In the Matter of the Proposed Quest Academy Charter School of Montclair Founders Group

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