Environmental Enforcement Provisions Updated
Lewis Goldshore and Marsha Wolf
On January 4, Gov. Jon Corzine signed Senate Bill No. 2650 (Senators Joseph Vitale, D-Middlesex and Barbara Buono, D-Middlesex), referred to as the Environmental Enforcement Enhancement Act (EEEA), into law. P.L. 2007, chapter 246. The measure was designed to modernize, standardize and step up the enforcement and penalty provisions for 10 of the environmental protection statutes. It was prompted by the Department of Environmental Protection's failure to take vigorous enforcement action against a company that had illegally dumped contaminated fill in the sponsoring legislators' district.
During the period that EEEA was under legislative consideration, the proposal was revised somewhat to soften its impact. In other words, from the perspective of the regulated community, it could have been even worse. For a discussion of EEEA as it was moving through the Legislature, see L. Goldshore and M. Wolf, "Penalties for Environmental Violations to Escalate," 189 N.J.L.J. 715 (Aug. 27, 2008).
The 10 affected statutes were the Waterfront Development Law, N.J.S.A. 12:5-6, the Pesticides Control Act of 1971, N.J.S.A. 13:1F-10, the [Coastal] Wetlands Act of 1970, N.J.S.A. 13:9A-9, the Freshwater Wetlands Protection Act, N.J.S.A. 13:9B-21, the Coastal Area Facility Review Act, N.J.S.A. 13:19-18, the Endangered and Nongame Species Conservation Act, N.J.S.A. 23:2A-10, the Water Supply Management Act, N.J.S.A. 58:1A-16, the Safe Dam Act, N.J.S.A. 58:4-6, the Safe Drinking Water Act, N.J.S.A. 58:12A-10, and the Flood Hazard Area Control Act, N.J.S.A. 58:16A-63. These laws had been adopted over a 35-plus year period and reflected different approaches to environmental enforcement. Apparently, the Legislature believed that the enforcement provisions contained in the other environmental statutes were sufficiently modern, standard and restrictive as to not require amendment.
The standardized enforcement section for each of the statutes provides DEP with five core enforcement options. Whenever the department determines that there has been a violation of a statute, administrative rule, permit or order, it is authorized to: (1) issue an administrative enforcement order (AO); (2) bring a civil action; (3) levy a civil administrative penalty assessment (CAPA); (4) bring an action for a civil penalty; and (5) petition the Attorney General to bring a criminal action. According to EEEA, the same conduct may trigger more than one of the enforcement options.
Each of the enforcement sections then proceeds to provide the details for five enforcement options. In those situations in which DEP elects to issue an AO, that document must include the following: (1) a specification of the statutory provision(s), or the rule, regulation, permit or order which has been violated; (2) a citation to the action which constituted the violation; (3) a requirement for compliance with the provision(s) violated; (4) a requirement for restoration to address any adverse effects; and (5) notice of the right to a hearing to contest the AO.
When DEP brings a civil action as the result of a statutory, regulatory, permit or order violation it is authorized to request five types of relief. These include: (1) a temporary or permanent injunction; (2) recovery of reasonable costs for investigation, inspection, or monitoring, as well as the reasonable costs for preparing and bringing the civil action; (3) recovery of reasonable costs incurred to remove, correct, or terminate the adverse effects; (4) recovery of compensatory damages to natural resources such as wildlife, fish, aquatic life, habitat, plants, or historic or archaeological resources, and for other actual damages; and (5) an order requiring restoration of the affected site to the maximum extent practicable and feasible, or failing that, the provision of DEP-approved off-site alternatives. According to the Senate Environmental Committee's Statement, the recovery of costs to prepare and bring an action was limited to outside experts' fees and other general litigation expenses, but did not include attorney's fees.
DEP's most potent enforcement tool takes the form of the authority to issue unilateral civil administrative penalty assessments (CAPA). These assessments may be up to $25,000 per day for any violation of the covered statutes, regulations, permits or orders. While pending in the Legislature, the maximum daily assessment level was reduced from $50,000 to $35,000 and then to $25,000. DEP is directed to adopt regulations setting CAPA levels based on the type, seriousness, duration and conduct of the violation. For an example of this type of penalty matrix rule, see N.J.A.C. 7:7A-16.8(c) and (d). In addition, the CAPA may include an assessment for any economic benefits from the violation derived by the violator. It should also be noted that DEP is expressly authorized to compromise a CAPA upon such terms as it deems appropriate.
DEP is required to provide notice of the CAPA by certified mail, or personal service, to the property owner or person alleged to have committed the violation. The notice in the form of an administrative order and notice of civil administrative penalty assessment (AONOCAPA) includes an identification of the violation, a statement of the agency's version of the operative facts, the basis for the penalty, and the recipient's hearing rights.
In the event that the recipient intends to contest the penalty, it must request a hearing within 35 days of receipt of the AONOCAPA. >From a practice perspective, it is essential that the request is made in writing in accordance with the instructions provided by DEP, that the request is filed by certified mail or courier and that evidence of receipt is retained. The state agency takes timely filing of appeals very seriously. For an example of DEP's approach concerning this requirement, see D.R. Horton, Inc. v. DEP, 383 N.J. Super. 405 (App. Div. 2006) (where DEP did not prevail in barring an appeal as untimely when the request had been sent by certified mail four days before the expiration of the appeal period but was not received until after its close).
Following the hearing and upon the finding of a violation, DEP may issue a final order assessing the fine. At that time, the payment is due. If the sum is not paid within 90 days, interest accrues at the rate on judgments provided in the Rules of Court.
EEEA authorizes DEP to seek civil penalties of up to $25,000 per day for violations of the statutes, regulations, permits, AOs or court orders. During the legislative process, EEEA's maximum daily civil penalty level was ultimately reduced from $50,000 to $25,000; however, the civil penalty level for Safe Drinking Water Act violations remained at $35,000. Civil penalties may also be sought for failure to pay a CAPA in full, failure to make a payment in accordance with a DEP penalty payment schedule, or knowingly making any false or misleading statement to DEP on any application, record, report, or other document. These penalties may be collected in summary proceedings under the Penalty Enforcement Law of 1999. N.J.S.A. 2A:58-10 et seq. As if these penalties, costs or interest charges were not sufficient deterrent and punishment, the statute authorizes the court to assess the violator for any economic benefit that accrued from the violation.
The stakes dramatically increase when DEP seeks criminal enforcement. It is a crime of the third degree for a person to purposely, knowingly or recklessly violate any of the 10 statutes, or any applicable rule or regulation, permit or order. Crimes of the third degree are punishable by imprisonment for a term of between three and five years and, in this situation, by a fine of not less than $5,000 nor more than $50,000 per day of violation. N.J.S.A. 2C:43-6(a)(3).
EEEA also provides for third-degree criminal prosecutions in three other situations. These are for purposely, knowingly or recklessly making a false statement, representation, or certification in any application, record, or other document filed or required to be maintained by the 10 statutes, their applicable regulations, permits or orders; for falsifying or tampering with any monitoring device or method; or for purposely, knowingly or recklessly rendering inaccurate any monitoring device or method. In addition to the possibility of imprisonment, violators are subject to fines of up to $50,000 per day of violation.
As onerous as this sounds, EEEA's criminal penalty provisions were amended prior to adoption. An earlier version would have authorized fourth-degree criminal penalties for negligent violations of the ten environmental statutes.
In three instances — the Freshwater Wetlands Protection Act, the Safe Dam Act, the Flood Hazard Area Control Act — DEP may also record a notice of a violation in the land title records on the affected property. Once the violation is corrected, the notice shall be removed.
The sponsoring legislators elaborated on their rationales for introducing EEEA. According to Senator Joseph Vitale: "While many of our state's corporate citizens seek to follow environmental law, our weak, outdated penalties for serious environmental crimes almost serve as a disincentive for companies required to clean up their pollution. We need to put in place strong penalties which reflect current environmental priorities, so that polluters can't take advantage of the system." Similar views were expressed by Senator Barbara Buono: "The agency [DEP] is responsible for ensuring compliance with so many environmental laws we take for granted in New Jersey, but many of these statutes carry outdated penalties which do not reflect the impact on the public that rampant pollution has had. Our proposed legislation would enhance the authority of the DEP, and ensure that polluters cannot continue business-as-usual without paying to help clean up their mess."
It is clear that EEEA will result in serious adjustments in the DEP-regulated community relationship. Due to its wide-ranging reach, those subject to the new regime include far more than the comparatively rare, wanton and nefarious polluter. Rather, those more likely to become ensnared in the enforcement web include homeowners with unauthorized waterfront improvements, the unwitting owners of dams that fail to keep pace with DEP's costly requirements, and the small businesses that are unable to achieve total and continual compliance with the thousands of pages of ever-changing environmental regulations. The questions that will have to be answered at some point are whether EEEA had a deterrent effect on those intent on polluting the environment, whether there were better ways to achieve the desired objective, and whether the enactment sent one more negative message to the state's struggling business community.
Goldshore is a partner at Goldshore, Cash & Kalac of Lawrenceville. His practice is devoted to environmental, land use and municipal law. Goldshore and Wolf are co-authors of New Jersey Environmental Law (ICLE 2003), and Goldshore is a co-author of New Jersey Brownfields Law, published by New Jersey Law Journal Law Books. Their column appears regularly in the Law Journal.