Wayne GARRITY, Sr. v. MARYLAND STATE BOARD OF PLUMBING
No. 35, Sept. Term, 2015
Court of Appeals of Maryland
April 26, 2016
135 A.3d 452 | 447 Md. 359
Wayne GARRITY, Sr.
v.
MARYLAND STATE BOARD OF PLUMBING.
No. 35, Sept. Term, 2015.
Court of Appeals of Maryland.
April 26, 2016.
Jessica B. Kaufman, Asst. Atty. Gen. (Brian E. Frosh, Atty. Gen. of Maryland, Baltimore, MD), on brief, for respondent.
Argued before BARBERA, C.J., BATTAGLIA,* GREENE, ADKINS, MCDONALD, WATTS, GLENN T. HARRELL, JR. (Retired, Specially Assigned), JJ.
To date, Maryland has not adopted formally the doctrine of offensive non-mutual collateral estoppel. We are asked to decide in the present case whether the doctrine is permissible in this State and, further, whether it can be invoked to grant preclusive effect to an administrative order. We hold that offensive non-mutual collateral estoppel was properly applied in this case, and that a Final Order issued by an administrative body constitutes a “final judgment” for purposes of granting that order preclusive effect. We also hold that the civil penalty imposed upon Petitioner, for the same conduct for which Petitioner was civilly sanctioned in an earlier proceeding, does not violate the Double Jeopardy Clause.
I.
On February 23, 2012, the Consumer Protection Division of Maryland‘s Office of the Attorney General (“CPD“) issued a Statement of Charges and Petition for Hearing1 against Petitioner, Wayne Garrity, Sr., and his companies, All State Plumbing, Inc. and All State Plumbing, Heating & Cooling, Inc. (“All State“). The CPD alleged that Petitioner and All State engaged in unfair and deceptive trade practices in violation of the Maryland Consumer Protection Act (“CPA“). See
The CPD and Petitioner participated in a hearing on June 5 and 6, 2012, before an Administrative Law Judge (“ALJ“), as the designee of the CPD.3 At the hearing, the CPD submitted 84 exhibits and called 24 witnesses to testify. Petitioner submitted only one exhibit and called no witnesses and, when called upon to testify by the CPD, invoked his Fifth Amendment right against compelled self-incrimination. Both parties submitted post-hearing Proposed Findings of Fact and Conclusions of Law. The ALJ submitted a Proposed Decision on
Consequently, on January 3, 2013, the final decision maker designated by the CPD in its quasi-judicial capacity issued written findings of fact and conclusions of law. The designee found that Petitioner, through All State, “engaged in a long-standing and disturbing pattern of conduct involving deception and deceit.” The CPD designee found in particular that Petitioner employed three plumbers whose licenses had either expired or been suspended, and who performed more than 6,000 plumbing jobs without a license. The CPD further found that Petitioner charged customers between $95 and $175 for permits for certain plumbing services, yet regularly failed to obtain the required permits or schedule the required inspections for water heaters installed in at least 697 Maryland homes. The CPD designee concluded by a preponderance of the evidence that Petitioner committed at least 7,079 violations of the CPA through the above-described conduct.4
The CPD contemporaneously issued a Final Order adopting those findings and conclusions and issuing sanctions for Petitioner‘s violations of the CPA. The CPD ordered Petitioner to cease and desist engaging in unfair and deceptive trade practices and pay $250,000 in restitution to the victims. The CPD also imposed $707,900 in civil penalties and assessed costs in the amount of $65,129.54. See
Petitioner‘s counsel objected to the introduction of the CPD‘s Final Order, arguing that the Board must conduct its own evidentiary hearing and prove independently the violations of which Petitioner was charged. Counsel for the Board responded that Petitioner was collaterally estopped from relitigating the same facts as were litigated before the CPD and
The Board issued a Final Decision and Order on July 9, 2013. The Board, by application of the doctrine of collateral estoppel, adopted the findings of fact made by the CPD and, based upon those findings, concluded that Petitioner had committed “pervasive, numerous and egregious” violations of the MPA as alleged in the Charge Letter. The Board revoked Petitioner‘s master plumber license and imposed a $75,000 civil penalty.6
Petitioner petitioned for judicial review of the Board‘s decision in the Circuit Court for Baltimore City, which ruled that the Board properly invoked collateral estoppel in adopting the CPD‘s findings of fact. The Court of Special Appeals affirmed, Garrity v. Md. State Bd. of Plumbing, 221 Md.App. 678, 681, 110 A.3d 769 (2015), and we granted Petitioner‘s petition for a writ of certiorari to answer two questions, which we have rephrased:
- Did the Maryland State Board of Plumbing correctly invoke the doctrine of offensive non-mutual collateral estoppel and use it to preclusive effect against Petitioner?
- Were Petitioner‘s double jeopardy protections violated when the Maryland State Board of Plumbing and the Consumer Protection Division both fined him for the same conduct?
We answer yes to the first question and no to the second, and consequently affirm the judgment of the Court of Special Appeals.
Application of Collateral Estoppel
In our review of an administrative action, we look through the decision of the circuit court and review that agency action directly. People‘s Counsel for Balt. Cty. v. Surina, 400 Md. 662, 681, 929 A.2d 899 (2007). We review the Board‘s adjudicatory decision for whether there was “substantial evidence in the record as a whole to support the agency‘s findings and conclusions” and whether the Board‘s decision was “premised upon an erroneous conclusion of law.” Md. Aviation Admin. v. Noland, 386 Md. 556, 571, 873 A.2d 1145 (2005). Whether it was appropriate to grant preclusive effect to the CPD‘s Final Order, however, is a legal conclusion that this Court reviews de novo. See Spencer v. Md. State Bd. of Pharmacy, 380 Md. 515, 528, 846 A.2d 341 (2004).
The doctrine of collateral estoppel provides that, “[w]hen an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim.” Cosby v. Dep‘t of Human Res., 425 Md. 629, 639, 42 A.3d 596 (2012) (alteration in original) (quoting Murray Int‘l Freight Corp. v. Graham, 315 Md. 543, 547, 555 A.2d 502 (1989)). The doctrine is based on two principles: judicial economy and fairness. Treating adjudicated facts as established “protect[s] litigants from the burden of relitigating an identical issue with the same party or his privy and promot[es] judicial economy by preventing needless litigation.” Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326, 99 S.Ct. 645, 58 L.Ed.2d 552 (1979). The collateral estoppel doctrine has several permutations, each dependent upon the posture of the party attempting to assert it.
Traditionally, collateral estoppel contemplates a “mutuality of parties,” meaning that an issue that was litigated and determined in one suit will have preclusive effect in a second suit when the parties are the same as, or in privity with, those
- Was the issue decided in the prior adjudication identical with the one presented in the action in question?
- Was there a final judgment on the merits?
- Was the party against whom the plea is asserted a party or in privity with a party to the prior adjudication?
- Was the party against whom the plea is asserted given a fair opportunity to be heard on the issue?
Colandrea v. Wilde Lake Cmty. Assoc., 361 Md. 371, 391, 761 A.2d 899 (2000) (quoting Washington Suburban Sanitary Comm‘n v. TKU Assocs., 281 Md. 1, 18-19, 376 A.2d 505 (1977)).
At issue in the present case is “offensive non-mutual collateral estoppel,” whereby a plaintiff seeks to establish as undisputed a fact that was previously litigated adversely to the defendant by another plaintiff. Shader, 443 Md. at 163. We recently explained the distinction between offensive non-mutual collateral estoppel and defensive non-mutual collateral estoppel:
Defensive non-mutual collateral estoppel has been invoked in Maryland, when a defendant seeks to prevent a plaintiff
from relitigating an issue the plaintiff has previously litigated unsuccessfully in another action against a different party. The doctrine of offensive non-mutual collateral estoppel has not been embraced and applied by this Court, but has been invoked by other courts when a plaintiff seeks to foreclose a defendant from relitigating an issue the defendant has previously litigated unsuccessfully in another action against a different party.
Id. at 162-63 (citations and internal quotation marks omitted).
The Supreme Court applied this particular permutation in Parklane, to which we look in considering whether to adopt the doctrine in the case before us. In Parklane, shareholders of the corporation sought to grant preclusive effect to facts found in an earlier civil suit brought by the Securities and Exchange Commission (“SEC“) against the same defendants. 439 U.S. at 324-25. Although concluding in the end that the doctrine was permissible in an appropriate case, the Parklane Court recognized certain concerns attendant to applying non-mutual collateral estoppel offensively. Id. at 329.
The Parklane Court recognized that offensive application of the doctrine “does not promote judicial economy in the same manner as defensive use does.” Id. That is so because, while defensive collateral estoppel incentivizes plaintiffs to join all potential defendants in a single action, offensive collateral estoppel provides the opposite motivation. Id. at 329-30. “[T]he plaintiff has every incentive to adopt a ‘wait and see’ attitude, in the hope that the first action by another plaintiff will result in a favorable judgment” because the plaintiff can rely on that favorable judgment against the defendant but is not bound by it if the defendant is successful. Id. at 330. The Court also acknowledged the potential for unfairness. Id. The defendant may not have had an incentive to defend vigorously against the first litigation if, for example, only “small or nominal damages” were previously at issue and a future suit was not foreseeable. Id. It might also be unfair if the judgment relied upon was “itself inconsis-
The Parklane Court concluded, however, that those potential judicial economy and fairness concerns did not preclude the doctrine‘s application in that case. Id. at 331. The Court noted that a shareholder could not have joined the SEC‘s lawsuit, rendering inapplicable the judicial economy concern. Id. at 331-32. Similarly, the Parklane defendants had every incentive to defend vigorously against the SEC‘s lawsuit, given the serious allegations and “the foreseeability of subsequent private suits that typically follow a successful Government judgment.” Id. at 332. The Court ultimately held that the Parklane defendants “received a ‘full and fair’ opportunity to litigate their claims in the SEC action,” and consequently were collaterally estopped from relitigating the facts that were already adjudicated adversely to them in that proceeding. Id. at 332-33.
The Parklane Court instructed, however, that because of its negative implications, trial courts should have broad discretion to determine when offensive non-mutual collateral estoppel should be applied. Id. at 331. “The general rule should be that in cases where a plaintiff could easily have joined in the earlier action or where, either for the reasons discussed above or for other reasons, the application of offensive estoppel would be unfair to a defendant, a trial judge should not allow the use of offensive collateral estoppel.” Id.
We have iterated the Parklane Court‘s concerns about offensive non-mutual collateral estoppel in several cases in which its application was sought. Yet, for one reason or another, in none of those cases have we expressly adopted or rejected that particular permutation. Rather, in each case in which we have been asked to apply it, the particulars of the case have counseled against doing so.
Later, in Burruss v. Board of County Commissioners of Frederick County, 427 Md. 231, 46 A.3d 1182 (2012), we were asked to grant preclusive effect to a determination by the Circuit Court for Anne Arundel County that a “sufficient cumulative information” standard applied to signature verification for purposes of requesting a special election for a board of county commissioners. Id. at 245. We echoed the Supreme Court‘s concern in Parklane that “offensive use of non-mutual collateral estoppel may be unfair ‘if the judgment relied upon as a basis for the estoppel is itself inconsistent with one or more previous judgments in favor of the defendant.‘” Id. at 252 (quoting Parklane, 439 U.S. at 330). Because we had vacated on appeal the decision of the Circuit Court for Anne Arundel County, upon which the petitioners sought to rely, we concluded that “it would be unfair to bind Respondents to an interpretation of the law inconsistent with our holding in that case.” Id.
We most recently considered the propriety of offensive use of non-mutual collateral estoppel in Shader. There, a restrictive covenant binding property owned by the petitioners provided that “no building of any kind whatsoever shall be erected or maintained thereon except private dwelling houses” and “no more than one dwelling may be erected on a lot.” 443 Md. at 152-53. When the petitioners—whose
The circuit court in Shader concluded that collateral estoppel was not appropriate because the issue in that case was not identical to the specific matter at issue in the earlier litigation. Id. at 169. The court reasoned that the petitioners were attempting to reconfigure a parcel that consisted of two different lots, whereas Duval was concerned with a reconfiguration within a single lot. Id. Moreover, the court emphasized that HIA was only deemed to have waived the covenant in Duval as to structures other than single family dwellings, but did not abandon enforcement of the covenant as a whole. Id. at 159. We agreed with the circuit court‘s analysis, recognizing that “[w]e have not embraced the doctrine of offensive non-mutual collateral estoppel, but even were we, the doctrine could not be applied in the present
We glean from all three of these cases, Rourke, Burruss, and Shader, that we have not formally adopted this particular form of collateral estoppel, and each of our decisions to date has reiterated the caution outlined in Parklane. In none of these cases, though, have all four elements of the doctrine been established and each concern articulated in Parklane been satisfied. See Parklane, 439 U.S. at 331. None of those cases, therefore, counsels against application of offensive non-mutual collateral estoppel when that application is appropriate.
The Court of Special Appeals was presented such an appropriate case in Culver v. Maryland Insurance Commissioner, 175 Md.App. 645, 931 A.2d 537 (2007). This Court had previously disbarred Mr. Culver after concluding that he violated several of our rules of professional conduct, including those prohibiting conduct involving dishonesty, deceit, or misrepresentation. Attorney Grievance Comm‘n v. Culver, 381 Md. 241, 266-83, 849 A.2d 423 (2004). Thereafter, the Maryland Insurance Administration (“MIA“) revoked Mr. Culver‘s insurance producer‘s license on the ground that he was deemed untrustworthy and therefore did not meet the statutory requirements for such a license. Culver, 175 Md.App. at 649-51; see
The Court of Special Appeals concluded that the judicial economy and fairness considerations articulated in Parklane, later repeated by us in Rourke, would not be implicated by applying offensive non-mutual collateral estoppel. Id. at 656. With respect to judicial economy, the MIA as a regulatory agency “is charged with protecting consumers from untrustworthy insurance producers by revoking or denying their licenses,” rendering inapplicable the “wait and see” attitude often present with private plaintiffs. Id. The Court of Special Appeals concluded that it was not unfair for Mr. Culver to be collaterally estopped from relitigating the facts supporting his disbarment because he had sufficient incentive to defend against those allegations and there were no procedural protections afforded in the MIA action that could lead to an inconsistent result. Id.
In the absence of any judicial economy or fairness concerns, the Court of Special Appeals held that the four-factor test, set forth in Colandrea, 361 Md. at 391, was also satisfied and accordingly granted our disbarment action preclusive effect. Id. at 657-58. “The action resulting in appellant‘s disbarment was certainly a final judgment on the merits; appellant was a party to that action; and appellant was provided a fair opportunity to be heard by the Court of Appeals.” Id. at 657. The Court of Special Appeals rejected Mr. Culver‘s suggestion that in such a circumstance the ALJ was nevertheless “required to make independent findings of fact.” Id. at 658. Instead, the court concluded that the exercise was unnecessary because the facts supporting our conclusion that Mr. Culver had engaged in dishonest conduct were identical to those that Mr. Culver sought to challenge before the ALJ. Id.
For reasons we shall explain, the reasoning espoused by the Court of Special Appeals in Culver applies equally here. Not one of the concerns articulated in Parklane, as reflected in our precedent, is present in this case; in addition, the Board
A. Judicial Economy and Fairness
Granting preclusive effect to the CPD‘s Final Order in this case comports with principles of judicial economy and fairness. Just as in Parklane, where the Court recognized that the shareholder could not have joined the first litigation instituted by the SEC, the Board likewise could not have joined the CPD‘s proceeding. See Parklane, 439 U.S. at 331-32. Both are administrative agencies, and both are constrained to charge violations of their own statutes. See
Nor is it unfair to Petitioner to apply collateral estoppel in this case. Petitioner had every “incentive to defend vigorously” the CPD‘s allegations. See id. Each violation of the CPA is susceptible to a $1,000 fine and Petitioner ultimately was adjudged to have committed over 7,000 violations. As the
And, finally, there is also no concern that there were different “procedural opportunities” in the two proceedings. Each proceeding was brought by an administrative agency that conducted a contested case administrative hearing in conformance with the Administrative Procedure Act. See
Petitioner notes that the Board‘s decision is rendered by a panel of plumbers and consumers rather than an ALJ, but he
B. The Finality of an Administrative Final Order
Given our conclusion that application of offensive collateral estoppel would be equitable in this case, it remains for us to decide whether the elements of that doctrine are satisfied. Petitioner concedes that the first, third, and fourth prongs are established, as indeed he must. The issues in the two proceedings are identical; both were concerned with Petitioner‘s actions in retaining unlicensed plumbers, failing to obtain required permits and inspections, making misrepresentations to his customers, and overcharging them for his services. Petitioner was a party in both proceedings, and he acknowledges that he had a full and fair opportunity to be heard on the issues in the CPD adjudication. The only issue, then, is whether the CPD‘s Final Order constitutes a final judgment under the second prong of the analysis.
Petitioner contends that there was no “final judgment” as that phrase is ordinarily contemplated because the decision in the first proceeding was rendered by an administrative agency, not a court. In that regard, he places great weight on the
The Supreme Court recently opined on the subject. B & B Hardware, Inc. v. Hargis Indus., Inc., — U.S. —, 135 S.Ct. 1293, 191 L.Ed.2d 222 (2015). In that case, the owner of trademark SEALTIGHT had opposed before the Trademark Trial and Appeal Board (“TTAB“) another corporation‘s attempt to register the mark SEALTITE, and at the same time had sued that corporation in federal district court for trademark infringement. Id. at 1299. When the TTAB issued a decision that registration of SEALTITE would result in a likelihood of confusion—also an element of a trademark infringement claim—the owner of SEALTIGHT sought for that ruling to have preclusive effect in the infringement litigation. Id. at 1302. The district court rejected the request on the ground that the TTAB is not an Article III court, and a jury ultimately concluded that there was no likelihood of confusion. Id.
The Supreme Court reversed. It concluded that “this Court‘s cases and the Restatement make clear that issue preclusion is not limited to those situations in which the same issue is before two courts.” Id. at 1303. The Court reasoned that one can presume that Congress, or, presumably, the General Assembly in this case, intended for administrative agency decisions to have preclusive effect precisely because the legislature delegated quasi-judicial functions to that agency. Id. (explaining that “a valid and final adjudicative determination by an administrative tribunal has the same effects
We have held that an agency decision can have preclusive effect when that agency is “performing quasi judicial functions.” See Batson v. Shiflett, 325 Md. 684, 703 n. 7, 602 A.2d 1191 (1992). We will grant an agency decision preclusive effect for purposes of collateral estoppel upon satisfaction of the three-part test arising from Exxon Corp. v. Fischer, 807 F.2d 842, 845-46 (9th Cir.1987), referred to as the Exxon test. See Batson, 325 Md. at 701, 602 A.2d 1191. That test provides that an agency decision can have preclusive effect if: (1) the agency acted in a judicial capacity; (2) the issue presented to the fact finder in the second proceeding was fully litigated before the agency; and (3) resolution of the issue was necessary to the agency‘s decision. Id. When those elements are satisfied, “agency findings made in the course of proceedings that are judicial in nature should be given the same preclusive effect as findings made by a court.” Id. at 702, 602 A.2d 1191; accord United States v. Utah Constr. & Mining Co., 384 U.S. 394, 422, 86 S.Ct. 1545, 16 L.Ed.2d 642 (1966) (“When an administrative agency is acting in a judicial capacity and resolves disputed issues of fact properly before it which the parties have had an adequate opportunity to litigate, the courts have not hesitated to apply res judicata to enforce repose.“). Each of those factors is unquestionably satisfied here.
Second, the issues to which the Board granted preclusive effect were actually litigated and determined in the CPD proceeding. See Batson, 325 Md. at 706, 602 A.2d 1191 (noting that the second prong of the Exxon test is concerned with whether “the identical issue sought to be relitigated was actually determined in the earlier proceeding“). Petitioner has acknowledged that the issues in the two proceedings are identical, and, to be sure, both administrative proceedings were concerned with the same misconduct in Petitioner‘s plumbing business.
Third, the CPD‘s finding that Petitioner engaged in misconduct in his plumbing business in violation of the CPA was a necessary predicate to the CPD‘s issuance of penalties and costs in its Final Order. See
Because all elements of the Exxon test are satisfied, we hold that the CPD‘s Final Order has preclusive effect. See Batson, 325 Md. at 701, 602 A.2d 1191. An agency decision can have preclusive effect regardless of whether that decision is called a “final order” or a “final judgment.” As a result, even if we agreed with Petitioner that the distinction between
Petitioner argues that we should not apply the Exxon test in the context of offensive non-mutual collateral estoppel because it would set a “dangerous legal precedent” and leave a “wide-ranging and chaotic legal impact” on future trial court and administrative proceedings. We disagree. As the Board emphasized in its brief, by considering the Parklane factors as a threshold question, we have “already established ample safeguards to ensure fairness in the offensive application of non-mutual collateral estoppel to an administrative agency final decision by another administrative agency or a court.” We need not grant Petitioner any further safeguards.
Petitioner raises hypothetical concerns that an ALJ‘s findings of fact could later be granted preclusive effect in court when those findings were based upon hearsay, but we fail to see how those hypothetical concerns implicate application of collateral estoppel here. We agree with the Court of Special Appeals that “[t]he mere fact that hearsay might have been allowed in both the CPD and the [Board] hearings is irrelevant, as he had the same procedural opportunities in both forums.” Garrity, 221 Md.App. at 693, 110 A.3d 769. If such a case were to arise in the future, we expect that the trial court, or administrative agency acting in a quasi-judicial capacity, would recognize that the two proceedings presented different procedural opportunities, thereby reflecting one of the elements of unfairness delineated in Parklane, 439 U.S. at 331, 99 S.Ct. 645. Here, Petitioner was charged by and participated in a hearing with two administrative agencies that were governed by the same rules of procedure, bore the same burden of proof, and required the same facts to be established to support violations of their respective statutes. It is against this backdrop that we conclude that non-mutual collateral estoppel can be applied offensively in this case in a manner that is fair to the party against whom the doctrine is asserted. We need not and do not opine on whether offensive non-mutual collateral estoppel could be applied appropriately upon
III.
Double Jeopardy
Petitioner argues that “it is undisputed that the State of Maryland has punished [him] twice for the same offense” in violation of the Double Jeopardy Clause of the Fifth Amendment, by fining him $707,900 for violating the CPA and $75,000 for violating the MPA. He argues that the Board‘s penalty constitutes a “subsequent and redundant civil punishment” that is cumulative of the penalty he already received from the CPD for the same conduct. Petitioner‘s double jeopardy argument assumes mistakenly that the CPD‘s penalty put him in jeopardy in the first instance. Gianiny v. State, 320 Md. 337, 344, 577 A.2d 795 (1990) (noting that “it is essential to a plea of double jeopardy that the accused must have been put in jeopardy“). We disagree with the assumption that the civil penalty imposed under the CPA was “criminal punishment,” thereby placing Petitioner in initial jeopardy, much less that the Board‘s subsequent civil penalty, for violating an entirely separate statutory scheme, was a second “criminal punishment” in violation of the Double Jeopardy Clause.
The United States Supreme Court has made clear that the Double Jeopardy Clause only protects “against the imposition of multiple criminal punishments for the same offense.” Hudson v. United States, 522 U.S. 93, 99, 118 S.Ct. 488, 139 L.Ed.2d 450 (1997). The proper first question before us, then, is whether the penalty imposed by the CPD should be characterized as civil or criminal. See Breed v. Jones, 421 U.S. 519, 528, 95 S.Ct. 1779, 44 L.Ed.2d 346 (1975) (explaining that “jeopardy describes the risk that is traditionally associated with a criminal prosecution“). The answer to that question lies in statutory construction. Hudson, 522 U.S. at 99, 118 S.Ct. 488. Under current Supreme Court precedent, we first must discern whether the language of the statute authorizing
[w]hether the sanction involves an affirmative disability or restraint, whether it has historically been regarded as a punishment, whether it comes into play only on a finding of scienter, whether its operation will promote the traditional aims of punishment—retribution and deterrence, whether the behavior to which it applies is already a crime, whether an alternative purpose to which it may rationally be connected is assignable for it, and whether it appears excessive in relation to the alternative purpose assigned.
Id. (footnotes omitted). The Supreme Court has also instructed that “these factors must be considered in relation to the statute on its face,” id. at 169, 83 S.Ct. 554 and that “only the clearest proof could suffice to establish the unconstitutionality” of sanctions imposed by the government, Ward, 448 U.S. at 249, 100 S.Ct. 2636 (emphasis added). In weighing these factors, moreover, “no one factor should be considered controlling as they ‘may often point in differing directions.’” Hudson, 522 U.S. at 101, 118 S.Ct. 488 (quoting Kennedy, 372 U.S. at 169, 83 S.Ct. 554).
Petitioner asks us to apply instead the rationale espoused by an earlier Supreme Court case, United States v. Halper, 490 U.S. 435, 109 S.Ct. 1892, 104 L.Ed.2d 487 (1989). The Halper Court had instructed that principles of double jeopardy prohibited any second “punishment,” defined as a sanction that serves the traditional goals of punishment—retribution and deterrence. Id. at 448-50, 109 S.Ct. 1892. The Court
We decline Petitioner‘s invitation, however, because the Supreme Court in Hudson displaced the analysis applied in Halper. Hudson, 522 U.S. at 101, 118 S.Ct. 488. The Hudson Court noted that Halper “deviated from our traditional double jeopardy doctrine” by “bypass[ing] the threshold question: whether the successive punishment at issue is a ‘criminal’ punishment.” Id. The Court further opined that this “deviation from longstanding double jeopardy principles was ill considered” and “has proved unworkable.” Id. at 101-02, 118 S.Ct. 488. The Court reasoned that “all civil penalties have some deterrent effect,” and therefore requiring a civil sanction to be “‘solely’ remedial” would mean that “no civil penalties are beyond the scope of the Clause.” Id. at 102, 118 S.Ct. 488. The Hudson Court therefore clarified that the preliminary question in any double jeopardy analysis must concern whether a sanction can be fairly regarded as criminal in the first instance.
In assessing that preliminary question, we turn to the statutory language of the CPA. See Hudson, 522 U.S. at 99, 118 S.Ct. 488 (noting that a double jeopardy inquiry begins with determining whether the language of the statute indicates “a preference for one label or the other” (quoting Ward, 448 U.S. at 248, 100 S.Ct. 2636)). To begin, the statute according to which Petitioner was sanctioned expressly designated the penalty as civil;
By contrast,
Because the General Assembly intended for the penalty to be civil in nature, we turn now to the question of whether the penalty is nevertheless “so punitive in form and effect as to render [it] criminal.” Hudson, 522 U.S. at 104, 118 S.Ct. 488
First, we emphasize that the CPD is charged with protecting consumers and ensuring that only merchants with integrity are offering goods and services to the public. See
We have held that penalties imposed on licensed individuals for violating provisions attendant to that license are outside of the reach of the Double Jeopardy Clause because those penalties are directed toward protecting the public, and are therefore remedial, rather than punitive. See Spencer, 380 Md. at 534, 846 A.2d 341 (“The Board [of Pharmacy]‘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.“). In the context of a license suspension, we explained that the purpose of a licensing system “is to prevent unscrupulous or incompetent persons from engaging in the licensed activity” and to “protect the public” from those persons. See State v. Jones, 340 Md. 235, 251-52, 666 A.2d 128 (1995); cf. Ward v. Dep‘t of Pub. Safety & Corr. Servs., 339 Md. 343, 350, 663 A.2d 66 (1995) (holding that a penalty for employee misconduct was not punishment for double jeopardy purposes because the purpose of the penalty was to ensure that employees conform to the standard of conduct and was therefore remedial); McDonnell v. Comm‘n on Med. Discipline, 301 Md. 426, 436, 483 A.2d 76 (1984) (explaining 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“). For that reason, we have concluded that “license suspensions generally serve remedial purposes.” Jones, 340 Md. at 251, 666 A.2d 128. That rationale applies to penalties imposed for violating consumer protection laws, equally aimed at protecting the public, because a monetary penalty similarly has not “historically been viewed as punishment.” See Hudson, 522 U.S. at 104, 118 S.Ct. 488 (noting that “the payment of fixed or variable sums of money is a sanction which has been recognized as enforcible [sic] by civil proceedings since the original revenue law of 1789” (alteration in original) (quoting Helvering v. Mitchell, 303 U.S. 391, 400, 58 S.Ct. 630, 82 L.Ed. 917 (1938))). A statutory scheme designed to protect consumers is necessarily remedial, notwithstanding that a penalty for violating those statutes may have a deterrent component to it. Jones, 340 Md. at 249, 666 A.2d 128 (concluding that a penalty should not be viewed from a defendant‘s perspective in determining whether the penalty constitutes punishment because “even remedial sanctions carry the sting of punishment” (quoting Halper, 490 U.S. at 447 n. 7, 109 S.Ct. 1892)). Because the CPA is a remedial statutory scheme, monetary penalties for its violations are civil, rather than criminal, and consequently do not implicate the Double Jeopardy Clause.
We reach the same conclusion by applying the Kennedy factors. A monetary penalty is not an “affirmative disability or restraint.” See Smith v. Doe, 538 U.S. 84, 100, 123 S.Ct. 1140, 155 L.Ed.2d 164 (2003) (concluding that the sex offender registry was not an affirmative disability or restraint because it “imposes no physical restraint, and so does not resemble the punishment of imprisonment, which is the paradigmatic affirmative disability or restraint“). The penalty also is not imposed only upon a finding of scienter because the CPD can assess that penalty against “[a] merchant who engages in a violation of this title.” See
In that regard, while Petitioner‘s misconduct could also have subjected him to a criminal prosecution under the CPA, that factor alone does not render the civil monetary penalty a criminal punishment. See Hudson, 522 U.S. at 101, 118 S.Ct. 488 (instructing that “no one factor should be considered controlling“); Klein v. State, 52 Md.App. 640, 645, 452 A.2d 173 (1982) (concluding that “[t]he remedies available in the Consumer Protection Act are civil and equitable“). “[T]he nature of the sanction cannot turn solely on whether the conduct at issue is also a crime” because the legislature “may impose both a criminal and a civil sanction in respect to the same act or omission.” SEC v. Palmisano, 135 F.3d 860, 865-66 (2d Cir.1998) (quoting Ursery, 518 U.S. at 292, 116 S.Ct. 2135) (concluding that a disgorgement order for violating securities laws did not place the violator in jeopardy even though the conduct was also criminal, the violations required scienter, and the penalty had a deterrence element because the securities laws have a clear remedial purpose). Petitioner has not alerted us to any “alternative purpose to which [the penalty] may rationally be connected,” and in our view the purpose is to protect the public from dishonest merchants. See Grossfeld v. Commodity Futures Trading Comm‘n, 137 F.3d 1300, 1303 (11th Cir.1998) (per curiam) (concluding that a fine imposed for violating the Commodities Exchange Act was a civil and remedial penalty because it was rationally related to the remedial purpose of deterring fraudulent behavior by brokers).
Although unnecessary to the resolution of Petitioner‘s double jeopardy argument, we would conclude likewise that the subsequent civil penalty imposed by the Board was not “criminal punishment” for purposes of double jeopardy. Like the CPA, the MPA is a remedial scheme designed to protect the public. It contains both civil and criminal punishments that are clearly delineated, and the monetary penalty is reasonable on its face. Consequently, neither the CPD‘s nor the Board‘s penalties placed Petitioner in “jeopardy” for purposes of the Double Jeopardy Clause.
JUDGMENT OF THE COURT OF SPECIAL APPEALS AFFIRMED; COSTS TO BE PAID BY PETITIONER.
ADKINS, J., concurs.
ADKINS, J.
Respectfully, I concur with the Majority. The Majority‘s Double Jeopardy Clause analysis of the CPA is eminently reasonable. In its robust discussion of Garrity‘s penalty under the CPA, however, the penalty Garrity incurred under the MPA fades into the background. But the Court should be troubled by the MPA penalty lest we sanction the imposition of duplicate fines for the same conduct. Cf. Howard Cnty., Md. v. One 1994 Chevrolet Corvette Vin No. 1G1YY22P5R5100931, 119 Md.App. 93, 98, 704 A.2d 455 (1998) (affirming the trial court‘s conclusion that the excessive fines clause prohibited a civil forfeiture).1
Excessive fines may not be imposed under
When the General Assembly added the penalty provision to
While the excessive fines test focuses on the relationship between the fine and the associated offense, courts have undertaken this inquiry by also considering other penalties levied against the defendant. Cf. United States v. Ferro, 681 F.3d 1105, 1115 (9th Cir.2012) (“In assessing whether a fine is excessive, this court is ‘not required to consider any rigid set of factors.’ “) (citation omitted). In Wemhoff, for example, the U.S. District Court for the District of Maryland considered whether a late payment penalty for a parking fine was excessive in light of the original fine. 591 F.Supp.2d at 808-09; see also Mackby, 261 F.3d at 831 (observing that the excessive fines analyses of a civil penalty and treble damages “need not be considered in isolation as if the other did not exist“).
In State v. Starlight Club, the Supreme Court of Utah affirmed the judgment of the revocation of an establishment‘s charter and a fine of $2,500 but reversed as to the fines of $5,000 for two additional convictions arising out of the same conduct. 17 Utah 2d 174, 406 P.2d 912, 914-15 (1965). The
Returning to
Garrity did not make a claim under the excessive fines clause. Thus, the Majority rightly limited its discussion regarding the duplicate fine to the double jeopardy claim made by Garrity, and I agree with that discussion, and join that opinion. But I write this concurring opinion lest the Majority opinion be construed as necessarily rejecting a challenge
135 A.3d 473
O‘BRIEN & GERE ENGINEERS, INC.
v.
CITY OF SALISBURY.
No. 53, Sept. Term, 2015.
Court of Appeals of Maryland.
April 26, 2016.
Notes
A person may not engage in any unfair or deceptive trade practice, as defined in this subtitle or as further defined by the Division, in:
- The sale, lease, rental, loan, or bailment of any consumer goods, consumer realty, or consumer services;
- The offer for sale, lease, rental, loan, or bailment of consumer goods, consumer realty, or consumer services;
- The offer for sale of course credit or other educational services;
- The extension of consumer credit;
- The collection of consumer debts; or
- The purchase or offer for purchase of consumer goods or consumer realty from a consumer by a merchant whose business includes paying off consumer debt in connection with the purchase of any consumer goods or consumer realty from a consumer.