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

Mason, J., delivered the opinion of the Court. The issues in this case concern the Maryland Human Relations Commission’s (“Commission”) right to judicial enforcement of a subpoena duces tecum issued against the Equitable Trust Company (“Equitable”). On 18 December 1974 the Commission issued a complaint in its own name against Equitable charging: “The above named financial institution is subject to the jurisdiction of the Maryland Commission on Human Relations acting in accordance with Section 12(b) of Article 49B of the Annotated Code of Maryland. “We have reason to believe the above named financial institution has engaged in unlawful application of financial standards, terms, and conditions regarding mortgage financing, personal credit, and all other forms of credit to individuals and' classes protected by Article 49B. Such unlawful practices have the effect of causing differential treatment in credit evaluation and the determination of credit worthiness of racial minorities and the protected sex class. “An investigation of said practices shall be undertaken pursuant to Article 49B of the Annotated Code of Maryland.

This investigation shall examine and look into the specific facts and circumstances concerning the holding of different ⁵⁶ standards of credit worthiness for men and for women, differential evaluation of income of males and females, and refusing services to females when changes are made in marital status. On the basis of investigation into these facts and circumstances the Maryland Commission on Human Relations will determine whether there is probable cause to believe that there is validity to the complaints.” This complaint was referred to the Commission staff for investigation and ascertainment of the facts. Following several unsuccessful attempts to obtain information from Equitable during this investigation, the Commission on 23 October 1976 issued a subpoena duces tecum directing Equitable to deliver the documents requested. Upon Equitable’s refusal to comply with the subpoena, the Commission petitioned the Circuit Court of Baltimore City to direct Equitable to deliver the documents.

After a hearing, the chancellor 1 ordered Equitable to produce the documents specified in the subpoena and dismissed Equitable’s counterclaim for the production of certain of the information under the Maryland Public Information Act. Article 76A, Annotated Code. From this order Equitable appeals and presents the following arguments in challenging the validity and enforceability of the subpoena: “I. Before the Commission validly may issue and enforce compliance with a subpoena duces tecum pursuant to a Commission complaint under § 12(b) of Article 49B of the Annotated Code of Maryland, appellants are entitled to be apprised of any reliable information indicating discriminatory practices received by the Commission and of any preliminary investigation of that information by the Commission. “II. Since the Commission complaint in this action was not sworn as required by § 12 of Article 49B of ⁵⁷ the Annotated Code of Maryland, the Commission did not validly issue and may not enforce compliance with its subpoena duces tecum. “III.

The Commission’s complaint and the subpoena duces tecum issued pursuant thereto are deficient since the Commission has failed to state, as required by § 12 of Article 49B, the particulars, including the dates, of the discrimination charged. “IV. Since the Commission complaint fails to charge discrimination within the ambit of Article 49B, the subpoena duces tecum was not validly issued and may not be enforced. “V. Since the Commission is seeking financial records protected from disclosure by Article 11, §§ 224-27 of the Annotated Code of Maryland the subpoena duces tecum may not be enforced. “VI. Since the Commission is seeking data irrelevant to its complaint, the subpoena duces tecum should not be enforced. “VII. Since the documents sought by the Commission are so voluminous as to be unduly burdensome to provide, the court should deny enforcement to the Commission’s subpoena duces tecum. “VIII.

The Maryland Public Information Act guarantees appellants the right to information concerning any reliable information received by or any results of a preliminary investigation conducted by the Commission.” I, II and III. In arguments I, II and III, which we will consolidate and consider together, Equitable’s attack on the validity and enforceability of the subpoena is premised solely on alleged defects in the Commission complaint. Equitable, in essence, argues that the subpoena should not be judicially enforced because the Commission complaint was not sworn and lacked ⁵⁸ the particulars required by Article 49B, section 9 (a). 2 Equitable further contends the complaint failed to disclose the reliable information purportedly received, or any evidence that a preliminary hearing had been conducted as required by section 9 (b). 3 Instructive on the issue of particulars required in a complaint during the investigative stage of a proceeding, such as here, is Banach v. State of Maryland, Commission on Human Relations, 277 Md. 502 (1976). In that case several individuals filed complaints with the Commission under section 9 (a) alleging discrimination by the A. S. Abell Company.

After refusal by the company to supply the requested data, the chairman of the Commission authorized a preliminary investigation under section 9 (b) and issued a subpoena duces tecum to aid in the investigation. In challenging ⁵⁹ the subpoena the A. S. Abell Company argued, among other things, that the Commission was not empowered to issue the subpoena because: (1) the individual complaints lacked the particulars required by section 9 (a) and (2) that before a preliminary investigation can be conducted under section 9 (b), the Commission must establish that the information received is reliable. In disposing of the contention that the Commission was without authority to issue the subpoena because the individual complaints lacked the particulars required by section 9 (a), the Court observed: “The argument that appellants were not provided the ‘particulars’ required by § 12(a) [9(a)] is, at least in part, attenuated by our holding that subpoenas may be issued during the investigative stage preceding the filing of a formal complaint. In essence, appellants contend that since the four individual complaints are defective due to the absence of the necessary particulars, the commission is not empowered to issue the subpoenas.

This argument misconceives the role of the administrative complaint and the relationship between the investigative and adjudicatory functions of the commission. “Notwithstanding the ‘particulars’ requirement, a complaint filed with the commission under § 12(a) [9(a)] merely triggers the investigative process. If, as we have seen, the commission then wishes on the strength of such a complaint to issue a complaint in its own name it must first conduct a preliminary investigation. In any event, an investigation is mandated by § 13(a) [10(a)] ‘after the filing of any complaint,’ and it is only after the results of that investigation are reduced to written findings that the statute requires notice to be given the respondent against whom the complaint has been made.” Id at 513. ⁶⁰ The Court further observed that it is at the adjudicatory stage and not at the non-judicial investigative stage of the proceedings that the traditional safeguards of fairness, i.e., notice of charges and opportunity to be heard, must be demonstrated. “It is only when the conciliation process prescribed by § 13 [10] fails and the hearing stage contemplated by § 14 [11] is invoked that' the investigative yields to the adjudicative function. See Atchison, Topeka and Santa Fe Railway Co. v. Lopez, 216 Kan. 108 , 531 P. 2d 455, 462 (1975).

Only at that juncture must the charges be capable of withstanding attack for lack of particularity.” Id. at 515. In answering the argument that the information received by the Commission must be “reliable” before it can initiate a preliminary investigation, the Court said, “[t]he determination whether the information received from individuals is ‘reliable’ can only rest within the sound administrative discretion of the Commission.” Id. at 516. Returning to the present case, both parties apparently rely on Banach for support. The Commission contends that Banach is fully dispositive of Equitable’s argument that the subpoena is invalid and unenforceable because of alleged defects in the complaint.

Equitable, on the other hand, argues that Banach did not address the issue of a defective Commission complaint, but was concerned with the lack of particulars in complaints filed by several individuals. Further, according to Equitable, the Banach court implicitly held that a Commission complaint, in contrast to an individual complaint, should be particularized to reflect compliance with the statutory requirements of sections 9 (a) and 9 (b). In the present case, the proceedings have barely reached the threshold of the investigative stage mandated by section 10 (a), 4 and as the Banach court said, “[i]t is only when the ⁶¹ conciliation process prescribed by section 13 [10] fails and the hearing stage contemplated by section 14 [11] is invoked that the investigative yields to the adjudicative function .... Only at that juncture must the charges be capable of withstanding attack for lack of particularity.” Id. at 515.

(Emphasis supplied). Obviously, if particulars are not required until the adjudicatory stage of the proceedings, it necessarily follows that an unparticularized Commission complaint issued at the investigative stage of the proceedings would not preclude issuance of a valid, enforceable subpoena. Consonant with this view see Augusta Building and Loan Association v. The State Commission, 39 Md. App. 466 (1978), where this Court, in responding to a claim of alleged defects in the Commission complaints specifically held that “[a]ny alleged defects in the complaints in this case, which were filed after the initiation of the preliminary investigation, are irrelevant to the validity of the properly executed subpoena duces tecum.” Id. at 470 . See also Soley v. State Commission on Human Relations, 277 Md. 521 (1976) where the Court of Appeals held that the subpoena power delegated to the Commission Is clearly available following the issuance of a Commission complaint. “At that point the staff becomes engaged in an investigation pursuant to the command of § 13 (a) [§ 10 (a)] that may lead directly to a finding of probable cause to believe that a discriminatory act has been committed, and may conceivably eventuate in the quasi-judicial hearing contemplated by § 14 [§ 11].” Id. at 524-25.

Although the factual and legal issues involved in Banach may have been different from those in this case, we think Banach makes clear that during the investigative stage of a proceeding, i.e., when the Commission is attempting to discover and procure evidence, as opposed to proving a pending charge or complaint, the lack of specificity or other ⁶² non-jurisdictional defects in a complaint will not render invalid or unenforceable an otherwise properly issued subpoena. Therefore, the alleged defects in the instant complaint were insufficient to defeat the issuance of the subject subpoena.

IV

The Commission complaint charged Equitable with engaging in “unlawful application .of financial standards, terms and conditions regarding mortgage financing, personal credit, and all other forms of credit to individuals and classes protected by Article 49B.” The subpoena issued pursuant to this complaint requested, among other things, documents, memoranda, and other writings regarding the policy followed by the bank in extending automobile loans, consumer loans, mortgage loans and Bankamericard transactions. Equitable opines that the alleged charges of discrimination are not within the ambit of the Commission's authority because the jurisdiction of the Commission with respect to discrimination in financing is expressly circumscribed by section 22 (a) 5 of Article 49B which, in relevant part, provides: “(a) It shall be unlawful for any bank, savings and loan institution, credit union, insurance company, or other person regularly engaged in the business of making mortgages or other loans for the purchase, construction, improvement, or repair or maintenance of dwellings to deny such a loan to a person applying therefor, or discriminate against him in the fixing of the down payment, interest rate, duration, or other terms or conditions of such a loan, because of the race, color, religion, creed, marital status, sex, national origin or physical or mental handicap of such person, or of any member, stockholder, director, officer, or employee of such person, or of the prospective occupants, lessees, or tenants of the ⁶³ dwelling or dwellings in relation to which the application for a loan is made.” Even if we assume that the discrimination alleged in the Commission complaint is not within the contemplation of section 22 (a) and that the Commission cannot pursue its investigation under authority of this section, we do not agree With Equitable that the Commission’s authority to investigate discrimination in financing is strictly limited to transactions delineated in section 22 (a). The Commission contends, and we agree, that its authority to investigate the instant charges derives from section 8 6 of Article 49B which in pertinent part reads: “It is unlawful for any person, business, corporation, partnership, co-partnership or association or any other individual, agent, employee, group or firm which is licensed or regulated by the Department of Licensing and Regulations as set out under Article 41, Subtitle 15, 221A(a), ‘The Department of Licensing and Regulations,’ to refuse, withhold from, deny or discriminate against any person the accommodations, advantages, facilities, privileges, sales or services because of the race, sex, creed, color or national origin, marital status, or physical or mental handicap of any person.” Included within the jurisdiction of the Department of Licensing and Regulation is the Bank Commissioner. Article 41, section 221A.

Inasmuch as section 8 demonstrates a clear legislative intent to prohibit discrimination by regulatees of the Department of Licensing and Regulations, it follows that Equitable, a regulatee of the Bank Commissioner, is subject to the authority of the Commission by virtue of section 8. Consequently, the discrimination alleged in the Commission complaint is not outside the orbit of the Commission’s ⁶⁴ jurisdiction. Therefore, the Commission can validly conduct the subject investigation and issue a subpoena in aid thereof. Equitable further argues that if section 8 is also construed as vesting authority in the Commission to investigate discrimination in financing, section 22 (a) becomes meaningless because, according to Equitable, the canons of construction require the specific language of section 22 (a) to control over the general language of section 8.

In support of its position Equitable quotes the following passage from Maguire v. State, 192 Md. 615, 623 (1949): “It is an old and familiar rule that ‘where there is, in the same statute, a particular enactment, and also a general one, which, in its most comprehensive sense, would include what is embraced in the former, the particular enactment must be operative, and the general enactment must be taken to affect only such cases within its general language as are not within the provisions of the particular enactment____’ This rule applies wherever an act contains general provisions and also special ones upon a subject which, standing alone, the general provisions would include----” (Citations omitted). However, the Court of Appeals in Rafferty v. Comptroller, 228 Md. 153, 158 (1967) said: “There is, of course, a rule of statutory construction to the effect that the general language of one part of a statute may be controlled by the more specific phraseology of another part, ..., but there is also an elementary rule of construction requiring that a statute shall so be interpreted as to give meaning to each of its provisions so as not to render any of them nugatory.” (Citations omitted). Further, where two statutory provisions, such as we have here, are neither irreconcilable nor mutually repugnant they should be construed in harmony even though the statutes were passed at different times and contain no reference to ⁶⁵ each other. Department of Natural Resources v. France, 277 Md. 432, 461 (1976).

Moreover, in holding that the Commission’s authority to investigate the instant complaint of discrimination in financing derives from section 8, a general enactment, and not from section 22 (a), a particular enactment, we have, in effect, applied the statutory rule of construction expressed in Maguire and urged by Equitable. Stated another way, the general language of section 8 vests authority in the Commission to investigate cases of discrimination in financing that are not included within the specific provisions of section 22 (a). V. Equitable next attacks the subpoena by contending the Commission was seeking financial records protected from disclosure under sections 224-227 of Article 11 of the Maryland Code. Section 225 provides: “A fiduciary institution may not disclose to any person, except to the customer or his duly authorized agent, any financial records relating to that customer of that fiduciary institution unless: (a) The customer has authorized disclosure to the person; or (b) The financial records are disclosed in response to a lawful subpoena, summons, warrant or court order which meets the requirements of § 226 (a).” Section 226 (a) requires a subpoena to be “served upon the customer and upon the financial institution; however, the court for good cause may waive service of the subpoena... upon the customer.” Because we have already determined that the subpoena was lawful, and the statute permits waiver of service upon the customer by the court, the exception set forth in section 225 (b) permitting disclosure of the subpoenaed records applies.

Furthermore, the chancellor found, and we agree, that the records sought by the ⁶⁶ Commission were not within the protected classes of documents enumerated in section 224 (a) (2). 7 VI. Equitable next argues that the subpoena should not be enforced because the Commission is seeking data irrelevant tó its complaint. Section 11 of Article 49B empowers the Commission to issue subpoenas to compel the production of only those books, papers and records which are relevant or necessary for its proceedings. Equitable contends that the Commission complaint limits its investigation to allegations of sex discrimination.

Therefore, the racial data sought by the subpoena is irrelevant to the complaint. The predicate for this argument is the third paragraph of the Commission complaint which reads: “An investigation of said practices shall be undertaken pursuant to Article 49B of the Annotated Code of Maryland. This investigation shall examine and look into the specific facts and circumstances concerning the holding of different standards of credit worthiness for men and for women, differential evaluation of income of males and females, and refusing services to females when changes are made in marital status. On the basis of investigation into these facts and circumstances the Maryland Commission on Human Relations will ⁶⁷ determine whether there is probable cause to believe that there is validity to the complaints.” Equitable apparently ignores the second paragraph of the Commission complaint which states: “We have reason to believe the above named financial institution has engaged in unlawful application of financial standards, terms, and conditions regarding mortgage financing, personal credit, and all other forms of credit to individuals and classes protected by Article 49B.

Such unlawful practices have the effect of causing differential treatment in credit evaluation and the determination of credit worthiness of racial minorities and the protected sex class. ” (Emphasis supplied). Like the chancellor below, we are hard pressed to understand why the Commission, after stating in the second paragraph of the complaint that it had reason to believe Equitable was engaging in unlawful financing practices and that such practices resulted in a different treatment of “racial minorities and the protected sex class,” should be limited to investigating only sex discrimination. We think the requested data was relevant and necessary to the proceedings. Additionally, the case of EEOC v. United States Fidelity and Guaranty Co., 420 F. Supp. 244 (D. Md. 1976) relied on by Equitable is inapposite.

In that case the court, in answering a question raised concerning the scope of the subpoena, said: “The Commission is entitled only to those records identified by sex and not by race. The underlying charge alleges exclusively sex discrimination, and Ms. Braden is Caucasian. Therefore, information identified by race is not relevant to the instant investigation and cannot be obtained.” (Emphasis supplied) Id. at 247 .

VII

The final argument advanced by Equitable in challenging the subpoena is that the documents sought by the Commission are so voluminous that compliance would be ⁶⁸ unduly burdensome. The subpoena sought documents with respect to fifteen categories of information relating to Equitable’s lending practices and policies. According to Equitable, “in order to develop the information sought by the Commission, Equitable would be forced to collate data from over 63,000 accounts, which, conservatively estimated, would consume 9,600 work hours. The cost of such an undertaking would be staggering.

Equitable, were it to attempt to supply the documents, memoranda and other writings sought by the subpoena duces tecum, would have to expend, again conservatively estimated, $96,000.00.” In determining whether the information subpoenaed by the Commission was relevant and within its investigatory powers, we are guided by the principles established in United States v. Morton Salt, 338 U. S. 632, 652 (1950). There the Supreme Court declared: “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... 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.’’ (Citation omitted) (Emphasis supplied). Accord, Oklahoma Press Publishing Co. v. Walling, 327 U. S. 186, 208-09 (1945).

In Banach, supra, the Court of Appeals adopted the three-fold test articulated in the Oklahoma Press Pub. Co. v. Walling case for determining the validity of a subpoena issued by an administrative agency: “[w]hether the inquiry is authorized by statute, the information sought is relevant to the inquiry, and the demand is not too indefinite or overbroad.” Id. at 506 . Applying the above principles to the present case, the requested documents clearly meet the test articulated by the Supreme Court and the Court of Appeals. The statutory authority for the inquiry is section 8, Article 49B, which makes it unlawful for any entity, such as Equitable, licensed ⁶⁹ or regulated by the Department of Licensing and Regulations “to refuse, withhold from, deny or discriminate against any person the accommodations, advantages, facilities, privileges, sales or services because of race, sex, creed, color, national origin, marital status, or physical or mental handicap of any person.” Further, section 11 authorizes the Commission to issue subpoenas for the production of records and documents relevant, or necessary for proceedings under section 8.

As to the relevancy of the information requested, the Commission complaint charges Equitable with discrimination “in mortgage financing, personal credit, and all other forms of credit to individuals and classes protected by Article 49B.” Plainly, the documents sought are relevant to the investigation of these charges. Moreover, we do