THE NJDEP’S UNILATERAL WITHDRAWAL OF A RIP WAIVER UNDER ISRA FOUND TO BE CONSTITUTIONAL; RECIPIENT NOT ENTITLED TO ADJUDICATORY HEARING

On February 5, 2024, the Appellate Division issued is decision In Re Appeal Of The New Jersey Department Of Environmental Protection’s September 6, 2022 Denial Of Request For Adjudicatory Hearing Under N.J.A.C. 7:26c-9.10, Dated May 12, 2022, Concerning The Department’s April 20, 2022 Notice Of Remediation In Progress Waiver Rescission. The question at issue was whether a Remediation in Progress waiver (RIP waiver) issued by the New Jersey Department of Environmental Protection (NJDEP) under the Industrial Site Recovery Act (ISRA) conveys a property interest. If a RIP waiver did constitute a protected property interest, unilateral withdrawal by the NJDEP without a hearing would be unconstitutional, violating the procedural due process rights of a RIP waiver recipient.

An RIP waiver permits an owner of an industrial establishment to transfer ownership or operation of that establishment without fulfilling the ISRA requirement of obtaining a final remediation document, provided that the industrial establishment is  in the process of remediation and other specific requirements are met. The Appellate Division here concluded that a RIP waiver is not a property right such that a recipient is not deprived of procedural due process when their waiver is withdrawn and further, their request for an adjudicatory hearing denied. The Court reasoned that the recipient has no expectation to a continued entitlement by virtue of the RIP waiver, since it does not convey a continuing benefit after the property is transferred (its purpose is to expedite transfers of property) and since it is conditioned on the underlying ISRA requirements including remediation. When those conditions are not met, the RIP waiver may be withdrawn by the agency without the need for a hearing.

While incredibly important for recipients of RIP waivers and owners and operators of industrial establishments, former and current, this decision may have ripple effects throughout the regulated community. There are numerous NJDEP programs, such as permitting, land use and remediation, that offer benefits to regulated parties conditioned upon compliance with underlying applicable law. If the NJDEP withdraws a benefit, the recipient may not be entitled to adjudicatory recourse.