A. S. Abell Publishing Co. v. Mezzanote

Davidson, J., delivered the opinion of the Court. This case presents the question whether the Maryland Insurance Guaranty Association (MIGA), established by Maryland Code (1957, 1979 Repl.Vol. & 1982 Cum.Supp.), Art. 48A, §§ 504-519, is an agency or instrumentality of the State of Maryland within the scope of Maryland Code (1957, 1980 Repl.Vol. & 1982 Cum.Supp.), Art. 76A, §§ 1-5A (Public Information Act), that requires public records to be open for public inspection. The relevant statutory provisions are ²⁸ Md. Code, Art. 48A, § 504 (a), § 506; Md. Code, Art. 76A, § 1A, § 2 (a), and § 1 (b). Article 48A, § 504 (a) provides in pertinent part: "The purposes of this subtitle are to provide a mechanism for the prompt payment of covered claims under certain insurance policies and to avoid financial loss to claimants or policyholders because of the insolvency of an insurer; to assist in the detection and prevention of insurer insolvencies; and to provide for the assessment of the cost of such payments and protection among insurers.” Article 48A, § 506 provides in pertinent part: "There is created a nonprofit unincorporated legal entity to be known as the Maryland Insurance Guaranty Association.

All insurers defined as member insurers in § 505 (e)[ 1 ] shall be and remain members of the Association as a condition of their authority to transact insurance in this State.” Article 76A, § 1A provides in pertinent part: "[A]ll persons are entitled to information regarding the affairs of government and the official acts of those who represent them as public officials and employees. To this end, the provisions of this act shall be construed in every instance with the view toward public access, unless an unwarranted invasion of the privacy of a person in interest would result therefrom, and the minimization of costs and time delays to persons requesting information.” ²⁹ Article 76A, § 2 (a) provides in pertinent part: "All public records shall be open for inspection by any person at reasonable times... .” Article 76A, § 1 (b) provides in pertinent part: " 'Public records’ when not otherwise specified shall include any paper, correspondence, form, book, photograph, photostat, film, microfilm, sound recording, map, drawing, or other written document, regardless of physical form or characteristics, and including all copies thereof, that have been made by any branch of the State government, including the legislative, judicial, and executive branches, by any branch of a political subdivision, and by any agency or instrumentality of the State or a political subdivision, or received by them in connection with the transaction of public business. The term 'public records’ also includes the salaries of all employees of the State, of a political subdivision, and any agency or instrumentality thereof, both in the classified and nonclassified service.” (Emphasis added.) In a letter dated 24 February 1982, John H. Fairhall, a reporter for the Evening Sun, which is owned by the appellant, A. S. Abell Publishing Co. (publisher), asked the appellee, Albert J. Mezzanote, Chairman of the Board of Directors of MIGA (Chairman of the Board), for the right to inspect certain records 2 pursuant to the Public Information ³⁰ Act. In a letter dated 8 March 1982, the request was denied because MIGA "is not an agency or instrumentality of the State,” and because "some or all [of the requested records] contain confidential information.” On 22 March 1982, in the Circuit Court of Baltimore City (now the Circuit Court for Baltimore City), the publisher, pursuant to Art. 76A, § 5 (b) (l), 3 filed suit against the Chairman of the Board and MIGA.

In an amended complaint, the publisher sought an "injunction and order for production of public records” and an award of reasonable attorney fees and costs pursuant to Art. 76A, § 5 (b) (6). 4 On 8 July 1982, MIGA and the Chairman of the Board filed a motion for summary judgment in which they pointed out that Art. 76A, § 2 mandated access only to "public records,” and § 1 (b) defined a public record as including a record made or received by "an agency or instrumentality of the State.” They asserted that MIGA was a "private non-profit unincorporated legal entity,” and that, although created for a public purpose, it was not sufficiently controlled by the State to be characterized as an agency or instrumentality of the State. They also argued that the characterization of MIGA as a private entity was supported by legislative history and administrative interpretation. They concluded that MIGA was therefore not subject to the Public ³¹ Information Act and was not subject to an award of attorney fees and costs. MIGA additionally argued in the alternative that, even if it were subject to the Public Information Act, some of the records requested by the publisher would be exempt from disclosure, either under the terms of the Act, Art. 76A, § 3, 5 or because of the attorney/client privilege.

The publisher filed a motion for summary judgment in which it asserted that MIGA served a public purpose and was sufficiently subject to State control to be deemed an agency or instrumentality of the State. It concluded that MIGA was therefore subject to the Public Information Act and to an award of attorney fees and costs. The trial court concluded that MIGA was not an agency or instrumentality of the State within the scope of the Public Information Act. In view of this conclusion, the trial court did not determine whether any of the requested records were exempt from disclosure under Art. 76A, § 3, or whether attorney fees and costs should be awarded under Art. 76A, § 5 (b) (6).

On 21 July 1982, the trial court entered a final order that granted MIGA’s motion for summary judgment and denied the publisher’s motion for summary judgment. Costs were divided between the parties. ³² The publisher appealed to the Court of Special Appeals. We issued a writ of certiorari before consideration by that Court. We shall reverse the judgment of the trial court.

The Public Information Act provides that the public is entitled to information regarding the affairs of government, Art. 76A, § 1A. To that end, the Public Information Act provides that the public has the right to inspect the public records of any branch of the State government, § 1 (b) & § 2 (a). Moreover, the Public Information Act expressly states that its provisions "shall be broadly construed in every instance with the view toward public access,” § 1A. Thus, the provisions of the Public Information Act reflect the legislative intent that citizens of the State of Maryland be accorded wide-ranging access to public information concerning the operation of their government.

Accordingly, in determining whether MIGA is an agency or instrumentality of the State within the scope of the Public Information Act, the language of § 1 (b) must be liberally construed in favor of inclusion in order to effectuate the Public Information Act’s broad remedial purpose. See Keesling v. State, 288 Md. 579, 589 , 420 A.2d 261, 266 (1980); James v. Prince George’s County, 288 Md. 315, 335 , 418 A.2d 1173, 1184 (1980). MIGA was established in 1971 by the General Assembly, 1971 Md.Laws, ch.703. Its purpose is to protect the public by avoiding financial loss to policyholders and claimants resulting from the insolvency of insurers and by preventing insurer insolvencies, Art. 48A, § 504 (a).

MIGA is designated as a "nonprofit unincorporated legal entity,” § 506, and all insurers providing insurance other than life insurance, health insurance, and annuities are required to be members of MIGA as a condition of their authority to operate in Maryland, § 504 (b). MIGA is required to exercise its powers through a Board of Directors (Board) serving fixed terms. Directors are appointed by the State Insurance Commissioner of Maryland (Commissioner) who also fills vacancies. The Chairman of the Board, however, is elected from the Board by its members, § 506 & § 507 (a).

The Board is authorized to delegate certain of its powers and ³³ duties subject to approval by the Commissioner, § 509 (d). MIGA is vested with broad authority. It is required to pay claimants on covered claims against an insolvent insurer, Art. 48A, § 508 (a) (1), (2), & (4); to allocate claims paid and expenses incurred subsequent to an insolvency and to assess its member insurers accordingly, § 508 (a) (3); and to designate member insurers as "servicing facilities” for the handling of claims subject to the approval and right of removal by the Commissioner, § 508 (a) (6) & § 510 (b) (3). Additionally, MIGA is authorized to hire or retain employees to handle claims, Art. 48A, § 508 (b) (1).

MIGA is also authorized to borrow funds, § 508 (b) (2); sue or be sued, § 508 (b) (3); enter into contracts, § 508 (b) (4); and to perform other acts necessary to effectuate its purposes, § 508 (b) (5). MIGA is funded from assessments paid by its members, Art. 48A, § 508 (a) (3). It is exempt from all State and local taxes, except for property taxes, § 515, and from liability from any action taken in the performance of its powers and duties, § 517. 6 The Commissioner also is vested with broad authority with respect to MIGA’s operation. In addition to the authority to appoint the Board of Directors, to approve the delegation of the Board’s powers, and to approve or revoke the designation of a member insurer as a "servicing facility,” the Commissioner has the authority, and indeed is required, not only to approve all plans of operation and amendments submitted by the Board, but also under certain circumstances, to promulgate necessary rules.

More particularly, MIGA is required to perform its functions under a plan of operation (plan) consisting of rules and regulations that establish the procedures to be followed by MIGA when exercising its ³⁴ powers or performing its duties. The plan and any necessary or suitable amendments must be submitted to the Commissioner by the Board and become effective upon approval by the Commissioner, Art. 48A, § 509 (a) (1). If at any time the Board fails to submit suitable amendments, the Commissioner is required to adopt reasonable rules that continue in force until modified by the Commissioner or superseded by a plan submitted by the Board and approved by the Commissioner, § 509 (a) (2). Upon approval, all member insurers are required to comply with the plan, § 509 (b).

The Commissioner has the authority to entertain an appeal by any member insurer aggrieved by a final action of MIGA, Art. 48A, § 509 (c) (7). Additionally, the Commissioner is authorized to revoke a member insurer’s authority to operate in Maryland if the member insurer fails to pay an assessment or fails to comply with the plan of operation, § 510 (b) (2). Finally, MIGA is subject to examination and regulation by the Commissioner. Indeed, its Board is expressly required to submit an annual financial report to the Commissioner, § 514.

The central issue in this case concerns the test to be applied in determining whether MIGA is an agency or instrumentality of the State within the scope of the Public Information Act. MIGA maintains that "the true test of whether an entity is a State instrumentality is whether that entity is under the complete control of the State.” It concludes that because the State does not exercise control over all aspects of MIGA’s operation, MIGA is not an agency or instrumentality of the State. In response, while the publisher concedes that "State control is indicative of an organization’s governmental status,” it contends that it is not necessary for the State to have control over all aspects of the organization’s operation in order to be characterized as a State agency or instrumentality. It asserts that the State exercises a sufficient degree of control over MIGA to characterize MIGA as an agency or instrumentality of the State within the scope of the Public Information Act. ³⁵ This Court has repeatedly recognized that there is no single test for determining whether a statutorily-established entity is an agency or instrumentality of the State for a particular purpose.

All aspects of the interrelationship between the State and the statutorily-established entity must be examined in order to determine its status. Katz v. Washington Suburban Sanitary Comm’n, 284 Md. 503, 510 , 397 A.2d 1027, 1031 (1979) (sovereign immunity); O & B, Inc. v. Maryland-National Capital Park & Planning Comm’n, 279 Md. 459, 462 , 369 A.2d 553, 555 (1977) (sovereign immunity); see, e.g., Board of Trustees of Howard Community College v. John K. Ruff, Inc., 278 Md. 580, 587 , 366 A.2d 360, 364 (1976) (sovereign immunity); University of Maryland v. Murray, 169 Md. 478, 481 , 182 A. 590, 592 (1936) (equal protection). In each of these cited cases, this Court held that a statutorily-established entity was an agency or instrumentality of the State, notwithstanding the fact that the State did not exercise control over all aspects of the entity’s operation. These cases demonstrate that complete control — control over all aspects of an entity’s operation — is not a determinative factor in characterizing a statutorily-established entity as an agency or instrumentality of the State.

Rather, a number of factors, including the degree of control by the State over the entity, must be taken into account. Moreover, this Court has previously rejected the contention that the sole test to be applied in characterizing a statutorily-established entity as an agency or instrumentality of a government is whether the entity is subject to its complete control. In Moberly v. Herboldsheimer, 276 Md. 211 , 345 A.2d 855 (1977), this Court considered whether a statutorily-established entity, a corporation known as the Board of Governors of the Memorial Hospital of Cumberland (Hospital), was a private corporation or an agency of the City of Cumberland (City) within the scope of the Public Information Act. 7 ³⁶ In Moberly , the record showed that the Hospital was established by the General Assembly, 1927 Md.Laws, ch.411. That Act authorized the Mayor and City Council of Cumberland to spend bond proceeds for the purpose of taking title to land and erecting the Hospital.

Section 6 of the Act created a Board of Governors consisting of seven members, including the Mayor of the City and the President of the Board of Commissioners of Allegany County, both of whom were ex-officio members. As to the remaining general members, the Board was self-perpetuating in that it, was authorized to fill its own vacancies. The Board was empowered to select the land for the Hospital, title to which was to be in the name of the Mayor and City Council of Cumberland, and it was to select plans for the building and enter into