IN THE MATTER OF THE CHALLENGE TO THE DENIAL OF THE REQUEST FOR ADJUDICATORY HEARING AND THE GRANT OF CAFRA PERMIT REGARDING MORDECHAI STERNSTEIN, ETC. (NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION)

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-3561-18
IN THE MATTER OF THE
CHALLENGE TO THE DENIAL
OF THE REQUEST FOR
ADJUDICATORY HEARING
AND THE GRANT OF CAFRA
PERMIT REGARDING
MORDECHAI STERNSTEIN C/O
GDMS HOLDINGS, LLC CAFRA
INDIVIDUAL PERMIT,
FRESHWATER WETLANDS
GENERAL PERMIT NO. 6, AND
WATER QUALITY
CERTIFICATE, PERMIT NO.
1500-04-0005.3 APL1700001
CHALLENGED BY FAIRWAYS
AT LAKE RIDGE
HOMEOWNERS ASSOCIATION,
INC., DATED APRIL 12, 2019.
_____________________________
Argued April 19, 2021 – Decided June 22, 2021
Before Judges Currier and DeAlmeida.
On appeal from the New Jersey Department of
Environmental Protection, Permit Nos. 6 and
1500-04-0005.3 APL1700001.
Michele R. Donato argued the cause for appellant
Fairways at Lake Ridge Homeowners Association, Inc.
Matthew N. Fiorovanti argued the cause for respondent
Mordechai Sternstein c/o GDMS Holdings, LLC
(Giordano, Halleran & Ciesla, attorneys; Matthew N.
Fiorovanti, of counsel and on the brief; David J. Miller,
on the brief).
Kathrine M. Hunt, Deputy Attorney General, argued
the cause for respondent New Jersey Department of
Environmental Protection (Gurbir S. Grewal, Attorney
General, attorney; Melissa H. Raksa, Assistant
Attorney General, of counsel; Kathrine M. Hunt,
Deputy Attorney General, on the brief).
PER CURIAM
Appellant Fairways at Lake Ridge Homeowners Association, Inc.
(Fairways) appeals from the April 12, 2019 order of respondent Commissioner,
Department of Environmental Protection (DEP) denying its request for an
adjudicatory hearing with respect to approvals DEP issued to respondent
Mordechai Sternstein c/o GDMS Holdings, LLC (GDMS) authorizing the
commercial and residential development of respondent's property. We affirm.
I.
The following facts are derived from the record. GDMS intends to
develop four contiguous lots comprising approximately 100 acres in Lakewood
Township on which is located the Eagle Ridge golf course. Fairways is a
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homeowners' association whose members include approximately 1124 property
owners in an age-restricted residential development adjacent to the golf course.
A private road in the Fairways development, Augusta Boulevard, provides
access to the golf course through an easement.
In 2017, GDMS applied to DEP for permits necessary to develop the
property pursuant to the Coastal Area Facility Review Act (CAFRA), N.J.S.A.
13:19-1 to -51, the Freshwater Wetlands Protection Act (FWPA), N.J.S.A.
13:9B-1 to -30, and regulations implementing the statutes. Fairways opposed
the application.
On August 3, 2017, DEP denied the application. GDMS challenged the
denial and requested the matter be submitted to DEP's alternative dispute
resolution process. GDMS and DEP entered into a settlement that provided for
DEP to publish a notice of intent to settle and issue approvals to GDMS for
development of its property, a thirty-day public comment period, and
submission of agreed upon plans to Lakewood and interested parties that
previously commented on GDMS's application. The stipulation provided that
DEP would issue the approvals following the public comment period unless any
comments showed that the decision to approve the development was based on
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incomplete or inaccurate information or violated DEP regulations. Fairways
submitted comments on the settlement during the public comment period.
On January 11, 2018, DEP issued a CAFRA individual permit, freshwater
wetlands general permit, and a water quality certificate to GDMS (collectively,
the Permit). The Permit authorizes the construction of 1034 residential units,
five community buildings, a clubhouse, retail buildings, parking, internal
roadways, stormwater management facilities, and associated improvements on
the golf course property. The Permit also authorizes filling 14,941 square feet
(0.34 acres) of isolated intermediate value freshwater wetlands and requires
GDMS to record conservation restrictions on 1.94 acres of forested area to meet
vegetation cover requirements and other areas of critical habitat for the red-
headed woodpecker, a protected species under CAFRA.
Notice of the January 11, 2018 issuance of the Permit was published in
the DEP bulletin on February 7, 2018. Fairways did not file a notice of appeal
challenging the Permit.
On February 15, 2018, Fairways requested an adjudicatory hearing
regarding issuance of the Permit. In its hearing request, Fairways argued that
the Permit conflicts with certain provisions of Lakewood municipal land use
ordinances, earlier municipal approvals for GDMS's planned development, and
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CAFRA's implementing regulations. Fairways also argued that the planned
development of the golf course property requires additional permits and
conflicts with prior CAFRA approvals issued with respect to the development
of the Fairways community. Fairways contends that the approval of its
development was conditioned on the golf course property remaining open space
and that the Permit allows GDMS to use Augusta Boulevard for access to its
proposed development, contrary to the terms of the existing easement.
GDMS opposed the application, arguing Fairways lacked standing to
request a hearing and that its substantive arguments were meritless. It stated
that it did not intend to use Augusta Boulevard for access to the development.
On April 12, 2019, the Commissioner denied Fairways's request for a
hearing. The Commissioner found that Fairways was not an applicant, State
agency, or an individual with a "particularized property interest sufficient to
require a hearing on constitutional or statutory grounds." N.J.S.A. 52:14B-3.2.
The Commissioner noted that neither CAFRA nor FWPA give Fairways a
statutory right to an adjudicatory hearing. In addition, the Commissioner
determined that Fairways's interest in the Augusta Boulevard easement was not
a particularized property interest sufficient to create a right to an adjudicatory
hearing because the Permit authorizes activities on land adjacent to, but not
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including, Augusta Boulevard and does not impact the existing easement or its
terms. Further, the Commissioner noted that GDMS had conceded that it does
not intend to use Augusta Boulevard for access to its development.
The Commissioner also found that Fairways's contention regarding the
dedication of the golf course property as open space was, in effect, a question
of interpretation and implementation of Lakewood's zoning ordinances within
the exclusive jurisdiction of the municipality. The Commissioner also noted
that a standard condition of the Permit requires GDMS to obtain all necessary
permits and approvals from the municipality. Fairways can raise its claims
concerning the alleged open space dedication before municipal officials. 1
On April 23, 2019, Fairways filed a notice of appeal challenging the April
12, 2019 agency decision. Fairways raises the following arguments.
POINT I
THE CAFRA PERMIT AND THE DENIAL OF THE
ADJUDICATORY HEARING LACK SUBSTANTIAL
CREDIBLE EVIDENCE TO SUPPORT THE
DECISION OF THE [DEP].
POINT II
1
The Commissioner took no position on constructive trust, consumer fraud, and
statutory claims concerning the marketing of the Fairways development that
Fairways has alleged in a pending Law Division action.
A-3561-18
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THE [DEP] ERRED IN FAILING TO RECOGNIZE
THAT THE FAIRWAYS ASSOCIATION HAS A
PARTICULARIZED INTEREST AND IN
CONCLUDING THAT A CONSTITUTIONAL
RIGHT MUST BE SHOWN.
POINT III
THE [DEP] ERRED IN APPROVING SETTLEMENT
OF A DENIED PERMIT WITHOUT COMPLIANCE
WITH THE ADMINISTRATIVE CODE.
POINT IV
THE [DEP] ERRED IN IGNORING THE OPEN
SPACE PROTECTIONS OF THE [MUNICIPAL
LAND USE LAW].
POINT V
THE 2018 CAFRA PERMIT ALLOWS A
PERCENTAGE OF IMPERVIOUS COVERAGE
INCONSISTENT WITH THE STATE PLAN POLICY
MAP.
GDMS and DEP argue that Fairways's appeal is limited to the denial of
its request for an adjudicatory hearing because Fairways did not appeal the
January 11, 2018 issuance of the Permit. They argue that this court lacks
jurisdiction to consider Fairways's substantive challenges to the Permit.
II.
We first address the scope of Fairways's appeal. When DEP issued the
Permit on January 11, 2018, Fairways had the option of appealing the Permit
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directly to this court within forty-five days, R. 2:4-1(b), pursuing administrative
remedies at the DEP, N.J.A.C. 7:7-28.1, or taking both steps. In re Riverview
Dev., LLC, 411 N.J. Super. 409, 425 (App. Div. 2010). Fairways elected to seek
a hearing at the DEP. It did not file a notice of appeal challenging the
substantive provisions of the Permit within forty-five days of its issuance.
Fairways's request for a hearing did not affect the Permit's status as a final
agency decision. N.J.A.C. 7-7.28.3(b) provides that "[w]hen a person other than
the permittee requests an adjudicatory hearing on a permit or authorization, the
operation of the permit or authorization is not automatically stayed. The
Department shall stay operation of the permit or authorization only if it
determines that good cause to do so exists." This regulation implicitly
recognizes that a DEP approval that is the subject of a third-party adjudicatory
hearing request is a final agency decision. To conclude otherwise would render
the regulation superfluous, as a stay of a DEP approval would not be a
consideration if the permit was not final.
The DEP's April 12, 2019 final agency decision, which is the only decision
of the agency issued within forty-five days of the April 23, 2019 notice of
appeal, concerns the narrow question of whether Fairways was entitled to an
adjudicatory hearing. Fairways cannot assert a time-barred challenge to the
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substantive basis of the Permit through its appeal of DEP's decision to deny its
request for an adjudicatory hearing. See Dep't of Law & Pub. Safety v.
Contemporary Cmtys., 337 N.J. Super. 177, 179 (App. Div. 2001). We,
therefore, do not address the arguments raised by Fairways regarding the
substantive validity of the Permit.
III.
With respect to the agency's denial of Fairways's request for an
adjudicatory hearing, a "strong presumption of reasonableness attaches to the
actions of the administrative agencies." In re Carroll, 339 N.J. Super. 429, 437
(App. Div. 2001) (quoting In re Vey, 272 N.J. Super. 199, 205 (App. Div.
1993)). The scope of our review of a final decision of an administrative agency
is limited and we will not reverse such a decision unless it is "arbitrary,
capricious, or unreasonable, or . . . not supported by substantial credible
evidence in the record as a whole." In re Stallworth, 208 N.J. 182, 194 (2011)
(citing Henry v. Rahway State Prison, 81 N.J. 571, 579-80 (1980)). When
making that determination, we consider:
(1) whether the agency's action violates express or
implied legislative policies, that is, did the agency
follow the law; (2) whether the record contains
substantial evidence to support the findings on which
the agency based its action; and (3) whether in applying
the legislative policies to the facts, the agency clearly
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erred in reaching a conclusion that could not reasonably
have been made on a showing of the relevant factors.
[Ibid. (citing In re Carter, 191 N.J. 474, 482-83
(2007)).]
We are "in no way bound by the agency's interpretation of a statute or its
determination of a strictly legal issue . . . ." Carter, 191 N.J. at 483 (quoting
Mayflower Sec. Co. v. Bureau of Sec., 64 N.J. 85, 93 (1973)). We will, however,
generally "afford substantial deference to an agency's interpretation of a statute
that the agency is charged with enforcing." Patel v. N.J. Motor Vehicle Comm'n,
200 N.J. 413, 420 (2009) (quoting Richardson v. Bd. of Trs., 192 N.J. 189, 196
(2007)). Substantial deference must be extended to an agency's interpretation
of its own regulations, particularly on technical matters within the agency's
expertise. In re Freshwater Wetlands Prot. Act Rules, 180 N.J. 478, 488-89
(2004).
Under the Administrative Procedure Act (APA or the Act), an "applicant"
is entitled to request an adjudicatory hearing with respect to a decision by the
DEP on its application. The APA defines "applicant" as an entity seeking an
"agency license, permit, certificate, approval, chapter, registration[,] or other
form of permission required by law." N.J.S.A. 52:14B-3.2. The Act, however,
"strictly limits the situations in which third parties are entitled to . . . a formal
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hearing to challenge a permit application." In re Riverview Dev., 411 N.J.
Super. at 424. A third party is defined as any person other than:
a. An applicant . . . .
b. A State agency; or
c. A person who has a particularized property
interest sufficient to require a hearing on constitutional
or statutory grounds.
[N.J.S.A. 52:14B-3.2.]
Accordingly, a non-applicant can demand an adjudicatory hearing only
where the non-applicant can demonstrate: (1) a right to a hearing under an
applicable statute; or (2) a "particularized property interest" of constitutional
significance. In re Freshwater Wetlands Statewide Gen. Permits, 185 N.J. 452,
463–64 (2006). These limitations are "intended to prevent the processing of
permit applications by State agencies from being bogged down by time-
consuming and costly formal hearings," which "consume substantial public and
private resources." In re Riverview Dev., 411 N.J. Super. at 424.
Having considered the record in light of the applicable legal precedents,
we conclude that DEP's decision denying Fairways's request for an adjudicatory
hearing is well supported by the record. Fairways acknowledges that it is not an
applicant with respect to the Permit. Neither the CAFRA nor the FWPA provide
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a third-party with a statutory right to appeal a permit issued to an applicant by
the DEP. In re Auth. for Freshwater Wetlands Statewide Gen. Permit 6, 433
N.J. Super. 385, 407 (App. Div. 2013) (finding the FWPA does not provide
third-party objectors with the right to a plenary administrative hearing to
challenge the DEP's issuance of a permit); Spalt v. Dep't of Envt'l Protection,
237 N.J. Super. 206, 211-12 (App. Div. 1989) (finding the CAFRA does not
provide third-party objectors with the right to a plenary administrative hearing
to challenge the DEP's issuance of a permit). Fairways identified no other
statute entitling it to a hearing.
We also agree with DEP's determination that Fairways does not have a
particularized property interest sufficient to create a right to an adjudicatory
hearing. "[T]hird parties generally are not able to meet the stringent
requirements for constitutional standing in respect of an adjudicatory hearing."
In re NJPDES Permit No. NJ0025241, 185 N.J. 474, 482 (2006). Fairways does
not own the property that GDMS seeks to develop; its members own property in
an adjoining development. "[L]andowners objecting to the development of
neighboring property" do not, by proximity alone, "have a particularized
property interest warranting an adversarial hearing before an administrative law
judge." In re Freshwater Wetlands Gen. Permits, 185 N.J. at 470. Our courts
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have consistently held that a generalized property right shared with other
property owners, such as collateral economic impacts, traffic, views, quality of
life, recreational interest, and property values, are insufficient to establish a
third-party right to an adjudicatory hearing. Ibid.; In re Riverview Dev., 411
N.J. Super. at 429; In re AMICO/Tunnel Carwash, 371 N.J. Super. 199, 212
(App. Div. 2004); In re Waterfront Dev. Permit No. WD88-0443-1, Lincoln
Harbor Final Dev., 244 N.J. Super. 426, 436 (App. Div. 1990); Spalt, 237 N.J.
Super. at 212; Normandy Beach Improv. Ass'n v. Comm'r, DEP, 193 N.J. Super.
57, 61 (App. Div. 1983).
Any interest that the members of Fairways have with respect to the alleged
prior dedication of the golf course property as open space and the municipal and
DEP approvals associated with the construction of their development are not
particularized property interests under the APA. The DEP adjudicatory process
is not the forum in which Fairways may assert those claims. The Commissioner
concluded she would take no position on those claims, which Fairways may
pursue before municipal land use authorities or in its pending Law Division
action.
In addition, the Permit does not purport to affect Fairways's rights under
the Augusta Boulevard easement. As the Commissioner aptly noted, the Permit
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authorizes activities on land adjacent to, and not including, Augusta Boulevard,
does not address the terms of the easement, and is based on a proposal that
GDMS concedes does not include use of Augusta Boulevard for access to the
development. As is the case with the zoning-related claims raised by Fairways,
any rights that it has under the easement can be enforced through the courts. An
adjudicatory hearing before the DEP is not the appropriate forum for claims
under the easement.
To the extent we have not addressed any of Fairways's remaining
arguments we find them to be without sufficient merit to warrant discussion in
a written opinion. R. 2:11-3(e)(1)(E).
Affirmed.
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