## Facts

- A founders group proposed Quest Academy, a charter high school in Montclair, and applied for a charter under the Charter School Program Act of 1995 and implementing regulations.
- The statutory and regulatory scheme assigns the Commissioner of Education final authority to grant or deny charter applications and contemplates batched, cycle-based review of applications.
- Local officials and community members raised concerns that the proposed school could affect desegregation efforts and the finances of existing public schools; the local superintendent submitted comments opposing the application.
- The Commissioner denied the application in a brief written decision that did not fully detail deficiencies but offered to meet to discuss shortcomings and invited participation in training aimed at resubmission in the next cycle.
- After a founder appealed, the Commissioner issued a written amplification setting out specific reasons for denial.
- The Appellate Division affirmed the denial as not arbitrary, capricious, or unreasonable; the Supreme Court granted review to determine the proper standard of judicial review and whether the denial was lawful under that standard.

## Issues

1. Whether the Commissioner’s approval/denial of a charter-school application is a quasi-judicial determination requiring a hearing, a formal record, and substantial-credible-evidence review, or a quasi-legislative policy decision reviewed for arbitrariness, caprice, or unreasonableness.
2. Under the proper standard, whether the Commissioner’s denial of the charter application was arbitrary, capricious, or unreasonable.

## Decision

- The Supreme Court affirmed the Appellate Division and upheld the Commissioner’s denial.
- The Court held that charter-application decisions are quasi-legislative, reflecting program-level educational policy choices committed to the Commissioner’s discretion.
- The Court ruled that judicial review applies the arbitrary, capricious, or unreasonable standard, not substantial-credible-evidence review.
- The Court accepted the Commissioner’s post-appeal amplification as a permissible clarification of reasons supporting the denial.
- Applying deferential review, the Court concluded the denial was supported by the record and was not arbitrary, capricious, or unreasonable.

## Legal Principles

- Agency action that implements broad statutory policy choices and requires balancing programmatic considerations is quasi-legislative and is reviewed for whether it is arbitrary, capricious, or unreasonable.
- Substantial-credible-evidence review generally applies to contested, trial-type administrative proceedings; it does not govern discretionary, policy-based licensing decisions absent a statutory hearing requirement.
- A charter-school application decision need not be preceded by an adversarial hearing or a formal evidentiary record when the governing statute and regulations establish a programmatic approval process.
- An agency may amplify or clarify the reasons for its decision during appellate review, and reviewing courts may consider that amplification when assessing whether the agency had a rational basis.

## Conclusion

The New Jersey Supreme Court treated the Commissioner’s charter-school application determinations as discretionary, quasi-legislative policy decisions and therefore reviewed the denial only for arbitrariness, caprice, or unreasonableness; because the record and the Commissioner’s amplification supplied a rational basis, the denial was upheld and no hearing or substantial-evidence review was required.


In re Proposed Quest Acad. Charter Sch. of Montclair Founders Grp., 216 N.J. 370, 80 A.3d 1120 (N.J. 2013)