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Supreme Court of New Jersey Holds that Permittee Should Be Named as a Party to Appeal Affecting Project

When a public interest environmental rights group or other party appeals a decision by the New Jersey Department of Environmental Protection affecting a planned project, it should name the permittee as a party on the Notice of Appeal and serve them accordingly. On April 11, 2022, the Supreme Court of New Jersey remanded a case back to the Appellate Division and held that an appellant natural gas company should have been named as a party in the Notice of Appeal and served. See In re Proposed Constr. of Compressor Station (CS327), No. 086428 (Apr. 11, 2022).

In June 2021, after Tennessee applied for a HAD, NJDEP determined the project was consistent with the Statewide Water Quality Management Planning Rules and notified Tennessee that the project qualified for exemption under N.J.S.A. 13:20-28(a)(11) of the Highlands Act, which authorized “the routine maintenance and operations, rehabilitation, preservation, reconstruction, repair, or upgrade of public utility lines, rights of way, or systems, by a public utility.” Later, in August 2021, public interest groups—Food & Water Watch, the New Jersey Highlands Coalition, and the Sierra Club—filed a Notice of Appeal and Case Information Statement in the Appellate Division challenging NJDEP's determination. Importantly, the public interest groups neither name Tennessee as a party nor served Tennessee the Notice of Appeal or Case Information statement.

Tennessee moved to intervene as of right pursuant to Rule 4:33-1, but the Appellate Division denied Tennessee’s initial motion and then denied its motion for reconsideration. Tennessee moved for leave to appeal, which the New Jersey Supreme Court granted. The Supreme Court also granted the collective motion filed by the New Jersey Builders Association, New Jersey State Chamber of Commerce, New Jersey Utilities Association, the New Jersey Chapter of NAIOP, the Commercial Real Estate Development Association, and the New Jersey Business & Industry Association seeking leave to appear as amici curiae.

At oral argument, Tennessee argued that it met the standard to intervene as a matter of right under Rule 4:33-1, which provided that unless the rights of the party seeking intervention are adequately represented by an existing party, “anyone shall be permitted to intervene in an action if the applicant claims an interest relating to the property or transaction which is the subject of the action and is so situated that the disposition of the action may as a practical matter impair or impede the ability to protect that interest…” According to Tennessee, it had an undisputed economic interest in the appeal because it had invested millions of dollars into the approximately $246.3 million project and, any decision that would set aside the permit would potentially delay the construction of its project and impact its ability to meet its contractual obligations. Tennessee further argued that that the Appellate Division should have granted its motion for permissive intervention under Rule 4:33-2 because its underlying interests and status as the permittee made it indispensable to this appeal.

While supporting Tennessee’s arguments to intervene, the amici additionally contended that Tennessee should not have to participate as an intervenor but rather should have been named as a party in appellants' Notice of Appeal pursuant to Rule 2:5-1(d), which required that an appeal to review the decision of any state administrative agency is taken by the Appellate Division by “serving copies of the notice of appeal on the agency or officer, the Attorney General and all other interested parties.”

The Supreme Court found the amici’s argument compelling and, in remanding, held that based on the role that Tennessee played in obtaining administrative relief from NJDEP, the company was an “interested party” under R. 2:5-1(d) and should have been included as a party in the notice of appeal and served accordingly.