Court Opinion

ID: 7618164
Source: CourtListenerOpinion
Date Created: 2022-07-29 14:08:42.827142+00
Date Added: 2024-06-11T16:25:00.828001
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
             APPROVAL OF THE APPELLATE DIVISION

                                 SUPERIOR COURT OF NEW JERSEY
                                 APPELLATE DIVISION
                                 DOCKET NO. A-2598-21

IN THE MATTER OF
NJ TRANSIT AWARD OF                 APPROVED FOR PUBLICATION
CONTRACTS NO. 21-048A
and NO. 21-048B TO                          July 29, 2022
ORANGE, NEWARK,                        APPELLATE DIVISION
ELIZABETH BUS, INC.,
I/P/A COACH USA, LLC.
________________________

         Argued May 31, 2022 – Decided July 29, 2022

         Before Judges Messano, Accurso and Enright.

         On appeal from New Jersey Transit.

         Matthew Lakind argued the cause for appellant
         Academy Express, LLC (Tesser & Cohen, attorneys;
         Lee Tesser and Matthew Lakind, on the briefs).

         Jennifer Borek argued the cause for respondent NJ
         Transit (Genova Burns LLC, attorneys; Jennifer
         Borek, of counsel and on the brief; Victor Andreou, on
         the brief).

         Maeve E. Cannon argued the cause for respondent
         Orange, Newark, Elizabeth Bus Inc. (Stevens & Lee,
         attorneys; Maeve E. Cannon, of counsel and on the
         brief; Michael A. Cedrone, on the brief).

    The opinion of the court was delivered by

ACCURSO, J.A.D.
       We granted Academy Express LLC's application to file an emergent

motion to stay New Jersey Transit's award or execution of Contract No. 21 -

048A (Hudson County bus routes 2, 84 and 88) pending Academy Express's

appeal of NJ Transit's decision to award the contract to Orange, Newark,

Elizabeth Bus Inc. (ONE Bus), and permitted ONE Bus to intervene as an

interested party, entering a temporary stay pursuant to Rule 2:9-8 pending our

disposition of the motion. Having now considered the parties' briefs and

listened to oral argument — and without prejudice to the merits panel's

ultimate disposition of the matter — we deny the motion and dissolve our

temporary stay.1 Reviewing the facts presented in the submissions on the

emergent application through the prism of the Crowe2 factors, we conclude

Academy Express has not demonstrated a reasonable probability of success on

the merits of its appeal. See Garden State Equal. v. Dow, 216 N.J. 314, 320

(2013) (application for a stay requires consideration of the soundness of the

ruling and the effect of a stay on the parties and the public).

1
  We issued our order denying the motion on June 15, 2022, with a
supplemental statement of reasons, advising the parties "[a] formal opinion
memorializing this order will be forthcoming." This opinion is essentially our
supplemental statement of reasons, reformatted for publication and with minor
stylistic changes to improve its readability.
2
    Crowe v. De Gioia, 90 N.J. 126 (1982).

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      The essential facts are not disputed. In September 2021, NJ Transit

issued a request for proposals from qualified carriers to provide regular route

local bus services in the Hudson and North Hudson County areas via two,

three-year contracts: Contract No. 21-048A (Hudson County routes 2, 84 and

88) and Contract No. 21-048B (North Hudson routes 22, 23, 86 and 89). In

accord with N.J.S.A. 27:25-11(c)(2), NJ Transit declared its intention to

execute an agreement with the carrier whose proposal was "the most

advantageous, . . . price and other factors considered." At the time NJ Transit

issued the RFP, ONE Bus was operating Hudson and North Hudson local bus

routes 2, 22, 23 and 88 pursuant to an emergency contract and NJ Transit was

operating routes 84, 86 and 89 itself due to Transit's decision not to renew its

existing contract with an Academy Express affiliate, No. 22 Hillside, LLC,

which had operated the routes.

      Submitted proposals were to be evaluated by a Technical Evaluation

Committee whose "recommendation to award" was to "be made based on

technical and cost evaluation scores as well as comparison to the benchmark

cost submitted by NJ Transit Bus Operations." Although the committee's

recommendation to award would be made to the proposer with the highest total

combined score who submitted the lowest cost bid, the RFP made clear NJ

Transit "reserve[d] the right to reject any and all Proposal(s) in accordance

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   with applicable law," and that "[t]he award of the Contract [was] subject to the

   approval of the NJ Transit Board of Directors."

         NJ Transit received only two proposals for each contract — from

   Academy Express and ONE Bus. Although the Technical Evaluation

   Committee ranked ONE Bus's proposal slightly higher on the technical

   evaluation scores, Academy Express's lower bid on both contracts resulted in

   higher scores on the cost evaluation, yielding Academy Express a higher

   combined score and ranking for both contracts as follows:

Contract       Costs              Differential       Costs   Tech.   Combined          Ranking
No. 21-48A                                           score   score   score
Academy        $77,704,216.80     $0.00              100     85.20   185.20            1
Express
ONE Bus        $86,436,316.22     $8,732,099.42 88.76        92.60   181.36            2

Contract       Costs              Differential       Costs   Tech.   Combined          Ranking
No. 21-48B                                           score   score   score
Academy        $47,284,321.07     $0.00              100     85.20   185.20            1
Express
ONE Bus        $53,800,351.30     $6,516,030.23 86.22        92.60   178.82            2

         On February 15, 2022, NJ Transit issued a "Notice of Intent to Award"

   both contracts to Academy Express. The Notice advised it was "subject to the

   full execution of a written contract," which itself was subject to "passage

   through Board Approval and the New Jersey Governor veto period." NJ

   Transit expressly reserved the right to cancel the Notice of Intent at any time

   prior to the execution of the written contract.

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      On March 4, 2022, ONE Bus submitted a request for reconsideration,

and shortly thereafter a supplemental request following its receipt of the

Technical Evaluation Committee's scoring sheet pursuant to an OPRA request,

arguing the Technical Evaluation Committee had "grossly misjudged its

evaluation" of Academy Express's "experience and qualifications" and

"operations" components by failing to account for the "massive fraud" the

Attorney General alleged Academy companies had perpetrated against NJ

Transit in a recently settled qui tam action.

      Specifically, in March 2017, a former No. 22 Hillside employee filed a

complaint under seal against Academy Express and several of its affiliated

companies and officers pursuant to the qui tam provisions of the New Jersey

False Claims Act, N.J.S.A. 2A:32C-1 to -18. Following an investigation into

the relator's allegations, the Attorney General filed a complaint in intervention

in November 2020 against Academy Bus LLC and its affiliated companies,

No. 22 Hillside, Academy Lines, LLC, and Academy Express, movant here. 3

      In addition to the corporate defendants, the complaint named Academy

officer defendants Thomas F.X. Scullin, Vice President and Chief Operating

Officer of each of the Academy affiliates; Frank DiPalma, Controller for each

3
 The Attorney General alleged, and the settlement agreement confirms,
Academy Bus is the 100% owner and parent corporation of Academy Lines,
Academy Express, and No. 22 Hillside.

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of the Academy affiliates; Antonio Luna, a former assistant manager at No. 22

Hillside and current dispatcher for the Academy affiliates; and Edward

Rosario, general manager of No. 22 Hillside. The Attorney General

maintained that although each of the Academy corporate affiliate defendants

served "different parts of the Academy operation, at all relevant times

defendants Number 22 Hillside, LLC, . . . Academy Lines, LLC, Academy

Express, LLC, and Academy Bus, LLC, functioned as one operation, all

managed by the Academy officer defendants, among others, shifting drivers

and buses from one company to the other to maximize Academy's profits

overall."

      The Attorney General alleged Academy Bus, its officers, employees and

affiliated companies had engaged in a "massive," "multi-year, multi-million

dollar fraud" against NJ Transit through No. 22 Hillside's operation of Hudson

bus routes 2, 10, 22, 22X, 23, 88 and 119. Under its contract with NJ Transit,

No. 22 Hillside was required to submit detailed monthly reports to NJ Transit

about the number of miles and hours it operated the bus line as well as all

"missed trips." The Attorney General alleged that from April 2012 to

December 2018, Academy defrauded NJ Transit "out of more than $15

million," by "systematically, knowingly, and deliberately" underreporting the

number of missed bus trips to avoid paying thousands of missed trip fees and

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overcharged NJ Transit for hours and miles not actually driven. The Attorney

General alleged that in 2016 alone, Academy defrauded NJ Transit out of more

than $3.6 million by "deliberately fail[ing] to report more than 12,000 missed

trips, averaging over 1,000 unreported missed trips each month." From

September to November 2016, Academy failed to report "more than 3,500

missed bus trips, an average of more than 40 bus trips a day."

      The Attorney General claimed "[i]nternal Academy documents and

sworn testimony show[ed] that Academy's exceedingly high number of actual

[m]issed [t]rips most months resulted from Academy's deliberate decision to

divert its short supply of bus drivers away from the bus lines it operated for

New Jersey Transit in favor of higher paying contracts." The complaint

alleged Academy's officers "were aware of, and directed, the shifting of bus

drivers from New Jersey Transit runs to Academy's other operations, including

higher-paying private charter trips, to the detriment of New Jersey Transit and

its customers." The Attorney General alleged "Academy's fraud" not only

caused harm to NJ Transit and New Jersey taxpayers, but also "caused the

riding public to suffer because Academy missed tens of thousands of bus trips

on busy Hudson and South Hudson service area bus lines."

      ONE Bus contended a review of the Technical Evaluation Committee's

score sheet made clear the Committee had not taken the qui tam action into

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account in assessing Academy Express's technical scores, notwithstanding they

"directly related to the RFP's Services." ONE Bus claimed that "[i]f

appropriately considered, the litigation should have substantially reduced

points" to Academy Express in the categories of "legal proceedings,

experience, and personnel." ONE Bus concluded its supplemental request for

reconsideration of Academy Express's scores by rhetorically asking, "If a

lawsuit that alleges a massive fraud with considerable evidence committed by

a proposer on the very same services as the RFP still results in an 'excellent'

score, what does it take for a proposer to only achieve 'good' or 'poor'?" 4

      Five days before NJ Transit issued its Notice of Intent to award the

contract to Academy Express, the Academy companies settled the qui tam

action by agreeing to pay the State $20.5 million over nine years, which sum

would include individual contributions by Scullin of $150,000 and

contributions by Rosario and Luna of $50,000 each. The settlement agreement

provides it was "neither an admission of liability by Defendants nor a

4
  In its brief, NJ Transit did not address the Technical Evaluation Committee's
reasons for not considering the Attorney General's qui tam allegations
regarding the Academy companies' prior operation of these routes in its
evaluation of Academy Express's proposal. See N.J.A.C. 16:85-2.3(a)(4)
(providing the agency is to consider "[t]he adequacy of performance by a
carrier or its affiliates under other contracts or leases with NJ Transit" in
deciding "whether to contract out regular route bus services"). Because our
query at oral argument did not provide an answer to the question, we do not
address it.

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                                         8
concession by the State or the Relator that their claims are not well -founded."

The State agreed "to not make any application for debarment or suspension" of

Academy Bus, Academy Lines, Academy Express or No. 22 Hillside based on

the allegations of the complaint, "[s]ubject to and conditioned upon the

Defendants' timely payments of the full Settlement Amount and compliance

with their obligations" as set forth in the agreement. "With respect to any

contract or agreement to operate New Jersey Transit bus lines," those

obligations include an agreement to abide by the following terms:

            a. Shall not engage in any violations of the [New
            Jersey False Claims Act] relating to any contract with
            New Jersey Transit, including their missed trip and
            miles and hours reporting and invoicing.

            b. Shall implement and share with New Jersey Transit
            within thirty (30) days of the Effective Date of the
            final Settlement Agreement, new written policies and
            procedures to ensure accurate reporting of missed trips
            and hours and miles on all contracts with New Jersey
            Transit, including training on accurate reporting,
            policies on maintenance of adequate records and
            databases, and adequate document retention policies.

            c. Shall create within thirty (30) days of the Effective
            Date of the final Settlement Agreement
            comprehensive written bus operator training policies
            that ensure the proper use of all provided equipment,
            including but not limited to proper use of and log-on
            to Clever Devices and other telematics, as well as the
            proper reporting of equipment malfunctions.

            d. Shall create and share with New Jersey Transit
            within thirty (30) days of the Effective Date of the

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final Settlement Agreement comprehensive written
procedures that the Entity Defendants' Road
Supervisors must employ to ensure conformity to
contracted bus service rules and regulations, as well as
driver adherence to specific routes and accident
reporting. The Entity Defendants should retain all
data sheet reports created by Entity Defendants' Road
Supervisors while performing these functions, and
make them available to New Jersey Transit upon
request.

e. Shall report to the Attorney General and New Jersey
Transit within seven (7) days if any of the Defendants
learn that any other Defendant or any of their
employees or agents has engaged in any conduct to
falsify any records of missed trips or miles and hours
submitted to New Jersey Transit for payment or if any
of their employees or agents responsible for
submitting, preparing, or approving records of missed
trips or miles and hours is arrested, indicted,
convicted, or engaged in unethical or irregular
business activity.

f. Shall submit with each invoice for payment a
personal certification from a Senior Vice President,
Chief Financial Officer or such person's designee, of
the Entity Defendant that attests to the accuracy of
that submission, as well as the accuracy of the
supporting Daily and Monthly Reports of Operation.

g. Shall for three (3) years following the
commencement of the first new contract with New
Jersey Transit after the Effective Date of the final
Settlement Agreement, engage an independent
Integrity Oversight Monitor that is fully financed by
the Entity Defendants and approved by New Jersey
Transit to oversee the accuracy of its internal records
of trip operations and the accuracy of invoices and
missed trip and miles and hours reporting to New
Jersey Transit for such new contract, as well as for

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any current contracts New Jersey Transit has with an
Entity Defendant. Such monitor shall be in place prior
to the commencement of the first new contract with
New Jersey Transit after the Effective Date of the
final Settlement Agreement, and with respect to any
existing contracts, shall be in place within fourteen
(14) days of the Effective Date of the final Settlement
Agreement. The monitor would be responsible for,
among other things, the following duties:

      i. Monitor the Entity Defendants' internal
      controls, as they apply to the proper
      maintenance of records and accurate
      billing relating to any contract with New
      Jersey Transit. Particular emphasis shall
      be placed on assessing the design and
      effectiveness of the Entity Defendants'
      controls to prevent or detect any
      fraudulent reporting and invoicing in their
      New Jersey Transit contracts.

      ii. Ensure that accurate supporting
      documentation is submitted with invoices
      to New Jersey Transit.

      iii. Ensure that the Entity Defendants have
      a comprehensive policy against retaliation
      for those complaining of misconduct on
      the part of Defendants or their officers or
      employees.

      iv. Defendants agree to fully cooperate
      with the monitor by, among other things,
      providing the monitor with access to all
      records and documents, including the
      Entity Defendants' Line Run System or
      any later comparable database, and
      electronically stored information, solely
      concerning any current or future contract
      with New Jersey Transit.

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                  v. Defendants further agree to fully
                  cooperate with the monitor by, among
                  other things, permitting the monitor to
                  make verbal and written reports to New
                  Jersey Transit regarding the monitor's
                  activities and Defendants' compliance
                  with the terms of this Agreement.

                  vi. Defendants agree that, without
                  informing the Entity Defendants, the
                  monitor shall inform the New Jersey
                  Attorney General and New Jersey Transit
                  of any suspected or actual criminal,
                  unethical or irregular business activity by
                  Defendants or their officers or employees.

      On March 8, 2022, six days before the NJ Transit Board meeting at

which the contracts were to be voted on, Academy transmitted copies of the

written policies and procedures required by the Settlement Agreement to NJ

Transit and made efforts to obtain an integrity oversight monitor. NJ Transit

claims it received the materials on March 9, 2022, three business days before

the Board meeting.

      At its March 14, 2022 meeting, the NJ Transit Board was presented with

resolutions to award the Hudson County and North Hudson contracts to

Academy Express. During the public comment section of the meeting, several

individuals expressed their opposition to the award to Academy Express as

constituting a disservice to the public, including former Senator Loretta

Weinberg and Senator Joseph Cryan, who "strongly urged" the Board to select

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the runner up bid based on Academy's "multi-year, multi-million dollar fraud"

that had left "people standing by the side of the road."

      The Board unanimously voted against awarding the contracts to

Academy Express and voted in favor of awarding them to ONE Bus. 5 The

Board members set forth their reasons for voting to deny the contracts,

including concerns about Academy's moral integrity and ethics and concerns

that the protections contemplated in the very recent settlement agreement were

not in place at the time of the award. Several acknowledged their

responsibility as Board members under N.J.S.A. 27:25-4.1(b)(1) to apply their

independent judgment in the best interests of NJ Transit, expressing the view

that Academy was not a "responsible bidder" under the bidding statutes.

      Three weeks after the vote, Academy Express submitted an application

for reconsideration to the NJ Transit Procurement and Support Services

Department. In a verified petition in support of the application, Academy

Express alleged the Board's reasons for rejecting its bid were "based on

erroneous facts" and constituted a "gross abuse of its power" and a violation of

New Jersey's public bidding laws. It sought a stay of the execution of the

5
  Following negotiations on price as provided under the RFP, NJ Transit
determined ONE Bus only met the criteria for an award against NJ Transit's
benchmark cost for Contract No. 21-048A, the Hudson County routes. As to
Contract No. 21-048B, the North Hudson lines, NJ Transit states it intends to
operate and run the routes itself through Bus Operations.

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contracts with ONE Bus and an expedited review of its request for

reconsideration.

      By letter of April 22, 2022, Ronald Hovey, NJ Transit's Acting Chief

Procurement Officer, denied Academy Express's request for reconsideration

and a stay of the award to ONE Bus, emphasizing the Notice of Intent to award

the contracts to Academy Express was subject to approval by NJ Transit's

Board of Directors. In the letter, the Acting Chief rejected Academy Express's

"attempts to distinguish" itself from No. 22 Hillside, the corporate entity sued

by the State "for allegedly defrauding NJ Transit of approx. $15 million and of

providing poor service to NJ Transit and its customers," noting No. 22 Hillside

was "100% owned and managed by the same persons that own and manage

Academy [Express]."

      The letter further provided Academy Express had

            not made its case that the Board's stated reasons are
            erroneous. The Board utilized its independent
            judgment, taking into consideration the factors
            articulated in N.J.S.A. 27:25-4.1, and decided that
            rejecting Academy's bids was in the best interest of NJ
            Transit. N.J.A.C. 16:72-3.12. That rationale is
            reflected in the Minutes of the 14 March 2022
            meeting.

                   Academy has not shown that the Board relied
            upon incorrect or erroneous reasons in its decision, or
            that the Board could not consider "moral integrity" in
            making its decision, or that it could not consider the
            views of elected officials or other persons, who made

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             public comments at the Board meeting. For these
             reasons, we deny Academy's Request for
             Reconsideration, and determine that NJ Transit's
             agency action was not arbitrary, capricious or
             unreasonable under the circumstances.

      The Acting Chief was also unpersuaded by Academy Express's claim

that rejecting its bids based on "moral integrity" acted as a de facto debarment

or suspension of the bus company. He wrote the

             claim is untrue — if Academy [Express] was debarred
             by NJ Transit, it would not have been able to
             participate in the bidding of these contracts. In
             addition, the debarment would have repercussions
             beyond its business with NJ Transit, and would most
             likely bar Academy [Express] from doing business
             with other public transit agencies. NJ Transit has not
             debarred or suspended Academy [Express] from
             bidding on contracts with NJ Transit, but that issue
             does not bar the NJ Transit Board from evaluating
             bids, pursuant to their own independent judgment, as
             required by law.

Finding the rejection of Academy Express's bid would cause it no irreparable

harm under a Crowe analysis, the Acting Chief denied Academy Express's

request for a stay.

      Academy Express has appealed and seeks emergent relief in the form of

a stay of the award or execution of Contract No. 21-048A to ONE Bus pending

our disposition of its appeal on the merits, reprising the arguments it made to

NJ Transit. Because appellate review of bidding disputes in "[c]ontractual

matters in which the State and its public entities engage must proceed with

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alacrity," Barrick v. State, 218 N.J. 247, 264 (2014), we granted Academy

Express's application to file an emergent motion for a stay pending appeal

pursuant to Rule 2:9-8, allowed briefing, as well as intervention by ONE Bus

as an interested party, and set the matter down for oral argument. Having

reviewed the record, the parties' briefs and heard oral argument on the motion,

we are convinced the motion should not be granted.

      The requirements for issuance of a stay are well established. The party

seeking the stay must establish by clear and convincing evidence that

            (1) relief is needed to prevent irreparable harm;
            (2) the applicant's claim rests on settled law and has a
            reasonable probability of succeeding on the merits;
            and (3) balancing the "relative hardships to the parties
            reveals that greater harm would occur if a stay is not
            granted than if it were."

            [Garden State, 216 N.J. at 320 (quoting McNeil v.
            Legis. Apportionment Comm'n, 176 N.J. 484, 486
            (2003) (LaVecchia, J., dissenting)).]

"When a case presents an issue of 'significant public importance,'" we must

also "consider the public interest in addition to the traditional Crowe factors."

Garden State, 216 N.J. at 321 (quoting McNeil, 176 N.J. at 484). To evaluate

an application for a stay, an appellate court "in essence considers the

soundness of the . . . ruling and the effect of a stay on the parties and the

public." Garden State, 216 N.J. at 320.

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      Performing that analysis here, it's clear the controlling factor is

Academy Express's inability to demonstrate any reasonable probability of

success on the merits of its appeal. Appellate review of administrative action

is "severely limited." Mazza v. Bd. of Trs., 143 N.J. 22, 25 (1995). An

appellate court "will not overturn an agency determination unless it is

arbitrary, capricious, or unreasonable." In re Renewal Application of TEAM

Acad. Charter Sch., 247 N.J. 46, 73 (2021). "The deferential standard is

consistent with 'the strong presumption of reasonableness that an appellate

court must accord an administrative agency's exercise of statutorily delegated

responsibility.'" In re Att'y Gen. Law Enf't Directive Nos. 2020-5 & 2020-6,

246 N.J. 462, 489 (2021) (quoting City of Newark v. Nat. Res. Council, Dep't

of Env't Prot., 82 N.J. 530, 539 (1980)).

      We are not asked to review the wisdom of the State's decision not to

debar an entity it claims has defrauded it of tens of millions of dollars, but

instead permit it to fund its scheduled $20.5 million in settlement payments

through additional State contracts — and thus we do not do so. Our task is

simply to apply the gross abuse of discretion criterion to NJ Transit's choice

between what it has determined to be two qualified bidders under the standard

established in N.J.S.A. 27:25-11(c)(2). See Barrick, 218 N.J. at 258.

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      NJ Transit is a public corporation created by the New Jersey Public

Transportation Act of 1979, N.J.S.A. 27:25-1 to -24, tasked with maintaining

"a coherent public transportation system," N.J.S.A. 27:25-2(b), including the

power to acquire and operate public bus service, N.J.S.A. 27:25-2(e), N.J.A.C.

16:85-1.1. Maison v. N.J. Transit Corp., 245 N.J. 270, 287 (2021). To that

end, the Act gives NJ Transit the power to "enter into contracts with any public

or private entity to operate motorbus regular route . . . services." N.J.S.A.

27:25-6(b).

      The powers of NJ Transit are "vested in the voting members of the

board." N.J.S.A. 27:25-4(e). N.J.S.A. 27:25-4.1(b)(1) provides:

              The members of the board shall perform each of their
              duties as board members, including but not limited to
              those imposed by this section, in good faith and with
              that degree of diligence, care, and skill which an
              ordinarily prudent person in like position would use
              under similar circumstances, and may take into
              consideration the views and policies of any elected
              official or body, or other person and ultimately apply
              independent judgment in the best interest of the
              corporation, its mission, and the public.

      This RFP is governed by N.J.S.A. 27:25-11(c), which provides that NJ

Transit may reject any bid or proposal when it determines, among other things,

"it is in the public interest to do so." N.J.S.A. 27:25-11(c)(2) further provides

that contract awards shall be made to "the responsible bidder whose bid or

proposal, conforming to the invitation for bids or request for proposals, will be

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the most advantageous to [NJ Transit], price and other factors considered."

See N.J.A.C. 16:72-3.12.

      The RFP is also subject to NJ Transit's "contracting out" regulations,

N.J.A.C. 16:85-1.1 to -3.14, under which the agency adopted a specific policy

to govern how bus services provided by NJ Transit should be contracted out to

private carriers. N.J.A.C. 16:85-1.1(a); Acad. Bus Tours, Inc. v. N.J. Transit

Corp., 263 N.J. Super. 353, 356 (App. Div. 1993). The regulations are

applicable, as in this case, whenever NJ Transit "performs a competitive

procurement process seeking proposals for the operation of regular route bus

services." N.J.A.C. 16:85-1.1(b). The "contracting out" regulations provide

that NJ Transit's decision to award a carrier a contract for regular route bus

service will be based on both financial, N.J.A.C. 16:85-2.2, and non-financial

considerations, N.J.A.C. 16:85-2.3. Significantly, non-financial considerations

include the "adequacy of performance by a carrier or its affiliates under other

contracts or leases with NJ Transit," and "[a]ny other factor that NJ Transit

deems relevant to a particular proposal and deems to be in the public interest."

N.J.A.C. 16:85-2.3(a)(4),(7). "If an award is made, the award shall be made to

that carrier whose proposal, conforming to the request for proposals, will be

most advantageous to NJ Transit, as so determined by NJ Transit." N.J.A.C.

16:85-3.14.

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      Considering Academy Express's reasonable probability of success

against those standards, its proofs are seriously wanting. Its argument that NJ

Transit violated the legislative intent of the public bidding laws in rejecting its

proposal requires no discussion here. See R. 2:11- 3(e)(1)(E). As ONE Bus

notes, NJ Transit has been statutorily exempted from the need to bid the

contracting-out of bus routes, N.J.S.A. 27:25-6(b), N.J.S.A. 27:25-11(g)(3)(d),

and is expressly not required to award the contract to the "lowest responsible

bidder." N.J.S.A. 27:25-11(c)(1),(2).

      Nor is NJ Transit required to adopt the proposal recommended by the

Technical Evaluation Committee, or to afford the Committee's evaluation any

deference. The contract award is plainly subject to approval by the NJ Transit

Board, whose members, in performing their duties, can "take into

consideration the views and policies of any elected official or body, or other

person and ultimately apply independent judgment in the best interest of" NJ

Transit. N.J.S.A. 27:25-4.1(b)(1). The Board's consideration of "price and

other factors," N.J.S.A. 27:25-11(c)(2), is thus broader than the criteria used

by the Technical Evaluation Committee in determining the technical and cost

scores of Academy Express and ONE Bus.

      As already noted, the Board has broad discretionary authority to reject

any proposal when it determines "it is in the public interest to do so," N.J.S.A.

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27:25-11(c), and can consider any factor it "deems to be in the public interest,"

N.J.A.C. 16:85-2.3(a)(7). Under that broad authority, NJ Transit could

certainly consider the qui tam action and determine it was in the public interest

to reject a proposal from a carrier that had only weeks before entered into a

multi-million-dollar settlement with the State in a massive fraud case

involving the same routes covered by these contracts. See Keyes Martin & Co.

v. Dir., Div. of Purchase & Prop., 99 N.J. 244, 262 (1985) (upholding

Director's rejection of a bid "in the public interest" based on an appearance of

wrongdoing attributable to a possible conflict of interest). Understanding we

consider only a motion for stay pending appeal, we see nothing untoward at

this point, and certainly nothing approaching a gross abuse of discretion, in the

Board determining a contract with Academy Express immediately on the heels

of the settlement agreement was not in the public interest nor most

advantageous to NJ Transit given Academy's policies and procedures to

protect against future fraud had only been submitted three business days before

the meeting and not yet vetted by the agency.

      Moreover, Academy Express has offered nothing to suggest the Board

should not have considered its record of performance and integrity based on

past performance in determining whether it was a responsible carrier. See

N.J.A.C. 16:85-3.11(b); N.J.A.C. 16:72-1.4(a)(3),(4). Under the "contracting

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out" regulations, the corporation "shall" consider the "adequacy of

performance by a carrier or its affiliates under other contracts or leases with

NJ Transit." N.J.A.C. 16:85-2.3(a)(4). Thus, NJ Transit could consider that

No. 22 Hillside, Academy Express's affiliate, was alleged in the settled qui tam

suit to have submitted fraudulent reports of missed trips over the course of

several years, defrauding NJ Transit of millions of dollars and stranding

passengers waiting for buses on the very same routes at issue in these

contracts. See N.J.A.C. 16:85-2.3(a)(4).

      We agree with NJ Transit that Academy Express's efforts to distance

itself from No. 22 Hillside and the qui tam action in its proposal ring

somewhat hollow in view of its participation in the settlement agreement that

followed. Leaving aside the individual Academy Express identified as the

person responsible for the "day to day" operation of the bus service (Rosario),

and its vice-president and COO (Scullin) were two of only three individual

defendants contributing to the monetary settlement with the State, Academy

Express represented in its proposal it had been named a co-defendant in the qui

tam action against an "affiliated entity" it did not identify based solely on the

State's "naked assertion that the Academy Companies are operated as a single

legal entity," while at the same time claiming it had "operated" the Hudson and

North Hudson service from 1999 to 2021, which, of course, included the bus

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routes at issue in the qui tam action for which its affiliate, No. 22 Hillside,

held the contract.

      In sum, Academy Express's claim that the rejection of its proposal was

based on "media optics" does not meet the standard of clear and convincing

proof of likelihood of success on the merits measured against the broad

discretion vested in the NJ Transit Board and the knowledge our public

bidding statutes "exist 'for the benefit of the taxpayers and are construed as

nearly as possible with sole reference to the public good,'" with the object of

"'guard[ing] against favoritism, improvidence, extravagance and corruption.'"

Barrick, 218 N.J. at 258 (quoting Keyes, 99 N.J. at 256). There is no

irreparable harm to a disappointed bidder in not staying the award of a contract

the bidder cannot show a reasonable likelihood of having been entitled to win.

      Finally, we find no merit in Academy Express's claim that the Board's

rejection of its proposal acted as a de facto debarment or suspension in

violation of the settlement agreement. The agency's acceptance and

consideration of Academy Express's proposal demonstrates convincingly it

was not barred from bidding on contracts with NJ Transit. Further, the Board

did not bar or suspend Academy from submitting future proposals — it

rejected this proposal because, among other reasons, the contract award on the

RFP followed too close on the settlement, thereby depriving NJ Transit from

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any assurance the extensive policies and procedures Academy Express and its

affiliates had agreed to develop, put in place and arrange to be independently

monitored to ensure NJ Transit was not again defrauded and riders left waiting

for buses that never come, were in accord with the agreement and sufficient to

serve their purposes.

      The motion for stay pending appeal is denied. Our April 29, 2022

temporary stay pending disposition of the motion is dissolved. The clerk's

office shall issue a scheduling order.

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