(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for
the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please
note that, in the interests of brevity, portions of any opinion may not have been summarized).
SMB ASSOCIATES (Anchoring Point) V. NEW JERSEY DEPARTMENT OF ENVIRONMENTAL
PROTECTION (A-118-93)
Argued March 14, 1994 -- Decided April 26, 1994
PER CURIAM
The issues addressed on this appeal are (1) the standing of an environmental interest group to
contest the issuance of a development permit in a coastal zone, and (2) the ability of an interdepartmental
review body to waive the substantive provisions of a regulatory plan that is under the jurisdiction of one of
the agencies.
SMB Associates proposed the building of a 200-slip marina, a 200-room motel, a restaurant, five
nautical shops, a dockmaster's building, and a residential development, consisting of sixty-nine townhouses,
120 condominiums, and 700 parking spaces on an undeveloped bay island. The development, called
Anchoring Point, will require an elevated roadway covering 5.63 acres of a seventeen-acre tract of wetlands
in Egg Harbor Township.
The major regulatory issues surrounding the case arose under the Coastal Area Facilities Review
Act (CAFRA). The Department of Environmental Protection and Energy (DEPE) enforces CAFRA and
has adopted regulations to guide the development of bay-island corridors, which are "non-oceanfront islands
surrounded by tidal waters" and areas "lying upland of wetlands and beaches but including the filled water's
edge." The regulations permit certain forms of "water dependent development" in bay-island corridors if the
property abuts a paved road and a sewage system with adequate capacity. The proposed Anchoring Point
development is "water dependent" because it involves a marina. However, according to DEPE, the property
does not abut a paved road and lacks access to sewers.
The primary issue in controversy is the ability of the Coastal Area Review Board (CARB) to waive
the CAFRA bay-island corridor development requirements for SMB Associates. CARB was established in
1973. It has power to hear appeals from decisions of the Commissioner of Environmental Protection and
Energy. CARB may affirm or reverse the decision of the Commissioner with respect to the applicability of
any provision of CAFRA to a proposed use, it may modify any permit granted by the Commissioner, grant a
permit denied by the Commissioner, deny a permit granted by the Commissioner or confirm his or her grant
of a permit. Beyond that, CAFRA does not grant explicitly any other powers to CARB.
DEPE denied SMB's request for a waiver of the bay-island corridor requirements. SMB then
appealed to CARB, over the DEPE Commissioner's objection. CARB granted the waiver and directed the
issuance of the necessary permits. DEPE elected not to appeal. The American Littoral Society (ALS) filed
a notice of appeal, challenging the waiver and the issuance of the permit. SMB challenged ALS's right to
appeal.
On appeal, the Appellate Division held that ALS had standing to seek judicial review of the
administrative action. In addition, the court, relying on general principles of agency law, concluded that the
power to waive CAFRA regulations must be exercised through the adoption of a rule establishing standards
for the application of waiver authority.
The Supreme Court granted certification.
HELD: In the unusual and non-recurring circumstances of this case, the Appellate Division correctly held
that the Coastal Area Review Board lacked the power to waive the substantive requirements of
the CAFRA bay-island corridor regulatory plan and that the American Littoral Society had the
required standing to challenge the review board's decision.
1. The Legislature did not contemplate that CARB would be authorized to waive substantive
requirements of CAFRA. In view of the nature of CARB, the Court will not generalize about the issue of
agency power. The decision not to decide this case expansively is reinforced by the fact that the Legislature
has recently repealed the CARB statute, thereby abolishing CARB. (pp. 3-4)
2. ALS had the required standing to pursue this appeal. This case is atypical because the position of
the DEPE (the primary regulator) was at odds with CARB (the final review body). ALS argues that it could
not have foreseen that existing DEPE policy would not be applied. Thus, although the dissent argues that
notions of fundamental fairness and exhaustion of administrative remedies should preclude sophisticated
third-party objectors from intervening in litigation after observing its progress for several years, the
application of those principles are not required here. The facts are much too unusual to deny ALS standing
to appeal, even though it should have made its position known earlier in the administrative process.
Therefore, under the circumstances the Appellate Division did not err in concluding that the ALS had
sufficient interests in the water-dependent development issues to appeal the CARB action. (pp. 4-5)
3. The Court need not consider whether D.W. Bennett or Richard Crema had sufficient interests in the
disposition of the case to give them standing to appeal as individuals. (pp. 5-6)
Judgment of the Appellate Division is AFFIRMED.
JUSTICE GARIBALDI, dissents from the Court's holding that knowledgeable and sophisticated
third-party objectors, who knew and monitored this ten-year long proceeding, but who deliberately chose not
to participate in the administrative proceedings or the prior appeal in the Appellate Division, now had the
right to seek judicial review of the final administrative determination. To permit the objectors' standing is
not only fundamentally unfair to the plaintiff but also places an unnecessary burden on the limited resources
of the judiciary and the administrative agencies involved. Moreover, the Court is deprived of the
administrative agency's well-established expertise in this extremely technical field, thus violating the doctrine
of exhaustion of administrative remedies and the statutory and administrative scheme of CAFRA.
CHIEF JUSTICE WILENTZ and JUSTICES CLIFFORD, HANDLER, POLLOCK, O'HERN and
STEIN join in this opinion. JUSTICE GARIBALDI filed a separate dissenting opinion.
SUPREME COURT OF NEW JERSEY
A-
118 September Term 1993
SMB ASSOCIATES
(Anchoring Point),
Appellant,
v.
NEW JERSEY DEPARTMENT
OF ENVIRONMENTAL PROTECTION,
Respondent.
Argued March 14, 1994 -- Decided April 26, 1994
On certification to the Superior Court,
Appellate Division, whose opinion is reported
at
264 N.J. Super. 38 (1993).
Richard M. Hluchan argued the cause for
appellant (Levin & Hluchan, attorneys).
Gordon N. Litwin argued the cause for
respondents American Littoral Society, D.W.
Bennett and Richard Crema (Ansell, Zaro,
Bennett, Kenney & Grimm, attorneys).
Mary C. Jacobson, Assistant Attorney General,
argued the cause for respondent Attorney
General of New Jersey (Deborah T. Poritz,
Attorney General of New Jersey, attorney).
PER CURIAM
This appeal concerns primarily (1) the standing of the American Littoral Society (ALS), an environmental interest group, to contest the issuance of a development permit in a coastal zone, and (2) the ability of an interdepartmental review body to waive the substantive provisions of a regulatory plan that is under the jurisdiction of one of the agencies. We hold that in
the unusual and non-recurring circumstances of this case the
Appellate Division correctly held that the review panel lacked
the power to waive the substantive requirements of the regulatory
plan and that ALS had the required standing to challenge the
review board's decision.
The facts of the case are set forth in the decision of the Appellate Division. 264 N.J. Super. 38 (1993). Briefly stated, the case involves SMB Associates' proposal to build a 200-slip marina, a 200-room motel, a restaurant, five nautical shops, a dockmaster's building, and a residential development consisting of sixty-nine townhouses, 120 condominiums, and 700 parking spaces on an undeveloped bay island. The development would require an elevated roadway covering 5.63 acres of a seventeen-acre tract of wetlands in Egg Harbor Township. The primary regulatory issues arose under the Coastal Area Facilities Review Act (CAFRA), N.J.S.A. 13:19-1 to -21. The Department of Environmental Protection and Energy (DEPE) is the agency charged with enforcing CAFRA. It has adopted regulations to guide the development of bay-island corridors, which are "non-oceanfront islands surrounded by tidal waters" and areas "lying upland of wetlands and beaches but including the filled water's edge." N.J.A.C. 7:7E-3.24(a)(2) and (3). The regulations permit certain forms of "water dependent development" in bay-island corridors if
the property "abut[s] a paved road and sewage system with
adequate capacity." N.J.A.C. 7:7E-3.24(d). The proposed
Anchoring Point development at issue in this case is "water
dependent" because it involves a marina. However, in the view of
DEPE, the Anchoring Point property does not abut a paved road and
lacks access to sewers. Without detailing the prior history of
the matter, the nub of the present controversy is the ability of
the Coastal Area Review Board (CARB) to waive certain CAFRA bay-island corridor development requirements for SMB Associates.
CARB was established in 1973 as a sort of safety valve for
the then-newly-enacted CAFRA. N.J.S.A. 13:19-13, in pertinent
part, provided the following:
The Coastal Area Review Board shall have
the power to hear appeals from decisions of
the [C]ommissioner [of Environmental
Protection] * * * . The board may affirm or
reverse the decision of the commissioner with
respect to applicability of any provision of
this act to a proposed use; it may modify any
permit granted by the commissioner, grant a
permit denied by him [or her], deny a permit
granted by him [or her], or confirm his [or
her] grant of a permit.
Beyond that, CAFRA does not grant explicitly any other powers to
CARB.
The Appellate Division, relying on general principles of
agency law, concluded in this case that "the power to waive CAFRA
regulations must be exercised through the adoption of a rule
establishing standards for the application of waiver authority."
264 N.J. Super. at 54. The Attorney General argues that agencies
have inherent power to waive regulatory requirements without
first promulgating a waiver rule pursuant to the Administrative
Procedure Act, N.J.S.A. 52:14B-1 to -21, if "extraordinary
circumstances merit a waiver to prevent an unjust and
unreasonable result in a particular case."
We need not resolve in this case the breadth of an agency's
power to waive regulatory requirements or whether a rule
authorizing waiver is always necessary. We are satisfied that
the Legislature did not contemplate that CARB would be authorized
to waive substantive requirements of CAFRA. The CARB members are
to use their best judgment and experience in applying the law to
the facts of cases coming before them, but not to revise CAFRA in
the process. In addition, the idiosyncratic interdepartmental
nature of CARB, which is composed of the Commissioners of
Environmental Protection and Energy, Commerce, and Community
Affairs (or their representatives), prompts us not to generalize
about the issue of agency power. Our decision not to decide this
case expansively is reinforced by the fact that the Legislature
has recently repealed N.J.S.A. 13:19-13, thus abolishing CARB.
L. 1993, c. 190, § 20.
Those same considerations lead us to conclude that ALS had
the required standing to pursue this appeal. The policy choice
between the desire to have a manageable administrative hearing
process (without a proliferation of parties) and the public
interest in not having non-party objectors raise issues in
judicial appeals that might better be resolved in the agency process is difficult. This case is atypical in that the position of the primary regulator (DEPE) in the administrative hearing was at variance with that of the final review body (CARB). ALS argues that it could not have foreseen that existing DEPE policy would not be applied to the case under review. ALS did not lay back to sandbag its opponents later. Thus, although our dissenting colleague makes an excellent argument that notions of fundamental fairness and exhaustion of administrative remedies should preclude sophisticated third-party objectors from intervening in litigation after observing its progress for several years, this is not the case for application of those principles. These facts are much too unusual to deny ALS standing to appeal, even though ALS should have made its position known earlier in the administrative process. Under the circumstances, the Appellate Division did not err in concluding that ALS, as an association concerned with the preservation of our coastal resources, had sufficient interests in the water-dependent development issues of this case to appeal the CARB action under Rule 2:2-3(a)(2). Because ALS had standing to prosecute this appeal, we need not consider whether D.W. Bennett and Richard Crema had sufficient interests in the disposition of the case to provide them with standing to appeal as individuals. See Elizabeth Fed. S. & L. Ass'n v. Howell, 24 N.J. 488, 499-500 (1957) (holding that right to challenge administrative decisions
"inheres not only in those who are direct parties to the initial
proceedings before an administrative agency * * * but also
belongs to all persons who are directly affected by and aggrieved
as a result of the particular action sought to be brought before
the courts for review").
The judgment of the Appellate Division is affirmed.
Chief Justice Wilentz and Justices Clifford, Handler,
Pollock, O'Hern, and Stein join in this opinion. Justice
Garibaldi has filed a separate dissenting opinion.
SUPREME COURT OF NEW JERSEY
A-
118 September Term l993
IN THE MATTER OF
SMB ASSOCIATES
(ANCHORING POINT),
Appellant,
v.
NEW JERSEY DEPARTMENT OF
ENVIRONMENTAL PROTECTION,
Respondent.
___________________________
GARIBALDI, J., dissenting.
Today the Court holds that knowledgeable and sophisticated
third-party objectors who knew and monitored this ten-year long
proceeding, but who deliberately chose not to participate in the
administrative proceedings or the prior appeal in the Appellate
Division, now have the right to seek judicial review of the final
administrative determination. I respectfully dissent.
To permit such objectors to thrust themselves into this
matter after intentionally holding back for ten years is not only
fundamentally unfair to plaintiff but also places an unnecessary
burden on the scarce resources of the judiciary and the
administrative agencies involved. Moreover, it deprives the
Court of the administrative agencies' well-established expertise
in this extremely technical field, thus violating the doctrine of
exhaustion of administrative remedies and the statutory and
administrative scheme of the Coastal Area Facility Review Act
("CAFRA"), N.J.S.A. l3:l9-l to -21.
This case commenced nearly ten years ago on October l8, l984, when SMB Associates ("SMB") applied to the Department of Environmental Protection, now the Department of Environmental Protection and Energy (DEPE), for permits under CAFRA. SMB requested the permits so it could proceed with its marina and residential development project known as Anchoring Point. CAFRA prohibits construction of a facility in a coastal area without a permit. See N.J.S.A. l3:l9-5. Because SMB's project constituted a facility, see N.J.S.A. l3:l9-4, the project could not progress without a permit from DEPE. The Commissioner of DEPE conducted a public hearing at which all "interested persons" had the right to participate and present comments. See N.J.S.A. l3:l9-9(a).
After the hearing, DEPE denied SMB's applications for permits because, inter alia, SMB's project plan did not satisfy DEPE regulations concerning the bay island corridor policy, see N.J.A.C. 7:7E-3.24 (now N.J.A.C. 7:7E-3.2l), and the general land area policy, see N.J.A.C. 7:7E-5.l. When SMB appealed the denial, the matter was referred to an Administrative Law Judge (ALJ) as a contested case. The ALJ found that DEPE should issue the permits because the project as proposed would meet the CAFRA standards. The Commissioner of DEPE reversed the ALJ's decision and refused to grant the permits based on his finding that the
site plan violated the bay island corridor policy and the general
land area policy.
SMB appealed to the Appellate Division. In an unpublished
opinion, the Appellate Division affirmed the denial on the bay
island corridor and the general land areas rationales cited by
the Commissioner. Yet, the Appellate Division reversed the
Commissioner's determination that the project violated other
regulations, such as the protection of shellfish beds, loss of
navigability of a channel that is part of the Intracoastal
Waterway, violation of wetlands regulations, inadequacy of the
proposed wetlands buffer, and the absence of an approvable storm
water run-off plan. SMB Assocs. v. New Jersey Dep't of Envtl.
Protection, No. A-2l75-87 (App. Div. March 23), certif. denied,
ll7 N.J. l54 (l989).
Although the Appellate Division affirmed the denial, it
suggested that SMB might benefit by submitting a revised plan and
requesting a waiver of the bay island corridor regulations.
However, as previously indicated, we
anticipate that SMB may elect to submit a
revised plan together with requests for a
waiver which may meet with DEP's approval.
If so, the DEP might want to reassess its
denial justified only by the bay island
corridor policy and the general land areas
policy. That is, with all other policies in
compliance, the agency might want to evaluate
the impact of any revised proposal. For
example, the regulations provide only that
coastal development which does not conform to
the acceptable intensity of development is
discouraged, not prohibited. N.J.A.C. 7:7E-5.2(c). While we will not speculate further,
we do note that it is possible that, if
intensity of development were the only factor
standing in the way of SMB's project, a plan
modification in that respect might result in
DEP approval.
Taking the hint, SMB requested a waiver of the bay island
corridor policy and the general land area policy. DEPE denied
the request, and SMB appealed to the Coastal Area Review Board
("CARB"), which is authorized to hear appeals from decisions of
the Commissioner of DEPE granting or denying a permit. See
N.J.S.A. l3:l9-l3. CARB had three voting members -- the
Commissioner of DEPE, the Commissioner of Commerce and Economic
Development, and the Commissioner of Community Affairs. Over the
DEPE Commissioner's objection, CARB granted the waiver and
directed the issuance of the necessary permits. CARB
reconsidered, pursuant to a DEPE motion, but ultimately affirmed
its initial decision to grant the waiver and to direct DEPE to
issue the necessary permits. DEPE elected not to appeal CARB's
decision to the Appellate Division.
The date was then January l5, l99l. Although the battle had
taken nearly seven years, SMB appeared to have emerged
victorious. The authority to grant a waiver had never been
questioned in any of the proceedings. With CARB's decision, SMB
now seemingly had the go-ahead to pursue its project. Enter the
American Littoral Society (ALS); its executive director, D.W.
Bennett; and an area shell fisherman, Richard Crema. They filed
a notice of appeal, challenging the waiver and the issuance of
the permit in the Appellate Division.
SMB challenged the objectors' right to appeal. The
Appellate Division held that the objectors had standing to seek
judicial review of the administrative action. 264 N.J. Super.
at 64. Today, the majority affirms that decision by relying on
the language of Elizabeth Federal Savings & Loan Ass'n v. Howell,
24 N.J. 488, 499-500 (l957) (holding that right to challenge
administrative decisions "inheres not only in those who are
direct parties to the initial proceedings before an
administrative agency * * * but also belongs to all persons who
are directly affected by and aggrieved as a result of the
particular action sought to be brought before the court for
review"). The objectors also cite as support the following
language from that case as if it were a mantra: "[If not we,] who
then is there who can or will challenge an administrative
decision favorable to the applicant?" Id. at 50l.
Both quotations, however, have little meaning in the context
of this case. This case is not like Elizabeth Federal Savings &
Loan Ass'n, supra, or In re Waterfront Development Permit,
244 N.J. Super. 426 (App. Div. 1990), certif. denied,
126 N.J. 320
(1991), or Public Interest Research Group v. Department of
Environmental Protection, l52 N.J. Super. l9l (App. Div.),
certif. denied,
75 N.J. 538 (l977), or Crema v. Department of
Environmental Protection, l
82 N.J. Super. 445 (App. Div. l982),
aff'd,
94 N.J. 286 (l983). In all those cases, the third-party
objector to the administrative action at least attempted to
participate in the administrative proceedings. Although their
attempts may have proven unsuccessful, they at least registered
their objection on the record. See Elizabeth Federal Sav. & Loan
Ass'n, supra, 24 N.J. at 494 (stating that third-party objectors
wrote to Commissioner to express their objections and their
desire to be heard); In re Waterfront Dev. Permit, supra, 244
N.J. Super. at 436 (noting that ALS sought to intervene in
administrative proceedings); Crema, supra, l82 N.J. Super. at
448-49 (noting that third-party objector appealed to CARB before
seeking judicial review); Public Interest Research Group, supra,
l52 N.J. Super. at 20l-02 (noting that third-party objector
sought to intervene and requested adjudicatory hearing).
In this case, by contrast, the third-party objectors elected
not to act although they clearly could have acted. CAFRA affords
"interested parties the opportunity to present, orally or in
writing, their position concerning the application and any data
they may have developed in reference to the environmental effects
of [a] proposed facility." N.J.S.A. l3:l9-9(a). In addition,
DEPE regulations adopted under CAFRA permit "[a]ny interested
person who considers himself aggrieved by a final action of the
Division" to request a hearing. N.J.A.C. 7:7-5.l(2). Likewise,
during an appeal to CARB, "[a]ny person or entity having a
significant interest in the outcome of a hearing request may, in
addition to filing a response, request permission to participate
in the appeal process." N.J.A.C. 7:7-5.2(c). Such persons are
those interested other than the applicant. N.J.A.C. 7:7-5.2(d)
(stating, "Where the request to participate is filed by someone
other than the applicant, evidence that a copy of the request has
been mailed to the applicant shall be admitted.") (emphasis
added).
Despite all those opportunities to be heard, the objectors
remained silent. They never raised a complaint, never sought to
be heard, and never presented arguments against SMB's permit
application. Their silence was not born of ignorance of SMB's
application for a permit. In fact, in an affidavit filed with
the court, ALS Executive Director Bennett admitted:
For a number of years on behalf of ALS, I
have monitored the proceedings in conjunction
with the permit applications of SMB
Associates (Anchoring Point), particularly in
conjunction with the Bay Island Corridor
Policy of the regulations of NJDEP. Because
we have limited funds and staff we do not
intervene or seek to take part directly in
any matter in which we believe the interest
of the public is properly being considered
and weighed by the appropriate governmental
authorities.
Nor was their silence born of ignorance of the process. The
objectors were well aware of their rights and were frequent
players in the game. See, e.g., In re Waterfront Development
Permit, supra,
244 N.J. Super. 426; Crema, supra,
182 N.J. Super. 445 (involving objectors' intervention in CAFRA permit
applications).
Here, the objectors engaged in a classic case of
sandbagging, biding their time and preserving their arguments
until the eleventh hour. Such attempts at sandbagging should not
be, and almost invariably are not, rewarded by allowing a third-party objector to seek judicial review of an administrative
determination. See Red River Broadcasting Co., Inc. v. Federal
Communications Comm'n,
98 F.2d 282 (D.C. Cir.), cert. denied,
305 U.S. 625,
59 S. Ct. 86,
83 L. Ed. 400 (l938); Bergen Pines Hosp.
v. Department of Human Serv.,
96 N.J. 456 (l984).
In Red River, the FCC's award of a radio station license was
challenged by a competitor that neither had participated nor
sought to participate in the proceedings before the FCC. No
question existed that the competitor had a cognizable interest in
the FCC's licensing decision. Nonetheless, the D.C. Circuit
found that because the competitor had made no attempt to
participate in the FCC proceedings, it could not be heard to
complain for the first time by means of judicial review.
The right to administrative relief is a
privilege afforded by law to persons who
consider themselves interested or aggrieved.
Unless the interests of such a person are
brought to the attention of the Commission
through established procedural channels, it
will be impossible for it to give them proper
consideration. The Act and the rules of the
Commission have made adequate provision
therefor. The burden, therefore, is, and
properly should be, upon an interested person
to act affirmatively to protect himself. It
is more reasonable to assume in this case a
legislative intent that an interested person
should be alert to protect his own interests
than to assume that Congress intended the
Commission to consider on its own motion the
possible effect of its action in each case,
upon every person who might possibly be
affected thereby. Such a person should not
be entitled to sit back and wait until all
interested persons who do so act have been
heard, and then complain that he has not been
properly treated. To permit such a person to
stand aside and speculate on the outcome; if
adversely affected, come into this court for
relief; and then permit the whole matter to
be reopened in his behalf, would create an
impossible situation. In a closely settled
area with a number of existing stations such
a procedure would permit successive appeals
by many persons and as a result a complete
blocking of administrative action.
Likewise, in Bergen Pines, we refused to entertain an appeal
of administrative regulations by a hospital that had declined to
participate in the administrative-rulemaking proceeding. We
reasoned that allowing objectors to administrative action to seek
judicial review without first presenting their arguments and
objections to the administrative agency "would force courts to
review potentially overwhelming reams of technical data and to
resolve from scratch issues as to which it does not have
particular expertise." 96 N.J. at 474.
Moreover, "it would permit a party who fostered an
inadequate rulemaking record by his own omission to take
advantage of the inadequacy of the factual record in order to
secure de novo review of the wisdom of the rule." Ibid. Having
identified those concerns, we adopted the reasoning of Professor
Schwartz, a well-respected administrative-law scholar, to
preclude the hospital from arguing against administrative action
for the first time in an appellate court.
One may go further and say there is not only
a right but a duty to present all relevant
evidence before the agency. The fundamental
principle is that issues and evidence
available to the individual must be raised
before the agency or the right to raise them
is waived. * * * The whole scheme of the
statute setting up the agency * * * would be
defeated if a party could go into court and
present his evidence for the first time
there.
* * *
Not only is review restricted to the
administrative record, it is also limited to
the issues raised before the agency. Both
orderly procedure and good administration
require that objections to agency proceedings
be made while the agency has opportunity for
correction. Any issue not raised at the
administrative level may not be considered on
review. "A reviewing court usurps the
agency's function when it sets aside the
administrative determination upon a ground
not theretofore presented and deprives the
Commission of an opportunity to consider the
matter, make its ruling, and state the
reasons for its action."
Our holding in Bergen Pines and the D.C. Circuit's decision
in Red River ultimately rest on a notion of fundamental fairness.
The Supreme Court explained the rationale over forty years ago in
United States v. L.A. Tucker Truck Lines, Inc.,
344 U.S. 33, 37,
73 S. Ct. 67, 69,
97 L. Ed. 54, 58 (l952):
Simple fairness to those who are engaged in
the tasks of administration, and to
litigants, requires as a general rule that
courts should not topple over administrative
decisions unless the administrative body not
only has erred but has erred against
objection made at the time appropriate under
its practice.
Underlying those decisions is the doctrine of exhaustion of administrative remedies. That doctrine does not merely serve as a bar to judicial review where an opportunity still exists to pursue administrative redress. It also serves as a form of estoppel, precluding parties who inexcusably fail to present their objections and arguments before the relevant administrative body from seeking judicial review of administrative determinations. See Frank E. Cooper, State Administrative Law, Vol. II, at 586 (lst ed. l965) (defining "the so-called doctrine of estoppel for failure to exhaust administrative remedies"); II Kenneth Culp Davis and Richard J. Pierce, Jr., Administrative Law Treatise § l5.l, at 306 (3rd Ed. l994) (stating that in such situations, "the court still may decline to review the final agency action because of the petitioner's failure to have exhausted the administrative remedies that were previously available"); see also S & G, Inc. v. Morgan, 797 P.2d l085, l087 (Utah l990) (stating that under corollary of doctrine of exhaustion of administrative remedies, "[i]t is well settled . . . that persons aggrieved by decisions of administrative agencies `may not, by refusing or neglecting to submit issues of fact to such agencies, by-pass them, and call upon the courts to
determine . . . matters properly determinable originally by such
agencies'") (quoting People v. Keith Ry. Equip. Co., l6l P.2d
244, 249 (Cal. Dis. Ct. App. l945)).
The doctrine of exhaustion of administrative remedies serves
important interests.
(l) the rule ensures that claims
will be heard, as a preliminary
matter, by a body possessing
expertise in the area; (2)
administrative exhaustion allows
the parties to create a factual
record necessary for meaningful
appellate review; and (3) the
agency decision may satisfy the
parties and thus obviate resort to
the courts.
[City of Atlantic City v. Laezza,
80 N.J. 255, 265 (l979).]
Those interests are undermined by the majority's failure to preclude the objectors' appeal. Indeed, the doctrine functions precisely to preclude appeals such as this one. The propriety of issuing permits under CAFRA is undoubtedly an issue of expertise better decided by an administrative body such as DEPE or CARB. Courts do not have the expertise to evaluate the environmental issues raised by the third-party objectors. ALS's claim that the only issue on appeal is a purely legal one -- whether or not DEPE may waive application of its regulations -- is both untrue and overly simplistic. First of all, the objectors have made factual assertions concerning the potential impact of waiving the bay island corridor policy. Second, inextricably linked to the legal
issue of waiver are the ramifications on economic development and
the environment of allowing or disallowing such a waiver.
Because the issues presented by the third-party objectors on
appeal were not addressed at the administrative level, the
factual underpinnings of those new issues were not developed at
the administrative level.
We have hitherto recognized that our entire system of
administrative law is better served when we resist the temptation
to usurp an administrative body's position as a fact-finder and
expert in a particular field. See Abbott v. Burke,
100 N.J. 269,
299 (1985) (stating that "this Court has called for exhaustion of
administrative remedies when this will serve to develop a fully
informed factual record and maximize the soundness of
determinations through the agency's expertise"); Paterson Redev.
Agency v. Schulman,
78 N.J. 378, 387 (stating that exhaustion of
administrative remedies ensures that "claims will be heard, as a
preliminary matter, by the body having expertise in the area"),
cert. denied,
444 U.S. 900,
100 S. Ct. 210,
62 L. Ed.2d 136
(1979). This case calls for precisely such restraint.
Because I would not permit the objectors' appeal, I do not
reach the waiver issue.