Taking on the NJDOT: Appellate Division Broadens Objector’s Ability to Challenge NJDOT Permits

It is not uncommon in New Jersey for businesses to fight tooth and nail to prevent competitors from obtaining development approvals. This month, in In the Matter of the Issuance of Access Conforming Lot Permit No. A-17-N-N040-2007 by the New Jersey Department of Transportation for Block 136, Lots 2 and 3 in Mahwah Township, New Jersey, the Appellate Division dragged the New Jersey Department of Transportation (“NJDOT”) into the fight and provided objectors with another path to delay or even prevent a business competitor from moving into town.

Typically, objections are fought in front of the relevant municipal land use board and later in court. In the Mahwah case, a gas station along Route 17 objected to an application by Pilot to construct a competing service station and convenience store approximately 0.2 miles away on Route 17. In addition to objecting during the Zoning Board of Adjustment hearings, the objector filed a letter and traffic data with the NJDOT objecting to Pilot’s application for a major access permit and waiver for lot frontage pursuant to the State Highway Access Code.

The NJDOT rejected the objector’s submission on the basis that the State Highway Access Code does not allow direct public input and directed the objector to air its grievances during the Zoning Board of Adjustment hearings. Upon the grant of the access permit and waiver, the objector appealed the NJDOT’s decision to the Appellate Division.

The Court began by stating that New Jersey takes “a liberal approach to standing to seek review of administrative actions.” The Court explicitly found that “[t]he competitors of a party who has received a governmental approval required for a proposed business operation also have standing to appeal the approval.” The Court concluded that the objecting gas station owner had standing both as a nearby property owner and as a business competitor.

The Court also concluded that the objector was an “interested person” because it had standing and the issue involved a public interest (i.e. the increase in traffic congestion and risk of accidents). As an “interested person,” the Court found that the Administrative Procedures Act permitted the objector to submit “data, views, or arguments” to the NJDOT for its consideration. Because the NJDOT rejected the objector’s submission, the Court overturned the grant of the permit and waiver and directed the NJDOT to reconsider Pilot’s application in light of the objector’s data, views, and arguments.

This case may have a wide reaching impact on the land use approval process. Besides making the already lengthy NJDOT permitting process even longer and more contentious, the decision and its holding with respect to the Administrative Procedures Act may open the door to making every administrative permitting process into an objecting business competitor’s playground. Although the ability to challenge the issuance of an NJDOT permit may not prevent a business competitor from opening , it will most certainly make the process of obtaining land use approvals longer and more expensive for the applicant.