Hi Tech Trans, LLC v. New Jersey

• Citation: 382 F.3d 295
• Decision Date: 02 September 2004
• Docket Number: No. 03-2849.,No. 03-2773.,03-2773.,03-2849.
• Parties: HI TECH TRANS, LLC; David Stoller, Appellants v. State of NEW JERSEY, Department of Environmental Protection; Wolfgang Skacel, C.H.M.M.;<SMALL><SUP>*</SUP></SMALL> Bradley M. Campbell.<SMALL><SUP>*</SUP></SMALL>
• Court: United States Courts of Appeals. United States Court of Appeals (3rd Circuit)

Page 295

382 F.3d 295

HI TECH TRANS, LLC; David Stoller, Appellants v. State of NEW JERSEY, Department of Environmental Protection; Wolfgang Skacel, C.H.M.M.;^* Bradley M. Campbell.^*

No. 03-2773.

No. 03-2849.

United States Court of Appeals, Third Circuit.

Argued September 19, 2003.

September 2, 2004.

Appeal from the United States District Court for the District of New Jersey, Faith S. Hochberg, J Andrew L. Indeck, (Argued), Scarinci & Hollenbeck, LLC, Lyndhurst, for Appellants.

Peter C. Harvey, Attorney General of New Jersey, Andrea M. Silkowitz, Assistant Attorney General, James H. Martin, (Argued), Deputy Attorney General, R.J. Hughes Justice Complex, Trenton, for Appellees.

Before McKEE and SMITH, Circuit

Judges, and SCHILLER, District Judge.^*

SMITH, Circuit Judge, concurring in the judgment.

OPINION

McKEE, Circuit Judge.

Hi Tech Trans, LLC, which operates a solid waste disposal facility in Newark, New Jersey, and its Chairman and Chief Executive Officer, David Stoller (hereinafter collectively referred to as "Hi Tech"), sought declaratory relief against an administrative enforcement proceeding the New Jersey Department of Environmental Protection ("NJDEP") brought against Hi Tech. Hi Tech claimed that certain permit and license requirements imposed on solid waste disposal facilities by the New Jersey Solid Waste Management Act ("SWMA"), N.J.S.A. 13:1E-1 to -207, and its implementing regulations¹ are preempted because its solid waste disposal facility involves transportation by railroad and is therefore subject to the exclusive jurisdiction of the Surface Transportation Board ("STB").² The district court did not directly address the merits of Hi Tech's preemption argument. Rather, the court invoked the doctrine of abstention under both Burford v. Sun Oil Co., 319 U.S. 315, 63 S.Ct. 1098, 87 L.Ed. 1424 (1943), and Younger v. Harris, 401 U.S. 37, 91 S.Ct. 746, 27 L.Ed.2d 669 (1971), and dismissed the complaint. Hi Tech now appeals the dismissal of its declaratory action. Although our analysis differs from the analysis the district court relied upon, for the reasons the follow, we will affirm.³

I. BACKGROUND

A. New Jersey's Regulatory Scheme

New Jersey has established a comprehensive statutory scheme for regulating solid waste disposal based upon a legislative determination that "disposal and utilization of solid waste is a matter of grave concern . . . and . . . that the health, safety and welfare of the people of [New Jersey] require efficient and reasonable solid waste collection and disposal service or efficient utilization of such waste." N.J.S.A. 13:1E-2(a).

The collection, transportation, transfer, processing and disposal of solid waste is regulated by the SWMA and corresponding regulations located at N.J.A.C. 7:26-1.1 et seq. The SWMA grants the NJDEP the authority to regulate all solid waste facilities and register all persons engaged in the collection or disposal of solid waste. N.J.S.A. 13:1E-2(b)(6), N.J.S.A. 13:1E-4(a). In its regulatory capacity, NJDEP can impose liability on any "person" who violates the SWMA or the solid waste regulations. N.J.S.A. 13:1E-9(b). Regulations define a "person" to include individuals, corporations and corporate officials. N.J.A.C. 7:26-1.4. "Solid Waste" is defined broadly to include waste material that is stored or deposited in a manner that "such material or any constituent thereof may enter the environment or be emitted into the air or discharged into ground or surface waters." N.J.A.C. 7:26-1.6©, N.J.A.C. 7-26-2.13(g)(1)(iii). Hi Tech's OIRY facility is a "Solid waste facility" under the SWMA.⁵ It also constitutes a "transfer station" under the SWMA.⁶

New Jersey's environmental regulatory scheme prohibits "construction or operation of a solid waste facility without first obtaining a Solid Waste Facility ("SWF") Permit unless exempted pursuant to N.J.A.C. 7:26-1.1, -1.7 or -1.8."⁷ In addition to requiring a SWF, New Jersey law states that no "person" may operate a solid waste disposal facility . . . without first obtaining a certificate of public convenience and necessity. N.J.S.A. 48:13A-6.⁸ A person operating a solid waste facility in violation of that requirement is subject to fines ranging from $10,000 for a first offense, to not more than $50,000 for a third or subsequent offense. N.J.S.A. 48:13A-12(b).

B. Hi Tech's Business

Hi Tech's principal place of business is located at the Oak Island Rail Yard ("OIRY"), in Newark, New Jersey. David Stoller is Chairman and CEO of Hi Tech. In 1990, the Canadian Pacific Limited, now known as the Canadian Pacific Railroad ("CPR"), purchased the assets and "trackage rights" of the former Delaware and Hudson Railway Company.⁹ Those assets included trackage rights into the OIRY.

On November 6, 2000, CPR and Hi Tech entered into a License Agreement whereby Hi Tech agreed to develop and operate a construction and demolition debris ("C & D") bulk waste loading facility at the OIRY.¹⁰ Paragraph 4(a) of the License Agreement limits Hi Tech to using "the Premises only for the transfer of Waste Products from truck to railcars operated by CPR."

Hi Tech began operations at the facility (which it refers to as the "Transload Facility"), on September 17, 2001. Hi Tech's Transload Facility operates as follows: (1) trucks hauling C & D waste arrive at the facility; (2) the trucks discharge C & D into a hopper that Hi Tech provides at the facility; and (3) the C & D waste is then loaded directly into rail cars from the hoppers. C & D waste is neither stored nor processed at the facility. Once the rail cars have been filled, CPR transports them exclusively to out-of-state disposal facilities.

C. The NJDEP Investigation at OIRY

On April 16, 2003, NJDEP investigators conducted a site visit at the Hi Tech facility at OIRY. While there, they saw solid waste origin/disposal ("O & D") forms¹¹ and weigh tickets taken in and generated for solid waste loads accepted that day. All loads were classified on the O & D forms as either ID # 13 or ID # 13C. See note 11.

Records indicated that approximately 12 "roll-off vehicles" had delivered solid waste to the facility for transfer from Hi Tech's facility prior to the NJDEP's investigators' arrival on April 16, 2003.

Before Joseph Levy, Hi Tech's general manager, arrived at the facility, the investigators also observed 4 loaded gondola rail cars containing bulky waste materials such as plaster, lathe, treated painted wood, plastic bags, cardboard, drywall, and sheet metal. The investigators met with Levy and asked him to accompany them to observe the actual "tipping operation" and to answer questions regarding the operation.

Inbound roll-off trucks transporting C & D (ID # 13C) and bulky waste (ID # 13) were thereafter observed entering the facility and proceeding to the inbound scale. The trucks went to the "east box"¹² to dump their loads of solid waste and thereafter a crane loaded the waste into a waiting open-top rail car. Loads were visually inspected prior to dumping, and the crane operator had a full view of what was being dumped out of the roll-off container.

After dumping and leaving the "east box" area, trucks crossed the railroad tracks and proceeded to "weigh out" at the outbound scale. There, drivers turned in O & D forms and signed off on scale tickets prior to leaving the site. During the several minutes that investigators observed this operation, they saw several roll-off containers from various commercial and non-commercial solid waste haulers dump loads into the east box before the crane loaded that waste into a waiting rail car. They also saw approximately 15 loads (approximately 375 cubic yards) of ID # 13 or ID # 13D solid waste tipped for transfer at the facility.

Based upon this investigation, the NJDEP determined that Hi Tech was operating a transfer station, and that OIRY was a "solid waste facility." As noted above, solid waste facilities require solid waste facility permits and NJDEP approval of engineering designs. Based upon observations during the site visit, the NJDEP issued an Administrative Order after determining that Hi Tech was operating the facility without the required permits, registration, or design approvals and that Hi Tech was therefore operating the facility in violation of N.J.A.C. 7:26-2.8(f). The Administrative Order also charged that Hi Tech was operating in violation of N.J.A.C. 7:26H-1.6(a) because it was engaging in the business of solid waste disposal without a Certificate of Public Convenience and Necessity.¹³ No penalty was assessed, but Hi Tech and Stoller were ordered to cease solid waste operations within twenty days.

The Order was served upon Hi Tech and Stoller on May 28, 2003, with an effective date of June 17, 2003. As will be detailed later, Hi Tech and Stoller filed a complaint in the district court on June 6, 2003, seeking, a declaration that state regulation of the OIRY facility was preempted by federal law. However, as of June 16, 2003, the day the district court dismissed the complaint, Hi Tech and Stoller had not availed themselves of their right to request either an administrative hearing, a stay from the NJDEP, or any of the other relief afforded under New Jersey's Administrative Procedure Act.¹⁴ Instead, they waited until June 17, 2003, the day after the district court dismissed the complaint in this case, and then sought a hearing and stay from the NJDEP.

On June 30, 2003, Bradley Campbell, New Jersey's Commissioner of Environmental Protection, ordered "that the Office of Solid Waste Compliance and Enforcement shall forbear from seeking judicial enforcement of the cease and desist order for a period of 60 days, or until further order of the Department vacating or amending this order for emergency relief, to enable [Hi Tech and Stoller] to obtain appropriate administrative due process on an expedited basis pursuant to the Administrative Procedure Act."

As noted, on June 17, 2003, Hi Tech requested an...