No Entitlement to Indefinite Continuance of Remediation-in-Progress Waivers: Due Process Limits Under ISRA

Introduction

In Re Appeal of the New Jersey Department of Environmental Protection’s September 6, 2022 Denial of Request for Adjudicatory Hearing brought before the Supreme Court of New Jersey on April 7, 2025, addressed whether a Remediation-in-Progress Waiver (RIP Waiver) issued under the Industrial Site Recovery Act (ISRA) confers a constitutionally protected property interest entitling its holder to notice and a hearing before rescission. The parties were Clarios, LLC (successor to a prior industrial site owner), the New Jersey Department of Environmental Protection (DEP), and intervenor 760 New Brunswick Urban Renewal LLC, the current site owner. The key issue: when remediation pauses and funding trust accounts deplete, does the waiver holder gain a permanent entitlement to relief from further cleanup mandates?

Summary of the Judgment

Writing for a unanimous Court, Justice Hoffman affirmed the Appellate Division’s ruling that Clarios never acquired a property interest in the indefinite continuation of its 2007 RIP Waiver. The Court held that (1) neither ISRA’s text nor its implementing regulations guaranteed perpetual waiver protection, (2) ISRA leaves the DEP free to rescind waivers whenever a site falls out of compliance, and (3) no “mutually explicit understanding” arose over fifteen years of relative agency quiescence. Because Clarios lacked any legitimate claim of entitlement to continued waiver relief, its due-process challenge to the waiver’s rescission without hearing failed.

Analysis

Precedents Cited

Board of Regents v. Roth, 408 U.S. 564 (1972): Establishes that a property interest under due process must be grounded in “explicit language” or mutually binding understandings, not mere expectancies.
Cleveland Board of Education v. Loudermill, 470 U.S. 532 (1985): Holds that where statutes narrowly limit removal of public employees and mandate procedural protections, the statutory scheme itself confers a property right.
Town of Castle Rock v. Gonzales, 545 U.S. 748 (2005): Emphasizes that entitlements must be clearly created by statute or policy and not left to the unbounded discretion of the enforcing agency.
Perry v. Sindermann, 408 U.S. 593 (1972): Recognizes that an informal “mutually explicit understanding” of job security may create a property interest even without formal contract terms, but only if clearly demonstrated.

Legal Reasoning

The Court’s due-process analysis proceeded in two steps: first, did Clarios hold a protected property interest in its RIP Waiver; second, if so, were procedural safeguards lacking when it was rescinded? The opinion focused on the first question:

Statutory and Regulatory Text: ISRA’s waiver provision (N.J.S.A. 13:1K-11.5) authorizes—but does not compel—waiver grants. Its implementing rule (N.J.A.C. 7:26B-1.8(b)) expressly reserves the DEP’s unlimited discretion to rescind a waiver if a site falls out of compliance. No language in ISRA or the regulations circumscribes that authority or guarantees perpetuity.
Unfettered Discretion Defeats Entitlement: Following Roth and Olim, where public bodies retain “unfettered discretion,” they cannot vest a protected property interest. Here, the DEP’s authority to revoke waivers whenever remediation stops precludes any legitimate, enforceable entitlement.
No Mutually Explicit Understanding: Fifteen years of DEP non-enforcement did not transform a permissive waiver into a permanent right. In fact, the DEP’s 2007 waiver letter expressly reserved enforcement rights, and its 2021 correspondence warned Clarios that depleted trust funds would trigger rescission. These factors show the absence of any shared expectation that the waiver could not be revoked.

Because Clarios lacked any constitutionally protected interest, the Court never reached whether Clarios would have been entitled to a hearing on rescission. It nonetheless noted that, in any enforcement action under N.J.A.C. 7:26C-9, Clarios would have had the opportunity to present factual and legal defenses.

Impact

This decision clarifies that environmental waivers under ISRA do not become iron-clad rights once issued. Agencies retain full discretion to enforce cleanup requirements whenever conditions change. In practice, entities seeking RIP Waivers (or similar regulatory relief) should:

Anticipate that compliance obligations may resume if remediation halts or funding sources fail.
Negotiate contractual indemnities or insurance to hedge against future enforcement risk.
Request early clarification from regulators on any conditions that might trigger revocation.

For environmental practitioners, the ruling underscores the importance of clear statutory or regulatory language when seeking durable entitlements, and it cautions against relying on administrative inaction as evidence of a permanent right.

Complex Concepts Simplified

Property Interest: A right protected by the Due Process Clause—beyond just land or money—such as continued eligibility for a benefit, but only if that right is established by clear legal rules or mutual agreements.
Legitimate Claim of Entitlement: A legal guarantee that the beneficiary will receive (or keep) a benefit unless specific, limited conditions occur; not the same as a mere hope or expectation.
Unfettered Discretion: When a statute or agency rule gives officials broad authority to grant or revoke relief for any lawful reason—or none—preventing the creation of a protected entitlement.
Remediation-in-Progress Waiver (RIP Waiver): A temporary exemption from certain pollution-cleanup steps required under New Jersey’s ISRA, granted when a property is already being cleaned up under a prior owner’s plan and funding source.

Conclusion

The Supreme Court of New Jersey’s decision in In Re Appeal of DEP’s Denial of Request for Adjudicatory Hearing reaffirms that regulatory waivers under ISRA do not, by their mere issuance, confer immutable property rights. Absent express statutory guarantees or a demonstrable, mutual understanding limiting agency authority, the DEP may lawfully rescind a RIP Waiver once remediation ceases or funding is exhausted. This ruling underscores the principle that due-process protections attach only when law or contract clearly locks in administrative benefits, cautioning regulators and regulated parties alike to spell out entitlements in advance or to rely on contractual and insurance mechanisms to manage enforcement risk.