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December 30, 2014


Argued December 10, 2014 Decided

Before Judges Alvarez, Waugh, and Maven.

On appeal from the New Jersey State Board of Nursing.

Bruce M. Pitman argued the cause for appellant Center for Advanced Training and Studies (Pitman, Mindas, Grossman, Lee and Moore, P.C., attorneys; Caroline E. Pyrz, on the briefs).

Olga E. Bradford, Deputy Attorney General, argued the cause for respondent New Jersey State Board of Nursing (John J. Hoffman, Acting Attorney General, attorney; Andrea M. Silkowitz, Assistant Attorney General, of counsel; Ms. Bradford, on the brief).


Appellant Center for Advanced Training and Studies1 (Center) appeals the final administrative agency action of the New Jersey Board of Nursing (Board) denying its application for accreditation as a school of practical nursing. We affirm.


We discern the following facts and procedural history from the record on appeal.

Pursuant to its authority under N.J.S.A. 45:11-24(d)(12) and (14) and N.J.A.C. 13:37-1.2(f), the Board granted the Center provisional accreditation in February 2006. Based upon its provisional accreditation, the Center commenced operations and began training students.

To obtain full accreditation, the Center was required to satisfy the following requirements of N.J.A.C. 13:37-1.3(b)2

1. The first class has graduated;

2. Seventy-five percent of students from the first or second graduating class, who have taken the licensing examination, pass the examination the first time it is taken by the student; and

3. A self-study report is submitted to the Board that shows the nursing program is in compliance with the requirements of N.J.A.C. 13:37-1.4 through 1.11.

On November 6, 2008, counsel for the Center sought clarification from the Board regarding its interpretation of N.J.A.C. 13:37-1.3(c)(2). The letter reflects the Center's concern that the Board's interpretation might not inure to its benefit.

The school's first graduating class was June, 2007 and its second graduating class was June, 2008. The first class consisted of seventy-six (76) students. Initially, forty-two (42) of those students took the [licensing exam] in 2007. Thirty-four (34) students of the graduating class did not take the exam. Twenty-five (25) of the thirty-four (34) took the exam in 2008 and apparently have not done well. Nine (9) from the first graduating class have yet to take the test.

. . . .

My client's concern is that under the regulations as we understand it, seventy-five (75%) percent of the students from the "first or second graduating class" who have taken the licensing exam must pass the exam the first time they take it in order to continue the accreditation of the program.

My client is very much concerned that the latter thirty-four (34) students from the June, 2007 graduating class noted above either have not or will not perform well on the test and may be lumped in with the 2008 graduating class. We object to that.

The 2008 graduating class should be judged on its own merits with respect to the percentage passing the exam. We believe that the second graduating class is going to perform at a far higher level than the first graduating class.

I would therefore appreciate it if you would advise myself and the Program Director . . . as to whether or not we are interpreting the program correctly.

The Board never replied to the Center's request.

On February 26, 2009, the Board notified the Center that its first-time licensing-exam takers for the calendar year 2008 had a fifty-percent pass rate.3 The Board based its calculation on the test scores of all the students who took the test in 2008, without regard to their year of graduation.

The Center responded to the Board on March 18, arguing that the Board should revise its calculations, basing them only on the passing rate of 2008 test takers who graduated in 2008. Twenty members of the 2008 class had taken the licensing exam in 2008 and sixteen passed, which would satisfy the seventy-five-percent requirement if calculated as the Center proposed.

On May 15, the Board issued a provisional order placing the Center on probation and denying full accreditation. It explained its method of calculating the applicable passing rate for each calendar year as follows

The Board . . . determined decades ago that the first-time [licensing-exam] pass rates for professional and practical nurses should serve as the gold standard signifying nursing program quality. The [exam] score for an individual represents the attained skill level of the student after successful completion of a nursing program. The [exam] pass rate for an institution shows the percentage of its graduates who took the examination and passed on the first attempt. . . . The Board ascertains a nursing program's annual [exam] passage rates by utilizing the statistics of the school's graduates who took the examination for the first time during a calendar year.

Consequently, the Board was applying the regulation's seventy-five-percent requirement to a single year of testing, without regard to year of graduation, while the Center sought to have it applied to the results of students from its first or second class, at its option, without regard to the year in which the test was taken.4

On June 10, the Center filed a request for modification or dismissal of the provisional order. It submitted documentation supporting its position that it had met the seventy-five-percent requirement for first-time test takers for its second graduating class, the class of 2008, based on tests taken in 2008. On October 20, representatives of the Center appeared before the Board's Education Committee to present evidence in support of its modification request.

On March 15, 2010, the Board advised the Center that the pass rate for all first-time test takers during 2009 was 77.33 percent. On February 27, 2012, the Board advised the Center that the results for all first-time test takers in 2011 was 55.56 percent. The Board directed the Center to submit an assessment of the poor performance. The Center responded, explaining the reasons it believed its graduates had performed so poorly and outlining proposed actions to improve performance in the future. It observed that its graduates consist "mostly of family members with children who have to work to support their households and pay their tuition. These economic needs cause them to go to work after graduation instead of preparing themselves for the [licensing] [e]xamination." The Center represented that it was already working to remedy the problem.

On January 30, 2012, the Center contacted the Board concerning the status of its application for full accreditation. On June 10, the Board responded that it would be reviewing its provisional order at its July 12 meeting and inviting the Center to send representatives to the meeting.

The Center's representatives appeared at the meeting in July. They argued that, because the Center's 2008 graduates met the requirements of N.J.A.C. 13:37-1.3(b)(2), it was entitled to be fully accredited. On August 2, the Board denied the Center's application for accreditation.

In its order, the Board asserted that it had "consistently applied [the same] standard since at least 1985" and had "placed all schools on notice of how the pass rates are calculated by the Board." The Board also argued that the Center's proposed method for determining the pass rate, which focused only on a specific class of students, would not be appropriate because those students might opt not to take the exam for years and the Board would then have to delay its decision to grant accreditation or base its decision on undersized samples. Finally, the Board asserted that it would not be administratively feasible to adopt the Center's proposed interpretation because of increased workload and staff shortages. The Board also noted its concern that so many of the Center's students were unable to pass the exam on their first attempt.

The Board ordered the Center to stop the admission of new students. It allowed the Center to continue to operate on probation until the last student enrolled in the program graduated or left the program. At that time, the Center would lose its provisional accreditation. This appeal followed.5


On appeal, the Center argues that the Board's actions were (1) arbitrary, capricious, and unreasonable; (2) not supported by credible evidence in the record; and (3) based on the amendment of a regulation by interpretation in violation of the Administrative Procedure Act (APA), N.J.S.A. 52:14B-1 to -15. In addition, the Center argues that the Board should be equitably estopped from denying accreditation.


Appellate review of an agency's decision is limited. In re Taylor, 158 N.J. 644, 656 (1999). An appellate court "will reverse the decision of the administrative agency only if it is arbitrary, capricious[,] or unreasonable or it is not supported by substantial credible evidence in the record as a whole." Henry v. Rahway State Prison, 81 N.J. 571, 579-80 (1980).

This standard, "although deferential, does not lack content." In re Proposed Quest Acad. Charter Sch. of Montclair Founders Grp., 216 N.J. 370, 385 (2013). The judicial role in reviewing agency decisions 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.

[Ibid. (quoting Mazza v. Bd. of Trs., 143 N.J. 22, 25 (1995)).]

A reviewing court "may not substitute its own judgment for the agency's, even though the court might have reached a different result." In re Stallworth, 208 N.J. 182, 194 (2011). Additionally, "an agency charged with enforcement of a statute is entitled to great deference in its interpretation of the statute." In re Centex Homes, LLC, 411 N.J. Super. 244, 251 (App. Div. 2009).

"A strong presumption of reasonableness" should be accorded to an agency's "exercise of statutorily-delegated duties." Gloucester Cnty. Welfare Bd. v. N.J. Civil Serv. Comm'n, 93 N.J. 384, 390 (1983) (citing City of Newark v. Natural Res. Council, Dep't of Envtl. Prot., 82 N.J. 530, 539, cert. denied, 449 U.S. 983, 101 S. Ct. 400, 66 L. Ed. 2d 245 (1980)). It follows that we must grant deference to agency expertise where, as here, "'such expertise is a pertinent factor[]'" in the agency's decision. Campbell v. N.J. Racing Comm'n, 169 N.J. 579, 588 (2001) (quoting Close v. Kordulak Bros., 44 N.J. 589, 599 (1965)).

In interpreting a regulation, this court generally looks to the same canons of construction applied to statutes. Essex Cnty. Welfare Bd. v. Klein, 149 N.J. Super. 241, 247 (App. Div. 1977). Initially, the regulation's language should be considered. Cruz-Diaz v. Hendricks, 409 N.J. Super. 268, 275-76 (App. Div.) (stating, when interpreting regulations, the court must consider the plain meaning of the language used, assuming the drafter meant to ascribe to the words their ordinary meaning), certif. denied, 200 N.J. 548 (2009). If the regulation is ambiguous, this court should construe the regulation to implement the apparent intent or purpose of its adoption. Seacoast Builders Corp. v. Jackson Twp. Bd. of Educ., 363 N.J. Super. 373, 378-79 (App. Div. 2003) (where regulation is ambiguous and prior history of agency construction is unhelpful, "the key to decision lies in the public policy" underlying the regulation). A court will "defer to the agency's interpretation [of the statute] provided it is not plainly unreasonable." In re Pub. Serv. Elec. & Gas Co.'s Rate Unbundling, Stranded Costs & Restructuring Filings, 167 N.J. 377, 384, cert. denied, 534 U.S. 813, 122 S. Ct. 37, 151 L. Ed. 2d 11 (2001); see also Metromedia, Inc. v. Dir., Div. of Taxation, 97 N.J. 313, 327 (1984).


Applying these principles, we find no basis to conclude that the Board's interpretation of the governing regulation was arbitrary, capricious, or unreasonable.

Although the language of N.J.A.C. 13:37-1.3(b)(2) could certainly be clearer,6 it is apparent from the November 6, 2008 letter written by the Center's attorney that the Center viewed the language as capable of several interpretations and that it was concerned that the Board's interpretation would be detrimental to its ability to obtain full accreditation based on the test results of which it had knowledge and those it anticipated. The record demonstrates to our satisfaction that the Board's interpretation was consistent with its past practice and was not, as the Center suggests, a change in the content of a regulation by interpretation to avoid compliance with the rule-making requirements of the APA. We also conclude that the Board adequately explained the reasons for its interpretation of the regulation, and for its unwillingness to adopt the interpretation urged by the Center. With respect to the latter, the Board's articulated policy and practical reasons cannot be categorized as arbitrary, capricious, or unreasonable. Consequently, the Board's interpretation is not "plainly unreasonable."

In light of our finding that the Board appropriately applied its own regulation, we also find that the record fully supports the Board's determination that the Center had not satisfied the passing-rate requirements of N.J.A.C. 13:37-1.3(b)(2). Although the passing rate would have been above seventy-five percent under the Center's proposed interpretation, it is clear that the required rate was not reached in either 2007 or 2008 using the Board's longstanding interpretation.


The Center's suggestion that we should reverse the Board's decision on the theory that its actions, especially as they relate to delays, warrant application of equitable concepts such as waiver, laches, and equitable estoppel is without sufficient merit to warrant an extended discussion in a written opinion. R. 2:11-3(e)(1)(E). We add only the following.

Equitable defenses are rarely invoked against governmental entities without the showing of a "manifest injustice." Aqua Beach Condo. Assoc. v. Dep't of Cmty. Affairs, 186 N.J. 5, 20 (2006). We see nothing in the record by way of a "manifest injustice" to justify such relief in this case, nor do we see any evidence of the required detrimental reliance. Ibid. (quoting Knorr v. Smeal, 178 N.J. 169, 178 (2003)). Similarly, there is no evidence that the Board waived its right, and statutory obligation, to accredit nursing programs. N.J.S.A. 45:11-23. Finally, we find no factual basis for an application of laches, especially with respect to changed circumstances. Lavin v. Bd. of Educ., 90 N.J. 145, 151-52 (1982).


1 When it initially applied for accreditation, the Center was known as the Caribbean Education Training Center (Caribbean).

2 Due to the subsequent amendment of section 1.3, the provision is now designated N.J.A.C. 13:37-1.3(c). We use the prior designation for the purposes of this opinion.

3 The Board's percentage was calculated based solely on the students taking the exam under the Center's new name and did not include test takers providing its former name, Caribbean, on the test materials. Combining the rates under both names, the passage rate for 2008 was 29.41 percent.

4 The pass rate for the members of the 2007 class who took the exam that year did not satisfy the seventy-five-percent requirement.

5 After the Board denied a stay, the Center applied to us for a stay, which we denied.

6 The Board would be well advised to amend the regulation to provide greater clarity in its language and to ensure that its potential licensees have a clear understanding of the rule going forward. Nevertheless, we note that the Board's interpretation was reflected in open public meeting minutes of a June 2008 meeting and in the New Jersey Register. Minutes of N.J. State Bd. of Nursing Open Bus. Meeting (June 17, 2008); 26 N.J.R. 4732 (Dec. 5, 1994). The minutes advised that the Board interpreted the term "graduating class" as pertinent to all graduates of a program who are first-time test takers during a calendar year.