In an unpublished decision, the Appellate Division of the Superior Court of New Jersey recently ruled that the NJDEP was required, but failed, to undertake formal rulemaking before imposing liability under several NJDEP regulations that govern radon measurement and mitigation activities.  NJDEP v. Radiation Data, Inc., Docket No. A‑1777‑17T3 (N.J. App. Div. Oct. 9, 2018).

In Radiation Data, defendant appealed from NJDEP’s final agency decision (after seven days of hearings) finding defendant liable for violating several requirements relating to the certification of radon testers and mitigators under the Radiation Protection Act, N.J.S.A. 26:2D-1 et seq. and relevant implementing regulations, N.J.A.C. 7:28-27.1 et seq.. On appeal, defendant argued that NJDEP’s Radon Section, which administered the state’s radon program, was wrongfully imposing regulatory standards upon defendant without adopting those standards through formal rulemaking processes. Specifically, the court determined that NJDEP had deviated from the text and stated intent of the radon measurement regulations by making defendant responsible for approximately 450 “affiliate” technicians not employed or controlled by defendant. Defendant further alleged that plaintiff was impermissibly enforcing an internal NJDEP “Guidance Document” as a mandatory rule without the required public notice and comment.

The Appellate Court affirmed in part, reversed in part and remanded in part. The court found that NJDEP was required, but failed, to undertake formal rulemaking for imposition of liability for the conduct of “affiliates” and for enforcing the informal “Guidance Document” concerning quality assurance and control plans as a mandatory rule, without the necessary public notice and comment.  The court held that NJDEP was obligated to undertake public notice and comment to make explicit that it intended to hold certified measurement businesses liable for the conduct of independent contract field tests rather than to require the agencies that employed such testers become certified measurement businesses. The court found that such liability was not apparent from the text of the regulations. With regard to the “Guidance Document,” the court observed that it added requirements not found in the adopted regulations or set forth specific requirements where regulations were more broadly written. Therefore, the court found that the NJDEP intended for the document to operate as an unpromulgated rule and remand was necessary for a determination as to which parts of the Guidance Document required formal rulemaking.

The court declined to vacate certain regulatory violations against the defendant since defendant’s measurement functions did not depend on activities of “affiliate” technicians, and were within defendant’s realistic ability to control.