This case arises out of a decision by the Maryland State Board of Pharmacy, an administrative agency. The decision was reviewed first by the Circuit Court for Baltimore City and then by the Court of Special Appeals, 150 Md.App. 138, 819 A.2d 383 (2003). Petitioner sought review of the decision by the Court of Special Appeals because the remedy that court fashioned, she contends, exceeded its authority and violated the Maryland Constitution and Administrative Procedure Act, Md.Code (1984, 1999 Repl.Vol., 2003 Cum.
Whether a court has exceeded its statutory and judicial authority over an administrative agency is a question that involves the constitutional balance of power between the judiciary and executive administrative agencies. That balance of power is governed by an established area of administrative law dealing with the scope of judicial review over the various types of administrative agency decisions. In this case, we consider whether the Court of Special Appeals exercised the proper standard of judicial review over an administrative agency decision in a matter that is committed, ultimately, to the agency's discretion.
Linda Ann Spencer, a pharmacist, continued to practice pharmacy after her license expired on July 1, 1999. On August 16, 1999, Spencer's supervisor, having confirmed with the Maryland State Board of Pharmacy ("the Board") the expiration and non-renewal of Spencer's pharmacy license, instructed Spencer to cease practicing pharmacy, which she did. Spencer then contacted the Board to inquire why her license had not been renewed, asserting that she had timely submitted the required renewal application. An internal review of the Board's office records, however, indicated that no application or accompanying fee was received. Spencer surmised that her application had been lost in the mail and therefore submitted a renewal application to the Board on August 30, 1999. Although her application included certification that she had acquired the requisite number of continuing education credits, the majority of those credits were obtained after her license had expired in June. Nevertheless, the Board granted Spencer's renewal application on September 14, 1999, after which Spencer resumed her practice of pharmacy.
The Court of Special Appeals described the remaining events that led to this appeal as follows (referring to the Board as "appellant" and to Spencer as "appellee"):
Spencer then filed a Petition for Judicial Review in the Circuit Court for Baltimore City, alleging, inter alia, that she had been deprived of procedural due process because Mr. Ades and Ms. Schneider participated both as representatives of the Board in settlement negotiations and as members of the panel adjudicating her case. Agreeing with Spencer's arguments, the Circuit Court vacated and reversed the Board's Final Decision and Order. The Circuit Court ruled that there was not substantial evidence in the record to support the Board's decision; that the Board's renewal of Spencer's license pending the outcome of the investigation operated as a waiver of the violations subsequently found by the Board; and that Spencer had been deprived of due process as a result of the arguments that took place at the Board hearing between her attorney and two Board members.
The Board appealed the Circuit Court's ruling to the Court of Special Appeals. The Court of Special Appeals agreed with the Circuit Court that Spencer was denied her right to a fair and unbiased hearing, focusing on Ms. Hawkins' accusation that Spencer's counsel was a "bold-faced liar." The intermediate appellate court reversed the Circuit Court's ruling that the Board's renewal of Spencer's license had foreclosed the Board from taking disciplinary action against her. Consequently, it remanded the case to the Circuit Court "with instructions to remand the case to the Board, directing [the Board] to delegate the authority to conduct the contested case hearing and to issue the final administrative decision in this case to the OAH." 150 Md.App. at 155, 819 A.2d at 393.
Spencer then filed a petition for writ of certiorari in this Court. 376 Md. 49, 827 A.2d 112 (2003). Although petitioner has phrased the first question for our review as whether the Court of Special Appeals, by its order to the administrative agency to refer the case to the OAH, violated Article 8 of the Declaration of Rights and § 10-205 of the APA, a more accurate way of formulating the question, as we explain infra, is whether the Court of Special Appeals afforded the administrative agency the proper level of deference in a matter committed to the agency's discretion. Petitioner's second question is whether the order to remand the matter to the OAH contravened either res judicata or double jeopardy principles as applied to administrative proceedings.
Petitioner argues that the Court of Special Appeals exceeded its judicial authority when it fashioned a remedy that interfered with the Board's discretion to determine whether her case should be remanded to the OAH. She contends that the Court of Special Appeals violated Article 8 of the Declaration of Rights in ordering the Board to send the case to the OAH, because in so doing, that court performed a "non-judicial function," violating the constitutional mandate that the power of the three branches of government in Maryland "be forever separate and distinct." See Dep't of Nat. Res. v. Linchester Sand & Gravel Corp., 274 Md. 211, 334 A.2d 514 (1975). Petitioner also argues that because § 10-205 of the APA does not explicitly authorize the courts to delegate matters to the OAH, the Court of Special Appeals did not have authority to do so. Although the Board, as respondent, initially opposed these arguments in its Answer to Petition for Writ of Certiorari, in its brief, respondent reversed course and now agrees with petitioner that the Court of Special Appeals performed a non-judicial function in violation of Article 8.
This Court, of course, is not bound by the concessions made by the parties on
We address first the procedural and analytical posture of this case as it comes before this Court. When this Court sits in review of an administrative agency decision, we reevaluate the decision of the agency under the same statutory standards as would the circuit court; we do not employ those standards to reevaluate the decision of the circuit or intermediate appellate court. See Division of Labor v. Triangle General Contractors, Inc., 366 Md. 407, 416, 784 A.2d 534, 539 (2001); Dept. of Health v. Campbell, 364 Md. 108, 123, 771 A.2d 1051, 1060 (2001) (noting that it is the final decision at the administrative level, not the decision of the reviewing court, which is the focus of each level of judicial review). Thus, as to the merits of such a matter, ordinarily and primarily, the inquiry is not whether the Court of Special Appeals erred, but whether the administrative agency erred.
In the present case, in what way might the Board have erred? The answer to this question lies with the two disputed administrative actions taken by the Board that were reversed by the Court of Special Appeals. Petitioner's original motion to the Board requested either (a) that her case be referred to the Office of Administrative Hearings or, in the alternative, (b) that the Board members who participated in the settlement negotiations recuse themselves. Petitioner asked the Circuit Court to review both the denial of the recusal motion and the denial of the motion to remove to the OAH. These two denials by the Board constitute the two administrative decisions which petitioner asked the Circuit Court and the Court of Special Appeals to review.
The Court of Special Appeals, disagreeing with the Board's denial of both of those requests, held as follows:
150 Md.App. at 155, 819 A.2d at 393. Critical to understanding this case is the observation that the intermediate appellate court's analysis amounted to a simultaneous review of two separate administrative actions: (1) the Board's failure to recuse certain members of the panel and (2) the Board's failure to refer the case to the OAH. Although the Court of Special Appeals apparently considered the agency's failure to recuse the biased panel
With respect to the agency decision denying the recusal motion, the Court of Special Appeals held that "the actions by the Board that caused an appearance of impropriety in the proceedings in this case before the Board ... denied [petitioner] due process in that hearing." Id.; cf. Maryland State Police v. Zeigler, 330 Md. 540, 559, 625 A.2d 914, 923 (1993) (stating that "[p]rocedural due process, guaranteed to persons in this State by Article 24 of the Maryland Declaration of Rights, requires that administrative agencies performing adjudicatory or quasi-judicial functions observe basic principles of fairness as to parties appearing before them"). Petitioner, of course, is satisfied with that ruling and did not raise that issue in the petition for certiorari, and neither did respondent cross-petition on that issue. Accordingly, we do not review that ruling by the Court of Special Appeals. See Mehrling v. Nationwide, 371 Md. 40, 44 n. 3, 806 A.2d 662, 665 n. 3 (2002) (noting that the Court of Appeals will not normally address a question not presented in petition for certiorari), and upon remand, the Board must adhere to the court's ruling as it bears on the defects in procedural due process at petitioner's hearing.
It is the second administrative decision taken by the Board, and its review by the Court of Special Appeals, that concerns us in the case sub judice. By this we mean the Court of Special Appeals's holding "directing [the Board] to delegate the authority to conduct the contested case hearing and to issue the final administrative decision in this case to the OAH." The key point here is that the Court of Special Appeals judicially reviewed the Board's decision to deny the motion to refer the case to the OAH, and it found that decision to be wanting. The court's reasoning behind its determination is made in a footnote to its opinion:
150 Md.App. at 156 n.14, 819 A.2d at 393 n.14. We do not think it so obvious that this case "must" be retried before the OAH, and the Court of Special Appeals did not discuss the appropriate standard of judicial review of the Board's decision not to refer. Because the Court of Special Appeals did not consider the appropriate standard of judicial review and whether, under that standard, the agency's decision must be overturned, that task is now before this Court, as we sit in review of the
Whether the administrative agency's refusal to delegate to the OAH was improper requires us to determine the standard of review for such an agency decision. The standard of review for an agency decision, in turn, will depend upon the level of discretion delegated to the administrative agency with respect to such decisions. See MTA v. King, 369 Md. 274, 293-94, 799 A.2d 1246, 1257 (2002) (Wilner, J., concurring); Hecht v. Crook, 184 Md. 271, 280-81, 40 A.2d 673, 677 (1945); see generally A. Rochvarg, Maryland Administrative Law, §§ 4.29-4.38 (2001); E. Tomlinson, The Maryland Administrative Procedure Act, 56 Md. L.Rev. 196 (1997).
To discover the proper standard of judicial review, we begin with the APA. Because this case involves an agency acting in a "quasi-judicial" capacity, adjudicating the personal rights of petitioner, judicial review is governed by § 10-222, which is applicable to final decisions in contested cases. See § 10-222(a). Were we reviewing the agency acting in its policymaking or "quasi-legislative" capacity, a wholly different analysis governs the decision. See § 10-125; Fogle v. H & G Restaurant, Inc., 337 Md. 441, 654 A.2d 449 (1995).
Section 10-222(h) governs the scope of judicial review of final administrative agency decisions in contested cases as follows:
(1) remand the case for further proceedings;
(2) affirm the final decision; or
(i) is unconstitutional;
(ii) exceeds the statutory authority or jurisdiction of the final decision maker;
(iii) results from an unlawful procedure;
(iv) is affected by any other error of law;
(v) is unsupported by competent, material, and substantial evidence in light of the entire record as submitted; or
(vi) is arbitrary or capricious.
Section 10-222(h)(3)(i)-(vi) provides a statutory framework for understanding the scope of judicial review of agency decisions and is of particular interest to the case sub judice. Section 10-222(h)(3)(i)-(iv) deals with judicial review of agency conclusions of law. Section 10-222(h)(3)(v) deals with judicial review of agency factual determinations. Section 10-222(h)(3)(vi) deals with judicial review of any other agency determination—for instance, as in the case sub judice, determinations over matters committed to the agency's discretion. Our jurisprudence has expanded on the meaning of these statutory provisions and provided guidance for their application by the courts.
When an agency makes "conclusions of law" in a contested case, the court, on judicial review, decides the correctness of the agency's conclusions and may substitute the court's judgment for that of the agency's. Total AV v. Dept. of Labor, 360 Md. 387, 394, 758 A.2d 124, 127-28 (2000) (noting that questions of law addressed by administrative agency are completely subject to review by courts, although agency's
In contrast, when an agency is not interpreting law but instead makes a "finding of fact," we have applied "substantial evidence" review. Substantial evidence review of agency factual findings is embodied in § 10-222(h)(3)(v). That provision grants a court authority to overrule an agency's factual finding only when the finding is "unsupported by competent, material, and substantial evidence in light of the entire record as submitted." According to this more deferential standard of review, judicial review of agency factual findings is limited to ascertaining whether a reasoning mind could have reached the same factual conclusions reached by the agency on the record before it. See Stansbury v. Jones, 372 Md. 172, 182-185, 812 A.2d 312, 318-320 (2002) (discussing substantial evidence review in Maryland).
Finally, there are circumstances when an agency acts neither as a finder of fact nor as an interpreter of law but rather in a "discretionary" capacity. See, e.g., Maryland State Police v. Zeigler, 330 Md. 540, 625 A.2d 914. Logically, the courts owe a higher level of deference to functions specifically committed to the agency's discretion than they do to an agency's legal conclusions or factual findings. Therefore, the discretionary functions of the agency must be reviewed under a standard more deferential than either the de novo review afforded an agency's legal conclusions or the substantial evidence review afforded an agency's factual findings. In this regard, the standard set forth in § 10-222(h)(3)(vi), review of "arbitrary or capricious" agency actions, provides guidance for the courts as they seek to apply the correct standard of review to discretionary functions of the agency.
Id. (citations omitted).
Similarly, in MTA v. King, we held that an agency's discretion to determine the magnitude of a sanction could only be reviewed pursuant to § 10-222(h)(3)(vi), i.e., for arbitrariness or capriciousness. 369 Md. at 291, 799 A.2d at 1255-56. Even if the court felt the punishment to be "disproportionate" to the violation, the agency's determination of the amount or level of sanction could not be second-guessed, unless the sanction "was so extreme and egregious that the reviewing court can properly deem the decision to be `arbitrary or capricious,'" as set forth in § 10-222(h)(3)(vi). Id.
The case sub judice does not differ significantly from Zeigler or King in that the decision being reviewed is also one committed to the agency's discretion and is to be reviewed under the same arbitrary or capricious standard set forth in 10-222(h)(3)(vi). Whether an action is in fact deemed arbitrary or capricious will vary depending upon the amount of discretion granted an agency, a matter of substantive law, see King, 369 Md. at 293-94, 799 A.2d at 1257 (Wilner, J., concurring); thus, the level of discretion afforded an agency's decision to reopen a hearing, as in Zeigler, may differ from the discretion afforded an agency's decision to forgo the OAH, as in the instant case. Arbitrary and capricious review will apply to both types of decisions, but whether the agency's decision in each case is actually arbitrary or capricious will correspond to the discretion afforded it.
Applying the legal principles outlined above, we hold that (1) the determination
First, it is clear that the Board's refusal to refer the case to the OAH was not a legal conclusion or a factual finding but rather a function of the Board's discretion. The discretion is granted to the Board in § 10-205(b)
Second, it is clear that the Board's decision to forgo the OAH was not arbitrary or capricious. An agency's prerogative with respect to case referral to the OAH is similar in scope to that of the agency's prerogative in determining the severity of sanctions, see King, 369 Md. at 291, 799 A.2d at 1255-56; Resetar v. State Bd. of Education, 284 Md. 537, 562, 399 A.2d 225, 238 (1979) ("It is impossible to catalogue just what would or would not constitute arbitrary action on the part of an administrative agency ... in imposing sanctions"), or to that of forgoing prosecution of a particular individual. In such cases, it is most difficult to apply or even articulate a judicial standard by which the agency's discretionary decision might be deemed arbitrary or capricious, cf. Heckler v. Chaney, 470 U.S. 821, 105 S.Ct. 1649, 84 L.Ed.2d 714 (1985) (holding that the FDA's decision not to take enforcement actions was not subject to judicial review under the federal APA because such enforcement decisions are "committed to
To be sure, because of the nature of the Board members participating, it was improper for those members who participated in the settlement negotiations to remain as panel members adjudicating petitioner's case, and those members may not constitute a part of the panel if or when petitioner's case is reheard.
Petitioner's final argument, that a remand will create issues of res judicata or double jeopardy, is without merit and frivolous. The Board's enforcement of its licensing and disciplinary requirements serve purposes essential to the protection of the public, which are deemed remedial, rather than punitive, and therefore are not subject to double jeopardy principles. See State v. Jones, 340 Md. 235, 666 A.2d 128 (1995); Ward v. Dept. of Pub. Saf. & Cor. Services, 339 Md. 343, 350, 663 A.2d 66, 69 (1995) (holding that where the purpose of the penalty is remedial, it is not punishment for double jeopardy purposes); McDonnell v. Comm'n on Medical Discipline, 301 Md. 426, 436, 483 A.2d 76, 81 (1984) (noting that the "purpose of disciplinary proceedings against licensed professionals is not to punish the offender but rather as a catharsis for the profession and a prophylactic for the public"). Even if double jeopardy was applicable, which it is not, the rehearing would not be precluded, as a new trial (or rehearing) ordinarily is not precluded by double jeopardy principles when a conviction is reversed on grounds other than sufficiency of the evidence. Huffington v. State, 302 Md. 184, 189, 486 A.2d 200, 203 (1983). The remand was not based on insufficiency of evidence but on defects in procedure.
JUDGMENT OF THE COURT OF SPECIAL APPEALS REVERSED IN PART. CASE REMANDED TO THAT COURT WITH DIRECTIONS TO VACATE THE JUDGMENT OF THE CIRCUIT COURT FOR BALTIMORE CITY AND TO REMAND THE CASE TO THE CIRCUIT COURT WITH INSTRUCTIONS TO REMAND THE CASE TO THE STATE BOARD OF PHARMACY FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION. COSTS TO BE EVENLY DIVIDED BETWEEN PETITIONER AND STATE BOARD OF PHARMACY.
Chief Judge BELL concurs in the judgment only.
We do not encounter, or decide, this issue of whether the arbitrary and capricious standard in § 10-222(h)(3)(vi) will govern every type of agency action not encompassed by § 10-222(h)(3)(i)(v). See Maryland State Police v. Zeigler, 330 Md. 540, 569-570, 625 A.2d 914, 928 (1993) (Bell, J., dissenting); A. Rochvarg, Maryland Administrative Law, § 4.38 (2001). It is notable, however, that in contrast to the first five grounds for judicial review in § 10-222(h)(3)(i)-(v), § 10-222(h)(3)(vi) does not delineate the type of agency decision to which it applies, cf. § 10-222(h)(3)(i)-(iv) (implicitly and necessarily involving legal determinations by the agency); § 10-222(h)(3)(vi) (explicitly applying to evidentiary, factual findings), and could conceivably be a "catch-all" standard of review for any other agency action. And even in the absence of an applicable statutory scheme providing for judicial review, we have held an implied limitation upon an administrative agency's authority is that its decisions "be not arbitrary or capricious." Bucktail, LLC v. County Council of Talbot County, 352 Md. 530, 550, 723 A.2d 440, 449 (1999); see also our line of cases explaining mandamus actions as they apply to ministerial or non-discretionary functions of administrative agencies, discussed in Criminal Inj. Comp. Bd. v. Gould, 273 Md. 486, 500-504, 331 A.2d 55, 65-66 (1975).
(b) Scope of authority delegated.—An agency may delegate to the Office [of Administrative Hearings] the authority to issue:
(1) proposed or final findings of fact;
(2) proposed or final conclusions of law;
(3) proposed or final findings of fact and conclusions of law;
(4) proposed or final orders or orders under Article 49B of the Code; or
(5) the final administrative decision of an agency in a contested case.