Garrity v. State Bd. of Plumbing , 447 Md. 359 ( 2016 )

Wayne Garrity, Sr. v. Maryland State Board of Plumbing, No. 35, September Term 2015
CIVIL PROCEDURE — COLLATERAL ESTOPPEL — Offensive non-mutual
collateral estoppel applies when a plaintiff seeks to establish as undisputed a fact that
another plaintiff previously litigated adversely to the defendant. This form of collateral
estoppel cannot be applied unless the trial court determines that principles of judicial
economy would not be compromised and the doctrine’s application would not be unfair to
the defendant. Principles of judicial economy and fairness are served by application of
offensive non-mutual collateral estoppel in the case of two administrative proceedings
where the second agency could not have joined the first agency’s proceeding and the same
facts support violations of the respective agency’s statutes.
FIFTH AMENDMENT — DOUBLE JEOPARDY — Whether a penalty can be
characterized as criminal punishment subject to the Double Jeopardy Clause is first a matter
of statutory construction. The court must determine whether the General Assembly
reflected an intention for the penalty to be civil or criminal. Even if the General Assembly
intended the penalty to be civil, the court must determine whether the penalty is
nevertheless “so punitive either in purpose or effect” that the penalty should be
characterized as criminal. There is no double jeopardy violation when an administrative
agency imposes a monetary penalty on a merchant for violating consumer protection laws
because that penalty is civil, rather than criminal.
Circuit Court for Baltimore City IN THE COURT OF APPEALS
Case No. 24-C-13-004631 OF MARYLAND
Argued: December 4, 2015
No. 35
September Term, 2015
WAYNE GARRITY, SR.
v.
MARYLAND STATE BOARD OF
PLUMBING
Barbera, C.J.
*Battaglia
Greene
Adkins
McDonald
Watts
Harrell, Jr., Glenn T., (Retired,
Specially Assigned),
JJ.
Opinion by Barbera, C.J.
Adkins, J., concurs.
Filed: April 26, 2016
*Battaglia, J., now retired, participated in the
hearing and conference of the case while an
active member of this Court; after being recalled
pursuant to the Constitution, Article IV, Section
3A, she also participated in the decision and
adoption of this opinion.
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 Md. Code Ann., Com. Law (“CL”) § 13-303
(2011, 2013 Repl. Vol.).2 The CPD alleged that, over a period spanning at least five years,
1
The CPD is authorized to issue a statement of charges to an alleged violator of the
Consumer Protection Act and to hold a hearing to determine whether the individual
violated the Act. Md. Code Ann., Com. Law (“CL”) § 13-403(a) (2005, 2013 Repl. Vol.).
2
CL § 13-303 provides:
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:
(1) The sale, lease, rental, loan, or bailment of any consumer goods,
Petitioner, through All State, retained unlicensed plumbers; failed to obtain required
permits and inspections for job sites; misrepresented to consumers that his employees were
licensed and would obtain the requisite permits and inspections; and charged consumers
for services he did not provide. Also on February 23, 2012, the CPD entered an Order
Granting Hearing and Notification of Hearing, designating the Office of Administrative
Hearings to conduct the hearing on the Statement of Charges.
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
consumer realty, or consumer services;
(2) The offer for sale, lease, rental, loan, or bailment of consumer goods,
consumer realty, or consumer services;
(3) The offer for sale of course credit or other educational services;
(4) The extension of consumer credit;
(5) The collection of consumer debts; or
(6) 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.
“Unfair or deceptive trade practices” are defined in depth at CL § 13-301.
3
COMAR 02.01.02.02 explains the CPD’s dual roles in these proceedings: one as the
“administrative agency authorized to adjudicate contested cases under Commercial Law
Article, § 13-403, and State Government Article, § 10-202(b),” and the other as “a party to
a contested case.” COMAR 02.01.02.04 authorizes the CPD, in an adjudicatory capacity,
to hold contested case hearings or to designate that authority to the Office of Administrative
Hearings, which it did in this case. When the Office of Administrative Hearings is
designated to preside over a contested case hearing, the administrative law judge is required
to prepare proposed findings of fact and conclusions of law, and the agency—here, the
CPD—is required to review those proposed findings and conclusions and issue a final
order. See Md. Code Ann., State Gov’t (“SG”) § 10-220(a) (1993, 2014 Repl. Vol.). That
order “may include the Office’s proposed findings, conclusions, or order with or without
modification.” Id. § 10-220(c).
2
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 November 7, 2012, finding that Petitioner violated the CPA as charged by the
CPD. Neither party filed exceptions to the Proposed Decision.
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 longstanding 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
4
The CPD noted that there was evidence that Petitioner committed more than that number
of violations but that the CPD could not prove them because Petitioner failed to cooperate
in discovery, destroyed his service records, and refused to testify at the hearing.
3
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 CL § 13-410(a) (providing that an
individual who violates the CPA “is subject to a fine of not more than $1,000 for each
violation”); CL § 13-409 (“In any action brought by the Attorney General under the
provisions of this title, the Attorney General is entitled to recover the costs of the action
for the use of the State.”). Neither Petitioner nor the CPD sought judicial review of the
CPD’s decision.
Thereafter, Respondent, the Maryland State Board of Plumbing (“the Board”), upon
review of the decision of the CPD, opened a complaint against Petitioner.5 Following
unsuccessful efforts to obtain requested information from Petitioner, the Board issued a
Notice of Charges and Order for Hearing (“Charge Letter”). The Charge Letter alleged
that Petitioner had violated the Maryland Plumbing Act (“MPA”) by providing
incompetent or negligent plumbing services; failing to obtain permits required by local
jurisdictions; engaging in unfair trade practices; knowingly permitting employees to work
outside the scope of their licenses; and employing unlicensed persons to participate in the
provision of plumbing services. See Md. Code Ann., Bus. Occ. & Prof. (“BOP”) §§ 12-
5
The Board of Plumbing is a unit within the Maryland Department of Labor, Licensing,
and Regulation. Similar to the CPD, COMAR 09.01.02.02B(3) empowers the Board to
adjudicate a contested case against a respondent to determine whether the respondent
violated the Maryland Plumbing Act. COMAR 09.01.02.02B(17) authorizes an “attorney
assigned by the Office of the Attorney General to . . . [p]resent charges and evidence against
a respondent[.]” Consequently, much like the CPD, the Board acts both as a proponent of
evidence and as an adjudicatory body. The Board is likewise required to issue a final order
after considering all of the evidence produced at the hearing. COMAR 09.01.02.20.
4
312(a)(1) and 12-602(a) (2004, 2010 Repl. Vol.). The Charge Letter incorporated by
reference the CPD’s Final Order. At the hearing before the Board, counsel for the Board
moved to admit the CPD’s Final Order as evidence in its case in chief. Although the Board
admitted eight exhibits and called two witnesses—one of whom was Petitioner, who again
refused to testify pursuant to his Fifth Amendment privilege—the Board’s case largely
consisted of the CPD’s findings and conclusions.
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 determined finally in the CPD’s Final Order. The Board admitted the CPD’s
Final Order but did not state specifically that the Board would give that Final Order
preclusive effect. Petitioner did not seek to postpone the hearing until the Board ruled on
that issue.
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
6
See Md. Code Ann., Bus. Occ. & Prof. (“BOP”) § 12-312(a) (2004, 2010 Repl. Vol.)
(authorizing the Board to revoke a plumbing license upon a finding that the licensee
violated the MPA by, among other violations, negligently or incompetently providing
plumbing services or engaging in unfair and deceptive trade practices); BOP § 12-607(d)
5
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 (2015), and we granted Petitioner’s
petition for a writ of certiorari to answer two questions, which we have rephrased:
1. 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?
2. 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.
II.
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 (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 (2005). Whether
it was appropriate to grant preclusive effect to the CPD’s Final Order, however, is a legal
(authorizing the Board to fine an individual $5,000 for each violation of subtitle 6 of the
MPA).
6
conclusion that this Court reviews de novo. See Spencer v. Md. State Bd. of Pharmacy,
380 Md. 515, 528 (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 (2012) (alteration in original) (quoting Murray Int’l Freight Corp. v.
Graham, 315 Md. 543, 547 (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 (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 who participated in
the first litigation. Rourke v. Amchem Prods., Inc., 384 Md. 329, 340-41 (2004); Welsh v.
Gerber Prods., Inc., 315 Md. 510, 516 (1989). The mutuality requirement has been
relaxed, however, so long as the other elements of collateral estoppel are satisfied. See
Rourke, 384 Md. at 349. If either the defendant or the plaintiff in the second proceeding
was not a party to the first proceeding, we refer to that application of collateral estoppel as
“non-mutual.” Id. at 341. Mutual and non-mutual collateral estoppel are further
7
characterized as either “defensive” or “offensive: estoppel is “defensive” if applied by a
defendant and “offensive” if invoked by a plaintiff. See Shader v. Hampton Improvement
Ass’n, 443 Md. 148, 162-63 (2015). Regardless of the particular permutation, this Court
has required that four questions be answered affirmatively before collateral estoppel can
be applied:
1. Was the issue decided in the prior adjudication identical with the one
presented in the action in question?
2. Was there a final judgment on the merits?
3. Was the party against whom the plea is asserted a party or in privity with
a party to the prior adjudication?
4. 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 (2000) (quoting Washington
Suburban Sanitary Comm’n v. TKU Assocs., 281 Md. 1, 18-19 (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).
8
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 inconsistent with one or more
previous judgments in favor of the defendant,” or the second action allowed “procedural
opportunities unavailable in the first action that could readily cause a different result.” Id.
at 330-31.
9
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.
In Rourke, we determined that conflict of laws principles and the federal
10
Constitution’s full faith and credit requirement precluded us from applying collateral
estoppel to a Virginia judgment that held an issue was not arbitrable. 384 Md. at 342-43.
Citing the concerns outlined in Parklane, we concluded that, because the Virginia Supreme
Court expressly rejected offensive non-mutual collateral estoppel, we could not give “any
greater preclusive effect to the Virginia judgment than Virginia would give to it.” Id. at
343. Although we recognized that “we have yet to formally embrace” the doctrine, we
ultimately applied Virginia, rather than Maryland, law. Our lack of any formal adoption
of the doctrine did not drive our decision. Id. at 349, 351.
Later, in Burruss v. Board of County Commissioners of Frederick County, 427 Md.
231 (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
11
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 property consisted of one lot and a
portion of another lot—subdivided their property and listed the new parcel for sale to be
built upon, the homeowners’ association, HIA, notified the petitioners that the restrictive
covenant precluded any further building on the parcel. Id. The petitioners sought to invoke
offensive non-mutual collateral estoppel to prevent HIA from applying the restrictive
covenant against them because the covenant was not enforced in an earlier action adjudged
against HIA, Cortezi v. Duval Four-A, LLC, No. C-07-002587 (Cir. Ct. Balt. Cty. 2008).
Shader, 443 Md. at 155-56. In Duval, the developer had revised the 1930 Plat that created
the community and reconfigured one lot to create two additional lots. Id. at 167. HIA
sought to prevent Duval Four-A from constructing a dwelling on one of the new lots,
reasoning that the covenant’s prohibition on construction of more than one dwelling on a
lot intended to preserve the lots as they were originally depicted on the 1930 Plat. Id. The
court in Duval held that HIA had waived that argument because, on previous occasions, it
had not objected to additional construction on lots as they were depicted on the 1930 Plat,
which also would have violated the covenant. Id. at 167-68. The court in Duval therefore
held that HIA had waived application of the covenant under those circumstances. Id. at
168.
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
12
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 case.” Id. at 169; cf. Attorney Grievance Comm’n v. Bear,
362 Md. 123, 131, 134 (2000) (declining to give preclusive effect to a District of Columbia
civil judgment because the burden of proof in the latter attorney grievance case was higher
than the preponderance standard applicable to the earlier civil suit).
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 (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 (2004).
Thereafter, the Maryland Insurance Administration (“MIA”) revoked Mr. Culver’s
13
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 Md. Code Ann., Ins. § 10-126(a)(13) (2002, 2011 Repl. Vol.) (authorizing the
Insurance Commissioner to revoke a license if the holder “has otherwise shown a lack of
trustworthiness or competence to act as an insurance producer”). Mr. Culver challenged
the revocation at a hearing before an ALJ, at which he sought to contest the findings that
formed the basis for the sanction we imposed. Id. at 650. The ALJ concluded that a further
evidentiary hearing on the matter was unnecessary because the findings in the disbarment
action established Mr. Culver’s dishonesty and untrustworthiness and, consequently, the
MIA was entitled to revoke Mr. Culver’s license. Id.
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
14
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 established the
presence of all of the factors necessary to invoke offensive non-mutual collateral estoppel.
We therefore conclude that the doctrine was applied properly in the Board’s administrative
proceeding.
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 439 U.S. at
331-32. Both are administrative agencies, and both are constrained to charge violations of
their own statutes. See BOP § 12-208; accord CL § 13-403. In that regard, much like the
15
Insurance Commissioner’s role in Culver, the Board’s role in instituting proceedings such
as this one is to ensure that only qualified individuals are entrusted to “protect the integrity
of the potable water supply” and “provide for the efficient and safe discharge of storm
drainage and sanitary drainage.” See BOP § 12-102. The Board’s actions, therefore, “did
not constitute the kind of ‘wait and see’ attitude that troubled the Parklane Hosiery court.”
See Culver, 175 Md. App. at 656. Moreover, Petitioner failed to undertake any effort to
present a defense before the CPD, and similarly failed to call any witnesses or submit any
exhibits before the Board. Requiring the Board to present the same evidence already
presented to the CPD, to establish the same set of facts, would be a waste of resources. As
a result, principles of judicial economy, or, in this case, quasi-judicial economy, are served,
rather than compromised, by precluding Petitioner from relitigating facts in the Board
proceeding that were already established by the CPD. See id.
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 Court of Special Appeals emphasized, a penalty
of more than $700,000 cannot be characterized as “small and nominal,” particularly for an
individual running a small business. Garrity, 221 Md. App. at 692. And, just as a
subsequent shareholder class action suit was foreseeable after a successful SEC judgment
in Parklane, Petitioner acknowledged before us that the Board’s initiation of a proceeding
to revoke his license was a foreseeable consequence of an adverse ruling from the CPD.
See 439 U.S. at 332. Parklane’s concern that it might be unfair “if the judgment relied
16
upon as a basis for the estoppel is itself inconsistent with one or more previous judgments
in favor of the defendant” does not apply here, because Petitioner did not receive any
favorable ruling. See Parklane, 439 U.S. at 330.
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 Md. Code Ann., State Gov’t (“SG”) § 10-201 et. seq.
(1993, 2014 Repl. Vol.). Both sides in each proceeding were permitted to make opening
statements and closing arguments, offer evidence, call witnesses, and cross-examine any
witness. COMAR 28.02.01.20A; 09.01.02.13E, G. The admissibility of evidence in each
proceeding was governed by SG § 10-213. COMAR 02.01.02.16; 09.01.02.14. The
proponent of the evidence on behalf of each agency bore the burden of proving violations
of the respective statutes by a preponderance of the evidence. COMAR 02.01.02.05;
09.01.02.16. Both adjudicatory bodies were required to consider all of the testimony and
evidence and thereafter issue a final order explaining the disposition. COMAR
28.02.01.25; 09.01.02.20. And the aggrieved party in both proceedings was entitled to
seek judicial review of the final decision rendered by the agency. SG § 10-222.
Petitioner notes that the Board’s decision is rendered by a panel of plumbers and
consumers rather than an ALJ, but he fails to explain how this distinction led to “procedural
opportunities unavailable in the first action that could readily cause a different result.”
Parklane, 439 U.S. at 331. Upon our review of the transcript of the Board’s proceeding
and insofar as the record otherwise reflects, the two administrative hearings proceeded in
17
much the same way. Petitioner had every opportunity to present evidence or testimony
before the CPD and the Board but chose not to do so, and his admissible evidence would
have been accepted and considered the same way in each proceeding. Indeed, Petitioner
acknowledged at oral argument before us that there was nothing procedurally unfair about
either administrative hearing. In sum, where the CPD was “applying statutes designed to
protect consumers in highly-regulated industries,” we, like the Court of Special Appeals,
“see no unfairness here in preventing [Petitioner] from relitigating the question of his
deceptive plumbing practices.” Garrity, 221 Md. App. at 693.
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 fact that
18
the CPD’s decision was called a “final order” instead of a “final judgment,” and contends
that this distinction is dispositive. The Board responds, and the Court of Special Appeals
agreed, that Petitioner’s arguments are based on mere semantics. Id. at 693. We are in
accord with the Board and the Court of Special Appeals.7
The Supreme Court recently opined on the subject. B & B Hardware, Inc. v. Hargis
Indus., Inc., 135 S. Ct. 1293 (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
7
Petitioner also argued before us that, because neither the CPD nor the Board is part of the
judicial branch, the “judicial economy” factor articulated in Parklane cannot be satisfied
here. We have already explained why the judicial, or quasi-judicial, economy
consideration derived from Parklane was indeed satisfied, and we reject Petitioner’s
argument to the contrary.
19
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 under the
rules of res judicata, subject to the same exceptions and qualifications, as a judgment of a
court” (quoting Restatement (Second) of Judgments § 83(1))). Thus, the Court held that
the district court should have granted preclusive effect to the TTAB’s conclusion that a
likelihood of confusion could result from registration of the SEALTITE mark. See id. at
1305 (citing Univ. of Tenn. v. Elliott, 478 U.S. 788, 797 (1986)) (noting the Elliott Court’s
conclusion that, “absent a contrary indication, Congress presumptively intends that an
agency’s determination (there, a state agency) has preclusive effect”). The Court’s
reasoning applies with equal force here.
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
(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. 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
20
same preclusive effect as findings made by a court.” Id. at 702; accord United States v.
Utah Constr. & Mining Co., 384 U.S. 394, 422 (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.
First, the ALJ acted in a judicial capacity in the CPD proceeding. An administrative
agency acts in a judicial capacity “[b]y conducting a hearing, allowing the parties to present
evidence and ruling on a dispute of law.” Batson, 325 Md. at 705 (internal quotation marks
omitted); see also Exxon Corp., 807 F.2d at 846 (noting that “Exxon was given a hearing,
with a full opportunity to present its case and attempt to rebut opposing evidence”). The
CPD adjudication took place over the course of two days, during which time the CPD
submitted 84 exhibits and examined 24 witnesses. Petitioner, should he have chosen to do
so, likewise had the opportunity to present his own evidence or call witnesses in his
defense. The CPD then issued a final decision detailing its findings and conclusions with
respect to Petitioner’s many violations of the CPA.
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 (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
21
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 CL § 13-410(a) (“A merchant who engages in a
violation of this title is subject to a fine of not more than $1,000 for each violation.”).
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. 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 a
“final order” and a “final judgment” was more than semantic, which we do not, it would
be of no moment here.
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.
22
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. 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. 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 another set
of facts involving different tribunals, and we leave that question to a court presented with
such facts.
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
23
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 (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 (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 (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. Under current
Supreme Court precedent, we first must discern whether the language of the statute
authorizing the penalty indicates “a preference for one label or the other.” Id. (quoting
United States v. Ward, 448 U.S. 242, 248 (1980)). Even if the General Assembly intended
for the sanction to be civil, we must then decide “whether the statutory scheme was so
punitive either in purpose or effect, as to transfor[m] what was clearly intended as a civil
remedy into a criminal penalty.” Id. (alteration in original) (citations and internal quotation
marks omitted). Making the latter determination requires us to consider a number of
factors, as outlined in Kennedy v. Mendoza-Martinez, 372 U.S. 144, 168-69 (1963). Those
24
factors include:
[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, and that “only the clearest proof
could suffice to establish the unconstitutionality” of sanctions imposed by the government,
Ward, 448 U.S. at 249 (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 (quoting Kennedy, 372 U.S. at 169)).
Petitioner asks us to apply instead the rationale espoused by an earlier Supreme
Court case, United States v. Halper, 490 U.S. 435 (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. The Court concluded that a civil sanction could be considered punishment if it
was so “overwhelmingly disproportionate to the damages [the defendant] has caused,” that
the sanction could not “fairly be said solely to serve [the] remedial purpose” of
compensating the government. Id. at 448-49 (emphasis added).
We decline Petitioner’s invitation, however, because the Supreme Court in Hudson
displaced the analysis applied in Halper. Hudson, 522 U.S. at 101. The Hudson Court
noted that Halper “deviated from our traditional double jeopardy doctrine” by “bypass[ing]
25
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. 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. 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 (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)). To begin, the statute according to which Petitioner was
sanctioned expressly designated the penalty as civil; CL § 13-410 is entitled “Civil penalty
— Merchants.” That statute provides at subsection (a) that a person who violates the CPA
“is subject to a fine of not more than $1,000 for each violation.” Subsection (b) authorizes
the CPD to sanction a merchant “who subsequently repeats the same violation” up to
$5,000 for subsequent violations. In fashioning the appropriate penalty, the statute refers
the CPD to certain factors to consider, such as the severity of the violation, the good faith
of the merchant, whether the penalty will sufficiently deter future violations, and whether
restitution and injunctive relief “is insufficient for the protection of consumers.” Id. § 13-
410(d). Nowhere in that statute is there any mention of any criminal disposition. And,
notably, that provision includes the same factors that agencies should consider generally in
26
imposing a “civil penalty” under the Administrative Procedure Act. SG § 10-1001.
By contrast, CL § 13-411, entitled “Criminal penalties,” sets forth criminal
consequences for violating the CPA. Aside from a small subset of CPA violations not
relevant here, CL § 13-411 provides that violations of the CPA constitute a misdemeanor,
and “unless another criminal penalty is specifically provided elsewhere, on conviction [a
merchant] is subject to a fine not exceeding $1,000 or imprisonment not exceeding one
year or both, in addition to any civil penalties.” Because criminal and civil penalties were
separated into distinct statutes, and the language of each is clear, we conclude that the
General Assembly intended for the statutory provision according to which Petitioner was
sanctioned to constitute a civil penalty. See Ward, 448 U.S. at 249 (concluding that the
legislature’s intent was clear because the sanction was referred to as a “‘civil penalty,’ a
label that takes on added significance given its juxtaposition with the criminal penalties set
forth in the immediately preceding subparagraph”); cf. Kansas v. Hendricks, 521 U.S. 346,
361 (1997) (emphasizing that the statute authorizing commitment for sexually violent
predators, described as a civil commitment proceeding, was located in the probate code
rather than the criminal code, and concluding that “[n]othing on the face of the statute
suggests that the legislature sought to create anything other than a civil commitment
scheme designed to protect the public from harm”).
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 (quoting United States v. Ursery, 518
U.S. 267, 290 (1996)). We hold that “there is little evidence, much less the clearest proof
27
that we require,” that the CPD’s civil penalty was so punitive that it should be regarded as
a criminal punishment. See id.
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 CL
§§ 13-102, 13-201. The CPA contains a statutory statement of purpose, in which it
recognizes that “there has been mounting concern over the increase of deceptive practices
in connection with sales of merchandise, real property, and services.” Id. § 13-201. It
explains that the CPA is designed “to assist the public in obtaining relief from these
practices, and to prevent these practices from occurring in Maryland . . . and thereby
maintain the health and welfare of the citizens of the State.” Id. The CPD, in turn, was
created to effectuate that intent. See id. §§ 13-201, 13-204.
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 (“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 (1995); cf. Ward v. Dep’t of Pub. Safety & Corr. Servs., 339
Md. 343, 350 (1995) (holding that a penalty for employee misconduct was not punishment
28
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 (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. 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
(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 (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 (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)). 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
(2003) (concluding that the sex offender registry was not an affirmative disability or
29
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 CL § 13-410(a);
accord Hudson, 522 U.S. at 104 (noting that a penalty could be assessed “against any
person ‘who violates’ any of the underlying banking statutes, without regard to the
violator’s state of mind”). That the penalty may, in addition to its ultimately remedial goal,
promote some form of retribution and deter future violations does not in itself transform
what is otherwise a civil sanction into a criminal punishment. See Hudson, 522 U.S. at
100-01 (rejecting the notion in Halper that promoting the traditional goals of punishment
rendered a monetary penalty a criminal punishment because that impermissibly “elevated
a single Kennedy factor”).
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 (instructing that “no one
factor should be considered controlling”); Klein v. State, 52 Md. App. 640, 645 (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) (concluding that a disgorgement order for
violating securities laws did not place the violator in jeopardy even though the conduct was
30
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).
Finally, the amount of the fine imposed on Petitioner did not transform the civil
penalty into criminal punishment. The CPA authorizes the CPD to charge $1,000 for each
violation of the Act, and thereafter to assess $5,000 for each repeated violation against a
merchant who “subsequently repeats the same violation.” CL § 13-410(a)-(b). Petitioner
committed over 7,000 violations and engaged in a pattern of deceit against hundreds of
Maryland homeowners over the course of several years. Mindful that we are required to
look at the statute on its face, Kennedy, 372 U.S. at 169, a fine of $1,000 for each violation
cannot reasonably be characterized as “excessive in relation to the purpose assigned,” see
Grossfeld, 137 F.3d at 1303-04 & n.7 (concluding that a treble damages sanction of $1.8
million remained a civil, remedial penalty because the statute on its face was not
unreasonable). That Petitioner committed an extensive number of violations, and the
summation of each violation resulted in a large monetary penalty, cannot be used in his
favor to transform what is unquestionably a civil remedial sanction into a criminal
punishment. Under the Kennedy factors, there is no basis to override the General
31
Assembly’s intent to impose a civil, nonpunitive sanction, and certainly not the “clearest
proof” that the Supreme Court requires. We therefore hold that the CPD’s sanction did not
constitute “criminal punishment” for purposes of the Double Jeopardy Clause.
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.
32
Circuit Court for Baltimore City
Case No. 24-C-13-004631
Argued: December 4, 2015
IN THE COURT OF APPEALS
OF MARYLAND
No. 35
September Term, 2015
WAYNE GARRITY, SR.
v.
MARYLAND STATE BOARD OF
PLUMBING
Barbera, C.J.
*Battaglia
Greene
Adkins
McDonald
Watts
Harrell, Glenn T., Jr. (Retired,
Specially Assigned),
JJ.
Concurring Opinion by Adkins, J.
Filed: April 26, 2016
* Battaglia, J., now retired, participated in the
hearing and conference of this case while an
active member of this Court; after being recalled
pursuant to the Constitution, Article IV, Section
3A, she also participated in the decision and
adoption of the majority opinion.
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 (1998) (affirming
the trial court’s conclusion that the excessive fines clause prohibited a civil forfeiture).1
Excessive fines may not be imposed under Article 25 of the Maryland Declaration
of Rights. Md. Const. art. 25; see also U.S. Const. amend. VIII. This prohibition “limits
the government’s power to extract payments . . . as punishment for some offense.”
Wemhoff v. City of Balt., 591 F. Supp. 2d 804, 808 (D. Md. 2008) (quoting United States
v. Bajakajian, 524 U.S. 321, 328 (1998)). Although usually applicable to criminal fines,
this proscription reaches civil fines “designed at least in part to punish.” Id. (citing United
States v. Austin, 509 U.S. 602, 610 (1993)). When a civil fine comes within the ambit of
this prohibition, our task is to “examine the proportionality between the fine and the gravity
of the associated offense in order to determine whether it is constitutionally excessive.” Id.
This examination applies to questions of excessive fines under both the federal and our
1
The Board sought to revoke Garrity’s license based upon conduct alleged in the
Charge Letter, such as incompetent plumbing services. Maj. Slip Op. at 4. This penalty is
reasonable because the State has imposed a license requirement to ensure that “qualified
individuals” carry out the purposes of Title 12 of the BOP: “protect the integrity of the
potable water supply” and “provide for the efficient and safe discharge of storm drainage
and sanitary drainage.” BOP § 12-102. Garrity’s misconduct jeopardizes these statutory
goals such that he should no longer possess a license.
constitution. Id.; see Howard Cnty., 119 Md. App. at 102 (explaining that the excessive
fines clauses under Article 25 and the Eighth Amendment “‘should be interpreted
coextensively’”) (quoting Aravanis v. Somerset Cnty., 339 Md. 644, 656–57 (1995)).
When the General Assembly added the penalty provision to BOP § 12-312, the
relevant bill articulated this provision as an “attempt[]” to “increase the fines to the point
that they serve as an effective deterrent against undesirable behavior.” H.B. 88, Fiscal
Note, 2001 Reg. Sess., at 3 (Md. 2001). Deterrence is a “traditional aim[] of punishment.”
Hudson v. United States, 522 U.S. 93, 99 (1997). Although the Majority concludes that
the penalty the Board imposed was “not ‘criminal punishment’ for purposes of double
jeopardy,” Maj. Slip Op. at 32, I conclude that the penalty provision under BOP § 12-312
falls within the scope of the excessive fines clause because the provision was “designed at
least in part to punish,” Wemhoff, 591 F. Supp. 2d at 808; see also United States v. Mackby,
261 F.3d 821, 830 (9th Cir. 2001) (considering legislative history in determining whether
a statutory sanction was punitive).
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. at 808–09; see also Mackby, 261
2
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. 406 P.2d 912, 914–
15 (Utah 1965). The establishment’s employee sold around a dozen alcoholic drinks to a
couple in violation of a state statute. Id. at 914. Although the court acknowledged that
each violation of the statute could trigger the provision imposing a $2,500 fine, the court
explained that “the gathering of this evidence, in this particular case, was really one episode
designed to terminate defendant’s charter, . . . and that really but one mission, not three,
was accomplished.” Id. Moreover, the court reasoned that it was unjustifiable to seek
“continued charges and convictions” just “to aggrandize the penalty” because a single
purchase of alcohol alone triggered the penalties of forfeiture of charter and a $2,500 fine.
Id. at 915.
Returning to BOP § 12-312, the General Assembly enacted the monetary penalty
provision because various Maryland licensing boards believed they lacked the authority to
deter unprofessional behavior. H.B. 88, Fiscal Note, 2001 Reg. Sess., at 3. For the Board
to seek monetary penalties in addition to the revocation of Garrity’s license ignores the fact
that another State agency imposed a penalty based upon the same conduct and in part, too,
as a deterrence. Compare Maj. Slip Op. at 5 (noting that the “Board’s case [against Garrity]
largely consisted of the CPD’s findings and conclusions”), with CL § 13-410(d) (“Whether
the amount of the penalty will achieve the desired deterrent purpose” is a mandatory
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consideration for the CPD.). Thus, while Garrity’s misconduct sufficiently justified the
Board’s action of revoking his license, the Board’s pursuit of monetary penalties strikes
me, as in Starlight Club, as an unjustified attempt to increase the penalty Garrity incurred
as a result of the CPD’s case against him. See also BOP § 12-312(a)(3) (“The Board shall
pay any penalty collected under this subsection into the General Fund of the State.”)
(emphasis added).
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 under the excessive fines clause to double fines for the same conduct. In another
case, where such claim is preserved, the excessive fines clause could provide the
foundation for curbing governmental enthusiasm for fines.
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