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Court Reaffirms that Regulated Businesses Subject to Unannounced DEP Inspections

Posted on Monday, June 3, 2013 by Susan C. Gieser

The NJ Supreme Court recently reaffirmed NJDEP’s right to conduct unannounced inspections of commercial property owned by businesses in highly regulated industries – and in certain limited circumstances, residential property.  The case involved a residential property subject to the Freshwater Wetlands Protection Act (“FWPA”), N.J.S.A. 13:9B-1 et seq.  In, NJ Department of Environmental Protection v. Huber, decided April 4, 2013, the issue raised was whether a property owner’s Fourth Amendment rights to be free from unlawful searches and seizures is violated when theNJDEP inspectors enter the owner’s property without permission for the purpose of inspecting activities which the NJDEP asserted industrial violations of the FWPA.  The Court stopped short of endorsing any broad rule allowing warrantless searches when a residential owner withholds consent or when the NJDEP has no evidence of a wetlands violation in progress.

The New Jersey Legislature passed the Freshwater Wetlands Protection Act, N.J.S.A. 13:9B-1, et seq. (“FWPA”), in 1987 to protect and regulate New Jersey’s sensitive freshwater wetlands. The FWPA established a permitting process to which a property owner must submit before engaging in any activity that risks disturbing wetlands. Thus, the FWPA requires property owners to obtain a permit before taking certain action on their property such as removing soil, disturbing the water level, adding fill or altering plant life.   The FWPA also extends a statutory right to the NJDEP to enter property “for purpose of conducting inspections, sampling of soil or water… and for otherwise determining compliance with the provision of [the] act.” N.J.S.A. 13:9B-21(m).

In the Huber matter, NJDEP inspectors entered the Huber property and concluded that Huber had placed 2,500 square feet of fill within the wetlands and had cultivated a lawn.  They also found that Huber had constructed a deck, patio and retaining wall that encroached on a wetlands easement.  Huber was ordered to pay a substantial penalty and restore the property to its prior condition.

On appeal Huber argued that the evidence of violations should have been excluded from trial since it was obtained without a warrant.  The NJDEP countered and defended its warrantless inspection by relying upon a prior case where a warrantless inspection was declared legal – U.S. v. Burger, 482 U.S. 691 (1987) and asserted that the inspection of the Huber’s property was similar to the Burger inspection since it was done in furtherance of an existing law (FWPA) enacted for the well-being of the public and for the protection of wildlife – a strong public interest.

In a unanimous opinion the NJ Supreme Court held that homeowners and others who acquire permits under the FWPA agree as part of the process to allow such inspections, so long as they are conducted at reasonable times.  “In view of the vital importance of protecting freshwater wetlands in New Jersey, privacy expectations . . . are diminished,” the court said. “In effect, a property owner receives the right to develop restricted land in exchange for giving the right of reasonable entry to the DEP to inspect.”

The court specifically found that the regulatory scheme which implements the FWPA puts the permittee on notice that owning property subject to a FWPA permit renders the property subject to a reasonable right of entry by a NJDEP representative for the purpose of an inspection. N.J.A.C. 7:7A-013.1(a)(9). However, the FWPA requires that the NJDEP inspector present credentials prior to exercising the statutory right to enter, inspect, and sample at reasonable times. Id. Moreover, the regulatory scheme provides that the NJDEP Commissioner can issue orders to permittees who refuse entry, as well as bring a civil action to obtain a court order directing the entry. N.J.S.A. 13:9B-21. The Commissioner also can issue orders to permittees who deny entry to inspectors who have presented their credentials, charging such persons with a violation of the FWPA and of a regulation to which the permittee is subject by virtue of being a permittee, pursuant to the power granted to the NJDEP under N.J.S.A. 13:9B-21(b)-(c).

The NJDEP requires a permit applicant to consent to NJDEP inspections but the Court ruled that by such consent, as a precondition for issuance of a permit, a residential property owner does not waive its right to object to such NJDEP entry.  As a practical matter, for reasons mentioned above, the NJDEP is likely to issue a directive or obtain a Court Order to gain access when it can show evidence of violations.

In sum, NJDEP may not forcibly enter a property, and in cases where there is a dispute, must first get the NJDEP Commissioner to issue a directive. The homeowner has the right to contest such a directive in court, but there is a heavy presumption in favor of the NJDEP, the Supreme Court said where violation of law is alleged.  The owners of highly regulated commercial property have even less of an expectation of privacy; therefore, if access is denied, and the NJDEP subsequently imposes a penalty, a defense that the inspection violated an owner’s constitutional rights is not likely to succeed.

Please contact Susan Gieser at (201) 319-5750 or at scg@lawwmm.com.