Last month I blogged about Sackett v. Environmental Protection Agency (10-1062), the case involving pre-enforcement judicial review of compliance orders under the Clean Water Act that will be argued before the United States Supreme Court this term.

Yesterday, in In the Matter of Crompton Colors, Inc., (A-0778-09T), the Superior Court of New Jersey, Appellate Division, took up a similar cause. In a “not for publication” decision, the Court held that the owner of a property for which a No Further Action (NFA) letter was issued was entitled to a hearing when the NJDEP rescinded the NFA letter and directed it to perform certain environmental studies.

The underlying facts weave a complicated tale involving a tank removal,  a subdivision of property, a remediation, clearance under the NJ Industrial Site Recovery Act (ISRA), and a day care center.   Before 1990, 60 West Street, Bloomfield, NJ had two buildings on it, a warehouse and an office building which housed a day care center. In 1990, a heating oil tank was removed from the warehouse site, at which time certain contamination was identified and remediation ordered by NJDEP. After the removal of the tank but before the remediation was completed, the property was subdivided such that the location of the tank removal had a new address of 50 West Street and the day care center retained the address of 60 West Street. However, when the remediation was completed in 1996, the paperwork, including the NFA letter, identified the property as 60 West Street.

In 2001, Crompton Colors, which had been leasing 50 West Street since 1991, ceased business and sought environmental clearance under ISRA.    In submitting the application, Crompton did not notify the NJDEP that the site had previously been the subject of a petroleum contamination and clean up nor, presumably, that the site had received an NFA, something it should have done. In fact, it would have been to Crompton’s benefit to do so as it may have streamlined the process of receiving clearance. Nevertheless, in 2002, a second NFA was issued for the property. So, by 2002, everyone was happy and could go about their business, or so it would seem.

In 2004, following the now notorious discovery of mercury contamination at a day care center that had previously been a thermometer factory in South Jersey, NJDEP undertook to review all “closed cases” near day care centers around the state to ensure that no other children were similarly exposed. By 2007, NJDEP got around to West Street and realized that the Crompton facility had, in fact, been the site of the tank removal and remediation action. Thus, it directed Crompton and the facility owner, a subsidiary of Hartz Mountain Industries, to a submit Remedial Investigation Workplan, including a schedule for investigating, within 14 days, potential vapor intrusion at the day care.

Needless to say, Hartz and Crompton objected and sought an administrative hearing to challenge the action. NJDEP denied the hearing request, contending that the rescission wasn’t a new action or violation notice, but rather “mere requests for submission of documentation and performance of studies” that would have been required by Crompton’s original application for the 2002 NFA had NJDEP known about the 1996 NFA. But the Appellate Division disagreed. Relying on a provision in ISRA that requires an opportunity for a hearing whenever NJDEP contends that there is an alleged violation of the act, the Appellate Court held that revocation of the NFA and the directive to perform studies was, in effect, a finding of a violation such that enforcement action could be taken if the directive was not complied with.

This is the second Appellate Division decision in the last several years to interpret a statutory right to challenge an order issued by NJDEP to encompass a right to a hearing on agency action that falls short of an order in the traditional sense but on its face requires action without an express threat of enforcement.  While this affords an opportunity to those who feel they are being treated unfairly by the agency  without having to wait for the agency to take a formal enforcement action, it also poses a potential pitfal for those who fail to timely challenge an informal agency action and may risk waiving their rights.  Time will tell as to who the biggest beneficiary will be of these decisions.  

(Thanks to Bruce Katcher  for catching this case and honing my knowledge of NJ environmental laws).

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