This case arises out of a decision by the Maryland State Board of Pharmacy, an administrative agency. The decision was reviewed first by the Circuit Court for Baltimore City and then by the Court of Special Appeals,
Whether a court has exceeded its statutory and judicial authority over an administrative agency is a question that involves the constitutional balance of power between the judiciary and еxecutive administrative agencies. That balance of power is governed by an established area of administrative law dealing with the scope of judicial review over the various types of administrative agency decisions. In this case, we consider whether the Court of Special Appeals exercised the proper standard of judicial review over an administrative agency decision in a matter that is committed, ultimately, to the agency’s discretion.
I.
Linda Ann Spencer, a pharmacist, continued to practice pharmacy after her license expired on July 1, 1999. On *519 August 16, 1999, Spencer’s supervisor, having confirmed with the Maryland State Board of Pharmacy (“the Board”) the expiration and non-renewal of Spencer’s pharmacy license, instructed Spencer to cease practicing pharmacy, which she did. Spencer then contacted the Board to inquire why her license had not been renewed, asserting that she had timely submitted the required renewal application. An internal review of the Board’s office records, however, indicated that no application or accompanying fee was received. Spencer surmised that her application had been lost in the mail and therefore submitted a renewal application to the Board on August 30, 1999. Although her application included certification that she had acquired the requisite number of continuing education credits, the majority of those credits were obtained after her license had expired in June. Nevertheless, the Board granted Spencer’s renewal application on September 14, 1999, after which Spencer resumed her practice of pharmacy.
The Court of Special Appeals described the remaining events that led to this appeal as follows (referring to the Board as “appellant” and to Spencer as “appellee”):
“Appellant issued charges against appellee on February 16, 2000, alleging that she had practiced pharmacy without a license for a period of six weeks and that she had failed to maintain records of required continuing education credits. Appellant scheduled a case resolution conference (CRC) to attempt to resolve the matter without the necessity of a hearing. Mr. Stanton Ades and Ms. Laura Schneider, two members of the Board, represented appellant at the CRC. The settlement negotiations were unsuccessful. Both Mr. Ades and Ms. Schneider sat on the panel of Board members who eventually heard this contested case. On many occasions, beginning in July 2000, appellee sent letters to counsel for appellant, seeking to have the matter referred to the Office of Administrative Hearings (OAH). Appellee believed appellant incapable of giving her a fair and impartial hearing because appellant had been intimately involved in settlement negotiations with appellee and may have prejudged the case. Appellant repeatedly denied appellee’s *520 requests to move the case to OAH, stating that appellant’s knowledge of settlement negotiations did not disqualify it from hearing evidence. In further justification for refusing to move the case, appellant stated that appellee 'failed to assign any specific facts indicating the Board would not be an impartial arbiter,’ and also noted that the Board ‘ha[d] never delegated a matter to the Office of Administrative Hearings.’
“Finally, on August 14, 2000, appellee filed a motion to refer the casé to the Office of Administrative Hеarings or, in the alternative, to recuse members of the Board. Appellant denied that motion on September 15, 2000.
“Appellant held a hearing on the matter on September 20, 2000, and resumed the hearing on January 8, 2001. Counsel for appellant had given books containing exhibits to the members of the Board on the morning of the hearing. When counsel for appellee arrived for the hearing, he noticed that at least one member of the Board was reviewing evidence before the start of the hearing. Counsel for appellee complained about the member reviewing documents that were not in evidence, and asked that member to recuse himself. This request was denied. He then renewed the motion tо move the case to OAH and appellant denied that motion also. Finally, counsel for appellee asked that the two members who were involved in settlement negotiations recuse themselves, and that request was also denied.
“Appellee did not dispute that she had practiced pharmacy without a license for a period of six weeks. Her counsel argued, however, that her practice of pharmacy without a license was authorized under Md.Code (1984, 1999 Repl.Vol.), § 10-226(b) of the State Government Article, because she had submitted a timely renewal application. Appellee did not present any evidence, other than her testimony, that she had filed a renewal application prior to the expiration of her license on July 1, 1999. Appellant’s records did not reveal any application, check, or money order from appellee prior to July 1, 1999. Appellant determined that appellee’s *521 testimony on the matter lacked credibility and found that she had not filed a timely renewal application.
“During the hearing, counsel for appellee accused members of the Board of prejudging the case, of sleeping during the hearing, and of not paying attention to testimony. After the accusation about sleeping, the hearing deteriorated to the point where several members of the Board engaged in a heated conversation with counsel for аppellee involving demands for apologies and chastisements about finger pointing from counsel and members of the Board. Finally, one of the Board members asked counsel for appellee to leave the room, but he remained and continued arguing. Eventually, counsel was asked if he would act appropriately, and he said he would, so the hearing continued.
“Later, counsel for appellee objected to the entry of a mail log, and argued that it ‘does not go to [appellee’s] credibility.’ Ms. Hawkins, one of the Board members, stated ‘sure it does.’ When counsel then said to the Board, ‘Ms. Hawkins already said out loud it went to credibility,’ Ms. Hawkins denied saying it and then added, ‘I did not [say that], and you’re a bold-faced liar.’ Counsel for appellee objected to being called a liar during the proceeding and attempted to have Ms. Hawkins removed from hearing the case, but that request was denied.
“On February 21, 2001, appellant issued its Final Decision and Order, finding that appellee had violated Md.Code (1981, 2000 Repl.Vol.), §§ 12-301, 12-701, 12-707(e), and 12-313(b)(24) of the Health Occupations Article. Appellant placed appellee on probation, imposed a fine, and reprimanded her.”
Spencer then filed a Petition for Judicial Review in the Circuit Court for Baltimore City, alleging, inter alia, that she had been deprived of procedural due process because Mr. Ades and Ms. Schneider participated both as representatives of the Board in settlement negotiations and as members of the panel adjudicating her case. Agreeing with Spencer’s argu *522 ments, the Circuit Court vacated and reversed the Board’s Final Decision and Order. The Circuit Court ruled that there was not substantial evidence in the record to support the Board’s decision; that the Board’s renewal of Spencer’s license pending the outcome of the investigation operated as a waiver of the violations subsequently found by the Board; and that Spencer had been deprived of due process as a result of the arguments that took place at the Board hearing between her attorney and two Board members.
The Board appealed the Circuit Court’s ruling to the Court of Special Appeals. The Court of Special Appeals agreed with the Circuit Court that Spencer was denied her right to a fair and unbiased hearing, focusing on Ms. Hawkins’ accusation that Spencer’s counsel was a “bold-faced liar.” The intermediate appellate court reversed the Circuit Court’s ruling that the Board’s renewal of Spencer’s license had foreclosed the Board from taking disciplinary action against her. Consequently, it remanded the case to the Circuit Court “with instructions to remand the case to the Board, directing [the Board] to delegate the authority to conduct the contested case hearing and to issue the final administrative decision in this case to the OAH.”
Sрencer then filed a petition for writ of certiorari in this Court.
Petitioner argues that the Court of Special Appeals exceeded its judicial authority when it fashioned a remedy that
*523
interfered with the Board’s discretion to determine whether her case should be remanded to the OAH. She contends that the Court of Special Appeals violated Article 8 of the Declaration of Rights in ordering the Board to send the case to the OAH, because in so doing, that court performed a “nonjudicial function,” violating the constitutional mandate that the power of the three branches of government in Maryland “be forever separate and distinct.”
See Dep’t of Nat. Res. v. Linchester Sand & Gravel Corp.,
This Court, of course, is not bound by the concessions made by the parties on issues of law, which we may independently review.
See In re Heather B.,
EL
We address first the procedural and analytical posture of this case as it comes before this Court. When this Court sits in review of an administrative agency decision, we reevalu
*524
ate the decision of the agency under the same statutory standards as would the circuit court; we do not employ those standards to reevaluate the decision of the circuit or intermediate appellate court.
See Division of Labor v. Triangle General Contractors, Inc.,
In the present case, in what way might the Board have erred? The answer to this question lies with the two disputed administrative actions taken by the Board that were reversed by the Court of Special Appeals. Petitioner’s original motion to the Board requested either (a) that her case be referred to the Office of Administrative Hearings or, in the alternative, (b) that the Board members who participated in the settlement negotiations recuse themselves. Petitioner asked the Circuit Court to review both the denial of thе recusal motion and the denial of the motion to remove to the OAH. These two denials by the Board constitute the two administrative decisions which petitioner asked the Circuit Court and the Court of Special Appeals to review.
The Court of Special Appeals, disagreeing with the Board’s denial of both of those requests, held as follows:
“In light of the actions by the Board that caused an appearance of impropriety in the proceedings in this case before the Board, this Court holds that the circuit court did not err by finding that appellee was denied due process in that hearing. Consequently, we remand this case to the Circuit Court for Baltimore City with instructions to remand the case to the Board, directing appellant to delegate the authority to conduct the contested case hearing and to issue the final administrative decision in this case to the OAH.”
*525
With respect to the agency decision denying the recusal motion, the Court of Special Appeals held that “the actions by the Board that caused an appearance of impropriety in the proceedings in this case before the Board ... denied [petitioner] due process in that hearing.”
Id.; cf. Maryland State Police v. Zeigler,
It is the second administrative decision taken by the Board, and its review by the Court of Special Appeals, that concerns us in the case sub judice. By this we mean the Court of Special Appeals’s holding “directing [the Board] to delegate the authority to conduct the contested case hearing and to issue the final administrative decision in this case to the OAH.” The key point here is that the Court of Special Appeals judicially reviewed the Board’s deсision to deny the motion to refer the case to the OAH, and it found that decision to be wanting. The court’s reasoning behind its determination is made in a footnote to its opinion:
“We recognize that ‘under the APA, the delegation of matters to the OAH is not a mandatory function but a function within the discretion of the administrative agency.’ [Regan v. Board of Chiropractic,120 Md.App. 494 , 513,707 A.2d 891 , 900 (1998).] In light of the facts of this particular case, however, it would not be appropriate to remand the case to the same tribunal that heard the case originally. * * * In this case, we have held that the actions of the Board members created an appearance of impropriety and unfairness, and for that reason, the case must be retried before a different tribunal.”
III.
Whether the administrative agency’s refusal to delegate to the OAH was improper requires us to determine the standard of review for such an agency decision. The standard of review for an agency decision, in turn, will depend upon the level of discretion delegated to the administrative agency with respect to such decisions.
See MTA v. King,
To discover the proper standard of judicial review, we begin with the APA. Because this case involves an agency acting in a “quasi-judicial” capacity, adjudicating the personal rights of petitioner, judicial review is governed by § 10-222, which is applicable to final decisions in contested cases.
See
§ 10-222(a). Were we reviewing the agency acting in its policy-making or “quasi-legislative” capacity, a wholly different analysis governs the decision.
See
§ 10-125;
Fogle v. H & G Restaurant, Inc.,
Section 10-222(h) governs the scope of judicial review of final administrative agency decisions in contested cases as follows:
(h) Decision. — In a proceeding under this section, the court may:
(1) remand the case for further proceedings;
(2) affirm the final decision; or
(3) reverse or modify the decision if any substantial right of the petitioner may have been prejudiced because a finding, conclusion, or decision:
(i) is unconstitutional;
(ii) exceeds the statutory authority or jurisdiction of the final decision maker;
*528 (iii) results from an unlawful procedure;
(iv) is affected by any other error of law;
(v) is unsupported by competent, material, and substantial evidence in light of the entire record as submitted; or
(vi) is arbitrary or capricious.
Section 10-222(h)(3)(i)-(vi) provides a statutory framework for understanding the scope of judicial review of agency decisions аnd is of particular interest to the case sub judice. Section 10-222(h)(3)(i)-(iv) deals with judicial review of agency conclusions of law. Section 10-222(h)(3)(v) deals with judicial review of agency factual determinations. Section 10-222(h)(3)(vi) deals with judicial review of any other agency determination— for instance, as in the case sub judice, determinations over matters committed to the agency’s discretion. Our jurisprudence has expanded on the meaning of these statutory provisions and provided guidance for their application by the courts.
When an agency makes “conclusions of law” in a contested case, the court, on judicial review, decides the correctness of the agency’s conclusions and may substitute the court’s judgment for that of the agency’s.
Total AV v. Dept. of Labor,
In contrast, when an agency is not interpreting law but instead makes a “finding of fact,” we have applied “substantial evidence” review. Substantial evidence review of agency factual findings is embodied in § 10-222(h)(3)(v). That provision grants a court authority to overrule an agency’s factual finding only when the finding is “unsupported by competent, material, and substantial evidence in light of the entire record as submitted.” According to this more deferential standard of review, judicial review of agency factual findings is limited to ascertaining whether a reasoning mind could have reached the same factual conclusions reached by the agency on the record befоre it.
See Stansbury v. Jones,
Finally, there are circumstances when an agency acts neither as a finder of fact nor as an interpreter of law but rather in a “discretionary” capacity.
See, e.g., Maryland State Police v. Zeigler,
This Court recently applied the arbitrary or capricious standard of review to discretionary functions of the agency in a case closely analogous to this one.
Maryland State Police v. Zeigler
involved an administrative agency’s decision to reopen a hearing after it had already begun deliberations on the matter. In that case, we first determined that the decision to reopen a hearing for additional evidence was committed to the agency’s discretion.
*531 “[A]s long as an administrative agency’s exercise of discretion does not violate regulations, statutes, common law principles, due process and other constitutional requirements, it is ordinarily unreviewable by the courts. It is only when an agency’s exercise of discretion, in an adjudicatory proceeding, is ‘arbitrary’ or ‘capricious’ that courts are authorized to intervene [citing the provision now codified as 10 — 222(h)(vi), the arbitrary and capricious standard of review].”
Id. (citations omitted).
Similarly, in
MTA v. King,
we held that an agency’s discretion to determine the magnitude of a sanction could only be reviewеd pursuant to § 10-222(h)(3)(vi),
ie.,
for arbitrariness or eaprieiousness.
The case
sub judice
does not differ significantly from
Zeigler
or
King
in that the decision being reviewed is also one committed to the agency’s discretion and is to be reviewed under the same arbitrary or capricious standard set forth in 10-222(h)(3)(vi). Whether an action is in fact deemed arbitrary or capricious will vary depending upon the amount of discretion granted an agency, a matter of substantive law,
see King,
Applying the legal principles outlined above, we hold that (1) the determination by an agency to refer a case to the *532 OAH is a matter committed to its discretion and that (2) the Board did not abuse that discretion under the arbitrary or capricious standard.
First, it is clear that the Board’s refusal to refer the сase to the OAH was not a legal conclusion or a factual finding but rather a function of the Board’s discretion. The discretion is granted to the Board in § 10-205(b)
5
which declares an “agency
may
delegate to the Office [of Administrative Hearings] the authority” (emphasis added) to hear the case.
6
The word “may” connotes a permissive, discretionary function of the agency when it delegates a case to the OAH.
See Brodsky v. Brodsky,
Second, it is clear that the Board’s decision to forgo the OAH was not arbitrary or capricious. An agency’s prerogative with respect to case referral to the OAH is similar in scope to that of the agency’s prerogative in determining the severity of sanctions,
see King,
*534 To be sure, because of the nature of the Board members participating, it was improper for those members who participated in the settlement negotiations to remain as panel members adjudicating petitioner’s case, and those members may not constitute a part of the panel if or when petitioner’s case is reheard. 7 But that did not by itself require referral to the OAH, as any number of other options lay open to the Board. The proper course, in view of the Board’s discretion to refer, was to remand the case to the Board with instructions to cure the defects the reviewing court found at the original hearing, but without a mandate requiring referral of the cаse to the OAH. That is what we shall do, and the lower court’s direction regarding referral of the case to the OAH is reversed.
IV.
Petitioner’s final argument, that a remand will create issues of
res judicata
or double jeopardy, is without merit and frivolous. The Board’s enforcement of its licensing and disciplinary requirements serve purposes essential to the protection of the public, which are deemed remedial, rather than punitive, and therefore are not subject to double jeopardy principles.
See State v. Jones,
Neither is
res judicata
applicable in this case because there is no final judgment — the case is still on appellate review — and because issue and claim preclusion require a subsequent cause of action in which those doctrines may take effect; this appeal is not a subsequent cause of action but all part of the same case.
See Murray International v. Graham,
JUDGMENT OF THE COURT OF SPECIAL APPEALS REVERSED IN PART. CASE REMANDED TO THAT COURT WITH DIRECTIONS TO VACATE THE JUDGMENT OF THE CIRCUIT COURT FOR BALTIMORE CITY AND TO REMAND THE CASE TO THE CIRCUIT COURT WITH INSTRUCTIONS TO REMAND THE CASE TO THE STATE BOARD OF PHARMACY FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS OPINION. COSTS TO BE EVENLY DIVIDED BETWEEN PETITIONER AND STATE BOARD OF PHARMACY.
Chief Judge BELL concurs in the judgment only.
Notes
. Except where otherwise indicated, all future statutory references shall be to provisions in the Administrative Procedure Act, Md.Code (1984, 1999 Repl.Vol., 2003 Cum.Supp.) §§ 10-101 to 10-305 of the State Government Articlе.
. Because of the reasoning of our opinion, we will decline to address the constitutional arguments posed by the parties, for this Court regularly has adhered to the principle that we will not reach a constitutional issue when a case can be disposed of properly on a non-constitutional ground.
Piscatelli v. Liquor Board,
. Even in the case of an agency interpreting law, our jurisprudence has shown a level of deference to an agency’s interpretation of law, provided the agency is interpreting its own regulations,
MTA v. King
. Although a few of our cases appear to conflate substantiаl evidence review with arbitrary or capricious review,
see, e.g., Insurance Comm'r v. Nat’l Bureau of Cas. Underwriters,
We do not encounter, or decide, this issue of whether the arbitrary and capricious standard in § 10-222(h)(3)(vi) will govern every type of agency action not encompassed by § 10-222(h)(3)(i)(v).
See Maryland State Police v. Zeigler,
. Section 10-205(b) provides for the delegation of a contestеd case to the OAH:
(b) Scope of authority delegated. — An agency may delegate to the Office [of Administrative Hearings] the authority to issue:
(1) proposed or final findings of fact;
(2) proposed or final conclusions of law;
(3) proposed or final findings of fact and conclusions of law;
(4) proposed or final orders or orders under Article 49B of the Code; or
(5) the final administrative decision of an agency in a contested case.
. Although it is our understanding that, as a matter of practice, most state agencies subject to the APA exercise their authority to delegate duties to the OAH by regulation or administrative order and usually in broad categories of case types, there appears no reason why an agency may not do so on an ad hoc basis in a given case. We do not here address whether an agency's violation of its own established protocol with regard to OAH delegation may somehow amount to arbitrary or capricious agency action.
. We do not adopt a
per se
rule of recusal, nor do we intend our holding or comments to imply that recusal is mandatory when a trial judge participates in settlement negotiations.
See
Maryland Rule 16-813, Maryland Code of Judicial Conduct, Canon 3 (setting forth the situations requiring mandatory recusal);
see also
Annot.,
Judge’s Comments-Urging Settlement,