Burch v. United Cable Television of Baltimore Ltd. Partnership

ELDRIDGE, J. I. This case has a long history, having come before this Court on two prior occasions. See Dua v. Comcast Cable of Maryland, 370 Md. 604 , 805 A.2d 1061 (2002); United Cable v. Burch, 354 Md. 658 , 732 A.2d 887 (1999) (“Burch I ”). Although a detailed factual and procedural history can be found in those cases, it would be useful to provide a brief summary here. The case originated in 1995 as a class action suit brought by consumer television cable subscribers against their cable television provider, United Cable Television of Baltimore, L.P., now Comcast Cable, challenging the five dollar per month late fee that was being charged for cable bills that were not paid by the date set forth on the face of the bills.

The subscribers alleged that the five dollar late fee was an illegal penalty and not a valid liquidated damages provision, and that, under Article III, § 57, of the Maryland Constitution, such late fees could not be charged in excess of six percent per annum without authorization from the General Assembly. 1 The Circuit Court for Baltimore City agreed. The court enjoined United Cable from collecting late fees in excess of $.50 per month after September 20, 1997, and entered a judgment in the amount of $6,701,50.60 against United Cable, which represented the late fees paid in excess of the limit from 1992 ⁶⁹¹ through 1997. 2 United Cable appealed to the Court of Special Appeals, and this Court issued a writ of certiorari prior to any proceedings in the Court of Special Appeals. We held that United Cable could only charge the rate of interest allowed under Article III, § 57, of the Maryland Constitution, unless the General Assembly provided otherwise. Burch I, 354 Md. at 669 , 732 A.2d at 893 .

At the time of the decision, the General Assembly had not enacted any legislation altering the interest rate which could be charged by cable television providers. Accordingly, under Article III, § 57, of the Constitution, the maximum late fee which could be charged by cable television providers was six percent per annum. See Dua v. Comcast, supra, 370 Md. at 611-613 , 805 A.2d at 1066-1067 . In response to this Court’s decision in Burch I, the General Assembly enacted Ch. 59 of the Acts of 2000, codified as Maryland Code (2000, 2002 Repl.Vol.), § 14-1315 of the Commercial Law Article, which became effective on October 1, 2000.

The new statute increased the maximum allowable late fees that could be collected on consumer contracts involving the “sale, lease, or provision of goods or services which are for personal, family, or household purposes.” The statute also contained a retroactive provision which purported to validate the late fees charged in excess of the constitutional limit on contracts entered into between November 1995 and October 1, 2000. See Ch. 59 of the Acts of 2000, § 5. The retroactive provision of the statute, contained in § 5 of Ch. 59, was challenged in several actions by consumer subscribers of cable television against Comcast Cable of Maryland, Inc., the successor to United Cable. The suits had been brought in both the Circuit Court for Baltimore County and the Circuit Court for Harford County.

The plaintiffs in those cases sought to recover the monthly late fees paid to Comcast in excess of the six percent per annum fee allowed under ⁶⁹² Article III, § 57, of the Maryland Constitution. The cases were later consolidated in the Circuit Court for Baltimore County. Comcast moved to dismiss the actions on the ground that the retroactive provision in Ch. 59, § 5, validated the late fees which had exceeded the constitutional limit. The plaintiffs responded by arguing that the retroactive provision contained in § 5 of Ch. 59 violated their rights under both the federal and state constitutions.

After a hearing on the matter, the Circuit Court granted Comcast’s motion to dismiss, rejecting the plaintiffs constitutional arguments, and holding that the retroactive provision was valid. See Dua, 370 Md. at 614 , 805 A.2d at 1067 . The plaintiffs appealed to the Court of Special Appeals, and then filed in this Court a petition for a writ of certiorari which was granted. Thereafter, this Court reversed, holding that the retroactive provision contained in the statute violated Articles 19 and 24 of the Maryland Declaration of Rights and Article III, § 40, of the Maryland Constitution, and that, therefore, the retroactive provision was unenforceable.

Dua v. Comcast, 370 Md. 604 , 805 A.2d 1061 . There was no challenge in that case to the prospective application of Ch. 59. In September 2001, while the Dua case was pending in this Court, and in response to the enactment of Ch. 59, United Cable filed a motion in the Circuit Court for Baltimore City, requesting that the court vacate the permanent injunction entered in 1997, which continued to prohibit United Cable from collecting late fees in excess of $.50 per month. In its motion, United Cable argued that Ch. 59 substantially changed the law, and it requested the Circuit Court to vacate the permanent injunction so that United Cable could prospectively collect late fees in accordance with the new statutory provisions.

The Burch class of plaintiffs responded by requesting the court to abstain from vacating the permanent injunction until the Baltimore City Council had an opportunity to vote on a proposal which would have restricted cable television providers within the City limits from charging late fees in excess of $.50 per month. They also argued that, even if Baltimore ⁶⁹³ City’s proposal was not enacted, the new law did not apply to the members of the Burch class of plaintiffs because the General Assembly intended to exempt that class. According to the plaintiffs, the exemption was contained in § 6 of Ch. 59, which provided that the new law would not apply to “any case for which a final judgment has been rendered and for which appeals have been exhausted prior to June 1, 2000.” The plaintiffs further argued that, under § 4 of Ch. 59, the Circuit Court had jurisdiction to limit the late fees because the court qualified as a “federal, state, or local regulatory agency or authority,” which was allowed under the statute to impose additional conditions or limitation on late fees. The plaintiffs asserted that the injunction constituted a valid regulation of late fees in Baltimore City.

Following a hearing on the matter, the Circuit Court granted United Cable’s motion to vacate the permanent injunction, thereby allowing the cable company to collect future late fees in accordance with Ch. 59. The plaintiffs appealed to the Court of Special Appeals, which affirmed in an unreported opinion. The plaintiffs then filed in this Court a petition for a writ of certiorari which we granted. Burch v. United Cable, 377 Md. 111 , 832 A.2d 204 (2003).

The plaintiffs, asserting that it was erroneous for the trial court to vacate the permanent injunction, reiterate the two arguments which they had made in the Circuit Court. First, the plaintiffs contend that the Burch class of plaintiffs was specifically exempt from the prospective application of Ch. 59 by the language of § 6. Second, the plaintiffs argue that the language of Ch. 59, § 4, allowing a “federal, state, or local regulatory agency” to impose additional limitations was applicable because the Circuit Court for Baltimore City qualified as such an “agency.” Third, the plaintiffs maintain that the prospective application of Ch. 59 to the Burch class would be unconstitutional. They rely on Articles 8 and 24 of the Maryland Declaration of Rights, Article III, §§40 and 57 of the Maryland Constitution, and Article 1, Section 10, Clause 1, of the United States Constitution (“No State shall ... pass any ...

Law impairing the Obligation of Contracts .. .”). ⁶⁹⁴ United Cable disagrees with the plaintiffs’ interpretation of Ch. 59, arguing that both the Circuit Court and the Court of Special Appeals correctly held that Ch. 59 prospectively applied to the Burch Class of plaintiffs. United Cable urges that this Court refuse to consider the plaintiffs’ constitutional arguments, as no constitutional issue was raised in the Circuit Court, and the arguments were made for the first time on appeal to the Court of Special Appeals. This Court shall reject the plaintiffs’ arguments based on §§ 6 and 4 of Ch. 59, and shall affirm. We shall not decide the merits of the constitutional arguments because no constitutional issue was raised in the Circuit Court.

II

The plaintiffs acknowledge that United Cable “correctly contends” that no constitutional issue was raised in the Circuit Court; they “concede that this is true.” (Petitioners’ reply brief at 14). Nonetheless, they point out that Maryland Rule 8-131(a) gives an appellate court discretion to decide issues not raised at trial, and they request that this Court exercise its discretion to consider the merits of their constitutional arguments. As did the Court of Special Appeals, we shall deny the request. Very recently we addressed this matter in Baltimore Teachers Union v. Board of Education, 379 Md. 192 , 840 A.2d 728 (2004).

In that case, the petitioner Union brought suit against the Board of Education requesting a declaratory judgment and injunctive relief on the ground that the Board lacked the statutory authority necessary to enter into contracts with private entities for the operation of public elementary schools. For the first time on appeal, the Union raised a constitutional issue under Article VIII, § 1, of the Maryland Constitution. This Court held that the failure of the Union to raise the constitutional issue in the trial court precluded it from raising the issue on appeal. We stated ( 379 Md. at 205-206 , 840 A.2d at 736 ): ⁶⁹⁵ “Since the constitutional issue raised in the Union’s brief was not raised in the trial court, we shall decline to address it.

It is particularly important not to address a constitutional issue not raised in the trial court in light of the principle that a court will not unnecessarily decide a constitutional question. Winder v. State, 362 Md. 275 , 306-307 n. 18, 765 A.2d 97 , 114 n. 18 (2001); Dorsey v. State, 356 Md. 324, 342 , 739 A.2d 41, 51 (1999).” See, e.g., Fitzgerald v. State, 384 Md. 484, 505 , 864 A.2d 1006, 1018 (2004) (“It is well-established and this Court has held consistently that we, in accordance with Rule 8-131, ordinarily will not consider any point or question not plainly raised or decided by the trial court”); Livesay v. Baltimore, 384 Md. 1, 18 , 862 A.2d 33, 43 (2004) (“Because these issues were not raised below, we shall not consider them”); Walker v. State, 338 Md. 253, 262 , 658 A.2d 239, 243 (1995) (Refusing to consider constitutional issues because “[tjhere is nothing in the record before us to indicate that these issues were ever raised or decided below”); County Council v. Offen, 334 Md. 499, 508-511 , 639 A.2d 1070, 1074-1076 (1994) (Holding that the Court of Special Appeals abused its discretion under Rule 8-131 (a) by deciding an important issue of first impression in Maryland that had not been raised in the trial court); In re John H., 293 Md. 295, 303 , 443 A.2d 594, 598 (1982) (The Court declined to decide whether a statute was constitutional because the appellants “did not argue the issue of constitutionality to the trial judge”). As indicated above, “the Court’s established policy is to decide constitutional issues only when necessary.” Mercy Hospital v. Jackson, 306 Md. 556, 565 , 510 A.2d 562, 566 (1986). Even when a constitutional issue is properly raised at trial and on appeal, or presented in a certiorari petition and the grant of the petition does not limit the issues, this Court will not reach the constitutional issue unless it is necessary to do so.

See, e.g., Wells v. Chevy Chase Bank, 377 Md. 197 , 205 n. 4, 832 A.2d 812 , 817 n. 4 (2003); McCarter v. State, 363 Md. 705, 712-713 , 770 A.2d 195, 199 (2001); Baltimore Sun Co. v. Mayor & City Council of Baltimore, 359 Md. 653, 659-660 , ⁶⁹⁶ 755 A.2d 1130, 1133-1134 (2000); Harryman v. State, 359 Md. 492, 503 , 754 A.2d 1018, 1024 (2000); Ashford v. State, 358 Md. 552, 561-562 , 750 A.2d 35, 39-40 (2000); Thrower v. Bureau of Support Enforcement, 358 Md. 146, 149 , 747 A.2d 634, 636 (2000); Professional Staff Nurses Assn. v. Dimensions Health Corp., 346 Md. 132, 138-140 , 695 A.2d 158, 160-162 (1997); Schochet v. State, 320 Md. 714, 725-731 , 580 A.2d 176, 181-185 (1990). In light of this strong policy against reaching a constitutional issue unnecessarily, this Court has normally exercised its discretion to decide a constitutional issue, not raised below, only when the issue falls within a well-established exception to Rule 8-131(a), such as a jurisdictional matter. See, e.g., Duffy v. Conaway, 295 Md. 242, 254, 259-262 , 455 A.2d 955, 963-965 (1983); Shell Oil Co. v. Supervisor, 276 Md. 36, 38-40 , 343 A.2d 521, 522-524 (1975). See also the discussions in County Council v. Offen, supra, 334 Md. at 508-511 , 639 A.2d at 1074-1076 ; Moats v. City of Hagerstown, 324 Md. 519, 524-526 , 597 A.2d 972, 974 (1991).

The plaintiffs’ constitutional arguments, raised for the first time on appeal, do not involve a jurisdictional question or any other matter which falls within an established exception to Maryland Rule 8-131(a). Consequently, we decline to consider the constitutional arguments.

III

We shall now turn to the propriety of the Circuit Court’s order vacating the injunction and the plaintiffs’ arguments based on their interpretation of Ch. 59 of the Acts of 2000. A. Maryland circuit courts are authorized to grant, deny, modify or dissolve an injunction. Maryland Rule 15-502(b) and 15—202(f); State Commission v. Talbot County, 370 Md. 115, 127 , 803 A.2d 527, 534 (2002). Moreover, the “finality” of a judgment containing a permanent injunction does not mean that the trial court, in a later separate proceeding, is ⁶⁹⁷ precluded from entering another judgment modifying or dissolving the injunction when circumstances have changed.

This settled principle was explained by Judge Offutt for the Court in Emergency Hospital v. Stevens, 146 Md. 159, 166 , 126 A. 101, 104 (1924): “[The] contention assumes that the court granting the injunction had no power to rescind or modify its final decree after it had become enrolled, no matter what changes had occurred in the conditions or the relations of the parties after the decree. There is obviously no force in these contentions. “Certainly, where changes in the relations of the parties or the conditions upon which it is based, occurring after a final decree of the nature of that passed in this case, render its further operation unreasonable, unjust, oppressive or inequitable, the court which passed it necessarily must have the right to dissolve it....” “It is true as a general principle that a final enrolled decree will not be opened to relitigate any question dealt with in it by the court passing such a decree, but that rule does not mean that, where events have occurred since the decree which would necessarily make the continuance of the injunction an absurdity, or unjust or oppressive, that the court which granted it could not in a proper proceeding change its decree to conform to the changed conditions. By way of illustration, if one were enjoined from obstructing a way appurtenant to land, and he afterwards acquired the land and its appurtenances, it cannot be supposed that the court which granted the injunction could not under such circumstances open the decree and dissolve it.” See also Evans v. Stinchcomb, 180 Md. 482, 485 , 25 A.2d 444, 445 (1942) (“[A]n injunction ... is ... necessarily open to some change to meet intervening circumstances”). It is ordinarily an appropriate exercise of a circuit court’s authority to vacate a permanent injunction when there are statutory changes which nullify the basis for the injunction.

See Chayt v. Maryland Jockey Club, 179 Md. 390, 395 , ⁶⁹⁸ 18 A.2d 856, 859 (1941) (holding that the court properly lifted an injunction which restricted the building of a stable where a zoning ordinance had been amended subsequent to the imposition of the injunction). This is what the trial court did in the case at bar. Here, the Circuit Court vacated the permanent injunction entered in Burch I in response to the General Assembly’s enactment of Ch. 59, which allowed cable providers to charge late fees in excess of those permitted when the permanent injunction was entered. Since Ch. 59 authorized late fees in excess of the previous six percent limit on all consumer contracts within the State of Maryland, the trial court complied with the new law by