NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

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1 NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION IN THE MATTER OF THE REVOCATION OR THE SUSPENSION OF THE PROVISIONAL ACCREDITATION OF AND/OR THE IMPOSITION OF PROBATION ON EASTWICK COLLEGE LPN-TO-RN BRIDGE PROGRAM APPROVED TO ESTABLISH A SCHOOL OF REGISTERED NURSING IN THE STATE OF NEW JERSEY. SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. Argued May 14, 2014 Decided July 21, 2014 PER CURIAM Before Judges Maven and Hoffman. On appeal from the New Jersey State Board of Nursing, Division of Consumer Affairs. Robert A. Mintz argued the cause for appellant Eastwick College (McCarter & English, LLP, attorneys; Mr. Mintz of counsel; Geoffrey N. Rosamond and Mary Gabriel, on the briefs). Olga E. Bradford, Deputy Attorney General, argued the cause for respondent State Board of New Jersey (John J. Hoffman, Acting Attorney General, attorney; Sharon M. Joyce, Assistant Attorney General, of counsel; Ms. Bradford, on the brief). Appellant Eastwick College (Eastwick) appeals from the September 27, 2013 Final Order of Probation and Denial of

2 Accreditation (Final Order) of the New Jersey State Board of Nursing (Board) denying its application for full accreditation of its nursing program, following the Board's grant of provisional accreditation pursuant to N.J.A.C. 13:37-1.2(f)(1). On appeal, Eastwick contends the Board's decision is not supported by the record, and is arbitrary and capricious. We affirm. I. The facts as adduced from the record follow. In September 2008, Eastwick applied to the Board seeking to establish a professional nursing program to be known as the Licensed Practical Nurse to Registered Nurse Bridge (LPN-to-RN Bridge) Program. Following its receipt and review of the application, the Board granted Eastwick provisional accreditation for its LPN-to- RN Bridge Program on or around September 22, began admitting students on September 24, The program It graduated its first class of twenty students on January 21, Of those twenty students, nineteen passed the National Council Licensure Examination for Registered Nurses (examination) on their first attempt, resulting in a ninety-five percent pass rate for the program's first graduating class. Three more classes graduated from the program in Of the eighty-three students who graduated in 2011, fifty-nine took the examination 2

3 that year and forty-one passed on their first attempt. These results, in turn, created an aggregate passage rate of percent for the program's four graduating classes in On February 27, 2012, the Board notified Eastwick that their program was not in compliance with N.J.A.C. 13:37-1.3(c)(2), 1 emphasizing that the program's 2011 pass rate for "ALL FIRST TIME TEST TAKERS" was less than the requisite seventy-five percent pass rate. Thus, the Board requested that Eastwick "provide [the Board] with [its] assessment of why the graduates performed so poorly and outline the plan of action the program will employ to correct this." After receiving the Board's letter, Eastwick "undertook a comprehensive analysis with the objective of determining the 1 N.J.A.C. 13:37-1.3, provides: (c) A nursing program that has been granted provisional accreditation shall not be granted accreditation until: 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: through

4 causes for the [p]rogram's 2011 graduates' low pass rate" and developed a plan to correct any deficiencies for the program's 2012 graduates. Eastwick submitted its assessment and action plan, along with an addendum outlining its strategy for improving graduate performance on the examination, to the Board in July According to Eastwick, the implementation of its action plan proved successful for its 2012 graduates. As in 2011, there were four graduating classes from the LPN-to-RN Bridge Program. Of the ninety-seven students who graduated in 2012 and who took the examination that year, seventy-four passed on their first attempt, resulting in an aggregate percent pass rate. Three of the four graduating classes exceeded the seventy-five percent pass rate, with April 2012, July 2012, and October 2012 classes reporting pass rates of percent, percent, and percent, respectively. Eastwick's January 2012 class, which graduated before the implementation of the action plan, did not exceed the required pass rate. Despite such claimed improvements, the Board issued a Provisional Order of Probation and Denial of Accreditation on June 24, In the order, the Board reiterated that Eastwick's first graduating class had failed to meet the required seventy-five percent pass rate. The Board concluded that "neither Eastwick's first nor second graduating class obtained the requisite examination pass 4

5 rate required by N.J.A.C. 13:37-1.3(c)(2)." 2 Thus, as authorized by N.J.A.C. 13:37-1.3(e), the Board issued a Provisional Order of Probation and Denial of Accreditation ordering that "Eastwick shall cease to admit students and shall be placed on probation until the last student enrolled in the program graduates or otherwise leaves the program." Once the last student left the program, Eastwick's provisional accreditation status was to be rescinded. On August 29, 2013, Eastwick requested a modification or dismissal of the Board's provisional order. In doing so, Eastwick raised four arguments. First, "a plain reading of the regulations governing the provisional accreditation procedure demonstrates Eastwick ha[d] satisfied N.J.A.C. 13:37-1.3c, which requires, among other things, that 75 percent of its students from the first or second graduating class pass the licensing examination on their first attempt." Eastwick argued the Board's interpretation ran counter to the regulation's "intent to provide an institution with two opportunities (either their first or second graduating class) to meet the 75 percent pass rate requirement." 2 The other two requirements under N.J.A.C. 13:37-1.3(c) that applicants must meet in order to obtain full accreditation are not in dispute here. Eastwick satisfied both N.J.A.C. 13:37-1.3(c)(1) and (c)(3). 5

6 Second, Eastwick posited that "the language of the regulation invoked by the Board in denying Eastwick's application for accreditation and placing it on probation does not, in fact, authorize the Board to take such action" against its program. Eastwick contended the Board overstepped its authority because Eastwick's LPN-to-RN Bridge Program is not a licensed practical nurse education program. Third, Eastwick argued that even if it did not meet the requisite pass rate, the Board's placement of the school on probation was premature. Under N.J.A.C. 13:37-1.3(e), Eastwick was entitled to "remain on provisional accreditation status until December 2013, two years from the date that Eastwick's first graduating class (as that term has been defined by the Board) graduated in December 2011." Finally, Eastwick argued mitigating factors weighed in favor of dismissing the order, including its unblemished history of academic excellence and the unique educational opportunities Eastwick's nursing program provided to traditionally underserved sectors of the State. Following oral argument before the Board on September 6, 2013, the Board determined an evidentiary hearing was unwarranted "because Eastwick's strained interpretation of its accreditation regulation regarding the calculation of the [examination] pass rate [was] not valid." The Board, thereafter, voted to finalize the provisional order with no 6

7 modifications. As a result, Eastwick's LPN-to-RN Bridge Program remained on probation and did not obtain full accreditation. The Board issued its Final Order of Probation and Denial of Accreditation on September 27, 2013, in which it made findings of fact and conclusions of law. As to its factual determinations, the Board reiterated its findings with respect to Eastwick's 2011 and 2012 deficient pass rates for the examination, further noting that the school's test scores for the first quarter of 2013 indicated that only percent of its 2013 graduates passed the national examination so far that year. Turning to its conclusions of law, the Board stated its final decision as follows: The Board finds that Eastwick has failed to meet the requisite test scores of seventy-five (75%), for either the first or second graduating class, on the national licensing examination as required by N.J.A.C. 13:37-1.3(c). As authorized by N.J.A.C. 13:37-1.3(e), the Board concludes that Eastwick shall cease to admit students and shall be placed on probation until the last student enrolled in the program graduates or otherwise leaves the program. Once the last student has left the program, Eastwick shall lose its provisional accreditation and cease to operate as a professional nursing program, as directed by N.J.A.C. 13:37-1.3(e). 7

8 As support for its final decision, the Board addressed each argument Eastwick raised in its written request for the modification or dismissal of the Board's provisional order. First, the Board concluded that Eastwick's interpretation of the plain language of N.J.A.C. 13:37-1.3(c)(2) was not only contrary to nationally accepted nursing education practice, but also arbitrary and administratively burdensome. The Board explained that it had been "determined decades ago that the first-time [examination] rates for professional and practical nurses [w]ould serve as the gold standard for signifying nursing program quality." Thus, the Board has used that pass rate when considering the accreditation of a nursing program for quite some time. The Board further clarified how it calculated the annual pass rate for all nursing programs, including Eastwick's LPN-to- RN Bridge Program: The Board ascertains a nursing program's annual [examination] passage rate by utilizing the statistics of the school's graduates who took the examination for the first time during a calendar year regardless of the student's graduation date. Hence, for accreditation purposes, the Board: 1) has consistently applied this standard since at least 1985; 2) has placed all schools on notice of how the pass rates are calculated by the Board; and 3) is properly charged with the responsibility of interpreting its own rules and regulations.... 8

9 Therefore, utilizing the nationally accepted calculation method, Eastwick's overall [examination] pass rate was determined by the Board using test scores from all program graduates who took the exam for the first time during a calendar year. Eastwick graduated its first class in In that year, a total of fifty-nine (59) students, from four (4) classes, sat for the licensure examination for the first time. Applying the Board's standard, in calculating the program's 2011 annual [examination] rate; which utilized the scores of all first-time test takers who took the examination during 2011 regardless of the student's graduation date; Eastwick's pass rate totaled [percent] when 41 students passed and 18 failed the test. These results were below the 75 [percent] pass rate required by N.J.A.C. 13:37-1.3(c)(2). After explaining its method of calculation, the Board summarized Eastwick's argument as follows: "the school contends that a plain reading of the Board's accreditation regulation requires the Board to use only the test scores of the 2012 graduates who sat for the [examination] for the first time in 2012 as opposed to utilizing scores of all first-time test takers who took the examination in 2012." Thus, under Eastwick's logic, of the 121 students who took the examination in 2012, only ninety-seven graduated in Of those ninetyseven test takers, seventy-four passed and twenty-four failed, thus creating a pass rate of percent. Contrary to Eastwick's position, the Board posited that "[t]he graduation date of the first-time test taker is 9

10 irrelevant to the Board. For accreditation purposes, the Board's focus is not on the performance of certain graduating classes. Rather, the Board's focus is on the performance of the program's first-time test takers in a calendar year." This method of calculation has been in place for a long time, as it "accurately and consistently measures the quality and effectiveness of a nursing program's curriculum and ability to adequately educate its students." As support for its position, the Board referred to the prefatory language of a 1994 proposed amendment to the regulations, which, citing 26 N.J.R. 4732, stated that [b]eginning in April 1994, the national nursing licensure examinations... have been given by appointment at various test sites throughout the State and will continue to be given on an on-going year-round basis, six days a week. Educational Testing Services (ETS), the examination administrator, will report scores to the Board on an annual basis.... Relying on the above language, the Board reasoned that "it [was] clear that as early as 1994, the Board was utilizing the annual or calendar year [examination] scores for all first-time test takers, regardless of the student's graduation date, for accreditation purposes." The Board further stated that it had provided notice to the public about its calculation methods when it advised in a public session on June 17, 2008 that "'class' as per N.J.A.C. 13:

11 will be defined as all the graduates from a nursing program who are first-time [examination] takers during [a] one-year period of time extending from January 1 through December 31." It also explained that other states follow a similar approach, with approximately twenty-five other state boards 3 using the examination scores of all first-time test takers during a calendar year to determine a program's yearly passage rate. The Board clarified that Eastwick had relied upon the following language in the regulation to support its contention: "[s]eventy-five percent of the students from the first or second graduating class." Eastwick maintained that in adopting this language, the Board "intended to provide nursing programs with two 'separate and distinct opportunities' to satisfy [the examination] pass rate." The Board disagreed, concluding that [w]hile the 2005 amendment allowed programs to meet the requisite [examination] pass rate with results from either the first calendar year or second calendar year test scores, there is no indication in this language, or in the proposal of this regulation in May 2004, that the Board intended to deviate from the method by which it calculated [examination] pass rates. 3 The Board reportedly conducted an unofficial survey in which sixty-four nursing boards were asked about their method of evaluating yearly pass rates for their programs. Of the fortyfour boards that responded, twenty-five indicated they used the same approach as the Board. The Board did not include any materials in its appendix which address or confirm the details of the survey, including the results. 11

12 If the Board had intended to modify its calculation method of annual examination pass rates, "it would have done so in the regulation." Further, the Board reasoned that under Eastwick's interpretation of the regulation, it would have to be read as follows: "[seventy-five percent] of students from each of the first or second graduating class must pass the examination the first time it is taken." 4 The Board also deemed Eastwick's interpretation of the regulation administratively burdensome in light of its responsibility to accredit over seventy nursing programs. According to the Board, "[t]here are simply no resources available to track hundreds of graduates from over [seventy] schools to ascertain and isolate the test scores of these individual cohorts or students who sat for the examination during the same year they graduated from the program." Moreover, the Board acknowledged the existence of Eastwick's other two nursing programs, both of which became fully accredited after the Board determined that seventy-five 4 Additionally, the Board found Eastwick's position arbitrary. Hypothetically adopting Eastwick's interpretation, the Board proposed, for example, that "[i]f... only [twenty-five] of Eastwick's [ninety-seven] graduates of 2012 took the examination in 2012, should nearly 1/4 of the class graduates set the passage rate for the program?" Alternatively, "[w]hat if... the remaining [seventy-three] graduates from the 2012 class finally sat for [the examination] in 2013 or 2014? Should their test results modify the previous examination results on which decisions relative to accreditation were reached?" 12

13 percent of all their first-time test takers passed the examination, regardless of their graduation date. Eastwick did not argue for an alternative interpretation of the regulations with respect to its other two nursing programs. Second, the Board addressed Eastwick's argument that it was not authorized to place the school on probation since N.J.A.C. 13:37-1.3(e) is inapplicable to its LPN-to-RN Bridge Program. That particular provision provides: A program that does not meet the requirements of (b) above shall remain on provisional accreditation status. A program may remain on provisional accreditation status for no more than two years from the date the first class graduates. A program that has not met the requirements of (b) above in that two-year period shall cease to admit students and shall be placed on probation until the last student enrolled in the program graduates or otherwise leaves the program.... [N.J.A.C. 13:37-1.3(e).] N.J.A.C. 13:37-1.3(b) states that "[a] licensed practical nurse education program granted provisional accreditation shall not admit more than [forty] students per calendar year." According to Eastwick, the above language mandates that the Board can only divest a program of its provisional accreditation status, and place it on probation, "if it is a practical nursing program that has exceeded the enrollment limit detailed in subsection (b)." Since Eastwick's LPN-to-RN Bridge Program is not a practical nursing program, the regulation does not apply 13

14 to it. Thus, the Board was not authorized to place it on probation. In response, the Board concluded that Eastwick's reliance on the above provisions was misplaced, as the reference in subsection (e) to subsection (b) was a drafting error. The Board admits that N.J.A.C. 13:37-1.3(e) should instead have referenced subsection (c), which outlines the three accreditation criteria. Alternatively, the Board reasoned that it nevertheless possessed the authority to take such action because its enabling statute, N.J.S.A. 45:11-24(d)(12)-(13), expressly authorized it to suspend or revoke certificates of accreditation. Third, the Board responded to Eastwick's allegation that placing the program on probation was premature "because N.J.A.C. 13:37-1.3(e) mandates that the program remain on provisional accreditation for two years from the date its first class graduated." The Board rejected Eastwick's interpretation of the regulation, finding that the provision merely states that "[a] program may remain on provisional accreditation status for no more than two years from the date the first class graduates." N.J.A.C. 13:37-1.3(e) (emphasis added). Such discretionary language does not require "that programs remain on provisional accreditation for two years before the Board can take action." 14

15 Lastly, the Board addressed Eastwick's contention that it should have considered certain mitigating factors unique to its program. The Board stated that it had considered such factors, but that they were outweighed by its concern that "a significant number of students enrolled in Eastwick's nursing program are unable, after the completion of didactic and clinical work as well as the expenditure of thousands of tuition dollars, to pass the national licensing examination in order to become competent registered nurses." Importantly, in denying Eastwick full accreditation, the Board advised that Eastwick could cure the deficiencies in its current LPN-to-RN Bridge Program or establish a new educationally sound nursing program, and reapply to the Board for the establishment of a new program and subsequent accreditation as authorized by the provisions of N.J.A.C. 13:37-1.3(e). At the same September meeting, the Board also approved a recommendation to amend N.J.A.C. 13:37-1.3(c)(2). As the Board noted in its opposition to Eastwick's motion to supplement the record, "the sub-committee draft, while approved by the Board, has not, to date, been proposed by the Board as required by the Administrative Procedure Act... indicating its intent to 15

16 modify the existing rule." Thus, the "Board has yet to commit to any particular amendatory language for N.J.A.C. 13: " 5 Eastwick filed a Notice of Appeal from the Board's final written order on September 30, On appeal, Eastwick raises the following legal claims for our consideration: POINT I EASTWICK HAS SATISIFIED N.J.A.C. 13:37-1.3(C) A. The Order of Probation Disregards the Express Language of N.J.A.C. 13:37-1.3(c)(2) B. The Order of Probation Disregards the Language Used in Other Board of Nursing Regulations and the Relevant Legislative History POINT II B. THE BOARD WAS NOT AUTHORIZED TO PLACE EASTWICK ON PROBATION II. Pursuant to Rule 2:2-3(a)(2), appeals may be taken to the Appellate Division "to review final decisions or actions of any 5 Specifically, the meeting minutes reveal the Board's Education Committee approved a proposed amendment to the provision so that it would read as follows: "seventy-five percent of all the graduates who take the NCLEX examination within the 1st or 2nd calendar year from the date that the first class graduates." At oral argument, we were informed by Board's Counsel that additional proposed rule changes were presented at the Board's October and December 2013 board meetings. 6 Thereafter, on October 4, 2013, the Board considered and denied Eastwick's motion to stay the Board's final order pending Eastwick's appeal. This court heard the same motion and also denied it. 16

17 state administrative agency or officer." 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, (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)).] 7 7 The Quest Court acknowledged that some cases have broken the standard for judicial review of agency action into a four-part, rather than three-part, test. See Quest, supra, 216 N.J. at 386, n.4 (citing Brady v. Bd. of Review, 152 N.J. 197, (1997)). 17

18 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). "[W]here, [however,] technical or specialized expertise is not implicated, and the issue is one of statutory interpretation, [a reviewing court] owe[s] no deference to the agency." A.Z. ex rel. B.Z. v. Higher Educ. Student Assistance Auth., 427 N.J. Super. 389, 394 (App. Div. 2012). In other words, "[a]n appellate tribunal is... in no way bound by the agency's interpretation of a statute or its determination of a strictly legal issue." Mayflower Sec. Co. v. Bureau of Sec., 64 N.J. 85, 93 (1973). After carefully reviewing the record in light of the written arguments advanced by the parties, we conclude the issues presented by Eastwick are fully addressed in the Board's comprehensive twenty-seven page decision contained in its September 27, 2013 final order; thus, we affirm substantially for the reasons expressed therein. The findings and conclusions of the Board are supported by substantial, credible evidence in the record. Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, (1974). 18

19 Affirmed. 19