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Appellate Division Upholds New Jersey Department of Environmental Protection Waiver Rule

March 21, 2013

The New Jersey Superior Court - Appellate Division upheld this morning the New Jersey Department of Environmental Protection’s (“DEP”) authority to promulgate a regulation enabling DEP to waive strict regulatory requirements in certain specific situations (the “Waiver Rule”).

The Waiver Rule was adopted in March 2012 in response to Governor Christie’s Executive Order No. 2, which directed state agencies to implement common sense principles of government reform. The Waiver Rule recognizes that rigid regulatory rules sometimes create unintended consequences, and provides DEP with a mechanism to utilize when strict compliance with a rule would produce an unreasonable result that undermines its intended purpose. Under the Rule, in order to apply for a waiver, a requester must demonstrate one of the following: 1) there is a public emergency that has been formally declared; 2) conflicting rules (between federal and state agencies, or between state agencies) are adversely affecting a project or activity from proceeding; 3) a net environmental benefit would be achieved; or 4) undue hardship is being imposed by the rule requirement(s).

Several environmental and labor organizations challenged DEP’s promulgation of the Waiver Rule, arguing that DEP exceeded its legislative authority by promulgating the Waiver Rule and that the Waiver Rule was facially invalid due to the lack of adequate standards informing the public and guiding DEP as to how decisions to issue waivers would be made. Wolff & Samson PC represented the American Petroleum Institute, NAIOP New Jersey and the New Jersey Chamber of Commerce in opposing the challengers.

Ultimately, the Appellate Division rejected the challengers’ arguments. The Appellate Division agreed with NJDEP and the position claimed by the regulated community, stating that the power to promulgate a regulation implies the incidental authority to suspend or waive its application in certain limited, well-defined circumstances. Further, the Appellate Division specifically held that the Waiver Rule contains adequate standards for DEP to decide waiver applications.

The Appellate Division did agree with the challengers in striking down information posted on the DEP website, including guidance documents, after the Waiver Rule had gone through public notice and comment. However, the court was clear in stating that the striking down of this material does not impact the ability of DEP to go forward in applying the Waiver Rule. While it remains to be seen as to whether DEP will engage in any additional process to publish guidance, it is clear that DEP can act immediately on current and future applications.

Today’s decision by the Appellate Division enables DEP to continue to accept and process applications for waivers, facilitating economic growth in New Jersey and furthering the common sense goals of the Christie Administration.

If you have a project or activity that may benefit from a waiver of strict compliance and would fall within one of the categories listed above, we would be happy to discuss the applicability of the Waiver Rule to your situation.

Dennis M. Toft, Co-Chair of Wolff & Samson’s Environmental Group, argued the appeal on behalf of American Petroleum Institute, NAIOP New Jersey and the New Jersey Chamber of Commerce. Member of the Firm John Valeri Jr. and Associate Daniel McKillop assisted on the brief.

For more information, please contact:
Dennis M. Toft | Co-Chair, Environmental Group | dtoft@wolffsamson.com | (973) 530-2014
John G. Valeri Jr. | Member of the Firm | jvaleri@wolffsamson.com | (973) 530-2030
Daniel T. McKillop | Associate | dmckillop@wolffsamson.com | (973) 530-2066