State Supreme Court Adds Hurdles to Third Parties Seeking Hearings to Contest Environmental Permits, Cole Schotz Docket

Summer 2006

In January 2006, the New Jersey Supreme Court issued two decisions addressing when the public has a right to a trial-like administrative hearing to challenge environmental permits issued by the New Jersey Department of Environmental Protection (“NJDEP”).  In decisions that are favorable to the regulated community, the Court affirmed that the right of third parties to trial-like hearings before the NJDEP should be viewed narrowly.  In the cases, the Court indicated that a third party only has a right to a hearing if authorized by a state statute or if required by the state constitution to provide  the party its due process.  The permit applicant, as the real “party” in interest, automatically has a right to a hearing.

In the first case – the “Wetlands Case” – neighbors sought a hearing to challenge the NJDEP’s decision to grant a wetlands permit to a developer.  The neighbors claimed that allowing the developer to fill wetlands, as authorized by the NJDEP permit, would cause damaging runoff onto their properties.  The Court indicated that a third party has a hearing right if that third party can demonstrate a particularized property interest of constitutional significance that would be impacted by the NJDEP’s decision.  To demonstrate such a property interest, mere speculation about the potential impact of an NJDEP permit is insufficient.  In this case, the Court denied the requested hearing, noting that is was purely speculative whether there would be runoff problems for the neighbors if the wetlands are filled.  In addition, the neighbors had several meetings with the NJDEP, and had submitted written comments objecting to the wetlands permit.  Second, the Court noted that stormwater management issues were more properly part of the local planning board review process, which the neighbors had participated in.  The Court found that the neighbors had sufficient due process even without a trial-like hearing because the neighbors participated in discussions of these issues before the local planning board and attended several meetings with the NJDEP and submitted written comments objecting to the wetlands permit.

In the second case – “the Wastewater Permit Case” – an environmental group was challenging the NJDEP’s decision to renew the discharge permit for the Asbury Park wastewater treatment plant.  In this case, the environmental group sought a trial-like hearing based not upon constitutional grounds (i.e. a particularized property interest), but rather on a statute granting third parties such a right.  Under the Water Pollution Control Act, a third party can seek “party” status if it meets a number of criteria set forth in the statute.  By obtaining “party” status, a non-applicant has an automatic right to a hearing.  However, notwithstanding that statutorily created right to a hearing, the Court found that a third party faces a high burden to demonstrate that it qualifies for “party” status.  A third party must demonstrate that there are significant factual or legal issues in dispute, and that only a trial-like proceeding can resolve those issues.  Because the environmental group only raised insignificant factual issues and general objections to NJDEP policies, the Court found that the objectors did not meet their burden of demonstrating “party” status.

In these two new cases, the Supreme Court has affirmed the high burden third parties face when trying to challenge an NJDEP permitting decision through a trial-like hearing.  While third parties have an absolute right to submit written objections to a pending permit application during the standard 30-day public comment period, they generally will not have a right to force the NJDEP to hold a hearing to challenge a permitting decision.



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