In its May 8, 2024 decision in In the Matter of P.T. Jibsail Family Limited Partnership, the Appellate Division clarified the distinction between the riparian rights under a tidelands grant versus a license and the scope of the Tidelands Resource Council’s (“TRC”) authority to fix pierhead lines.

In 2017, P.T. Jibsail Family Limited Partnership (“Jibsail”) applied for (1) a Waterfront Development (“WFD”) permit from the New Jersey Department of Environmental Protection (“NJDEP”) and (2) a modification of a tidelands license received by its predecessor-in-interest, in order to extend its dock in Barnegat Bay. The owner of the neighboring property, the Janine Morris Trust (“JMT”) opposed the application. JMT’s property also had a dock that its predecessor had built pursuant to its own tidelands license. Jibsail received a WFD permit and a modified tidelands license to construct a 168-foot dock extension (“2018 License”). The dock was constructed in 2018, but was not in compliance with the submitted plans, which required that modifications be made to the WFD permit and Tidelands license (“2022 Modified License”). NJDEP and the TRC approved the modifications in 2019 and 2022, respectively.

JMT appealed the TRC approval of a modification of the Jibsail tidelands license. JMT argued that the TRC should not have issued the 2022 Modified License because Jibsail’s dock was outside the existing pierhead lines. JMT also argued that the TRC acted outside of its statutory authority by establishing the pierhead line in the license itself.

Notably, JMT did not appeal the 2018 License, and the time to appeal it had long since passed by the time JMT appealed the 2022 Modified License. JMT did continue to object to Jibsail’s WFD permit including requesting the permit be revoked or modified. Jibsail needed to modify its WFD permit and the unchallenged 2018 License because it built its dock extension one foot out of compliance with the submitted plans. This one-foot error and Jibsail’s application to modify its Tidelands license reopened the appeal period for a project that had been permitted and completed several years before, at least with respect to certain issues addressed in the 2018 License.

The Appellate Division affirmed the TRC’s issuance of the 2022 Modified License.  In its decision, the court distinguished the rights afforded to holders of a tidelands grant and a tidelands license. The court explained that a tidelands grant provides a fee simple interest in real property that extends the width of the upland parcel to the pierhead line. A tidelands license, on the other hand, only gives the licensee a lease of the area in the “license box” that aligns with the size of the permitted structure. Additionally, a tidelands grant provides a right to the land under the water that extends to the point where the owner has access to navigable water. Conversely, the tidelands license only provides a right to use the land in the “license box” and the licensee’s right is no stronger outside the license box than another member of the public. As such, the Appellate Division disagreed with JMT’s arguments that it had a preemptive right to the tidelands from its bulkhead to the pierhead line and it determined that JMT’s rights do not preclude the State from managing the area outside of their license box. Jibsail’s dock did not enter into JMT’s licensed area, thus the TRC’s approval was not arbitrary, capricious, or unreasonable.

Additionally, the Appellate Division further clarified the TRC’s statutory authority to establish pierhead lines. JMT asserted that the pierhead line for Jibsail’s dock was beyond the pierhead line that was previously established as required by statute and the TRC acted outside of its authority in establishing a new pierhead line in Jibsail’s license. The court found that the TRC had acted within its statutory authority when approving the modification to Jibsail’s license. The court explained that the TRC’s authority in N.J.S.A. 12:3-19 directs it to “from time to time, fix and establish … exterior lines in said waters beyond which no pier, wharf, bulkhead, erection, or permanent obstruction of any kind shall be made or maintained.” Citing Schultz v. Wilson, 44 N.J. Super. 561 (App. Div. 1957), the Appellate Division determined that the TRC had acted within its authority in fixing a new pierhead line in the Jibsail 2022 Modified License by fixing a pierhead line through a license and suggested that the TRC likely had in mind that in future grants or licenses “the same exterior course could be followed.”

Parties acquiring property subject to a tidelands grant or license or considering applying for a new tidelands grant or license should be aware of the different rights each interest conveys and the limited scope of a tidelands license, as set forth in the Jibsail case.  Outside of the context of tidelands, the decision serves as a reminder that modifications to a permit could reopen the permit holder to legal challenges to issues that, in the absence of the modification, would have been settled and unappealable.

For more information, please contact the author Amelia Whiting at awhiting@riker.com or any attorney in our Environmental Practice group.