J.J. and L.J. on Behalf of C.J., Petitioners–Appellants, v. NEW JERSEY DIVISION OF DEVELOPMENTAL DISABILITIES (2011)

J.J. and L.J., the parents and co-guardians of C.J., appeal from a final determination of the Division of Developmental Disabilities (Division), denying their application to provide funds for C.J.'s transportation to and from a day program.   We affirm.

C.J. is a twenty-five year old man with autism and a history of serious maladaptive behavior.   He resides with his parents in Somerset County.   In 1990, C.J. was placed in an educational program at the Eden Institute (Eden) in Mercer County.   From 1990 to 2007, his local school district paid for that program.

When C.J. reached the age of twenty-one, his school district was no longer obligated to bear the cost of his education.   The Division offered to enroll C.J. in a day program at the Center for Family Support (CFS), which is located in Somerset County.   Appellants declined the offer and requested that the Division enroll him in a vocational day program at Eden.

The Division agreed to do so, but informed appellants that it could not fund C.J.'s transportation to and from the program.   Appellants initially accepted the Division's offer and assumed the responsibility for transporting C.J. to and from Eden.

However, appellants requested that the Division provide a written explanation for its refusal to provide C.J. with transportation to the Eden program.   In January 2008, appellants asked that the matter be transmitted to the Office of Administrative Law (OAL) for a hearing.

In February 2008, Assistant Commissioner Kenneth W. Ritchey (Ritchey) advised appellants that the matter was not considered to be a “contested” case but offered appellants the opportunity for an informal conference with a hearing officer.   The conference took place in April 2008, after which the hearing officer issued a letter dated May 15, 2008, in which he stated that there was no basis for the Division to change its position regarding appellants' request for transportation.

Thereafter, appellants advised the Division that they wanted to pursue the matter further and again requested that the case be transmitted to the OAL for a hearing.   Appellants also asked the Division to explain why it had refused to provide C.J. with transportation when it was providing transportation to other individuals in the Eden program.

The Division again denied appellants' request to provide C.J. with transportation to and from the Eden program.   In addition, on June 17, 2008, Lee Berkey (Berkey), the Division's Chief of Staff, informed appellants that C.J. was not eligible for any program from the Division which offered day services, including transportation services, because he was not on the “Community Care Waiver” (CCW).

The CCW is a program that allows the State to receive partial reimbursement from the federal Medicaid program for the cost of providing services to certain individuals who would require institutionalization without such services.   42 U.S.C.A. § 1396n(c)(1);  N.J.A.C. 10:46–1.3. The Division operates a CCW program, but maintains a waiting list for the program because it is unable to provide services to all who might qualify.  N.J.A.C. 10:46C–1.1 to 1.15.

Berkey advised appellants that C.J.'s name would not be placed “on the waiver until he is reachable on the waiting list.”   According to the Division, as of April 20, 2010, the Division was providing services with individuals who had been placed on the waiting list in 1998.

Furthermore, by letter dated June 25, 2008, Berkey advised appellants that the Division continued to view the case as “non-contested” and therefore it would not be referred to the OAL for a hearing.   Berkey stated, however, that appellants could seek administrative paper review of the Division's decision and the matter would be referred to an administrative analyst for a recommended decision.

Appellants submitted further comments to the Division and asked the Division to respond to written interrogatories.   The Division refused to provide answers to the interrogatories, and on August 28, 2008, informed appellants that it adhered to its determination that the matter was a “non-contested” case that need not be referred to the OAL for a hearing.

In February 2009, Shawn McInerney (McInerney), Regional Assistant Director for the Division's Northern/Upper Central Region, provided appellants with a statement of the Region's position regarding their request for funding.   McInerney wrote that, since July 2007, the Division had been funding C.J.'s attendance at Eden's day program at an annual cost of $28,500.   He stated that the cost of transporting C.J. to and from the Eden program would be more than $74,000 each year.

McInerney also stated that C.J. was not on the CCW. Therefore, he was not eligible for additional funding for transportation.   McInerney said that, “[d]ue to limited availability of resources, coupled with the exorbitant and disproportionate costs of providing door to door transportation, the Division is not able to fund this request at this time.”

On July 10, 2009, the analyst issued a recommended decision in the matter, finding that the Division's decision to deny funding for C.J.'s transportation was proper.   The analyst noted that Eden had contracted with a bus company to provide transportation for some program attendees who reside in Union County, but the company would have to add an “additional run” for C.J. at a cost of about $300 per day.   The analyst stated that the Division could not bear this expense because the resources available to it were limited.

The analyst also noted that, before the Division provided C.J. with the Eden program in April 2007, it had referred him to a “viable and appropriate” program in his home county.   That program included transportation.   The analyst stated that appellants declined this program because they preferred the program provided at Eden.

The analyst rejected appellants' contention that the Division had acted arbitrarily and capriciously by denying C.J. transportation while providing such transportation to other individuals placed at Eden. The analyst stated that the “three other individuals received services from a different region and were in the same catchment area” and that the cost of transporting C.J. to Eden would be “exorbitant.”   The analyst also stated that C.J. was not eligible for the CCW because he was placed on the waiting list for such services in January 2006, and he could not be “jumped ahead of others” on the list.

Appellants provided further comments to Assistant Commissioner Ritchey regarding the recommended decision.   They argued that:  state law required the Division to provide transportation to and from day programs;  C.J. was eligible for the CCW;  the Division's refusal to provide transportation was arbitrary, capricious and unreasonable;  and the Division was violating C.J.'s right to due process by refusing to refer the matter to the OAL for a hearing.

Assistant Commissioner Ritchey issued an interim decision dated December 16, 2009, in which he directed the Division's staff to provide appellants with documentation of its transportation analysis and to contact Eden to ascertain whether any transportation services may have become available.   The Division's staff was also directed to provide a copy of Eden's transportation policy to appellants.   In addition, appellants and the Regional office were permitted to provide further arguments based on the information provided to them.

Thereafter, appellants and the Regional Assistant Director provided Assistant Commissioner Ritchey with additional arguments in support of their respective positions.   Assistant Commissioner Ritchey issued his final decision in the matter on April 20, 2010.   The Assistant Commissioner denied appellants' request to fund C.J.'s transportation to and from the Eden program but directed the Division to continue to explore transportation alternatives for C.J. This appeal followed.

Appellants argue that:  1) the Division's denial of transportation services for C.J. is a “contested case” that should be transmitted to the OAL for a hearing;  2) the Division is required to fund C.J.'s transportation to and from his day program at Eden;  and 3) if the court remands the matter for a hearing, the court should order the Division to provide transportation services to C.J. in the interim and require the Division to reimburse appellants for the transportation provided “to date.”

We have carefully considered these arguments and conclude that they are without merit.   We therefore affirm the Division's determination substantially for the reasons stated by Assistant Commissioner Ritchey in his final decision dated April 20, 2010.   R. 2:11–3(e)(1)(D) and (E).   We add the following comments.

The scope of our review in an appeal from a final determination of an administrative agency is strictly limited.   An administrative agency's decision may not be disturbed unless shown to be arbitrary, capricious or unreasonable.  Brady v. Bd. of Review, 152 N.J. 197, 210 (1997) (citing In re Warren, 117 N.J. 295, 296 (1989)).   We can only intervene “ ‘in those rare circumstances in which an agency action is clearly inconsistent with its statutory mission or with other State policy.’ ”  Ibid. (quoting George Harms Constr.   Co. v. N.J. Tpk. Auth., 137 N.J. 8, 27 (1994)).

Appellants contend that the Division erred by refusing to refer this matter to the OAL for a hearing as a “contested case,” which is defined as

a proceeding ․ in which the legal rights, duties, obligations, privileges, benefits or other legal relations of specific parties are required by constitutional right or by statute to be determined by an agency by decisions, determinations, or orders, addressed to them or disposing of their interests, after opportunity for an agency hearing.

[N.J.S.A. 52:14B–2(b).]

However, if the matter before the agency does not present contested material issues of fact that can only be decided after the opportunity for a hearing, the matter is not a “contested case” subject to referral to the OAL. Sloan ex rel. Sloan v. Klagholtz, 342 N.J.Super. 385, 392 (App.Div.2001).

Appellants contend that they are entitled to a “contested case” hearing pursuant to the Division's regulations.   We disagree.   Under the Division's regulations, administrative appeals may be taken from decisions regarding so-called “waiver” services, which are those that are either partially or fully funded with federal funds.  N.J.A.C. 10:48–2.1(b).

Administrative appeals may also be taken of decisions pertaining to non-waiver funded services, including those funded entirely with State funds.  N.J.A.C. 10:48–2.2. Appeals are considered to be “contested” matters if they are challenges to “determination[s] of ineligibility for services and appeals of specific offers of non-waiver funded placements[.]”  Ibid.

Here, the record shows that C.J. is on the CCW waiting list and he is not presently eligible for CCW services.   Therefore, appellants have no right to a hearing under N.J.A.C. 10:48–2.1(b).  In addition, although C.J.'s attendance at the Eden program is funded with State monies, appellants are not challenging a determination of C.J.'s eligibility for those services, or a specific offer of a non-CCW funded placement.   Consequently, appellants are not entitled to a hearing pursuant to N.J.A.C. 10:48–2.2.

Moreover, this matter cannot be considered a “contested case” because it does not involve any disputed issue of material fact that could only be resolved after a hearing.  Klagholtz, supra, 342 N.J.Super. at 392.   As we stated previously, C.J. is presently on the waiting list for the CCW, and he is not entitled to receive CCW services until he is reached chronologically on the waiting list.   Furthermore, there is no dispute that C.J.'s day program costs $28,500 per year, and the cost of transporting him to and from that program would cost the Division $74,700 per year.   Based on those undisputed facts, the Division reasonably determined not to provide funds for C.J.'s transportation to and from the Eden program.

Appellants argue, however, that there is a disputed issue of fact as to whether C.J. is on the CCW. In support of this contention, they rely upon certain internal e-mails, in which the Division's staff discussed placing C.J. on the CCW. This contention fails because, while staff may have discussed the matter, C.J. was never placed on the CCW.

Appellants also argue that there is a factual dispute as to whether the Division acted arbitrarily by denying C.J. funding for transportation, when it is providing funds to transport others to the Eden program.   However, it is undisputed that:  these other individuals all live in the same area;  they are transported to Eden in a single bus;  and an additional vehicle would be required to transport C.J. to the program at substantial cost.

Appellants additionally argue that the Division is required by N.J.S.A. 30:6D–3 to provide transportation to C.J. to and from the Eden program.   However, the Division is only required to provide services “to the extent available.”  N.J.S.A. 30:4–25.6. If an appropriate service is not available, the Division must provide “alternate service[.]”  N.J.S.A. 30:4–25.6. The statutes governing the provision of services by the Division evince a recognition that “fiscal constraints may delay the provision of services.”   J.D. ex rel. D.D.H. v. N.J. Div. of Developmental Disabilities, 329 N.J.Super. 516, 522 (App.Div.2000).

Here, the record establishes that there is insufficient waiver funding for all of the Division's clients and C.J. is on a waiting list for such funding.   The Division has nevertheless elected to provide funding for C.J.'s day program entirely with State funds.   The fact that the Division has elected to use State funds for the program does not mean that the Division is also required to fund the cost of transportation to and from that program, particularly when the cost of transportation greatly exceeds the cost of the program itself.

Moreover, the record shows that the Division offered appellants an alternative day program for C.J. in Somerset County and appellants rejected that offer, preferring instead to have C.J. attend the Eden program.   In our view, the Division's determination is consistent with the governing statutes, supported by sufficient credible evidence in the record, and not arbitrary, capricious or unreasonable.

We have considered appellants' other contentions and conclude that they are without sufficient merit to warrant discussion in a written opinion.   R. 2:11–3(e)(1)(E).

Affirmed.

PER CURIAM