This case arises from attempts by Derek T. Harvey, a father who reunited with four of his children, to have a Maryland court extinguish, or, in the alternative, direct the Child Support Enforcement Administration ("CSEA") to forgive, child support arrearages he owes that accumulated before he obtained custody of the children. In resolving this case, we are called upon to examine whether a court may eliminate completely child support arrearages in light of the statutory prohibition on the retrospective modification of child support orders. We also must determine whether the CSEA is bound to apply the familiar "best interests of the child" standard in deciding, pursuant to its statutory discretion, whether to forgive child support arrearages, and whether the agency's refusal to exercise that discretion in the father's favor, because of financial and administrative considerations affecting the State's child welfare program, was "arbitrary or capricious."
Derek T. Harvey obtained physical custody of his three youngest children, Dereka, Robin, and Derek, Jr., when they came
Harvey's child support obligations arose from consent paternity decrees issued by the Circuit Court for Baltimore City in 1986 and 1989 establishing Harvey as the biological father of the pertinent children.
Soon after the children joined his household, Harvey, on several occasions, informed officials at the Baltimore City Office of Child Support Enforcement ("BCOCSE") that the children were now in his physical custody. At all times relevant to these proceedings, BCOCSE was operated by MAXIMUS, Inc. ("MAXIMUS"), a private corporation under contract with the CSEA.
Also in July 2000, Harvey approached the Baltimore City office of the Legal Aid Bureau, Inc. ("Legal Aid") seeking assistance with regard to his attempts to reduce or eliminate his child support obligations and arrearages. In the spring of 2001, with the assistance of Legal Aid, Harvey was successful in diverting his then-ongoing child support obligation toward his arrearages. Harvey, however,
Frustrated with BCOCSE, Harvey switched his focus to the CSEA, BCOCSE's parent agency. In a 4 June 2001 letter, Legal Aid made a formal request to the CSEA for "forgiveness or abatement" of Harvey's arrearages and current support obligations. The letter advised the CSEA that, as of May 2001, Harvey owed approximately $32,000 in two cases, of which all but $1600 was owed to the State. Legal Aid argued that, although the funds sought by BCOCSE would be used to reimburse the State for past welfare support of the affected children, the current and future best interests of Harvey's children would be served by allowing Harvey to apply current and future income, including $57 subtracted from his paycheck each week, to the future support and upbringing of his children now in his custody.
In a 6 July 2001 letter, Teresa L. Kaiser, executive director of the CSEA, informed Legal Aid that the CSEA would consider exercising its statutory discretion to eliminate or reduce Harvey's child support arrearages owed to the State. The letter, however, stated that, in order to do so, Harvey would need to provide BCOCSE with evidence confirming the length of his physical custody of the children. In response, Harvey provided documentation, including school records and documents relating to an investigation of Ms. Marshall for fraudulent receipt of welfare benefits, establishing that the children had lived with him since 1996. Harvey also procured and delivered to BCOCSE a court order, issued 20 November 2001 by the Circuit Court for Baltimore City, granting him legal custody of the four children, and made retrospectively effective as of 1 October 1996. The order also terminated Harvey's ongoing child support obligations and eliminated any arrearages accruing after 1 October 1996.
In a memorandum, dated 6 March 2002, to Dwayne Brown, project director of BCOCSE, Ms. Kaiser acknowledged receipt of the 20 November 2001 court order and proposed that BCOCSE take the following actions with regards to the enforcement of the arrearages owed by Harvey:
Ms. Kaiser also instructed Mr. Brown in this memorandum that he would "need to
Meeting no success in his initiatives with BCOCSE or the CSEA, Harvey filed in the Circuit Court for Baltimore City on 17 May 2002 a Motion to Set-Aside Child Support.
At a merits hearing on the motion held on 25 October 2002, Rachelle Langdon, a manager for BCOCSE, testified that, in regard to the proposal by Ms. Kaiser,
Ms. Langdon also testified that BCOCSE did not want to take the action proposed by Ms. Kaiser because to do so "would potentially harm the numbers that show the local enforcement office's collection rate."
At the hearing, Harvey testified that he supported his children and extended household on wages of $10.96 an hour as a landscaper for the City of Baltimore. Harvey claimed that the existence of unpaid child support obligations affected adversely his credit rating, prevented him from purchasing or financing a home, and undermined his ability to pay and save for his children's education. All of these consequences of continued enforcement, Harvey argued, acted as a detriment to the best interests of his children and thus provided a justification for the complete elimination of his arrearages.
After hearing arguments from counsel, the Circuit Court, in an order dated 8 May
Harvey argues that the Circuit Court erred when it found that it did not possess discretion under § 5-1038(b) to eliminate Harvey's child support arrearages accruing prior to the filing of his motion. Sec. 5-1038, in context, states:
The CSEA and BCOCSE counter that the discretion conferred upon a court by § 5-1038(b) conflicts with and is limited by the more specific pronouncements in § 12-104, which state, in context:
Harvey continues by maintaining that the Court of Special Appeals erred in concluding that, as applied to his case, the specific prohibition in § 12-104 on retrospective modification conflicts with the wide discretion contained in § 5-1038(b). He argues that, because he seeks to eliminate completely his past arrearages, he is not requesting a "modification" of his obligations, but rather a "set aside." Harvey's theory relies heavily on the fact that, although § 5-1038(b) permits a court to "modify or set aside any order," the language in § 12-104 only limits a court's discretion to "modify" a child support award retrospectively. He posits that the absence in § 12-104 of a limitation on a court's discretional authority to "set aside" an order is a clear and conspicuous indication that § 12-104 does not limit a court's authority, under § 5-1038(b), to eliminate completely his arrearages accruing before the filing of his motion. We do not agree with his interpretation.
Harvey's question is one of statutory interpretation and, as such, is purely a legal one. Mohan v. Norris, 386 Md. 63, 66-67, 871 A.2d 575, 577 (2005). We therefore review the matter de novo. Id.; see also Davis v. Slater, 383 Md. 599, 604, 861 A.2d 78, 80-81 (2004) (stating that "[b]ecause our interpretation of . . . provisions of the Maryland Code . . . are appropriately classified as questions of law, we review the issues de novo to determine if the trial court was legally correct in its rulings on these matters").
The CSEA and BCOCSE argue, as a preliminary matter, that Harvey's claim is foreclosed by claim preclusion principles because he "previously sought relief from his responsibility to pay past due child support based on exactly the same factual circumstances that form the basis of his claims in the present proceeding; that he has had actual physical custody of his children since 1996."
We conclude that the doctrine of res judicata does not bar the present case because Harvey's motion seeking to establish custody of his children did not present the same claim or cause of action as the present case. See Lizzi v. Washington Metro. Area Transit Auth., 384 Md. 199, 206-07, 862 A.2d 1017, 1022 (2004) (stating that res judicata "bar[s] the same parties from litigating a second lawsuit on the same claim, or any other claim arising
Although Harvey experienced some resistance from the Baltimore City Department of Social Services in obtaining documents relating to his claims, Ms. Marshall, the mother of three of the children and the putative plaintiff, did not oppose the relief requested.
The record reveals that Harvey's purpose in asking the court to award him custody of his children was to establish a foundation to pursue forgiveness of his arrearages from the CSEA under the statutory scheme in § 10-112. There is no indication that Harvey asked the court, at that time, to exercise its discretion under § 5-1038(b) to eliminate or modify his arrearages that accrued prior to 1 October 1996. Had Harvey sought retrospective modification (i.e., elimination) of his past child support obligations for the period before he gained custody, he theoretically would have encountered the same obstacle as he has in the present case — the limitations on retrospective modification contained in § 12-104. Confronted with only a request for a retrospective child custody determination, the Circuit Court awarded Harvey only that relief that was a direct consequence of a finding of retrospective custody, including a "credit" or "offset" of child support payments that he was to have paid during that period. See Child Support Enforcement Admin. v. Shehan, 148 Md.App. 550, 562, 813 A.2d 334, 342 (2002) (finding that, because, under § 12-204(l)(2), "[t]he custodial parent shall be presumed to spend that parent's total child support obligation directly on the child. . .," a parent that had reunited with his family and became the custodial parent was entitled to a credit of the payments made during the period since he became a custodial parent). A motion, pursuant to § 5-1038(b), seeking elimination of arrearages accruing during a non-custodial period of time is not, for res judicata purposes, the same claim as a motion to establish custody retrospectively, and simply was not litigated in the 2001 proceeding.
Next, we consider whether the prohibition on retrospective modification of child support orders (for non-custodial periods of time) in § 12-104 was intended as a limitation on the broad authority conferred upon a court by § 5-1038(b), and, if
Harvey observes correctly that, although § 5-1038(b) provides authority for a court to both "modify or set aside" any order in paternity actions (other than a declaration of paternity), § 12-104 merely limits a court's discretion to "modify," retrospectively, a child support order. Harvey continues, however, that, although the statutes use similar language, there is a substantive difference between a court's authority to "set aside" a child support order and a court's authority to "modify" retrospectively such an order. In order to grant Harvey the relief he requests, therefore, a court must be convinced that an action to eliminate retrospectively and completely child support arrearages should be classified properly as a "set aside," governed by § 5-1038(b), rather than a "modification," governed by § 12-104. The CSEA responds that the Legislature's use of the term "modify" in § 12-104 was intended, as a matter of both legislative intent and common sense, to include those actions covered by any definition of "set aside," and thus the distinction sought by Harvey is irrelevant. Thus, proper analysis, as we perceive it, hinges on interpretation of the term "modify" in § 12-104, and specifically whether the use of that term encapsulates the complete elimination of a child support arrearage — the relief that Harvey requests.
Although the terms "modify" and "set aside" are not defined in either of the respective subtitles that contain the relevant statutes, these terms (or similar terms) are addressed in Black's Law Dictionary. The fifth edition of Black's Law Dictionary,
Harvey, however, in arguing that there is a substantive distinction between "modify"
We agree with Harvey that there is a substantive distinction, at least with regard to child support and paternity matters, between a "modification" and a "set aside." Despite this, we conclude that the relief Harvey seeks, in fact, is defined more properly as an effort to "modify" his child support arrearages, rather than as an action to "set aside." Cf. Morton County Soc. Serv. Bd. v. Hakanson, 660 N.W.2d 599, 601 (N.D.2003) (finding that, when a child support judgment is filed in a court solely for the purposes of enforcement of that order, that court may not forgive child support arrearages because, "[i]f a court forgives past due child support obligations, it has modified a child support order"); Gilbertson v. Graff, 477 N.W.2d 771, 774 (Minn.Ct.App.1991) (finding that "[f]orgiveness of unpaid child support
This conclusion finds support in the legislative history of § 12-104. The limitations on retrospective modification of child support awards found in § 12-104 were enacted by the General Assembly in 1988 in response to a federal stimulus to the States regarding their enforcement of child support awards. 1988 Md. Laws, Chap. 338. In her statement before the Maryland Senate Judicial Proceedings Committee on 10 March 1988, Senator Ida G. Ruben (D — Montgomery County), the sponsor of the bill that ultimately became the enacted legislation, explained the underlying issues and policy concerns regarding Maryland's child support enforcement situation:
Ann C. Helton, then-executive director of the CSEA, appeared before the Senate Committee to emphasize that the legislation was necessary to prevent courts from forgiving accumulated arrearages:
Beyond these financial implications for any State, the federal government identified the retrospective reduction and elimination of child support awards as a significant problem warranting national attention. In 1986, Congress amended Title IV of the Social Security Act, 42 U.S.C. 601 et seq. (2005), to require States to conform to national standards with regard to child support payments and enforcement. Omnibus Budget Reconciliation Act of 1986, Pub. L. No. 99-509, § 9103, 100 Stat. 1874, 1973 (1986). This legislation, codified at 42 U.S.C. § 666(a)(9) (2005), provided in part:
Legislation containing the language found in 42 U.S.C. § 666(a)(9) originally was introduced by Senator William W. "Bill" Bradley of New Jersey on 5 May 1986 as S. 2404, and by Representative Barbara B. Kennelly of Connecticut on 7 May 1986 as H.R. 4769. These two bills, however, died in committee. Nonetheless, the amendments codified ultimately as 42 U.S.C. § 666(a)(9) were placed into H.R. 5300, the Omnibus Budget Reconciliation Act of 1986, which was passed by the Congress and signed into law by the President on 21 October 1986. Pub.L. No. 99-509, § 9103, 100 Stat. 1874, 1973 (1986). The legislative history of the two predecessor bills indicates that the main concerns addressed were deficiencies and loopholes affecting the interstate enforcement of child support awards, including the effect of retrospective modification of child support orders. See 132 Cong. Rec. 9416-17 (1986) (statement of Sen. Bradley); 132 Cong. Rec. 9958 (1986) (statement of Rep. Kennelly). In her statement in the House of Representatives on 7 May 1986, Rep. Kennelly stated that H.R. 4769 was aimed at States that allowed "[child support] debt
The Maryland Legislature understood clearly that significant federal funds were in jeopardy if it did not enact legislation intended to effectuate the child support mechanisms located in, and defined by, 42 U.S.C. § 666(a)(9). Regarding the federal legislation and its accompanying fiscal incentives, Sen. Ruben stated at the Committee hearings:
CSEA Executive Director Helton also recognized that S.B. 691 was designed to conform Maryland law to federal mandates:
This history indicates clearly that, in enacting § 12-104, the Maryland Legislature sought to fulfill the purpose of 42 U.S.C. § 666(a)(9) as outlined by Congress. See Department of Fiscal Services, Fiscal Note Revised 1988, S.B. 691 (stating that the "Department of Human Resources advises that this bill conforms State practice to federal requirements"); see also Langston v. Langston, 366 Md. 490, 514 n. 11, 784 A.2d 1086, 1099 n. 11 (2001), abrogated on other grounds, Bienkowski v. Brooks, 386 Md. 516, 873 A.2d 1122 (2005) (concluding that "[i]t appears that the General Assembly imposed limitations on the modification of child support awards in order to comply with the requirement of the [AFDC]"). We therefore conclude that, in using the term "modify" in § 12-104, the General Assembly intended to reflect and appropriate the language
Despite this legislative history and purpose, Harvey argues that, by defining "modify" to include the retrospective elimination of arrearages, we would be ignoring our responsibility, under principles of statutory interpretation, to search for and find a harmonious interpretation between two related statutes. See Pete v. State, 384 Md. 47, 65-66, 862 A.2d 419, 429-30 (2004) (stating that "various consistent and related enactments, although made at different times and without reference to one another, nevertheless should be harmonized as much as possible" (citations omitted)). When two statutes conflict, by their plain language, however, no harmonious interpretation is possible. In this case, there is a conflict between the statutes in that § 5-1038(b) seemingly allows a court to eliminate child support arrearages retrospectively, while, as we have concluded, § 12-104 specifically precludes that result.
This conflict becomes even more apparent when we examine the logical consequences of Harvey's interpretation of § 12-104. State v. Glass, 386 Md. 401, 410, 872 A.2d 729, 734 (2005) (stating that a court's analysis "must be undertaken from a commonsensical rather than a technical perspective, always seeking to avoid giving the statute a strained interpretation or one that reaches an absurd result" (citations omitted)); Price v. State, 378 Md. 378, 388, 835 A.2d 1221, 1227 (2003) (stating that courts must "avoid constructions that are illogical, unreasonable, or inconsistent with common sense" (citations omitted)). Under Harvey's "harmonious interpretation," § 12-104 would not limit a court's discretion to extinguish retrospectively 100% of a parent's arrearages, because that action would be a "set aside," but that same court would have no discretion to reduce that parent's arrearages by up to 99.99%, because that would be a "modification." Common sense and the legislative history of § 12-104 restrain us from agreeing with such a conclusion. Cf. In re Trust of Lane, 323 Md. 188, 192-93, 592 A.2d 492, 494-95 (1991) (finding that "if a court has the power to terminate a trust it necessarily has the power to take less drastic measures and modify that same trust").
Although we conclude that the two statutes conflict with respect to the retrospective modification of child support arrearages, we note that our interpretation of § 12-104 and § 5-1038(b) in this case harmonizes those statutes with the Court's holding in Walter v. Gunter. In Walter, we held that, when a child support order is premised on an invalid paternity declaration, § 12-104 does not limit a court's discretion to "set aside" that child support order. 367 Md. at 393-96, 788 A.2d at 613-15. Our holding today is consistent with Walter in that, by including the complete
When a court concludes that the provisions of two statutes conflict, it then must determine which statute controls the facts before it. We turn now to the principles of statutory interpretation concerning conflicting statutes.
We often have stated that "[w]here there is a specific enactment and a general enactment which, in its most comprehensive sense, would include what is embraced in the former, the particular enactment must be operative, and the general enactment must be taken to affect only such cases within its general language as are not within the provisions of the particular enactment." Dep't of Natural Res. v. France, 277 Md. 432, 461-62, 357 A.2d 78, 94-95 (1976) (citations and quotations omitted); see also Smack v. Dept. of Health and Mental Hygiene, 378 Md. 298, 306, 835 A.2d 1175, 1179 (2003) (stating that when, in the context of statutes within the same statutory scheme, "two statutes conflict and one is general and the other specific, `the statutes may be harmonized by viewing the more specific statute as an exception to the more general one'" (citations omitted)). In the present case, we conclude that the prohibition on retrospective modification in § 12-104 limits a court's broad discretion, under § 5-1038(b), to "modify or set aside" any order that is in the best interests of the child.
Sec. 5-1038(b) allows a court in a paternity action to "modify or set aside any order or part of an order under this subtitle as the court considers just and proper in light of the circumstances and in the best interests of the child." This broad authority, viewed in isolation, would appear to allow the retrospective modification of a child support order in a paternity action. That action, however, expressly is prohibited by the more specific and particular provisions of § 12-104. We therefore give effect to the specific limitations of § 12-104 as a curb on the broad discretion conferred on the courts by § 5-1038(b). Smack, 378 Md. at 306, 835 A.2d at 1179.
We are convinced of the controlling applicability of § 12-104 also as a result of the relative dates of enactment of the two statutes. At the time that § 12-104 was enacted in 1988, § 5-1038(b) long had been part of the Maryland legal landscape. See 1963 Md. Laws, Chap. 722 (enacting the standard found in § 5-1038(b)). "In attempting to harmonize [two statutes that address the same subject], we presume that, when the Legislature enacted the later of the two statutes, it was aware of the one earlier enacted." Ridge Heating, Air Conditioning and Plumbing, Inc. v. Brennen, 366 Md. 336, 352, 783 A.2d 691, 700 (2001) (citations omitted).
The legislative history reveals that § 12-104 was enacted as a result of financial incentives, contained in federal law, to ensure that child support orders were "not subject to retroactive modification" by any State. See supra Section II. A. 4. This purpose of § 12-104 corroborates the presumption that the Legislature was aware of the broad discretion in § 5-1038(b) because, had such discretion not existed, a statute limiting discretion would have been wholly unnecessary.
By examining this legislative history, we arrive at the conclusion that § 12-104 was designed to circumscribe the broad authority delegated to the courts by § 5-1038(b). Thus, the limitation on retrospective modification contained in § 12-104 precluded the Circuit Court from granting Harvey's request to eliminate completely the child support arrearages he owed.
Harvey also contends that the Circuit Court and the Court of Special Appeals erred in finding that the CSEA's decision not to exercise its discretion under § 10-112 in his favor was not subject to judicial review and that alternatively, if it were, the CSEA's refusal to exercise that discretion to grant his request was not "arbitrary,
Our analysis begins with the basic premise that, in order for an administrative agency's action properly to be before this Court (or any court) for judicial review, there generally must be a legislative grant of the right to seek judicial review. See South Easton Neighborhood Ass'n v. Easton, 387 Md. 468, 476 n. 3, 876 A.2d 58, 62 n. 3 (2005) (observing that the Circuit Court did not possess jurisdiction to exercise appellate review of the Easton Town Council's decision to enact an ordinance closing a street so that public property could be conveyed to a local, non-profit hospital); Criminal Injuries Comp. Bd. v. Gould, 273 Md. 486, 500, 331 A.2d 55, 64 (1975) (stating that the "right to an appeal is not a right required by due process of law, nor is it an inherent or inalienable right" and that "[a]n appellate right is entirely statutory in origin and no person or agency may prosecute such an appeal unless the right is conferred by statute"). As Harvey concedes, there was no statutory right of judicial review for CSEA actions under § 10-112 at the time the relevant legal proceedings were initiated in the present case. At the time of the CSEA's consideration of Harvey's request, § 10-222 of the State Administrative Procedure Act ("APA"), Md. Code (1984, 2004 Repl. Vol.), §§ 10-201 et seq. of the State Government Article, did not apply to this situation. Sec. 10-222 of the APA provides, with certain exceptions, that "a party who is aggrieved by the final decision [of an administrative agency] in a contested case is entitled to judicial review of the decision as provided in this section." This section does not apply to a decision by the CSEA not to exercise its discretion to forgive Harvey's arrearages, however, because such a decision is not a "contested case" under the APA. The APA defines a "contested case" as
Md. Code (1984, 2004 Repl. Vol.), § 10-202(d)(1) of the State Government Article. Because § 10-112 did not provide the opportunity or procedure for a hearing before the CSEA, an individual affected by a decision (whether affirmatively made or presumed a denial through non-action) under § 10-112 was not entitled to judicial review under the APA.
In those circumstances where there is no statutory provision for judicial review, however, this Court "has consistently held that the Legislature cannot divest the courts of the inherent power they possess to review and correct actions by an administrative agency which are arbitrary, illegal, capricious or unreasonable." Gould, 273 Md. at 500-01, 331 A.2d at 65 (citations omitted); see also Heaps v. Cobb, 185 Md. 372, 379, 45 A.2d 73, 76 (1945) (finding that "[c]ourts have the inherent power, through the writ of mandamus, by injunction, or otherwise, to correct abuses of discretion and arbitrary, illegal, capricious or unreasonable acts; but in exercising that power care must be taken not to interfere with the legislative prerogative or with the exercise of sound administrative discretion, where discretion is clearly conferred" (citations omitted)); Hurl v. Bd. of Educ., 107 Md.App. 286, 304-05, 667 A.2d 970, 979 (1995) (finding a determination of whether the APA conferred judicial review on a particular administrative decision irrelevant in light of the courts' inherent power to review "illegal, unreasonable, arbitrary or capricious administrative action. . .").
Despite this inherent power of limited judicial review, the Court of Special Appeals concluded that Harvey's "complaint [did] not qualify for [such] relief because it is about a
The inherent power of judicial review of administrative decisions, however, is extremely limited.
Harvey characterizes the CSEA's refusal to exercise its discretion to eliminate his child support arrearages as "arbitrary, illegal, capricious or unreasonable" because the agency failed, as a matter of law, to consider the "best interests of the child" in determining whether forgiveness of Harvey's child support arrearages was within the "best interest of this State." For reasons to be explained, we conclude that the CSEA is not bound to consider with the same primacy, if at all, the "best interests of the child," as that standard applies to most decisions relating to children, when exercising its discretion under § 10-112.
Sec. 10-106 established the CSEA in 1976 as the agency within the Department of Human Resources charged with coordinating
The CSEA also is charged with the duty to "accept assignment of right, title, or interest in child support made under Article 88A, § 50(b)(2) of the Code [and to] prosecute and maintain any legal or equitable action available to establish each absent parent's obligation to pay child support." §§ 10-108(5)-(6). Under Md. Code (1957, 2003 Repl. Vol.), Art. 88A, § 50(b)(2), an otherwise eligible individual becomes available for temporary cash assistance benefits only if he or she "assigns to the State all right, title, and interest in support from any other person that the applicant or recipient has on behalf of any intended or potential recipient for whom the applicant or recipient is applying for or receiving assistance, including any right accrued when the assignment is executed." When individuals owing child support to the State under such an assignment accumulate unpaid arrearages, the CSEA is granted statutory authority to settle with a child support obligor for an amount less than the full arrearages.
Harvey argues that, notwithstanding the use of a "best interest of this State" standard in § 10-112 for settlement of arrearages, the CSEA nonetheless is bound by the traditional "best interests of the child" standard when exercising its discretion in deciding whether to forgive arrearages. Harvey guides us toward the language of § 10-118:
He claims that § 10-118 represents a clear statement of legislative purpose to which the CSEA must conform when "carrying out ... child support responsibilities," which he interprets to include the settlement of arrearages pursuant to § 10-112.
Preliminarily, we must address whether the act of settling or forgiving arrearages, in the context of § 10-112, is a "child support responsibilit[y]." With regard to this point, the Court of Special Appeals held:
Harvey, 158 Md.App. at 376-77, 857 A.2d at 542 (emphasis omitted).
We disagree with the intermediate appellate court on this point. Although this novel conclusion superficially appears to be supported by sound reasoning, the implications of that court's holding are inconsistent with the statutory scheme for child support enforcement. The Court of Special Appeals apparently overlooked the
Removing State-owed child support collection from the scope of a "child support responsibilit[y]" would also raise serious questions about the applicability of § 12-104 to child support orders. If State-owed child support is not entitled to its special status, but is mere debt, a court no longer would be limited by § 12-104 and would be able to modify (and eliminate) retrospectively that debt, because § 12-104, by its language, only applies to child support orders and not mere debt. State-owed child support instead would be subject to the broad discretion set forth in § 5-1038(b). This, of course, is contrary to our interpretation of § 12-104 and, as Harvey argues, is unsupported by relevant case law. See Petitioner's Brief at 19 (stating that the "Court of Special Appeals' conclusion provides no explanation of how Maryland law provides for the mutation from child support to mere state debt, and the case-law... supports the opposite conclusion").
Harvey argues that, because the CSEA is performing a "child support responsibilit[y]" under § 10-112, it thus is bound by the "best interests of the child" standard found in § 10-118 in making decisions on the forgiveness of arrearages. We disagree. Our starting point in the analysis of this contention is the plain language of the statutes. Johnson v. Mayor of Baltimore, 387 Md. at 11, 874 A.2d at 445.
Sec. 10-112 clearly states that the CSEA may settle a child support arrearage
He reminds us that, in interpreting two provisions of a statutory scheme, we should be mindful that, when a statute "is a part of a statutory scheme, the legislative intention is not determined from that statute alone, rather it is to be discerned by considering it in light of the statutory scheme," and when "in that scheme, two statutes, enacted at different times and not referring to each other ... address the same subject, they must be read together ... i.e., interpreted with reference to one another, . . . and harmonized. . . ." Gov't Employees Ins. Co. v. Ins. Comm'r, 332 Md. 124, 132, 630 A.2d 713, 717 (1993). Harvey suggests that a harmonious reading here results in the standard in § 10-112 being eclipsed, and, in essence, replaced, by § 10-118's application of the paramount standard of the "best interests of the child." We reject such an interpretation.
We conclude instead that the language of § 10-112 indicates that the Legislature intended a different standard, other than the "best interests of the child" standard, to govern the settlement of arrearages. Even though it may be a "child support responsibilit[y]," the Legislature made a conscious election that the forgiveness of arrearages was an action, separate and distinct from other "child support responsibilities," that, because of its unique purpose, warranted a different standard. Although the "best interests of the child" standard is generally the standard that applies in paternity or other family law matters relating to child support, there are some situations in which the Legislature has mandated, and the courts apply, a different standard or have limited, or in
In this case, the Legislature's use of the "best interest of this State" standard, rather than the "best interests of the child" standard, is consistent with the notion that, because the obligation to pay child support was scrutinized at the time of imposition under the "best interests of the child" standard, any subsequent attempt to eliminate those arrearages through the exercise of an agency's discretion may be subject to a different standard that may at times be incongruent with the "best interests of the child," particularly when the State, in lieu of the delinquent, responsible parent's payment of support, has advanced public funds to support the child. Indeed, there is a remarkable distinction between the judicial determination of child support, which certainly implicates the best interests of a child, and the forgiveness of arrearages that accrued through no fault of the child and are often due to a noncustodial parent's financial problems or irresponsibility.
We also keep in mind that "a statute should be read so that no word, clause, sentence or phrase is rendered superfluous or nugatory." Glass, 386 Md. at 410, 872 A.2d at 734. Accepting Harvey's interpretation would do just that, render meaningless the inclusion of "best interest of this State" in § 10-112. We decline to do that. Instead, we find that § 10-118 and § 10-112 are better harmonized by giving full
Harvey remonstrates, however, that, by enacting § 10-118, the Legislature intended the same standard to govern "all agency child support responsibilities conducted pursuant to the entire statutory and regulatory framework governing child support, including those that were already specified in FL § 10-112." Petitioner's Brief at 27-28.
Harvey continues that, even if the CSEA was not required to apply the "best interests of the child" standard, Maryland courts have the inherent power to review the discretionary decision of the CSEA not to forgive Harvey's arrearages. See Gould, 273 Md. at 510-11, 331 A.2d at 70 (affirming the inherent power of Maryland courts to review the discretionary actions of administrative agencies); see also Gonzales v. Ghingher, 218 Md. 132, 136-37, 145 A.2d 769, 772 (1958) (finding the reasoning of the Mayor and Treasurer of Baltimore City regarding the exercise of purely discretionary power to grant or deny an amusement license "arbitrary and unreasonable in a legal sense"). When an agency engages in proper fact-finding and applies the appropriate law, our inquiry is limited solely to whether, given the relevant standard and facts, the administrative agency's decision was "arbitrary, illegal, capricious or unreasonable." Gould, 273 Md. at 500-01, 331 A.2d at 65. In order to
When an administrative action is subject to the Administrative Procedure Act ("APA"), the APA grants a reviewing court the power to "reverse or modify the decision [of an administrative agency] if any substantial right of the petitioner may have been prejudiced because a finding, conclusion, or decision... is arbitrary or capricious." Md. Code (1984, 2004 Repl. Vol.), § 10-222(h)(3)(vi) of the State Government Article. Although we are cognizant that the particular situation presented in this case under § 10-112 was not a "contested case" at the time it was considered by the agency and therefore the APA does not apply, Maryland cases suggest that "an administrative proceeding, even if not subject to judicial review under the APA, would be subject to judicial review, of essentially the same scope, in an action for mandamus, certiorari, injunction or declaratory judgment [under the framework of Heaps, Gould, and their progeny]." Med. Waste Assocs. v. Maryland Waste Coalition, 327 Md. 596, 610, 612 A.2d 241, 248 (1992); see also Dickinson-Tidewater, 273 Md. at 255-56, 329 A.2d at 25 (finding that the substantial evidence test, which the courts use when acting pursuant to the inherent ability to review administrative decisions, "is similar to the tests laid down by [the APA]"); Hurl, 107 Md.App. at 305, 667 A.2d at 979 (finding that "the standards of judicial review of agency decisions are essentially the same whether proceeding under the APA or pursuant to our inherent power to review administrative actions"). Because the standard of review under our inherent power of judicial review of discretionary administrative action is similar, if not identical, to the "arbitrary or capricious" standard enunciated in the APA, we therefore conclude that "it is appropriate for this Court to examine and rely upon cases decided under the APA for guidance regarding the appropriate standard of review of [an agency's] decision." Hurl, 107 Md.App. at 305, 667 A.2d at 979.
A review of Maryland case law demonstrates that this "arbitrary or capricious" standard is, perhaps intentionally, less than well-defined with respect to judicial review of discretionary actions.
Arnold Rochvarg, Maryland Administrative Law, § 4.38 at 128 (2001, 2004 Supp.).
We also find, as Professor Rochvarg observes, id., some guidance in the definitions found in Black's Law Dictionary. Black's defines "arbitrary" as including those judicial decisions "founded on prejudice or preference rather than on reason or fact." Black's Law Dictionary 112 (8th ed. 2004). Black's defines "capricious" as including those decisions "characterized by or guided by unpredictable or impulsive behavior, . . . contrary to the evidence or established rules of law."
Merriam-Webster's Collegiate Dictionary 59 (10th ed. 1999).
These definitions echo Professor Rochvarg's explication that, so long as the actions of administrative agencies are reasonable or rationally motivated, those decisions should not be struck down as "arbitrary or capricious." "Arbitrary or capricious" decision-making, rather, occurs when decisions are made impulsively, at random, or according to individual preference rather than motivated by a relevant or applicable set of norms. Indeed, this conclusion is confirmed by the Maryland courts' application of the "arbitrary or capricious" standard to several differing circumstances involving allegations that an administrative agency's decision was "arbitrary or capricious."
Few Maryland cases have developed a detailed general definition of "arbitrary or capricious," relying instead on a case-by-case development or an application of the standard solely to the case at hand. See Rochvarg, supra, at § 4.38 at 128 (finding that, because of the relative ambiguity of the "arbitrary or capricious" standard, "[e]ach case must be evaluated on an individual basis"); Maryland State Bd. of Social Work Exam'rs v. Chertkov, 121 Md.App. 574, 585-86, 710 A.2d 391, 396 (1998).
Most cases, however, recognize as a threshold matter the extremely deferential nature of the "arbitrary or capricious" standard. In reviewing a claim that an administrative sanction was so disproportionate to the misconduct involved as to be "arbitrary or capricious," the Court in Maryland Transportation Authority v. King stated:
369 Md. 274, 291, 799 A.2d 1246, 1255-56 (2002) (emphasis added). Other cases have adopted this "extreme and egregious" synonym for "arbitrary or capricious." See, e.g., Bd. of Physician Quality Assurance v. Mullan, 381 Md. 157, 170-71, 848 A.2d 642, 650 (2004) (referencing the "extreme and egregious" standard in finding that, as a matter of law, "a delay in the issuance of [an administrative agency's order] is a relevant factor in determining whether the agency properly exercised its statutory discretion, judicially reviewed under the extremely deferential arbitrary or capricious standard"); but see Rochvarg, supra, at 24 (2004 Supp.) (commenting that an "extreme and egregious" definition of "arbitrary or capricious" is "much too deferential" and that "[c]ourts would be abdicating their responsibility if they were only willing to reverse an agency under the arbitrary or capricious standard for extreme and egregious conduct"). In Maryland Aviation Admin. v. Noland, 386 Md. 556, 581, 873 A.2d 1145, 1160 (2005), we expanded upon the standard announced in King:
Some cases suggest that the meaning of "arbitrary or capricious" varies according to the level of discretion afforded to a particular agency. See Spencer, 380 Md. at 531, 846 A.2d. at 350 (finding that "[w]hether 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"). In Spencer, the Court considered whether the refusal of the Maryland State Board of Pharmacy to refer for hearing a pharmacist's disciplinary matter to the Maryland Office of Administrative Hearings (OAH) was "arbitrary or capricious." 380 Md. at 527-30, 846 A.2d at 348-50. The Board had issued charges against Spencer for practicing pharmacy without a license after the Board failed to receive a timely license renewal application from Spencer (although Spencer claimed that she in fact mailed the application). Id. at 518-20, 846 A.2d at 343-44. Based on her belief that members of a Board panel that was scheduled to hear the charges against her were biased against her, Spencer sought to have the matter referred to the OAH, a decision committed exclusively to the Board's discretion. Id. at 521-22, 846 A.2d at 344-45. The Board refused to refer the matter, and Spencer sought judicial review. Id., 846 A.2d at 345.
The Court of Special Appeals agreed with Spencer that the presence of certain Board members on the panel prejudiced her rights, and remanded the case with directions that the matter be referred to the OAH. Id. at 522, 846 A.2d at 345. We reversed, however, concluding that, even though Spencer's rights in fact were prejudiced by the presence of those members, the Court of Special Appeals exceeded its authority in directing the matter be referred to the OAH. Id. at 531-32, 846 A.2d at 350-51. We directed remand of the matter to the Board with instructions to it to cure, through any manner available to the Board, the prejudice caused by the presence of the biased Board members on the panel. Id. at 534, 846 A.2d at 352. In finding it "clear that the Board's decision to forgo the OAH was not arbitrary or capricious," the Court stated:
Id. at 533, 846 A.2d at 351-52 (some citations omitted).
Although some cases, such as Spencer, perceive that agency discretion, by its nature, may be well-insulated from judicial review, other cases have applied more particularized scrutiny to determine whether an agency action was "arbitrary or capricious." An agency decision, for example, may be deemed "arbitrary or capricious" if it is contrary to or inconsistent with an enabling statute's language or policy goals. See, e.g., Hurl, 107 Md.App. at 306, 667 A.2d at 980 (finding an elementary school teacher's transfer not "arbitrary or capricious" in light of standards found in the enabling statute and relevant regulations); Rochvarg, supra, at § 4.38 at 129 (stating that "[a]n agency decision that is contrary to the enabling statute's language or policy goals is a decision that is arbitrary or capricious").
Even if an administrative agency does not articulate policy goals within its pertinent regulations or such are not expressed in the agency's enabling statute, an agency action nonetheless may be "arbitrary or capricious" if it is irrationally inconsistent with previous agency decisions. See Christopher v. Montgomery County Dep't of Health & Human Servs., 381 Md. 188, 215, 849 A.2d 46, 61-62 (2004) (rejecting a food stamp recipient's claim that an agency's denial of a benefit was "arbitrary or capricious" based on her contention that she was being singled out because there was "no evidence in the record that the [administrative law judge] treated [the recipient] any differently from any other applicant claiming to be disabled, acted inconsistently, or deviated from prior policies relating to disability determinations under the Food Stamp Program"). In Montgomery County v. Anastasi, 77 Md.App. 126, 549 A.2d 753 (1988), the Court of Special Appeals affirmed a circuit court's reversal of decisions of the Montgomery County Merit System Protection Board with respect to promotion of police officers. The court found that, although an administrative agency certainly has some leeway to abandon prior decisions and "adapt [its] rules and policies to the demands of changing circumstances," an agency's decisions must also "not be so fluid as to become arbitrary or capricious." Id. at 137, 549 A.2d at 758 (citations omitted). In Anastasi, the court found the Board's actions to be "arbitrary or capricious" because the Board acted in a manner inconsistent with policies adopted in prior cases regarding the consultation of persons not on the Board, without providing an adequate explanation for the divergence. Id. at 137-39, 549 A.2d at 758-59. Just as actions that are inconsistent with prior administrative precedents may be deemed "arbitrary or capricious," an agency action also may be deemed "arbitrary or capricious" if similarly situated individuals are treated differently without a rational basis for such a deviation. See Chertkov, 121 Md.App. at 589, 710 A.2d at 398 (finding that, even if an agency decision is supported by substantial evidence, it may nonetheless be "arbitrary or capricious" if individuals are
The substance of Harvey's concluding argument is that the CSEA's refusal to exercise its discretion to forgive his arrearages was "arbitrary or capricious" because it was the result of the illegal delegation of authority and discretion to a private corporation (BCOCSE/MAXIMUS) whose conduct was tainted with private self-interest. For reasons to be explained, we conclude that the CSEA's decision not to exercise its discretion to grant relief to Harvey under § 10-112 was not the result of an illegal or unreasonable (and thus "arbitrary or capricious") delegation of authority, nor was it the product of "arbitrary or capricious" reasoning or rationales.
At the threshold of this argument, Harvey betrays a misunderstanding of the fundamental relationship between the CSEA and BCOCSE. As stated supra Section IV.A., the CSEA was created in 1976 as an agency within the Department of Human Resources ("Department") for the purpose of coordinating a statewide program covering all aspects of child support enforcement. § 10-106; § 10-108; 1976 Md. Laws, Chap. 778. In 1995, the Legislature established the Child Support Enforcement Privatization Pilot Program, which operates in Baltimore City and Queen Anne's County. 1995 Md. Laws, Chap. 491. Sec. 10-119.1(c) lays out the purpose and scope of this privatization program:
At all times relevant to these proceedings, BCOCSE/MAXIMUS was a private agency that had contracted with the CSEA to carry out, in selected jurisdictions, its child support enforcement functions, including those outlined in § 10-119.1(c). Harvey argues that it was "arbitrary or capricious" for the CSEA to "abdicate its authority entirely to the private delegate [BCOCSE] without exercising any meaningful review of the decision." Petitioner's Brief at 33-34.
The memorandum from Ms. Kaiser to the project director of BCOCSE proposing certain actions with respect to Harvey's arrearages was simply that — a proposal. There is nothing in the record to suggest that Ms. Kaiser or anyone else at the CSEA demanded, ordered, or mandated that the specified actions be taken with regard to Harvey's account. Accepting the memorandum as a proposal inviting feedback, rather than as an order from a superior, BCOCSE thereafter provided the CSEA with its recommendations and objections, including its concerns over the
Harvey argues that, even if the CSEA's acquiescence was not per se "arbitrary or capricious," it was unreasonable, and therefore "arbitrary or capricious," for the CSEA to acquiesce in the particular reasons that BCOCSE gave for objecting to the proposed forgiveness plan. In her testimony at the Circuit Court, an official from BCOCSE acknowledged that "one of the reasons" BCOCSE objected to the proposed forgiveness plan was "that it would potentially harm the numbers that show the local enforcement office's collection rate." Harvey argues that it was "arbitrary or capricious" for the CSEA to ratify BCOCSE's pecuniary self-interest by acquiescing in its objection to the proposed forgiveness plan based on financial considerations.
In order to determine whether it was "arbitrary or capricious" for the CSEA to consider the financial implications or impact on BCOCSE's "collection rate" in its decision not to exercise its discretion to grant relief to Harvey under § 10-112, we must examine such a decision in light of the standard announced by the Legislature in enacting § 10-112. The question becomes whether the CSEA's consideration of the fiscal impact of the requested action was a reasonable action taken for the "best interest of this State."
We begin by examining the State's purpose, divined through the legislative history, in enacting a privatization scheme for the enforcement of child support obligations in certain jurisdictions. The privatization
The welfare privatization provisions, however, did not begin as part of S.B. 754. While S.B. 754, without the privatization provisions, was being considered in the Senate, the House of Delegates was considering House Bill 1177. H.B. 1177, introduced on 20 February 1995, would have "establishe[d] a Child Support Enforcement Privatization Pilot Program in the Department of Human Resources . . . to privatize all child support enforcement functions in Baltimore City and [Queen Anne's County] by July 1, 1996." Department of Fiscal Services, Fiscal Note Revised 1995, H.B. 1177. Although H.B. 1177 was not passed by both houses of the Legislature, its provisions regarding child support privatization were incorporated into S.B. 754, which was signed into law on 25 May 1995.
These financial considerations are explicitly set forth in § 10-119.1. Section 10-119.1(d) mandates that the Secretary of the Department shall "adopt regulations that . . . (ii) provide for the reimbursement of any private contractor; [and] (iii) prohibit the cost of transferring child support enforcement to private contractors as defined in item (ii) of this paragraph from exceeding the fiscal year 1995 administrative cost per child support dollar collected by the Child Support Enforcement Administration in the Pilot Program areas. . . ." This language indicates clearly the primary concern of privatization: to save the State money by ensuring that funds paid to a private contractor are lower than the administrative cost of enforcing child support obligations through means in place prior to the initiation of the privatization program.
The financial interests of the State are also implicated by the level of performance of its child support enforcement offices, be it private or public. Under 42 U.S.C. § 658a (2005), the federal government pays incentives to States based on their performance with regard to the establishment and enforcement of child support orders and the collection of past-due child support arrearages. These incentives are deposited by the State into the Child Support Reinvestment Fund, which "is a special, nonlapsing fund that shall consist of all of the federal performance incentive payments received by the Department of Human Resources in a fiscal year." §§ 10-106.1(b), (c)(1). Although the regulations promulgated pursuant to § 10-106.1 provide that "the incentive amount that would be paid to a privatized support enforcement agency in a subdivision shall be retained by [the CSEA]," COMAR 07.07.11.03, this does not diminish the consequence that a heightened collection rate affects positively the financial interests of the State by increasing the level of federal incentive payments.
This concern with fiscal efficiency appears to be an integral part of Maryland's child support enforcement scheme, reflected not only in § 10-119.1, but in other statutes and case law. For example, in 1978 the responsibility for child support enforcement was transferred from the Department of Parole and Probation to the
Even the paternity statutes, codified at § 5-1001 et seq., state as their express purpose not only the promotion of "the general welfare and best interests of children born out of wedlock," but also the "impos[ition] on the mothers and fathers of children born out of wedlock the basic obligations and responsibilities of parenthood." § 5-1002(b); see Commonwealth of Virginia ex rel. Halsey v. Autry, 293 Md. 53, 61, 441 A.2d 1056, 1060 (1982) (finding that one of the main purposes of the paternity statutes "is to shift the burden of support from the taxpayers to the parents of the illegitimate child"); Mayor of Rockville v. Randolph, 267 Md. 56, 61, 296 A.2d 574, 576 (1972) (finding that the "main purpose [of the paternity statutes] is the shifting of some of the burden of financial support of illegitimates from the taxpayer to the father" (citations omitted)). Because the CSEA is not obligated, under § 10-112, to apply transcendently the "best interests of the child" standard, if at all, we conclude that it is reasonable, in light of the foregoing financial considerations, to premise the refusal to exercise discretion under § 10-112 to grant an obligor's request for relief on concerns over the potential fiscal impact to the State.
Harvey maintains that the CSEA's acquiescence in BCOCSE's objections to the
Harvey finally argues that it was "arbitrary or capricious" for the CSEA to premise the rejection of his request for forgiveness of arrearages on the technological shortcomings of BCOCSE being unable to factor such a result into its record-keeping system. In recommending that Harvey's request be denied, BCOCSE stated that its computer system was not capable of monitoring Harvey's child support account without triggering automatically certain enforcement provisions, such as the interception of tax refunds. Harvey claims that this is "arbitrary or capricious" because it sacrifices individualized treatment in favor of administrative efficiency. When administrative agencies are faced with a high volume of transactions and accounts, it is not "arbitrary or capricious," as a matter of law, for such agencies to implement an automated or computerized system that emphasizes administrative efficiency at the expense of some degree of individualized treatment. Requests that come before the CSEA and BCOCSE are given individualized treatment, subject to the administrative limitations that have been put in place. By making the all-too-common and arguably necessary decision to install computerized databases and enforcement mechanisms, the CSEA and BCOCSE have not acted in an "arbitrary or capricious" manner, but instead, like many other government agencies and private corporations, have recognized the net benefits of those systems. Nonetheless, we understand Harvey's frustration in this regard.
Harvey states in his brief: "There is nothing in the record that suggests that the current configuration of the computer system is a necessity or that the automated enforcement activities that it generates cannot be overridden in an individual case by a stroke of the keyboard, where circumstances so warrant." Petitioner's Brief at 35 n. 16. Although we recognize that the CSEA's decision to decline forgiveness of Harvey's arrearages may be "arbitrary or capricious" if BCOCSE's computer system was in fact configured to administer the CSEA's proposal effectively, the burden to demonstrate such failure does not fall on the CSEA or BCOCSE. When an individual alleges that an agency's decision is "arbitrary or capricious" based on a factual issue, the burden lies on the individual to provide factual evidence to the court. In this case, Harvey presented no evidence suggesting that the automated system utilized by BCOCSE actually had the capability to implement Harvey's request effectively or that the CSEA or BCOCSE was aware of any method of overriding the noted deficiencies within the existing system.
JUDGMENT OF THE COURT OF SPECIAL APPEALS AFFIRMED. COSTS TO BE PAID BY PETITIONER.
Chief Judge BELL joins in the judgment only.
Petitioner's Brief at 39-40. While this passage is certainly applicable to the circumstances of Jessica G., we find that its language is not relevant to any interpretation of § 5-1038(b) as it affects the application of § 12-104. To accept this dicta in Jessica G. wholesale that the "orders" to which § 5-1038(b) are applicable are "all inclusive" would render § 12-104 completely impotent. Harvey concedes that, at the very least, § 12-104 prohibits the retrospective modification (inserting, of course, his definition of modification) of child support orders, something that is clearly in conflict with the language of the passage in Jessica G. We therefore conclude that, although the language in Jessica G. is instructive as to the generally broad scope of § 5-1038(b), it aids little in terms of determining when that broad scope is qualified or narrowed by an exception in a competing statute.
2005 Md. Laws, Chap. 595. This provision became effective on 1 October 2005.
273 Md. at 514, 331 A.2d at 72. Thus, it appears that the substance of a petition for mandamus involves two complimentary requirements: 1) a clear right on the part of the petitioner to the relief requested, and 2) a clear duty on the part of the administrative agency to perform the particular duty implicated. Harvey, however, has no clear right to have his child support arrearages forgiven under § 10-112. Sec. 10-112 involves the extinguishment or reduction of a legal obligation to pay child support, imposed by a court under circumstances in which Harvey had the opportunity to contest the imposition of such an obligation.
We also note that § 10-112 was enacted in order to allow (as opposed to mandate) the CSEA to forgive child support arrearages in its discretion. There is no duty on the part of the CSEA to reduce or eliminate child support arrearages in any case. Even if the CSEA were to concede that forgiveness in a particular case was within "the best interest of this State," such a finding does not create a legal duty to exercise that discretion in a particular way. Instead, any action taken pursuant to § 10-112 is entirely at the CSEA's discretion, and may not be compelled under a petition for mandamus relief. See Bd. of Educ. v. Secy. of Personnel, 317 Md. 34, 46-47, 562 A.2d 700, 706 (1989) (finding that mandamus relief to compel the Secretary of Personnel to issue a declaratory ruling under the Administrative Procedure Act would be improper because such a decision is "clearly a matter of the agency's discretion").
A case not relied upon by either party or the Court of Special Appeals, however, hints that the type of discretionary authority vested in the CSEA by § 10-112 may represent a potential matter of grace, the exercise or non-exercise of discretion as to which may not be reviewable properly by the courts. In State Department of Assessments and Taxation v. Clark, 281 Md. 385, 380 A.2d 28 (1977), this Court chose to consider whether a circuit court may exercise jurisdiction over a declaratory judgment action (which sought a declaration of unconstitutionality on equal protection and due process grounds, in the application of a statute, as well as injunctive relief) seeking review of the gratuitous reduction of a real property tax assessment by a local taxing authority. At the time of the operative facts in Clark, real property tax assessments were an annual ritual, with dates of finality from which a full panoply of administrative and judicial appellate rights attached for the benefit of affected property owners. Each year brought new dates of finality, triggering new appeal opportunities. The statutory scheme also provided that the local assessing authorities, by order, could decrease or abate an assessment after the date of finality in any year "in order to correct erroneous and improper assessments and to prevent injustice. . . ." 281 Md. at 388, 380 A.2d at 31 (citing Md. Code (1957, 1975 Repl. Vol.), Art. 81, § 67). No provision for further administrative or judicial review of a decision made under Art. 81, § 67 appeared in the statute.
The Clarks' Montgomery County property was re-assessed, following rezoning in 1971, for the 1972 tax year. They did not protest or appeal the re-assessment before the 1 January 1972 date of finality. In May 1972, a sewer moratorium was declared that prevented immediate development of the Clarks' rezoned property. In August 1972, the Clarks sought a reassessment because of the moratorium. The local assessing authority, after a hearing at which the Clarks and their counsel presented evidence and argument, granted a 25% reduction in February 1973. Id. at 389, 380 A.2d at 31. Unsatisfied with the amount of the reduction, the Clarks appealed to the Maryland Tax Court in April 1973, but that administrative body dismissed the appeal in August 1974. Although the Clarks noted an "appeal" of that dismissal to the Court of Appeals, we ultimately dismissed the case in August 1975. Id.
While the Clarks' appeal to the Tax Court was pending, they concurrently initiated an original action in the Circuit Court for Montgomery County, against the local tax assessing authorities and the State Department of Assessment and Taxation, seeking a declaration that Art. 81, § 67, as applied to them, violated equal protection and due process principles to the point of being a taking, and an injunction against the levy and collection of the tax until a rehearing was held on the question of the value of their property as affected by the sewer moratorium. Id. at 389-90, 380 A.2d at 31-32.
Of potential relevance to the present case, the Court of Special Appeals in Clark, over the protests of the assessing authorities that the statutory remedies in Art. 81 for contesting property assessments were exclusive, concluded that it had inherent power to consider the Clarks' declaratory judgment action. Id. at 390, 380 A.2d at 32. Thus, in the posture in which the case ultimately was briefed and argued before the Court of Appeals, the question was presented squarely whether the administrative agencies' decision to grant a reduction in assessment under Art. 81, § 67, after the date of finality in the relevant tax year, was reviewable by the courts at all and, if so, under what authority and according to what standards.
The Court in Clark first attached significance in its analysis to several general considerations: (1) a declaratory judgment action may not be utilized in lieu of a special statutory remedy provided for in a specific type of case; (2) Art. 81 provided for a thorough scheme of administrative and judicial appeals from annual assessment decisions, keyed to the date of finality, but did not include decisions made pursuant to § 67 in that scheme; and (3) recognition of the importance to the Government in achieving a balanced budget through the ascertainment of a tax base, fixing a tax rate, and the accurate calculation and timely levy of taxes, all keyed necessarily to fixing a time for final establishment of assessments. Id. at 391-94, 380 A.2d at 32-34. Grounded on these premises, the analysis continued by focusing on the role Art. 81, § 67 played in the scheme. Relying on earlier cases, the Court noted that: (1) § 67 only comes into play between dates of finality; (2) no statutory authority existed conferring on a higher administrative tribunal the power to review decisions made by the local assessing authorities under § 67; (3) § 67 proceedings are not subject to judicial review under the State Administrative Procedure Act; and (4) the earlier cases characterized the authority granted under § 67 as "entirely discretionary" and as "a matter of grace." Id. at 394-96, 380 A.2d at 34-35. One of those cases, LaBelle v. State Tax Commission, 217 Md. 443, 142 A.2d 560 (1958), described the petitioning property owner's legitimate expectations under § 67 as "he can only hope that the ... authorities ... will agree that his cause is just and demands relief. If they do not, the statute gives him no further remedy and the assessment that has been allowed to become final remains on the books for the year in question." 217 Md. at 451-52, 142 A.2d at 565. Given the statutory scheme for administrative and judicial review of annual assessment decisions tied to the date of finality, the Court found no infirmity in concluding that the courts lacked either statutory or inherent authority to review "the potential extraordinary relief held out by § 67," existing as it did as a purely discretionary "matter of grace." Clark, 281 Md. at 402, 380 A.2d at 38.
There are many similarities between § 67 in Art. 81 as considered in Clark and § 10-112 in the Family Law Article. Both contain loose-fitting, amorphous standards for the exercise of their respective discretion ("correct erroneous and improper assessments and to prevent injustice" versus "the best interest of this State"). Neither statutory scheme of which each provision is a part authorizes expressly either further administrative review of a decision made pursuant to the statute, or judicial review. The significance of the date of finality in Clark's reasoning could be argued to be of like significance to that accorded the order directing the payment of child support, protected from change by § 10-112. Yet, as important to Clark as was the fact that Art. 81 provided a detailed and comprehensive administrative and judicial review scheme for annual final assessment, no comparable scheme exists in the Family Law Article relative to the support order upon which § 10-112 depends for efficacy. Ultimately, in the present case, we are not compelled to resolve whether Clark's reasoning would operate to deny Harvey a judicial answer to his claims.
1976 Md. Laws, Chap. 778. This language was codified originally as Md. Code (1957, 1979 Repl. Vol.), Art. 88A, § 59(b)(3). Upon recodification into the Family Law Article in 1984, the language of the provision was changed to the current language. 1984 Md. Laws, Chap. 296. The revisor's note indicates that the new language was derived without substantive change from the language in Art. 88A, § 59(b)(3).
Subsequent to oral argument in this Court on 5 April 2005, Governor Robert L. Ehrlich, Jr., on 26 May 2005, signed House Bill 1181 into law. 2005 Md. Laws, Chap. 595. This legislation elaborates on the otherwise amorphous "best interest of this State" standard by adding to the current language of § 10-112 the following provisions:
This new language enunciates clearly and specifically a non-exhaustive set of circumstances under which the Legislature intended forgiveness of child support arrearages to be "in the best interest of this State." Harvey is, of course, free to pursue forgiveness of his arrearages under this new statutory scheme. We note though that, although it appears that this legislation may have been enacted, at least in part, in response to the intermediate appellate court's decision in the present case, the enacted legislation, which took effect 1 October 2005, might not apply, by its plain language, to Harvey's situation as indicated in this record. In addition to assisting low income parents to reduce the financial strains of accumulated arrearages, H.B. 1181 also "rewards parents who are fulfilling their parental responsibilities by living with and providing for their children." Testimony of Delegate Samuel ("Sandy") I. Rosenberg before the Senate Judicial Proceedings Committee in Support of H.B. 1181, 29 March 2005; see also Letter from Brian D. Shea, Executive Director of the CSEA, to Senator Brian E. Frosh, Chairman, Senate Judicial Proceedings Committee, 28 March 2005 (stating the CSEA's support for the final version of H.B. 1181 because it is "committed to adopting State policies that help to encourage family formation"). This concept of "family formation," however, apparently applies only to those circumstances where the obligor and obligee reunite. Because the record indicates that the mother of one of Harvey's pertinent children is deceased, under the language of § 10-112 as amended there may not be a presumption that forgiveness of Harvey's arrearage, with respect to that child, would be "in the best interest of this State." Ironically, Harvey also may have precluded the application of this presumption, designed to encourage "family formation," by remarrying.
We also note, however, that the initial version of H.B. 1181, introduced by Del. Rosenberg, did not include any language limiting a presumption to those situations in which the child, the obligor parent, and the obligee parent reside together. In fact, the initial version of H.B. 1181 stated that, with limited exceptions,
This initial version provided that an obligor would be able to reapply every three years, indefinitely, for suspension of child support arrearages. The proposed legislation was amended, apparently in response to criticism of certain provisions of the bill by Legal Aid. Legal Aid, which represented Harvey during his interaction with the CSEA and BCOCSE, and later as co-counsel in both the Court of Special Appeals and this Court, stated in its testimony before the House Judiciary Committee:
Testimony of the Legal Aid Bureau, Inc. regarding H.B. 1181 before the House Judiciary Committee, 23 February 2005. The House Judiciary Committee apparently responded positively to Legal Aid's advocacy by implementing the proposed amendments. In doing so, however, the Committee also added the requirement that, in order for the presumption to apply, the assignor/obligee parent must also reside with the obligor and the child(ren). This requirement reflects similar provisions in the statutes or regulations of other States allowing settlement or compromise of past arrearages. See, e.g., Vt. Stat. Ann. tit. 33, § 4106(e) (2001) (stating that "[i]f [child support] arrearages accrue after support rights have been assigned [to the State] and the obligor and obligee subsequently reunite, the office of child support may not take any action to collect the support arrearages [unless the combined family income exceeds certain figures]").
The most notable and conspicuous feature of the enacted legislation, from the perspective of any potential impact on the present case, is the absence of any mention of the "best interests of the child" standard or any reference to § 10-118. Although Legal Aid, in its testimony before the Committee, maintained that § 10-112 is subject to § 10-118, it made no effort to advocate for language in § 10-112 explicitly suggesting as such. Instead, by expressly qualifying the "best interest of this State" standard in § 10-112 with a presumption that involves only a small portion of those circumstances under which forgiveness would be in the "best interests of the child," one might conclude logically that the Legislature intended that other situations where forgiveness might be in the "best interests of the child" nonetheless would be subordinate to the "best interest of this State" standard. Indeed, had the Legislature believed that § 10-118 applied to § 10-112, there would be little need for the presumption now found in § 10-112.
Likewise, Harvey included in his Reply Brief in this Court statements by the CSEA's Executive Director regarding an arrearage forgiveness program under development that, as Harvey argues, "clearly indicates an explicit policy understanding by CSEA that the interests of the State are aligned with the best interests of the children." Petitioner's Reply Brief at 16. Although the "best interest of this State" may at times converge with the "best interests of the child," Harvey presents no evidence that the proposed arrearage forgiveness program ever was implemented or that the CSEA deviated from a current adopted policy in his case.
Black's Law Dictionary 104-05 (6th ed. 1990). "Capricious disregard" was defined as "[a] wilful and deliberate disregard of competent testimony and relevant evidence which one of ordinary intelligence could not possibly have avoided in reaching the result." Id. at 211. This earlier edition of Black's defines "arbitrary and capricious" as "[c]haracterization of a decision or action taken by an administrative agency or inferior court meaning willful and unreasonable action without consideration or in disregard of facts or law or without determining principle." Id. at 105. As with the definitions of "modification" and "set aside" referenced earlier in this opinion, Black's gives no indication for why these definitions were altered, or, in this instance, completely removed.
Petitioner's Reply Brief at 5.
Nor is this the correct forum in which to air effectively grievances and complaints about MAXIMUS, the private organization operating BCOCSE at the time of the operative facts of this case. See Amicus Brief at 11 (highlighting a study that characterized management of BCOCSE during the tenure of MAXIMUS as "not encouraging"); id. at 19 (accusing MAXIMUS of mishandling child support cases in Colorado); id. at 20-21 (citing concerns by the CSEA in 2002 that MAXIMUS was mishandling child support cases in Maryland as illustrative generally of "the risk of serious harm to individuals served by government programs under privatization").
Id. at 898.
Despite Harvey's perception of its significance, we find that this case supports, rather than refutes, the legitimacy of the financial incentives granted to a private company in performing government services. The analysis discounting PSI's pecuniary "interest" occurs in the context of the attorney-client relationship, reaffirming that an attorney's financial interest in his or her client's claim is secondary to the client's control over the claim. When a private company's interests are congruent with those of the State, the private company is free to reap the benefits of incentives that the State has offered to achieve those congruent interests.