NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-1950-21
IN THE MATTER OF THE GRANT OF RENEWAL APPLICATION OF THE RED BANK CHARTER SCHOOL, 2022-2027. _________________________
Argued April 15, 2024 – Decided April 25, 2024
Before Judges Sabatino, Mawla, and Vinci.
On appeal from the New Jersey Department of Education.
Aron Grant Mandel argued the cause for appellant The Board of Education of the Borough of Red Bank (The Busch Law Group LLC, attorneys; Jonathan Matthew Busch, of counsel; Nicholas Celso, III, and Aron Grant Mandel, of counsel and on the briefs).
Francesco Ferrantelli, Jr., argued the cause for respondent Commissioner of Education (Matthew J. Platkin, Attorney General, attorney; Sara M. Gregory, Assistant Attorney General, of counsel; Amna T. Toor, Deputy Attorney General, on the brief).
Thomas Owen Johnston argued the cause for respondent Red Bank Charter School, Inc. (Johnston Law Firm LLC, attorneys; Thomas Owen Johnston, of counsel and on the brief; Jaryda A. Gonzalez, on the brief).
PER CURIAM
The Board of Education of the Borough of Red Bank ("the School Board")
appeals from the February 1, 2022 final agency decision of the then-Acting
Commissioner of the New Jersey Department of Education ("DOE"), renewing
the charter of the Red Bank Charter School ("RBCS") for the 2022-2027 five-
year term. Over the objection of the School Board, the Acting Commissioner
approved RBCS's renewal application based primarily on the school's academic
performance, fiscal viability, and operational stability. 1 The School Board
opposed renewal, arguing that RBCS has contributed to a racial/ethnic, socio -
economic, and academic demographic imbalance within the Red Bank school
district.
The Acting Commissioner's renewal decision only briefly mentioned the
racial/ethnic demographic issues, without analyzing them in detail utilizing an
explicitly defined standard for impermissible segregative impact. The renewal
decision also omitted a substantive analysis of other required considerations,
1 During the pendency of this appeal, a new Commissioner of Education has been nominated, and is serving as Acting Commissioner. A-1950-21 2 including segregative impacts on students with disabilities, English Language
Learner ("ELL") students, and economically disadvantaged students.
Among other things, the School Board argues the Acting Commissioner's
decision was arbitrary, capricious, and unreasonable and not entitled to
deferential review because it failed to adequately consider RBCS's segregative
impact on the Red Bank school district, and this and other failures violated both
public policy and legislative mandate. The School Board requests this court
reverse the renewal decision—thereby revoking RBCS's charter—or, in the
alternative, either exercise original appellate jurisdiction and determine this case
on the merits or retain jurisdiction and appoint a Special Adjudicator. 2
RBCS joins with the Attorney General (as counsel to the Acting
Commissioner) in opposing the School Board's appeal. Among other things,
respondents contend any alleged shortcomings in the Acting Commissioner's
renewal decision are cured by explanations set forth in the Attorney General's
appellate brief and the data contained in a "renewal summary report" that was
issued after the Acting Commissioner's decision. Respondents contend the
2 The School Board requests the appointment of a Special Master. We use the term "Special Adjudicator" because the Judiciary recently announced it is substituting the term "Special Adjudicator" for "Special Master." See Sup. Ct. of N.J., Notice to the Bar: Supreme Court Announces Adoption of Term "Special Adjudicator" to Replace use of "Special Master" (April 5, 2024). A-1950-21 3 Acting Commissioner's renewal decision, coupled with the later-issued renewal
summary report, satisfied her obligations under the statutory scheme, because
the form and substance of her decision is left to her discretion. On the merits,
respondents point to substantial growth in the percentages of minority students
enrolled at RBCS since its last renewal, and the educational benefits provided
by RBCS's program.
For the reasons that follow, we remand this matter to require the present
Acting Commissioner to address in an amplified final agency decision, with
appropriate reasoned analysis, the issues of segregative impact required by the
applicable statutes, regulations, and case law. As part of that analysis, the
Acting Commissioner must clarify the methodology the DOE is using to assess
segregative impact in this charter school renewal context. The Acting
Commissioner shall also delineate the analysis of any segregative impact of the
charter school's renewal on ELL students, students with disabilities, and
economically disadvantaged students. Lastly, the Acting Commissioner shall
address in the amplification other discrete subjects identified in this opinion t hat
bear upon whether renewal of RBCS's charter is arbitrary, capricious, or
unreasonable.
A-1950-21 4 I.
Given that we are remanding this matter for additional findings, and the
parties are well familiar with the facts and RBCS's oft-litigated history, we need
not present the factual and procedural background comprehensively. The
following summary will suffice for this opinion.
RBCS's History
RBCS's student demographic composition and whether it has contributed
to segregation within the Red Bank school district has been the subject of dispute
in the over two decades since the inception of RBCS. We incorporate by
reference that history as detailed in our 2019 opinion, which addressed an
outside challenge to RBCS's enrollment practices. See In re Grant of the Charter
Renewal of the Red Bank Charter Sch. ("Red Bank II"), No. A-3342-16 (App.
Div. Sept. 20, 2019).
The pertinent history begins with the 1998 approval of RBCS's initial
charter application. The School Board challenged the application, arguing in
part that "the grant of a charter in this case will violate the New Jersey Law
Against Discrimination, Title VI of the Civil Rights Act and the Equal
Educational Opportunities Act." The State Board of Education found this
argument "speculative" and not supported by "actual enrollment data."
A-1950-21 5 However, it added that "given the racial composition of Red Bank, the
Commissioner should review the racial composition of the student population of
the [RBCS] before granting final approval."
The Red Bank I Decision
In 2001, RBCS filed a renewal application, and sought to expand its class
size to include kindergarten through third grade and increase enrollment in its
existing grades four through eight. In re Red Bank Charter Sch. ("Red Bank I"),
367 N.J. Super. 462, 468 (App. Div. 2004). The School Board challenged the
application, contending that the school exacerbated the racial/ethnic imbalance
within the school district and that a hearing was required to fully assess this
point. Id. at 469. In response, RBCS attributed the decreased number of White
students within the district schools 3 to personal family decisions on schooling
and argued that this "[W]hite flight" had been occurring even prior to RBCS's
opening.4 Id. at 469-70. The Commissioner renewed RBCS's charter and
3 For purposes of this opinion, the term "district schools" refers to the public elementary and middle schools in Red Bank, since RBCS has a pre-kindergarten through eighth-grade program. 4 The demographic categorizations herein are largely based on the language used by the parties in their briefs and appendices. When we are not referring to the parties' specific categorizations, we replace "Hispanic" with "Hispanic/Latino," as these two categorizations were sometimes used together
A-1950-21 6 approved the expansion request, without reference to the segregation charges.
Id. at 470.
Following an administrative appeal, the State Board of Education affirmed
the Commissioner's decision, concluding that the School Board had failed to
"demonstrate[] that the Charter School has had a segregative effect on the
district's schools or that expansion of the School will have an impermissible
impact on the racial composition of the district's schools." Ibid.
The School Board appealed to this court, and in a 2004 published opinion,
we affirmed the renewal decision. Id. at 468. Although the Commissioner's
decision failed to expressly address the segregation argument, we "discern[ed]
from the entire record"—including from the Commissioner's brief on appeal—
that the Commissioner found no evidence that RBCS "has promoted racial
segregation." Id. at 476. We rejected in Red Bank I the School Board's
segregation arguments on the ground that it had "used the wrong population
base" (by comparing RBCS's demographics with Red Bank's general population,
or interchangeably but refer to two distinct demographic groups. Similarly, we replace the phrase "students with special needs" with "students with disabilities," as the latter is more inclusive. Because the parties' racial/ethnic segregation arguments are limited to White and Hispanic/Latino students, we confine our discussion to these two groups as well. A-1950-21 7 not its relevant school-aged population) "and failed to establish causation" by
not considering the "pre-existing 'white flight' trend." Id. at 477.
That said, we observed in Red Bank I that "the enrollment statistics clearly
demonstrate that [RBCS] has a significantly higher percentage of non-minority
students than the district schools." Id. 477-78. While we noted there were no
objections to RBCS's random admissions lottery, we considered the School
Board's arguments about how RBCS may otherwise be manipulating its student
population—such as allegedly pushing minority students out of the school or
using its waitlist and sibling preference policy (which gives preference to
applicants who have siblings already enrolled at RBCS) "to further exacerbate
racial/ethnic imbalance." Id. at 478-79. We recognized those allegations were
"difficult to dismiss on this record." Id. at 480. Thus, without disturbing the
renewal decision, we remanded the matter for a hearing to determine whether
any of RBCS's policies and practices exacerbated the district's racial/ethnic
imbalance, and whether any remedial action was warranted. Id. at 481, 486.
This administrative hearing directed by Red Bank I never occurred
because the School Board and RBCS entered into a consent order resolving the
litigation. The subsequent renewal periods passed, apparently without issue.
Red Bank II, (slip op. at 13).
A-1950-21 8 Red Bank II
In 2017, the DOE again renewed RBCS's charter by way of a "short,
congratulatory letter." Red Bank II, (slip op. at 14). Two nonprofit coalition
groups in Red Bank appealed that renewal. Ibid. In response, the then-
Commissioner submitted an Amplification of Reasons explaining the renewal
decision. Id. at 14-15.
As we summarized in our Red Bank II decision, the Amplification
provided three main reasons for the Commissioner's decision: "(1) RBCS's
favorable student performance on statewide assessments; (2) operational
sustainability; and (3) demographic enrollment data and public comment." Id.
at 15. The Commissioner acknowledged that RBCS's racial/ethnic composition,
on its face, did not "currently reflect the community's school-age population,"
but nonetheless concluded that RBCS had taken "sufficient action" to address
this racial imbalance. Id. at 15-16. As part of her assessment, the Commissioner
considered: the limited opportunities for new students to enroll because RBCS
had twenty students per grade and there was a low attrition rate; RBCS's
advertising and recruiting in Spanish and English and its targeting of "high-
needs communities"; a 33% increase in incoming Hispanic pre-kindergarten
students as compared to the last academic year; and RBCS's implementation of
A-1950-21 9 a weighted lottery. 5 Id. at 16-17. After comparing the student populations
between RBCS and the district schools, the Commissioner found there was no
compelling evidence that RBCS had a segregative effect on the district schools.
Id. at 17.
Thereafter, we remanded the case to the Commissioner for further
"proceedings" to allow the parties to supplement the record based on the new
information considered in the Amplification of Reasons. Id. at 17. The remand
resulted in a second Amplification of Reasons (by a different Commissioner),
affirming the renewal of RBCS's charter. Id. at 21-24. Responding to the
arguments raised by the coalition groups, the then-Commissioner disagreed that
RBCS's advertising and recruitment practices favored White families. Id. at 22.
He endorsed RBCS's 3:2 weighted lottery "as a tool to promote enrollment of
economically disadvantaged students" and "to ensure that RBCS's enrollment
represent[ed] a cross-section of the community's school-age population." Id. at
23. Although the sibling preference policy limited the number of available seats,
5 A "weighted lottery" is defined as "a random selection process that provides additional weight or increased chances to individual students who are identified as part of a specified set of educationally disadvantaged students but does not reserve or set aside seats for individual students or sets of students." N.J.A.C. 6A:11-1.2. RBCS's weighted lottery favored applicants who qualified as economically disadvantaged, entering their names into the lottery three times, as opposed to only twice. Red Bank II, (slip op. at 16 n.4). A-1950-21 10 the Commissioner contemplated that the weighted lottery would result in
improved demographics better reflecting the community's population, which in
turn would benefit those siblings as well. Id. at 23-24. He pledged that the DOE
"will continue to monitor RBCS's demographics and will consider revisiting
both the weighted lottery and sibling preference if the trend does not continue."
Id. at 24.
Following that amplified agency decision, the coalition groups proceeded
with their appeal of the renewal decisions in Red Bank II. They argued that both
Commissioners' decisions failed to address their claims against RBCS's
allegedly discriminatory enrollment practices—which purportedly suppressed
Hispanic/Latino student enrollment and perpetuated White enrollment at far
higher levels than at the district schools. They further claimed the agency erred
in failing to suspend RBCS's sibling preference policy and by not addressing
RBCS's allegedly faulty recruitment methods. Id. at 2-3.
In Red Bank II, we declined to disturb the sibling preference policy,
concluding there was sufficient support for the Commissioners' determinations
that the sibling preference policy—coupled with the weighted lottery program—
likely would increase the number of incoming Hispanic/Latino students in the
future. Id. at 38-40. We specifically credited the Commissioner's representation
A-1950-21 11 that he would continue to monitor RBCS's demographics and would revisit both
the sibling preference and the weighted lottery policies if the upward trend in
Hispanic/Latino enrollment did not continue. Id. at 40.
However, we determined that RBCS's recruitment and advertising policies
required further examination by the DOE and requested the Commissioner to
make a third Amplification of Reasons on this point. Id. at 42-43. We further
noted that the impact of the weighted lottery and RBCS's
advertising/recruitment "may be considered anew" in the next charter renewal
cycle in 2021, and thus would "shed further light on whether the weighted lottery
is working in a desirable fashion, and whether the school's most recent
advertising measures to the community are timely and effective." Id. at 43, 45.
In December 2019, the Commissioner issued a third Amplification of
Reasons, affirming RBCS's charter renewal. The Commissioner determined
that, "consistent with its statutory and constitutional obligations," RBCS was
"taking all practicable steps to recruit and enroll a cross-section of the
community's school-age population," and there was no evidence of corruption
in RBCS's lottery system.
A-1950-21 12 The Current Renewal Application
In October 2021, RBCS submitted its charter renewal application for the
next term of 2022-2027. The application included general information about the
school's curriculum, student achievement, community engagement,
administration, and budget. RBCS also discussed its programs for students with
disabilities and ELL students. As in the past, it listed its projected maximum
enrollment at 200 students, with twenty students per each grade level (from pre -
kindergarten through eighth grade). Its application also included a table wit h
the school's current demographics.
The School Board submitted opposition to this newest renewal
application. The opposition included letters from the School Board, local school
superintendents, various firms, organizations, and concerned families; a
Borough Council resolution opposing renewal; and press releases and news
articles. In its letter, the School Board alleged that RBCS caused "a
demographic imbalance between the two school systems," and that RBCS's
demographics did not "reflect the K-8 population of Red Bank."
RBCS submitted a response in further support of its renewal application.
In addition to reiterating its prior arguments and including support letters from
families and community members, RBCS's response included "NJ School
A-1950-21 13 Performance Reports," which are annual reports prepared by the DOE
addressing school performance and student achievement data and include the
school's demographic data for each academic year. See N.J.A.C. 6A:33-1.3.
RBCS also submitted to the DOE racial/ethnic demographic data for Red
Bank's student population based on the United States census for 2019. The
School Board responded with a further submission, reiterating that a charter
school's admissions policy must reflect a cross-section of the community, which
includes racial/ethnic differences as well as academic differences, such as ELL
and students with disabilities. The School Board argued that RBCS's student
composition reflected segregation in these additional areas as well.
The agency record on appeal includes several additional documents,
containing more data. This includes figures about enrollment at RBCS, which
listed the number of students anticipated for each racial/ethnic demographic for
each grade level, for academic years 2017-2018 through 2021-2022.
The Commissioner's Renewal Decision and the Ensuing Renewal Summary Report
On February 1, 2022, the then-Acting Commissioner approved RBCS's
renewal application. In her two-page approval letter, the Acting Commissioner
stated the DOE had "completed a comprehensive review of RBCS including but
not limited to, the renewal application, annual reports, student performance on
A-1950-21 14 statewide assessments, a structured interview with school officials, public
comments, student composition of RBCS, and the fiscal impact on the sending
district." The Commissioner noted RBCS's academic ranking over the years and
found that RBCS "met standard[s]" on various fiscal and performance measures.
The Commissioner also stated that a "Renewal Summary Report, which
contain[ed] the findings gathered from [DOE's] comprehensive review, [wa]s
forthcoming."
The Renewal Summary Report was issued months later, on July 26, 2022.
That lengthy document, consisting mainly of data and charts with associated
narrative commentary, summarized what it characterized as the DOE's
"comprehensive review" of RBCS, in consideration of the following: "student
performance on statewide assessments; annual reports; monitoring visit results;
financial reports; public comments; possible effect of charter school enrollment
on district(s) of residence that could lead to segregation of students; financial
impact on district(s) of residence; and other relevant evidence."
The Renewal Summary Report noted that since 2017, RBCS has annually
enrolled 180 students (twenty students per grade, from kindergarten through
A-1950-21 15 eighth grade).6 The report included racial/ethnic demographic data for both
RBCS and Red Bank district schools. Utilizing a "Performance Framework,"
the DOE concluded in the Renewal Summary Report that RBCS was faithful to
its mission and charter; had a comprehensive curriculum; provided high-quality
instruction; had a productive student assessment system; had a clear and well -
functioning organizational structure; promoted a safe, respectful, and supportive
culture; actively engaged families and the community; had a capable Board of
Trustees; and satisfied state/federal law and reporting requirements. 7
Relevant to our purposes, the DOE found in the report that RBCS had
"demonstrate[d] a commitment to serving and meeting the needs of all students,
especially the highest need students requiring special education services, [ELL
students], students who qualify for free or reduced-price lunch and other
underserved or at-risk populations." The DOE noted that RBCS's weighted
lottery gave preference to economically disadvantaged students, and highlighted
recruitment methods, which included Spanish-language newspapers.
6 For whatever reason, the report's enrollment data did not include RBCS's pre - kindergarten class. 7 The term "Performance Frameworks" is defined as the Department of Education's "accountability system" to assess "the academic, financial, and organizational performance of each charter school." N.J.A.C. 6A:11-1.2. A-1950-21 16 Based on this review, the Acting Commissioner renewed RBCS's charter.
The School Board moved for reconsideration of the renewal, which the Acting
Commissioner denied.
The School Board then appealed the Acting Commissioner's decision.
RBCS and the Attorney General, as counsel to the Acting Commissioner, each
submitted briefs in opposition to the School Board's appeal. As we will discuss,
the Attorney General's brief contained additional rationales and data analyses
that were not explicated in the Acting Commissioner's February 2022 agency
decision or the July 2022 Renewal Summary Report.
II.
In reviewing an administrative agency determination, the court must
"respect agency action taken pursuant to authority delegated by the Legislature."
In re Proposed Quest Acad. Charter Sch. of Montclair Founders Grp. ("Quest
Academy"), 216 N.J. 370, 385 (2013). Thus, we should "not overturn an agency
determination unless it is arbitrary, capricious, or unreasonable." In re Renewal
Application of TEAM Acad. Charter Sch., 247 N.J. 46, 73 (2021) (citing In re
Att'y Gen. Law Enf't Directives Nos. 2020-5 and 2020-6 ("In re Directives"),
246 N.J. 462, 489 (2021)). This standard "recognizes the 'agency's expertise and
superior knowledge of a particular field,' as well as the Judiciary's 'limited role
A-1950-21 17 . . . in reviewing the actions of other branches of government.'" Id. at 74 (quoting
In re Directives, 246 N.J. at 489).
Accordingly, when reviewing an agency determination, the reviewing
court "is limited to three inquiries":
(1) whether the agency's action violates express or implied legislative policies—i.e. the law; (2) whether the record contains substantial evidence to support the agency's findings; and (3) whether the agency clearly erred in reaching a conclusion that could not reasonably have been made on a showing of the relevant factors.
[Alcantara v. Allen-McMillan, 475 N.J. Super. 58, 64 (App. Div. 2023) (citing Allstars Auto Grp., Inc. v. N.J. Motor Vehicle Comm'n, 234 N.J. 150, 157 (2018)).]
So long as the "agency has satisfied these criteria, then [the reviewing court
owes it] substantial deference," even if it would have reached a different result.
Ibid. (citing In re Herrmann, 192 N.J. 19, 28 (2007)). The burden is on the party
challenging the agency action—here, the School Board—to show that the
administrative determination was arbitrary, capricious, or unreasonable. TEAM
Acad., 247 N.J. at 73-74 (citing In re Directives, 246 N.J. at 489).
The applicable statute that guides us here is the Charter School Program
Act, N.J.S.A. 18A:36A-1 to -18 ("CSPA"). In enacting the CSPA in 1995, the
Legislature declared that the "establishment of a charter school program is in
the best interests of the students of this State and it is therefore the public policy
A-1950-21 18 of the State to encourage and facilitate the development of charter schools."
N.J.S.A. 18A:36A-2. To that end, the State Board of Education has promulgated
a series of rules to govern the implementation of the CSPA. N.J.A.C. 6A:11 -
1.1 to -6.4.
N.J.S.A. 18A:36A-4 outlines the procedure for applying to establish a
charter school and bestows the Commissioner final authority to grant or reject
an initial charter application. N.J.A.C. 6A:11-2.1 details the extensive charter
application and approval process. Most pertinent to the present dispute, the
regulations require the Commissioner to "assess the student composition of a
charter school and the segregative effect that the loss of the students may have
on its district of residence." 8 N.J.A.C. 6A:11-2.1(j). The Commissioner's initial
grant of a charter is for a four-year period. N.J.S.A. 18A:36A-17.
Charter schools must be "open to all students on a space available basis."
N.J.S.A. 18A:36A-7. A charter school cannot discriminate in its admissions
policies and practices, although it "may limit admission to a particular grade
level or to areas of concentration of the school." Ibid.
8 "District of residence" is defined as "the school district in which a charter school facility is physically located; if a charter school is approved with a region of residence comprised of contiguous school districts, that region is the charter school's district of residence." N.J.A.C. 6A:11-1.2. A-1950-21 19 N.J.S.A. 18A:36A-8 details the admissions process for charter schools,
including the use of a "random selection process" if the number of applicants is
greater than the number of available spots. Once admitted, the student is
automatically enrolled in the next grade, and a charter school is permitted to
give "enrollment priority to a sibling of a student enrolled in the charter school."
N.J.S.A. 18A:36A-8(b), (c). Notably, the statute requires a charter school's
admissions policy to "seek the enrollment of a cross section of the community's
school age population including racial and academic factors." N.J.S.A.
18A:36A-8(e).
Following establishment of the charter school, the Commissioner must
"annually assess whether each charter school is meeting the goals of its charter."
N.J.S.A. 18A:36A-16(a). The annual review includes, among other things,
evidence that "[t]he school is achieving the mission, goals, and objectives of its
charter as measured against the Performance Frameworks." N.J.A.C. 6A:11-
2.2(a)(1)(i). The agency review also includes consideration of the curriculum,
statewide assessment results, and parent and community involvement in the
school. N.J.A.C. 6A:11-2.2(a)(1). Moreover, the Commissioner must annually
"assess the student composition of a charter school and the segregative effect
A-1950-21 20 that the loss of students may have on its district of residence." N.J.A.C. 6A:11 -
2.2(c).
In addition to the annual review, the Commissioner must also conduct "a
comprehensive review prior to granting a renewal of the charter." N.J.S.A.
18A:36A-16(a). This "comprehensive review" includes the renewal application,
the Performance Framework, annual reports, Statewide assessment programs,
interviews, and "[t]he annual assessments of student composition of the charter
school." N.J.A.C. 6A:11-2.3(b)(8).
N.J.S.A. 18A:36A-16(e) sets forth the types of material the Commissioner
must review when conducting an overall evaluation of the charter school
program, including:
(4) the impact of the shift of pupils from nonpublic schools to charter schools;
(5) the comparative demographics of student enrollments in school districts of residence and the charter schools located within those districts. The comparison shall include, but not be limited to, race, gender, socioeconomic status, enrollment of special education students, enrollment of students of limited English proficiency, and student progress toward meeting the core curriculum content standards as measured by student results on Statewide assessment tests[.]
[N.J.S.A. 18A:36A-16(e).]
A-1950-21 21 A charter may be renewed for a five-year period. N.J.S.A. 18A:36A-17.
The Commissioner may revoke a school's charter if the Commissioner
concludes that "the school has not fulfilled any condition imposed by the
commissioner in connection with the granting of the charter or if the school has
violated any provision of its charter." Ibid. In the alternative, the Commissioner
"may place the charter school on probationary status" to implement a remedial
plan. Ibid. It is left to the Commissioner to "develop procedures and guidelines
for the revocation and renewal of a school's charter." Ibid. N.J.A.C. 6A:11-2.4,
in turn, addresses placing a charter school on probationary status and/or the
charter revocation procedure.
Aside from this regulatory framework, "[c]ertain principles permeate our
school laws," including the State's obligation to "ensure that no student is
discriminated against or subjected to segregation in our public schools." In re
Grant of Charter Sch. Application of Englewood on the Palisades Charter Sch.
("Englewood"), 164 N.J. 316, 323 (2000). This obligation to prohibit
segregation in New Jersey public schools extends to our charter schools. In re
Renewal Application of TEAM Acad. Charter Sch., 459 N.J. Super. 111, 144
(App. Div. 2019), aff'd as modified by TEAM Acad., 247 N.J. at 46.
A-1950-21 22 In this regard, the CSPA and accompanying regulations require the
Commissioner "to monitor and remedy any segregative effect that a charter
school has on the public school district in which the charter school operates."
Red Bank I, 367 N.J. Super. at 471. N.J.A.C. 6A:11-2.1(j) provides that before
the granting of a charter, the Commissioner "shall assess the student
composition of a charter school and the segregative effect that the loss of the
students may have on its district of residence." This demographic review
includes addressing racial/ethnic segregation, and the impact on particular
student groups, such as students with disabilities and ELL students. TEAM
Academy, 247 N.J. at 79 (citing N.J.S.A. 18A:36A-16(e)(5)).
The Commissioner's obligation to engage in this assessment "is not
contingent on a showing by the district of residence that the charter school would
have such a segregative effect." TEAM Acad., 247 N.J. at 70 (citing Englewood,
164 N.J. at 328-29). This "obligation is imposed even if the district raises no
concerns about the charter school's segregative impact." 9 Ibid. The obligation
applies to review of initial applications, annual review, and—as here—renewal
9 In contrast, when discussing the fiscal harm that a charter school may impose on the district, the Court determined that the burden is on the party challenging renewal to make a preliminary showing of this harm; only if such a showing is made is the Commissioner required to analyze fiscal harm to the district. TEAM Acad., 247 N.J. at 78 (citing Englewood, 164 N.J. at 330-36). A-1950-21 23 applications. Id. at 70-71 (citing N.J.A.C. 6A:11-2.1(j); N.J.A.C. 6A:11-4.4(b);
Red Bank I, 267 N.J. Super. at 472). Consequently, there is no burden on anyone
to demonstrate segregative effect or demographic imbalance; rather the
Commissioner is required to evaluate this as part of the responsibilities under
the CSPA and accompanying regulations.
As observed by our Supreme Court in Quest Academy, "[d]espite all their
detail, the statutory and regulatory programmatic requirements provide no
guidance to the Commissioner on how to assess an application." 216 N.J. at
377. While this comment was about reviewing an initial application, it equally
and logically applies to reviewing a renewal application. There is no codified
provision specifying how the Commissioner should conduct the comprehensive
review of segregative impacts, what demographic differences constitute an
unacceptable segregative effect, and how to weigh any findings of segregative
effect. Undoubtedly, however, "'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." Ibid.
(quoting Englewood, 164 N.J. at 329) (alteration in original). Less clear is how
A-1950-21 24 segregative effect is measured, and how extensive the Commissioner's
assessment must be.
In Englewood, our Supreme Court identified a source for assessing
segregative effect, referred to as the New Jersey State Guidelines on the
Desegregation and Integration of Public Schools. 164 N.J. at 324-28 (citing
State of N.J., Guidelines Governing School Desegregation/Integration (1989)
[hereinafter the Guidelines]). "The Guidelines provide a step-by-step
methodology" for districts to determine "overall pupil population percentages
for its racial groups" so that a district can address, for example, whether one
school's pupil population is "substantially out of line" with that of another school
within the same district. Id. at 325. The Guidelines strived "to keep the school
populations within expected ranges or to otherwise achieve in the students'
learning environment appropriate mixtures of pupil populations that reflect the
community's pertinent school age population." Ibid. The Court observed in
Englewood that "the Legislature sought to achieve a comparable result" with
charter schools, referring to the provision that a charter school "seek the
enrollment of a cross section of the community's school age population,
including racial and academic factors." Ibid. (quoting N.J.S.A. 18A:36A-8(e)).
A-1950-21 25 "In the wake" of the Court's Englewood holding, the DOE "promulgated
two regulations codifying the Commissioner's duty to consider a charter school's
segregative effect on its district of residence." TEAM Acad., 247 N.J. at 70
(citing 32 N.J.R. 3560(a) (Oct. 2, 2000)). Those regulations, N.J.A.C. 6A:11 -
2.1(j) and N.J.A.C. 6A:11-2.2(c), require the Commissioner to "assess the
student composition of a charter school and the segregative effect that the loss
of the students may have on its district of residence." Id. at 70-71 (quoting
N.J.A.C. 6A:11-2.1(j)).
While these regulations codify the Englewood Court's general declaration
that the Commissioner must consider segregative impact, there has been no
explicit adoption of the Court's reference to the Guidelines as a methodology for
this assessment. None of the published decisions interpreting the CSPA refer to
the Guidelines or their methodology when discussing segregative effect.
Although the appropriate methodology to measure segregative effect is
undefined, there is caselaw describing the form of such an assessment. When
reviewing a charter renewal application, the Commissioner is "acting in his [or
her] legislative capacity, not in a quasi-judicial capacity." Red Bank I, 367 N.J.
Super. at 475 (citing In re Grant of Charter Sch. Application of Englewood on
Palisades Charter Sch., 320 N.J. Super 174, 236 (App. Div. 1999)) (alteration in
A-1950-21 26 original). Hence, the Commissioner is not required to conduct a "full -blown
hearing whenever a district board of education objects to the charter renewal of
an existing school," nor must the Commissioner issue a decision with "the kind
of formalized findings and conclusions necessary in the traditional contested
case." Id. at 476 (quoting, in the second instance, Englewood, 320 N.J. Super.
at 217). We stated in Red Bank I that the agency's rationale for charter renewal
need "not be detailed or formalized"; it is sufficient if the agency's reasoning is
"discernible from the record." Ibid. (citing E. Windsor Reg'l Bd. of Educ. v.
State Bd. of Educ., 172 N.J. Super. 547, 552-53 (App. Div. 1980); In re
Allegations of Physical Abuse at Blackacre Acad., 304 N.J. Super. 168, 188
(App. Div. 1997)).
Even so, in Quest Academy, our Supreme Court clarified 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." 216 N.J. at 386. This "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." Id. at 387.
"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
A-1950-21 27 Commissioner under the statutory framework within which [the Commissioner]
must act." Ibid.
More pointedly with respect to the factor of segregative impact, the
Supreme Court most recently instructed in TEAM Academy that:
In future determinations of applications for approval of charter schools pursuant to N.J.S.A. 18A:36A-4.1 and -5 and N.J.A.C. 6A:11-2.1, applications for renewals of charters pursuant to N.J.S.A. 18A:36A-17 and N.J.A.C. 6A:11-2.3, and applications for amendments of charters pursuant to N.J.A.C. 6A:11-2.6, the Commissioner should address the impact of the charter school's approval, renewal or amendment on racial segregation in the district of residence. The Commissioner should also address the impact of the charter school's approval, renewal or amendment on the demographic composition of the district of residence with respect to two groups of students of particular concern to the Legislature, students with disabilities and students who are English language learners.
....
The Commissioner's careful analysis of those issues, along with the other factors prescribed in the governing statutes and regulations, will further the Legislature's objectives in the [CSPA], satisfy the requirements of Englewood, and facilitate fair and effective appellate review of charter school determinations.
[247 N.J. at 79-80 (citing N.J.S.A. 18A:36A-7; N.J.S.A. 18A:36A-16(e)(5)) (emphasis added).]
A-1950-21 28 Although the Court in TEAM Academy did not specify exactly how the
Commissioner "should address" segregative impact, its directive that "careful
analysis" is necessary for "fair and effective appellate review" signifies these
assessments are to be done explicitly. Ibid. Merely alluding to demographic
data, without reasonably explaining the methodology applied to the data to
gauge any unacceptable segregative impacts, does not suffice.
Here, the Acting Commissioner's renewal letter highlighted several points
she considered as part of her comprehensive review but does not mention
segregative impacts. The Renewal Summary Report recognized the DOE's
obligation to conduct a demographic comparison, asserting on its second page
the DOE had considered, in accordance with N.J.A.C. 6A:11-2.3(b), the
"possible effect of charter school enrollment on district(s) of residence that
could lead to segregation of students." Aside from that conclusory as sertion,
however, the Renewal Summary Report is bereft of any meaningful analytic
discussion of segregative effects.
The Renewal Summary Report does contain charts and graphs displaying
the percentages of enrollment of White, Hispanic/Latino, and other racial groups
at RBCS and the comparative percentages of those racial groups at the district
A-1950-21 29 schools. However, it does not explain why the manifest differences in those
percentages are not indicative of segregation.
The Renewal Summary Report contains a series of tables addressing the
RBCS's "Organizational Performance Framework," one of which states that the
school meets the "Indicator 4.1 Access and Equity" standard for demonstrating
"a commitment to serving and meeting the needs of all students," including
special education pupils, ELL students, students who qualify for free or reduced -
price lunches, and other underserved or at-risk populations. The narrative
presented with that Indicator 4.1 finding does not mention segregative impacts,
nor does it include a demographic comparison, although it does conclude that
RBCS has maintained "accessible and equitable" application, admissions,
lottery and enrollment practices, citing the weighed lottery and methods the
school is using to recruit Hispanic/Latino applicants. On that same page, the
Report further concludes as to Indicator 4.2 that RBCS "complies with state and
federal special-education laws and provides a high-quality learning environment
for all students."
Considered together, the Acting Commissioner's February 2022 renewal
letter and the June 2022 Renewal Summary Report fail to analyze the
demographic figures in a transparent manner that explains whether RBCS is
A-1950-21 30 producing or perpetuating unacceptable segregative impacts within the school
district. The renewal letter and Report do not disclose how the agency defines
unacceptable "segregative impacts," nor why the Acting Commissioner
apparently concluded that no such impacts exist. The Acting Commissioner's
decision, on its face, does not reflect the "careful analysis" that the Supreme
Court called for in TEAM Academy, 247 N.J. at 79, nor does it enable "fair and
effective appellate review." Ibid.
Although the form of a charter school approval decision is generally left
to an Education Commissioner's discretion, the Commissioner's rationale
nevertheless must be discernible from the record, Red Bank I, 367 N.J. Super.
at 475-76, and have sufficient support from the record, Quest Academy, 216 N.J.
at 386. The Acting Commissioner's February 2022 decision, as supplemented
by the Renewal Summary Report, does not satisfy these requirements. Her
conclusions about the significance of the demographic comparisons and her
assessment of possible segregative impacts are neither discernible from nor
adequately supported by the record.
As the School Board argues, the data on its face could support an inference
that a demographic imbalance has persisted between the enrollment at RBCS
and the Red Bank district schools. In particular, the data for school year 2019 -
A-1950-21 31 2020 shows the White and Hispanic/Latino student proportions at RBCS were
respectively 39.3% and 53.6%, whereas the proportions in the district schools
were 7.1% and 84.7%. That disparity has narrowed since school year 2017 -
2018, when the White and Hispanic/Latino proportions at RBCS were 44.5%
and 45%, and 7.3% and 83.8% within the district schools. Meanwhile, the
record contains data showing that in school year 2020-21, the total K-8 school-
age population in Red Bank was 16% White and 75% Hispanic/Latino, as
compared with 39.9% and 52.5% at RBCS and 7% and 85.3% at the district
schools, signifying that the demographic disparity at RBCS is less pronounced
when compared with the local population than when compared with the district
schools.
The Acting Commissioner's decision apparently infers from these and
other demographic figures in the record that no untenable segregative effects are
attributable to RBCS. But the Acting Commissioner's decision does not reveal
the methodology used to reach that assessment, and does not articulate a
methodology, metric, or weighing of specified factors, by which the Acting
Commissioner measures segregative effect.
We note that our Supreme Court in Englewood, 164 N.J. at 325,
referenced the step-by-step methodology of the Guidelines to establish a ratio
A-1950-21 32 for district schools' population demographics, to model the overall pupil
population percentages for its racial groups. 10 While it does not appear that the
DOE has adopted this metric for charter school evaluations, the Acting
Commissioner's decision identifies no metric, including any alternative metric,
upon which she based her review. The decision does not address the School
Board's contention that the existence of two schools with substantively different
demographic populations, in and of itself, supports a finding of segregation. The
decision further fails to explain why the demographic disparity is not
attributable—as the School Board argues—to the existence of and admission
practices at RBCS, or whether, as RBCS contends, the disparity stems from
independent causes such as parental dissatisfaction with the district schools and
migration to private and parochial schools.
The Acting Commissioner's decision also fails to analyze whether RBCS
is causing unacceptable segregative impacts on the discrete categories of
disabled students, ELL students, and economically disadvantaged students,
10 The Guidelines "establish[ed] a set of uniform criteria for school desegregation in New Jersey public schools." Guidelines, at 2. It described how to identify imbalanced enrollments based on racial/ethnic demographics , required schools to submit desegregation/integration plans, and provided a formula from which to compute "permissible deviation limits for each group of students." Id. at 8, 11, 14-15. A-1950-21 33 despite the Supreme Court's mandate in TEAM Academy, 274 N.J. at 79, to give
"careful" scrutiny to those groups. At most, the narrative portions of the
Renewal Summary Report only generically refer to RBSC's commitment to and
services offered to such students, without analyzing their composition. The dat a
contained in the record reveals that in school year 2020-21, the enrollment in
the district schools consisted of 78.6% economically disadvantaged students,
32.4% ELL students, and 19.1% students with disabilities, whereas the RBCS
enrollment that year consisted of 40.2% economically disadvantaged students,
12.1% ELL students, and 10.6% students with disabilities. The Acting
Commissioner's approval letter and the Renewal Summary Report omit any
discussion of why those disparities are inconsequential.
Another concern raised by the raw data is whether RBCS's weighed lottery
and more robust recruitment practices have been producing sufficient
enrollment of Hispanic/Latino students in the pre-kindergarten and kindergarten
classes, which are key sources of new enrollments within this relatively small
charter school. This was a major focus of the dispute in Red Bank II, (slip op.
at 18-19). It was hoped at that time that the demographic mix of pre-
kindergarten and kindergarten students would increase the ratio of
Hispanic/Latino students and produce an ongoing reduction of segregative
A-1950-21 34 impacts, as those students rose through higher grades. However, the data in
recent years has not borne out that expectation. Instead, the pre-kindergarten
and kindergarten enrollment numbers have been relatively stable, with 20 White
and 16 Hispanic/Latino students enrolled in those classes at RBCS in school
year 2021-22, as compared with 17 Whites and 21 Hispanic/Latino students four
years earlier in school year 2017-2018.
The Attorney General's appellate brief filed on behalf of the Acting
Commissioner attempts to cure these various shortcomings by advancing, for
the first time, various explanations and rationales for the final agency decision. 11
11 We do note in this regard that the brief supplies no definition or methodology for how the DOE ascertains unacceptable segregative impact. The brief asserts that "[u]sing the framework approved in Red Bank I, Quest and Englewood," the Acting Commissioner "conducted a holistic examination of the demographics of [the district schools] and RBCS and found that its operation would not have a segregative effect on the demographics of the district." The brief does not identify what definition of unacceptable segregative effect was applied, or what metric was used to determine if the disparities shown by the numbers were substantial enough to comprise such an effect. There is no assertion that the Acting Commissioner used any uniform and specified methodology to assess this point. As noted, the Guidelines cited in Englewood have not been explicitly applied since that decision, and no other decisions set forth any alternative methodology, benchmark, or normative factors from which to measure segregative effect. The brief further contends that because the racial composition of the district schools between 2017-2018 and 2020-2021 "remained similar in range," that means "there is no evidence that RBCS's operations [have] exacerbated racial imbalance in the district." But, again, it is unclear on what basis that inference is made, and why a static continuance of
A-1950-21 35 We appreciate the Attorney General's important role as the "sole legal adviser"
to State Government, N.J.S.A. 52:17A-4(e). However, "[a]n appellate brief is
no place for an agency to try and rehabilitate its actions." In re N.J.A.C. 7:1B-
1.1 et seq., 431 N.J. Super. 100, 139 (App. Div. 2013) (citing In re Petition of
Elizabethtown Water Co., 107 N.J. 440, 460 (1987) (stating that an
administrative order should be judged on the record, "not an after-the-fact
affidavit purporting to explain the administrative agency's decision")); In re
Orban, 461 N.J. Super. 57, 76-78 (App. Div. 2019) (discussing how an agency
"must explain the specific reasons for its determination"). As we noted earlier,
the Supreme Court in TEAM Academy emphasized the crucial responsibility of
the Commissioner to perform a "careful analysis" of various demographic issues
and "factors prescribed in the governing statutes and regulations" concerning
charter school approvals or renewals. 247 N.J. at 79-80.
The after-the-fact rationales set forth in the brief submitted by the
Attorney General, however cogent they may be, are no substitute for the Acting
Commissioner's own analyses as the Cabinet officer responsible for
segregative impact would be acceptable. Thus, even if we were willing to rely on the Attorney General's brief to rehabilitate the Acting Commissioner's decision, it also does not provide a sufficient metric or methodology from which to determine whether the Acting Commissioner's decision was arbitrary, capricious, or unreasonable. A-1950-21 36 administering the education laws of our State. See N.J.S.A. 18:4-23. It is also
not fair to the School Board as the appellant to have the agency's final decision
fortified in such a post-decision, post-appeal manner by its lawyers. The brief
was not an amplification by the then-Acting Commissioner, even presuming (as
we should) that she authorized its filing. 12
Another important question of segregative impact not addressed by the
Acting Commissioner is what is likely to occur if, hypothetically, RBCS's
charter were revoked. Assuming, arguendo, that RBCS were closed and all or
virtually all its current students enrolled in the district schools, the White
enrollment in the district schools would nearly double (rising from 6.2% to
10.2%), but Hispanic/Latino enrollment would remain at over 80%. Such an
outcome arguably might suggest that RBCS did not create a demographic
imbalance in the district school, as absorption of its population seemingly would
not yield a marked shift in student population. Yet the Acting Commissioner
did not explicitly consider how RBCS's potential closure would likely impact
12 We recognize that in Red Bank I, 367 N.J. Super. at 476 (App. Div. 2004), we discerned the grounds for the Education Commissioner's decision "from the entire record, including the . . . Commissioner's brief in th[e] appeal." We decline to do the same here, given the intervening case law, including TEAM Academy and the published appellate opinions we have cited involving other state agencies in similar circumstances.
A-1950-21 37 the district schools' demographics, or indeed whether the school's closure would
result in an influx of White students to the district schools, as opposed to parents
enrolling them in private or parochial schools instead.
We are mindful that, as we noted above, an Education Commissioner's
determination of a charter school application does not have to adhere to a
prescribed form, and that the Commissioner has a degree of flexibility in how
to set forth the reasoning. But the special history of this long-standing
controversy over the alleged segregative impacts of RBCS warrants more
explanation than the Acting Commissioner has given on these critical
segregative issues. We would be remiss in our responsibility as a reviewing
court to validate the final agency decision "as is."
For these reasons, we are constrained to remand this matter to the current
Acting Education Commissioner to address these important omissions from the
February 1, 2022 final agency decision. 13 Specifically, on remand, the Acting
13 We decline the School Board's alternative requests that we appoint a Special Adjudicator, or that we exercise original appellate jurisdiction under Rule 2:10- 5. The Court Rules do not permit the Appellate Division to appoint a Special Adjudicator, and we are unconvinced the quasi-legislative function of the Commissioner should be undertaken by or aided by a Special Adjudicator. The policy-laden and highly technical subjects for remand we have identified are also not suitable for this appellate court to resolve on original jurisdiction in lieu of the Commissioner. See Rudbart v. Bd. of Rev., 339 N.J. Super. 118, 127 (App. Div. 2001). A-1950-21 38 Commissioner shall provide a written amplification addressing the following
subjects:
• How does the DOE define impermissible segregative effect in a
charter school renewal context? What extent of imbalance in the
respective racial/ethnic demographics of the charter school and the
district school is disallowed?
• How does the DOE measure segregative effect? What is the
appropriate methodology, metric, or weighing of specified factors?
Relatedly, how does the DOE ascertain whether the charter school's
existence is causally responsible for a dearth of White students in
the district schools? To what extent are external causal factors
considered, such as the enrollment of students in private and
parochial schools?
• Applying the definition of impermissible segregative impact and the
DOE's metric/methodology to the data and other facts in the record,
is the continued renewal of RBCS's charter producing such
impermissible segregative impacts? Why or why not?
• Does the CSPA model the Guidelines cited in Englewood, which
aim to avoid having two public schools within the same district co -
A-1950-21 39 exist with substantively different student demographic populations?
If not, why do the Guidelines, or at least their general principles,
not apply?
• What is the Acting Commissioner's reasoned assessment of the
disparities in the percentages of economically disadvantaged
students, ELL students, and students with disabilities at RBCS as
compared with the district schools? Are the disparities
inconsequential and do they comport with the Supreme Court's
admonitions in TEAM Academy?
• What is the Acting Commissioner's assessment of the relatively flat
trend in the racial/ethnic composition of incoming pre-kindergarten
and kindergarten students at RBCS? Does the trend signify that
additional measures are warranted to recruit and admit new students
that may abate segregative impacts?
• How does the Acting Commissioner forecast the likely effect on
student population demographics within the district if RBCS were
disbanded, and predict whether the school's disbandment would
advance the goals of desegregation?
A-1950-21 40 On remand, the current Acting Commissioner in his discretion may invite
further submissions from the parties. The Acting Commissioner also has the
discretion to consider updated demographic data compiled from the intervening
school year(s), provided the parties are afforded a fair opportunity to comment
on that more recent data.
The remand amplification shall be issued no later than October 1, 2024.
In setting that deadline, we recognize the litigation costs and uncertainties
associated with a remand, and the concerns that parents and staff members at
RBCS will have about the continued operation and viability of the school. We
therefore instruct the agency and the parties to act expeditiously. We intimate
no views on the appropriate outcome, and in the meantime, no stay of RBCS's
operations is imposed.
Remanded in accordance with the terms of this opinion. We do not retain
jurisdiction, but any party aggrieved by the remand may file a new appeal.
A-1950-21 41