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LaRoy v. New Jersey Department of Environmental Protection

A-0447-07T3 (N.J. Super. App. Div. 2009) (Unpublished)

ENVIRONMENTAL PERMITS — It is not improper for the Department of Environmental Protection to propose that related owners of adjacent parcels cooperate with each other as a way to resolve land use problems under the Freshwater Protections Act or even to condition its issuance of a general permit upon those related parties reaching an agreement as to cross-use of their adjacent properties.

Two half-brothers each purchased alternating real estate lots from a single prior owner. Each lot was separately assessed for real estate taxes. One half-brother, who paid for all of the lots, was responsible for the property taxes on all of the lots. A time came when the brothers, acting jointly, filed a complaint alleging a regulatory taking of their lots resulting from the constraints under the Freshwater Protections Act (FWPA). Under the comprehensive wetlands protection scheme of the FWPA, the New Jersey Department of Environmental Protection (DEP) can issue general permits for certain regulated activities if an applicant’s activities will have only a minor impact on freshwater wetlands. If an applicant is ineligible for a general permit, it may request an individual wetlands permit. Further, an applicant may seek a transition area waiver under the FWPA, including an individual hardship waiver or individual special-activity waiver.

During the pendency of their takings litigation, the brothers filed a joint application for FWPA general permits for four of their lots. The DEP granted general permits for three of the lots conditioned on the brothers submitting a transitional area averaging plan (TAAP). A TAAP allows a landowner to reduce the transition area in one location to facilitate building or some other use of the area if it correspondingly increases the transition area at another location. The general permits also required that the brothers file for a stream encroachment permit for each lot. The brothers did not appeal the conditional nature of the general permits granted; rather, they continued to pursue their takings claim with respect to all of the lots. The DEP moved to dismiss the regulatory takings litigation, arguing that the takings claim was not ripe because the brothers had not exhausted their administrative remedies. The lower court granted the motion to dismiss. On the brothers’ appeal, the Appellate Division agreed the litigation was not yet ripe because the brothers had not appealed the conditions set in their general permits, did not appeal the denial of a permit for one other lot, and had never filed for any type of wetlands permit for other subject lots.

The brothers subsequently filed a joint administrative appeal for the three conditional general permits, arguing that the DEP was not empowered to condition the permits on their submission of a TAAP. They also appealed the denial of the general permit for one lot, and raised allegations of DEP inaction with respect to other applications. The matter was adjudicated by an administrative law judge, which found that the brothers failed to prove their claims by a preponderance of the credible evidence. This decision was adopted by the DEP Commissioner as final. The brothers then appealed only that portion of DEP’s decision that concerned the TAAP-related conditions for three of the lots. The brothers argued that they exercised no control over each other’s alternate lots, and therefore the DEP could not legally treat their lots as one “site” for the purpose of directing the performance of a TAAP. Under a TAAP’s implementing regulation, a proposed expanded transition area must be located on the same site as the reduced area.

The Appellate Division upheld the intention of the DEP, finding that the brothers could voluntarily agree to joint control of the lots (the site) that would enable them to submit a joint TAAP to DEP for the purposes of complying with the general permits so as to facilitate the overall use of their property. The Court additionally held that if the brothers chose not to submit a TAAP through voluntary action, the DEP could not force them to do so. The Court opined that the DEP had offered brothers, who had proceeded jointly in litigation and administrative proceedings involving all of the lots, an approach to resolving land use problems under the FWPA. While the DEP could not force them to utilize the approach, the Court concluded that it was not improper for the DEP to propose it or to condition a general permit on its submission.

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