Court Opinion

ID: 9902443
Source: CourtListenerOpinion
Date Created: 2023-11-27 15:06:51.53289+00
Date Added: 2024-06-11T09:21:51.408810
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                                APPROVAL OF THE APPELLATE DIVISION
        This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
     internet, this opinion is binding only on the parties in the case and its use in other cases is limited . R. 1:36-3.

                                                         SUPERIOR COURT OF NEW JERSEY
                                                         APPELLATE DIVISION
                                                         DOCKET NO. A-0709-21

BOARD OF EDUCATION OF THE
TOWNSHIP OF LAKEWOOD,
OCEAN COUNTY,

          Petitioner-Appellant,

v.

NEW JERSEY DEPARTMENT OF
EDUCATION and KATHLEEN
EHLING,

     Respondents-Respondents.
______________________________

                   Argued October 17, 2023 – Decided November 27, 2023

                   Before Judges Whipple, Enright and Paganelli.

                   On appeal from the New Jersey Commissioner of
                   Education, Docket No. 152-7/20.

                   Edward J. Dauber and Michael I. Inzelbuch argued the
                   cause for appellant (Greenberg Dauber Epstein &
                   Tucker, PC and Michael I. Inzelbuch, attorneys;
                   Edward J. Dauber, Michael I. Inzelbuch and Michael
                   Harris Freeman, on the briefs).
            Matthew J. Lynch, Deputy Attorney General, argued
            the cause for respondents (Matthew J. Platkin, Attorney
            General, attorney; Donna Sue Arons, Assistant
            Attorney General, of counsel; Michael Czarnecki and
            Christopher W. Weber, Deputy Attorneys General, on
            the brief).

PER CURIAM

      In this appeal we are presented with a narrow question of whether a final

agency decision (FAD) of the Commissioner of Education was arbitrary and

capricious because it was based upon an improper method of calculation. We

affirm.

      Federal funds are provided to school districts to supplement special

education services pursuant to the Individuals with Disabilities Education Act

(IDEA), 20 U.S.C. §§ 1400 to 1482. The federal regulations require states to

monitor school districts and determine whether there is "significant

disproportionality" with respect to the racial composition of students in specific

areas of special education. States are charged with determining the calculations

that constitute disproportionality. If a district has disproportionality for three

consecutive years in one area, it must use 15% of its IDEA grant for

Comprehensive Coordinate Early Intervening Services (CCEIS) to determine

the root causes of the disproportionality and to address those causes.

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       In April 2020, the New Jersey Department of Education (DOE or

Department) informed the Lakewood Board of Education (BOE or the Board)

that Lakewood Public School District (Lakewood or District) had significant

disproportionality for three consecutive years in five areas of special education.

In those five categories, Lakewood's risk ratios exceeded the State's threshold

of 3.0.    District White students were disproportionally identified in four

categories, and Black students were disproportionately represented in total

disciplinary removals. As a result, DOE instructed Lakewood to use 15% of its

IDEA funding to address the disproportionality.

       The Board appealed the disproportionality determination, but the DOE

commissioner affirmed it, issuing an FAD. BOE now appeals here, arguing the

decision was arbitrary and capricious because it was based upon factual errors

and an improper methodology of calculation.

                                        I.

       Under Part B of the IDEA, 20 U.S.C. §§ 1400 to 1482, states receive

grants which they must allocate to local educational agencies (LEAs) 1 with the

goal of ensuring the provision of a "free and appropriate public education" for

students with disabilities. In order for LEAs to receive federal assistance, the

1
    We use the terms "LEA" and "school district" interchangeably.
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                                        3
IDEA requires states to determine whether "significant disproportionality based

on race and ethnicity" is present within (1) the identification of children as

children with disabilities; (2) the placement in particular educational settings of

such children; and (3) disciplinary actions against those students in any LEA

within a state. 20 U.S.C. § 1418(d); 34 C.F.R. §§ 300.646 & 300.647. Under

the IDEA, state departments of education must calculate risk ratios and

determine whether districts are significantly disproportionate. Ibid. If a state

finds any significant disproportionality in an LEA, it must require the LEA to

reserve "the maximum amount of funds [defined elsewhere in the statute] . . . to

provide [CCEIS] to serve children" in the LEA. 20 U.S.C. § 1418(d)(2).

      "Disproportionality" occurs when more individuals from a particular

group are experiencing a given situation than one would expect based on that

group's representation in the general population. See 20 U.S.C. § 1418(d); 34

C.F.R. §§ 300.646 & 300.647. Disproportionality is considered "significant"

when overrepresentation of a group exceeds a specific risk ratio threshold, set

by each individual state. 34 C.F.R. §§ 300.647(a)(7) and (b)(1)(ii). A "ri sk

ratio" is the measure of a specific racial or ethnic group's risk, as compared to

all other children, of special education identification or placement or of

discipline of special education students. 34 C.F.R. §§ 300.647(a)(5) and (6). A

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risk ratio for each category is calculated by determining the risk that a group of

children in the LEA will receive the particular treatment (e.g., identification,

placement, or discipline) and comparing that risk with the risk faced by other

comparable children in the district.

      For instance, to determine whether there is significant disproportionality

for Black children receiving a particular special education identification, the

state would calculate the risk for Black children by dividing the number of Black

children receiving that identification by all Black children in the LEA. See 34

C.F.R. §§ 300.647(a)(5).     Then, the risk of all other children in the LEA

receiving that identification is calculated by dividing the number of non -Black

children in that category by the total number of non-Black children in the

district. See 34 C.F.R. §§ 300.647(a)(5) and (6). Finally, the risk for Black

children is then divided by the risk for all other children, resulting in the risk

ratio for Black children in that category. See ibid.

      States have an obligation to collect and examine data and determine

whether there is significant disproportionality based on race or ethnicity in the

LEAs. 20 U.S.C. § 1418(d); 34 C.F.R. § 300.646. There are fourteen categories

for which states must calculate risk ratios. 34 C.F.R. §§ 300.647(b)(3) and (4).

With regard to determining which particular data to use, the regulations

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specifically state that data pertaining to children "enrolled in an LEA" or "within

an LEA" are to be used in conducting these calculations. 34 C.F.R. §§ 300.647

(a)(1), (2), (4), (5), and (6).

      If an LEA is determined to have significant disproportionality in any one

of the enumerated areas for three consecutive years, it must set aside 15% of its

IDEA Part B funds for the implementation of CCEIS.                  20 U.S.C. §

1418(d)(2)(b); 34 C.F.R. § 300.646(d). There is no provision that would allow

a particular state to waive the statutory remedy for an LEA identified with

significant disproportionality. See ibid.

                                        II.

      In December 2016, the United States Department of Education (USDOE)

issued new regulations changing the way each state would identify districts with

significant disproportionality. 81 Fed. Reg. 92376, 92378 (Dec. 19, 2016). The

2016 regulations required states to use risk ratios to analyze disparities across

racial and ethnic groups, while providing each state with the discretion to

determine the appropriate risk ratio threshold that would be used to determine

significant disproportionality. 81 Fed. Reg. 10968, 10981 (Mar. 2, 2016); 34

C.F.R. § 647(a)(6).

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      Following litigation in federal court over a proposed delay in the

implementation of the regulations, Council of Parent Attys. & Advocates, Inc.

v. DeVos, 365 F. Supp. 3d 28 (D.D.C. 2019), the 2016 regulations took effect

on March 17, 2019. Due to the timing of the decision, which was close to the

time in which the DOE conducted its risk ratio calculations, DOE used a hybrid

model for identifying districts with significant disproportionality for the 2019 -

2020 grant year.     In this hybrid model, significant disproportionality was

identified only in school districts that had both (1) met the risk ratio threshold,

and (2) had been previously identified for significant disproportionality. This

hybrid model allowed both DOE and the LEAs to prepare for the changes that

would be implemented.        For the following grant year, 2020-2021, DOE

implemented the risk ratio model as set forth in the 2016 Regulations and

implemented by the court in DeVos. Therefore, the first time DOE fully used

the 2016 regulations, which were intended to more accurately determine areas

of significant disproportionality, was in the spring of 2020 for the upcoming

2020-2021 grant year.

      States select their own risk ratio thresholds for determining significant

disproportionality so long as they are reasonable and are developed based on

input from stakeholder districts. 34 C.F.R. § 300.647(b). Accordingly, in

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preparation for the implementation of the 2016 regulations, DOE held meetings

with stakeholders on May 18 and October 19, 2017, to discuss the calculations

of significant disproportionality conducted in the spring that would apply to the

following grant year—e.g., a calculation done in the spring of 2020 would be

applicable to the 2020-2021 grant year. At both meetings, participants discussed

the updates to the calculation of significant disproportionality. They were also

afforded the opportunity to give recommendations for New Jersey's risk ratio

threshold   and    for   handling     districts   identified   with   significant

disproportionality. DOE also worked collaboratively with federal technical

assistance centers such as the IDEA Data Center, the National Center for

Systemic Improvement, and the Center for IDEA Fiscal Reporting to ensure the

best and most appropriate risk ratio threshold would be used. At the culmination

of these efforts, DOE determined its appropriate risk ratio threshold would be

3.0, its minimum cell size would be ten, 2 and a minimum n-size of 30 3 would be

2
  A minimum cell size is the "minimum number of children experiencing a
particular outcome, to be used as the numerator" when calculating risks. 34
C.F.R. § 300.647(a)(3).
3
  A minimum n-size is the "minimum number of children enrolled in an LEA
with respect to identification, and the minimum number of children with
disabilities enrolled in an LEA with respect to placement and discipline, to be
used as the denominator" when calculating risks. 34 C.F.R. § 300.647(a)(4).
                                                                           A-0709-21
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chosen. These numbers are presumptively reasonable under federal regulations.

34 C.F.R. § 300.647(b)(1)(iv)(A) and (B).

                                       III.

      In New Jersey, the data used to calculate an LEA's risk ratio is collected

through two web-based systems: NJ SMART Reporting, and Student Safety

Data System (SSDS). Both systems are maintained by DOE, but the actual

information on the systems comes directly from the LEAs. Based on the data

provided by Lakewood through NJ SMART and SSDS, DOE determined some

of Lakewood's risk ratios for special education identification and placements

were significantly disproportionate in 2020. That meant, for the previous three

years, Lakewood's risk ratios exceeded the State threshold in four categories:

White students with autism, White students with intellectual disability, White

students with all eligibilities, and White students placed in separat e education

settings.

      In other words, the number of White students within each respective

category, as compared to the total number of White students in the district

overall,4 was significantly disproportionate to the number of all other students

4
  In placement categories, such as students placed in separate education settings,
the number of White students within each respective category is compared to
the total number of White students with disabilities in the district overall.
                                                                            A-0709-21
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within each respective category, meaning the risk ratio in each category

exceeded the state threshold of 3.0. That is, for example, White children were

at least three times more likely to be identified as having autism than were non -

White children in the district. Consistent with the IDEA, DOE completed its

calculations using the student population enrolled in the district's public schools

but did not include those students enrolled in non-public schools.

      DOE also calculated risk ratios for disciplinary removals, which it must

do for children with disabilities ages six through twenty-one. 34 C.F.R. §

300.647(b)(4)(ii). To determine if an LEA is significantly disproportionate for

disciplinary removals, DOE reviews five categories, all of which can have their

own finding of significant disproportionality: "out-of-school suspensions and

expulsions of [ten] days or fewer"; "out-of-school suspensions and expulsions

of more than [ten] days"; "in-school suspensions of [ten] days or fewer"; "in-

school suspensions of more than [ten] days"; and "disciplinary removals in

total." 34 C.F.R. § 300.647(b)(4)(iii)–(vii). The first four disciplinary risk

ratios are calculated using the number of students who faced those disciplinary

actions.   The fifth, however, is calculated based on the total disciplinary

removals, as the category's name suggests. Lakewood's data indicated that a

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significantly disproportionate number of total disciplinary removals occurred

among Black special education students.

      Consistent with the IDEA, DOE reached its calculations regarding

significant disproportionality as to disciplinary removals using the student

population enrolled in its public schools but did not include those students

enrolled in non-public schools. See 34 C.F.R. § 300.647(b).

      Lakewood has a demographic situation unique in the State and possibly in

the nation, inasmuch as the non-public school population is six times that of the

public school population.     Nationally, and in the rest of New Jersey, the

percentage of students enrolled in non-public schools is 11% or 12%, but in

Lakewood it is 88%.5

      On April 6, 2020, DOE notified BOE the DOE had calculated the District's

risk ratios and found that it was significantly disproportionate in five categories.

As such, Lakewood would be required to allocate 15% of its 2020-2021 IDEA

5
  The National and New Jersey figures are taken from New Jersey Education
Data, TownCharts, https://www.towncharts.com/New-Jersey/New-Jersey-state-
Education-data.html (last visited Nov. 15, 2023) (based on data collected via the
American Community Survey, administered by the U.S. Census Bureau). The
Lakewood figure is obtained by dividing the number of nonpublic students in
the district (39,513) by the total number of students in the district (44,978).
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Part B funding for CCEIS to identify and address the underlying causes of the

disproportionality.

      In response, BOE provided a June 1, 2020 expert report from Sue Gamm,

Esq., disputing the Department's calculations. Notably, Gamm included non -

public students in her analysis of special education placements.         As to

disciplinary removals, Gamm agreed non-public students could not be included

due to a lack of data and acknowledged there was significant disproportionality

for total disciplinary removals of Black students in the district.

      On June 24, 2020, in response to Lakewood's inquiry, DOE provided BOE

with the raw data used to calculate Lakewood's disciplinary removal findings.

      On July 1, 2020, Lakewood petitioned DOE's Office of Controversies and

Disputes, naming as respondents DOE and Kathleen Ehling, its Director of the

Office of Fiscal and Data Services. Lakewood challenged the DOE's significant

disproportionality determination, and argued the DOE's findings should have

included non-public students. Its three-count petition alleged violations of

substantive and procedural due process, and "the [c]ivil [r]ights of [p]ublic

[s]chool [s]tudents." The matter was transferred to the Office of Administrative

Law as a contested case, and—at the conclusion of discovery—both parties filed

motions for summary decision, which included a joint stipulation of facts.

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      In his July 20, 2021 decision granting DOE's motion, the Administrative

Law Judge (ALJ) found Lakewood crossed the 3.0 risk ratio threshold and was

significantly disproportionate in the following categories: White-autism, 6.85;

White-intellectual disability, 13.87; White-all eligibilities, 3.35; White-separate

settings, 14.38; and Black-total disciplinary removals, 8.42. The ALJ also found

there was no factual dispute about the mathematical calculations. The ALJ

found Lakewood was provided the raw data used to calculate the disciplinary

removal findings on June 24, 2020. The ALJ concluded DOE had complied with

the regulations and requirements of the IDEA as written and was not required to

include non-public students in their calculations. The ALJ noted the dispute did

not pertain to the accuracy of the data, but rather "whether students placed in

private schools should be considered in computing the ratio to determine

disproportionality." The ALJ determined DOE's decision to exclude non-public

students in the computation of the risk ratio was not arbitrary or capricious,

noting there was no requirement that a state consider such students in their

calculations. Although Lakewood contended the reason for disproportionality

is the large number of students residing in Lakewood that attend non-public

schools, the ALJ concluded "[u]ncovering the factor(s) causing the discrepancy

is the purpose of the CCEIS fund allocation."

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                                       13
      The ALJ also rejected Lakewood's procedural due process claim, noting

there is no requirement for early notification a district might be identified as

being significantly disproportionate. But, DOE did advise Lakewood in October

2018 of the change in risk ratio thresholds and that Lakewood was at risk of

exceeding them.

      As the ALJ observed, "[t]hat Lakewood chose not to follow up with the

State or to look at the data it was submitting annually to the State and perform

its own calculations does not mean that the State failed to provide adequate

notice to the LEA." He further found Lakewood was not entitled to attend any

stakeholder meetings, because there is no requirement to invite Lakewood, or

any other specific district.

      The ALJ granted DOE's motion for summary decision and held Lakewood

was required to use 15% of its total IDEA Part B funds for CCEIS ($1,442,938).

      On October 18, 2021, the Commissioner issued her decision agreeing with

the ALJ, granting DOE's motion for summary decision, and dismissing

Lakewood's petition. She agreed with the ALJ that the Department's decision to

set the risk ratio at 3.0, and to apply a uniform methodology without making an

exception for Lakewood's specific circumstances, was not arbitrary, capricious,

or unreasonable and so did not violate substantive due process.             The

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                                      14
Commissioner explained DOE "was not obligated to deviate from its chosen

calculation methodology to address Lakewood's private school population[,]"

and that DOE "complied with the federal regulations and requirements of the

IDEA as they are written." She further noted Lakewood failed to cite any

provision within the federal regulations that would require the Department to

include private school students in its calculations. On the other hand, she

explained, 34 C.F.R. § 300.647 "repeatedly refers to students 'enrolled in the

LEA' or 'within the LEA,' supporting the [DOE's] decision to include only public

school students in the disproportionality calculations." (footnote omitted).

      The Commissioner also rejected Lakewood's argument that the "root cause

for Lakewood's disproportionality is that many White parents in Lakewood send

their White children to private schools." She reasoned, "while the [DOE] is

aware of those demographic circumstances, it does not necessarily follow th at

the demographics are the root cause of disproportionality among Lakewood's

public school students." She explained "[t]he purpose of calculating significant

disproportionality and setting aside CCEIS funds is to identify and address

contributing factors, 34 C.F.R. § 300.646," and thus she disagreed that "an

assumption based on Lakewood's demographics sufficiently analyzes or

addresses possible causes."     The Commissioner also rejected Lakewood's

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procedural due process claims, finding there is "no dispute that the DOE issued

a notice to the Board when it was found to be significantly disproportionate."

The Commissioner pointed out there were at least two occasions when DOE

"notified Lakewood that it was trending towards disproportionality[,]" as well

as the fact Lakewood clearly had an opportunity to be heard, given that it was

engaged in an administrative proceeding.         She also held there was no

requirement that specific districts attend stakeholder meetings, and Lakewood

was, therefore, not entitled to attend those meetings.

      The Commissioner agreed with the ALJ that Lakewood was required "to

set aside $1,442,938—15% of its total IDEA grant funds—for CCEIS programs

at Lakewood's public schools." The Commissioner also emphasized she did not

have any discretion regarding the 15% reservation of IDEA Part B funds,

explaining that, under 20 U.S.C. § 1418(d)(2), "a state shall require the district

to reserve the maximum amount of funds to provide CCEIS[.]" (emphasis in

original). And given that 20 U.S.C. § 1413(f)(1) sets the maximum amount of

funds at 15%, she concluded those "provisions do not afford the Commissioner

any discretion to reduce the amount of CCEIS funds that [Lakewood] is required

to set aside." Finally, the Commissioner also denied Lakewood's motion to

supplement the record under N.J.A.C. 1:1-18.4(c), holding there is no provision

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under the Uniform Administrative Procedure Rules or N.J.A.C. 6A:3 that

permitted for the supplementation of the record before her. She noted under

N.J.A.C. 1:1-18.4(c), "[e]vidence not presented at the hearing shall not be

submitted as part of an exception, nor shall it be incorporated or referred to

within exceptions." This appeal followed. 6

                                       IV.

      Our review of an agency decision is limited. Circus Liquors, Inc. v.

Middletown Twp., 199 N.J. 1, 9 (2009). Our review is focused on: (1) whether

the agency followed the law; (2) whether the agency's decision is supported by

substantial evidence in the record; and (3) whether in applying the law to the

facts, the agency reached a supportable conclusion. See City of Jersey City v.

Jersey City Police Officers Benev. Ass'n, 154 N.J. 555, 567 (1998). Absent a

"clear showing" that the agency's decision is "arbitrary, capricious, or

unreasonable, or that it lacks fair support in the record," an agency's final

decision should be upheld, "regardless of whether a reviewing court would have

6
  On March 10, 2022, we granted Lakewood's motion to supplement the record
with materials outside the record before the Commissioner—including, but not
limited to, training materials the Department produced, Lakewood's contracts
and proposals for CCEIS, and emails and attached documents between the
Department and Lakewood's agents—but noted in our order the Department may
argue that the materials should not be factored into considering the merits of the
appeal.
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                                       17
reached a different conclusion in the first instance." Circus Liquors, 199 N.J. at

9. "If the agency decision satisfies these criteria, [the court is] bound to give

substantial deference to the agency's fact-finding and legal conclusions, while

acknowledging the agency's 'expertise and superior knowledge of a particular

field.'" Twp. Pharmacy v. Div. of Med. Assistance & Health Servs., 432 N.J.

Super. 273, 284 (App. Div. 2013) (quoting Circus Liquors, 199 N.J. at 10).

      A strong presumption of reasonableness is accorded to agency decisions,

and the court should not substitute its "judgment for the wisdom of agency action

if that action is statutorily authorized and not arbitrary or unreasonable." Bd. of

Educ. of Englewood Cliffs v. Bd. of Educ. of Englewood, 257 N.J. Super. 413,

455 (App. Div. 1992). As long as the agency decision is contemplated under its

enabling legislation, the "action must be accorded a presumption of validity and

regularity." Ibid. And where, as in this case, "special expertise is required, . . .

an even stronger presumption of reasonableness exists." Ibid. Thus, while we

examine legal questions de novo, we are "mindful of an administrative agency's

day-to-day role in interpreting statutes 'within its implementing and enforcing

responsibility.'"   In re State Bd. of Educ.'s Denial of Petition to Adopt

Regulations Implementing N.J. High Sch. Voter Registration Law, 422 N.J.

                                                                              A-0709-21
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Super. 521, 530-31 (App. Div. 2011) (quoting Wnuck v. N.J. Div. of Motor

Vehicles, 337 N.J. Super. 52, 56 (App. Div. 2001)).

      States must comply with federal law in fulfilling their obligations under

the IDEA. Here, DOE considered only those students enrolled in the districts'

public schools in its methodology for determining whether public school

districts are disproportionately subjecting certain subgroups of special education

students to different treatment. The IDEA defines a "local educational agency"

as

            a public board of education or other public authority
            legally constituted within a State for either
            administrative control or direction of, or to perform a
            service function for, public elementary schools or
            secondary schools in a city, county, township, school
            district, or other political subdivision of a State, or for
            a combination of school districts or counties as are
            recognized in a State as an administrative agency for its
            public elementary schools or secondary schools.

            [34 C.F.R. § 303.23(a) (emphasis added).]

      States are required to determine risk, defined as "the likelihood of a

particular outcome (identification, placement, or disciplinary removal) for a

specified racial or ethnic group (or groups)." 34 C.F.R. § 300.647(a)(5). That

is calculated "by dividing the number of children from a specified racial or

ethnic group (or groups) experiencing that outcome by the total number of

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children from that racial or ethnic group or groups enrolled in the LEA." Ibid.

(emphasis added). The "risk ratio," in turn, is calculated by "dividing the risk

of a particular outcome for children in one racial or ethnic group within an LEA

by the risk for children in all other racial and ethnic groups within the LEA." 34

C.F.R. § 300.647(a)(6) (emphases added). Based on this language, New Jersey

established a formula for calculating risk that divided the number of children of

a specified racial or ethnic group in the LEA experiencing a particular outcome

by the total number of children from that racial or ethnic group enrolled in the

LEA. See 34 C.F.R. §300.647(a)(5). This approach follows the plain letter of

the regulation, because the purpose of the disproportionality calculation is to

identify where districts are treating certain public-school students differently

based on their characteristics. See 34 C.F.R. § 300.646(a) (requiring states

receiving IDEA Part B funds "to determine if significant disproportionality

based on race and ethnicity is occurring in the   . . . LEAs of the State").

      Significantly, public school districts do not determine the special

education placements for students parentally placed in private schools. In our

view, it is consistent with the IDEA for the DOE to calculate risk ratios based

solely on children enrolled in the LEA and excluding non-public students. Thus,

when DOE calculated Lakewood's risk ratios without considering its parent -

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chosen, private school students, DOE properly found there was significant

disproportionality in Lakewood because the district exceeded the risk ratio

threshold of 3.0 in four special education identification or placement categories.

In doing so, DOE followed the law and properly calculated those risk ratios

using data from students enrolled in the LEA—while excluding from its

calculations consideration of students enrolled by their parents in private, non -

public schools. The USDOE has stated districts were not required to include

non-public students in disproportionality calculations. 7 The commissioner

agreed, finding "no such requirement in the applicable law[,]" and that 34 C.F.R.

§ 300.647 "repeatedly refers to students 'enrolled in the LEA' or 'within the

LEA,' supporting the [DOE's] decision to include only public school students in

the disproportionality calculations."

      Districts have little to no control over special education placement

determinations by private schools and we do not consider it unreasonable for

states to exclude those non-public school students from the disproportionality

calculation. Although Lakewood has certain duties and responsibilities under

7
  Memorandum from William W. Knudsen, Acting Director, Office of Special
Education Programs, USDOE to Chief State School Officers and State Directors
of Special Education. 9 ¶14 (July 28, 2008) (https://www2.ed.gov/policy/
speced/guid/idea/ceis-guidance.pdf).
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the IDEA to provide services to non-public school students attending private

schools located in Lakewood, those services are not the same as the

identification and placement actions at issue in the disproportionality review.

Lakewood is correct it must provide "child find," consultation, and other

services to private school students, but this has no bearing on whether the district

engages in significant disproportionality with respect to students enrolled in the

LEA. Under the IDEA, children who are parentally placed in private schools do

not have an individual entitlement to the special education and related services

they would receive if they were enrolled in public schools. The IDEA requires

the LEA to engage in timely and meaningful consultation to determine which

parentally placed children with disabilities will be designated to receive special

education and related services. But it is possible and permissible under the

IDEA that some of these parentally placed children with disabilities will not

receive any special education and related services.

      Lakewood argues the only root cause for its disproportionality is its

demographics and it is pointless to require Lakewood to use IDEA funds to

examine that further.      We have previously recognized the demographic

peculiarities present in Lakewood, Alcantara v. Allen-McMillan, 475 N.J.

Super. 58 (App. Div. 2023), but it does not necessarily follow that the

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demographics are the root cause of the disproportionality among Lakewood's

public-school students. Although demographics may be a contributing factor,

without further investigation, we conclude it would be arbitrary and capricious

to presume it is the only factor.

      We are not persuaded the DOE's decision to perform Lakewood's

disproportionality calculations based only on the students enrolled in public

schools was arbitrary, capricious, or unreasonable.           Lakewood argues the

Department's calculations of disproportionality were "skewed, unrepresentative,

and unreliable" only "because the public school and non[-]public school

populations are markedly different" than other districts. Utilizing the Gamm

report, the Board asserts that, had DOE considered all students residing in

Lakewood, there would have been no instances of significant disproportionality

involving White students. This may be true, in as far as it goes. Lakewood's

focus on its White student population, however, is itself skewed,

unrepresentative, and unreliable, because, had DOE factored in all students

residing in Lakewood—as Lakewood advocates—there would almost certainly

have been even more instances of significant disproportionality—only these

would    have    been    reflected   in        Black   and   Hispanic   populations.

Disproportionality is not eliminated by simply increasing the quantity of

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individuals in a population.    Disproportionality can only be eliminated by

stabilizing the proportions among the separate populations being examined,

because Lakewood's student population is significantly disproportionate.

                                       V.

      We reject Lakewood's argument that it should be permitted to divert only

15% of the portion of the IDEA grant allocated to public school students, rather

than being required to divert 15% of its total IDEA grant.         The relevant

regulations and statutes do not allow the remedy Lakewood advocates.

      Federal law requires any LEA that is identified by a state as significantly

disproportionate must reserve the maximum amount of funds required under 20

U.S.C. § 1413(f) in order to provide CCEIS. 20 U.S.C. § 1418(d)(2). Under 20

U.S.C. § 1413(f)(1), the maximum amount of funds permitted is 15% of the

LEA's IDEA Part B funding. Thus, the statute expressly requires the LEA to set

aside 15% of the total funds received toward providing CCEIS. 20 U.S.C. §

1413(f)(1); see also 20 U.S.C. § 1418(d)(2)(b) (requiring the State to direct the

LEA to reserve funds for the provision of CCEIS to address factors contributing

to significant disproportionality); 34 C.F.R. § 300.646(d) (same).       As the

Commissioner found, this 15% set-aside is mandatory, and she has no discretion.

See 20 U.S.C. §§ 1413(f)(1) and 1418(d)(2). Plus, the regulations specifically

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state that "[n]othing in this section authorizes a State or an LEA to develop or

implement policies, practices, or procedures that result in actions that violate

the requirements of this part[.]" 34 C.F.R. § 300.646(f). The Commissioner

followed this federal mandate and required that the district reserve $1,442,938

for CCEIS programs at Lakewood's public schools.

      Lakewood contends the reservation of these funds for CCEIS would be

counter-productive because it would result in a reduction of its special education

services budget for public schools by depriving the District of funds that are

used "primarily to supplement expensive and much-needed, out-of-district

placements[.]" But the IDEA requires, and USDOE guidance has confirmed,

the mandatory 15% reservation of total IDEA Part B funds was intended to be

drawn from districts' total allocation. Memorandum from William W. Knudsen,

Acting Director, Office of Special Education Programs to the Chief State School

Officers and State Directors of Special Education ("ceis-guidance.doc" available

from https://www2.ed.gov) ("[A]n LEA may not deduct funds for equitable

services for students parentally-placed in private schools before calculating the

15%. An LEA that is required to use funds for [CCEIS] because of significant

disproportionality must use 15% of the total Part B funds awarded to the LEA.");

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see also 20 U.S.C. § 1418(d)(2)(B); 31 U.S.C. § 1413(f)(1); 34 C.F.R. §

300.646(d). DOE retains no discretion in this regard.

      Even with the 15% deduction, Lakewood will still retain all its publicly-

allocated Part B funds. A portion of that allocation, however, must simply be

earmarked for CCEIS. The entire purpose of requiring a 15% reservation of

funds for CCEIS is to identify and address factors contributing to significant

disproportionality in public schools. See 20 U.S.C. § 1418(d)(2)(B); 34 C.F.R.

§ 300.646(d)(1)(ii).      The regulations mandate that, when significant

disproportionality is identified, IDEA Part B funds are earmarked to "identify

and address" the types of factors that contribute to significant disproportionality,

which could include a "lack of access to scientifically based instruction;

economic, cultural, or linguistic barriers to appropriate identification or

placement in particular educational settings; inappropriate use of disciplinary

removals; lack of access to appropriate diagnostic screenings; differences in

academic achievement levels; and policies, practices, or procedures that

contribute to the significant disproportionality." 34 C.F.R. § 300.646(d)(1)(ii).

      Funds reserved for CCEIS may go to "activities that include professional

development and educational and behavioral evaluations, services, and

supports." 34 C.F.R. § 300.646(d)(1)(i). The IDEA requires Lakewood to

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reserve 15% of its overall IDEA Part B funds, and then draw that amount from

its public allocation, in order to address and rectify the root causes for significant

disproportionality. Lakewood still has funding for a wide variety of service s

under 34 C.F.R. § 300.646(d)(1)(i)—the same type of services for which

Lakewood would use IDEA Part B funds. The regulation broadly allows for the

provision of services spanning across "professional development and

educational and behavioral evaluations, services, and supports." Lakewood

cannot use those funds for tuition to private schools, which makes sense given

that one of the areas for which Lakewood was identified as being significantly

disproportionate is the number of White students placed in separate education

settings such as private schools.

      Because Lakewood has not raised on appeal any challenge to the

Commissioner's ruling on its procedural due process claim, that issue is waived

and will not be considered by this court. See Telebright Corp., Inc. v. Dir., N.J.

Div. of Taxation, 424 N.J. Super. 384, 393 (App. Div. 2012) (issues not raised

on appeal are waived).

      Any remaining arguments raised by appellants are without sufficient merit

to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).

      Affirmed.

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