In a significant ruling on April 7, 2025, the New Jersey Supreme Court addressed the legal implications of the Department of Environmental Protection’s (DEP) Remediation in Progress (RIP) Waivers. The case, In Re Appeal of the New Jersey Department of Environmental Protection’s September 6, 2022 Denial of Request for Adjudicatory Hearing (A-42-23/089182), centered on whether such waivers confer a constitutionally protected property interest.
Background of the Case
The appellant, Clarios LLC, had been granted a RIP Waiver by the DEP to facilitate the closure of operations at an industrial site without completing the full remediation process, as required under the New Jersey Industrial Site Recovery Act (ISRA). This waiver was contingent upon the condition that remediation efforts were actively underway.
In April 2022, the DEP rescinded Clarios’s RIP Waiver, citing noncompliance with ISRA deadlines, depletion of the funding source designated for remediation, and insufficient progress in the cleanup efforts. Clarios contested this action, seeking an adjudicatory hearing, asserting that the rescission violated its due process rights by depriving it of a property interest without appropriate notice or a hearing.
Supreme Court’s Decision
The New Jersey Supreme Court unanimously upheld the DEP’s decision, concluding that the RIP Waiver did not create a constitutionally protected property interest. The Court emphasized that while the waiver provided temporary relief from certain remediation obligations, it did not grant Clarios a permanent entitlement to suspend those obligations indefinitely.
The Court’s analysis highlighted that a protected property interest requires a “legitimate claim of entitlement,” which can arise from statutes, regulations, or mutually explicit understandings. In this case, the Court found that neither ISRA nor its implementing regulations limited the DEP’s discretion to rescind the waiver, particularly when the site was no longer in compliance with remediation requirements.
Implications for Environmental Transactions
This ruling underscores the conditional nature of RIP Waivers and their limited legal effect. Stakeholders involved in industrial property transactions should be aware that such waivers do not provide long-term protection from future enforcement actions if the site falls out of compliance with remediation obligations.
The decision serves as a reminder that regulatory waivers are inherently conditional, and silence from the agency should not be mistaken for a guarantee of continued compliance. Parties involved in transactions should proactively monitor ongoing ISRA compliance and consider mechanisms such as escrow accounts to ensure remediation obligations are met, even if a RIP Waiver is in place.
The New Jersey Supreme Court’s decision clarifies the legal status of RIP Waivers, emphasizing that they do not confer a constitutionally protected property interest. This ruling has significant implications for environmental compliance strategies and industrial property transactions, highlighting the importance of maintaining active and ongoing remediation efforts to ensure compliance with state environmental laws.
