In the Matter of the Proposed Quest Academy Charter School of Montclair Founders Group , 216 N.J. 370 ( 2013 )

SYLLABUS
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the
convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the
interest of brevity, portions of any opinion may not have been summarized).
IMO Proposed Quest Academy Charter School of Montclair Founders Group (A-12-12) (070972)
Argued September 9, 2013 -- Decided December 16, 2013
LaVECCHIA, J., writing for a unanimous Court.
In this appeal, the Court considers the standard of review applicable to the Commissioner of Education’s
decision to deny a charter school application and the propriety of that decision.
The Charter School Program Act of 1995 (the Act), N.J.S.A. 18A:36A-1 to -18, authorizes the
establishment of charter schools in New Jersey. The Act charges the Commissioner of Education (Commissioner)
with the responsibility to establish a program to “provide for the approval and granting of charters to charter schools
pursuant to [the Act].” N.J.S.A. 18A:36A-3. The application process is governed by the Act, see N.J.S.A.
18A:36A-4, -4.1, -5, and implementing regulations, see N.J.A.C. 6A:11-2.1. Each charter school application must
be submitted not only to the Commissioner, but also to the local board of education for a recommendation to the
Commissioner. The Commissioner has the “final authority to grant or reject a charter application.” N.J.S.A.
18A:36A-4(c). Although the statutory and regulatory programmatic requirements provide no guidance to the
Commissioner on how to assess an application, case law requires the Commissioner to (1) avoid segregation
resulting from the grant of a charter school application and (2) evaluate the impact that loss of funds would have on
the local school district’s ability to deliver a thorough and efficient education. In re Grant of Charter Sch.
Application of Englewood on the Palisades Charter Sch. (Englewood on the Palisades II), 164 N.J. 316 (2000).
On October 15, 2010, Tracey Williams, on behalf of a group of founders, submitted an application to the
Commissioner to open Quest Academy, a proposed charter high school in Montclair. On December 6, 2010,
Williams received an email response from the State Department of Education (Department) stating that certain
sections of the application were incomplete, insufficient, or unclear, pointing out specific deficiencies in the
application, and providing an opportunity to address the deficiencies through the submission of further information.
Also on December 6, 2010, Dr. Frank Alvarez, Superintendent of the Montclair Public Schools, provided the
Commissioner comments on the Quest Academy application on behalf of the local board of education. Dr. Alvarez
addressed the negative financial impact that the proposed charter school would have on the Montclair School
District and criticized the application for containing inadequate and unclear information on course requirements,
graduation requirements, and curriculum development. Quest Academy submitted additional materials on
December 14, 2010. On January 18, 2011, the Commissioner sent a brief, form-like letter to Williams stating that,
“based on recommendations and my review, I am denying your request because of the deficiencies in your
application.” Although there was no further detail regarding the deficiencies, the letter informed Williams that the
Department had additional information regarding her application and invited her to arrange an appointment with
staff to review the additional information and to register for a Department training program on preparing charter
school applications.
Williams filed a notice of appeal with the Appellate Division on February 24, 2011. On June 6, 2011, the
Commissioner submitted an amplification of reasons for the denial to the Appellate Division. The Commissioner
characterized Quest Academy’s education plan as weak and discussed content and programmatic deficiencies,
including that Quest Academy failed to present a comprehensive and fully integrated educational program and that
its strategies were neither connected to, nor supportive of, the proposed educational program. The Commissioner
added that, from her own experience, stand-alone charter high schools were particularly difficult to open and operate
successfully. She also expressed concern that a charter school might interfere with the existing desegregation order
that applies to the Montclair public schools. Finally, the letter cited criticisms voiced by Dr. Alvarez and
community members who had written unsolicited letters of opposition to the proposed charter school. The
Appellate Division affirmed the Commissioner’s denial. The appellate panel stated that, because the Commissioner
did not act in a quasi-judicial capacity, it did not review the Commissioner’s decision under the substantial-credible-
evidence standard, but rather under the standard of whether the decision is arbitrary, capricious, or unreasonable.
The panel found that the Commissioner’s denial of Quest Academy’s application was not arbitrary, capricious, or
unreasonable. The Court granted Williams’s petition for certification. 212 N.J. 288 (2012).
HELD: The arbitrary, capricious, or unreasonable standard of review is applicable to the Commissioner’s decision to
grant or deny a charter school application. The Commissioner’s decision to deny Quest Academy’s charter school
application was amply supported by the record and was not arbitrary, capricious, or unreasonable.
1. Because the Act does not confer a right to an administrative hearing for charter school applications, applicants
cannot claim the right to a quasi-judicial administrative hearing as a “contested case” under the Administrative
Procedure Act (APA), N.J.S.A. 52:14B-1 to -15. However, that does not end all inquiry into the nature of the
proceedings before the Commissioner. The labels of “quasi-judicial” and “quasi-legislative” typically are used to
determine whether an agency is obligated to provide an administrative adjudicative hearing, regardless of whether
the matter would merit the designation of a “contested case” under the APA. If the matter centers on the resolution
of disputed adjudicative facts, if the parties are adverse, or if credibility determinations must be made, more formal
adjudicatory-type proceedings must be provided (hence the quasi-judicial designation). The quasi-judicial and
quasi-legislative labels have limits to their usefulness, however, because agencies must retain the ability to provide
various informal, flexible procedures for determining certain issues that may not fit easily into either
characterization. Importantly, the labels do not result in a meaningful difference in the role played by judicial
review of administrative determinations. (pp. 17-20)
2. Reflecting the need to respect agency action taken pursuant to authority delegated by the Legislature, an appellate
court may only reverse an agency decision if it is arbitrary, capricious, or unreasonable. In other words, a court may
intervene when it is clear that the agency action is inconsistent with its mandate. That standard is applicable to
administrative agency actions regardless of whether they are quasi-legislative or quasi-judicial. In addition, it is
inarguable that the arbitrary, capricious, or unreasonable standard requires that the administrative decision be
supported by the evidence in the record. (pp. 20-23)
3. The Commissioner’s decision to deny Quest Academy’s application was amply supported by the record. The
Court does not second guess the educational judgments expressed in the Commissioner’s amplification. Moreover,
the analysis provided by Dr. Alvarez, which is required by the Act, was properly included in the record and was
appropriately part of the Commissioner’s determination. It was also appropriate for the Commissioner to consider
the existing desegregation order pursuant to Englewood on the Palisades II. Finally, the Court finds no error in the
Commissioner’s consideration of unsolicited letters from local citizens or her reliance on her own expertise in
assessing the overall viability of the proposed charter school. Case law has recognized the value that administrative
expertise can play in making predictive or judgmental determinations. The Commissioner’s decision demonstrates a
thoughtful and thorough weighing and judgment of the merits of Quest Academy’s application and does not warrant
judicial intervention. (pp. 23-27)
4. Rule 2:5-1(b) permits the filing of an amplification of reasons after an appeal has been filed and no objection was
raised on the basis of the Rule’s time frames for such submissions. In addition, the Court accepts the
Commissioner’s explanation for the manner of her initial response to the application. Although the letter of denial
did not detail the application’s deficiencies, it offered instead a face-to-face meeting to review the application in
detail. In reviewing a complex proposal for a charter school, there is a benefit to offering a discussion, instead of a
written cataloguing, of mistakes or deficiencies in the application that has been rejected. The Court does not fault
the Commissioner for choosing a dialogue involving constructive criticism as her preferred approach for producing
approvable applications when resubmitted. (pp. 27-28)
The judgment of the Appellate Division is AFFIRMED.
CHIEF JUSTICE RABNER, JUSTICES ALBIN and PATTERSON, and JUDGES RODRÍGUEZ
and CUFF (both temporarily assigned) join in JUSTICE LaVECCHIA’s opinion.
2
SUPREME COURT OF NEW JERSEY
A-12 September Term 2012
070972
IN THE MATTER OF THE
PROPOSED QUEST ACADEMY
CHARTER SCHOOL OF MONTCLAIR
FOUNDERS GROUP.
Argued September 9, 2013 – Decided December 16, 2013
On certification to the Superior Court,
Appellate Division.
Michael J. Confusione argued the cause for
appellant Tracey Williams a member of Quest
Academy Charter School of Montclair Founders
Group (Hegge & Confusione, attorneys).
Michelle Lyn Miller, Assistant Attorney
General, argued the cause for respondent The
Commissioner of Education (John J. Hoffman,
Acting Attorney General; Lewis A.
Scheindlin, Assistant Attorney General, of
counsel; Diana C. Sierotowicz and Geoffrey
N. Stark, Deputies Attorney General, on the
briefs).
JUSTICE LaVECCHIA delivered the opinion for the Court.
The Charter School Program Act of 1995 (the Act), L. 1995,
c. 426, §§ 1 to 18 (codified as amended at N.J.S.A. 18A:36A-1 to
-18), authorizes the establishment of charter schools in New
Jersey. See N.J.S.A. 18A:36A-2 (finding that charter schools
“can assist in promoting comprehensive educational reform” and
1
that their establishment “is in the best interests of the
students of this State”). The Act charges the Commissioner of
Education (Commissioner) with the responsibility to establish a
program to “provide for the approval and granting of charters to
charter schools pursuant to [the Act].” N.J.S.A. 18A:36A-3.
The application process is governed by the Act, see N.J.S.A.
18A:36A-4, -4.1, -5, and implementing regulations, see N.J.A.C.
6A:11-2.1. Review of applications is conducted in accordance
with prescribed timing requirements that promote batched reviews
tied to school cycles. See N.J.A.C. 6A:11-2.1(b)(5), -2.1(f).
Ultimately, the Commissioner has the “final authority to grant
or reject a charter application.” N.J.S.A. 18A:36A-4(c); see
also N.J.A.C. 6A:11-2.1(a).
In this matter, petitioner is one of the founders of the
proposed Quest Academy Charter School of Montclair (Quest
Academy), which sought licensure pursuant to N.J.S.A. 18A:36A-4
to operate as a charter school for high school students. The
Commissioner denied the application in a writing that was short
on detail with respect to the application’s deficiencies.
Instead, an offer to meet and discuss the application’s
shortcomings was extended, as well as the opportunity to
participate in a training program for preparing an application
for the upcoming application deadline. Following petitioner’s
filing of a notice of appeal to the Appellate Division, the
2
Commissioner issued a written amplification of reasons for
denial of the application. The Appellate Division upheld the
Commissioner’s action on the grounds that the decision was not
arbitrary, capricious, or unreasonable.
We granted certification to consider petitioner’s claim
that the Appellate Division misconstrued the standard of review
applicable to the Commissioner’s decision. We now affirm the
judgment of the Appellate Division. For clarity’s sake, we
restate the standard applicable in appellate review of agency
actions and what is encompassed in that review; however, we
discern no error in the appellate panel’s performance of its
review function here. Further, like the Appellate Division, we
see no basis for interfering with the Commissioner’s use of a
written amplification of reasons for her denial after
petitioner’s appeal had been filed.
I.
On October 15, 2010, petitioner Tracey Williams, on behalf
of a group of founders, submitted an application to the
Commissioner to open Quest Academy, a proposed charter high
school to serve pupils in grades nine through twelve with
approximately eighty pupils per grade. We digress briefly to
explain the regulatory process required for charter schools
before addressing the Commissioner’s response to the Quest
Academy application.
3
A.
Pursuant to the Act, a charter school application minimally
must include the following information:
a. The identification of the charter
applicant;
b. The name of the proposed charter school;
c. The proposed governance structure of the
charter school including a list of the
proposed members of the board of trustees of
the charter school or a description of the
qualifications and method for the
appointment or election of members of the
board of trustees;
d. The educational goals of the charter
school, the curriculum to be offered, and
the methods of assessing whether students
are meeting educational goals. Charter
school students shall be required to meet
the same testing and academic performance
standards as established by law and
regulation for public school students.
Charter school students shall also meet any
additional assessment indicators which are
included within the charter approved by the
commissioner;
e. The admission policy and criteria for
evaluating the admission of students which
shall comply with the requirements of
[N.J.S.A. 18A:36A-8];
f. The age or grade range of students to be
enrolled;
g. The school calendar and school day
schedule;
h. A description of the charter school staff
responsibilities and the proposed
qualifications of teaching staff;
4
i. A description of the procedures to be
implemented to ensure significant parental
involvement in the operation of the school;
j. A description of, and address for, the
physical facility in which the charter
school will be located;
k. Information on the manner in which
community groups will be involved in the
charter school planning process;
l. The financial plan for the charter school
and the provisions which will be made for
auditing the school pursuant to the
provisions of [N.J.S.A. 18A:23-1];
m. A description of and justification for
any waivers of regulations which the charter
school will request; and
n. Such other information as the
commissioner may require.
[N.J.S.A. 18A:36A-5.]
Regulations impose additional requirements, including completion
of the Department’s “New Jersey Charter School Application.”
N.J.A.C. 6A:11-2.1(b)(1); see N.J. Dep’t of Educ. Office of
Charter Sch., Phase One Request for Applications (2013),
available at
http://www.nj.gov/education/chartsch/app/2013PhaseOneCharter
SchoolApplication.pdf. The initial application form is made
available no later than August 31 of each year. N.J.A.C. 6A:11-
2.1(b)(1).
5
Significantly, the application process proceeds in two
phases.1 In phase one, the application must include
i. The name of the proposed charter
school;
ii. Mission;
iii. Educational program overview;
iv. Applicant and founder information;
v. Enrollment and admission information;
vi. Demonstration of need; and
vii. Community and parent involvement.
[N.J.A.C. 6A:11-2.1(b)(2).]
The Commissioner determines whether the applicant is a
“qualified applicant” that advances to phase two of the
evaluation process. See N.J.A.C. 6A:11-2.1(b)(3), (c). In
order to advance to phase two, the applicant must have
submitted an application that[: 1] has a
clear, focused, and results-oriented mission
statement that aligns with all parts of the
application; [2] demonstrates understanding
of the population that the school is likely
to serve; [3] has an educational program
that is likely to be effective for the
student population; [4] has strong and
1
The process is further separated into standard applications and
expedited applications. Standard applicants may submit the
phase one application no later than March 31 of the year before
the school seeks to open. N.J.A.C. 6A:11-2.1(b)(5). Applicants
with “demonstrable experience operating an educational
institution” may submit applications by October 15 for expedited
review. N.J.A.C. 6A:11-2.1(g). Quest’s application seeking
expedited review was filed in accordance with the October 15
deadline.
6
diverse leadership; and [5] has strong
financial planning and management.
[N.J.A.C. 6A:11-2.1(b)(3)(ii).]
In phase two, the applicant must submit additional detailed
information addressing the following:
(1) Educational program;
(2) Goals and objectives;
(3) At-risk populations;
(4) Staffing information;
(5) Financial plan;
(6) Governance and organizational plan;
(7) Facilities;
(8) Daily and annual schedule;
(9) Requested waivers; and
(10) All required documentation as set forth
in the phase two application. Such
documentation shall include, but not be
limited to: course and curriculum outlines,
graduation requirements, school scheduling
information, professional backgrounds of
administrators and staff, professional
development and evaluation plans, an
organizational chart, and documentation of
fiscal and legal compliance.
[N.J.A.C. 6A:11-2.1(b)(3)(iii).]
Following receipt of the required phase two information, the
Commissioner schedules the applicant for “an in-depth interview”
with the Commissioner or a designated representative. N.J.A.C.
6A:11-2.1(b)(3)(iv), (e).
7
Each charter school application must be submitted not only
to the Commissioner, but also to the local board of education
or, if the district is being operated under State intervention,2
the State district superintendent. N.J.S.A. 18A:36A-4(c). The
board or district superintendent must review the application and
recommend to the Commissioner whether she should grant or deny
the application. See ibid. (requiring board of education in
which proposed charter school is to be located to review
application and to forward to Commissioner recommendation on
application’s merit); N.J.A.C. 6A:11-2.1(d)(1)-(2) (requiring
same and setting forth specified time frames dependent on phase
of review). The information clearly is intended to assist the
Commissioner in her consideration of the application.
Despite all their detail, the statutory and regulatory
programmatic requirements provide no guidance to the
Commissioner on how to assess an application. Case law imposes
two requirements, however. First, “the Commissioner must assess
the racial impact that a charter school applicant will have on
the district of residence in which the charter school will
operate” and “must use the full panoply of [her] powers to
avoid” segregation resulting from the grant of a charter school
2
N.J.S.A. 18A:7A-34 permits the State Board to place a failing
school district under State control. The State Board appoints a
State district superintendent to run such a district. See
N.J.S.A. 18A:7A-35.
8
application. In re Grant of Charter Sch. Application of
Englewood on the Palisades Charter Sch. (Englewood on the
Palisades II), 164 N.J. 316, 329 (2000). Second, if the local
school district “demonstrates with some specificity that the
constitutional requirements of a thorough and efficient
education would be jeopardized by [the district’s] loss” of the
funds to be allocated to a charter school, “the Commissioner is
obligated to evaluate carefully the impact that loss of funds
would have on the ability of the district of residence to
deliver a thorough and efficient education.” Id. at 334-35; see
N.J. Const. art. VIII, § 4, ¶ 1 (“The Legislature shall provide
for the maintenance and support of a thorough and efficient
system of free public schools for the instruction of all the
children in the State between the ages of five and eighteen
years.”).
B.
On December 6, 2010, approximately six weeks after Quest
Academy submitted its October 15 application, Ms. Williams
received an email response from a representative of the State
Department of Education, stating that certain sections of the
application were incomplete, insufficient, or unclear. The
response informed Quest Academy of specific deficiencies in its
application and afforded it the opportunity to address the
concerns raised through the submission of further information.
9
Also on December 6, 2010, in accordance with the Act, Dr.
Frank Alvarez, Superintendent of the Montclair Public Schools,
provided comments on the Quest Academy application to the
Commissioner on behalf of his local board of education. Dr.
Alvarez addressed the negative financial impact that the
proposed charter school would have on the Montclair School
District in light of recent reductions in state aid and the
District’s reliance on local property taxes. Substantively, Dr.
Alvarez criticized the application for lacking clear information
on course requirements, inadequately addressing state high
school graduation requirements, and failing to specify a process
of curriculum development in the nine areas of the state’s core
curriculum content standards.
Quest Academy submitted additional materials on December
14, 2010, in response to the December 6 departmental request.
Thereafter, on January 3, 2011, Department representatives met
with Quest founders to discuss the application as augmented by
the addenda.
On January 18, 2011, the Commissioner sent a brief and
rather form-like letter to Williams denying Quest Academy’s
application. In it, the Commissioner referred to the forty-five
applications that had been reviewed in the application cycle as
“present[ing] varying degrees of readiness to successfully
implement exciting and educationally innovative models to
10
enhance student achievement,” but tersely informed Williams
that, “based on recommendations and my review, I am denying your
request because of the deficiencies in your application.” There
was no further detail on those deficiencies in the denial
letter.
The letter provided other important information, however.
It advised Williams of her right to appeal the Commissioner’s
denial. It informed Williams that the Department had additional
information regarding Quest’s application and invited her to
call to arrange an appointment with staff to review the
additional information. The letter further informed Williams
that training was available to assist individuals with
preparation of charter school applications for the next charter
school application deadline, which was March 31, 2011. The
letter invited Williams and the founders to register for the
training program offered by the Department for the upcoming
application deadline.
Williams, acting pro se, filed a notice of appeal with the
Appellate Division on February 24, 2011.
On June 6, 2011, the Commissioner submitted to the Clerk of
the Appellate Division an Amplification of Reasons for the
denial in the form of a letter from Carly Bolger, Director of
the Department’s Office of Charter Schools. According to the
Amplification, the Commissioner denied the application based on
11
its overall lack of quality, as expressed in the initial letter.
In the Amplification, the Commissioner expanded upon her
concerns.
The Commissioner characterized Quest Academy’s education
plan as weak, discerning content and programmatic deficiencies
in several aspects of the proposed program. Specifically, the
Commissioner noted that
Quest’s educational plan . . . incorporated
many different strategies, programs, and
philosophies, but failed to present these
varied ideas as a comprehensive and fully
integrated educational school program. In
particular, the goals and objectives
presented in the plan were weak. . . .
Moreover, the Commissioner found that the
strategies presented by Quest were neither
connected to, nor supportive of, the
proposed educational program.
The Commissioner added that, from her own experience, she
believed that stand-alone charter high schools were particularly
difficult to open and operate successfully. She questioned the
ability of the school to attract sufficient students in the
small community of Montclair, and expressed concern that a
charter school might interfere with Montclair’s desegregation
efforts. The letter cited criticisms voiced by Dr. Alvarez and
community members who had written unsolicited letters of
opposition to the proposed charter school. Those criticisms
questioned the capacity and qualifications of Quest’s founders;
the potential negative impact on the quality of programs and
12
educational offerings at Montclair public schools; a lack of
community support for, or interest in, a charter school and,
conversely, strong community support for the public high school;
and the lack of an adequate facility to house the proposed
charter school.
According to the Amplification, based on the entirety of
those considerations, the Commissioner had determined that
Quest’s application did not have a high probability of success.
She therefore had denied the application.
C.
On appeal before the Appellate Division, petitioner’s
criticisms focused on the Commissioner’s review procedures and
the specific information used by the Commissioner in her
evaluation of the application, including the information
provided through Dr. Alvarez’s evaluation, the citizen letters,
and the existing desegregation order that applied to the
Montclair public schools. In addition, petitioner contended
that the federal No Child Left Behind Act, 20 U.S.C.A. § 6316,
required the Commissioner to approve charter school applications
in districts, like Montclair, that had been identified as in
need of improvement.
In response, the Commissioner addressed the propriety of
the information that she had considered in connection with the
application, countered the argument that the No Child Left
13
Behind Act had applicability in this setting, and urged the
Appellate Division to affirm her determination because the
administrative decision was not arbitrary, capricious, or
unreasonable.
The Appellate Division affirmed the Commissioner’s denial
in an unpublished decision. The court noted that a deferential
standard of review applied to its review of the Commissioner’s
action in this matter. Quoting In re Grant of Charter Sch.
Application of Englewood on the Palisades Charter Sch., 320 N.J.
Super. 174, 217 (App. Div. 1999), aff’d as modified, 164 N.J.
316 (2000), the court stated that, because the Commissioner
“[did] not act in a quasi-judicial capacity,” the appellate
panel “‘[did] not review the Commissioner’s decision under the
substantial-credible-evidence standard, but rather under the
standard of whether the decision is arbitrary, capricious or
unreasonable.’”
Turning to the record that the Commissioner considered in
making her determination, the appellate panel found that the
Commissioner did not act improperly in considering Dr. Alvarez’s
views, the opposition letters from Montclair citizens, or the
desegregation order. The panel held that, based on the record,
the Commissioner’s denial of Quest Academy’s application was not
arbitrary, capricious, or unreasonable. The court specifically
rejected petitioner’s argument that the federal No Child Left
14
Behind Act, 20 U.S.C.A. § 6316, requires the Commissioner to
approve charter school applications in districts identified as
in need of improvement. Petitioner’s other arguments were
summarily rejected.
With the assistance of counsel, Williams filed a petition
for certification, which was granted. 212 N.J. 288 (2012).
II.
Before this Court, petitioner’s arguments are refined.
Focusing primarily on the standard of review, she zeros in on
two sentences in the Appellate Division’s decision and claims
that the panel reviewed the Commissioner’s determination under a
misapprehension of the correct standard for appellate review.
She contends that an appellate court reviewing a denial of a
charter school application must consider whether the decision
was supported by “substantial credible evidence,” not simply
whether it was “arbitrary, capricious or unreasonable” as the
Appellate Division said in its decision. She further argues
that the Commissioner should be required to provide written
reasons for a denial at the time the decision is made, and that
an Amplification of Reasons given after a decision is appealed
should not be allowed. Consistent with those criticisms,
petitioner claims that due process was violated because the
decision, when issued, was not supported by substantial credible
evidence.
15
The Commissioner argues that the Appellate Division
correctly applied an arbitrary and capricious standard of
review. She further argues that the panel appropriately
determined that the Commissioner’s denial procedurally was
compliant with law and substantively was not arbitrary,
capricious, or unreasonable.
More specifically, the Commissioner characterizes her
decision to deny a charter school application as quasi-
legislative, distinguishing it from quasi-judicial actions. The
Commissioner points out that the Act does not require the
Commissioner to conduct a hearing and none is required by due
process. The Commissioner and the applicant do not have an
adversarial relationship and the Commissioner is not required,
in deciding whether to grant a charter school application, to
weigh opposing parties’ evidence or make credibility
determinations. Therefore, the Commissioner maintains that this
appeal does not involve review of quasi-judicial action.
Instead, she relies on case law that states that quasi-
legislative decisions are reviewed under the arbitrary,
capricious, or unreasonable standard. Further, the Commissioner
contends that, subsumed in that standard, are the requirements
that the Commissioner’s decision demonstrate a thorough review
of the record and that the decision reached have sufficient
support in the record to sustain it. Both requirements, she
16
contends, are met here. Further, in response to petitioner’s
objection to the Commissioner’s amplification of reasons for her
decision, the Commissioner cites Rule 2:5-1(b), which permits a
judge, officer, or agency to file an amplification of a prior
decision if it is appealed, as authority for her action.
III.
A.
Judicial review of administrative agency action is a matter
of constitutional right in New Jersey. See N.J. Const. art. VI,
§ 5, ¶ 4 (allocating relief from agency actions to “the Superior
Court, on terms and in the manner provided by rules of the
Supreme Court, as of right”). Rule 2:2-3(a)(2) provides for
review of “final decisions or actions of any state
administrative agency or officer” in the Appellate Division of
the Superior Court.
Through N.J.S.A. 18A:36A-4(c), the Legislature has decreed
that the Commissioner is the final administrative decision-maker
on the grant or rejection of a charter school application.
Thus, an applicant has the right to appeal the Commissioner’s
rejection of a charter school application pursuant to Rule 2:2-
3(a)(2). The Act also confers on an unsuccessful applicant a
statutory right to appeal. See N.J.S.A. 18A:36A-4(d)
(conferring statutory right to appeal to Appellate Division of
Superior Court on charter school applicant and local board of
17
education).
While the Act grants to a denied applicant a statutory
right to appeal, it does not confer a right to an administrative
hearing. That has the consequence of denying a rejected
applicant the ability to claim the right, under the
Administrative Procedure Act (APA), N.J.S.A. 52:14B-1 to -15, to
a quasi-judicial administrative hearing governed by APA
standards for a “contested case.” See N.J.S.A. 52:14B-2
(defining “contested case” as “a proceeding . . . in which the
legal rights, duties, obligations, privileges, benefits or other
legal relations of specific parties are required by
constitutional right or by statute to be determined by an agency
by decisions, determinations, or orders, addressed to them or
disposing of their interests, after opportunity for an agency
hearing”).3 However, that does not end all inquiry into the
nature of the proceedings before the Commissioner when reviewing
an application to operate a charter school.
The labels of “quasi-judicial” and “quasi-legislative”
typically are used to determine whether the agency is obligated
to provide an administrative adjudicative hearing, regardless of
whether the matter would merit the designation of a “contested
case” under the APA. See Cunningham v. Dep’t of Civil Serv., 69
3
The applicant has not asserted a substantive constitutional
right.
18
N.J. 13, 20 (1975) (using such labels in explaining when,
outside of APA requirements, right to trial-like hearing exists
as matter of fundamental fairness and administrative due
process). If the matter centers on the resolution of disputed
adjudicative facts, if the parties are adverse, or if
credibility determinations must be made, more formal
adjudicatory-type proceedings must be provided (hence the quasi-
judicial designation). See, e.g., High Horizons Dev. Co. v.
N.J. Dep’t of Transp., 120 N.J. 40, 49-51 (1990) (discussing
when need arises for trial-like, adjudicatory process). The
most important procedural rights in such proceedings are
adequate notice, a chance to know opposing evidence, and the
opportunity to present evidence and argument in response. Id.
at 52-53.
Such labels as quasi-adjudicative and quasi-legislative
have limits to their usefulness. Indeed, this Court has
recognized that agencies must retain the ability to provide
various informal, flexible procedures for determining certain
issues or taking certain actions. Ibid. In all instances,
fundamental due process requirements of notice and opportunity
to be heard must be satisfied, even though the contours of their
satisfaction may vary. See id. at 51-54 (reviewing property
owner’s criticism of procedural fairness in Commissioner of
Transportation’s handling of application for highway access
19
permit). As in the matter presently before this Court, High
Horizons involved a due process challenge in a matter that did
not fit easily into classifications of whether an agency was
acting in a judicial or “quasi-judicial” capacity, or in a
legislative or “quasi-legislative” capacity. Id. at 50-51.
Importantly, the labels do not result in a meaningful difference
in the role played by judicial review of administrative
determinations. The “core value[] of judicial review of
administrative action is the furtherance of accountability.”
Id. at 53.
B.
Reflecting the need to respect agency action taken pursuant
to authority delegated by the Legislature, the standard for
judicial review of administrative agency action is limited: An
appellate court may reverse an agency decision if it is
arbitrary, capricious, or unreasonable. See In re Petition for
Rulemaking, 117 N.J. 311, 325 (1989). In other words, a court
may intervene when “it is clear that the agency action is
inconsistent with its mandate.” Ibid. Indeed, the test often
is expressed in the negative. See, e.g., Brady v. Bd. of
Review, 152 N.J. 197, 210 (1997) (“Unless a Court finds that the
agency’s action was arbitrary, capricious, or unreasonable, the
agency’s ruling should not be disturbed.”). The test, although
deferential, does not lack content. As this Court has stated on
20
many occasions,
[a]lthough sometimes phrased in terms of a
search for arbitrary or unreasonable agency
action, the judicial role [in reviewing an
agency action] is generally restricted to
three inquiries: (1) whether the agency’s
action violates express or implied
legislative policies, that is, did the
agency follow the law; (2) whether the
record contains substantial evidence to
support the findings on which the agency
based its action; and (3) whether in
applying the legislative policies to the
facts, the agency clearly erred in reaching
a conclusion that could not reasonably have
been made on a showing of the relevant
factors.
[Mazza v. Bd. of Trs., 143 N.J. 22, 25
(1995).]
See, e.g., In re Stallworth, 208 N.J. 182, 194 (2011); N.J.
Soc’y for Prevention of Cruelty to Animals v. N.J. Dep’t of
Agric., 196 N.J. 366, 384-85 (2008); In re Carter, 191 N.J. 474,
482-83 (2007); Dennery v. Bd. of Educ., 131 N.J. 626, 641
(1993); In re Petition for Rulemaking, supra, 117 N.J. at 325;
Henry v. Rahway State Prison, 81 N.J. 571, 579-80 (1980).
The standard is applicable to administrative agency actions
regardless of whether they are quasi-legislative or quasi-
judicial.4 Examples demonstrate the test’s applicability to a
quasi-legislative rulemaking context, see, e.g., N.J. Soc’y for
4
Some cases have made this standard for judicial review of
agency action a four-part inquiry. See, e.g., Brady, supra, 152
N.J. at 210-11 (separating duty to follow law into two
inquiries, one legislative and one constitutional). We adhere
to the test as formulated in Mazza.
21
Prevention of Cruelty to Animals, supra, 196 N.J. at 384-85; In
re Petition for Rulemaking, supra, 117 N.J. at 325; Public Serv.
Elec. & Gas Co. v. N.J. Dep’t of Envtl. Prot., 101 N.J. 95, 103
(1985), as well as to a quasi-judicial context, see, e.g.,
Mazza, supra 143 N.J. at 25; Dennery, supra, 131 N.J. at 641;
Exec. Comm’n on Ethical Standards v. Salmon, 295 N.J. Super. 86,
96-97 (App. Div. 1996).
In this matter, both parties concede that the arbitrary,
capricious, or unreasonable standard applicable in the review of
administrative agency decisions subsumes the need to find
sufficient support in the record to sustain the decision reached
by the Commissioner. The point is beyond argument, for a
failure to consider all the evidence in a record would perforce
lead to arbitrary decision making. See, e.g., Close v. Kordulak
Bros., 44 N.J. 589, 599 (1965) (noting that “the proofs as a
whole” must be considered); Green v. State Health Benefits
Comm’n, 373 N.J. Super. 408, 415 (App. Div. 2004) (finding
agency decision that failed to address issues raised in key
documents in record arbitrary and capricious). Moreover, a
decision based on a complete misperception of the facts
submitted in a record would render the agency’s conclusion
unreasonable. See, e.g., Clowes v. Terminix Int’l, Inc., 109
N.J. 575, 588-89 (1988) (stating that appellate court should
intervene where agency’s “finding is clearly a mistaken one”);
22
Constantino v. N.J. Merit Sys. Bd., 313 N.J. Super. 212, 218
(App. Div.) (reversing board’s decision where findings were
unsupported by record, based on “total disregard” of facts,
against “overwhelming weight” of testimony, and based on record
“skew[ed]” by administrative law judge), certif. denied, 157
N.J. 544 (1998). Plainly, the standard requires that the
administrative decision be supported by the underlying record,
regardless of the manner in which due process requires that the
record be created. The obligation that there be substantial
evidence in the record requires a sifting of the record, and the
ability to find support for the conclusions reached by the
Commissioner under the statutory framework within which she must
act.
IV.
A.
The statutory and regulatory scheme for the approval of
applications to operate a charter school functions under tight
time frames as cycle after cycle of charter school applications
are submitted seeking approval to open in the ensuing school
year. N.J.A.C. 6A:11-2.1(b)(1). The regulatory scheme operates
under the expectation that an application either will be
approved through phases one and two of the review process and
move on for implementation in the upcoming school year, or will
require retooling and resubmission. N.J.A.C. 6A:11-2.1. The
23
Department, as noted in Quest’s denial letter, assists
applicants with the application process by offering training
programs in how to prepare applications for review.
That said, the applications arrive in batches and must be
reviewed and resolved in a timely fashion in order to proceed to
implementation in the next school year. See ibid. At oral
argument, the Attorney General, arguing for the Commissioner,
represented to the Court that the Commissioner is exceedingly
careful in the approval of charter schools because of the impact
that a wrong decision will have on students who attend a charter
school that falters, or worse, fails to provide an educational
program that satisfies the constitutional standard of a thorough
and efficient education. See Englewood on the Palisades II,
supra, 164 N.J. at 323, 336 (stating obligation to provide
“thorough and efficient system of education” and holding that
Commissioner must assess economic impact of proposed charter
school on district of residence). We are appreciative of the
importance that must be ascribed to the Commissioner’s approval
of a charter school and that, nevertheless, such reviews must
proceed expeditiously.
Turning to the merits of the Commissioner’s determination
in respect of Quest Academy’s application, we find that the
Commissioner’s decision was amply supported by the record before
her. We do not second guess the educational judgments expressed
24
in the Amplification letter issued on behalf of the
Commissioner, such as her findings that Quest Academy “failed to
present . . . a comprehensive and fully integrated educational
program” and that “the strategies presented by Quest were
neither connected to, nor supportive of, the proposed
educational program.” Moreover, as envisioned by the
Legislature, that record properly included relevant submissions
necessary for proper consideration and allowance of a charter
school to operate. Specifically, we refer to the analysis
provided by the local superintendent of schools, which is
required to be submitted by N.J.S.A. 18A:36A-4(c) and N.J.A.C.
6A:11-2.1(d). In addition, in Englewood on the Palisades II,
supra, we stated that the Commissioner was obliged to consider
whether an impacted local school district had demonstrated “with
some specificity that the constitutional requirements of a
thorough and efficient education would be jeopardized by [the
district’s] loss” of the funds to be allocated to a charter
school, and that the Commissioner was “obligated to evaluate
carefully the impact that loss of funds would have on the
ability of the district of residence to deliver a thorough and
efficient education” when considering whether or not to approve
the charter school. 164 N.J. at 334-35. The information in Dr.
Alvarez’s submission was appropriately part of the
Commissioner’s determination. We add that Quest Academy was
25
entitled to respond to it by way of argument, at the least,
within the tight time frames permitted in the review process,
and through any subsequent resubmission of the application.
In addition, petitioner’s objection to the Commissioner’s
reliance on the existing desegregation order as a factor to
consider in rejecting the application lacks merit. Again, in
Englewood on the Palisades II, supra, we stated that “the
Commissioner must assess the racial impact that a charter school
applicant will have on the district of residence in which the
charter school will operate” and “must use the full panoply of
[her] powers to avoid” segregation resulting from the grant of a
charter school application. 164 N.J. at 329.
Finally, we see no error in the Commissioner’s
consideration of unsolicited letters from local citizens or her
reliance on her own expertise in assessing overall viability of
this proposed charter school. In making predictive or
judgmental determinations, case law has recognized the value
that administrative expertise can play in the rendering of a
sound administrative determination. Judicial deference is at a
high when reviewing such findings. See, e.g., Golden Nugget
Atl. City Corp. v. Atl. City Elec. Co., 229 N.J. Super. 118,
122-23 (App. Div. 1988).
The Commissioner’s decision -- but only as it was amplified
-- demonstrates a thoughtful and thorough weighing and judgment
26
of the merits of the Quest Academy application. There is no
right to operate a charter school. There is only the
opportunity to apply for approval to operate one if the
application demonstrates proper merit. The burden is on the
applicant to show that it can meet the requirements for
obtaining permission to educate public school children in a
charter school setting. The Commissioner’s review and rejection
of this application is sustainable on the record she had before
her. There is no basis for judicial intervention.
B.
We add only a brief comment about the Commissioner’s
amplification. Rule 2:5-1(b) expressly permits its filing after
a notice of appeal has been filed. Indeed, the Rule anticipates
that amplification may occur after an appeal has been filed. To
the extent that there are time frames for its submission set
forth in the Court Rule, we note that no objection was raised on
the basis of the Rule’s time frames for such submissions, which
are designed to prevent delay in the processing of appeals.
We add that we accept the Commissioner’s explanation for
her manner of responding to applicants. Although the letter of
denial did not detail the deficiencies found in the application,
it offered instead a face-to-face meeting to review in detail
the shortcomings in the application that Quest Academy
submitted. According to the Commissioner, the large number of
27
applicants (forty-five) who were reviewed in the batch with
Quest Academy rendered lengthy written responses difficult and
taxing of precious departmental resources. While it would be
naturally preferable from the applicant’s perspective to receive
initially more than a generic form letter denying an
application, here Quest Academy received a bit more than that.
Some information about the application’s shortcomings was
provided in the denial letter, and the subsequent amplification
fully detailed those issues. In reviewing as complex a proposal
as that required for a newly proposed charter school, there is a
benefit to offering a discussion, instead of a written
cataloguing, of mistakes or deficiencies in the application that
has been rejected. We do not fault the Commissioner for
choosing a dialogue involving constructive criticism as her
preferred approach for producing approvable applications when
resubmitted.
V.
The judgment of the Appellate Division, affirming the
Commissioner of Education’s denial of the charter school
application of Quest Academy, is affirmed.
CHIEF JUSTICE RABNER, and JUSTICES ALBIN and PATTERSON, and
JUDGES RODRÍGUEZ and CUFF (both temporarily assigned) join in
JUSTICE LaVECCHIA’s opinion.
28
SUPREME COURT OF NEW JERSEY
NO. A-12 SEPTEMBER TERM 2012
ON CERTIFICATION TO Appellate Division, Superior Court
IN THE MATTER OF THE
PROPOSED QUEST ACADEMY
CHARTER SCHOOL OF MONTCLAIR
FOUNDERS GROUP
DECIDED December 16, 2013
Chief Justice Rabner PRESIDING
OPINION BY Justice LaVecchia
CONCURRING/DISSENTING OPINIONS BY
DISSENTING OPINION BY
CHECKLIST AFFIRM
CHIEF JUSTICE RABNER X
JUSTICE LaVECCHIA X
JUSTICE ALBIN X
JUSTICE PATTERSON X
JUDGE RODRÍGUEZ (t/a) X
JUDGE CUFF (t/a) X
TOTALS 6
1