Washington Suburban Sanitary Commission v. Lafarge North America, Inc.

Washington Suburban Sanitary Commission v. Lafarge North America, Inc.,
No. 69, September Term, 2014
PUBLIC UTILITIES – WASHINGTON SUBURBAN SANITARY COMMISSION
– REFUND CLAIMS – DENIAL BY OPERATION OF LAW FOR FAILURE TO
RENDER A TIMELY DECISION – JUDICIAL REVIEW
If the Washington Suburban Sanitary Commission (“WSSC”) fails to decide a refund
claim within 180 days, the claim is deemed denied, pursuant to Maryland Code (1998,
2010 Repl. Vol.), Public Utilities Article, § 25-106(d). A reviewing court is authorized to
reverse the decision of the WSSC (assuming that the denial was not supported by
substantial evidence and/or was arbitrary and capricious on the record) and remand the
case to the WSSC with directions to calculate and issue the appropriate refund, thus
foreclosing the agency’s ability to consider anew on remand the potential for denial of the
refund request.
Circuit Court for Montgomery County
Case Nos. 369284 & 370064
Argued: 1 April 2015
IN THE COURT OF APPEALS OF
MARYLAND
No. 69
September Term, 2014
WASHINGTON SUBURBAN
SANITARY COMMISSION
v.
LAFARGE NORTH AMERICA, INC.
Barbera, C.J.,
Harrell,
Battaglia,
Greene,
Adkins,
McDonald,
Watts,
JJ.
Opinion by Harrell, J.
Filed: June 18, 2015
Lafarge North America, Inc. (“Lafarge”) operated a ready-mix concrete plant in
Rockville, Maryland, during the time relevant to this case. It sought a refund from the
Washington Suburban Sanitary Commission (“WSSC”) for allegedly erroneously
assessed and paid water and sewer service charges for the operation of the plant. Lafarge
sought initially from the WSSC administrative review and action on its refund request
from the WSSC. The WSSC did not hold a hearing or decide the refund request within
180 days of its filing, as it was obliged to do by Maryland Code (1998, 2010 Repl. Vol.),
Public Utilities Article, § 25-106 (“PUA”). The same statutory scheme decreed that the
refund request was deemed denied by operation of law because of the WSSC’s failure to
render a timely decision. PUA § 25-106(d)
Lafarge turned to the Circuit Court for Montgomery County for judicial review,
noting that its claim was deemed denied by the WSSC’s inaction. The Circuit Court
concluded that the deemed denial was not supported by substantial evidence in the record
and was arbitrary and capricious because the WSSC failed to act timely. As a result, that
court remanded the matter to the WSSC with directions to determine and issue an
appropriate refund. On direct appeal by the WSSC, a panel of the Court of Special
Appeals affirmed unanimously the judgment of the Circuit Court. We granted the
WSSC’s petition for a writ of certiorari. For the reasons explained below, we affirm.
FACTUAL AND PROCEDURAL BACKGROUND
The WSSC operates the public water supply, sewage collection and treatment, and
storm water management systems in most of Prince George’s and Montgomery counties.
This bi-county, state agency levies separate charges for water consumption and sewer
services, but its sewerage charges are determined by the water consumption of a user.
PUA § 25-503(a). If some of the water consumed by a commercial, industrial, or multi-
family residential use is “used exclusively for any purpose that results in the [consumed]
water not entering the [WSSC’s] sewer system[,]” however, the WSSC may not impose
sewer charges for that portion of the water consumption. PUA § 25-503(d) and (e). To
avoid being billed for water consumption not entering into the sewer system, a property
or business owner must have a submeter installed to measure the water not discharged
into the sewer. Id. After installation of a submeter, the WSSC calculates the sewerage bill
by subtracting the water passing through the submeter from the amount of water passing
through a primary meter at the site. Id.
The WSSC delivered large quantities of water to Lafarge’s ready-mix concrete
plant in Rockville. According to Lafarge’s refund request, the production of concrete
consumes the vast majority of the water delivered to the plant. This water is not
discharged into the WSSC’s sewer system. The only incoming water discharged into the
public sewer system as “sewage” came from an employee bathroom on the premises.
Lafarge asserted further in its refund request that the number of employees and activity
levels at the plant remained the same over the past decade.
2
In 2000, at Lafarge’s request and expense, the WSSC installed on the property a
submeter to measure the water used to make concrete.1 In August 2005, the submeter was
moved elsewhere on-site after the structure housing the submeter (described by Lafarge
as a “shed”) was destroyed by fire. Lafarge maintained, in its refund request, that the
submeter ceased working properly after the fire and relocation, resulting in sewer charges
for substantial amounts of water that Lafarge’s operations did not discharge into the
sewer system.
An internal investigation into sewerage charges following a submeter malfunction
in February of 2012 alerted Lafarge for the first time to the charges it came to believe
were in error. Before the 2005 fire, the Rockville plant was billed consistently for
discharging into the sewer system approximately one-tenth of the plant’s total water
consumption. After the fire, Lafarge was billed for a water-to-sewage ratio of between 2-
to-1 and 1-to-1. Lafarge claims that such indicated sewage discharges were erroneously
high. On 16 February 2012, Lafarge contacted initially the WSSC about the erroneous
sewerage charges.
On 6 March 2012, Lafarge, pursuant to PUA § 25-106, submitted a letter (with
attachments) to the WSSC requesting a refund for the allegedly erroneous charges.2 On 9
1
The “record” is unclear as to whether Lafarge or a predecessor entity operated the
plant before the submeter was installed. The submeter installed in 2000, however, was the
first submeter at the business.
2
Refund claims are provided for by subsections (b) and (c) of Maryland Code
(1998, 2010 Repl. Vol.), Public Utilities Article, § 25-106 (“PUA”):
(Continued…)
3
April 2012, Lafarge completed and submitted a refund hearing request form, as directed
by the WSSC. The WSSC did not hold a hearing or issue a decision on Lafarge’s claim
within 180 days, as required by PUA § 25-106(d).3
Pursuant to PUA § 25-106(d) and (e), Lafarge petitioned the Circuit Court for
Montgomery County for judicial review of the “deemed final rejection” of its claim.4 The
WSSC filed a motion for a stay of the proceedings until it could hold a hearing so that a
fuller evidentiary record could be developed and actual final action made. The Circuit
Court denied the WSSC’s motion.
(…continued)
(b) Claims. — (1) A person may file a written claim with the
[WSSC] in a form and containing the information and
supporting documents required by the [WSSC], for a refund
of the amount of a fee or charge the person paid to the
[WSSC] that exceeds the amount that is properly and legally
payable.
****
(c) Investigation. — (1) On the receipt of a claim for a refund
under subsection (b) of this section, the [WSSC] shall
investigate the merits of the claim.
(2) On the request of the claimant, the [WSSC], or the
[WSSC’s] designee, shall hold a hearing on the claim.
3
PUA § 25-106(d) states:
Failure to reach a final decision. — If the [WSSC] fails to
reach a final decision on a claim within 180 days after the
date the claim is filed, the failure shall be deemed a final
rejection of the claim.
4
Lafarge filed two petitions for judicial review with the Circuit Court as a
protective maneuver to ensure that it would not lose its right to judicial review of either
its 6 March 2012 letter requesting a refund or its 9 April 2012 request for a hearing,
whichever as might be determined to be the “claim” for purposes of PUA § 25-106(d).
The two petitions were consolidated by the Circuit Court.
4
The WSSC filed thereafter with the court the “agency record.” The “record”
consisted of, in its entirety, Lafarge’s 6 March 2012 letter requesting a refund and the 9
April 2012 hearing request (both of which had supporting documents attached by
Lafarge). Lafarge responded with a motion requesting that the court require the WSSC to
supplement the “record” with any documents created during the agency’s investigation of
the claim, if any. The WSSC opposed the motion. On 8 January 2013, the Circuit Court
granted Lafarge’s motion. Thereafter, the WSSC provided to the Circuit Court additional
documents.5
On 17 June 2013, the Circuit Court determined that: (1) the WSSC’s deemed
denial of Lafarge’s claim was not supported by substantial evidence; (2) the WSSC’s
failure to decide the claim within the 180-day window required by PUA § 25-106(d) was
arbitrary and capricious; (3) it would be inappropriate to give the WSSC a second
opportunity to consider whether to deny the refund request after the agency failed to
make a determination within the time-period required by the statute; and, (4) therefore,
Lafarge was entitled to a refund in some appropriate amount. The court remanded the
matter to the WSSC with directions to issue a refund according to the agency’s standard
5
The documents from the investigative file included: Lafarge’s water and sewer
bills from January 2006 through February 2012; a document titled “Refund Hearing
Summary,” prepared apparently by the WSSC staff, which set out the interactions
between Lafarge and the WSSC regarding the submeter and recommended that the refund
claim be denied; a spreadsheet with illustrative charts detailing water and sewerage usage
and billing history for the property; and meter-reading data, notes, and work order results.
5
operating procedures.6 On 20 September 2013, the Circuit Court granted Lafarge’s
motion to alter or amend the judgment and required additionally that the WSSC issue the
refund within 30 days.7
On 3 July 2013, the WSSC appealed timely to the Court of Special Appeals. The
WSSC did not argue to the intermediate appellate court that Lafarge was not due a
refund, but rather attempted to persuade the court that the Circuit Court exceeded its
powers in requiring the WSSC to supplement the “record,” as submitted originally, with
the agency’s investigative file and by making factual determinations absent a proper
agency record, agency findings, or agency conclusions. Lafarge retorted that the appellate
court was not authorized expressly to consider appeals from the Circuit Court under PUA
§ 25-106(e).8
6
The Circuit Court ordered the WSSC to calculate the refund owed to Lafarge
according to a document entitled “Standard Procedures for Adjustment and Correction of
Water/Sewer Bill, SP Number CUS 10-01.” CUS 10-01 appears to be a standard and
uniform method of determining refunds. Neither the WSSC nor Lafarge objected to the
document’s use to determine the amount of the refund owed.
7
According to documents found in the WSSC’s investigative file, WSSC staff
calculated that Lafarge may have been overcharged by as much as $230,391.81. Lafarge
claims that the refund should be larger substantially, but the adequacy of the amount of a
refund has not been litigated and is not an issue before us at this time.
8
PUA § 25-106(e) states:
Judicial review. — Within 30 days after the date of final
action by the [WSSC] on a claim for a refund filed under
subsection (b) of this section, a petition for judicial review
may be filed with the circuit court as provided in Title 7,
Chapter 200 of the Maryland Rules.
6
A panel of the Court of Special Appeals, in an unreported opinion, examined the
legislative history of PUA §25-106(e) and held that the Legislature intended to allow
further appeals to the Court of Special Appeals from judgments by a circuit court, after
judicial review of PUA § 25-106 refund claims. On the merits of the case, however, the
intermediate appellate court affirmed.
The WSSC petitioned us to issue a writ of certiorari. The WSSC requested further
that we stay enforcement of the mandate of the Court of Special Appeals pending our
consideration of the petition. On 19 September 2014, we granted the WSSC’s petition
and motion to stay the enforcement of the intermediate appellate court’s judgment,
pending our consideration and disposition of the following questions:
1) Did the Court of Special Appeals err in holding that a
[circuit court] may exceed the permissible scope of judicial
review when considering a “deemed” rejection of a refund
claim under PUA § 25-106?
2) Did the Court of Special Appeals err in upholding the
[Circuit Court’s] order mandating that WSSC’s investigative
files be produced as part of the agency record pursuant to Md.
Rule 7-206?
Washington Suburban Sanitary Commission v. Lafarge N. Am., Inc., 440 Md. 115, 99
A.3d 778 (2014).
ANALYSIS
I. Appellate Jurisdiction
Before the Court of Special Appeals, Lafarge sought a dismissal of the WSSC’s
appeal because: (1) PUA § 25-106(e) does not authorize expressly appellate review by
the Court of Special Appeals of the judgment of the Circuit Court; (2) a refund request
7
before the WSSC is not a “contested case” for purposes of Maryland’s Administrative
Procedures Act; and, (3) the review requested by Lafarge before the Circuit Court cannot
be considered alternately as a common law action for mandamus. As the argument goes,
if the WSSC’s appeal to the Court of Special Appeals was improper, its petition to us for
a writ of certiorari is untimely. Although neither party argues before us that we or the
intermediate appellate court lack fundamental jurisdiction over the subject matter of this
case, an appellate court may consider, on its initiative, jurisdictional questions that it
notices. Waterkeeper Alliance, Inc. v. Maryland Dep't of Agric., 439 Md. 262, 275, 96
A.3d 105, 113 (2014); Johnson v. Johnson, 423 Md. 602, 606, 32 A.3d 1072, 1074
(2011); Stachowski v. State, 416 Md. 276, 285, 6 A.3d 907, 912 (2010); Miller & Smith
at Quercus, LLC v. Casey PMN, LLC, 412 Md. 230, 240, 987 A.2d 1, 6-7 (2010); Biro v.
Schombert, 285 Md. 290, 293, 402 A.2d 71, 73 (1979).
The right to appeal, except as authorized by constitution, is regulated entirely by
statutes. E.g., Dvorak v. Anne Arundel Cnty. Ethics Comm'n, 400 Md. 446, 450, 929 A.2d
185, 187 (2007); Pack Shack, Inc. v. Howard Cnty., 371 Md. 243, 247, 808 A.2d 795,
797 (2002); Subsequent Injury Fund v. Pack, 250 Md. 306, 309, 242 A.2d 506, 509
(1968); Switkes v. John McShain, Inc., 202 Md. 340, 343, 96 A.2d 617, 618 (1953).
Maryland Code (1974, 2013 Repl. Vol.), Courts and Judicial Proceedings Article, § 12-
301 (“CJP”) provides a general right to appeal from a final judgment of a circuit court,
subject to certain exceptions. One such exception is relevant to the present case: “[u]nless
a right to appeal is expressly granted by law, [CJP] § 12-301 . . . does not permit an
appeal from a final judgment of a court entered or made in the exercise of appellate
8
jurisdiction in reviewing the decision of . . . an administrative agency . . . .” CJP § 12-
302.9
PUA § 25-106(e) provides expressly for judicial review by a circuit court of final
action on a refund claim by the WSSC, but is silent regarding appellate review of that
circuit court’s judgment by the Court of Special Appeals. The panel of the Court of
Special Appeals in the present case, looking to the legislative history of PUA § 25-
106(e), concluded that the General Assembly intended to maintain allowance for such
appellate review. According to the intermediate appellate court panel, the provision for
this was left out mistakenly from the prior code provision during the relevant re-
codification.
The apparent purpose of PUA § 25-106, its legislative history, and the canons of
construction regarding re-codification initiatives of the Maryland Code indicate that the
Legislature intended to allow appeals to the intermediate appellate court in the
circumstances of the present case.10 CJP § 12-302 does not authorize by implication,
9
We described briefly the history of this exception, from its origin in 1785 to
relatively modern times, in Gisriel v. Ocean City Bd. of Sup'rs of Elections, 345 Md. 477,
487-90, 693 A.2d 757, 762-63 (1997).
10
The predecessor to PUA § 25-106(e) was Maryland Code (1957), Article 29, § 6-
111(e), which stated:
Within 30 days from the date of final action by the WSSC on
a claim for refund filed under this section, an appeal from the
final action may be made to the circuit court and the
appellate courts of this State as provided in Title 7, Chapter
200 of the Maryland Rules. [emphasis supplied]
(Continued…)
9
however, appeals from circuit court judgments in water/sewer charge refund matters. The
right to appeal must be “expressly granted by law.” CJP § 12-302. Rather than inquire
(…continued)
As part of Maryland’s decades-long re-codification efforts, Art. 29, § 6-111(e) was re-
codified by Senate Bill 96 of 2010 as PUA § 25-106(e), which states:
Within 30 days after the date of final action by the
Commission on a claim for a refund filed under subsection
(b) of this section, a petition for judicial review may be filed
with the circuit court as provided in Title 7, Chapter 200 of
the Maryland Rules. [emphasis supplied]
There are indications, however, that the Legislature did not intend to remove the
ability to appeal (seek judicial review of) a circuit court’s disposition of a refund claim to
the intermediate appellate court. It is well established that, as a general rule, alterations in
statutory language resulting from Maryland’s code revision process are not intended to be
substantive. Comptroller of Treasury v. Blanton, 390 Md. 528, 538, 890 A.2d 279, 285
(2006). The uncodified preamble to Senate Bill 96 and committee reports generated
during the drafting process further indicate that the Legislature did not intend to change
the substance of the pre-existing law with regard to access to the Court of Special
Appeals.
The Revisor’s Note provides insight into the intent of the Legislature. Blanton,
390 Md. at 538, 890 A.2d at 285 (citing Dean v. Pinder, 312 Md. 154, 163, 538 A.2d
1184, 1189 (1988); Kane v. Schulmeyer, 349 Md. 424, 435, 437, 708 A.2d 1038, 1044,
1045 (1998); Briggs v. State, 289 Md. 23, 30–31, 421 A.2d 1369, 1374 (1980)). The
Revisor’s Note to Bill 96 (PUA § 25-106) indicates generally that the “section is new
language derived without substantial change . . . .” Regarding PUA § 25-106(e), it notes
that “the former reference to filing an appeal with ‘the appellate courts of this State’
[was] deleted because according to the Maryland Rules, a petition for judicial review of
an administrative decision shall be filed with the circuit court.” The deletion appears
intended to clarify that judicial review replaces the former reference to “appeals” and that
review would be obtained first in a circuit court, but not to foreclose subsequent appellate
review.
10
into the meaning of “expressly” in CJP § 12-302, we find an appropriate jurisdictional
basis in Maryland’s Administrative Procedure Act (“APA”).11
Maryland’s APA was enacted initially in 1957 to increase the perceived
legitimacy of administrative agencies by imposing transparency, procedural regularity,
and judicial review of agency actions. Edward A. Tomlinson, The Maryland
Administrative Procedure Act: Forty Years Old in 1997, 56 Md. L. Rev. 196, 197-98
(1997). The current iteration of the APA regarding “contested cases” is codified in Title
10, Subtitle 2 of the State Government Article of the Maryland Code. Judicial review was
(and remains) more robust regarding trial-like, quasi-adjudicatory proceedings of
“contested cases” than agency rulemaking. Id. at 199.
Maryland Code (1984, 2014 Repl. Vol.), State Government Article, § 10-202(d)
(“SG”) defines “contested case”:
(1) “Contested case” means a proceeding before an agency to
determine:
(i) a right, duty, statutory entitlement, or privilege of a
person that is required by statute or constitution to be
determined only after an opportunity for an agency
hearing; or
(ii) the grant, denial, renewal, revocation, suspension, or
amendment of a license that is required by statute or
constitution to be determined only after an opportunity for
an agency hearing.
11
Lafarge argued before the intermediate appellate court that the appellate review
provisions of Maryland’s Administrative Procedure Act (“APA”) do not apply to refund
claims because refund claims, pursuant to PUA § 25-106, are not “contested cases” as
defined in Maryland Code (1984, 2014 Repl. Vol.), State Government Article, § 10-
202(d). The WSSC disagreed, as do we.
11
(2) “Contested case” does not include a proceeding before an
agency involving an agency hearing required only by
regulation unless the regulation expressly, or by clear
implication, requires the hearing to be held in accordance
with this subtitle.
Refund claims pursuant to PUA § 25-106, for which the claimant requests a
hearing, are “contested cases.” PUA § 25-106(a) grants a right to submit a claim for any
fee or charge levied by the WSSC, except assessment or benefit charges authorized by
Subtitle 2 of Title 25 of the Public Utilities Article.12 Pursuant to PUA § 25-106(c)(2),
upon the request of a claimant, the WSSC is required to hold a hearing. The object of a
hearing generally is to determine whether the claimant is entitled to a refund under PUA
§ 25-106 and, if so, in what amount. Further, the WSSC is an “agency” for the purposes
of the definition of a “contested case” as it (1) derives its existence from Division II of
the Public Utilities Article of the Maryland Code, PUA § 17-101; (2) operates in portions
of two counties, PUA § 17-501; and, (3) is authorized to hear contested cases pursuant to
PUA § 25-106. See SG § 10-202(b).13
12
As noted above, charges for sewer usage are authorized by PUA § 25-503(a), and
therefore, a refund claim for such charges may be asserted under PUA § 25-106.
13
SG § 10-202(b), defines agency as
(1) an officer or unit of the State government authorized by
law to adjudicate contested cases; or
(2) a unit that:
(i) is created by general law;
(ii) operates in at least two counties; and
(3) is authorized by law to adjudicate contested cases.
12
We held in Donocam Associates v. Washington Suburban Sanitary Commission,
302 Md. 501, 503, 489 A.2d 26, 27 (1985), that the WSSC is a state agency subject to the
requirements of the APA and that a hearing regarding an assessment to fund the
construction of additional sewer and water lines was a “contested case.” 302 Md. at 503,
489 A.2d at 27, cited with approval in Washington Suburban Sanitary Comm'n v.
Phillips, 413 Md. 606, 631, 994 A.2d 411, 426 (2010). Although the procedures of the
hearing required in Donocam were not elaborated in the statute, we concluded that the
hearing would fall necessarily under the ambit of the requirements of the APA.
Donocam, 302 Md. at 513, 489 A.2d at 32 (1985).
Because refund claims pursuant to PUA § 25-106 in which a hearing is requested
are “contested cases” pursuant to Maryland’s APA, an appeal to the Court of Special
Appeals was authorized here. The State Government Article, § 10-223 authorizes appeals
to the intermediate appellate court “in the manner that law provides for appeal of civil
cases.”
Lafarge’s petition for judicial review, the WSSC’s appeal to the intermediate
appellate court, and its petition to us for a writ of certiorari were timely. The WSSC
appealed the decision of the Circuit Court within 30 days of the judgment of the Circuit
Court, as required by Maryland Rule 8-202, and petitioned us for a writ of certiorari
within 15 days after Court of Special Appeals issued its mandate, as required by
Maryland Rule 8-302. The present case is properly before us.
13
II. Reversal of the Deemed Denial
The WSSC argues that the Circuit Court’s scope of review of the “deemed denial”
of Lafarge’s refund claim was limited to determining whether there was substantial
evidence in the record to support the denial. According to the WSSC, upon finding a lack
of substantial evidence, the Circuit Court did not have then the authority to engage in its
own factual inquiry whether Lafarge was entitled to a refund. The agency argues that the
Circuit Court was authorized only to remand the case to the WSSC to engage in a fact-
finding hearing and issue an appropriate decision based on the evidence, i.e., the court
should order a “do-over,” with the potential that the WSSC could deny the claim
altogether. Although the WSSC states correctly the general standard of judicial review of
agency decisions, it misunderstands (conveniently) the intent of the Legislature’s
codification of PUA § 25-106 and how the courts may carry-out best that intent.
The WSSC’s refund process, and the Circuit Court’s authority to review refund
actions (or failures to act resulting in a final denial decision by operation of law) of the
WSSC, derives from PUA § 25-106. Our primary goal when interpreting statutes is to
ascertain and effectuate the intent of the Legislature. Williams v. Peninsula Reg’l Med.
Ctr., 440 Md. 573, 580, 103 A.3d 658, 663 (2014); Johnson v. Mayor & City Council of
Baltimore City, 387 Md. 1, 11, 874 A.2d 439, 445 (2005); Witte v. Azarian, 369 Md. 518,
525, 801 A.2d 160, 165 (2002). We look first to the text of the statute, and “[i]f the
language of the statute is unambiguous and clearly consistent with the statute’s apparent
purpose, our inquiry as to legislative intent ends ordinarily and we apply the statute as
written, without resort to other rules of construction.” Lockshin v. Semsker, 412 Md. 257,
14
275, 987 A.2d 18, 28-29 (2010); accord Bost v. State, 406 Md. 341, 350, 958 A.2d 356,
361 (2008) (citing Ishola v. State, 404 Md. 155, 160, 945 A.2d 1273, 1276 (2008));
Moore v. State, 388 Md. 446, 453, 879 A.2d 1111, 1114 (2005).
PUA § 25-106 makes clear that the Legislature intended for refund claims to be
investigated and decided within 180 days from the filing of the claim. If the WSSC falls
short of this benchmark, the resultant deemed denial of the claim by operation of law is
subject to judicial review. The relevant portions of PUA § 25-106 provide:
(b) Claims. — (1) A person may file a written claim with the
Commission, in a form and containing the information and
supporting documents required by the Commission, for a
refund of the amount of a fee or charge the person paid to the
Commission that exceeds the amount that is properly and
legally payable.
****
(c) Investigation. — (1) On the receipt of a claim for a refund
under subsection (b) of this section, the Commission shall
investigate the merits of the claim.
(2) On the request of the claimant, the Commission, or the
Commission's designee, shall hold a hearing on the claim.
****
(4) The Commission shall pay interest on any amount
refunded under this section, calculated at the rate of 6% per
year, starting 180 days from the date the claim was made.
(d) Failure to reach a final decision. — If the Commission
fails to reach a final decision on a claim within 180 days after
the date the claim is filed, the failure shall be deemed a final
rejection of the claim.
(e) Judicial Review. — Within 30 days after the date of final
action by the Commission on a claim for a refund filed under
subsection (b) of this section, a petition for judicial review
may be filed with the circuit court as provided in Title 7,
Chapter 200 of the Maryland Rules.
The legislative choice to use the mandatory word “shall” indicates that the General
Assembly intended for the 180 day limitation not to be discretionary or without
15
consequences.14 See, e.g., Perez v. State, 420 Md. 57, 63, 21 A.3d 1048, 1052 (2011)
(“As this Court and the intermediate appellate court have reiterated on numerous
occasions, the word “shall” indicates the intent that a provision is mandatory.”) (citing
State v. Green, 367 Md. 61, 82, 785 A.2d 1275, 1287 (2001)); 1A Norman J. Singer & J.
D. Shambie Singer, Sutherland Statutory Construction § 25:4 (7th ed.). PUA § 25-106(d)
supplies a result if the WSSC fails to meet the statutory deadline: “the failure shall be
deemed a final rejection of the claim.” The claimant may move-on then and seek judicial
review of the deemed denial. See PUA § 25-106(e).15, 16
14
The WSSC does not dispute the mandatory nature of its obligation to hold a
hearing (if requested) and render a decision on a refund claim pursuant to PUA § 25-106
within 180 days.
15
The WSSC incants an alternative narrative based on a letter found within the bill
file for House Bill 1170 of 1986, which would become codified as Art. 29, § 6-11 and re-
codified later as PUA § 25-106(e). As first presented, Bill 1170 allowed for de novo
appeals to the Tax Court of denied refund requests. Without explanation for the sake of
posterity, the Bill was amended in committee to authorize judicial review by a circuit
court.
The WSSC asserts that authorizing judicial review of deemed denials was a
drafting mistake. According to the agency, the Legislature intended there to be additional
de novo proceedings before another agency (the Maryland Tax Court) after a deemed
denial pursuant to PUA § 25-106(d), not judicial review as a plain reading of the statute
would suggest.
The WSSC’s urging does not overcome the unambiguous plain language of the
resultant statute. “We cannot assume authority to read into the Act what the Legislature
apparently deliberately left out. Judicial construction should only be resorted to when an
ambiguity exists.” Price v. State, 378 Md. 378, 388, 835 A.2d 1221, 1226 (2003)
(quoting Howard Contr. Co. v. Yeager, 184 Md. 503, 511, 41 A.2d 494, 498 (1945)).
PUA § 25-106(d) is clear that a refund claim is considered a final denial by operation of
law if the WSSC does not issue a decision within 180 days. PUA § 25-106(e) is
(Continued…)
16
The WSSC’s interpretation would render nugatory portions of PUA § 25-106. If
the Circuit Court was obliged merely to remand the case to the WSSC for a complete
“do-over,” without consequences, after the agency failed to develop a more complete
agency record and decide the case within 180 days, the purposes underlying PUA § 25-
106(d) would be meaningless indeed. Even without the deemed-denial provisions of PUA
§ 25-106(d), after the passage of 180 days, a common law mandamus action might lie.17
(…continued)
unambiguous that a claimant may petition the proper circuit court for judicial review of
such a denial. Attempting to uncover hidden meaning in the statute from a disregarded
portion of legislative history is more likely to frustrate the will of the Legislature than
advance it.
16
It seems rather predictable what the outcome of judicial review will be in the
probable majority of denial by operation of law refund cases where the WSSC failed to
act timely. There is a high order of probability that the agency “record” in such cases will
be as scanty as was the case here, leaving little or no basis for upholding the denial based
on “substantial evidence” analysis where the only “evidence” is the refund requestor’s
refund and hearing requests. The outcome is foreseeable and may be referred to popularly
as a “slam dunk.”
17
Mandamus is “an original action used to compel inferior tribunals, public officials
or administrative agencies to perform their function, or perform some particular duty
imposed upon them which in its nature is imperative and to the performance of which
duty the party applying for the writ has a clear legal right.” Town of La Plata v. Faison-
Rosewick LLC, 434 Md. 496, 511, 76 A.3d 1001, 1010 (2013) (quoting Goodwich v.
Nolan, 343 Md. 130, 145, 680 A.2d 1040, 1047 (1996)) (internal quotation marks
omitted). “[A] common law mandamus action is appropriate where the relief sought
involves the traditional enforcement of a ministerial act (a legal duty) by recalcitrant
public officials, but not where there is any vestige of discretion in the agency action or
decision. Id. (quoting South Easton Neighborhood Ass'n v. Town of Easton, 387 Md. 468,
477 n. 3, 876 A.2d 58, 63 n. 3 (2005)) (internal quotation marks omitted). “Ministerial
acts are duties in respect to which nothing is left to discretion and are distinguished from
those allowing freedom and authority to make decisions and choices. Faison-Rosewick,
434 Md. at 511-12, 76 A.3d at 1010 (quoting Talbot Cnty. v. Miles Point Prop., LLC, 415
(Continued…)
17
We will not interpret statutes in such a way as to render them meaningless or nugatory, if
reasonable alternatives are available. E.g., Whiting–Turner Contracting Co. v.
Fitzpatrick, 366 Md. 295, 302–303, 783 A.2d 667, 672 (2001), quoted with approval in
Miller v. Mathias, 428 Md. 419, 451, 52 A.3d 53, 72 (2012).
PUA § 25-106 is a remedial statute.18 As such, the statute must be construed
liberally to effectuate the remedial purpose of the legislation. Employees' Ret. Sys. of City
of Baltimore v. Dorsey, 430 Md. 100, 113, 59 A.3d 990, 997 (2013) (citing Marsheck v.
Bd. of Trustees of Fire & Police Employees' Ret. Sys. of City of Baltimore, 358 Md. 393,
403, 749 A.2d 774, 779 (2000)); Washington Suburban Sanitary Comm'n v. Phillips, 413
Md. 606, 620, 994 A.2d 411, 420 (2010); Elste v. ISG Sparrows Point, LLC, 188 Md.
App. 634, 653, 982 A.2d 938, 949 (2009). Three goals are evinced by the plain language
(…continued)
Md. 372, 397, 2 A.3d 344, 359 (2010)) (internal quotation marks omitted). Absent the
judicial review scheme allowed by PUA § 25-106, however, mandamus would be
available as a means to compel the WSSC to fulfil its procedural obligations under the
statute.
18
“‘Under Maryland law, statutes are remedial in nature if they are designed to
correct existing law, to redress existing grievances and to introduce regulations conducive
to the public good.’” Langston v. Riffe, 359 Md. 396, 409, 754 A.2d 389, 396 (2000)
(quoting Weathersby v. Kentucky Fried Chicken Nat'l Management Co., 86 Md. App.
533, 550, 587 A.2d 569, 577 (1991)); accord State v. Barnes, 273 Md. 195, 208, 328
A.2d 737, 745 (1974). Also described as remedial are “statutes intended to correct
defects, mistakes and omissions in the civil institutions and the administration of the
state.” 3 Norman J. Singer & J. D. Shambie Singer, Sutherland Statutory Construction §
60:2 (7th ed.) (citing Langston, 359 Md. at 396, 754 A.2d at 389). PUA § 25-106(a)
provides a remedy for overcharges by the WSSC, subsection (d) requires the WSSC to
determine the validity of a refund claim within 180 days, and subsection (e) provides for
judicial review to ensure the agency’s compliance. The orderly and timely administration
by the WSSC is central to the statute, with consequences provided for failure.
18
of PUA § 25-106: (1) to refund charges assessed improperly by the WSSC19; (2) for the
WSSC to determine timely refund claims (i.e., within 180 days); and, (3) for judicial
review of denied claims.
Adopting the WSSC’s interpretation would frustrate the remedial aims of PUA §
25-106. Providing the WSSC with a second opportunity to consider outright denial of a
refund would mock the requirement of timely determination of refund claims and render
judicial review a waste of scarce judicial resources.
Courts are inhibited, however, in their exercise of judgment as to how to effectuate
the will of the Legislature. As the WSSC points out, Article 8 of the Declaration of
Rights in the Maryland Constitution (requiring separation of legislative, executive, and
judicial powers) prevents the courts from making de novo administrative decisions in
cases in which some exercise of agency expertise or discretion may yet remain to be
19
Passage of the predecessor to PUA § 25-106 was motivated in part, it seems, by
our decision in Washington Suburban Sanitary Commission v. C.I. Mitchell & Best Co.,
303 Md. 544, 495 A.2d 30 (1985). In C.I. Mitchell & Best Co., a class of plaintiffs sought
the refund of assertedly improper payments to the WSSC and a declaratory judgment that
the assessment charging scheme was improper. 303 Md. 544, 553, 495 A.2d 30, 34.
Ultimately, we held that the charges were illegal, but that Maryland’s voluntary payment
rule prevented a refund of the charges. C.I. Mitchell & Best Co., 303 Md. 544, 549, 495
A.2d 30, 32.
Fourteen days after we filed an order of denial of a motion for reconsideration in
C.I. Mitchell & Best Co., the attorney who represented the claimants sent a letter to a
member of the House of Delegates advocating the need for legislation authorizing
refunds for improper WSSC charges and offering suggestions how to accomplish that
goal. Letter from Charles G. Dalrymple, Esq., to Del. Jerry H. Hyatt (September 25,
1985) (in bill file of Maryland House Bill 1170 of 1986). In January of 1986, Delegate
Hyatt drafted and submitted the bill to the General Assembly. The letter found eventually
its place in the bill file retained by the Department of Legislative Services.
19
applied. See Dep't of Natural Res. v. Linchester Sand & Gravel Corp., 274 Md. 211, 228,
334 A.2d 514, 525 (1975). Because agency expertise may be exercised by the WSSC in
determining the appropriate amount of the charges collected in error, it would be
unconstitutional for a court to consider de novo the amount of a refund claim where that
issue has not been adjudicated administratively as yet.
The Circuit Court, while sailing its course to a proper resolution of the present
case, avoided both the Scylla of running afoul of the Declaration of Rights and the
Charybdis of interpreting PUA § 25-106 contrary to the intent of the Legislature. The
intent of the Legislature codified in PUA § 25-106 demands that the case not be
remanded to the WSSC back to “Square One.” The Declaration of Rights bars the courts
from considering evidence de novo and judicial review prevents it as well. The Circuit
Court violated neither principle by reversing the deemed rejection by the WSSC and
ordering remand for the agency to calculate and issue an appropriate refund according to
its standard procedures.
The Circuit Court’s decision in the present case was not outside the normal scope
of judicial review in the main. A court reviewing an agency decision must decide, based
on whatever the record reveals, whether the agency’s decision is supported by
“substantial evidence” and whether the discretionary determinations of the agency may
be maintained in the face of the “arbitrary and capricious” standard. See Spencer v.
Maryland State Bd. of Pharmacy, 380 Md. 515, 530 n.4, 846 A.2d 341, 349 n.4 (2004).
Indeed, in most “denied by operation of law” cases (at least where the agency record
contains absolutely no basis for denial or an explanation for why an actual timely hearing
20
and decision was not made), a reviewing court would be hard-pressed, on judicial review,
not to reverse the deemed denial. In the present case, the record consisted only of
Lafarge’s 6 March 2012 refund request and its 9 April 2012 hearing request (with
supporting attachments), as the WSSC maintained.20 Based on the agency “record,” the
deemed denial of Lafarge’s claim was not supported by substantial evidence.21 The trial
court also found that the WSSC’s failure to decide affirmatively Lafarge’s claim was
arbitrary and capricious.
Although a case should be remanded ordinarily to an agency when the reviewing
court determines that the agency decision was not supported by substantial evidence or
was arbitrary and capricious, see, e.g., Maryland Bd. of Pub. Works v. K. Hovnanian’s
Four Seasons at Kent Island, LLC, 425 Md. 482, 522, 42 A.3d 40, 63 (2012); Bereano v.
State Ethics Comm’n, 403 Md. 716, 756, 944 A.2d 538, 561 (2008), doing so for deemed
denials pursuant to PUA § 25-106, without limitation, would be contrary to the purposes
underlying the statute, as we have noted above.22 The only path forward is to reverse a
20
For the reasons discussed below in Part II, we decline to determine whether the
investigative materials were properly part of the record in the posture in which the case
reached the Circuit Court.
21
The WSSC does not argue to us that there was substantial evidence to support the
denial of Lafarge’s claim. The agency admits that the record was not developed
sufficiently to support denial of some refund amount.
22
The court need not remand to the administrative agency if doing so would be
futile. O'Donnell v. Bassler, 289 Md. 501, 510, 425 A.2d 1003, 1008 (1981); see also
Green v. Church of Jesus Christ of Latter-Day Saints, 430 Md. 119, 143, 59 A.3d 1001,
1015 (2013) (ordering the case remanded to the Tax Court, but directing the Tax Court’s
(Continued…)
21
deemed denial by the WSSC that is unsupported by substantial evidence or arbitrary and
capricious.
Anne Arundel County v. Halle Development, Inc., 408 Md. 539, 971 A.2d 214(2009) is instructive.23 In Halle Development, a class of property owners sought to
recover development impact fees that they argued were assessed improperly by Anne
(…continued)
decision); Anne Arundel Cnty. v. Halle Dev., Inc., 408 Md. 539, 557, 971 A.2d 214, 225
(2009) (“The County's appeal to Frankel [v. Bd. of Regents of Univ. of Maryland Sys.,
361 Md. 298, 301, 761 A.2d 324, 325 (2000)] and general administrative law principles
in arguing for a remand presumes, erroneously, that there is an administrative procedure
and function that remains to be performed in this case.”). In the present case, although
there remains the possibility for additional fact-finding as to the proper amount of the
refund due Lafarge, permitting the outright denial of the claim would be contrary to the
intent of the Legislature codified in PUA § 25-106, and hence contrary to law. The only
decision that the WSSC may make consistent with the intent of the Legislature is to
determine the proper amount of the refund due. The option to deny Lafarge’s claim is
foreclosed by the failure to act within the allowed 180 days.
23
The property-owner plaintiffs in Halle Development did not petition for judicial
review. Rather, they claimed that the failure to refund impact fees: “(1) constituted an
unconstitutional taking under the Fifth and Fourteenth Amendments, (2) violated the
Owners rights under the Article 24 of the Maryland Declaration of Rights, and (3)
unjustly enriched the County, creating the basis for a constructive trust.” Halle Dev., 408
Md. at 547, 971 A.2d at 219. Nevertheless, determination of the case required review of
administrative decisions and actions. See Halle Dev., 408 Md. at 552, 971 A.2d at 222.
When the courts review the decisions of an administrative agency, “the standard of
review is the same,” regardless of the grounds upon which the action was filed. Bowen v.
City of Annapolis, 402 Md. 587, 611, 937 A.2d 242, 256 (2007) (“[T]he basis of judicial
review of an administrative decision may be by explicit statutory authorization or by a
common law or equity writ. . . . Regardless of the basis for judicial review, the standard
of the review is the same.”); Harvey v. Marshall, 389 Md. 243, 296, 884 A.2d 1171, 1203
(2005) (“Maryland cases suggest that ‘an administrative proceeding, even if not subject
to judicial review under the APA, would be subject to judicial review, of essentially the
same scope, in an action for mandamus, certiorari, injunction or declaratory judgment . . .
.’”) (quoting Med. Waste Assocs. v. Maryland Waste Coalition, 327 Md. 596, 610, 612
A.2d 241, 248 (1992)).
22
Arundel County. 408 Md. at 543, 971 A.2d at 216. The Circuit Court for Anne Arundel
County held that the property owners were entitled to refunds. Id. The Court of Special
Appeals, in an unreported opinion, affirmed the judgment of the Circuit Court. Halle
Dev., 408 Md. at 551, 971 A.2d at 221. We issued a writ of certiorari to consider, among
other questions, whether the Circuit Court erred by declining to remand fully the case
after reversing decisions of the County administrative officials. Halle Dev., 408 Md. at
551-52, 971 A.2d at 221. The County contended that the Circuit Court was obligated to
remand the case. We affirmed.
We concluded in Halle Development that no administrative function remained to
be performed after the County agency failed to perform administrative functions within
the required time period. Halle Dev., 408 Md. at 558-59, 971 A.2d at 225. We refused to
allow the county “to go back and make administrative decisions that it failed to
effectively execute when permitted.” Halle Dev., 408 Md. at 559, 971 A.2d at 226.
In Halle Development, the Circuit Court remanded for the precise determination of
which property owners were eligible for refunds.24 408 Md. at 550, 971 A.2d at 220. The
trial court did not attempt to determine exactly which charges were assessed properly
against which property owners. Instead, the Circuit Court remanded for additional
determination by the County agencies, which decision would be subject to subsequent
judicial scrutiny.
24
Where agency expertise or discretion is required typically, it might interfere with
an agency function to reverse without remanding the case to the relevant agency, but with
appropriate limiting directions.
23
The present case shares the key considerations reflected in Halle Development. As
in Halle Development, the administrative agency is obliged to act within a limited time
period, but failed to fulfil its obligation. In both cases, a circuit court ordered the agency
to issue a refund, without giving the agency a second chance to determine whether to
deny outright a refund. Finally, in both cases, additional agency consideration was
ordered regarding the proper amount of the refund owed.25
Given the legislative intent to provide for refunds when charges are assessed
improperly, it is appropriate to remand the case to the WSSC for calculation of the
amount of the refund due. The legislative intent evident from the plain language of PUA
§ 25-106 is that refunds should be issued for improperly assessed charges.26, 27
III. Production of the Investigative File
Our holding regarding the Circuit Court’s reversal of the WSSC’s deemed denial
of Lafarge’s claim and limited remand renders moot the WSSC’s question regarding the
authority of the Circuit Court to order production of the agency’s investigative file,
25
On appeal, the WSSC did not take exception to the part of the Circuit Court’s
order requiring that the refund be calculated in accordance with Standard Procedures for
Adjustment and Correction of Water/Sewer Bill, SP Number CUS 10-01. Further, if CUS
10-01 is a standard and uniform method of determining refunds, as the parties’
memoranda before the Circuit Court (and the document’s title and content) suggest, then
it might be arbitrary and capricious for the WSSC to calculate Lafarge’s refund using a
different standard.
26
In addition to the provisions cited above, PUA § 25-106(f) authorizes refunds for
excess charges even if there is no pending claim for the refund.
27
In the circumstances of the present case, a hearing on remand is possible, but
would be limited to inquiry as to the proper amount of the refund.
24
whether for consideration as part of the agency “record” or otherwise. We note, however,
an observation or two as to this contretemps because instances of judicial review of
deemed denials by operation of law are “an exotic bird in these woods.” 28
The WSSC does not claim any prejudice resulting from the production of the
investigative file. Indeed, production of additional documents could help furnish the
sparse administrative record with evidence sufficient to justify the deemed denial. By the
same token, this sort of “evidence” had not been tested by the crucibles of
examination/cross-examination (if a witness or witnesses were called to authenticate or
identify the documents) or rebuttal evidence. Nonetheless, “[i]t is the policy of this Court
not to reverse for harmless error and the burden is on the appellant in all cases to show
prejudice as well as error.” Crane v. Dunn, 382 Md. 83, 91, 854 A.2d 1180, 1185 (2004)
(citing Rippon v. Mercantile Safe Deposit Co., 213 Md. 215, 222, 131 A.2d 695, 698
(1957)). As such, we decline to determine whether the Circuit Court erred by ordering the
WSSC to produce, in this judicial review proceeding, additional documents from the
agency’s preliminary investigation of the claim. Generally, supplementation of an agency
record while on judicial review is not permitted, except where agency bias or improper ex
parte communications are asserted. See Montgomery Cnty. v. Stevens, 337 Md. 471, 484-
85, 654 A.2d 877, 883-84 (1995); c.f. SG § 10-222(f) (indicating that additional evidence
should generally be collected by the agency).
28
This descriptive phrase was spoken by the Frank Underwood character in the U.S.
version of “House of Cards.” House of Cards: Chapter 5 (Media Rights, Capital Panic
Pictures (II), Trigger Street Productions 2013).
25
JUDGMENT OF THE COURT OF
SPECIAL APPEALS AFFIRMED. COSTS
TO BE PAID BY THE PETITIONER.
26