Last Chance Development Partnership v. Kean

• Decision Date: 20 June 1990
• Citation: 575 A.2d 427,119 N.J. 425
• Parties: , 21 Envtl. L. Rep. 20,236 LAST CHANCE DEVELOPMENT PARTNERSHIP, a New Jersey General Partnership; Bayshore Associates, a New Jersey General Partnership; Saw Mill Associates, a New Jersey General Partnership; Frederick W. Schmidt, Jr.; Stone Harbor Boulevard Corporation, a New Jersey Corporation; Ferguson Development Corporation, a New Jersey Corporation; Bald Eagle Enterprises, Inc., a New Jersey Corporation; and Long Beach Township Ocean Front Property Owners Association, Respondents, v. Thomas H. KEAN, Governor of New Jersey; Christopher J. Daggett, Acting Commissioner; and New Jersey Department of Environmental Protection, Appellants.
• Court: New Jersey Supreme Court

Page 425

119 N.J. 425

575 A.2d 427, 21 Envtl. L. Rep. 20,236

LAST CHANCE DEVELOPMENT PARTNERSHIP, a New Jersey General Partnership; Bayshore Associates, a New Jersey General Partnership; Saw Mill Associates, a New Jersey General Partnership; Frederick W. Schmidt, Jr.; Stone Harbor Boulevard Corporation, a New Jersey Corporation; Ferguson Development Corporation, a New Jersey Corporation; Bald Eagle Enterprises, Inc., a New Jersey Corporation; and Long Beach Township Ocean Front Property Owners Association, Respondents, v. Thomas H. KEAN, Governor of New Jersey; Christopher J Daggett, Acting Commissioner; and New Jersey Department of Environmental Protection Appellants.

Supreme Court of New Jersey.

Argued Nov. 27, 1989.

Decided June 20, 1990.

Harley A. Williams, Deputy Atty. Gen., for appellants (Peter N. Perretti, Jr., Atty. Gen. of New Jersey, attorney; Mary C. Jacobson, Deputy Atty. Gen., of counsel).

Richard M. Hluchan, for respondents (Levin & Hluchan, Marlton, attorneys).

PER CURIAM.

The Waterfront Development Act provides generally for state regulation of the development of property along the waterfront of navigable waters. This case requires the Court to decide whether the New Jersey Department of Environmental Protection ("DEP" or "Department") exceeded its statutory authority in promulgating either or both of two rule amendments to the Act. Those amendments extend DEP's regulatory authority to developments in upland areas extending considerably beyond the waterfront itself. The Appellate Division determined that the first amendment, which imposed no specific territorial limitation on the upland areas encompassed by the rules, exceeded the authority of the Waterfront Development Act and was therefore invalid. Last Chance Dev. Partnership v. Kean, 232 N.J.Super. 115, 556 A.2d 796 (1989).

Immediately following the Appellate Division's decision, DEP again amended the rules, imposing a territorial limitation on the upland areas covered by the regulations. Governor Kean and DEP filed a petition for certification to review the Appellate Division decision invalidating the regulations. They claimed that the rule amendment as initially promulgated by DEP was a valid exercise of administrative authority under the Act. In the alternative, they claimed that the most recent rule amendment, limiting the territorial extent of the State's regulatory authority, overcame the grounds relied on by the Appellate Division in invalidating the original rules and thus should be declared valid. Plaintiffs opposed the petition, contending that the Department's rules, even in their current form, are invalid. We granted the petition for certification, 117 N.J. 135, 564 A.2d 860 (1989).

I.

The rules that are the subject of this appeal were promulgated pursuant to the Waterfront Development Act ("Act"), originally enacted in 1914. L. 1914, c. 123; N.J.S.A. 12:5-1 to -11. It currently provides:

All plans for the development of any waterfront upon any navigable water or stream or bounding thereon, which is contemplated by any person or municipality, in the nature of individual improvement or development or as a part of a general plan which involves the construction or alteration of a dock, wharf, pier, bulkhead, bridge, pipeline, cable or any other similar or dissimilar waterfront development shall be first submitted to the Department of Environmental Protection. No such development or improvement shall be commenced or executed without the approval of the Department of Environmental Protection first had and received, or as hereinafter in this chapter provided. [ N.J.S.A. 12:5-3.]

The Department promulgated its rule amendments following a declaration by Governor Kean that the coastal areas of the state were in "imminent peril" and required protective regulations. The first amendment adopted by the Department on December 2, 1988, provided that the regulatory authority under the Act

extend inland to include an adjacent upland area measured from the most inland beach, dune, wetland or other water area, ... to the greater of (1) 100 feet; or (2) the inland limit of the first property associated with residential, commercial or industrial use that involves a permanent building based on property lines existing on October 3, 1988. [ N.J.A.C. 7:7-2.3(a)2.]

In a statement accompanying the publication of the proposal of that rule, DEP expressed concern that construction had occurred "in a piecemeal fashion without regard to cumulative impacts upon the special nature of the coastal area [and that] [a]bsent the adoption, the State will continue to suffer serious and cumulative adverse social and aesthetic effects." 20 N.J.R. 2815 (Nov. 7, 1988). To protect the coast from the environmental hazards of development, the rule would have established a "buffer zone" extending DEP's regulatory authority to the territorial areas covered by the Coastal Area Facility Review Act, N.J.S.A. 13:19-1 to -21 (CAFRA), and, within those areas, to projects of fewer than twenty-five units, which would not otherwise be subject to CAFRA regulation. As acknowledged by DEP, the rules were a response "to insufficient control and continued development in land areas within the CAFRA area approximate to tidal water." Ibid.

Plaintiffs Last Chance Development Partnership, Bayshore Associates, Saw Mill Associates, Frederick W. Schmidt, Jr., Stone Harbor Boulevard Corporation, Ferguson Development Corporation, Bald Eagle Enterprises, and Long Beach Township Ocean Front Property Owners Association, are developers and property owners of lands not directly adjacent to any waterfront. Claiming that the amendment would subject the development of their properties to State regulation, they challenged the rule in the Appellate Division, which determined that the Act did not authorize DEP regulation of upland areas that otherwise fell within the CAFRA region. It reasoned that with respect to uplands, the Act contemplated regulation of development only of "narrow strips of land" immediately contiguous to the waterfront itself, and that the rule in effect subjected upland areas to regulation without reference to any territorial limits or requirements of contiguity. 232 N.J.Super. at 130-31, 556 A.2d 796. The Appellate Division also ruled that applying the regulations to developments or projects of twenty-four units or fewer was invalid. It found that CAFRA's explicit and specific exemption from regulatory control of facilities of twenty-four dwelling units or fewer prevailed over the contrary provision of the emergency rule amendments. Ibid.

On April 11, 1989, four days after the decision of the Appellate Division, the Department promulgated another amendment to the rule. That amendment limits the regulatory authority to uplands that are no more than 1,000 feet from most inland, dune, beach, or wetland. The Attorney General contends that that territorial limitation conforms to the Appellate Division's requirement that only "narrow strips" of property adjacent to the waterfront can be regulated under the Waterfront Development Act.

We must determine, therefore, whether the Waterfront Development Act authorizes State-agency regulation of developments on land that is not actually next to, on, over, or in the waterway as such, and, if so, what standards must define the scope of such authority or territorial limitations.

II.

On its face, the Waterfront Development Act is concerned with the regulation of development immediately contiguous to "navigable water"; it refers to "development of any waterfront upon any navigable water." N.J.S.A. 12:5-3. Ambiguity arises, however, because the Act neither defines nor describes what is encompassed by the term "waterfront," nor does it indicate how far inland or upland waterfront property may extend, or even whether a development must directly involve the waterfront or the waterway itself. Although the enumeration of illustrative "developments" in the Act includes projects that would normally be directly on the waterfront and be in, over, on, or next to the water itself, e.g., "dock, wharf, pier," N.J.S.A. 12:15-3, the statutory definition also includes "any other similar or dissimilar waterfront development." Ibid. (emphasis added). Presented with such ambiguity, we must look beyond the language of the statute itself to find the underlying intent of the legislation. State v. Churchdale Leasing, 115 N.J. 83, 557 A.2d 277 (1989).

The Appellate Division undertook a thorough and well-reasoned analysis of the legislative history of the Act, concluding that the primary concern of the Legislature was to regulate the commercial development of the waterfront. 232 N.J.Super. at 119-22, 556 A.2d 796. As the Appellate Division stated:

While we acknowledge that the Legislature was concerned with the revitalization of the entire waterfront area when it enacted the Waterfront Development Act, it is equally plain that its principal objective was to facilitate navigation and commerce. The Act was not designed to empower the DEP to regulate upland areas distant from any coastal waterway. The legislative history of the Act, which we have recited in detail, compels that conclusion. [Id. at 128, 556 A.2d 796.]

With the enactment of CAFRA in 1973, the Legislature sought to effectuate the comprehensive regulation of the State's coastal areas stretching from Sandy Hook to Cape May to the Delaware Memorial Bridge, and extending twenty miles inland from the Atlantic Ocean and Delaware Bay. N.J.S.A. 13:19-4. Neither at that time nor in the following years did either DEP or the Legislature attempt to define, apply, or extend the regulatory jurisdiction of the State under the Act itself beyond land on or immediately contiguous to the waterfront of navigable waters. As the Appellate Division noted, "At no time during this period [1914-1980] did the State ever assert that it had regulatory authority over upland areas above the mean high waterline." 232...