NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION VS. DGRT STABLES, LLC (NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION) ( 2018 )

SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0821-16T1
NEW JERSEY DEPARTMENT OF
ENVIRONMENTAL PROTECTION,
Petitioner-Respondent,
v.
DGRT STABLES, LLC, d/b/a
DGRT SERVICES, MICHAEL
D'ANGELO and DERRICK
GREENBERG,
Respondents-Appellants.
_______________________________
Submitted January 10, 2018 – Decided July 16, 2018
Before Judges Fuentes and Suter.
On appeal from the New Jersey Department of
Environmental Protection.
Starkey, Kelly, Kenneally, Cunningham &
Turnbach, attorneys for appellants (Alton D.
Kenny, of counsel and on the brief; Clifford
P. Yannone, on the brief).
Christopher S. Porrino, Attorney General,
attorney for respondent (Jason W. Rockwell,
Assistant Attorney General, of counsel;
Elspeth Faiman Hans, Deputy Attorney General,
on the brief).
PER CURIAM
Defendants DGRT Stables, LLC, Michael D'Angelo and Derrick
Greenberg appeal from the September 30, 2016 Final Decision by the
Commissioner of the New Jersey Department of Environmental
Protection (DEP). The Final Decision found defendants violated
the Solid Waste Management Act (SWMA), N.J.S.A 13:1E-1 to -227,
for failing to obtain a license to transfer and dispose of solid
waste in violation of N.J.A.C. 7:26-16.3(a), and violated the
Solid Waste Utility Control Act (SWUCA), N.J.S.A. 48:13A-1 to -13
for failing to obtain a certificate of public convenience and
necessity, in violation of N.J.A.C. 7:26H-1.6(a). Defendants were
fined a total of $100,000, consisting of $50,000 for violation of
N.J.A.C. 7:26-16.3(a) and $50,000 as an economic penalty imposed
pursuant to N.J.A.C. 7:26-5.9. Because the Final Decision was
entered following DEP's motion for summary disposition, our review
is de novo. L.A. v. Bd. of Educ. of City of Trenton, 221 N.J.
192, 204 (2015). We affirm the Commissioner's decision. There
was ample support in the record that defendants violated the Acts
and for the penalties imposed by the Commissioner, which penalties
were not arbitrary, capricious or unreasonable.
I.
Defendant DGRT was a New Jersey limited liability company
(LLC) that initially was in the business of hauling hay and straw
for racetrack stables and later began to haul dirt. It is no
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longer in business. Defendant Derrick Greenberg was its president,
owner, and a managing member. Defendant Michael D'Angelo was "a
salesman, promoter and day to day operator of [DGRT]." He was its
consultant, but not a payroll employee or member of the limited
liability company. Greenberg and D'Angelo communicated daily.
In April 2013, D'Angelo signed a handwritten contract, on
behalf of DGRT, with VisionStream LLC (VisionStream) to supply
2000 loads of clean fill between May 1 and June 30, 2013, to a
location in Old Bridge where VisionStream was constructing a mixed-
use commercial and residential development. The fill was intended
to raise the grade of the property. Under the contract, D'Angelo
agreed that the "[m]aterial brought to the site will need to pass
the material compatibilities and Old Bridge Township requirements
and NJ residential . . . and USEPA requirements."
In May 2013, D'Angelo signed a contract with Michael Mecca
(Mecca) where D'Angelo agreed, for $250 per load, that DGRT would
remove recycled concrete aggregate fill that was commingled with
asphalt millings from a site in Jersey City where an old warehouse
had been demolished sometime between 1997 and 2002. The Mecca
contract confirmed that D'Angelo was given a July 24, 2012 soil
analysis from Restoration & Conservation, LLC,1 "outlining" that
1
The only July 24, 2012 soil analysis in the record is from
Analytical Chemists.
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the materials "meet[] New Jersey commercial criteria and another
report showing minor exceedances in the NJ residential criteria."
By signing the contract, D'Angelo expressly "acknowledge[d] and
accept[ed] all New Jersey environmental rules, regulations and
specifications associated with the disposal location" where he was
taking these materials.
A representative of VisionStream wrote to D'Angelo advising
DGRT that the data provided by Mecca "meet[s] the requirements for
our site" but requested that D'Angelo "resend" the analytical
reports for their "official records. . . . to make sure that we
keep the correct reports, as we had so many reports while we were
negotiating and don't want to confuse the reports."
When DEP commenced its investigation, VisionStream provided
DEP with a copy of soil analyses by Analytical Chemists. That
report, dated July 24, 2012, analyzed samples of the material from
the Mecca site. One of those samples showed the presence of
benzo(a)pyrene in the amount of .279 mg/kg, which exceeded the
direct contact soil remediation standard of 0.2 mg/kg.
Benzo(a)pyrene is a known carcinogen.2
2
The ingestion/dermal contact level for benzo(a)pyrene is actually
lower (0.06mg/kg), but 0.2 mg/kg is used because DEP advised that
this is the "lowest level that can practicably be detected and
quantified by testing laboratories."
4 A-0821-16T1
Greenberg and D'Angelo claimed that they did not review the
soil analysis report provided by Mecca "but relied on the
representations presented in the Mecca [l]etter and VisionStream
[l]etter."
DGRT contracted with subcontractors to excavate and load the
material at the Mecca site and with trucking firms to haul the
materials to the VisionStream site in Old Bridge. Between May and
July 2013, 895 loads were delivered to the VisionStream site.
Mecca paid DGRT $223,650 to remove the materials from the Mecca
site. VisionStream paid DGRT $40,220 to deliver the materials to
Old Bridge. DGRT paid its subcontractors $20 per load to excavate
and load the materials and $200 per load to transport them.
Following its investigation, DEP issued a Notice of Civil
Administrative Penalty Assessment (NOCAPA) to DGRT and D'Angelo
in February 2015, for the unlicensed transportation of solid waste
in violation of the SWMA. The NOCAPA was amended on October 16,
2015, to include Greenberg and an economic penalty. The amended
NOCAPA alleged that defendants engaged in the brokering of solid
waste without an A-901 license, as required by N.J.A.C. 7:26-
16.3(a), and then by accepting and selling solid waste obtained
from the Mecca site to be used as fill at the VisionStream site,
which was being developed for commercial and residential use. DEP
alleged that defendants failed to hold certificates of public
5 A-0821-16T1
convenience and necessity as required by N.J.A.C. 7:26H-1.6(a).
The amended NOCAPA imposed a $100,000 civil administrative penalty
which consisted of a $50,000 penalty against all the parties for
violation of N.J.A.C. 7:26-16.3(a) and an economic benefit penalty
of $50,000, also against all parties, in accordance with N.J.A.C.
7:26-5.9.
Defendants requested an administrative hearing. The case was
transferred to the Office of Administrative Law (OAL) as a
contested case. DEP filed a motion for summary decision in March
2016. See N.J.A.C. 1:1-12.5(a). It contended there were no
disputed issues of fact requiring a hearing. An Administrative
Law Judge (ALJ) decided the motion in DEP's favor, issuing her
Initial Decision on May 20, 2016. Defendants filed exceptions.
The Commissioner of DEP issued a Final Decision on September 30,
2016, that adopted the Initial Decision, finding that DEP was
"entitled to summary decision as a matter of law against DGRT, and
against Greenberg and D'Angelo, individually."
In his Final Decision, the Commissioner found that the
materials transported from the Mecca site and deposited at the
VisionStream site constituted solid waste under N.J.A.C. 7:26-1.6,
whether or not unsafe levels of benzo(a)pyrene were present in
those materials. Defendants did not submit any evidence to refute
the soil tests that showed the presence of benzo(a)pyrene at a
6 A-0821-16T1
level exceeding DEP standards. The letters from Mecca and
VisionStream that defendants relied on in their defense made
reference to testing that showed an excess level of benzo(a)pyrene.
As such, defendants had not shown there were any disputed factual
issues about the transportation of solid waste without a license.
The Final Decision held Greenberg individually liable as a
"responsible corporate officer" because he was "aware of key
aspects of DGRT's business with Mecca and VisionStream" and, as
president and sole owner of DGRT, "would have been in a position
to prevent the violations of the SWMA and rules." The Final
Decision also imposed individual liability upon D'Angelo, as a
"person" under N.J.A.C. 7:26-1.4 who was required to have a license
to engage in the solid waste industry, N.J.A.C. 7:26-16.3(a),
because he was "the consultant and manager responsible for DGRT's
daily operations." He was a "key decision maker" about DGRT's
operations along with Greenberg and "played an integral role in
the transport of the Mecca site material without a solid waste
license."
The Final Decision imposed penalties, finding that violation
of N.J.A.C. 7:26-16.3 was major and the degree of conduct of the
defendants was also major. See N.J.A.C. 7:26-5.5(g)(1). The
Commissioner applied DEP's civil administrative penalty matrix and
then adjusted the penalty to the maximum amount, agreeing with the
7 A-0821-16T1
ALJ that defendant's actions "created a risk to the public by
contaminating a future residential site with a carcinogen." The
Commissioner also imposed a $50,000 economic penalty, finding that
DEP reasonably calculated defendants' economic benefit to be at
$66,970 "based on the costs and profits per load transported
multiplied by the number of loads as supported by certifications
and documentation." Although defendants objected to DEP's
calculations, they did not "supply any certifications or
affidavits to support their claims." Therefore, the Commissioner
did not find any disputed issues of fact related to the economic
penalty.
On appeal, defendants contend that there were disputed issues
of fact that warranted a hearing at the OAL. They argue they did
not violate the SWMA because they relied on the letters from Mecca
and VisionStream that the soil was acceptable. They did not intend
to transport "solid waste" under the Act. For the first time on
appeal, defendants contend that they should not have been held
individually liable for any violation. Even if there were a
violation of the SWMA, defendants assert any violation was minor,
warranting a lesser civil penalty, and that the economic penalty
did not reflect their economic benefit.
8 A-0821-16T1
II.
We review de novo an agency's summary decision because it is
a legal determination. L.A., 221 N.J. at 204. The standard
governing agency determinations under N.J.A.C. 1:1-12.5 is
"substantially the same as that governing a motion under Rule
4:46-2 for summary judgment in civil litigation." Id. at 203
(quoting Contini v. Bd. of Educ. of Newark, 286 N.J. Super. 106,
121-22 (App. Div. 1995)). Summary judgment must be granted if
"the pleadings, depositions, answers to interrogatories and
admissions on file, together with the affidavits, if any, show
that there is no genuine issue as to any material fact challenged
and that the moving party is entitled to a judgment or order as a
matter of law." Templo Fuente De Vida Corp. v. Nat'l Union Fire
Ins. Co. of Pittsburg, 224 N.J. 189, 199 (2016) (quoting R. 4:46-
2(c)). We are not "bound by [an] agency's interpretation of a
statute or its determination of a strictly legal issue." L.A.,
221 N.J. at 204 (alteration in original) (quoting Div. of Youth &
Family Servs. v. T.B., 207 N.J. 294, 302 (2011)).
We agree with the Commissioner that there were no genuine
issues of fact here that precluded summary decision. The case did
not present "competent evidentiary materials" that would permit a
"rational factfinder" to resolve the issues in defendants' favor
9 A-0821-16T1
or require a plenary haring. See Brill v. Guardian Life Ins. Co.
of Am., 142 N.J. 520, 540 (1995).
The SWMA regulates the collection, transportation, storage
and disposal of solid waste in New Jersey. N.J.S.A. 13:1E-2. The
purpose was to "[e]stablish a statutory framework within which all
solid waste collection, disposal and utilization activity in this
State may be coordinated." N.J.S.A. 13:1E-2(b)(1). The
Legislature found:
That the collection, transportation,
treatment, storage, and disposal of solid
waste are critical components of the economic
structure of this State and, when properly
controlled and regulated, make substantial
contributions to the general welfare, health
and prosperity of the State and its
inhabitants by minimizing the serious health
and environmental threats inherent in the
management of these wastes;
That the regulatory provisions of this act are
designed to extend strict State regulation to
those persons involved in the operations of
these licensed activities so as to foster and
justify the public confidence and trust in the
credibility and integrity of the conduct of
these activities.
[N.J.S.A. 13:1E-126.]
Under the SWMA regulations, "No person shall engage or
continue to engage in the collection, transportation, treatment,
storage, transfer or disposal of solid waste or hazardous waste
in this State without a license or without complying with all the
10 A-0821-16T1
provisions of N.J.S.A. 13:1E-126 et seq[.]" N.J.A.C. 7:26-16.3.
Further N.J.A.C. 7:26H-1.6(a) provides, "No person shall engage
in the business of solid waste collection or solid waste disposal
as defined in N.J.S.A. 48:13A-3 unless such person is the holder
of a certificate of public convenience and necessity issued by the
Department."
Here, defendants do not dispute that at the time they
contracted for the removal and transportation of materials from
the Mecca site to the VisionStream site that none of the defendants
held any license or a certificate of public convenience or
necessity.
There was no factual issue on this record that what was
transported was solid waste within the meaning of the SWMA. The
Act defines solid waste generally as "garbage, refuse, and other
discarded materials resulting from industrial, commercial and
agricultural operations, and from domestic and community
activities." N.J.S.A. 13:1E-3. N.J.A.C. 7:26-1.6(a) defines
solid waste as "any garbage, refuse, sludge . . . or any other
waste material . . . ."3 N.J.A.C. 7:26-1.6(b) defines "other waste
material" as:
3
The regulation was amended in 2017 to expressly include within
the definition of solid waste, "processed or unprocessed mixed
construction and demolition debris, including, but not limited to,
11 A-0821-16T1
any solid . . . including, but not limited to
spent material . . . resulting from
industrial, commercial . . . operations. . .
or any other material which has served or can
no longer serve its original intended use,
which:
(1) [i]s discarded or intended to be
discarded; or
. . . .
(4) [i]s applied to the land . . . or
(5) [i]s recycled.
A material also is solid waste under N.J.A.C. 7:26-1.6(c) if "it
is 'disposed of' by being discharged, deposited, injected, dumped,
spilled, leaked or placed into or on any land or water so that
such material or any constituent thereof may enter the environment
or be emitted into the air or discharged into ground or surface
waters."
Defendants contend that the letters they received from Mecca
and VisionStream created an issue of fact about whether the
materials constituted solid waste. However, there was no dispute
that the materials transported resulted from the demolition and
removal of a warehouse. By any of the definitions cited, these
wallboard, plastic, wood or metal, are solid wastes. 48 N.J.R.
1526(a)(1). Prior to this, the term "clean fill" excluded
"processed or unprocessed mixed construction and demolition
debris, including, but not limited to, wallboard, plastic, wood
or metal." Ibid.
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materials constitute solid waste as discarded materials from
industrial or commercial operations that are deposited on or into
the land.
Defendants urge that what they transported "was only
recognizable as stone, dirt and concrete." They argue a fact
issue exists about whether this was clean fill as previously
defined in the regulations, meaning,
an uncontaminated nonwater-soluble,
nondecomposable, inert solid such as rock,
soil, gravel, concrete, glass and/or clay or
ceramic products. Clean fill shall not mean
processed or unprocessed mixed construction
and demolition debris, including, but not
limited to, wallboard, plastic, wood or metal.
The non-water soluble, non decomposable inert
products generated from an approved Class B
recycling facility are considered clean fill
[48 N.J.R. 1526(a)(1).]
They base their argument on the Mecca and VisionStream letters
that said the soil sample met commercial standards and met the
requirement for the site.
However, these letters never created a genuine issue that the
materials transported did not have benzo(a)pyrene present at a
level exceeding standards. Both letters cited to the soil
analysis. The Mecca letter cited to a July 24, 2014 test that
showed the soil exceeded New Jersey residential criteria.
VisionStream actually supplied DEP with copies of the Analytical
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Chemists report that showed benzo(a)pyrene present at an excess
level. Defendants did not provide any testing that refuted these
findings. We are to consider all "competent evidential material"
on summary decision. Brill, 142 N.J. at 540. There must be a
genuine issue of material fact to defeat the motion, not an
inference lacking any proof.
Defendants argue that they did not intend to commit a
violation, but the SWMA does not require that DEP prove a violation
was knowingly or intentionally committed. See State v. Lewis, 215
N.J. Super. 564, 572 (App. Div. 1987) (providing that the SWMA did
not "require a finding of intent to violate the Act before [its]
remedies may be invoked").
The record supported the Commissioner's summary decision.
Defendants arranged for the removal and transportation of solid
waste without the requisite license which violated the SWMA. The
materials transported contained benzo(a)pyrene at levels exceeding
DEP's standards. Defendants submitted no evidence that contested
the analysis of the soil sample. By failing to do so, they did
not prove there was any genuine issue of material fact that would
have required a hearing.
We reject Greenberg's and D'Angelo's argument that they
should not be held individually responsible for violating the
SWMA. Greenberg was the owner and managing member of DGRT. He had
14 A-0821-16T1
daily contact with D'Angelo. He was in a position to control the
company and prevent it from transporting the materials or obtain
a license to do so. We have long held that an officer who "had
actual responsibility for the condition resulting in the violation
or [was] in a position to prevent the occurrence of the violation
but failed to do so" can be held responsible for the condition
that caused the violation. Dep't of Envtl. Prot. v. Standard Tank
Cleaning Corp., 284 N.J. Super. 381, 403 (App. Div. 1995).
D'Angelo was individually responsible under the SWMA
regulations as a "person" engaged in the collection,
transportation, transfer or disposal of solid waste. N.J.A.C.
7:26-16.3. Although not an officer or managing member of DGRT,
he was a key decision maker. He signed the contracts and received
the analyses of the soil. He was in daily contact with Greenberg.
Defendants contend that the Commissioner erred in assessing
the administrative and economic penalties. The Commissioner
assessed an administrative penalty of $50,000 for violating
N.J.A.C. 7:26-16.3(a) and imposed a $50,000 economic penalty under
N.J.A.C. 7:26-5.9.
We will not reverse the Commissioner's order assessing
penalties unless we find the decision to be "'arbitrary,
capricious, or unreasonable, or . . . not supported by substantial
credible evidence in the record as a whole.'" Kadonsky v. Lee,
15 A-0821-16T1
452 N.J. Super. 198, 202 (App. Div. 2017) (quoting In re
Stallworth, 208 N.J. 182, 194 (2011)). We "defer to the
specialized or technical expertise of the agency charged with
administration of a regulatory system." K.K. v. Div. of Med.
Assistance & Health Servs., 453 N.J. Super. 157, 160 (App. Div.
2018) (quoting In re Virtua-West Jersey Hosp., 194 N.J. 413, 422
(2008)).
The Commissioner imposed the $50,000 civil penalty based on
his finding that defendants committed a major violation of the
SWMA and that the degree of their conduct was major. Using the
DEP's penalty matrix, he determined that the mid-range of the
penalty was $45,000. See N.J.A.C. 7:26-5.5. He enhanced the mid-
range to the maximum penalty of $50,000. There was nothing
arbitrary, capricious or unreasonable about this. The
commissioner applied the matrix. We agree with the Commissioner
that the violation "created the potential for serious harm to
prospective residents of and visitors to the VisionStream site and
to the environment." This undermined the purpose of the SWMA
licensing scheme. Defendants' degree of conduct also was major
as defined by the regulations4 because the Mecca letter advised
4
"Major conduct shall include any intentional, deliberate,
purposeful, knowing or willful act or omission by the violator."
N.J.A.C. 7:26-5.5(h)(1).
16 A-0821-16T1
them that the soil testing exceeded residential standards and they
proceeded with the contracts anyway.
The Commissioner also imposed a civil administrative penalty
for economic benefit. See N.J.A.C. 7:26-5.9 ("The Department may,
in addition to any other civil administrative penalty assessed
pursuant to this subchapter, include as a civil administrative
penalty the economic benefit (in dollars) which the violator has
realized as a result of not complying with, or by delaying
compliance with, the requirements of the Act . . . ."). The
Commissioner calculated that defendants' profits from this
transportation was $66,970. This was calculated after taking into
consideration the number of loads of materials, what DGRT charged
Mecca and VisionStream, the amount still owed to them by
VisionStream, and what DGRT had to pay its sub-contractors.
Defendants take issue with the amounts they say they received from
Mecca and VisionStream. However, they never submitted a
certification or documentary evidence to support their claim. In
contrast, the Commissioner relied on contracts, cancelled checks,
and other documents supplied by defendants in discovery in making
his calculation. There was nothing arbitrary, capricious or
unreasonable about the Commissioner's analysis that assessed the
economic penalty, which was fully supported by the record.
Affirmed.
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