSEA's proposed rule readoption. Executive Director Casella
memorialized the vote in a memo to the NJSEA the next day. In pertinent part,
the memo stated, "[t]he motion to reject was based on the [c]ommittee's belief
that there should be some changes made." Casella provided no other written
4
The membership of the HMMC consists of the mayors of the municipalities
that comprise the Hackensack Meadowlands District. See supra at 2 n. 1.
5
The notice consisted of a two-page letter, dated August 2, 2022, addressed to
the HMCC chairman, Michael Gonnelli, and its executive director, James
Cassella.
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explanation for the HMMC's position, but he requested a meeting between the
NJSEA and a subcommittee of the HMMC membership.
The NJSEA replied to the memo on September 6, 2022. Adam Levy,
NJSEA's Vice President of Legal and Regulatory Affairs, wrote to Gonelli and
Cassella. In the letter, Levy summarized his understanding of HMMC's
objections to readoption. The letter stated in relevant part:
The chief concern of the HMMC members
appears to be the administration of the Transportation
Planning District (TPD) Fund, including the
requirement that at least 30% of the development fees
collected be used for transportation-related projects
within the District municipality where the
development, for which a particular fee was collected,
is located.
The HMMC should be aware that this
requirement regarding the municipal apportionment of
a percentage of the collected funds is statutory, and not
regulatory. The Committee's rejection of the proposed
regulatory readoption will not change the relevant
legislative provision, which can be found within the
[TPD Act] at N.J.S.A. 5:10A-74.
....
Contrary to [counsel's] assertion at the meeting,
the NJSEA has been completely transparent regarding
the accounting and use of TPD Fund. In fact, the
NJSEA regularly supplies the HMMC membership with
updated detailed accounting summaries, which show
how those funds are used for project costs within the
District municipalities. Furthermore, municipal
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representatives have been invited to and regularly
attend both. Meadowlands Transportation Planning
Board meetings and stakeholder group meetings, where
future planning for the Hackensack Meadowlands
Transportation Planning District and use of TPD funds
is highlighted and discussed.
It is important to note that the purpose of this
readoption is only to prevent the regulations from
expiring and no changes are proposed. This readoption
is to ensure that the programs and, projects under the
TPD Act, including the collection of development fees,
can continue to operate.
The record shows the September 22 The NJSEA Board agenda contained
just one land use related item: No. 2022-35, the readoption of its District
Transportation Plan Rules, codified in N.J.A.C. 19:7. The readoption resolution
was listed as the seventh action item for the board, immediately after public
participation.
At the meeting, HMMC's counsel opposed passage of resolution No.
2022-35 and readoption of the rule as presented by the NJSEA Board. HMMC
proposed an amendment to the rule, which stated, "[the NJSEA] shall distribute
the Meadowlands Transportation Funds pursuant to N.J.S.A. 5:10A-74(k)'s 30%
within the municipality statutory formula." The board rejected HMMC's
proposed amendment, unanimously passed Resolution No. 2022-35, and
readopted the rule. The record shows Resolution No. 2022-35 authorized
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NJSEA staff to submit the notice of readoption to the Office of Administrative
Law for publication in the New Jersey Register, a ministerial task which it
completed.
On appeal, Secaucus's primary arguments are that the NJSEA's re-
adoption of N.J.A.C. 19:7 violated due process and frustrated the development
funding scheme set forth in N.J.S.A. 5:10A-74(k). For the first time on appeal,
Secaucus contends N.J.A.C. 19:7 provides no mechanism for municipalities that
are part of the Transportation District to apply for a receive their share of
developer fees collected by the NJSEA and held by the fund.
II.
Appellate courts' standard of review of an agency's rulemaking under the
Administrative Procedure Act, N.J.S.A. 52:14B-131 to -31 (APA) is well
settled. Animal Prot. League of N.J. v. N.J. Fish & Game Council, 477 N.J.
Super. 145, 160 (App. Div. 2023). "Courts afford an agency 'great deference' in
reviewing its 'interpretation of statutes within its scope of authority and its
adoption of rules implementing' the laws for which it is responsible." N.J. Ass'n
of Sch. Adm'rs v. Schundler, 211 N.J. 535, 549 (2012) (quoting N.J. Soc'y for
Prevention of Cruelty to Animals v. N.J. Dep't of Agric., 196 N.J. 366, 385
(2008)). This deference "stems from the recognition that agencies have the
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specialized expertise necessary to enact regulations dealing with technical
matters and are 'particularly well equipped to read and understand the massive
documents and to evaluate the factual and technical issues that . . . rulemaking
would invite.'" Animal Prot. League of N.J., 477 N.J. Super. at 160 (quoting
N.J. State League of Muns. v. Dep't of Cmty. Affs., 158 N.J. 211, 222 (1999)).
Thus, "an agency's regulations are presumed 'valid and reasonable.'" Ibid.(quoting N.J. Soc'y for Prevention of Cruelty to Animals, 196 N.J. at 385).
We "may not, however, abdicate our 'function to assure that agency
rulemaking conforms with basic tenets of due process, and provides standards
to guide both the regulator and the regulated.'" Ibid. (quoting N.J. Soc'y for
Prevention of Cruelty to Animals, 196 N.J. at 386). "In assessing a regulation's
validity, we therefore must consider whether the administrative agency
complied with the APA's provisions 'and due process requirements.'" Ibid.(quoting In re Provision of Basic Generation Serv. for Period Beginning June 1
2008, 205 N.J. 339, 347 (2011)).
An agency's decision should be upheld "unless there is a clear showing
that it is arbitrary, capricious, or unreasonable, or that it lacks fair support in the
record." In re Herrmann, 192 N.J 19, 27-28 (2007). "When an agency violates
the express policy of its enabling act, the agency action may be deemed arbitrary
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and capricious." Caporusso v. N.J. Dep't of Health & Senior Servs., 434 N.J.
Super. 88, 103 (citing Pub. Serv. Elec. & Gas v. N.J. Dep't of Env't Prot.,101
N.J. 95, 103(1985)). Our "[i]ntervention is warranted when the action is
unsupported or unaccompanied by reasonable explanation." Ibid. (citing Pub.
Serv. Elec. & Gas, 101 N.J. at 103).
III.
Secaucus first argues that the NJSEA violated principles of due process
when it readopted N.J.A.C. 19:7. We are not persuaded.
N.J.S.A. 52:14B-5.1(c) of the APA governs the readoption of state agency
rules. It states in pertinent part:
[A]n agency may continue in effect an expiring rule for
a seven-year period by filing a public notice with the
Office of Administrative Law for publication in the
New Jersey Register at least 30 days prior to the
expiration date of the rule. The notice pursuant to this
paragraph shall include the citation for the rule, a
general description of the rule, the specific legal
authority under which the rule is authorized, and the
new expiration date of the rule. The notice pursuant to
this paragraph shall be effective upon filing with the
Office of Administrative Law.
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The record shows that the NJSEA timely sought and received the HMMC's
input on the proposed rule before its public meeting on September 22.6 At the
meeting, the HMMC stated its public opposition to the rule and its
accompanying enabling resolution, even proposing an amendment. The NJSEA
voted to adopt the resolution over HMMC's objection and submitted the notice
of readoption to the Office of Administrative Law on October 14, approximately
six weeks prior to expiration of section 19:7. The record further shows the
notice satisfied the requirements of section 14B-5.1(c) of the APA, containing
the cited authority for the rule, its description, its specific legal authority, and
the rule's new expiration date, October 14, 2029. We are satisfied, after a careful
review of the record, that the NJSEA provided Secaucus proper due process
throughout the readoption timeline.
Secaucus next posits that N.J.A.C. 19:7-6.1 should contain the
requirement that "at least 30% of the development fees collected be used for
transportation-related projects within the District municipality where the
6
See N.J.S.A. 5:10A-9(b), requiring the NJSEA to provide the proposed
readoption to the HMMC "prior to final action." The HMMC had thirty days to
state its position on the proposed readoption and, to do so, in writing.
Regardless of the HMMC's position, the NJSEA has the statutory power, upon
"an affirmative vote of the majority of its members" to act on any "matter
submitted to the [HMMC]."
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development, for which a particular fee was collected, is located." Without this
amendment, which it offered at the September 22 board meeting, Secaucus
contends the regulation frustrates the purpose of the TPD Act, specifically,
N.J.S.A. 5:10-74(k). We find its argument wholly without merit. We offer brief
comment.
"It has been a longstanding principle that 'the grant of authority to an
administrative agency is to be liberally construed . . . to enable the agency to
accomplish its statutory responsibilities.'" In re Adoption of N.J.A.C. 17:1-6.4,
454 N.J. Super. 386, 395 (App. Div. 2018) (quoting N.J. Guild of Hearing Aid
Dispensers v. Long, 75 N.J. 544, 562 (1978)). "[A] challenger must
'demonstrat[e] an inconsistency between the regulation and the statute it
implements, a violation of policy expressed or implied by the Legislature, an
extension of the statute beyond what the Legislature intended, or a conflict
between the enabling act and other statutory law that cannot be harmonized.'"
Hackensack Riverkeeper v. N.J. Dep't of Env't Prot., 443 N.J. Super. 293, 302
(App. Div. 2015) (second alteration in original) (quoting N.J. Ass'n of Sch.
Adm'rs v. Cerf, 428 N.J. Super. 588, 596 (App. Div. 2012)).
N.J.S.A. 5:10-74(k) establishes a percentage of the development fees that
are to be used for a specific purpose. It states, "[a]t least 30% of any
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development fees collected in accordance with this section shall be used for
transportation related projects within the municipality where the development,
for which a particular fee was collected, is located." The simply written statute
clearly identifies a percentage of collected development fees to be used, and
where to use them. It does not specify when the fees are to be used, or the
administrative method for dispersing them.
However, the contested regulation answers those questions. A plain
reading of N.J.A.C. 19:7-6.1(a) reveals the TPD Fund's mechanism for
depositing development fees, identifies the accounting method it must use to
track expenditures, and designates a responsible official to manage the collected
fees. N.J.A.C. 19:7-6.1(b) restricts use of the funds and makes expenditures
subject to approval by the board. The regulation dovetails neatly with N.J.S.A.
5:10-74(k) and cannot be said to be inconsistent in any way. Secaucus offers no
authority or even sound argument to the contrary.
For the first time before us, Secaucus argues that N.J.A.C. 19:7 lacks
adequate standards to guide the NJSEA's allocation of the TPD Fund. We may
"decline to consider issues not properly presented to the trial court when an
opportunity for such a presentation was available 'unless we find the issues
raised on appeal go to the jurisdiction of the trial court or concern matters of
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great public interest.'" Berardo v. City of Jersey City, 476 N.J. Super. 341, 344
(App. Div. 2023) (quoting Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234
(1973)). We decline to do so here.
Finally, to the extent not addressed, Secaucus's remaining arguments lack
sufficient merit to warrant discussion in a written opinion. See R. 2:11-
3(e)(1)(E).
Affirmed.
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