Opinion
DOCKET NO. A-3817-11T4 DOCKET NO. A-3818-11T3
04-18-2013
IN THE MATTER OF G.W. IN THE MATTER OF M.G.
Evelina E.G. Padilla argued the cause for appellants, the parents of G.W. and M.G. (Hinkle, Fingles & Prior, PC, attorneys; Ms. Padilla and S. Paul Prior, of counsel and on the brief; Herbert D. Hinkle, on the brief). John Regina, Deputy Attorney General, argued the cause for respondent New Jersey Department of Human Services, Division of Developmental Disabilities (Jeffrey S. Chiesa, Attorney General, attorney; Melissa H. Raksa, Assistant Attorney General, of counsel; Mr. Regina, on the brief).
RECORD IMPOUNDED
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Axelrad and Haas.
On appeal from the New Jersey Department of Human Services, Division of Developmental Disabilities.
Evelina E.G. Padilla argued the cause for appellants, the parents of G.W. and M.G. (Hinkle, Fingles & Prior, PC, attorneys; Ms. Padilla and S. Paul Prior, of counsel and on the brief; Herbert D. Hinkle, on the brief).
John Regina, Deputy Attorney General, argued the cause for respondent New Jersey Department of Human Services, Division of Developmental Disabilities (Jeffrey S. Chiesa, Attorney General, attorney; Melissa H. Raksa, Assistant Attorney General, of counsel; Mr. Regina, on the brief). PER CURIAM
In these cases calendared back-to-back, which we consolidate for purposes of this opinion, the parents of M.G. and G.W., developmentally disabled adults, appeal from the final decision of the New Jersey Department of Human Services, Division of Developmental Disabilities (DDD) holding that M.G. and G.W. are not entitled to a contested case hearing or reimbursement and funding of the entire cost of their chosen day program placement. Appellants also seek attorneys' fees and costs of litigation. We affirm.
I.
M.G. is a twenty-six-year-old developmentally disabled man who is cognitively and developmentally disabled due to autism. M.G.'s parents are A.G. (father) and B.G. (mother). They certified that M.G. is "barely verbal, needs assistance or oversight with everything he does and requires one-to-one supervision at all times." Moreover, he "exhibits high anxiety, repetitive actions and words, difficulty focusing or paying attention, and maladaptive behaviors including pica and aggressive behaviors."
M.G. was initially placed by his local board of education at Alpine Learning Group (Alpine) in Paramus, a highly structured education program designed to serve individuals with autism. However, M.G.'s educational entitlement ended on June 30, 2008. His parents applied for DDD services long before he aged out, and by letter of February 5, 1998, he was determined eligible for DDD services consisting of case management and home assistance/respite. By letter of April 19, 2007, M.G.'s parents were advised that he was placed on the DDD's priority waiting list for a community based living arrangement effective November 18, 2006.
On April 1, 2008, M.G. had his exit Individualized Education Plan (IEP) Meeting. The Child Study Team concluded that upon graduation from Alpine, M.G. needed a community-based adult day program with a low participant to staff ratio because he requires consistent implementation of behavior protocols by trained personnel and a setting that is able to provide him opportunities to continue to learn. M.G.'s parents wanted him to remain at Alpine in its highly structured adult day program after he aged out. Unfortunately, although the agency understood M.G. was a Level IV (most needy), the most it could afford to fund for a day program was $26,000 per year. Alpine, however, cost $48,000 per year plus transportation. M.G.'s parents asked the DDD to either contract with Alpine for M.G.'s placement or increase his self-directed day services (SDDS) funding to cover the cost of the program.
The record reflects that in 2010 M.G.'s Level IV budget was adjusted upward to $38,560 for medical and behavioral needs.
Transportation to Alpine was provided by NJ Transit's Service Provider First Transit program until February 2009, when NJ Transit refused to continue to transport M.G. without an aide due to two incidents of disruptive behavior. M.G.'s parents then began to transport him to and from Alpine.
By letter of May 14, 2008, Susan Marano, a DDD case manager, explained that if M.G. attended one of the contracted day programs the entire cost would be covered by the DDD. Alpine's adult program, however, was not a contracted program. She suggested M.G.'s parents consider the contracted programs at the Center for Family Support in Roselle Park or Life Skills, Inc. (Life Skills) in Somerville. Alternatively, they could use the SDDS funding to defray their cost at Alpine either permanently or pending an opening at Life Skills.
M.G. opted to use the SDDS funding to continue attending Alpine. However, by letter of March 19, 2009, through counsel, M.G.'s parents appealed the denial of funding for "necessary and appropriate services" at Alpine, asserting violations of the Developmental Disabilities Rights Act, N.J.S.A. 30:6D-1 to -12, and related state and federal law. Counsel requested an Office of Administrative Law (OAL) hearing pursuant to N.J.A.C. 10:48, placement at Alpine with costs fully paid, and reimbursement of attorney's fees and costs.
G.W. is a twenty-five-year-old man who is also cognitively and developmentally disabled due to autism. His parents are R.W. (father) and M.W. (mother). They certified that G.W. "has a history of gran mal seizures and consequently can never be left alone," requires one-on-one support for everything he does and constant supervision, is not aware of community dangers or personal safety, and "exhibits high anxiety, repetitive actions and words, difficulty focusing or paying attention, and maladaptive behaviors."
G.W. was also initially placed by his local board of education at Alpine. His educational entitlement ended on June 30, 2008. His parents applied for the DDD's services long before he aged out, and on May 4, 1994, the DDD deemed G.W. eligible for family support services. He was placed on the DDD's priority waiting list for a community based living arrangement effective March 10, 2008.
On August 13, 2008, the DDD prepared an Essential Lifestyle Plan (ELP) for G.W., which noted that he needed to be in a "a supportive and caring environment" with full-time support because of his seizures, which he had at Alpine. The ELP found that G.W. needs to attend Alpine Monday through Friday for 4.5hrs/day. A January 20, 2011 ELP provided an almost identical recommendation.
On February 14, 2009, G.W. had his exit IEP meeting during which the Child Study Team concluded that upon graduation from Alpine, G.W. needed a community-based adult day program with a low participant to staff ratio. It was recommended that G.W.'s activities include "supported work and volunteer activities in integrated community settings," and since establishing relationships with peers is difficult for G.W., it would be in his best interest to stay at Alpine so he could foster current relationships.
The DDD created a care plan for G.W. that commenced in September 2008, which provided for annual self-directed funding of $21,600 so he could attend a day program 4.5hrs/day five days a week and receive 1:1 daily lessons for the first year of the transition. However, the family was required to pay $12,319.20 for additional 1:1 support during morning and afternoon respite, tutoring, and for travel to his job and volunteer positions.
In March 2010, G.W.'s budget was increased to $31,150 annually to "reflect an increase in [G.W.'s] behavioral needs."
In a March 19, 2009 letter to the DDD, G.W.'s attorney appealed the DDD's refusal to increase the SDDS funding to cover the actual cost of Alpine. Counsel made similar arguments and demands as asserted for M.G.
In both instances the DDD advised that it determined the appeals to be non-contested matters and offered an informal conference for appellants to present new or additional information to support their position. Appellants challenged that position but agreed to participate without prejudice to their positions. Each conference took place on June 29, 2009, and was attended by the respective parents and their attorney, Herbert D. Hinkle; Marano (in M.G.'s case); Clark Gensler and Glenn Molyneaux from the DDD (in G.W.'s case); and chaired by Stephen DeLuca, the DDD's Regional Administrative Practice Officer.
Appellants' counsel sent several letters to the DDD asserting due process violations based on its significant delay in issuing the informal conference report in both instances. See N.J.A.C. 10:48-4.1(a)(3) (providing that an informal conference report shall be provided to the appellant within twenty working days of the conference). On December 6, 2010, appellants and seven other families filed a complaint for declaratory and injunctive relief in the Chancery Division, Mercer County, seeking: (1) a declaratory judgment with respect to the pending appeals; (2) an injunction requiring the DDD to transmit appellants' appeals to the Office of Administrative Law (OAL) for a contested case hearing; and (3) other appropriate relief, including attorneys' fees and costs. On February 22, 2011, the Chancery Division transferred the case to the Appellate Division. R. 2:2-3(a)(2). By order of September 6, 2011, we denied appellants' motion for summary disposition, and by order of December 8, 2011, we granted the DDD's motion to remand to issue final decisions addressing the merits of the appeals.
The DDD released the informal conference reports in late April 2011. In the reports, DeLuca summarized both parties' positions and ultimately denied appellants' requests for extra funding. DeLuca explained the DDD's support formula for providing SDDS to individuals in need of adult day activities who wished to participate in programs outside the traditional activity center or workshop setting. He found that M.G.'s "SDDS budget was established according to the standards which are used for all individuals receiving SDDS budgets[,]" and there was "no dispute of the finding of need for his original budget level based on the amount calculated as a result of the Developmental Disability Resource Tool (DDRT)." DeLuca noted that the DDD is "compelled by law to provide services to the maximum number of individuals without overspending available resources[]" and has established "objective formulas to manage its mission." He recommended that all planning meetings between the DDD and M.G.'s family "should address the effectiveness of the programming that is accessible within the budget and offer alternatives that might be available."
The DDD calculated SDDS funding based on an independent and empirical assessment conducted by the New Jersey Institute of Technology (NJIT) using the DDRT. The self-care component of the DDRT places the individual into one of four levels of self-care capability. The DDD has established a budget for each of the four levels. The DDD developed these four levels based upon its experience and expertise regarding median costs of services, available services, service providers, and the needs of individuals with developmental disabilities. If an individual has significant medical or behavioral issues, within its resources, the DDD will adjust his or her budget upward to reflect the increased need for supervision and support.
The conference report respecting G.W. contained similar information about the SDDS program. DeLuca noted that pursuant to discussions at the informal conference, a March 10, 2010 letter advised G.W.'s parents that his budget had been adjusted to $31,150 and Alpine was reimbursed retroactive to September 1, 2009. He concluded that the DDD "acted within its authority to assign a SDDS budget in lieu of traditional day program funding which is currently unavailable to [G.W.]." He noted that G.W. was not yet eligible for inclusion in the Community Care Waiver program and was awaiting addition "along with thousands of other New Jersey residents"; thus, he had no current entitlement to waiver services. He asserted that G.W. was being offered the highest level of SDDS budgeting, although he recognized it was insufficient to meet Alpine's cost structure. DeLuca recommended that the DDD's support coordinator continue working with G.W.'s family to identify appropriate day programming services that would fit his current level of budgeting, which "may include partial attendance at the Alpine Learning Center along with other creative and appropriate community opportunities that will allow for a five day schedule of weekly activities."
As noted in the final agency decision, G.W. was assessed at Level III, not Level IV.
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Appellants requested that the DDD treat their previously filed administrative appeals as continuing. They renewed their request that the matter be transferred for an OAL hearing, claiming there were factual issues such as "whether the level of self-directed services are sufficient to maximize [M.G. and G.W.]'s developmental potential." The DDD promptly offered appellants administrative paper reviews pursuant to N.J.A.C. 10:48-4.3. Appellants submitted written arguments supporting their positions. They claimed that M.G. and G.W.'s budgets were "underfunded" based on N.J.S.A. 30:6D-12.4(a), which requires the commissioner to ensure that the services provided by the DDD "maximize the developmental potential." They argued that the DDD "focused entirely on its budgetary concerns rather than [M.G. or G.W.'s] needs and the components of a self-directed day services budget that will provide [M.G. and G.W.] with a program that will meet the statutory mandate." They also asserted that the DDD was required by N.J.S.A. 30:6D-3(b) to fund M.G. and G.W.'s transportation to and from Alpine; based, in part, on principles of equity, the DDD was required to reimburse appellants for the funds they expended for services and for attorneys' fees.
In written arguments the DDD explained that both M.G. and G.W. currently received SDDS funding based on their DDRT scores with budget adjustments based on their behavioral levels. Because Alpine was similar to a traditional day program in that it had five days per week of structured programming, the agency was considering contracting with Alpine for a specific rate of $31,000 annually per person rather than using SDDS funding. However, in the interim, the DDD recommended that appellants continue to work within their current SDDS budget and urged that the recommendations of the informal conference be followed.
On September 23, 2011, the DDD's Administrative Review Officers issued recommended decisions adverse to appellants. They found there were no material facts in dispute as to the appropriateness of services; the matters solely involved appeals of the DDD's denial of appellants' requests that it increase their SDDS budgets and was not a denial of placement or services. Because the sole question involved whether the DDD acted appropriately based on the facts of the cases in administering the individual budget for the SDDS day services program, not whether Alpine was an appropriate placement, administrative review officers concluded that an OAL hearing was not warranted.
The administrative review officers additionally noted that both M.G. and G.W. received the highest available budget rate for their level based on an assessment of their needs as determined pursuant to the DDD's empirical assessment tool, the DDRT. Theresa Velazquez, the review officer for M.G., explained that his SDDS budget met the average cost of day programs, which the DDD determined to be about $22,000 annually, including transportation, and that to increase M.G.'s budget would create a hardship for the agency and other DDD clients. She further noted that the DDD was not required by statute or regulation to provide the disabled individuals' "services of choice," and M.G. could have used the alternative contracted services instead of paying the shortfall to remain at Alpine.
In addition to a similar explanation regarding G.W., Casey Woods noted the difference between the SDDS program and residential placement as follows:
[G.W.'s parents] attempt to expand the statutory obligations applicable to a residential placement to the [SDDS] program. When the [DDD] offers a specific residential placement to an individual, the [DDD] has the responsibility to ensure that the placement is the most appropriate setting designed to maximize the individual's developmental potential in the least restrictive manner. However, the [DDD]
offers various other services to individuals who are eligible for residential placements because of the Priority Waiting List and the unique needs of the vast developmentally disabled population. The [DDD] offers [SDDS] to individuals in lieu of a traditional day service program so that each individual can tailor services to his or her unique needs. [SDDS] is not a residential placement in which the [DDD] is offering a specific placement. Rather, the [DDD] works with the individual so that the individual may choose his or her own services within the assigned budget.
. . . .
The [DDD] did not assign G.W. to Alpine, [the DDD] assigned a budget. It is [G.W.'s parents'] choice to use the budget as best they see fit. . . . The [SDDS] is not an entitlement, nor does the service create any entitlement as it is based on availability of funding and appropriations. The [DDD] provides a specific budget to assist [G.W.] in procuring day programming services. This does not create an obligation for the [DDD] to pay for the full cost of services at Alpine or any other service. [The DDD] acted appropriately in denying an increase in the [SDDS] budget amount.
Appellants filed exceptions, arguing, in part, that the DDD's "administrative appeal procedure provided no opportunity for meaningful discovery, to present sworn oral testimony, to confront and cross examine agency staff, to present one's case before an impartial decision-maker and the decision is not based on evidence deduced at a hearing." They also argued that the DDD failed to identify a day program appropriate for M.G. or G.W. that would be fully funded.
On February 15, 2012, Dawn Apgar, the DDD's Acting Assistant Commissioner (AAC), issued final decisions concluding that the DDD acted properly in establishing M.G.'s and G.W.'s budgets. She noted, in part, that "traditional day services from an agency that contracts with the [DDD] continues to be available to [them], as does the option to obtain SDDS programming within [their] budget level." Moreover, both M.G.'s and G.W.'s budgets are "fully funded by the State and subject to appropriations." Accordingly, she denied appellants' requests for transportation, reimbursement, and attorneys' fees.
AAC Apgar emphasized that appellants "fail to recognize the unique nature of the SDDS program." She was satisfied the agency met the mandate of N.J.S.A. 30:6D-12.4, requiring the SDDS to be designed to maximize the developmental potential of an individual with developmental disabilities, by utilizing the DDRT, an independent assessment tool with appropriate adjustments for behavioral and medical needs. She explained that, distinct from residential placements, "the SDDS process does not involve the [DDD] 'offering' a specific day program." With SDDS, all the DDD does is assign a budget, and the individual seeks services based on his or her preferences.
AAC Apgar also found the matters were non-contested cases that did not warrant transfer to the OAL for three reasons: (1) they do not involve an appeal of determinations of ineligibility for services or of specific offers of non-waiver funded placements under the agency's appeal procedure, N.J.A.C. 10:48-22; (2) there are no disputes of material facts in dispute; and (3) there is no constitutional requirement for a trial-type hearing. These appeals ensued.
Appellants renew the following arguments on appeal:
POINT IBased on our review of the record and applicable law, we are not persuaded by any of these arguments and affirm.
THE DDD'S ACTIONS ARE ARBITRARY AND CAPRICIOUS AND UNSUPPORTED BY THE RECORD AS A WHOLE.
A. THE DDD'S REFUSAL TO FUND THE ACTUAL COST OF M.G.'s AND G.W.'S DAY PROGRAM VIOLATES [THEIR] LEGAL ENTITLEMENT TO SERVICES THAT MAXIMIZE DEVELOPMENTAL POTENTIAL.
1. THE DDD'S provision of services through Self-Directed Day Services must adhere to the Legislature's statutory mandate regarding the quality of services.
2. THE DDD cannot establish a practice or procedure without going through the administrative rulemaking process in accordance with the Administrative Procedure Act.
3. THE DDD cannot satisfy its burden that the self-
POINT IIdirected services it has offered to [M.G. and G.W.] maximize his developmental potential in a setting least restrictive of his personal liability.B. THIS COURT SHOULD ORDER THE DDD TO REIMBURSE THE FAMILY BECAUSE THE DDD FAILED TO FULFILL ITS PRESCRIBED DUTIES WHILE PUTTING THE FAMIL[IES] IN AN IMPOSSIBLE POSITION OF EITHER LEAVING THEIR SON[S] WITHOUT NECESSARY SERVICES OR FUNDING THE SHORTFALL.
ALTERNATIVELY, [THESE] MATTER[S] SHOULD BE TREATED AS CONTESTED AND TRANSFERRED TO THE OFFICE OF ADMINISTRATIVE LAW BECAUSE MATERIAL FACTS ARE DISPUTED AND M.G.'s AND G.W.'S PARENTS HAVE A CONSTITUTIONAL RIGHT TO A CONTESTED CASE HEARING.
A. [THESE ARE] CONTESTED CASE[S] BECAUSE THERE ARE MATERIAL ADJUDICATIVE FACTS IN DISPUTE.
B. M.G.'S AND G.W.'S PARENTS HAVE A CONSTITUTIONAL RIGHT TO A HEARING BECAUSE OF THE SIGNIFICANT INTEREST AT STAKE AND INADEQUACY OF PROCEDURES OFFERED BY THE DDD.
1. M.G.'s and G.W's parents' private interest at stake is of significant magnitude because the DDD has failed to provide them with services that satisfy their legal entitlement.
2. With the inadequate administrative procedures offered by the DDD, the risk of erroneous deprivation is high and employing the protections associated with a
POINT IIIhearing would significantly reduce that risk.
3. The additional procedural
safeguards associated with a hearing in the OAL are not unduly burdensome to the DDD.
M.G.'S AND G.W.'S PARENTS ARE ENTITLED TO REIMBURSEMENT FOR ATTORNEY'S FEES AND COSTS OF LITIGATION BECAUSE OF THE DDD'S FAILURE TO FULFILL ITS STATUTORY OBLIGATIONS COUPLED WITH EXCESSIVE DELAYS WHICH DENIED M.G.'S AND G.W.'S PARENTS THE DUE PROCESS OF LAW.
II.
We begin with an overview of our standard of review of administrative agency determinations. Our scope of review of an administrative agency's final determination is limited. In re Carter, 191 N.J. 474, 482 (2007). We "may reverse only if we conclude that the decision of the administrative agency is arbitrary, capricious or unreasonable, or is not supported by substantial credible evidence in the record as a whole." J.D. v. N.J. Div. of Developmental Disabilities, 329 N.J. Super. 516, 521 (App. Div. 2000) (citations omitted).
"The burden of demonstrating that the agency's action was arbitrary, capricious or unreasonable rests upon the person challenging the administrative action." In re Arenas, 385 N.J. Super. 440, 443-44 (App. Div.), certif. denied, 188 N.J. 219 (2006). See also Barone v. Dep't of Human Servs., 210 N.J. Super. 276, 285 (App. Div. 1986), aff'd, 107 N.J. 355 (1987).
Administrative 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). A regulation should be "construed in accordance with the plain meaning of its language . . . and in a manner that makes sense when read in the context of the entire regulation." Medford Convalescent & Nursing Ctr. v. Div. of Med. Assistance & Health Servs., 218 N.J. Super. 1, 5 (App. Div. 1985) (internal citation omitted). In interpreting a regulation, a reviewing court should give deference to the views of the administrative agency that implements the determinations. Barone, supra, 210 N.J. Super. at 285.
III.
Appellants argue that M.G.'s and G.W.'s current budgets are not maximizing their developmental potential as required by statute. We disagree.
The DDD is charged with providing "services for eligible persons with developmental disabilities . . . ." N.J.S.A. 30:6D-27. Moreover, "[e]very service for persons with developmental disabilities offered by any facility shall be designed to maximize the developmental potential of such persons[.]" Pursuant to N.J.S.A. 30:6D-12.4(a), this provision applies to persons with developmental disabilities receiving SDDS.
The DDD's commissioner:
shall, upon proper application for admission, forthwith admit the eligible person with a developmental disability, and provide him [or her] with appropriate functional service to the extent available. In the event that the functional service which has been specified as most appropriate . . . is not immediately available, the commissioner shall provide alternate service[.]
[N.J.S.A. 30:4-25.6 (emphasis added).]
In issuing this directive, however, the Legislature was mindful that the DDD does not have the available resources to provide the most appropriate services to every eligible individual. N.J.S.A. 30:4-25.6; N.J.S.A. 30:6D-27(a). It thus required the DDD to provide services "only to the extent available" and when the most appropriate service is not available, to provide an alternate service and place the eligible individual on a waiting list for his or her preferred service. N.J.S.A. 30:4-25.6; N.J.S.A. 30:6D-27(a). We reject appellants' argument that fiscal constraints are immaterial with regard to the provision of day services and that the DDD was legally obligated to fund the entire cost of Alpine for both M.G. and G.W., and if those were all the funds available, to place all other individuals with disabilities on the waiting list. See N.J.S.A. 30:6D-12.6 (requiring the DDD to develop self-directed services "to the extent feasible").
"By using the phrase 'to the extent available,' the Legislature contemplated that fiscal constraints may delay provision of services." J.D., supra, 329 N.J. Super. at 522. With competing claims for limited financial resources, we have recognized that the the DDD "is faced with the daunting and unenviable task of attempting to provide for a large number of clients with inadequate funding for placement of all those in need of services." Ibid. See also S.I. v. N.J. Div. Of Developmental Disabilities, 265 N.J. Super. 251, 264 (App. Div. 1993) ("Where the Legislature creates a class of beneficiaries which is greater than that which can be served by the amount of resources available for that purpose, and is silent on how to resolve the predicament, then the administrative agency may establish reasonable classifications and priorities to allocate these limited resources.").
Within this framework, the DDD established programs for services to individuals with developmental disabilities, including self-directed program funding. More specifically, the purpose of the "self-directed support services" arrangement is
to support the needs of the person with a developmental disability by allowing the
person, or his [or her] family or guardian, or both, to determine the nature and scope of services to be provided in lieu of [the agency] placing the person with a developmental disability in a residential program operated by [the agency] directly or by contracting with a residential provider of services for persons with developmental disabilities.
[N.J.S.A. 30:6D-12.3.].
Appellants were on the priority waiting list for a community based living arrangement so, after they aged out, the DDD offered alternate services in the form of traditional day services fully funded by the agency or an SDDS budget based on an objective, third-party evaluation that could be used to pay for a program of their choice. The DDRT placed M.G. in Level IV, and assigned G.W. in Level III. The DDD assigned them the highest level of funding for their classification at the time, and in fact, increased their funding based on appellants' behavioral needs. Appellants chose the self-directed option so they could remain at Alpine even though they knew their respective budgets would not cover the entire cost.
B.G. certified that the alternative programs were insufficient because Life Skills did not have any vacancies at the time, and the Center for Family Support's building was "under construction" and "very disorganized." However, M.G. could have temporarily remained at Alpine while placed on the Life Skills waiting list, and after being admitted, the entire cost would have been covered by the DDD. N.J.S.A. 30:4-25.6. Moreover, there was no evidence presented that these facilities were inappropriate, that other contracted programs would not meet appellants' needs, and that Alpine was the only appropriate program for appellants. Cf. P.F. v. N.J. Div. of Developmental Disabilities, 139 N.J. 522, 526-28 (1955) (finding dispositive the fact that the record demonstrated, and the DDD's own experts agreed, that the out-of-state institutional placement was the most appropriate for the beneficiary as compared with the New Jersey institution to which the DDD proposed transfer).
Appellants' challenges to the assigned budgets stem from a misunderstanding of the SDDS program. They argue that because their assigned budgets are less than the cost of Alpine, it automatically fails to meet the standard that "[e]very service for persons with developmental disabilities . . . shall be designed to maximize the developmental potential of such persons . . . . " See N.J.S.A. 30:6D-9; N.J.S.A. 30:6D-12.4. AAC Apgar properly rejected this argument, aptly noting that appellants were trying to apply standards used by courts with respect to residential placement to the SDDS program. The DDD did not require appellants to use their allotted funds for a program with costs exceeding their budget. As she explained, the "SDDS process does not involve the [DDD] 'offering' a specific day program." Instead, the DDD offered an SDDS budget to appellants and afforded them the flexibility to determine what services were the most appropriate based on their needs, preferences, and budgets. Appellants accepted the SDDS option and chose to use the funds for Alpine, which exceeded their budgets.
As we have rejected appellants' claim that the DDD failed to fulfill its prescribed duties, they are not entitled to retroactive reimbursement of the funds they expended for Alpine in excess of M.G.'s and G.W.'s annual SDDS budget. The issue of reimbursement is "not a mere question of discretion." S.I., supra, 265 N.J. Super. at 262. We expressly limited T.R. v. New Jersey Division of Developmental Disabilities, 249 N.J. Super. 77 (App. Div. 1991) and Rosen v. New Jersey Division of Developmental Disabilities, 256 N.J. Super. 629 (App. Div. 1992) to those circumstances where the DDD was so "manifestly mistaken" or the placement was so "arbitrary" as to warrant such extraordinary relief. The DDD's decision not to further increase M.G.'s and G.W.'s SDDS budgets to cover the cost of Alpine was a reasonable decision based on the agency's objective assessments of need and the fiscal constraints of attempting to provide appropriate services to as many disabled individuals as possible. As we are not persuaded appellants have carried their burden of demonstrating the DDD was "manifestly mistaken" in this matter, the rare equitable remedy of financial reimbursement is not warranted. Moreover, we are not convinced the record supports an order directing the DDD to pay an additional amount for SDDS for M.G. and G.W. beyond that determined under the DDRT.
Appellants further contend that the policy and procedure of the DDD to assign budgets, based on an empirical assessment conducted by NJIT using the DDRT, is entirely internal and not based on regulations promulgated after notice and comment. They argue this internal policy and procedure is "de facto rule-making," and in order to be valid, it must comply with the "requirements governing the promulgation of administrative rules in accordance with the Administrative Procedure Act (APA), N.J.S.A. 52:14B-1 to -15." We disagree.
Agencies are accorded "wide latitude in improvising appropriate procedures to effectuate their regulatory jurisdiction." Metromedia, Inc. v. Dir., Div. of Taxation, 97 N.J. 313, 333. "Administrative agencies possess the ability to be flexible and responsive to changing conditions[,]" which "includes the ability to select those procedures most appropriate to enable the agency to implement legislative policy." In re PSE&G Co. Rate Unbundling, 167 N.J. 377, 385 (2001) (internal quotation marks and citation omitted).
Not every action of a state agency requires rule-making. State v. Garthe, 145 N.J. 1, 7 (1996). "As an alternative to acting formally through rulemaking or adjudication, administrative agencies also may act informally." Nw. Covenant Med. Ctr. v. Fishman, 167 N.J. 123, 136 (2001). The Supreme Court defined informal agency action as "any determination that is taken without a trial-type hearing, including investigating, publicizing, negotiating, settling, advising, planning, and supervising a regulated industry." Id. at 136-37. Furthermore, the Supreme Court noted that "informal action constitutes the bulk of the activity of most administrative agencies." Id. at 137 (internal quotation marks and citation omitted).
We have recognized that an administrative agency "may establish reasonable classifications and priorities to allocate [its] limited resources[,]" in an attempt to serve the maximum class of individuals with developmental disabilities. See S.I., supra, 265 N.J. Super. at 264. Using the DDRT tool is an informal action used to plan and supervise the allocation of the DDD's funds to provide appropriate programs to as many clients as possible. Nw. Covenant Med. Ctr., supra, 167 N.J. at 136-37. Appellants have failed to provide any evidence to suggest that the DDD's reliance on the DDRT's calculations to allocate its limited resources is unreasonable. See S.I., supra, 265 N.J. Super. at 264. In fact, the DDRT establishes reasonable classifications by creating four different levels of funding, and this permits the DDD to allocate its limited funds in a sensible manner. This is in accordance with N.J.A.C. 10:40-1.1(a)(12).
We also disagree with appellants that the administrative procedures offered by the DDD were inadequate and that they are entitled to an OAL hearing by statute or regulation, or based on a constitutional right. See N.J.A.C. 10:48-3.1(a) (providing that appeals regarding non-waiver services funded by State dollars alone are non-contested unless other statutory or regulatory rights to a hearing exists). As noted by AAC Apgar, these appeals do not involve a denial of a placement decision but, rather, a denial of an increase in appellants' SDDS budget. Hearings are required for appeals of offers of placement because "expert witnesses would be expected to testify concerning the types of services best suited to the client's unique needs" and "witnesses would be likely to address the factors that determine which placement would best achieve the person's habilitative goals, and the level of restriction on the client's liberty that is dictated by the level of handicap." J.E ex rel G.E. v. Dep't of Human Servs., 131 N.J. 552, 566 (1993). In contrast, these appeals involve only the issue of whether M.G.'s and G.W.'s budgets are sufficient to cover the cost of Alpine.
Nor are we persuaded that there are material facts in dispute that warrant an OAL hearing. "[N]ot every factual dispute need be referred to [the] OAL as a contested case." J.D., supra, 329 N.J. Super. at 525. Entitlement to a trial-type hearing in administrative proceedings "is generally limited to the situation where adjudicatory facts -- that is, facts pertaining to a particular party -- are in issue." High Horizons Dev. Co. v. N.J. Dep't of Transp., 120 N.J. 40, 49 (1990) (internal quotation marks and citations omitted). Adjudicative facts "usually answer the question of who did what, where, when, how, why, with what motive." Ibid. Furthermore, "[i]t is the presence of disputed adjudicative facts, not the vital interests at stake, that requires the protection of formal trial procedure." J.D., supra, 329 N.J. Super. at 525 (citing High Horizons Dev. Co., supra, 120 N.J. at 53).
Here, it is undisputed that after M.G. and G.W. graduated from their educational entitlements, their families chose to receive SDDS funding instead of a traditional day service from the DDD. M.G. was evaluated through the DDRT at Level IV, the highest level of care in the DDRT matrix, and G.W. was at Level III. M.G. was assigned a $26,000 budget and G.W. was assigned a $21,600 budget, adjusted upwards to $38,560 and $31,150, respectively, for medical and behavioral needs. M.G. and G.W. chose to use their budgets to fund part of the costs at Alpine knowing there would be shortfall for which they would be responsible.
When the DDD determined the matters were non-contested, it properly offered an informal conference pursuant to N.J.A.C. 10:48-3.1(b), and adequate review of appellants' claims. The decisions from the informal conference, appeal, and final agency decision were all issued by different administrators. Appellants were permitted to present new and additional information to support their positions at the informal conference, written arguments for the appeal, and exceptions to the recommended decision for the final agency decision. Although we do not countenance the DDD's delay in issuing its informal conference report, we discern no denial of due process in that regard. We are not convinced the nature of the review and significant time for completion by the DDD violated the principles of fundamental procedural fairness or rendered its "proceedings as a whole" to result in a "seriously unfair disregard of appellant[s'] rights to warrant reversal. See In re Arndt, 67 N.J. 432, 436 (1975) (reversing the appellant's six-month suspension of her driver's license based on the three year delay between her refusal to submit to a breath chemical test and the issuance of a notice of proposed suspension). While appellants may be disappointed in the decisions reached by the DDD or delay in resolution of the cases, they cannot logically argue that the procedures were unjust.
Appellants do not have a constitutional right to a contested case hearing in this matter. We are satisfied the administrative appeal procedure offered by the DDD is adequate to protect M.G.'s and G.W.'s interests. See Mathews v. Eldridge, 424 U.S. 319, 96 S. Ct. 893, 47 L. Ed. 2d 18 (1976) (holding that the risk of erroneous deprivation of that interest through the agency procedures used, and the probable value of additional or substitute procedural safeguards is one of the factors considered in assessing whether a hearing is constitutionally required).
Lastly, appellants argue they are entitled to reimbursement for attorneys' fees and costs of litigation because they have demonstrated viable federal procedural due process claims based, in part, on the DDD's failure to transmit the appeal to the OAL as a contested case. See U.S.C.A. § 1983; Hosp. Ctr. at Orange v. Guhl, 331 N.J. Super. 322, 338 (App. Div. 2000) (holding that "[a]ttorney's fees are recoverable in a § 1983 action if the plaintiffs prevail on a state law issue arising from the same nucleus of common facts as the federal claims, provided the federal claims are substantial enough to support federal jurisdiction") (citations omitted).
We have concluded the DDD properly declined to transmit these appeals to the OAL. We further concluded the agency did not violate appellants' due process rights and was neither arbitrary nor capricious in its handling of these matters. Accordingly, appellants are not entitled to reimbursement of fees and costs.
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION