New Jersey Natural Gas Company v. Borough of Red Bank and Red Bank Rivercenter Special Improvement District

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1096-12T4

NEW JERSEY NATURAL GAS
COMPANY, APPROVED FOR PUBLICATION

Plaintiff-Respondent, October 28, 2014

APPELLATE DIVISION
v.

BOROUGH OF RED BANK and
RED BANK RIVERCENTER
SPECIAL IMPROVEMENT DISTRICT,

Defendants-Appellants.
________________________________________________________

Argued March 4, 2014 – Decided October 28, 2014

Before Judges Messano, Hayden and Rothstadt.

On appeal from the Superior Court of New
Jersey, Law Division, Monmouth County,
Docket No. L-1196-12.

Daniel J. O'Hern, Jr., and Joseph J. Colao,
Jr., argued the cause for appellants (Byrnes
O'Hern, L.L.C., attorneys for appellant
Borough of Red Bank; Lindabury, McCormick,
Estabrook & Cooper, P.C., attorneys for
appellant Red Bank Rivercenter Special
Improvement District; Mr. O'Hern and Mr.
Colao, on the joint brief).

Kevin H. Marino argued the cause for
respondent (Marino, Tortorella & Boyle,
P.C., attorneys; Mr. Marino, on the brief).

The opinion of the court was delivered by

MESSANO, P.J.A.D.
 The Borough of Red Bank ("Red Bank") and the Red Bank

RiverCenter Special Improvement District ("RiverCenter," and

collectively, "defendants") appeal from the October 17, 2012

order of the Law Division that granted plaintiff, New Jersey

Natural Gas Company ("NJNG"), summary judgment and denied

defendants' cross-motions for summary judgment.1 The order

provided NJNG with declaratory relief, as well as relief in the

nature of mandamus against Red Bank, specifically requiring the

borough to issue construction permits so that NJNG could "remove

all underground [gas] regulators located in . . . Red Bank and

replace them with above-ground regulators."

Defendants contend that the trial judge erred by concluding

that, pursuant to N.J.S.A. 48:9-17, NJNG's installation of

above-ground gas regulators in public sidewalks was largely

exempt from municipal control. That statute provides:

Every [gas] company may lay conductors and
install related facilities for conducting
gas through the streets, alleys, squares and
public places in any municipality or
municipalities in which it may lawfully
operate, having first obtained the consent
by resolution or ordinance of the governing
body of such municipality for the furnishing
of gas therein and the approval of such
consent by the Board of Public Utility
Commissioners. The consent may be subject

1
NJNG is a natural gas distribution company that serves
approximately 495,000 customers in 105 municipalities in
Monmouth, Ocean, Middlesex and Morris counties.

2 A-1096-12T4
 to reasonable regulations with respect to
the opening of streets, alleys, squares and
public places, not inconsistent with the
provisions of this article.

[Ibid. (emphasis added).]

Defendants further argue that because the judge

misconstrued this statute, he erred in not granting defendants

summary judgment and dismissing NJNG's complaint in lieu of

prerogative writs. They contend that NJNG was required to

exhaust its administrative remedies, first by submitting a

development application pursuant to Red Bank's planning and

development regulations. If NJNG remained dissatisfied with the

result, Red Bank contends the utility's remedies were set forth

in the Municipal Land Use Law ("the MLUL"), N.J.S.A. 40:55D-1 to

-163, a section of which provides:

If a public utility . . . is aggrieved by
the action of a municipal agency through
said agency's exercise of its powers under
this act, . . . an appeal to the Board of
Public Utilities . . . may be taken . . .
without appeal to the municipal governing
body pursuant to [N.J.S.A. 40:55D-17][2] unless
such public utility . . . so chooses. . . .
A hearing on the appeal of a public utility
to the Board of Public Utilities shall be
had on notice to the agency from which the
appeal is taken and to all parties primarily
concerned, all of whom shall be afforded an

2
N.J.S.A. 40:55D-17 permits "[a]ny interested party [to] appeal
to the governing body any final decision of a board of
adjustment approving an application" for a type (d) variance
pursuant to N.J.S.A. 40:55D-70(d).

3 A-1096-12T4
 opportunity to be heard. If, after such
hearing, the Board of Public Utilities shall
find that the present or proposed use by the
public utility . . . of the land described
in the petition is necessary for the
service, convenience or welfare of the
public . . . a finding by the board that the
present or proposed use of the land is
necessary to maintain reliable . . . natural
gas supply service for the general public
and that no alternative site or sites are
reasonably available to achieve an
equivalent public benefit, the public
utility . . . may proceed in accordance with
such decision of the Board of Public
Utilities, any ordinance or regulation made
under the authority of this act
notwithstanding.

. . . .

Nothing in this act shall be construed
to restrict the right of any interested
party to obtain a review of the action of
the municipal agency or of the Board of
Public Utilities by any court of competent
jurisdiction according to law.

[N.J.S.A. 40:55D-19.]

Alternatively, defendants argue that the judge should have

declined jurisdiction over the dispute and referred the parties

to the Board of Public Utilities (the "BPU") pursuant to the

doctrine of primary jurisdiction. See, e.g., Curzi v. Raub, 415

N.J. Super. 1, 20 (App. Div. 2010) (quoting Borough of Haledon

v. Borough of N. Haledon, 358 N.J. Super. 289, 301-02 (App. Div.

2003) ("Under the doctrine of primary jurisdiction, a 'court

declines original jurisdiction and refers to the appropriate

4 A-1096-12T4
body those issues which, under a regulatory scheme, have been

placed within the special competence of an administrative

body.'")).

NJNG contends the trial judge properly determined that,

pursuant to N.J.S.A. 48:9-17 and binding Supreme Court

precedent, a municipality -- under the guise of exercising its

zoning powers -- may not dictate the manner in which gas service

is provided, and that all Red Bank may require is compliance

with "reasonable regulations with respect to the opening of

streets, alleys, squares and public places." Ibid.

We have considered these arguments in light of the record

and applicable legal standards. We reverse.

I.

A.

Much of the record evidence is undisputed. In 1969, Red

Bank passed a resolution authorizing NJNG to "to lay, maintain

and operate its conductors, mains, and pipes, together with the

appurtenances thereto, in all the public streets, alleys,

squares and public places" in the municipality. The resolution

included the condition that

[NJNG] shall agree that, in all cases in
which street openings or excavations are
made for the purposes aforesaid, the
pavement and the surface of the streets,
alleys, squares or roadways shall be
restored to the same condition as existed

5 A-1096-12T4
 prior to the opening thereof, and in
accordance with Borough [o]rdinances.

[(Emphasis added).]

RiverCenter was established in 1991 to revitalize Red

Bank's downtown business district, which had suffered decline.

One of its signature efforts was a $1,800,000 streetscape

project, completed in 1998, that installed brick sidewalks,

decorative street lights and benches, substantially upgrading

the appearance of the downtown area. A second streetscape

project was completed in 2002.

In March 2011, NJNG obtained a construction permit to open

the street and sidewalk in front of a restaurant on Broad Street

in RiverCenter's special improvement district. NJNG thereafter

removed a gas regulator from the underground pit in the street

and reinstalled it on the sidewalk in front of the restaurant.

Red Bank's borough administrator, Stanley Sickels, certified

that although NJNG's representative had tried to schedule a

meeting with him, no meeting had occurred before NJNG installed

the new regulator, and Red Bank was unaware of NJNG's intentions

when it issued the permit.

The new regulator protruded approximately 15 inches from

the front of the building, through the sidewalk pavers and into

the public right of way, i.e., the sidewalk. Sickels, who also

served as Red Bank's construction code official and fire

6 A-1096-12T4
marshal, was concerned that the newly installed regulator was a

potential safety hazard for pedestrians, would interfere with

maintenance of the sidewalks and building facades and was

subject to impact damage and vandalism.

On March 22, 2011, Sickels met with NJNG's representatives,

Howard Brey and Holly McGovern. There is a factual dispute as

to what exactly occurred at the meeting.

In its verified complaint, NJNG claimed that following a

system-wide survey of its underground regulators, it had

concluded that replacement with above-ground regulators would be

necessary because of corrosion problems that compromised safety.

At the March 22, 2011 meeting, NJNG representatives showed

Sickels and Nancy Adams, RiverCenter's executive director,

pictures of corroded underground installations in another town.

According to NJNG, "the Red Bank officials were uniformly

receptive to the idea of moving the regulators above ground to

address safety concerns and indicated that NJNG would be

permitted to proceed with the relocation project."

Sickels certified that he recommended NJNG's

representatives meet with RiverCenter's representatives to

discuss the issue, and he called Adams, who arrived for the last

ten minutes of the meeting. Brey and McGovern advised that NJNG

intended to replace all underground regulators in Red Bank with

7 A-1096-12T4
above-ground installations. Sickels did not recall seeing any

pictures, and both he and Adams certified that plaintiff's

representatives made no mention of safety concerns. Adams

suggested NJNG perform surveys to determine if the regulators

could be moved to the side or rear of buildings, as opposed to

sidewalks in front. According to Sickels, Brey and McGovern

were unreceptive to requests that NJNG examine alternatives.

On March 30, 2011, Red Bank passed a resolution that

opposed the relocation project on safety grounds. The

resolution demanded that NJNG return the Broad Street regulator

to its original location below grade, and suggested that any

safety concerns be addressed with more frequent replacement of

regulators or improved underground enclosures. Another meeting

between NJNG and Red Bank in April failed to produce any

agreement.

On August 18, 2011, NJNG's general counsel wrote to BPU's

Director of the Division of Reliability and Security with a copy

to Red Bank's counsel asking for assistance in "resolving this

dispute." She detailed NJNG's investigation after discovery of

leaks in underground regulators in Red Bank, leading to the

conclusion that it could not safely install underground

regulators. She asserted that the "serious and imminent risk"

8 A-1096-12T4
posed by the corroding regulators rendered NJNG non-compliant

with federal regulations.

Red Bank's counsel responded by letter dated September 29.

He disputed NJNG's safety concerns, claiming that no leaks had

been reported since the underground regulators were installed in

1992, NJNG refused to share the actual results of its survey or

previous inspections, and NJNG failed to address safety issues

that could result from the placement of regulators aboveground

in heavily trafficked areas. He proposed that the regulators

could be located in building basements, rather than on

sidewalks. Although he did not request a hearing before the

BPU, counsel observed that "given the fact-sensitive nature of

this dispute, neither the BPU nor any other adjudicative body

would be in the position to render a decision . . . without the

benefit of a more formal evidentiary hearing."

In February 2012, NJNG submitted multiple applications to

open streets and sidewalks in Red Bank; on each application, the

purpose of the work was described as "sidewalk reg[ulator] pit

renewal" or "sidewalk regulator pit remediation." None of the

requests indicated that NJNG intended to place a service

regulator in and through the sidewalk. Sickels certified that

all were denied because NJNG failed to accurately describe the

9 A-1096-12T4
nature of the work to be performed and provide a sketch or

survey.

B.

On March 14, 2012, NJNG filed a verified complaint in lieu

of prerogative writs, along with an order to show cause seeking

injunctive and declaratory relief. Among other things, NJNG

sought an order directing Red Bank to immediately issue the

construction permits, and declaratory judgment "that [NJNG] is

lawfully permitted and legally obligated to relocate the

underground gas delivery equipment to above-ground locations,"

and that defendants were prohibited from interfering with the

relocation efforts.3

It suffices to say that the complaint contained extensive

technical support for NJNG's claim that it needed to relocate

the regulators aboveground for safety reasons. This included an

April 26, 2011 letter from Emerson Process Management,

apparently the manufacturer of the regulators at issue, in which

it cautioned against using its device "in any below grade

installations such as pits or vaults," because that "can cause

3
Count Two of the complaint sought attorneys' fees and costs
based upon defendants' alleged malicious and unjustified
interference with NJNG's activities. Although he briefly
addressed this count when denying NJNG a preliminary injunction,
the judge did not specifically address this allegation when he
subsequently granted summary judgment. In light of our ultimate
holding, this count of the complaint lacks any merit.

10 A-1096-12T4
accelerated corrosion rates in certain regulator components."4

Also attached to the complaint were orders for repairs NJNG made

to gas regulators in Red Bank during 2010.

On April 11, 2012, NJNG re-submitted fifty-five

applications for permits to open sidewalks. The applications

included sketches, but they continued to omit any reference to

the relocation of regulators aboveground, or their size or

location. On April 23, citing Red Bank's "Planning and

Development Regulations," the borough attorney notified NJNG

that Red Bank was denying the applications as incomplete and

directed NJNG to submit an application for a development permit.

Red Bank's regulations require the issuance of a

development permit prior to the "erection, construction,

alteration, repair, remodeling, conversion, removal or

destruction of any building or structure." Borough of Red Bank,

N.J., Planning & Dev. Regulation, § 25-3.6(a)(1)(c). A

"structure" is defined as

[A]ny combination of materials forming any
construction, the use of which requires
location on the ground or attachment to
something having location on the ground and
including, among other things: display
stands; fences and walls; gasoline pumps;
gates and gate posts; . . . standpipes;

4
It is unclear from the record whether the specific regulators
referenced were indeed the same type regulators already
installed in underground pits in Red Bank.

11 A-1096-12T4
 tanks of any kind; . . . towers of any kind
. . . trellises. The word structure shall
be construed as though following [sic] by
the words "or part thereof."

[Id. at § 25-2.]

Development permits are also required for "[t]he construction of

any site improvement either above or below ground." Id. at

§ 25-3.6(a)(1)(i). Lastly, the regulations specifically

required that "[a]ll utility lines and necessary appurtenances

including . . . gas distribution . . . shall be installed

underground within easements or dedicated public rights-of-way."

Id. at § 25-8.34.

On June 18, 2012, after considering oral argument, the

judge denied NJNG'S request for preliminary injunctive relief.

In his comprehensive written opinion, the judge concluded that

NJNG had not demonstrated the likelihood of imminent,

irreparable harm occasioned by alleged corrosion problems.

The judge further took note of two sections of Red Bank's

development regulations. "Essential Services" were defined as

[U]nderground gas . . . transmission or
distribution systems, including mains,
drains, sewers, pipes, conduits, cables; and
including normal above ground appurtenances
such as fire alarm boxes, police call boxes,
light standards, poles, traffic signals,
hydrants, and other similar equipment and
accessories in connection therewith,
reasonably necessary for the furnishing of
adequate service by public utilities or
municipal or other governmental agencies or

12 A-1096-12T4
 for the public health or safety or general
welfare.

[Id. at § 25-2.3.]

Further, § 25-5.10, entitled, "Non-Applicability," stated:

The provisions of this Chapter shall not
apply to customary underground essential
services, except that all facilities such as
pumping stations, repeater stations and
electric substations, which require a
structure above ground or any other above
ground appurtenance of any type more than
forty (40') feet high, shall require
approval as a conditional use . . . .

Based on these sections, the judge concluded that the

development regulations "explicitly do[] not apply to 'customary

underground essential services' which include gas distribution

systems and regulators."

The judge also agreed with NJNG that Red Bank's ordinances

clearly set forth what information was required to obtain a

permit to open a street or repair a sidewalk, and therefore the

issuance of construction permits was a ministerial act that

involved no discretion. The judge determined that Red Bank had

"fulfilled its ministerial act" when it denied NJNG's permit

applications. Nonetheless, he denied granting NJNG

"extraordinary [injunctive] relief" without a full hearing on

the merits.

On June 13, Red Bank amended § 25-9.3 of its regulations,

which defined "Public Utilities" and designated them as

13 A-1096-12T4
conditional uses. After amendment, the definition of public

utilities included "structures or appurtenances that may impact

a public sidewalk or right of way." A new subsection of the

regulation provided that "[a]ny structure or appurtenance

related to or separate from the installation shall not encroach

upon or unreasonably interfere with the use of public sidewalks

or rights of way."

On June 22, stating further discovery was unnecessary, NJNG

sought permission to file a motion for summary judgment,

contending that the only issue before the court was

[W]hether a public utility . . . is entitled
as a matter of law to determine the manner
in which it will deliver natural gas to its
customers, regardless of whether a
municipality such as Red Bank interposes a
substantive, principled objection to the
utility's manner of delivery and proposes an
alternative and reasonable method of
delivery that is nonetheless unacceptable to
the utility.

The judge granted NJNG's request.

NJNG filed its motion for summary judgment, relying in

large part on the factual assertions made in its verified

complaint. In a supplemental certification, NJNG supplied a

letter, dated July 31, 2012, from the BPU's bureau chief of

pipeline safety, acknowledging receipt of NJNG's notification

that it was temporarily replacing the "current underground

regulators with new ones." The letter also set forth BPU's

14 A-1096-12T4
"ongoing concerns" regarding safety issues involving the

continued use of regulators in underground pits. Defendants

cross-moved for summary judgment, arguing that NJNG was required

to submit development applications for the installation of the

above-ground regulators, and that NJNG had failed to exhaust its

administrative remedies before the BPU.

In his September 24, 2012 written opinion, the judge noted

that "[t]he first issue [was] whether the public utility has the

sole discretion to determine how that utility provides service

to a municipality." Citing N.J.S.A. 48:9-17, the judge

concluded that the utility must obtain authority from the

municipality to provide the service, but a municipality "does

not have the authority to dictate the manner in which such

service is provided."

The judge described "[t]he crucial issue" as whether the

service regulators were structures subject to zoning

regulations, or were exempt because they were part of the gas

distribution system. The judge was "convinced" that the service

regulators were part of the distribution line, and, therefore,

NJNG's installations were not subject to zoning regulations but

were only "subject to reasonable regulations with respect to the

opening of the streets" and other public places. He reasoned

that "just like a private customer cannot regulate the location

15 A-1096-12T4
of the service regulator at their residence," Red Bank could not

regulate, through zoning regulation or otherwise, the location

of the gas regulators.

Lastly, the judge concluded N.J.S.A. 40:55D-19 did not

apply. He reasoned that because NJNG was not required to obtain

a development permit, but only a construction permit to open

streets and sidewalks, it could properly seek relief to compel

this "ministerial act" in the Law Division.

The judge entered an order that granted summary judgment

and declared that: NJNG had sole and exclusive discretion to

determine the manner in which it would distribute natural gas

service within a municipality; Red Bank had no authority to

regulate or dictate the manner of distribution "except for

reasonable regulations with respect to the opening of streets,

alleys, squares, and public places"; Red Bank had no authority

via zoning or any other ordinance "to regulate, effect,

influence, or dictate" the location of plaintiff's regulators or

its relocation of those regulators to the above ground location;

and that neither action was subject to municipal laws,

ordinances or regulations "except for reasonable regulations

with respect to the opening of streets, alleys, squares and

public spaces." The order further provided that NJNG was only

16 A-1096-12T4
required to obtain construction permits, which Red Bank was

ordered to issue within seven days.

The judge denied defendants' motion for a stay. Their

application to this court for a stay pending appeal was

similarly denied.

II.

Rather than bringing a frontal challenge to Red Bank's

planning regulations themselves, NJNG took a different tack. It

argued that pursuant to N.J.S.A. 48:9-17, when it comes to the

distribution of its gas, NJNG is exempt from any regulation,

save reasonable controls on how and when it opens the streets

and sidewalks. Thus, NJNG advanced an argument that Red Bank's

obligation to issue a street opening permit was ministerial in

nature, the complete antithesis of the discretionary authority a

municipality exercises in implementing its planning and

development regulations.

Accepting NJNG's characterization of the issue, the trial

judge took an expansive view of N.J.S.A. 48:9-17 and concluded

that, but for "reasonable regulations with respect to the

opening of the streets, alleys, squares and public places," Red

Bank could not "dictate the manner in which [gas] service [was]

provided."

17 A-1096-12T4
 To some extent, however, this mischaracterized the issue,

since Red Bank was not attempting to dictate how NJNG provided

its service. In other words, Red Bank was not compelling NJNG

to use certain type regulators or requiring that they be placed

in certain positions. Rather, Red Bank wanted NJNG to submit a

development application - nothing more, nothing less. We view

this distinction as critical.

The central issue before us is whether the judge's

expansive reading of N.J.S.A. 48:9-17 was correct. In this

regard, "[w]e review the law de novo and owe no deference to the

trial court . . . if [it has] wrongly interpreted a statute."

Zabilowicz v. Kelsey, 200 N.J. 507, 512 (2009) (citations

omitted).

We start by noting that "[o]ur overriding goal in

interpreting a statute is to determine the Legislature's

intent." Brodsky v. Grinnell Haulers, Inc., 181 N.J. 102, 109

(2004). In this case, we frame the inquiry as whether by

enacting N.J.S.A. 48:9-17 the Legislature intended that all

aspects of the delivery of gas service be exempt from local land

use regulations, except "reasonable regulations with respect to

the opening of streets, alleys, squares and public places."

Ibid. As noted, NJNG urged that position in the Law Division,

and it did the same before us. We reject the argument.

18 A-1096-12T4
 The first step in divining legislative intent is to

consider the statute's plain language, Town of Kearny v. Brandt,

214 N.J. 76, 98 (2013), and accord those words "their ordinary

meaning and significance." DiProspero v. Penn, 183 N.J. 477,

492 (2005). "[W]e must examine that language sensibly, in the

context of the overall scheme in which the Legislature intended

the provision to operate[.]" N.J. Dep't. of Envtl. Prot. v.

Huber, 213 N.J. 338, 365 (2013). Moreover, "[w]hen interpreting

multiple statutes governing the same subject, the Court should

attempt to harmonize their provisions." Brandt, supra, 214 N.J.

at 98 (citation omitted).

Gas companies are public utilities under the general

supervision, regulation, jurisdiction, and control of the BPU,

which maintains the same powers over utilities' "property,

property rights, equipment, facilities and franchises so far as

may be necessary for the purpose of carrying out the provisions"

of the Department of Public Utilities Act of 1948 (the "Act").

N.J.S.A. 48:2-1.3; N.J.S.A. 48:2-13(a). Further, unless

specifically provided for by the Electric Discount and Energy

Competition Act, N.J.S.A. 48:3-49 to -98.4, "all services

necessary for the transmission and distribution of electricity

and gas, including but not limited to safety, reliability,

metering, meter reading and billing, shall remain the

19 A-1096-12T4
jurisdiction of the [BPU]." N.J.S.A. 48:2-13(d). The Court

long ago recognized that "the public interest in proper

regulation of public utilities transcends municipal or county

lines, and . . . a centralized control must be entrusted to an

agency whose continually developing expertise will assure

uniformly safe, proper and adequate service by utilities

throughout the State." In re Pub. Serv. Elec. & Gas Co., 35

N.J. 358, 371 (1961) [hereafter, "PSE&G"]. Still, the Court has

consistently recognized the inherent tension between a

municipality's right to regulate the land within its borders,

and the benefit to the public-at-large provided by safe and

efficient utility services. "Where the state has thus

established an agency of its own [(the BPU)] with plenary power

to regulate utilities, it is universally recognized that

municipalities cannot properly interpose their local

restrictions unless and only to the extent any power to do so is

expressly reserved to them by statute." Id. at 372 (emphasis

added).

Under N.J.S.A. 48:9-17, gas companies are granted the power

to "lay conductors and install related facilities for conducting

gas through the streets, alleys, squares and public places in

any municipality or municipalities in which it may lawfully

operate." Ibid. But, the utility must "first obtain[] the

20 A-1096-12T4
consent by resolution or ordinance of the governing body of such

municipality for the furnishing of gas therein and the approval

of such consent by the [BPU] Commissioners." Ibid. Municipal

consent "may be subject to reasonable regulations with respect

to the opening of streets, alleys, squares and public places,

not inconsistent with the provisions of this article." Ibid.

We reject defendants' argument that the statute does not

extend to gas regulators or the gas distribution line. The

plain meaning of the phrase, "install related facilities,"

covers what is at issue here, an above ground extension of the

gas distribution system. We also do not necessarily accept

defendants' argument that the statute only governs underground

installations. The statute permits the utility to "lay"

conductors, perhaps implying only installations in the ground,

but it also permits the utility to "install facilities," which

has no such implication. Moreover, the utility may conduct

either activity "through the streets, alleys, squares and public

places," the plain meaning of which may include both the

horizontal laying of pipe in the street as well as the vertical

installation of a facility "through" some other public place,

like the sidewalk.

However, even if N.J.S.A. 48:9-17 applies to all gas

"facilities," above or below grade, it cannot be disputed that

21 A-1096-12T4
NJNG's decision to install at least some of the regulators

through public sidewalks did not comply with its obligations

under the 1969 resolution. Under that agreement, once NJNG

opened a street or a "public place," like a sidewalk, it was

required to restore it to its prior condition. Photographs in

the record clearly demonstrate that NJNG did not restore

sidewalks to prior conditions since there was now a gas

regulator protruding through the sidewalk. Because conditions

in the public right of way would inevitably change, NJNG's

decision implicated more than the powers accorded to it under

the general consent provisions of N.J.S.A. 48:9-17. Hence, the

judge's conclusion, that the regulators were part of the

distribution system and therefore exempt from regulation other

than street opening permits, was mistaken.

More importantly, the trial judge's expansive reading of

N.J.S.A. 48:9-17 ignored other provisions of the Act and the

MLUL that clearly provide the municipality with more power than

simply regulating the opening and closing of streets and public

places. For example, N.J.S.A. 48:9-25.4, entitled,

"Distribution of natural gas; designation of route," provides:

Any gas company . . . may construct, lay,
maintain and use facilities, conductors,
mains and pipes, with the appurtenances
thereto, in, through and beyond any
municipality . . . for the purpose of
transmitting through the same natural gas

22 A-1096-12T4
 . . . ; provided, that in each case such
corporation shall first have obtained a
designation by the governing body or
official having control thereof, of the
public street, road, highway or place, which
may be occupied by such corporation for such
purpose. If any governing body or official
having control of any public street, road,
highway or place, after having received from
such corporation a request to designate such
public street, road, highway or place, for
occupancy by such corporation for such
purpose, shall fail or refuse to make such
designation or to designate a practicable
route, the [BPU] Commissioners, upon
application by the corporation, and after
hearing on notice to such governing body or
official, shall make such designation.

[Ibid. (emphasis added).]

Contrary to the trial court's holding that the municipality

could play no role in determining the location of a gas

company's distribution facility, even on public property, this

statute permits the governing body to designate the "public

street, road, highway or place, which may be occupied by such

corporation for such purpose." Ibid. If the municipality fails

to do so, or designates an impracticable route, then the gas

company may petition the BPU to designate the route. Ibid.

It is well-recognized that construing a statute so as to

render any part of it inoperative, superfluous or meaningless is

disfavored. Perrelli v. Pastorelle, 206 N.J. 193, 207 (2011)

(citing State v. Schumm, 146 N.J. Super. 30, 34 (App. Div.

1977). aff’d o.b., 75 N.J. 199 (1978)). The trial court's broad

23 A-1096-12T4
interpretation of N.J.S.A. 48:9-17 would seemingly render

N.J.S.A. 48:9-25.4 nugatory.

Additionally, both historically and presently, applicable

provisions of the MLUL make clear that the Legislature never

denied municipalities the ability to exercise at least some of

their traditional zoning powers simply because a public utility

was involved. N.J.S.A. 40:55-50 was the statutory predecessor

to N.J.S.A. 40:55D-19. L. 1975, c. 291, §10, amended by L.

1999, c. 23, § 58. It provided in relevant part:

This article ["Zoning"] or any ordinance or
regulation made under authority thereof,
shall not apply to existing property or to
buildings or structures used or to be used
by public utilities in furnishing service,
if upon a petition of the public utility,
the board of public utility commissioners
shall after a hearing, of which the
municipality affected shall have notice,
decide that the present or proposed
situation of the building or structure in
question is reasonably necessary for the
service, convenience or welfare of the
public.

[See State v. Jersey Cent. Power & Light, 55
N.J. 363, 367 (1970) [hereinafter "JCP&L"]
(quoting former N.J.S.A. 40:55-50).]

The Court explained the purpose of N.J.S.A. 40:55-50:

This exemption section expresses a
legislative intent that, in the zoning
field, at least some power over a utility is
reserved to a municipality, subject to the
supervising authority of the Board to
declare the local regulation inapplicable if
it determines "the situation of the building

24 A-1096-12T4
 or structure in question is reasonably
necessary for the service, convenience or
welfare of the public."

[PSE&G, supra, 35 N.J. at 373-74.]

We interpreted the statute similarly, by noting "that public

utilities are subject to the municipal zoning power, but by

[N.J.S.A.] 40:55-50 the Legislature created a method for

resolving conflicts between different interests and policies --

the 'public' served by the utility on the one hand and the

limited group benefited by the zoning ordinance on the other."

In re Petitions of Pub. Serv. Elec. & Gas Co., 100 N.J. Super.

1, 12 (App. Div. 1968) (citing N.Y. Cent. R.R. v. Borough of

Ridgefield, 84 N.J. Super. 85, 93 (App. Div. 1964)).

The trial judge relied upon the Supreme Court's decision in

PSE&G, supra, which NJNG argued was wholly dispositive and

demonstrated it was exempt from Red Bank's zoning regulations.

NJNG reiterates the argument before us, but we reject it.

At issue in PSE&G, supra, was "the power of a municipality

to compel a public utility to carry its high-capacity electric

power lines, transmitting current for other than local use,

through the municipality by underground installation rather than

on overhead structures." 35 N.J. at 361 (emphasis added).

After construction of an overhead tower that was part of a

multi-municipality distribution line had begun in a private

25 A-1096-12T4
railroad right-of-way, the Borough of Roselle ("Roselle")

adopted a local zoning ordinance compelling the utility to

obtain a permit. Id. at 361-62, 366. Additionally, Roselle

petitioned the BPU to conduct an investigation of the project,

including alternatives to overhead installations. Id. at 363.

The BPU held that the utility was exempt from the local

ordinance pursuant to N.J.S.A. 40:55-50. Id. at 373. After

Roselle filed its appeal from that administrative determination,

it passed another ordinance that specifically required all

electric power lines be installed underground. Id. at 363. The

utility challenged the ordinance in the Law Division, which

granted summary judgment, concluding, as a matter of law, that

"the ordinance was invalid as beyond the police power delegated

to the municipality, because the Legislature had specifically

committed the subject matter to the exclusive jurisdiction of

the Board." Id. at 364.

The Court agreed, finding that Roselle had no authority to

pass an ordinance "which attempts to do nothing less than

regulate the method of transmission of high voltage power." Id.

at 372 (emphasis added). In addition, the Court held that the

zoning authority reserved to municipalities under former

N.J.S.A. 40:55-50 was confined to the "physical 'situation' of a

building or structure, like a telephone exchange building, truck

26 A-1096-12T4
garage or water tank," where the regulation does not

"substantially affect[] the method of operation and functioning

of the utility." Id. at 375 (footnote omitted).

The case before us is distinguishable from PSE&G in

critical respects. First, NJNG has not challenged the validity

of Red Bank's land use regulations. Instead, it has

consistently argued that it is exempt from any regulation.

Second, unlike PSE&G, this case does not involve a challenge to

the method NJNG has chosen to transmit its gas, only to whether

NJNG must subject itself, in the first instance, to Red Bank's

development regulations. Third, unlike in PSE&G, where Roselle

attempted to impose specific methods of electrical distribution

on a portion of a multi-jurisdictional project, the location of

NJNG's regulators do not affect distribution of gas to any

municipality other than Red Bank. Lastly, in PSE&G, Roselle

attempted to impose a certain method of distribution even though

the utility was operating in a privately owned right-of-way;

here, NJNG has installed the regulators within the public right-

of-way.

There is subsequent Supreme Court precedent that support's

defendants' position and, in our opinion, is more closely on

point. In JCP&L, supra, the utility was convicted in two

different municipal courts for violating ordinances by

27 A-1096-12T4
commencing construction of overhead transmission towers without

submitting applications so as to comply with certain land use

regulations that 1) provided electrical lines were prohibited

uses, and 2) required a site plan be submitted and a variance

obtained. 55 N.J. at 366-67. The Court described the utility's

position.

Defendant takes the position, purportedly
based on this court's opinion in [PSE&G],
that the attempt of the municipalities to
apply their zoning ordinances to bulk
transmission lines merely passing through
the local community to some other place
constitutes an effort to regulate the
transmission of electrical energy, a field
committed to state regulation and beyond
local legislative power.[] It is said that
local zoning authority to which N.J.S.A.
40:55-50 is applicable can extend only to
single buildings or structures having a
particular local situs, such as a water
tank, or a railroad freight yard. It
therefore contends that it may simply
disregard municipal zoning provisions
affecting bulk transmission lines and make
its own binding decision whether it must
apply to the Board of Public Utility
Commissioners for exemption under the
statutory section.

[Id. at 368 (internal citations omitted).]

The municipalities argued that N.J.S.A. 40:55-50 indicated "a

legislative intention that some local power through zoning

regulation exists as to any utility installation, but with the

final 'say-so' resting in the state agency, subject to judicial

28 A-1096-12T4
review." Ibid. The Court generally agreed with the

municipalities, stating,

We have no doubt that the legislative scheme
puts the initiative upon the utility to
petition the Board for relief under N.J.S.A.
40:55-50 whenever a municipal zoning
provision affects any proposed installation
or it is claimed that it does, unless the
requirement is a purely ministerial one, as,
for example, where a building permit would
issue as of course without submission and
approval of structural or site plans.
Otherwise the utility may be prosecuted for
violation of the ordinance. The very
language of the section . . . evidences the
clear intent that the decision should not be
the utility's whether local zoning
provisions should apply at all or to what
extent, be the proposed facility one which
has a fixed local situs or a bulk
transmission line merely passing through the
municipality. The statutory provision for
notice to the municipality and a hearing
further shows that local interests are to be
considered and weighed with the broader
public interest in the light of the Board's
expertise.

Nothing we said in [PSE&G] was intended
to suggest otherwise. We meant no more than
to suggest, in discussing a hypothetical
zoning ordinance provision which went "to
the extent of amounting to attempted local
regulation substantially affecting the
method of operation and functioning of the
utility," such as a prohibition against any
overhead electric wires in the municipality,
that such a provision might go so far beyond
the pale of the local zoning power as to
permit the [BPU] to completely nullify it
for that reason in a proceeding brought by
the utility under N.J.S.A. 40:55-50. There
was not the slightest thought intended that

29 A-1096-12T4
 the utility could make that decision on its
own and act ex parte accordingly.

[Id. at 369-70 (emphasis added) (footnotes
omitted).]

The Court affirmed JCP&L's convictions for violating the

municipal ordinances. Id. at 371.

As already noted, the MLUL's successor statute, N.J.S.A.

40:55D-19, implicitly recognizes a municipality's ability to

exercise its zoning powers while at the same time according the

utility a special avenue for review before the BPU. It is

evident that the Legislature's enactment of N.J.S.A. 40:55D-19

actually increased control over a public utility's use of land

within a municipality's borders. As one noted commentator has

said:

It is evident that, as to structures and
uses affecting a single municipality, the
public utility must now apply to the local
zoning board of adjustment if a variance is
required or other relief within its
jurisdiction, or to the planning board if
relief is within its jurisdiction, such as a
conditional use permit, is required. Appeal
therefrom lies to the [BPU] or to the
governing body or courts. . . . Thus, the
1975 act created new powers for the
municipalities in dealing with a public
utility . . . .

[Cox & Koenig, N.J. Zoning and Land Use
Administration, § 21-7.2 (2014).]

NJNG seizes upon the Court's language in JCP&L that

development regulations do not apply if the utility's "proposed

30 A-1096-12T4
installation" requires municipal action that is "purely

ministerial." JCP&L, supra, 55 N.J. at 369. The intended

installation in this case, however, involved more than what was

routinely regulated by a permit to open a street or sidewalk.

As already noted above, NJNG's installation of above-ground

regulators through public sidewalks went well beyond the power

granted by the 1969 franchise resolution because the sidewalks

would, in fact, never be returned to their prior condition and

stanchions holding utility regulators would now be protruding

through the sidewalk and for some fifteen inches from the front

of buildings.

We hasten to add that we express no position on how Red

Bank's development regulations should be construed, and whether

NJNG, therefore, is required to submit a development permit.

The MLUL provides that "any interested party affected by any

decision of an administrative officer of the municipality based

on or made in the enforcement of the zoning ordinance or

official map" to appeal to the board of adjustment. N.J.S.A.

40:55D-72(a) (emphasis added). In our view, having received Red

Bank's counsel's letter denying construction permits because it

failed to apply for a development permit, NJNG was in position

to appeal that initial decision to the board of adjustment, and

thereafter to the court or the BPU. See N.J.S.A. 40:55D-19.

31 A-1096-12T4
 Those proceedings could have properly placed before the Law

Division the nature, scope and reasonableness of Red Bank's

development regulations. Since the trial judge agreed that NJNG

was not subject to any regulation, other than those that applied

to the opening of a street or sidewalk, no record has been

created before the municipal agency or in the Law Division. We

believe it would be imprudent for us to construe in the first

instance Red Bank's development regulations in relation to

NJNG's plan to relocate it gas regulators.

For the reasons stated, we reverse the grant of summary

judgment to NJNG and grant defendants' summary judgment

dismissing the complaint.

32 A-1096-12T4