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Bhavana Raval v. Department of Human


October 6, 2011


On appeal from the Department of Human Services, Commission for the Blind and Visually Impaired.

Per curiam.


Argued: September 21, 2011

Before Judges Cuff and St. John.

Appellant Bhavana Raval is legally blind. She participated in a program offered by respondent Commission for the Blind and Visually Impaired (Commission) to obtain a license to operate facilities, such as snack bars, coffee shops, and cafeterias, in public buildings. Following training, Raval successfully bid to operate a coffee shop at the Ocean County Courthouse and served a three-month probationary term and two discretionary one-month extensions. She appeals from a Final Decision of the Executive Director of the Commission denying licensure as a vending facility operator but offering her additional training. Following successful completion of the training, she would be returned to the certified placement list and permitted to bid on a new location with a three-month probationary period, or she could seek other employment through the Commission's vocational rehabilitation services program. We affirm.

On appeal, Raval contends that the Executive Director improperly rejected the Initial Decision rendered by an Administrative Law Judge (ALJ). The ALJ held that the Commission was governed by the probationary term regulations in place at the time of the hearing, rather than those in effect at the time of Raval's probationary term. Therefore, the ALJ concluded that the Commission did not afford Raval a legally sufficient probationary term. The ALJ also held that the Commission violated its rules about pricing. Although the ALJ found that Raval failed to develop a strong and growing relationship with customers, failed to retain employees, and failed to increase gross sales of merchandise, the ALJ also held that the Commission did not act within the scope of its regulations during Raval's probationary period. Therefore, the ALJ ordered the Commission to provide Raval a new working test period of six months and to provide Raval with further training on an expedited schedule. By rejecting the Initial Decision, Raval argues the Executive Director improperly rejected findings of fact made by the ALJ and misapplied the governing law.

It is well settled that appellate courts have a limited role in reviewing the decision of administrative agencies. In re Anthony Stallworth, ___ N.J. ___ (2011) (slip op. at 13); Brady v. Bd. of Review, 152 N.J. 197, 210 (1997). Appellate courts will not reverse an agency decision unless it is "'arbitrary, capricious, or unreasonable, or[] not supported by substantial credible evidence in the record as a whole.'" Stallworth, supra, slip op at 14 (alteration in original) (quoting Henry v. Rahway State Prison, 81 N.J. 571, 579-80 (1980)); Barry v. Arrow Pontiac, Inc., 100 N.J. 57, 71 (1985); Gloucester Cnty. Welfare Bd. v. N.J. Civil Serv. Comm'n, 93 N.J. 384, 391 (1983). In determining whether an agency decision is supported by substantial credible evidence, the reviewing court is obligated to accord deference to administrative agency factfinding. Doering v. Bd. of Review, 203 N.J. Super. 241, 245 (App. Div. 1985).

An appellate court may not vacate an agency's determination because of doubts as to its wisdom or because the record may support more than one result. See Henry, supra, 81 N.J. at 579-80. If the court finds sufficient credible, competent evidence in the record to support the agency's conclusions, then the court must uphold the agency's findings. See Clowes v. Terminix Int'l, Inc., 109 N.J. 575, 587 (1988) (citing Goodman v. London Metals Exch., Inc., 86 N.J. 19, 28 (1981)).

Thus, an administrative agency's decision may be disturbed only where it can be demonstrated that the agency's decision is arbitrary or capricious, unsupported by the record, or in violation of express or implicit legislative policies. See N.J. Guild of Hearing Aid Dispensers v. Long, 75 N.J. 544, 562-63 (1978). In Worthington v. Fauver, 88 N.J. 183, 204 (1982), the Court stated:

"Arbitrary and capricious action of administrative bodies means willful and unreasoning action, without consideration and in disregard of circumstances. Where there is room for two opinions, action is [valid] when exercised honestly and upon due consideration, even though it may be believed that an erroneous conclusion has been reached." [Id. at 204-05 (quoting Bayshore Sewerage Co. v. Dep't of Envtl. Prot., 122 N.J. Super. 184, 199 (Ch. Div. 1973), aff'd o.b., 131 N.J. Super. 37 (App. Div. 1974).]

Moreover, we accord substantial deference to an agency's interpretation of a statute or regulation that it is charged to enforce. In re Freshwater Wetlands Gen. Permit No. 16, 379 N.J. Super. 331, 341 (App. Div. 2005); In re Adopted Amendments to N.J.A.C. 7:7A-2.4, 365 N.J. Super. 255, 264 (App. Div. 2003). Underlying our deference is our recognition that the agency has the "staff, resources, and expertise to understand and solve those specialized problems." Bergen Pines Cnty. Hosp. v. N.J. Dep't of Human Servs., 96 N.J. 456, 474 (1984); see also Essex Cnty. Bd. of Taxation v. Twp. of Caldwell, 21 N.J. Tax 188, 197 (App. Div.) (agency's interpretation owed considerable deference because agency drafted and promulgated the rule), certif. denied, 176 N.J. 426 (2003).

Our deference, however, is not without limits and we are "'in no way bound by the agency's interpretation of a statute or its determination of a strictly legal issue.'" Univ. Cottage Club of Princeton N.J. Corp. v. Dep't of Envtl. Prot., 191 N.J. 38, 48 (2007) (quoting In re Taylor, 158 N.J. 644, 658 (1999)).

Contrary to Raval's arguments, this appeal turns almost exclusively on issues of law, not fact. Therefore, we are not confronted with the rejection of factual findings by the agency decision-maker based on credibility evaluations of witnesses by the ALJ. N.J.S.A. 52:14b-10(c). Here, the ALJ did not find evidence of customer complaints incredible but unsupported by competent evidence. The Executive Director was free to evaluate this evidence and find that the customers had complained during the probationary term, as long as there was a residuum of competent evidence to support and corroborate the claims. Weston v. State, 60 N.J. 36, 51 (1972). This record contained such evidence in the nature of the undisputed evidence that sales did not grow and Raval failed to develop a steady customer base.

We are satisfied that any challenge to the manner in which the Commission evaluated the performance of Raval during the probationary period should be assessed in accordance with the regulations in effect at the time. Regulations are subject to the same rules of construction as statutes. Essex Cnty. Welfare Bd. v. Klein, 149 N.J. Super. 241, 247 (App. Div. 1977). Legislation is normally accorded prospective application, Gibbons v. Gibbons, 86 N.J. 515, 522 (1981), unless the Legislature or the agency states otherwise, Kendall v. Snedeker, 219 N.J. Super. 283, 285 (App. Div. 1987). Unless those regulations have been declared unlawful, which is not the case, the Commission's conduct should be evaluated in accordance with the regulations governing it and program participants like Raval in effect at the time of her training and her probationary term.

We also reject Raval's argument that the Commission lacked authority to set prices in accordance with its recommendations. N.J.A.C. 10:97-4.12 addresses the pricing of merchandise sold at Commission locations:

(a) Prices will be set by the operator in consultation with the Commission's representative.

(b) The retail price of merchandise at a facility shall not exceed the general price pattern prevailing in the immediate locality.

The plain language of N.J.A.C. 10:97-4.12 limits the operator's pricing authority. Section (a) requires the operator to set prices "in consultation with the Commission's representative." This gives the operator authority to set prices if the Commission is consulted. Section (b), however, provides an outside limit to the operator's pricing discretion: no price may exceed the general price pattern of the immediate locality. Although section (b) does not specify what entity should enforce this price requirement, the context of the provision suggests the Commission, as the administrator for the program, is responsible.

Finally, the remedial portion of the Initial Decision in which the ALJ ordered a new working test period suggests that the ALJ treated the probationary term afforded by the Commission and the working test period afforded to Civil Service employees as identical. A "working test period" is defined as "a part of the examination process after regular appointment, during which time the work performance and conduct of the employee is evaluated to determine if permanent status is merited." N.J.A.C. 4A:1-1.3. "All regular appointments to a title in the career service" are entitled to a working test period, with some exceptions. N.J.A.C. 4A:4-5.1. "Regular appointment" is defined as the employment of a person to fill a position in either the competitive or noncompetitive divisions of the career service. N.J.A.C. 4A:1-1.3. "Career service" is defined as "those positions and job titles subject to the tenure provisions of Title 11A, New Jersey Statutes." N.J.A.C. 4A:1-1.3. The working test period process for regular appointments applies only to public employees. An operator of a business enterprise program location, however, "is not an employee of the State of New Jersey." N.J.A.C. 10:97-1.3.

We, therefore, affirm the May 24, 2010 Final Decision of the Executive Director.


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