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In re South Jersey Fuel, Inc.

A-6938-98T5 (N.J. Super. App. Div. 2000) (Unpublished)

ENVIRONMENTAL LAW; ISRA—The Department of Environmental Protection is entitled to judicial deference in determining whether an establishment is an industrial operation under ISRA.

Following a request by a fuel distributor, the New Jersey Department of Environmental Protection (DEP) issued a Letter of Non-Applicability (LNA) stating that ISRA did not apply to the sale of its premises. The DEP based its conclusion on the distributor’s assertion that its facility had a Standard Industrial Classification number of 5983, which was not covered by ISRA. Several years later, the DEP rescinded the LNA after it received information that the facility should have been classified as a wholesaler of petroleum products, which is covered by ISRA, rather than as a retailer of petroleum products, which is not covered by ISRA. Despite its disagreement with the DEP, the distributor began a plan to comply with the ISRA requirements. However, several years later, the distributor raised the ISRA issue once again, requesting that the DEP reconsider its earlier decision. The DEP responded that it based its position that the facility was subject to ISRA on gallonage reports it received. The distributor appealed to the Director of the Division of Responsible Party Site Remediation of the DEP who affirmed the DEP determination concluding that “the value of sales for wholesale fuel at the facility was greater than the value of sales for retail fuel.” The distributor appealed and the Court held that “the decision of an agency is entitled to deference unless the decision is arbitrary, capricious, or unreasonable. Indeed, where special expertise is required, as in this case, an even stronger presumption of reasonableness exists. Thus, where the agency’s decision is supported by credible evidence in the record, this presumption of reasonableness generally dictates that its decision should be affirmed.” Here, the Court concluded that DEP’s decision was clearly supported by the evidence in the record. The gallonage report indicated that in one year the facility sold approximately 8.5 million gallons of wholesale fuel and only 1.6 million gallons of retail fuel, and in another year, the facility sold approximately 3.2 million gallons of wholesale fuel and less than 1 million gallons of retail fuel. The Court concluded that these gallonage reports clearly indicated that the facility sold more wholesale fuel than retail fuel, and therefore, the facility should be categorized as a wholesaler of fuel subject to ISRA requirements.

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