Agenda - Planning Commission - 07/09/2009

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Zoning Bulletin April 25, 2~09 I Volume 3 I No.8 --" 1\ \. . ("LOA"), authorizing Kelly's project. The LOA specified that it was "in lieu of" a coastal general permit. The Dragons challenged the settlement agreement. An Administrative Law Judge set" aside the agreement as invalid. However, DEP's Commis- sioner issued a final administrative decision on the matter, finding the agreement valid. Despite Kelly's failure to meet one of three criteria{or issuance of a coastal general permit, DEP's Commissioner concluded that the settlement was within DEP's discretion because of a "'litigation risk' inherent in the denial of a permit." The Dragons appealed from DEP's final decision, They argued that the agency exceeded its authority under CAPRA by bypassing substan- tive CAPRA regulations and issuing approval in lieu of a permit. f ( I I J I DECISION: Reversed. The Superior Court of New Jersey, Appellate Division agreed with the Dragons. The court concluded that CAFRA did not give DEP express or implied power to authorize Kelly's proposed development in a settlement agreement or authorizing letter "in lieu of" a formal permit. The court explained that an administrative agency-such as DEP- 1) could only have the power to waive its substantive regulations if it: ad- opted a regulation pertaining to any such waiver; and set forth appropri- ate standards to govern its decision-making. New Jersey's Coast Permit Program ("CPP") Rules allowed "waiver" of substantive Coastal Zone Management ("CZM") Rules, but only if: (1) strict guidelines were met; and (2) the waiver was necessary to avoid an unconstitutional taking of property. Here, the court noted, there was no claim that DEP's permit de- nial was a taking; nor was there any hardship exemption since Kelly had alternatives under which he could reconstruct his home. Consequently, the court concluded, DEP could not waive the CZM Rule requirement that Kelly obtain a permit for his proposed development. DEP had argued that it had the authority to deviate from strict com- pliance with its own regulations in order to avoid "litigation riSKS" and potentially adverse legal determinations. The court disagreed. It noted that an agency-such as DEP-could not give itself authority that was not legislatively delegated. Here, the court found, DEP did not have statutory authority under CAPRA to use the settlement process "to cir- cumvent CAFR.A:s substantive permitting requirements." Rather, devel- opment governed by CAFRA: (1) required a permit; unless (2) the pro- posed development was expressly exempted by statute or would have "minimal impact to the environment, such as rebuilding in the same footprint..." Here, said the court, the settlement agreement and LOA . ------ , ) ~/ @ 2009 Thomson Reuters 11 39