New Jersey state and federal courts decided several important environmental cases during the past year, many addressing topical political and legal issues. Rulings often turned on the amount of discretion that courts will allow public agencies to exercise, especially in the face of unclear legislative authority. The majority of cases confirm that agencies retain a relatively free hand in crafting environmental policies, often at the expense of third parties. In a few instances, however, the courts did overrule the exercise of discretion they thought exceeded that which is authorized by legislation. This article discusses those cases that addressed agency discretion, the dominant theme in environmental decisions this year.