Beruflich Dokumente
Kultur Dokumente
Angelo Genova, Esq., Jennifer Mazawey, Esq., and Jennifer Borek, Esq.,
appearing on behalf of intervenor Catapult Learning, Inc. (Genova Burns,
attorneys)
PROCEDURAL HISTORY
On August 28, 2015, the petitioner filed a petition for emergent relief with the
Bureau of Controversies and Disputes, Department of Education (DOE).
The
The matter was transmitted to the Office of Administrative Law, where it was filed
on September 1, 2015, to be heard as a contested case. N.J.S.A. 52:14B-1 to -15;
N.J.S.A. 52:14F-1 to -13. Oral argument was heard on the emergent application on
September 9, 2015.
FINDINGS OF FACT2
In June 2015 the Board sought requests for proposals (RFP) pursuant to the
competitive contracting process authorized by N.J.S.A. 18A:18A-4.1 et seq. from
interested vendors for the provision of ICRP services to be provided to eligible
nonpublic school students in accordance with the Individuals with Disabilities Education
Act (IDEA). The Board indicated that contracts could be awarded to multiple vendors.
Counsel for the proposed intervenors were permitted to argue at the hearing on emergent relief.
These facts were taken from the parties briefs, as no testimony was taken on the date of the hearing on
emergent relief.
2
Three vendors submitted proposals for services: Tree of Knowledge Learning Center,
Inc. (TOK); Tender Touch Educational Services (TT);3 and Catapult.
The school district convened a selection committee4 to review the proposals and
ensure they were consistent with the specifications set forth in the RFP.
After
evaluation, the committee scored the proposals. While deficiencies were noted in all of
the proposals, all proposals scored within five to six points of one another.
The
committee issued an evaluation report reflecting the scores, and recommended that two
of the vendors (TT and TOK) receive contracts. Catapult, a previous service provider,
was advised that due to a number of identified material deficiencies in its proposal, it
would not be awarded a contract.
Catapult responded with a full explanation of the RFP and indicated that many of
the identified deficiencies were inaccurate. The Boards attorney advised the Monitor
that the remaining issues in Catapults response were not material and were subject to
cure through the provisions of a contract.
The Board meeting was scheduled for August 5, 2015. The contract awards to
TOK and TT as vendors for the ICRP were placed on the agenda, but the meeting was
canceled due to a lack of a quorum. The Monitor exercised his authority to approve
items on that evenings agenda, including the ICRP contract awards to TT and TOK.
In the interim before the next Board meeting, the Board became concerned that
TT and TOK would not be able to perform because Catapult advised that many of the
specialized instructors in its employ had signed non-compete agreements and would
therefore not be available to TT or TOK to provide the services those companies said
they could provide for the upcoming school year.5
conclusion and indicated that the two approved vendors had stated that they could
Neither TT nor TOK appeared at the hearing, although counsel advised that they had received notice of
these proceedings.
4
The Committee included the supervisor of related services, the supervisor of special education, and the
supervisor of Lakewood Early Childhood Center.
5
The Lakewood nonpublic schools started on August 31, 2015.
perform.
In addition, the Monitor felt that the non-compete agreements were not
enforceable.
The Board met again on August 26, 2015, at which time a motion was made from
the floor to award a contract to Catapult in addition to the contracts awarded to TT and
TOK.6
motion.
Special Monitor
The School District Fiscal Accountability Act, N.J.S.A. 18A:7A-54 to -60, was
passed to address the problem of some school districts failure to correct serious
deficiencies identified in their annual audits. The Act authorizes the Commissioner to
appoint a monitor to provide direct oversight of a board of educations business
operations and personnel matters.
N.J.S.A. 18A:7A-55(a).
Monitor shall
(1)
oversee the fiscal management and expenditures of
school district funds, including, but not limited to, budget
reallocations and reductions, approvals of purchase orders,
budget transfers, and payment of bills and claims;
....
(5)
have authority to override a chief school
administrators action and a vote by the board of education
on any of the matters set forth in this subsection, except that
all actions of the State monitor shall be subject to the
education, labor, and employment laws and regulations . . . .
[N.J.S.A. 18A:7A-55(b).]
6
As of September 9, 2015, neither TT nor TOK had executed contracts for the ICRP services. Counsel
indicated that TOK had received a contract, and that TT had signed a letter of intent to perform until the
contract was executed.
7
The Monitor expressed concern whether a contract awarded to Catapult would have violated the Public
Schools Contracts Law, and also expressed concern over possible litigation from TT and TOK if an
additional vendor were approved that had not met selection criteria. The Board expressed its concern
over possible litigation threatened by Catapult if it were not awarded a contract.
The Monitor is subject to the supervision of the Commissioner and provides oversight
until such time as the Commissioner determines that the necessary local capacity and
fiscal controls have been restored to school district operations. N.J.S.A. 18A:7A-55(e).
(May
31,
2011),
rejected,
Commr
(July
13,
2011),
agreed with the Board that the Monitor had exceeded his statutory authority because
the enabling legislation, N.J.S.A. 18A:7A-55, did not expressly authorize him to settle
lawsuits.
The Commissioner rejected the ALJs analysis and upheld the Monitors
authority to override a school boards refusal to settle a lawsuit that, in the Monitors
reasonable estimation, could have significant financial exposure for the Board. The
Appellate Division affirmed the Commissioners decision, finding that a history of fiscal
instability by a board warrants the limits of exercise of those powers through oversight
by the Monitor.
3,
2010),
rejected,
Commr
(October
26,
2010),
<http://njlaw.rutgers.edu/collections/courts/>,
the
Monitor
terminated
an
employee over the objection of the Board of Education. The ALJ vacated the Monitors
action, which was rejected by the Commissioner, who took an expansive view of the
Monitors powers. While a Monitor does not have unfettered power to make decisions
for the district, he must have fiscal or financial concerns or motivations in order to
appropriately overturn a Boards decision.
noted the Broad powers of the State Monitor conferred by statute and rejected the
argument that the Monitor has no authority to override a boards exercise of its own
power because no statute permits that action.
The
standard to be used in determining whether a Monitors decisions are ultra vires, as the
Board suggests, is whether the Monitor acted arbitrarily and capriciously. Arbitrary
and capricious means acting without rational basis, a willful and unreasoning action
without consideration of and in disregard of circumstances. J.P. and M.P. ex rel M.P.
and J.P. v. Bd. of Educ. of South Brunswick, EDU 4969-01, Initial Decision (December
17,
2002),
adopted,
Commr
(February
3,
2003),
<http://njlaw.rutgers.edu/collections/oal/>.
Intervention
Catapult has filed a motion to intervene in this matter, and, indeed, the Board
and the Monitor have expressed no objection to Catapults intervention. N.J.A.C. 1:116.1(a) provides that any person or entity not initially a party, who has a statutory right
to intervene or who will be substantially, specifically and directly affected by the
outcome of a contested case, may on motion, seek leave to intervene.
Catapult claims that it has a legitimate interest to protect in this matter which is
not the same as the interest of the Board. It contends that the action of the Monitor
resulted in its being deprived of economic benefit, as well as the students being
deprived of continuity of services. Catapult contends that the Monitor acted ultra vires
in depriving it of the opportunity to correct any deficiencies in its bid, if indeed there
were in fact any significant deficiencies from the other bids that were accepted. To that
extent, Catapult has a different position from the Board: the Board does not contend
that there were errors in the bidding process; rather, it contends that any deficiencies in
the bidding process could be corrected by the contracts offered to all three successful
bidders. Catapult, on the other hand, argues that it is in a superior position to provide
the services required by the Board, having adequate personnel to meet the demands of
the student population.
Emergent Relief
(a)
Where the subject matter of the controversy is a
particular course of action by a district board of education or
any other party subject to the jurisdiction of the
Commissioner, the petitioner may include with the petition of
appeal, a separate motion for emergent relief or a stay of
that action pending the Commissioners final decision in the
contested case.
(b)
A motion for a stay or emergent relief shall be
accompanied by a letter memorandum or brief which shall
address the following standards to be met for granting such
relief pursuant to Crowe v. DeGioia, 90 N.J. 126 (1982):
1.
The petitioner will suffer irreparable harm if the
requested relief is not granted;
2.
The legal right underlying petitioners claim is
settled;
3.
The petitioner has a likelihood of prevailing on
the merits of the underlying claim; and
4.
When the equities and interests of the parties
are balanced, the petitioner will suffer greater harm
than the respondent will suffer if the requested relief is
not granted.
[See also N.J.A.C. 1:1-12.6.]
For emergent relief to be granted, the petitioner must satisfy all four prongs of the
Crowe test by clear and convincing evidence, a particularly heavy burden. Rinaldo v.
RLR Inv., LLC, 387 N.J. Super. 387, 396 (App. Div. 2006) (quoting Punnett v. Carter,
621 F.2d 578, 582 (3d Cir. 1980)); see also Guaman v. Velez, 421 N.J. Super. 239,
24748 (App. Div. 2011).
The Board seeks injunctive relief in the form of a determination that the Monitor
acted arbitrarily and capriciously when he overruled the Boards decision to offer a
contract to Catapult. The effect would be a return to the status quo of the three
vendors being given contracts for the provision of ICRP services.
As to the first requirement, that the petitioner will suffer irreparable harm if the
requested relief is not granted, the Board contends that students educational programs
will be harmed if the Monitors decision is permitted to stand, because it has received
information that Catapult had entered into non-compete agreements with its individual
service providers, thus making them unavailable to be hired by TT or TOK.8 After
receiving this information, the Board endeavored to award a third contract to Catapult,
contending that any deficiencies noted in the bid could be corrected in the contract, only
to be denied by the Monitor.
This position essentially assumed that TT and TOK would default on their contract requirements
because of the unavailability of personnel held to their non-compete clauses with Catapult.
The Board also contends that the actions of the Monitor in overruling the Board
are harmful to it because the Board will be forced to abide by an illegal and capricious
action. The Monitor contends that his action in overruling the Board is not harmful in
and of itself. The Boards positon assumes that what the Monitor did was arbitrary and
capricious, but this can only be determined after a full hearing.
Catapult contends that it will be irreparably harmed if the Monitors decision is not
vacated, as it will be denied economic profits as the result of its not being able to enter
into a contract with the Board to provide services. However, loss of anticipated profits is
not a basis for emergent relief. Contracts are not a guarantee; any business must
recognize the risk that it will not be awarded every contract for which it applies. See
Pritchard Industries, Inc., v. State-Operated School District of Paterson, EDU 9297-09,
Order (September 25, 2009), <http://njlaw.rutgers.edu/collections/oal/>.
As to the second requirement, that the legal right underlying petitioners claim is
settled, both parties correctly note the dearth of cases regarding the power of the
Monitor to overrule school-board decisions. The Monitor has authority in fiscal affairs,
but, as noted above, it is not unfettered. While the Board is correct that the New
Jersey Constitution provides that students within this state are entitled to a thorough
and efficient education, and that the IDEA provides that students with special needs
have a right to services designed to meet those needs, that is not the legal standard to
be used in determining whether the Monitor misused his authority when he overruled
the Board. Indeed, given past rulings of the Commissioner as affirmed by the Appellate
Division, the Monitors authority is broad and wide-ranging when a matter has fiscal
involvement, such as prevention of costly litigation.
As to the third requirement, the petitioners likelihood of prevailing on the merits
of the underlying claim, it has not been established. The law in this area is sparse, but it
does provide the Monitor with a broad range of authority in fiscal matters. The Board
and Catapult must demonstrate that the Monitor acted ultra vires when he followed the
recommendations of the Selection Committee and overruled the Board by declining to
alter the bidding process to permit a third vendor access to the same contracts. Such
proof of arbitrary and capricious action can only come after a hearing in this matter.
9
Based on the information provided by the petitioner and Catapult, it cannot presently be
concluded that the petitioner and Catapult have a likelihood of prevailing on the merits
of the underlying claim.
As to the balancing of the equities of the situation and the interests of the parties,
the Board and the Monitor have an interest in seeing that the children of Lakewood
receive the education and special services they are entitled to by law. They both have
an interest in ensuring that these educational services are timely provided in a
financially sound manner in accordance with the bidding and selection process. There
is no indication that either the Board or the Monitor did not attempt to act in the best
interests of the students and the district in reaching their separate conclusions about the
acceptance or the rejection of the bids.
Catapult has a financial interest in obtaining a contract from the Board so that it
may continue to provide services and obtain the economic benefit of the contract.
Balancing the equities at this juncture, there is no indication that the two vendors
approved by the selection committee and the Board cannot perform in accordance with
the proposed contracts. If they cannot meet the demands of the contracts, then indeed,
the matter may yet become emergent and the petitioner may then re-apply for emergent
relief.
In conclusion, neither the Board nor Catapult has demonstrated that it is entitled
to emergent relief. The application soughtto overrule the decision of the Monitor on
the basis that he was without authority to so actis denied.
ORDER
Having concluded that the Board has not satisfied the four requirements for
emergent relief, the petitioners request for emergent relief is DENIED.
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DOCUMENTS CONSIDERED
Petitioners Motion for Emergent Relief, with attachments
Respondents Brief in Opposition, with attachments
Catapults Motion to Intervene and Supporting Brief
Mekor Hachinuchs Motion to Intervene, with attachments
(Mekor Hachinuchs Letter and Certification filed on September 10, 2015, after record
closed, not considered)
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