Real Property & Environmental Law Alert : New Jersey, New York, Pennsylvania & Delaware Lawyers & Attorneys for Real Estate Development & Environmental Law

A victory in the Supreme Court is generally welcome news for the U.S. Environmental Protection Agency (EPA). But, the Court’s decision last month in a Clean Water Act case may foreshadow a sweeping change in administrative law that would certainly not please EPA or other agencies: the end of a long-standing rule of judicial deference to agencies in the interpretation of their own regulations.

It is well established that when they interpret statutes, federal agencies are accorded substantial deference, such that a court must uphold an agency’s reading of an ambiguous statute as long as it is a plausible, reasonable reading. This is known as Chevron deference.

The Court has long applied the same rule when agencies interpret their own regulations. Beginning with Seminole Rock in 1945, the Court laid down the rule that an agency’s interpretation controls, even it is not the best or most natural reading, as long as it is not “plainly erroneous or inconsistent with the regulation.” This is often called Auer deference, after the 1997 case that reaffirmed the principle.

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In a unanimous decision that was at once sweeping and limited, the New Jersey Supreme Court held that the Department of Environmental Protection (DEP) need not obtain a warrant before entering a residential parcel to ensure compliance with the terms of a wetlands permit. The Court stopped short of a blanket validation of all warrantless searches under the wetlands statute, or of all warrantless searches of residential property subject to any sort of permit, instead grounding its holding in the protections afforded by the process that DEP must follow, and limiting it to searches of properties that are subject to a wetlands permit.

The case concerned the property of Robert and Michelle Huber. The parcel was subject to a permit issued to the developer of the property in 1992 under the Freshwater Wetlands Protection Act (FWPA). A deed restriction referring to the permit was recorded when the developer sold the property in 1994. The property was sold once again, in 1997, before the Hubers acquired it in 1999. Their title report also referred to the permit.

In 2002, after complaints from a neighbor about the placement of fill and the mowing of vegetation in restricted portions of the Hubers’ land, DEP sent an inspector to the property. The parties disputed whether he received permission to enter the property, but he did in fact enter and collected evidence of violations. Subsequent inspections, aerial photographs, and the Hubers’ own admissions eventually established clear evidence of permit violations. DEP assessed a civil penalty and ordered the Hubers to submit a restoration plan. An administrative law judge, the DEP Commissioner, and the Appellate Division all upheld the DEP order.

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New York State was among the first to enact programs aimed at remediation and redevelopment of contaminated sites. The goal of such programs is both to promote economic revitalization and to encourage private entities to remediate the state’s contaminated sites. Three such programs, the Voluntary Cleanup Program (“VCP”), the Environmental Restoration Program (ERP), and the Brownfield Cleanup Program (“BCP”), have achieved considerable success, with over 400 sites having been remediated in the past two decades. Nevertheless, policy makers continue to search for ways to make these programs better and more cost efficient. Prompted by the impending expiration of key provisions of the BCP, a report released by the New York State Comptroller’s office in April 2013, provides an assessment of these programs, as well as some options for improvement going forward.

The VCP was New York’s first attempt to address its brownfields problem. It provided participants with limited liability protection, targeted cleanup standards based on the proposed use of the site, and overall a more streamlined process than the State Superfund process. Unlike the other two programs, it did not offer any financial incentives. Nonetheless, 212 sites have been remediated through this program. The ERP supports municipal projects to remediate and redevelop brownfields. Like the VCP, the ERP provides limited liability protection to participating municipalities. Unlike the VCP, however, the ERP provides for 90% of cleanup costs. Since its inception, this program has resulted in the remediation of 68 sites at an average cost to the State of approximately $780,000 per site. The BCP, like the VCP and ERP, offers limited liability protection and a streamlined process. Unlike those programs, however, the BCP offers refundable tax credits of 22% to 50% for cleanup costs and (subject to caps based on cleanup expenses and overall dollar amounts) 10% to 22% for redevelopment costs. Since its adoption, this program has seen the cleanup of 128 sites at an average tax credit cost to the State of $9.4 million per site.

In an effort to make such programs more cost-effective without discouraging the continued cleanup and redevelopment of New York’s brownfields, several options have been proposed. These include tweaking the incentives that are currently offered by, for example, limiting or removing tax incentives entirely, or maintaining credits for cleanup costs while restricting them for development costs. Other options include reducing the administrative burdens of these programs in order to simplify participation, or creating low-cost options for projects that are viable without financial incentives.

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The United States Environmental Protection Agency (“EPA”) recently released its long-awaited final vapor intrusion draft guidance (“Final VI Guidance”). The nearly 200-page document establishes a complex framework for assessing vapor intrusion from analyzing key factors; making risk management decisions; and implementing, monitoring and terminating mitigation strategies and is intended to be used at any site that is being evaluated under CERCLA, RCRA, EPA’s brownfield grantees, or state agencies with delegated authority. The Final VI Guidance supercedes all prior EPA guidance documents addressing vapor intrusion assessment and mitigation including the 2002 Draft Vapor Intrusion Guidance, but takes into account the public comments submitted from 2002 through 2012 and the recommendations of the Office of Inspector General (OIG).

In addition to the Final VI Guidance, which applies generally to petroleum hydrocarbons, EPA released its companion Guidance For Addressing Petroleum Vapor Intrusion At Leaking Underground Storage Tank Sites (“PVI Guidance”), which focuses specifically on petroleum hydrocarbons released from underground storage tanks. For these situations, the guidance recommends that owners and operators assess any immediate threat to safety, conduct a site characterization and develop a conceptual site model, delineate a lateral inclusion zone, identify preferential transport pathways within the inclusion zone, sample if light non-aqueous phase liquid (“LNAPL”) exists within 15-feet of an underlying building, and mitigate as appropriate.

“When final, these guidance documents will help ensure vapor intrusion exposure assessment and mitigation actions to protect human health are undertaken in a technically, scientifically and nationally consistent manner,” stated Richard Kapuscinski, a senior official in EPA’s Office of Superfund Remediation and Technology Innovation, in a memorandum announcing the Final VI Guidance release.

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A recent news release on the NJDEP website discusses new efforts by the Christie Administration to streamline vital rebuilding projects necessitated by the destruction caused by Superstorm Sandy. The new rules, which were adopted on an emergency basis on April 16th, are intended to eliminate some of the red tape typically associated with permit procedures, while ensuring the protection of coastal resources and encouraging the rebuilding of a more resilient New Jersey coastline. This is just the latest action taken by the Governor and NJDEP to ease the burden on residents, businesses and municipalities seeking to rebuild. Beginning as early as five days after the storm swept through New Jersey, actions were already being taken to waive permitting requirements for those rebuilding vital infrastructure such as roads and bridges. More recently, the Christie Administration adopted a streamlined process for property owners wanting to rebuild to new elevation standards in flood zones.

Bob Martin, Commissioner of the NJDEP, justified these emergency actions, stating that the “Christie Administration is committed to taking every step possible to help our communities become stronger than ever from this historic storm, including eliminating unnecessary red tape that would needlessly impede the important work ahead. These common sense changes will make it easier for our residents and businesses to continue on the road to recovery while ensuring continued protection of natural resources.” Many activities that require individual permits will now be allowed under general permits or permits by rule. An example of these changes is the use of permits by rule for the maintenance of beaches and dunes in advance of the 2013 hurricane season. A general permit will replace individual permits for projects that create living shorelines with vegetation, sand, organic materials and/or bivalves such as oysters and clams. Countless other measures are similarly aimed at reducing both the time and money that formerly would have been spent on more complex permit requirements.

While these rules are being implemented on an emergency basis for 60 days, there is a concurrent proposal for a permanent rule change, which will be open for public comment for a period of 30-days. Comments can be submitted online until June 5th. A public hearing on the final rule will be held on May 22nd at the Long Branch Municipal Building in Long Branch, New Jersey. Following the 30-day comment period, the NJDEP will respond to any public comments before adopting the permanent rule, which it hopes to do at the expiration of the emergency rule.

Adam C. Arnold is an Associate in the Gibbons Real Property & Environmental Department.

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In a recent interview by Law360, Irvin M. Freilich, a Director in the Gibbons Real Property & Environmental Department, discussed the most challenging case he has faced yet, as well as an aspect of environmental law he feels should be reformed. This interview also provides insight into an important lesson Mr. Freilich learned early on that he has carried with him throughout his legal career. To view the full interview, please click here.

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For the first time in more than two decades, the Federal Emergency Management Agency (“FEMA”) has updated its Advisory Base Flood Elevation (“ABFE”) maps for New Jersey’s coastal counties. The Christie Administration adopted these new standards as an emergency measure on January 24, 2013, and through formal NJDEP regulations, has now made them permanent. The revised FEMA elevations, which remain subject to change, are anywhere from two to four feet higher on average than the standards that had been in effect prior to Hurricane Sandy. New Jersey residents, particularly those impacted by flooding from Hurricane Sandy, should be aware of this change, as the NJDEP has incorporated these revised maps as the new standard throughout the state for the elevation of reconstructed homes in flood zones.

The Commissioner of the NJDEP, Bob Martin, defended the new standards as more protective of flood-prone properties, and as helping affected residents avoid a dramatic increase in flood insurance premiums once FEMA formally adopts new guidance for flood insurance. One obvious question is how some residents, still struggling to recover financially from the devastation caused by Sandy, are meant to afford such a significant undertaking as elevating their homes. According to a news release on NJDEP’s website, the Christie Administration is looking to help such residents offset this cost by providing funds from the federal Community Development Block Grant. Eligible homeowners could receive up to $150,000 for reconstruction and elevation of their flood-damaged homes, according to the article.

Depending on the amount of damage incurred at a given residence, the elevation revisions may not have immediate consequences. Homes that sustained less than 50% damage are not required to do anything, but are cautioned that they will likely be subject to much higher flood insurance costs if they choose not to elevate in accordance with new standards. If, on the other hand, a residence sustained more than 50% damage, the owner must elevate to the new standard plus one foot, as required by the Flood Hazard Area Control Act. Under the amended rules, property owners rebuilding to the new standards will not need to apply for a special NJDEP Flood Hazard Area permit, which should result in savings on permit fees and design costs, as well as saving the time that it would normally take for NJDEP review.

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Russell B. Bershad, Co-Chair of the Gibbons Real Property & Environmental Department, will serve as a panelist at the upcoming RealShare New Jersey Conference on Wednesday, April 10, 2013, at the Newark Club in Newark, NJ.

Mr. Bershad's panel, "The Needs of the Modern Office User," will discuss both the design and demand for space, as companies constrict their physical space and telecommuting becomes more prevalent. The panelists will also discuss their approach to doing business in today’s challenging marketplace, including site and office selection in urban versus suburban regions, owning vs. leasing, the impact of the economy and job market on decisions, and the overall burdens and benefits of doing business in New Jersey.

For full program information or to register, please click here.

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The U.S. Supreme Court’s decision on superfund “arranger liability” in Burlington Northern & Santa Fe Railway Company v. United States continues to reverberate. In an article published in BNA’s Environmental Due Diligence Guide, David Freeman and Harry Clayton examine two recent decisions on arranger liability in Carolina Power & Light Co. v. Alcan Aluminum Corp. The full article is available here.

Pictured above: David J. Freeman (left) is a Director in the Gibbons Real Property & Environmental Department. Harry H. Clayton, IV (right) is an Associate in the Gibbons Real Property & Environmental Department.

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