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

Background

Tracey Williams (Quest Academy founders) applied on October 15, 2010 to open a charter high school in Montclair; the Department requested clarifying materials and Quest submitted supplements and met with staff.
The Montclair superintendent (Dr. Frank Alvarez) sent a required local-board analysis criticizing Quest’s curriculum, graduation requirements, and projecting a negative fiscal impact on the district.
On January 18, 2011 the Commissioner issued a brief denial letter citing unspecified “deficiencies,” invited a meeting, and offered training; an Amplification of Reasons was provided to the Appellate Division after appeal, detailing educational, programmatic, enrollment, facility, community-support, and desegregation concerns.
The Appellate Division affirmed, applying a deferential “arbitrary, capricious, or unreasonable” standard rather than the substantial-credible-evidence standard.
The Supreme Court granted certification to resolve the proper standard of review and related procedural challenges and affirmed the Appellate Division’s judgment upholding the Commissioner’s denial.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Standard of judicial review for Commissioner’s denial of charter application	Williams: Denial must be reviewed for support by “substantial credible evidence.”	Commissioner: Review under deferential arbitrary, capricious, or unreasonable standard (which includes record support).	Held: Arbitrary, capricious, or unreasonable standard applies; it subsumes requirement that decision be supported by the record.
Procedural due process / entitlement to a quasi‑judicial hearing	Williams: Act’s appeal rights imply right to quasi‑judicial/contested‑case hearing and written reasons at time of decision.	Commissioner: Act does not confer a contested‑case hearing; process need not be quasi‑judicial; notice and opportunity to be heard satisfied by procedures.	Held: No statutory right to an APA contested‑case hearing; labels (quasi‑legislative vs quasi‑judicial) do not change applicable review; due process satisfied.
Use of local superintendent’s report, unsolicited citizen letters, and desegregation order	Williams: Commissioner improperly relied on local critique, citizen letters, and desegregation concerns.	Commissioner: Those materials are statutorily and judicially appropriate considerations (local board input; racial impact per Englewood; community support; administrative expertise).	Held: Reliance on Dr. Alvarez’s analysis, citizen letters, and the existing desegregation order was proper and within Commissioner’s evaluative scope.
Post‑decision amplification of reasons after appeal	Williams: Amplification after appeal is improper and circumvents requirement to support decision at time issued.	Commissioner: Rule 2:5‑1(b) permits filing an amplification; initial denial invited dialogue; amplification is permissible and accepted.	Held: Amplification after appeal is permissible under Rule 2:5‑1(b); initial form letter offering meeting and later amplification were acceptable.

Key Cases Cited

In re Grant of Charter Sch. Application of Englewood on the Palisades Charter Sch., 164 N.J. 316 (2000) (Commissioner must assess racial impact and evaluate fiscal impact on district’s ability to provide a thorough and efficient education)
Mazza v. Bd. of Trs., 143 N.J. 22 (1995) (formulation of three‑part inquiry for judicial review of agency action)
High Horizons Dev. Co. v. N.J. Dep’t of Transp., 120 N.J. 40 (1990) (use of quasi‑judicial/quasi‑legislative labels in assessing when formal adjudicative procedures are required)
Clowes v. Terminix Int’l, Inc., 109 N.J. 575 (1988) (appellate intervention warranted where agency finding is clearly mistaken)