Equitable Trust Co. v. State of Maryland Commission on Human Relations

Smith, J., delivered the opinion of the Court. We shall here hold that the Commission on Human ⁸² Relations failed to comply with a statutory prerequisite for the filing of a complaint on its own motion. Hence, we shall reverse the judgment of the Court of Special Appeals in Equitable Tr. v. State of Md. Comm’n, 42 Md. App. 53 , 399 A.2d 908 (1979). For the guidance of trial courts, we shall also discuss the alleged burdensomeness of the subpoena which the Commission here sought to enforce.

The Commission on Human Relations is created and governed by Maryland Code (1957, 1979 Repl. Vol., 1979 Cum. Supp.) Art. 49B. On its own motion it filed a complaint against The Equitable Trust Company (styled as “Equitable Trust Bank” in the complaint).

It was served on Equitable on December 18,1974. The complaint in question was signed by the chairman and three members of the Commission. 1 In this instance there appear to have been no individual complaints similar to the Commission complaint filed against Equitable. Thus, this case is readily distinguishable from Banach v. St. Comm’n on Human Rel., 211 Md. 502, 356 A.2d 242 (1976), where we upheld a subpoena issued in connection with a preliminary investigation pursuant to individual complaints. In October of 1976, reciting the authority of Maryland Code (1957, 1972 Repl.

Vol., 1974 Cum. Supp.) Art. 49B, § 14 (d) ⁸³ (now found in the 1979 Repl. Vol. as Art. 49B, § 11 (d)), the Commission issued a subpoena to Equitable directing the production of a number of documents “for the period January 1975 through December 1975 unless otherwise specified.” 2 ⁸⁴ When the requested items were not produced, the Commission docketed a suit in the Circuit Court of Baltimore City seeking an order directing the production of the documents. That petition recited, among other things, that Equitable’s activities came “within the purview of Section 11C of Article 49B” (now Code (1957, 1979 Repl.

Vol.) Art. 49B, § 8); that pursuant to what was then Art. 49B, § 12 (b) (now § 9 (b)) “the Commission ha[d] received reliable information that Defendant is engaged in discriminatory practices within the scope of Section 11C of Article 49B, and a duly authorized preliminary investigation was conducted”; that “[p]ursuant to this investigation, a Commission complaint issued and was served on Respondent on December 18, 1974”; that the information sought was “deemed relevant and necessary to complete promptly an investigation of the aforesaid complaint,” and that Equitable had “refused to cooperate with the Commission’s investigation of the complaint.” Equitable responded with a number of defenses. It filed an affidavit of its executive vice-president (described in the Commission’s petition as “the officer in charge and believed to be the custodian of the records sought by the Petitioner”) in which he recited the vast amount of work and the substantial cost which would be necessary to produce the required information. 3 ⁸⁵ Ultimately the court passed an order directing Equitable to produce all of the requested items other than those pertaining to mortgage loans. (The reason for this latter exception was that a subpoena was already outstanding and ordered enforced in another proceeding pertaining to those documents.) An appeal followed to the Court of Special Appeals. It affirmed.

We granted the writ of certiorari in order that we might address the following issues as framed by Equitable: 1. May the Commission validly issue and compel compliance with a subpoena duces tecum which seeks documents pertaining to types of financing not regulated by Article 49B ...? 2. May the Commission validly issue and compel compliance with a subpoena duces tecum when its complaint was not made under oath as required by section 9 of Article 49B... and §§ 14.03.03(D)(1), .09(A)(1) of the Commission’s Rules of Procedure? 3. May the Commission validly issue and compel compliance with a subpoena duces tecum which seeks documents which are so voluminous that they would be unduly burdensome for Equitable to provide?

I The Commission says that its authority to seek these documents stems from the provisions of Code (1957, 1979 ⁸⁶ Repl. Vol.) Art. 49B, § 8. 4 That section makes it unlawful for one licensed or regulated by the Department of Licensing and Regulation as set out under Article 41, ... § 221A (a) “The Department of Licensing and Regulation,” to refuse, withhold from, deny or discriminate against any person in the accommodations, advantages, facilities, privileges, sales or services because of the race, sex, creed, color, national origin, marital status, or physical or mental handicap of any person. Equitable’s argument is that the statute originally enacting this section placed it under the “Public Accommodations” subtitle. Since the activities here do not amount to public accommodations, it says the statute is not applicable.

The standards for construing statutes have been set forth by this Court many times. We have indicated that the cardinal rule of statutory construction is to ascertain and carry out the real legislative intent, that in determining that intent the Court considers the language of an enactment in its natural and ordinary signification, and that a corollary to this rule is that if there is no ambiguity or obscurity in the language of a statute, there is usually no need to look elsewhere to ascertain the intent of the General Assembly. See, e.g., In Re: James S., 286 Md. 702, 705-06 , 410 A.2d 586 (1980), and Police Comm’r v. Dowling, 281 Md. 412, 418 , 379 A.2d 1007 (1977). There is no ambiguity here; thus there is no reason to look elsewhere for interpretation.

Section 8 prohibits, among other things, refusal or withholding of certain advantages from any person. If one denies an individual an automobile loan or a credit card because of his race or sex, as the complaint alleges has been done, then it certainly follows that he has been denied an advantage. It is conceded that Equitable is subject to regulation by the Bank Commissioner, who is assigned by Code (1957, 1978 Repl. Vol.) Art. 41, § 221A (a) to the ⁸⁷ Department of Licensing and Regulation.

Hence, this argument is without merit. II The Commission conceded at oral argument that it did not seek its subpoena here as a part of a preliminary investigation under § 9 (b) as was the case in Banach, 277 Md. 502 , but it seeks the subpoena pursuant to its investigation of a complaint filed by the Commission on its own motion. Equitable counters by saying, correctly, that the complaint is not under oath. The Commission contends its complaint is not required to be under oath.

Art. 49B, § 9 states in pertinent part: (a) Any person claiming to be aggrieved by an alleged discrimination prohibited by any section of this article may make, sign and file with the Human Relations Commission (hereinafter referred to as the “Commission”) a complaint in writing under oath. The complaint shall state the name and address of the person, ... [or] corporation, ... alleged to have committed the act of discrimination together with the particulars thereof____A complaint must be filed within six months from the date of the occurrence alleged to be a violation of this article. A complaint filed with the federal or with a local human relations commission within six months from the date of occurrence shall be deemed to have complied with the provisions of this section. (b) Whenever the Commission has received reliable information from any individual... that any person has been engaged ... in any discriminatory practice within the scope of this article, and after a preliminary investigation by the Commission’s staff authorized by the chairman ... it is satisfied that said information warrants the filing of a complaint, the Commission, on its own motion, and by action of not less than three commissioners, may issue a complaint in its name in the same manner as if the complaint had been filed by an individual. ⁸⁸ To the principles relative to statutory construction which we set forth in part I of this opinion we add that a court may not insert or omit words to make a statute express an intention not evidenced in its original form; the General Assembly is presumed to have had, and acted with respect to, full knowledge and information as to prior and existing law and legislation on the subject of the statute and the policy of the prior law; and, absent a clear indication to the contrary, a statute, if reasonably possible, is to be read so that no word, clause, sentence or phrase is rendered surplusage, superfluous, meaningless, or nugatory.

In Re: James S. supra, 286 Md. at 705 , and Dowling, 281 Md. at 419 . The Commission would have us read the words “in the same manner as if the complaint had been filed by an individual” as requiring it to state the name and address of the one “alleged to have committed the act of discrimination together with the particulars thereof” and no more. It says that the oath requirement is in no way applicable. Apparently, the Commission desires to pick and choose which of the requirements in § 9 (a) are applicable to its own complaint under § 9 (b).

If the Commission is correct in its construction of what portion of § 9 (a) is applicable to a complaint filed by it on its own motion, then following its argument to its logical conclusion the Commission could file a complaint without the necessity of signature by any commissioner (so long as at least three approved) and there would be no six-month limitation requirement as set forth in § 9 (a). However, the command of the statute is that the complaint is to be issued “in the same manner as if the complaint had been filed by an individual.” We perceive the General Assembly as having intended to assure persons against whom the Commission issued a complaint that the charges were not lightly made, that they were not issued upon the whim, fantasy, or prejudice of certain of the commissioners. Hence, the commissioners would be making oath that they were in possession of reliable information sufficient for a reasonable belief that a person may have been engaged in a discriminatory practice within the scope of Art. 49B. There is no other way that the statute can be interpreted without ⁸⁹ running afoul of the oft expressed principle that “absent a clear indication to the contrary, a statute, if reasonably possible, is to be read so that no word, clause, sentence or phrase is rendered surplusage, superfluous, meaningless, or nugatory.” The foundation of the Commission’s petition to enforce the subpoena was that after receipt of reliable information relative to Equitable’s having engaged in discriminatory practices and after having conducted a duly authorized preliminary investigation the Commission had issued a complaint.

Since the complaint does not meet the requirements of the statute, it follows that it may not be a basis for the issuance of a subpoena. Hence, the Circuit Court of Baltimore City should have declined to enforce the subpoena. Ill We note an increasing number of cases involving requests on behalf of administrative agencies for subpoenas such as that in the case at bar. Therefore, although we have held in this case that the subpoena should not have issued, pursuant to Maryland Rule 885 we shall set forth our views on the issue of burdensomeness for the guidance of trial judges.

Many things have changed since 1921, not least of which is the attitude of courts in the matter of subpoenas on behalf of administrative agencies. A landmark case of that era involved the attempt by the Federal Trade Commission to subpoena from American Tobacco Company all letters and telegrams received by it from its jobbers during 1921. The Supreme Court unanimously refused to enforce the subpoena, holding that a showing of probable cause and the relevancy of the documents requested was essential. The FTC was acting pursuant to a Senate resolution which directed the investigation of the domestic and export tobacco trade.

By preexisting statute the FTC was authorized, among other things, to gather information upon the direction of either House of Congress. The statute authorized it to require “the production of all such documentary evidence relating to any matter under investigation.” Mr. Justice Holmes said for a ⁹⁰ unanimous Court in Fed. Trade Comm. v. Amer. Tobacco Co., 264 U.S. 298 , 44 S. Ct. 336 , 68 L. Ed. 696 (1924): Anyone who respects the spirit as well as the letter of the Fourth Amendment would be loath to believe that Congress intended to authorize one of its subordinate agencies to sweep all our traditions into the fire (Interstate Commerce Commission v. Brimson, 154 U.S. 447, 479 ), and to direct fishing expeditions into private papers on the possibility that they may disclose evidence of crime. We do not discuss the question whether it could do so if it tried, as nothing short of the most explicit language would induce us to attribute to Congress that intent.

The interruption of business, the possible revelation of trade secrets, and the expense that compliance with the Commission’s wholesale demand would cause are the least considerations. It is contrary to the first principles of justice to allow a search through all the respondents’ records, relevant or irrelevant, in the hope that something will turn up. The unwillingness of this Court to sustain such a claim is shown in Harriman v. Interstate Commerce Commission, 211 U.S. 407 , and as to correspondence, even in the case of a common carrier, in United States v. Louisville & Nashville R.R. Co., 236 U.S. 318, 335 . The question is a different one where the State granting the charter gives its Commission power to inspect.

The right of access given by the statute is to documentary evidence — not to all documents, but to such documents as are evidence. The analogies of the law do not allow the party wanting evidence to call for all documents in order to see if they do not contain it. Some ground must be shown for supposing that the documents called for do contain it. [Id. at 305-06.] Of local interest is the holding of Judge Rose to the same effect in Federal Trade Commission v. Baltimore Grain Co., 284 F. 886 (D. Md. 1922). In a similar investigation conducted ⁹¹ at about the same time as that of the American Tobacco Co. and under similar authority, the FTC sought the production by Baltimore Grain Company of its books, letters, and telegrams from its jobbers during 1921.

Judge Rose found that the Congress was without power to authorize so broad an inquiry without probable cause, observing that “to sustain any right of inspection and searching, it must also appear that there is some reasonable proportion between the public value of the information likely to be obtained and the private annoyance and irritation it will occasion.” Id. at 889-90 . It will be noted that American Tobacco and Baltimore Grain rested upon the view that the Fourth Amendment proscribed unreasonable searches and seizures. By the time that Okla. Press Pub.

Co. v. Walling, 327 U.S. 186 , 66 S. Ct. 494 , 90 L. Ed. 614 (1946), reached the Court, its views toward administrative “fishing expeditions” had mellowed somewhat. There the Wage and Hour Administrator sought full payroll data and information about the source of the corporation’s advertisements and news. The Court noted: It is claimed that enforcement would permit the Administrator to conduct general fishing expeditions into petitioners’ books, records and papers, in order to secure evidence that they have violated the Act, without a prior charge or complaint and simply to secure information upon which to base one, all allegedly in violation of the Amendment’s search and seizure provisions. [Id. at 195.] It held that this subpoena of corporate records did not raise the Fourth Amendment issue, pointing out, "No officer or other person has sought to enter petitioners’ premises against their will, to search them, or to seize or examine their books, records or papers without their assent, otherwise than pursuant to orders of court authorized by law and made after adequate opportunity to present objections, which in fact were made.” Id. It distinguished American Tobacco, observing that no objection was taken to the breadth of the subpoenas.

Id. at 207 . It pointed out that corporations do not enjoy the same Fourth Amendment protections as those ⁹² enjoyed by individuals, id. at 204-05 , and that the proper analogy to such investigative subpoenas was the grand jury investigation, not the search upon probable cause. Id. at 209 . The principal impact of Oklahoma Press is the Court’s holding that such subpoenas need not be supported by probable cause but that their validity is to be measured by a three-fold test.

Citing Oklahoma Press, Judge Levine in Banach, 277 Md. at 506 , stated for this Court that the test is, “Whether the inquiry is authorized by statute, the information sought is relevant to the inquiry, and the demand is not too indefinite or overbroad.” Accord Cooper, Federal Agency Investigations: Requirements for the Production of Documents, 60 Mich. L. Rev. 187 (1961), and 1 F. Cooper, State Administrative Law 299 (1965). The broad change that has taken place is further illustrated by the pronouncement of the Supreme Court in United States v. Morton Salt Co., 338 U.S. 632 , 70 S. Ct. 357 , 94 L. Ed. 401 (1950), where Mr. Justice Jackson said for the Court: Even if one were to regard the request for information in this case as caused by nothing more than official curiosity, nevertheless law-enforcing agencies have a legitimate right to satisfy themselves that corporate behavior is consistent with the law and the public interest. Of course a governmental investigation into corporate matters may be of such a sweeping nature and so unrelated to the matter properly under inquiry as to exceed the investigatory power.

Federal Trade Comm’n v. American Tobacco Co., supra. But it is sufficient if the inquiry is within the authority of the agency, the demand is not too indefinite and the information sought is reasonably relevant. “The gist of the protection is in the requirement, expressed in terms, that the disclosure sought shall not be unreasonable.” Oklahoma Press Publishing Co. v. Walling, 327 U.S. 186, 208 . Nothing on the face of the Commission’s order transgressed these bounds. [Id. at 652-53.] ⁹³ See the discussion of the abrupt change and its implications in 1. K. Davis, Administrative Law Treatise, §§ 4.1 and 4.2 (2d ed. 1978).

In Vulcan, Inc. v. Md. Home Imp. Comm’n, 253 Md. 204, 210 , 252 A.2d 62 (1969), we quoted from Morton Salt relative to the function of an administrative agency and its investigation, pointing out that the Supreme Court said, “It is more analogous to the Grand Jury, which does not depend on a case or controversy for power to get evidence but can investigate merely on suspicion that the law is being violated, or even just because it wants assurance that it is not.” Id. 338 U.S. at 642-43 . It goes without saying, however, that an administrative agency may not exceed the powers vested in it. Moreover, in Vulcan we returned the case to the trial court to take evidence on Vulcan’s allegation that the commission’s action there was “malicious, arbitrary and unreasonable.” The question that arises is in what circumstance will the defense of undue burden prevail?

Although Oklahoma Press clearly curtailed the proscription against “fishing expeditions,” its three-fold test actually reaffirmed the requirement that the demands made must not be unduly vague or unreasonably burdensome. Professor Cooper