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Woodland Private Study Group v. State

ELR Citation: 18 ELR 20263
Nos. No. A-91, 533 A.2d 387/27 ERC 1834/109 N.J. 62, (N.J., 11/16/1987) Aff'd

The court holds that an administrative order issued by the New Jersey Department of Environmental Protection (DEP) that limits the participation of potentially responsible parties (PRPs) in the development of remedial investigations/feasibility studies (RI/FSs) is not an intraagency statement exempt from rulemaking procedures under the New Jersey Administrative Procedure Act (APA). Plaintiffs argue that the DEP should have provided notice and a hearing before issuing an administrative order that forbids PRPs from conducting an RI/FS and requires PRPs who wish to participate in the development of the RI/FS to agree to certain conditions, including payment in advance of all of the costs of the RI/FS. The court first rules that in order to constitute an "intraagency statement" that is exempt from the APA's procedural requirements, an agency action must not have a substantial effect on the rights or legitimate interests of the regulatees. Prior New Jersey case law establishing the criteria for differentiating rulemaking from adjudication is not determinative here. Case law under the federal APA and from other states limits the statutory exemption for internal memoranda to statements that do not affect private rights and interests. The purpose of notice and comment opportunities is to allow public participation and assure fairness to affected parties in agency decisionmaking. The court declines to adopt the view that any agency statement that affects the regulated public falls outside the exemption; rather, the exemption does not apply where there is a "substantial impact" on the rights or legitimate interests of regulatees.

The court holds that the DEP's administrative order in this case is not subject to the exemption for intraagency statements. That the contents of the order were transmitted to the public does not by itself mean that the order could not constitute an intraagency statement. However, although the New Jersey Spill Act does not give PRPs the right to participate in an RI/FS, they nevertheless have a legitimate ecomomic interest in the development of the RI/FS because of their potential liability for the cleanup. Because the administrative order substantially affects this interest by severely curtailing the regulatees' participation in the RI/FS process, the intraagency exemption does not apply.

The dissent would hold that the DEP administrative order is an intraagency statement because it represents an internal policy decision by the agency concerning the procedure by which it would carry out its legislative mandate, and no policy goal of administrative law is served by making such decisions subject to formal procedural requirements.

[The lower court decision is published at 16 ELR 20645.]

Counsel for Appellants
Mary C. Jacobson, Deputy Attorney General
Dep't of Law & Public Safety
8th Floor, Justice Complex, CN 080, Trenton NJ 08625
(609) 292-8740

Counsel for Respondents
William H. Hyatt Jr.
Pitney, Hardin, Kipp & Szuch
163 Madison Ave., CN 1945, Morristown NJ 07960-1945
(201) 267-3333