The New Jersey Appellate Division Invalidates NJDEP’s ISGWQC for PFNA

In 2014, the New Jersey Department of Environmental Protection (“NJDEP”) determined that perfluorononanoic acid (“PFNA”) was a “toxic” substance and posted Interim Specific Ground Water Quality Criteria (“ISGWQC”) describing PFNA as a perfluorinated compound with harmful human health effects. NJDEP did not follow the requirements for the issuance of a rule or regulation wherein the NJDEP action would be subject to public comment and posting in the New Jersey Register.  The NJDEP cited N.J.A.C. 7:9C-1.7(c), as its authority for this action, which provides that the NJDEP can establish interim specific criteria for ground water constituents, but also provides that the criteria must be replaced by specific criteria or a rule as soon as possible.  On March 14, 2017, NJDEP posted the ISGWQS on its website.  This was the first guideline or groundwater criteria related to PFNA that the NJDEP had issued.

In response to NJDEP’s attempted rule-making, the plaintiffs, Chemistry Council of New Jersey, Solvay Specialty Polymers USA, LLC, and Arkema, Inc., challenged the NJDEP’s reliance on N.J.A.C. 7:9C-1.7(c), arguing that the NJDEP violated the Administrative Procedure Act (“APA”).  The plaintiffs also argued that the ISGWQC was not supported by credible scientific evidence, thus the ISGWQC was “arbitrary, capricious, and unreasonable,” but the Appellate Division did not make a decision on that claim.

In its decision, the Appellate Division decided that pursuant to the APA, an administrative agency must “proceed in accordance with traditional rule-making requirements for a rule proposal, including provisions of notice and an opportunity to comment.”  The Appellate Division highlighted that the ISGWQC adopted by NJDEP was identified as an “interim criteria” and was posted on the NJDEP’s website on March 14, 2014, yet the measures remain in effect today.  Thus, the question for the Court was whether this is a valid exercise of authority or agency action in violation of the APA.  The Appellate Division, citing Metromedia, Inc. v. Div. of Taxation, found that the ISGWQC has all of the “earmarks of rule-making” as  it is a new standard for water quality, intended to apply universally, uniformly, and prospectively to the regulated community.  The Court considered that this was the first time NJDEP singled out PFNA as a constituent of ground water requiring attention and that the ISGWQC was in form and effect an administrative regulatory policy.  N.J.A.C. 7:9C-1.7(c)(2)(ii) limits the NJDEP’s authority and requires that any “specific criteria” shall be replaced as soon as reasonably possible by a rule.  The Court found that the interim criteria have become a de facto permanent regulatory scheme without complying with the APA, thus they are invalid.

The Appellate Division has provided the NJDEP with 30 days to seek Supreme Court review of its decision or to begin complying with the APA.