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

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court."
Although it is posted on the internet, this opinion is binding only on the
parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-4439-15T2
IN THE MATTER OF HAZARDOUS DISCHARGE SITE
REMEDIATION FUND PUBLIC ENTITY GRANT
APPLICATION FOR REMEDIAL INVESTIGATION
AND REMEDIAL ACTION.
______________________________________________
Argued August 14, 2018 – Decided August 29, 2018
Before Judges Messano and Geiger.
On appeal from the New Jersey Department of
Environmental Protection.
George J. Tyler argued the cause for appellant
Barry Rosengarten (Tyler & Carmeli, PC,
attorneys; George J. Tyler, of counsel and on
the briefs; James Aversano, III, on the
briefs).
Mark S. Heinzelmann, Deputy Attorney General,
argued the cause for respondent New Jersey
Department of Environmental Protection
(Gurbir S. Grewal, Attorney General, attorney;
Melissa H. Raksa, Assistant Attorney General,
of counsel; Mark S. Heinzelmann, on the
brief).
PER CURIAM
Barry Rosengarten entered into a contract to sell certain
property he owned in Perth Amboy to the County of Middlesex (the
County) for $5.15 million (the contract). Perth Amboy had
previously designated the prior owner of the property, The Landings
at Perth Amboy, LLC, the "redeveloper" of the property under the
Local Redevelopment and Housing Law, N.J.S.A. 40A:12A-1 to -73.
Rosengarten, however, warranted in the contract that he had
successfully "de-designated" the property and was able to convey
it for use as open space.
Environmental testing revealed contamination on the property,
and the contract specifically required Rosengarten to remediate
the site, as well as three additional "Areas of Concern" (AOCs)
that were identified during "subsequent investigations." The
County escrowed monies to be deducted from the purchase price and
released to Rosengarten for remediation expenses he incurred. The
County also agreed to cooperate and assist in securing grants
through the Department of Environmental Protection (DEP) and
Economic Development Authority (EDA), available from the Hazardous
Discharge Site Remediation Fund (HDSRF), N.J.S.A. 58:10B-4, to
recompense Rosengarten's remediation costs.1 The contract,
1
The HDSRF is a "revolving fund" established "in the New Jersey
Economic Development Authority" (EDA) "dedicated for the provision
of financial assistance or grants to municipalities, counties,
redevelopment entities authorized to exercise redevelopment powers
pursuant to [N.J.S.A. 40A:12A-4], and persons, for the purpose of
financing remediation activities at sites at which there is, or
is suspected of being, a discharge of hazardous substances or
hazardous wastes." N.J.S.A. 58:10B-4.
2 A-4439-15T2
however, provided that with respect to grant funding, the County
had "no obligation to [Rosengarten] if" the costs were "not
recovered or recoverable."
Rosengarten's counsel submitted a grant application on the
County's behalf, seeking funding either as a Brownfield
Development Area Grant, see N.J.S.A. 58:10B-6a(2)(a)(i); N.J.A.C.
19:31-8.3(b)(6), or as a 75 % Recreation and Conservation Grant,
see N.J.S.A. 58:10B-6a(2)(a)(ii); N.J.A.C. 19:31-8.3(b)2). DEP
denied the application.
In his April 28, 2016 letter, DEP's Chief of the Office of
Brownfield Reuse, Timothy Bartle, noted Rosengarten was
responsible for remediating the AOCs and did so. Therefore, "it
was unclear" whether the County was eligible for funding. Bartle
noted the contract might "demonstrate . . . Rosengarten was hired
by the County to conduct remediation on the County's behalf," but,
despite DEP's request, no one had supplied the contract for review.
The record reveals that in fact the contract had been
forwarded to someone else in DEP. In a subsequent email to
Rosengarten's counsel dated May 26, 2016, Bartle acknowledged his
review of the contract, stating:
[T]here is no language that would constitute
a contract between [the] County and . . .
Rosengarten to conduct remediation services on
the County's behalf and certainly no language
about payment to be made to . . . Rosengarten
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for remediation services. . . . While my
office can find the work appropriate and costs
reasonable, we cannot recommend a grant to EDA
for past work when the entity applying did not
do the work nor pay for it. The denial of the
application submitted by [the] County stands.2
This appeal ensued.
Rosengarten contends DEP premised its decision on
misinterpretations of the applicable statutory provisions,
regulations, and the contract. Therefore, denial of the
application was arbitrary, capricious and unreasonable. DEP
argues we should dismiss the appeal because the county has not
appealed, and Rosengarten lacks standing to challenge the denial
of the County's application. Alternatively, DEP contends it
properly denied the application under N.J.S.A. 58:10B-6.
Initially, we dispense with DEP's argument that Rosengarten
lacks standing and only the County, the grant applicant, could
2
Rosengarten's notice of appeal seeks review of only the April
28, 2016 letter. We routinely limit our consideration to only the
judgment or order listed in the notice of appeal. R. 2:5-
1(f)(3)(A); Pressler & Verniero, Current N.J. Court Rules, cmt.
6.1 on R. 2:5-1 (2018) ("[I]t is only the judgments or orders or
parts thereof designated in the notice of appeal which are subject
to the appeal process and review."). Nevertheless, at oral
argument, Rosengarten clarified the sequence of events, and
respondent DEP has not objected to our consideration of the email
as its statement of reasons for the final agency decision denying
the grant.
4 A-4439-15T2
appeal its denial.3 We recently addressed a similar argument in
New Jersey Department of Environmental Protection v. Exxon Mobil
Corp., 453 N.J. Super. 272 (App. Div.), certif. denied, 233 N.J.
378 (2018).
There, we recognized the right of public interest citizens'
groups to intervene on appeal to challenge DEP's settlement of an
action brought under the Spill Act. Id. at 301-03. In particular,
we noted prior decisions that recognized the standing of parties
"affected by a judgment . . . to pursue an appeal if a party with
a similar interest who actively litigated the case in the trial
court has elected not to appeal." Id. at 297 (quoting CFG Health
Sys., L.L.C. v. Cty. of Essex, 411 N.J. Super. 378, 385 (App. Div.
2010)). We also recognized the right of third parties to challenge
DEP's decisions, id. at 299-300, if they have "a sufficient
'personal or pecuniary interest or property right adversely
affected by the judgement.'" Id. at 301 (quoting State v. A.L.,
440 N.J. Super. 400, 418 (App. Div. 2015)).
Simply put, the record is clear that the County agreed to use
its efforts to secure a grant to reimburse Rosengarten for
remediation and associated costs. DEP's denial of the grant
3
DEP moved to dismiss the appeal on this ground. We denied the
motion without prejudice to DEP's right to reassert the argument
before the merits panel.
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directly and adversely affected Rosengarten's pecuniary interests.
Rosengarten has standing, and we consider the merits of his appeal.
As DEP points out, grants to public entities under the HSDRF
are governed by N.J.S.A. 58:10B-6a(2)(a), which provides in
relevant part:
Moneys shall be allocated to:
municipalities, counties, or redevelopment
entities authorized to exercise redevelopment
powers pursuant to [N.J.S.A. 40A:12A-4], for:
(i) projects in brownfield development areas
pursuant to [N.J.S.A. 58:10B-5],
(ii) matching grants . . . of up to 75 percent
of the costs of the remedial action for
projects involving the redevelopment of
contaminated property for recreation and
conservation purposes, provided that the use
of the property for recreation and
conservation purposes is included in the
comprehensive plan for the development or
redevelopment of contaminated property
. . . .
[Ibid. (emphasis added).]
Rosengarten acknowledges that under the plain meaning of the
statutory terms, he is not eligible for a grant.
Instead, Rosengarten argues DEP's cramped interpretation of
the statute when applied to the facts of this case is contrary to
the overarching public purpose of the Brownfield and Contaminated
Site Remediation Act, of which the HDSRF is a part. See N.J.S.A.
58:10B-4 (stating purpose of fund is to finance remediation
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activities at sites where there is a discharge of hazardous
substances or wastes); see also TAC Assocs. v. N.J. Dept. of Envtl
Prot., 202 N.J. 533, 536-37 (2010) (explaining evolution of site
remediation legislation and legislative history of the HDSRF). 4
He argues that the County met the eligibility requirements to
receive grant monies from the HDSRF pursuant to N.J.S.A. 58:10B-
5(c) and -6(a) (allowing financial assistance to counties who, by
resolution, "acquire [(real property)] by voluntary
conveyance . . . for recreation . . . purposes"), and N.J.A.C.
19:31-8.3(e) ("[p]reconditions to eligibility" for public entity
grants).
Our standard of review of agency action is limited. In re
Carter, 191 N.J. 474, 482 (2007) (citing Aqua Beach Condo. Ass'n
v. Dep't of Cmty. Affairs, 186 N.J. 5, 15-16 (2006)). "An
appellate court affords a 'strong presumption of reasonableness'
to an administrative agency's exercise of its statutorily
delegated responsibilities." Lavezzi v. State, 219 N.J. 163, 171
4
Rosengarten cites to one of our unpublished decisions in support
of this proposition. Not only are unpublished decisions non-
precedential, see R. 1:36-3, but also the grant at issue in that
appeal was a so-called "innocent party grant," governed by an
entirely different section of the HDSRF, since repealed. L. 2017,
c. 353; see also TAC Assocs., 202 N.J. at 537 (explaining
eligibility for grants made to "persons" under former N.J.S.A.
58:10B-5(d) and -6(a)(4)).
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(2014) (quoting City of Newark v. Natural Res. Council, Dep't of
Envtl. Prot., 82 N.J. 530, 539 (1980)).
An agency decision should not be overturned unless there is
"a showing that it was arbitrary, capricious or unreasonable, or
that it lacked fair support in the evidence." Carter, 191 N.J.
at 482.
To determine whether an agency decision "is
arbitrary, capricious or unreasonable," an
appellate court must determine
(1) whether the agency's action
violates express or implied
legislative policies, that is, did
the agency follow the law; (2)
whether the record contains
substantial evidence to support the
findings on which the agency based
its action; and (3) whether in
applying the legislative policies
to the facts, the agency clearly
erred in reaching a conclusion that
could not reasonably have been made
on a showing of the relevant
factors.
[Lavezzi, 219 N.J. at 171-72 (quoting In re
Stallworth, 208 N.J. 182, 194 (2011)).]
"[O]ur task in statutory interpretation is to discern and
effectuate the Legislature's intent[,]" N.J. Dep't of Envtl. Prot.
v. Huber, 213 N.J. 338, 365 (2013), and we are not "bound by [an]
agency's interpretation of a statute or its determination of a
strictly legal issue." Norfolk S. Ry. Co. v. Intermodal Props.,
LLC, 215 N.J. 142, 165 (2013)). Nevertheless, we "defer to an
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agency's expertise and superior knowledge of a particular
field[,]" Greenwood v. State Police Training Ctr., 127 N.J. 500,
513 (1992), including its reasonable statutory "construction in
recognition of the agency's expertise." TAC Assocs., 202 N.J. at
544 (citation omitted).
We agree with DEP that the County did not qualify for the
public entity grant because it did not perform the remediation
work, incur the costs and expenses associated with the work, or
otherwise designate Rosengarten as a "redeveloper" or as its agent
responsible for remediation. Under the contract, Rosengarten was
required to remediate the site at his own expense and undertook
that obligation as a precondition to his ability to transfer the
property. Rosengarten argues his decision to forego potential
residential development of the site resulted in a financial loss,
suggesting DEP should have considered his alleged eleemosynary
motivation. There is nothing in the statute or its regulations
that suggest those considerations are relevant.
Moreover, under the regulations, it would appear that the
County was not eligible for a recreation and conservation grant.
N.J.A.C. 19:31-8.3(b)(2) provides public entities are eligible
for:
Matching grants of up to 75 percent of the
costs of remedial action on contaminated real
property to be used for recreation and
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conservation purposes, provided that such use
is included in the comprehensive plan for the
development or redevelopment of the real
property and a permanent restriction regarding
development and preserving such use is
recorded and indexed with the deed in the
registry of deeds for the county in which the
real property is located.
The record includes evidence that the County long ago adopted a
plan for open space, but there is no evidence that this property
was part of "a comprehensive plan for the development or
redevelopment of the real property" with "a permanent restriction
regarding development and preserving such use."
We acknowledge that under the regulations, a public entity
may be eligible for a Brownfield Development Area Grant even if
it does not own the property. N.J.A.C. 19:31-8.3(b)(6). However,
"[n]o [such] grant shall be awarded unless the public entity has
adopted a comprehensive plan for the development or redevelopment
of contaminated, or potentially contaminated real property."
N.J.A.C. 19:31-8.3(e)(1)(iii). This limitation is certainly
consistent with the statutory requirement that public entity
grants may only be made to "municipalities, counties, or
redevelopment entities authorized to exercise redevelopment powers
pursuant to [N.J.S.A. 40A:12A-4.]" N.J.S.A. 58:10B-6a(2)(a).
Affirmed.
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