In re Revocation or Suspension of Provisional Accreditation of Eastwick College LPN-to-RN Bridge Program, 225 N.J. 533 (2016). As Justice Patterson reminded us in her opinion in this case today, an administrative agency’s interpretation of its own regulations receives deference from reviewing courts unless the interpretation is “plainly unreasonable.” Today, however, a unanimous Supreme Court found that the State Board of Nursing had adopted a plainly unreasonable interpretation of N.J.A.C. 13:37-1.3(c), which governs accreditation of new nursing programs and requires that full accreditation be denied unless “‘[s]eventy-five percent of [the program’s] students from the first or second graduating class,’ who take the licensing examination for registered nurses, ‘pass the examination the first time it is taken by the student.”
Eastwick College sought accreditation of its “Bridge Program,” which was designed to meet the needs of licensed professional nurses who sought to become registered nurses. Eastwick obtained provisional certification of the Bridge Program, and Eastwick’s licensing examination pass rates for students from its first two graduating classes, in 2011 and 2012, exceeded 75%, according to Eastwick. The Board, however, recalculated the pass rate for 2012 and determined that the pass rate for that year was only 71.07%. As a result, the Board put the Bridge Program on probation and entered an order denying accreditation to that program.
The difference in the pass rate calculations arose because the Board and Eastwick had different interpretations of what the regulation meant by “graduating class,” a term that the regulation does not define. Eastwick argued that a “graduating class” includes “all graduates of a nursing program in a particular year who took the examination in that same year.” The Board, on the other hand, contended that “graduating class” means “any graduate of a nursing program, no matter when he or she graduated, who took the … licensing examination for the first time in a particular year.” The Board observed that it had stated that interpretation at a meeting in 2008, but Eastwick asserted that that statement was not part of the regulation because it was not incorporated using the procedures of the Administrative Procedure Act, N.J.S.A. 52:14B-1 et seq.
Eastwick appealed unsuccessfully to the Appellate Division, which concluded that the Board’s interpretation was supported by substantial credible evidence in the record. On further review by the Supreme Court, however, the Court reversed the Board’s decision.
Justice Patterson recognized the deferential “plainly unreasonable” standard that is applied to an agency’s interpretation of its own regulation. But the unambiguous language of the regulation, which governs interpretation just as plain statutory language governs statutory interpretation, made the Board’s interpretation plainly unreasonable. “[I]n its ‘ordinary and commonsense usage,’ does not denote a cohort of students who have graduated from a professional school in different years, but have taken a licensing examination in the same calendar year. Instead, the term ‘class,’ modified by ‘graduating,’ describes a group of students who complete a program of studies and receive their diplomas or certificates in a given calendar year.”
The Board cited regulations from other jurisdictions as support for its view. But Justice Patterson noted that the language of those regulations expressly “tethers the pass rate to the timing of the licensing examination.” Nothing in the language of the Board’s regulation did that.
Since the regulatory language was clear, the Court did not have to go further. There was also no need, Justice Patterson said, to reach the issue of whether the Board’s 2008 statement constituted improper rulemaking, as Eastwick had contended.