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Griffith v. State of New Jersey, Department of Environmental Protection

A-4260-97T1 (N.J. Super. App. Div. 1999) (Unpublished)

REGULATORY TAKINGS; WETLANDS—A court can not issue a judgment of liability for loss attributable to denial of a freshwater wetlands permit until the agency has had the opportunity to mitigate or ameliorate the alleged loss by modifying its action or inaction.

A lower court found that the Department of Environmental Protection (DEP) had inversely condemned a landowner’s tract as a result of the regulatory permit process provided in the Freshwater Wetlands Protection Act (FWPA) and the Coastal Area Facility Review Act (CAFRA). The landowner had sought a freshwater wetlands permit to fill acreage on its site in order to construct a road to the site’s uplands, and sought a CAFRA permit to construct a single-family residential development on the uplands. The lower court found a taking based on the DEP’s shifting regulatory scheme and its failure to provide administrative guidance during the permit process which, according to the lower court, prevented the landowner from formulating an acceptable development plan, thereby denying the landowner economically viable use of its land. On appeal, the Court concluded that the lower court erred when it declared its holding on liability to be a final judgment. According to the Court, once the lower court recognized that N.J.S. 13:9B-22b was applicable to its proceedings, the DEP should have been afforded the opportunity to utilize that statute to ameliorate its potential liability exposure. The statute provides: “[i]f the court determines that the issuance, modification, or denial of a freshwater wetlands permit ... constitutes a taking of property without just compensation, the court should give the [DEP] the option of compensating the property owner for the full amount of the lost value ... or modifying its action or inaction concerning the property so as to minimize the detrimental effect to the value of the property.” Consequently, the Court found it clear that a judgment of liability may not by entered without first affording the DEP an opportunity to ameliorate a property owner’s alleged loss attributable to a denial of a freshwater wetlands permit. The matter was remanded to the lower court, specifically to provide the DEP a reasonable opportunity to explore methods to ameliorate the alleged loss.


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