Public Service Commission v. Hahn Transportation, Inc. ( 1969 )

Hammond, C. J., delivered

the opinion of the Court. Barnes, J., dissents. Dissenting opinion by Barnes, J. at p. 585 infra.

In 1966, during the course of a proceeding before the Public .Service Commission involving carriers in bulk of flammables, the attorney for one of the carriers objected to petitions and motions filed by a lay employee of another carrier, Hahn Transportation, Inc., arguing that the preparation and filing of these pleadings amounted to the practice of law by one not a member of the bar. This led the Commission to seek a determination of whether it should adopt a rule forbidding laymen to practice or appear before it in a representative capacity in connection with or at a formal hearing. Acting under Code (1965 Repl. Vol.), Art. 78, § 62 (“The Commission shall institute and conduct any proceedings reasonably necessary and proper to the exercise of any of its powers, or the performance of any of its duties”), it held hearings and considered testimony, oral presentations and briefs pro and con filed by various bar associations and various utilities regulated by the Commission, and on November 5, 1967, adopted Rule III-A reading as follows :

“All parties, except individuals appearing in their own behalf, shall be represented by attorneys-at-law, who are duly admitted and enrolled to practice before the Court of Appeals of this State where the Commission is performing a quasi-judicial function as distinguished from a legislative, executive, or a ministerial function. No non-resident attorney shall be allowed to enter his appearance in a case before the Commission except upon motion, which will not ordinarily be granted unless some attorney with a full time office in this state is associated with him or her in the matter.”

Hahn Transportation, Inc. and Germanko and Halter, co-partners trading as Baltimore Tank Lines, sought review and invalidation of the order adopting the Rule by> the Circuit .Court of Baltimore City under Code (1965 Repl. Vol.), Art. 78, §§ 90 and, 91, claiming to be aggrieved because over a,long period of time and in many instances they had filed papers before the Commission and had participated in its proceedings and hearings through employees and “laymen' officers” and, should Rule III-A remain in effect, would in the future not only be put from time to time to added expense but alsb deprived of the benefit tb‘ them of the special skill and knowledge of such employees and officers. They also filed a petition in the Superior Court of Baltimore City asking a declaration that Rule III-A was invalid. The two cases were consolidated and heard by Judge Cullen, who thought that although the Commission has authority under § 64 of Art. 78 to make such reasonable rules and regulations as it deems necessary to carry out the provisions and purposes of Art. 78,

“it would not seem that such a rule as is before the Court at the present time would be in furtherance of the exercise of the power of the Commission in carrying out its function * * *. The enforcement or non-enforcement of the Rule would in no way affect the result of the hearing. The function of the Commission is regulatory and not judicial. It may adopt rules and regulations necessary to carry out its regulatory functions, but it seems that the proceedings are only incidental to the exercise of its powers * * *.

“I reluctantly conclude that the General Assembly has reserved unto itself the right to determine who may practice before the Public Service Commission and has not yet exercised its prerogative in that respect. See Art. 10, § 1.”

He entered an order setting aside Rule III-A in each case. The Commission appealed under the authorization of Code (1965 Repl. Vol.), Art. 78, § 98.

The Commission under Art. 78, § 1, is given jurisdiction of and power over all public service companies and the legislative blessing that:

“The powers of the Commission shall be liberally construed ; and the Commission shall have the powers specifically conferred by this article, and also all implied and incidental powers necessary and proper to carry out effectually the provisions of this article.”

Section 62 gives the Commission the power to administer oaths, examine witnesses and conduct hearings. Section 64 says: “The Commission shall have the power to make such reasonable rules and regulations as it deems necessary to carry out the provisions of this article and any other law relating to the Commission.” Section 76 provides that “All proceedings before the Commission shall be governed by the rules of the Commission, conformably with the provisions of this article. The Commission shall not be bound by the technical rules of evidence or procedure of courts of law or equity.” Nevertheless, § 97 provides that any order of the Commission is to be deemed “prima facie correct” and must be affirmed on appeal unless unconstitutional, not within statutory authorization, procedurally unlawful, arbitrary or capricious, or otherwise illegal, or “if the subject of review is an order entered in a contested case after hearing, such order is unsupported by substantial evidence on the record considered as a whole.”

The Commission passed the Rule here challenged on the premises, which it earnestly continues to contend are fully sound and supportable, that (a) a contested case before it in which testimony and other evidence is received, law applied, and a record made which, if an appeal is taken, must be tested under the standards of § 97 of Art. 78, involves the practice of law and, therefore, a layman may not lawfully conduct such a case on behalf of an employer or other client, and (b) that the legislature has given the Commission powers of implementation of its functions and of control over its procedures which enable it properly to recognize and forbid such unlawful practice.

Hahn and Baltimore Tank Lines counter by contending (a) that the Commission exercises a naked statutory delegation of power and no statute exists that authorizes it to adopt Rule III-A; (b) that as is conceded, laymen have been permitted to represent their employers before the Commission since its founding in 1910 and this long-standing practice is conclusive of the lack of power in the Commission to forbid them so to do, particularly since the legislature did not act after Attorney General O’Conor in 23 Op. Att’y Gen. 427 (1938) had advised the State Accident Commission that it could adopt a rule requiring that claimants and employees be represented by lawyers only if practice before the Commission constituted the practice of law and this was debatable and should be resolved by a test suit brought by the Bar Association; (c) since one need not be a. lawyer to be a member of the Public Service Commission (Art. 78, § 5), it should be inferred that a layman lawfully can appear in a representative capacity before laymen; (d) it should be inferred that the legislature did not intend the Commission to determine who may practice before it because the Commission is expressly excluded from the Administrative Procedure Act (Code (1965 Repl. Vol.), Art. 41, §§ 244-256), which in § 245 specifically directs each covered agency to. adopt rules governing:

“the formal and informal procedures prescribed or authorized by this subtitle. Such rules shall include rules of practice * * * provided, however, that such rules shall not be construed or implemented so as to interfere with the right of any lawyer to practice before any agency, or so as to grant the right to practice law to anyone not authorized so to do,” •

(e) because the legislature in Art. 95A, §. 16 (b) has forbidden anyone not a lawyer to be paid or to accept a fee for appearing before the Employment Security Board and in § 229 (d) of Art. 81 specified who may appear in a representative capacity before the Tax Court, it should'be inferred that the legislature intends that only it can prescribe whát is and what is not the practice of law; (f) the legislature has shown in the Public Service Commission law that laymen.may appear before the Commission since in § 77 (a) it provides, that the Commission shall receive a complaint from “any person” and in § 79 that “[i]n. any contested casé begun' by complaint,’filed by any person * * *, the’person complained" of shall be entitled to a hearing”; (g) the matter is completely controlled'by "the decision in Rehm v. Cumberland Coal Company, 169 Md. 365, which held that a collection agency was not; practicing law in causing to be entered in the People’s Court of Baltimore a judgment of $18 for a coal company because the'word “attorney” in then § 626 of the Baltimore City Charter providing that no justice of the peace “shall issue a summons except on application * * by, the plaintiff or his attorney * had been used in similar statute’s for 114. years'as meaning attorney in fact as well as attorney at' law, and because the office of justice of the peace is entirely disassociated from the‘idea of a “court” in the common .acceptation of that term, although tlie office is judicial.

When the question before us is first asked the true answer may not seem easy to give, but deliberate consideration makes it clearly to be perceived. Rule III-A in terms recognizes that the Commission functions legislatively, executively and ministerially, as well as quasi-judicially. It declares the conceded right of an individual to appear in his own behalf no matter in which capacity the Commission is functioning and, by necessary implication, the Rule permits a layman to appear for another in Commission matters that are in nature legislative, executive or ministerial. Only when “the Commission is performing a quasi-judicial function” must “all parties, except individuals appearing in their own behalf,” be represented by attorneys-at-law who are “duly admitted and enrolled to practice before the Court of Appeals of this State.” What the Rule contemplates as the performance of a quasi-judicial function was illustrated by the chairman of the Commission, now Judge Eiss of the Supreme Bench of Baltimore City, when he said at one of the hearings that preceded its adoption:

“Whatever ruling we make, * * * will primarily be directed toward the questions that arise and require an actual formal hearing before the Commission; for example, a hearing of this kind; for example, also a hearing on rates or where there is a complaint of service that goes to a formal hearing or where there is an extension of territory or where there is a stock proceeding, the approval of an issuance of stock or of an issuance of debentures, or the approval of a payment of a stock dividend; all of these are issues which are brought before us in formal hearings and these are the issues in which there is a question as to whether or not the company must be represented by an attorney.”

The chairman at another of the hearings said:

“The thing that gives us difficulty, and I suppose it’s really the crux of this case, is what is to happen when you have a quasi-judicial question to consider, when there are exhibits to be prepared and filed, when there is examination and cross-examination of witnesses' to be prepared, when a record is being made which may ultimately reach the Court of Appeals, and is there not then a requirement that at least, as to that stage of the proceeding, that whoever comes in to be heard before the Commission ought to be represented by counsel.”

This Court has spoken as to quasi-judicial functioning by administrative agencies. Heaps v. Cobb, 185 Md. 372, 378, said: “Administrative boards in general may be said to act in a quasi-judicial capacity insofar as they have a duty to hear and determine facts and, based on them, to make decisions.”

Hyson v. Montgomery County, 242 Md. 55, involved a contention that the Montgomery County Council, sitting as the District Council in a zoning hearing, was acting in a quasi-judicial capacity and therefore cross-examination of the witnesses was a matter of right. The counter contention was that the Council was acting in a legislative or quasi-legislative capacity. In-holding there was a right to cross-examine, Judge Prescott for the Court said:

■“It is elementary that governmental bodies, tribunals, agencies, boards (and by whatever other appellations they may be known), and officials, in the performance of their public duties, exercise functions that are divided into three general categories: executive, judicial, and legislative * * *.

“Up to the present time, no one has been able to delineate, with precision, and accuracy, an exact formula for determining the line of demarcation between the-differences between legislative and judicial functions. These differences, on occasions, are particularly difficult of determination when mixed, blended, or combined functions are given, and exercised by, the same-official, board, or agency, 1 Davis, Administrative Law Treatise, §§ 1.09, 7.03, which is frequently the case. Compare Cooper, State Administrative Law, Ch. 1, Sec. 1.

* * *

“We have repeatedly stated and held that the actual acts of zoning and rezoning are legislative or quasi-legislative in nature * * *.

“However, this does not mean that the Legislature (or the Council by regulation adopted pursuant to proper authority) cannot prescribe, within lawful and constitutional limitations, the mode of conducting the hearing on a rezoning application, cannot provide for the making of a record at such hearing, or cannot require that such an application ‘shall be determined on the basis of the evidence of record,’ and shall be approved or disapproved on the merits.

* * *

“It is clear to us, from the general law elsewhere and our previous decisions, that the provisions set forth above make it improper and inaccurate to characterize the whole proceeding at the hearing held by the Council when considering an application for reclassification and its action of denying or granting reclassification as quasi-legislative in nature or quasi-judicial in nature. The above provisions, without question, required the members of the Council to resolve disputed questions of adjudicative facts (as contra-distinguished from legislative facts or judicial action) concerning particular parties. Davis, op. cit., § 7.03; Board v. Levitt & Sons, supra. (Professor Davis, in § 7.02, op. cit., states that adjudicative facts are ‘roughly’ the kind of facts that go to a jury in a jury case). And, when the Council was considering and determining these adjudicative facts concerning particular parties, it necessarily was performing a quasi-judicial function, even though its final action, in granting or denying the reclassification which was required to be based upon its findings of adjudicative facts, was quasi-legislative in character.

J}i * *

“We, therefore, as previously indicated, have no hesitancy in holding that the statutes and regulations, set forth above, conferred quasi-judicial functions upon the Council in making its determination of facts at the hearing. See, in addition to the authorities cited above, 1 & 2 Am. Jur. 2d, Administrative Law, §§ 92, 161, 415.” [242 Md. at pp. 62,63, 64-65, 67]

See also Mandel v. Bd. of County Comm'rs, 238 Md. 208, a case under the Administrative Procedure Act, of which the Court in Hyson said: “We do not mean to indicate that the Council is included in the definition of ‘agency’ in Code (1965 Repl. Vol.), Article 41, § 244 [a], but refer to the Act only for the purposes of analogy” [242 Md. at 66]; Schultze v. Montgomery County Bd., 230 Md. 76, 80; Woodlawn Area Citizens Ass’n, Inc. v. Bd. of Co. Comm’rs, 241 Md. 187; and Oppenheimer, Administrative Law in Maryland, 2 Md. L. Rev. 185 (1938).

Beyond question the Public Service Commission exercises quasi-judicial functions when on a record before it, consisting of pleadings (including discovery procedures), exhibits and testimony which later may undergo judicial scrutiny, it must after oral and written arguments determine adjudicative facts and choose the applicable law to produce a decision. Chairman Liss said :

“At some point * * * you get into an adversary situation in which questions of law have to be determined by the Commission and * * * I would say that at least 75 per cent of the actual cases that go to formal hearing here are decided not just on factual matters, but on legal matters as well [and therefore] should it not be required that * * * an attorney should represent the parties” ?

We think the Commission had the power to require that an attorney must represent parties before it other than individuals who desire to act for themselves. We have no doubt that when an individual on behalf of his employer or another prepares and files pleadings in a contested case before the Commission and appears at and engages in its trial by the examination or cross-examination of witnesses, in light of the law he has determined to be applicable or controlling and by arguing the case in writing or orally he engages in the practice of law. A host of cases throughout the country have agreed that he is.¹

Code (1968 Repl. Vol.), Art. 10, § 1, provides that “[n]o person shall practice the profession or perform the services of an attorney at law within this State without being admitted to the bar * * and then specifies certain acts and services the doing or- rendering of which will cause one to be deemed an attorney at law. Section 32 of Art. 10 provides :

“Any person who shall exact, demand, take or receive from any person whatsoever any fee, gratuity, gift or reward for his advice or service as an attorney - at law without having been admitted to the bar agreeably to the provisions of this article shall be guilty of a misdemeanor, and upon conviction thereof shall be liable to a fine of not more than one hundred dollars, or confinement in jail for not more than thirty days, or both fine and imprisonment, in the discretion of the court.”

A lay officer or employee of a corporation or a lay partner or employee of a co-partnership who represented his firm before the Commission in a contested case would be unlawfully practicing law although no part of his remuneration was allocated to his services as such representative. State v. Wells (S.C.), 5 S.E.2d 181.

The powers of the Commission which under § 1 of Art. 78 are to be “liberally construed” include the power under § 76 to have all its proceeding governed by rules not inconsistent with Art. 78, and the power under § 64 “to make such reasonable rules and regulations as it deems necessary to carry out the provisions of [Art. 78].” This Court said in Montgomery County v. Public Service Commission, 203 Md. 79, 88:

“When the Commission acts in a capacity at least quasi-judicial it should act under rules of procedure provided either by the Legislature or by itself * * *. The details of procedure may be supplied by the Commission under its power to make such rules not inconsistent with the laws as are necessary for the exercise of the powers conferred upon it.”

The Commission has the power to require that those who propose to engage or do engage in the practice of law before it may legally be authorized to practice law. In so doing, it not only obeys the law but offers itself aid in the solution of the contested factual and legal problems that come before it generally more competent and skilful than otherwise would be offered.

None of the contentions of Hahn and Baltimore Tank Lines requires a different conclusion.

The fact that for sixty years laymen have been permitted to practice before the Commission does not establish a binding administrative construction of the Public Service Commission article. The record makes it clear that the questions here posed were never raised until brought up in 1966, so that there should not reasonably arise a presumption of legislative acquiescence in an administrative determination of an ambiguous legislative provision. The opinion of the Attorney General to the Accident Commission actually came to no conclusion as to the power of that Commission to act as the Public Service Commission acted in this case (although it is implicit in the opinion that it could adopt such a rule if practice before the Commission was the practice of law), it merely advised the bringing of a test case.

Under our constitutional system of separation of powers, the determination of what constitutes the practice of law and the regulation of the practice and of its practitioners is, and essentially and appropriately should be, a function of the judicial branch of the government. In many States it has been held that the legislative branch cannot constitutionally exercise that judicial function although it may make implementing regulations. In Maryland there has always been a comfortable accommodation in this area. See 52 Transactions of the Maryland State Bar Association (1947), pp. 152-181, and Bastian v. Watkins, Clerk, 230 Md. 325. The legislature has forbidden the practice of law by one not a lawyer (and specified some “wherefores”) in § 1 of Art. 10 and made it a misdemeanor for a layman to practice law in § 32 of Art. 10, but it consistently has recognized that the courts can and should decide in any instance presented lo what does and what does not constitute the practice of law. By Ch. 217 of the Laws of 1961 it enacted the Model Act Providing Remedies for the Unauthorized Practice of Law, as §§ 26A to 26F of Art. 10 of the Code (1968 Repl. Vol.). Under this Act the Attorney General or any organized bar association may maintain an action for injunctive relief in an appropriate equity court against “any person who renders, offers to render, or holds himself out as rendering any service which constitutes the unauthorized practice of law.” The statute does not to any extent equate or limit what may be enjoined to acts or conduct legislatively proscribed as unlawful practice of law but uses the very broad measure of any “unauthorized practice,” and the courts must make the ultimate appraisal of what is unauthorized.

The fact that the legislature has occasionally spoken in specified areas on unlawful practice does not mean that it has attempted to exclude judicial or quasi-judicial bodies from acting at all or in other areas. For example, the legislative choice to specify that no person but a lawyer should be allowed a fee for .appearing before the Unemployment Security Board means no more, it would seem, than the desire to offer simple protection to extremely vulnerable people, largely unable or unwilling as a practical matter to defend themselves, from being preyed on.

-It does not follow' that because the legislature excluded the Commission from the agencies covered by the Administrative "Procedure Act and those agencies have been told.by the legislature that their power to make rules stops at a rule that interferes “with the right of any lawyer to practice before any agency” or to grant “the right to practice law to'anyone not authorized so to do,” that the Commission’s powers in this respect are different'from those of the covered agencies. The legislative grants of power to the Commission which have been, quoted earlier are phrased somewhat differently but they may be soundly and reasonably analogized to those given by the Administrative Procedure Act and certainly the legislature has neither attempted to empower the Commission to bar lawyers from appearing before it nor attempted to empower it to grant the right practice law-before it to one not authorized so to do. In our view if the Commission cannot lawfully or properly, as it cannot, authorize or permit laymen to practice law before it can announce by a general rule that it will not do so.

The argument that the Commission may be composed of laymen and therefore laymen should be able to practice before it has many answers which lead to rejection of the contention. Most of the Commission members have been and presently are lawyers. It is not the place, the forum or the status of the trier of fact and selector of law that determines whether what is done before him is the practice of law but rather the nature, character and quality of the acts and conduct. The philosophy of the argument; specious it seems to us, is that the blind should lead the blind. Under the Constitution the Supreme Court of the United States need not be composed of skilled and experienced lawyers, or even members of the bar, yet it scarcely could seriously be argued that those who as advocates for litigants advise and lead the Court to its decisions should not be required to be lawyers.

That the Public Service Commission law says that “any person” may file a complaint does not mean that if the complaint leads to a formal contested hearing or case that any person may act as a lawyer for another. Rehm v. Cumberland Coal Company, 169 Md. 365, does not compel the result sought by Hahn and Baltimore Tank Lines. The decision is distinguishable, grounded as it was on two bases which are not here involved, the first explicit, the second implicit. First, the word “attorney” in the Baltimore City statute had over a period of one hundred years acquired the gloss recognized by the legislature of attorney in fact as well as attorney at law the Court concluded. Second, the act performed by the corporate attorney in fact was so simple and so generally known and understood as not to require for its exercise legal skill, knowledge or training, and the amounts which could be involved under the then jurisdictional limits of the People’s Court were so small that the cost to a litigant of retaining a lawyer would not ordinarily have been warranted. The legislature seemingly agreed with this reading of the Rehrn case, for in amending § 1 of Art. 10 after the decision, it provided in effect that a layman could try a case for another in the People’s Court of Baltimore City if the amount involved did not exceed $100.

Upon remand a declaration should be made reflecting the view expressed in this opinion and appropriate orders entered in each case.

Orders reversed, with costs, and cases remanded for further proceedings.

1 . See 7 Am. Jur. 2d Attorneys at Law §§ 73 and 28; Note, 1964 Wisconsin L. Rev. 469. Cases involving Public Service Commissions include State v. Childe (Neb.), 23 N.W.2d 720; Clark v. Austin (Mo.), 101 S.W.2d 977; Smith v. Public Serv. Comm. of Missouri (Mo.), 336 S.W.2d 491; State v. Keller (Wis.), 123 N.W.2d 905, cert. denied 377 U. S. 964, modifying State v. Keller (Wis.), 114 N.W.2d 796, vacated 374 U. S. 102, 10 L.Ed.2d 1026; Blair v. Motor Carriers (C. P. Philadelphia, Pa.), 40 Pa. D. & C. 413; Denver Bar Ass’n v. Pub. Util. Comm. (Colo. en Banc), 391 P. 2d 467.

Cases involving Industrial Accident Commissions include: People v. Goodman (Ill.), 8 N.E.2d 941, 111 A.L.R.1, cert. denied, 302 U. S. 728; Shortz v. Farrell (Pa.), 193 A. 20; Ky. State Bar Ass’n v. Henry Vogt Machine Co. (Ky.), 416 S.W.2d 727; In re Unauthorized Practice of Raw (Ohio), 192 N.E.2d 54, 2 A.R.R.3d 712, cert. denied 376 U. S. 970; State v. Wells (S. C.), 5 S.E.2d 181; West Virginia State Bar v. Earley (W. Va.), 109 S.E.2d 420.

Miscellaneous agencies were involved in Chicago Bar Ass’n v. United Taxpayers of America (Ct. App. Ill.), 38 N.E.2d 349; In re Unauthorized Practice of Law in Lucas County (C. P. Ohio), 160 N.E.2d 423, aff. sub nom Appeal of Bailey (Ct. App. Ohio), 137 N.E.2d 528.