Ruling on NJ DEP Waiver Rule 'Guidance'

Wednesday, March 27, 2013

The Appellate Division of the New Jersey Superior Court has affirmed a trial court ruling upholding the DEP's "Waiver Rule" under which the DEP is authorized to waive the application of its own rules. See In re N.J.A.C. 7:1B-1.1 et seq., No. A-3514-11 and A-4098-11(consol.), slip op. (N.J. App. Div. Mar. 21, 2013). The challenge to DEP's rule was spearheaded by environmental protection groups, and the court's reasoning affirming the validity of the rule was along expected lines.

An interesting aspect of the appellate decision was the court's clarification of the status of "guidance" published by DEP. The legal effect of guidance has been a topic of debate among environmental professionals, including in the area of site remediation. "Guidance" consists of information an agency publishes without formal rule-making for the purposes of "investigating, publicizing, planning and supervising a regulated industry".

The Appellate Division's recent decision invalidates all guidance regarding the manner in which DEP will implement its "Waiver Rule" to the extent such guidance goes beyond the requirements of the actual regulations enacted in accordance with the APA.

The ruling does not undermine DEP's waiver regulations themselves, because the rules set forth in the New Jersey Administrative Code, N.J.A.C. 7:1B contain sufficient discernable standards for regulated persons to follow.

DEP defended its guidance as benefitting the regulated community by providing them bases and procedures to follow in seeking waivers, i.e., as making DEP's process more transparent. The court did not question DEP's purpose in publishing guidance. Nor did the court specifically address whether DEP must remove any of its guidance from its website. There may be debate about whether guidance tends to confuse and thus should be removed. It can also be argued that environmental professionals can readily discern those aspects of the Waiver Rule that comprise the "law" from those which are mere "guidance", and, as DEP contends, well-crafted guidance can be helpful.

For the regulated community, the court's ruling clarifies that the legal standards to satisfy in seeking a waiver are confined to those set forth in the APA-enacted rules published in the New Jersey Administrative Code. Mere guidance published by the agency, while perhaps promoting transparency and efficiency, cannot serve as the agency's basis for decision-making.

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Rich Crooker (Partner, Madison) is a member of several of the Firm's practice groups, including environmental law. His comments are not intended to serve as legal advice. Rich welcomes your questions and comments at 973.966.3206 or