Washington Suburban Sanitary Commission v. Lafarge North America, Inc.
116 A.3d 493
Md.2015Background
- Lafarge operated a ready-mix concrete plant in Rockville and paid WSSC water and sewer charges; much water was used in production and not discharged to the sewer.
- A submeter installed to exclude non-sewered water was damaged and relocated after a 2005 fire; afterward sewer bills rose substantially.
- Lafarge submitted a refund claim (March 6, 2012) and requested a hearing (April 9, 2012) under PUA §25-106; WSSC did not decide within 180 days.
- PUA §25-106(d) provides that failure to decide within 180 days is a deemed final rejection; Lafarge sought judicial review in Montgomery County Circuit Court under §25-106(e).
- The Circuit Court found the deemed denial unsupported by substantial evidence and arbitrary and capricious, reversed, and remanded with directions that WSSC calculate and issue an appropriate refund; the Court of Special Appeals affirmed and the Court of Appeals likewise affirmed.
Issues
| Issue | Plaintiff's Argument (Lafarge) | Defendant's Argument (WSSC) | Held |
|---|---|---|---|
| Whether a court reviewing a deemed denial may reverse and direct the agency to issue a refund rather than simply remand for reconsideration | Deemed denial permits judicial review; court may reverse and direct refund calculation when agency failed to act timely | Court may only remand for agency factfinding; allowing reversal forecloses agency discretion and conflicts with separation of powers | Court may reverse a deemed denial unsupported by substantial evidence or that is arbitrary and capricious and remand with directions to calculate and issue the refund, but cannot allow the agency to re-deny after the 180-day failure |
| Whether refund claims with requested hearings are "contested cases" under the APA, authorizing appeal to Court of Special Appeals | Refund claims with hearings are contested cases under SG §10-202(d); APA appellate scheme applies | (Argued) refund claims not contested cases; appeal path limited | Refund claims where a hearing is requested are contested cases under the APA; appellate review to Court of Special Appeals is available |
| Whether the Circuit Court exceeded its scope by supplementing the agency record with investigative files during judicial review | Court may require supplementation where necessary to review the deemed denial and ensure record supports agency action | Circuit Court exceeded authority by ordering production and making factual findings absent proper agency findings | Issue rendered moot by holding; Court declined to decide whether supplementation was proper but noted supplementation is generally disfavored absent asserted bias or ex parte contacts |
| Whether the WSSC’s failure to act within 180 days nullifies its ability to deny the claim on remand | Statute’s deemed-denial prevents the agency from later denying; court may order refund calculation | Agency retains ability to reconsider and potentially deny on remand | The 180-day deemed-denial precludes the agency from denying the claim on remand; agency may only calculate amount due and issue the refund |
Key Cases Cited
- Donocam Associates v. Washington Suburban Sanitary Commission, 302 Md. 501 (1985) (WSSC is a state agency subject to the APA and contested-case procedures apply)
- Washington Suburban Sanitary Comm'n v. Phillips, 413 Md. 606 (2010) (discusses WSSC administrative obligations and APA application)
- Anne Arundel County v. Halle Development, Inc., 408 Md. 539 (2009) (where agency failed to act timely, courts may order relief and limit remand to ministerial calculations)
- Washington Suburban Sanitary Commission v. C.I. Mitchell & Best Co., 303 Md. 544 (1985) (historical context motivating statutory refund remedies)
- Spencer v. Maryland State Bd. of Pharmacy, 380 Md. 515 (2004) (standards of judicial review: substantial evidence and arbitrary-and-capricious analysis)
- Waterkeeper Alliance, Inc. v. Maryland Dep't of Agriculture, 439 Md. 262 (2014) (courts may consider jurisdictional questions sua sponte)