Fogle v. H & G Restaurant, Inc.

MURPHY, Chief Judge. This case concerns the propriety of granting an interlocutory injunction delaying the implementation throughout this State of § 09.12.23 of the Code of Maryland Regulations (COMAR) captioned: “Prohibition on Smoking in an Enclosed Workplace.” I. The subject regulation was promulgated by the Commissioner of the Division of Labor and Industry (the Division) for the purpose of protecting Maryland employees from the haz ⁴⁴⁷ ards associated with environmental tobacco smoke (ETS). It was developed with reliance on scientific studies that establish ETS as a cause of lung cancer and coronary heart disease in non-smoking adults as well as those that cite the workplace as being a significant source of exposure to ETS. The regulation was promulgated under the authority of the Maryland Occupational Safety and Health Act (the MOSH Act), Maryland Code (1957, 1991 Repl.Vol.), §§ 5-101 et seq. of the Labor and Employment Article, 1 and the federal Occupational Safety and Health Act of 1970 (the OSH Act), 29 U.S.C. §§ 651 et seq. 2 Maryland’s occupational safety and health program is both funded and overseen by the federal OSH Act.

The OSH Act requires the Maryland Commissioner of Labor and Industry (the Commissioner) to adopt occupational safety and health standards that are “at least as effective” as those set forth by the federal Occupational Safety and Health Administration (OSHA). § 5-309(a)(1). Compliance with the federal guidelines in the OSH Act is a prerequisite to continued federal approval and funding of Maryland’s state plan. 29 U.S.C. § 667 (f) and (g). 3 The Commissioner is responsible for carrying out the statutory mandate of the MOSH Act, which includes developing and adopting occupational safety and health standards designed to ensure that Maryland employees labor in safe and healthful working conditions. § 5—102(b). An “occupational safety and health standard” is a regulation that requires “the adoption or use of a means, method, operation, practice, or process that is reasonably appropriate or necessary to make employment and places of employment safe and healthful.” § 5-101(e)(2). ⁴⁴⁸ According to the MOSH Act, “[t]he [Maryland Occupational Safety and Health Advisory] Board shall ... recommend to the Commissioner reasonable regulations: (1) to prevent conditions that are detrimental to safety and health in each employment or place of employment in the State; and (2) that the Board finds necessary to protect and to improve the safety and health of employees.” § 5-808. The MOSH Act also, at a minimum, requires that in making occupational safety and health standards, the Commissioner promulgate regulations “that most adequately ensure, to the extent feasible on the basis of the best available evidence, that no employee, including an employee who has regular exposure to [the toxic substance] during the working life of the employee, will suffer material impairment of health or functional capacity.” § 5-309(c)(1).

COMAR 09.12.23 is an occupational safety and health standard that requires all Maryland employers to ensure that there is no smoking permitted in any enclosed workplace and that there are “no smoking” signs posted at each entrance to a place of employment having such an enclosed workplace. 4 COMAR 09.12.23.03. According to the regulation, an “enclosed workplace” means an indoor place of employment. The definition includes, but is not limited to: all indoor work areas, vehicles used in the course of employment that are occupied by more than one employee, employee lounges or restrooms, conference and meeting rooms, classrooms, employer operated cafeterias for use of its employees, hallways, restaurants, bars and taverns, and sleeping rooms in hotels or motels. COMAR 09.12.23.01.

An important exception to this ban on smoking in all enclosed workplaces is that employers may permit smoking in “designated smoking rooms” as long as such facilities comply with specific structural and ventilation requirements. These designated smoking rooms may not be a location where an ⁴⁴⁹ employee, other than a custodial or maintenance employee, is required to work. COMAR 09.12.23.04. Certain workplaces are completely exempted from the regulation.

Those workplaces include tobacconist establishments (places that engage primarily in the sale of tobacco and tobacco-related accessories) and analytical or educational laboratories where smoking is necessary to the conduct of scientific research into the health effects of tobacco smoke. COMAR 09.12.23.02. Repeated or willful violations of COMAR 09.12.23 are punishable by fines of up to $70,000.00 per incident and all other deviations from the regulation’s mandate are punishable by fines of up to $7,000 per incident. § 5-810(a).

II

On November 3, 1993, the Maryland Department of Licensing and Regulation asked the Maryland Occupational Safety and Health Advisory Board (the Board) to consider whether it would be appropriate to promulgate regulations concerning smoking in the workplace. The Secretary of the Department submitted a draft proposal to the Board. The Board voted to act on the Department’s request and scheduled two public hearings in December, 1993. During these hearings, approximately 70 witnesses testified before the Board.

The witnesses represented a multitude of different opinions and backgrounds. They included: Dr. Louis Sullivan, a former Secretary of the United States Department of Health and Human Services; Nelson Sabatini, the Secretary of the Maryland Department of Health and Mental Hygiene; legislators; scientists; physicians who have addressed various areas relating to ETS; representatives of the Tobacco Institute, a trade association representing many tobacco companies; Philip Morris Companies, Inc., a cigarette manufacturer; Action on Smoking and Health (ASH), an association advocating restrictions on smoking; various other groups advocating smoking restrictions; employers; employees, and other members of the general public. Along with the live testimony, the Board received a substantial amount of documentary evidence, including reports from ⁴⁵⁰ state and federal agencies, scientific studies, and 33 volumes of material from Philip Morris. The Board deliberated on this issue on three separate occasions (January 12, February 2, and March 2, 1994).

At its January 12 meeting, the Board accepted into the record all documentary evidence received by it since the hearing on December 16, 1993. The Board then closed the record to any further submissions from the public. On March 2, 1994, the Board sent to the Commissioner a recommendation that smoking be prohibited in most enclosed workplaces. In a 56-page report accompanying its recommendation, the Board explained the reasons for its recommendation.

The Board, relying in part op a report issued by the United States Environmental Protection Agency in December 1992, entitled Respiratory Health Effects of Passive Smoking: Lung Cancer and Other Disorders, explained that ETS is a known human carcinogen causing approximately 3,000 lung cancer deaths annually in nonsmokers nationwide. The Board further found that ETS contributes to heart disease and is responsible for 35,000 to 40,000 heart disease deaths annually. This finding was based on several reviews of the scientific literature on heart disease and ETS. In addition, the Board found that ETS is present in the workplace at levels which are consistent with causing the health effects observed in the various studies.

The Board recommended that employers have the option of designating special smoking areas that would have to satisfy certain structural and ventilation requirements. The Board also recommended that certain workplaces, most notably bars and restaurants, be excluded from the smoking ban altogether despite the fact that employees who work at such establishments are in great need of this sort of protection. This proposed exemption came in response to concern over the possible economic impact that a statewide ban on smoking may have on such establishments. On March 8, after reviewing the Board’s recommendation and certain evidence received by it on this matter, the Commissioner proposed a regulation prohibiting smoking in all ⁴⁵¹ enclosed workplaces.

The Commissioner’s proposal differed from the Board’s recommendation in that the regulation as proposed did not exempt restaurants, bars, taverns, and hotel and motel sleeping rooms. The Commissioner rejected these proposed exemptions after reviewing evidence concerning the possible detrimental economic impact on these establishments by the proposed smoking prohibition and finding that such an impact would be insignificant. On April 15,1994, the Commissioner published his proposed regulation on smoking in the workplace in the Maryland Register (vol. 21, issue 8). On the same day, notice was also published in the Maryland Register that on May 3, the Commissioner would hold a public hearing on the proposed regulation to afford interested persons the opportunity to submit data or comments in writing or orally and that until the close of business on May 17, the public could submit written comments or data on the proposed regulation to the Commissioner.

On May 3, the Commissioner conducted a public hearing at which approximately 47 witnesses testified. Among these witnesses were those testifying to the health effects of ETS, representatives from the tobacco industry, representatives from the Coalition for Smoke Free Maryland Workplaces, a representative of the Public Affairs Committee of the American Heart Association (Maryland Chapter), a certified industrial hygienist, and members of the general public. On July 22, 1994, the Commissioner adopted COMAR 09.12.23 in the form proposed on April 15,1994 and directed it to be published along with his reasons for such in the July 22 issue of the Maryland Register (vol. 21, issue 15). The final adopted regulation was to become effective on August 1, 1994.

On the same day, several area businesses in Talbot County, along with several trade associations, and several tobacco companies (collectively, Appellees) filed a complaint for declaratory and injunctive relief and a motion for an interlocutory injunction in the Circuit Court for Talbot County. They sought to have COMAR 09.12.23 declared void, invalid, and ⁴⁵² unenforceable and to enjoin its implementation. Named as defendants were William A. Fogle, then Secretary of the Department of Licensing and Regulation of the State of Maryland; the Department of Licensing and Regulation of the State of Maryland; Henry A. Koellein, the Commissioner of the Division of Labor and Industry; and the Division of Labor and Industry (collectively, the State). On August 5,1994, the circuit court renewed the 10-day ex parte injunction for another 10-day period.

On August 11 and 12, 1994, the court (Horne, J.) conducted a two-day evidentiary hearing on the Appellees’ motion for an interlocutory injunction. Seventeen witnesses testified, including many local businesses and two economists who testified as expert witnesses for the Appellees. The State called no witnesses. A substantial amount of documentary evidence was submitted to the court by both sides.

At the conclusion of the two-day hearing, the court ruled that the Appellees had met their burden of demonstrating their entitlement to an interlocutory injunction temporarily enjoining the enforcement of COMAR 09.12.23. In response to this decision, the State asked this Court for a stay pending its appeal which was denied. We granted certiorari upon the State’s appeal prior to consideration of the appeal by the Court of Special Appeals, 336 Md. 224 , 647 A.2d 444 .

III

The appropriate standards of review to be applied in proceedings involving the MOSH Act are codified at § 5-215(c) of the Labor and Employment Article. That provision states: “(1) The court shall determine whether an order that the Commissioner passes under this title or regulation that the Commissioner adopts to carry out this title is in accordance with law. (2) If a finding of the Commissioner on a question of fact is supported by substantial evidence, the finding is conclusive. (3) A regulation that the Commissioner adopts to carry out this title: ⁴⁵³ (i) shall be deemed prima facie lawful and reasonable; and (ii) may not be held invalid because of a technical defect if there is substantial compliance with this title.” State agencies often perform functions that are legislative in nature.

CBS v. Comptroller, 319 Md. 687, 691-92 , 575 A.2d 324 (1990). See also Dep’t of Nat. Res. v. Linchester Sand and Gravel Corp., 274 Md. 211, 222 , 334 A.2d 514 (1975). Promulgation of new regulations by agencies is one of these so-called quasi-legislative activities.

Linchester, supra, 274 Md. at 222 , 334 A.2d 514 . The regulation at issue in the instant case was adopted by way of the rule-making process. 5 Agency regulations must be consistent with the letter and the spirit of the law under which the agency acts. Christ v. Department, 335 Md. 427, 437 , 644 A.2d 34 (1994). See also Maryland State Police v. Warwick Supply & Equipment Co., Inc., 330 Md. 474, 481 , 624 A.2d 1238 (1993); Ins.

Comm’r v. Bankers Independent Insurance Co., 326 Md. 617, 623 , 606 A.2d 1072 (1992). Furthermore, while it is well-settled that there must be sufficient guidance given when legislative authority is delegated to agencies, we have held that “the modern tendency of the courts is toward greater liberality in permitting grants of discretion to administrative officials in order to facilitate the administration of laws as the complexity of governmental and economic conditions increase.” Falik v. Prince George’s Hosp., 322 Md. 409, 418 , 588 A.2d 324 (1991) (citing Sullivan v. Bd. of License Comm’rs, 293 Md. 113, 121 , 442 A.2d 558 (1982). See also Christ, supra, 335 Md. at 442 , 644 A.2d 34 . In assessing the validity of a new regulation, a court must simply determine whether “the [quasi-legislative] responsibilities were properly empowered to the agency and [whether they] have been performed within the confines of the ⁴⁵⁴ traditional standards of procedural and substantive fair play.” 6 Linchester, supra, 274 Md. at 223 , 334 A.2d 514 .

Keeping in mind concerns over maintaining sufficient separation of powers, we have held: “This power of review, whether authorized by statute or assumed inherently, cannot be a substitution of the court’s judgment for that of the agency. In those instances where an administrative agency is acting in a manner which may be considered legislative in nature (quasi-legislative), the judiciary’s scope of review of that particular action is limited to assessing whether the agency was acting within its legal boundaries.” Weiner v. Ins. Admin., 337 Md. 181, 190 , 652 A.2d 125 (1995) (quoting Linchester, supra, 274 Md. at 224 , 334 A.2d 514 ); Judy v. Schaefer, 331 Md. 239, 265-66 , 627 A.2d 1039 (1993) (recognizing that the scope of judicial review is more limited when the agency action is quasi-legislative, not quasi-judicial); Storch v. Zoning Bd. of Howard Co., 267 Md. 476, 487 , 298 A.2d 8 (1972). Consistent with these principles, and our prior cases, § 5—215(c)(3) provides that a regulation of the Commissioner is “deemed prima facie lawful and reasonable” and may not be declared invalid for a “technical defect” if there is “substantial compliance” with the statutory mandate.

The “substantial evidence” standard of judicial review, as set forth in § 5-215(c)(2), namely, whether a reasoning mind could have reached the factual conclusion the agency reached, is inapplicable as our prior cases indicate where the agency is acting in a quasi-legislative mode in considering and adopting regulations within the boundaries of its rule-making authority. See also Montgomery County v. Woodward & Lothrop, Inc., 280 Md. 686, 711 , 376 A.2d 483 (1977). It is thus “not the function of the courts to pass upon the wisdom of the regulation, or to ⁴⁵⁵ approve or disapprove it, if it does not exceed constitutional limits.” Givner v. Commissioner of Health, 207 Md. 184, 192 , 113 A.2d 899 (1954). See also Weiner, supra, 337 Md. at 185-87 , 652 A.2d at 127 ; Sugarloaf Citizens Association v. Northeast Maryland Waste Disposal Authority, 323 Md. 641, 672-73 , 594 A.2d 1115 (1991); Crown Central Petroleum Corp. v. City Council of Baltimore, 258 Md. 82, 85 , 265 A.2d 192 (1970).

Finally, we have determined that courts should generally defer to agencies’ decisions in promulgating new regulations because they presumably make rules based upon their expertise in a particular field. Givner, supra, 207 Md. at 192 , 113 A.2d 899 . This is especially true of agencies working in the area of health and safety, which rely extensively on their specialized knowledge of that area in promulgating regulations. Id. at 191 , 113 A.2d 899 .

In the present case, the Appellees seek to have COMAR 09.12.23 declared void pursuant to § 10-129 of the State Government Article, which states in pertinent part: “The court shall declare a provision of a regulation invalid if the court finds that: (1) the provision violates any provision of the United States or Maryland Constitution; (2) the provision exceeds the statutory authority of the unit; or (3) the unit failed to comply with statutory requirements for adoption of the provision.” It is thus clear that the scope of our appellate review in this case is limited. We do not undertake to finally determine the merits of the Appellees’ arguments at this time. Rather, we will merely review whether the trial court erred in granting the interlocutory injunction. In Department of Transportation v. Armacost, 299 Md. 392 , 474 A.2d 191 (1984), we set forth four specific factors that a court must find to exist before it may issue an interlocutory injunction.

We decided that “[a]s a general rule, the appropriateness of granting an interlocutory injunction is determined by examining four factors: (1) the likelihood that the plaintiff will succeed on the merits; (2) the ‘balance of convenience’ determined by whether greater injury would be done to the defendant by ⁴⁵⁶ granting the injunction than would result from its refusal; (3) whether the plaintiff will suffer irreparable injury unless the injunction is granted; and (4) the public interest.” Id. at 404-05 , 474 A.2d 191 (citing State Dep’t of Health and Mental Hygiene v. Baltimore County, 281 Md. 548, 554-57 , 383 A.2d 51 (1977)). The burden of proving the facts necessary to satisfy these factors rests on the party seeking the interlocutory injunction. Id. 299 Md. at 405 , 474 A.2d 191 . In addition, the party seeking the injunction must prove the existence of all four of the factors set forth in Armacost in order to be entitled to preliminary relief.

Id. The failure to prove the existence of even one of the four factors will preclude the grant of preliminary relief. Id. It is well-accepted that if a party cannot establish that it has a likelihood of success on the merits, then no interlocutory injunction should be granted.

More precisely, “if the facts as stated in the bill of complaint or, when appropriate, as shown by the evidence, are not ‘full and sufficiently definite and clear, in support of the right asserted, and that such right has been violated,’ the court will not order preliminary relief.” State Dep’t of Health and Mental Hygiene v. Baltimore County, supra, 281 Md. at 554 , 383 A.2d 51 . This appears to create a standard by which the party seeking the interlocutory injunction must establish that it has a real probability of prevailing on the merits, not merely a remote possibility of doing so. Furthermore, we have found that in litigation between governmental and private parties, or in cases in which injunctive relief directly impacts governmental interests, “the court is not bound by the strict requirements of traditional equity as developed in private litigation.” Id. at 555, 383 A.2d 51 . We have also acknowledged that “[c]ourts of equity may, and frequently do, go much farther both to give and withhold relief in furtherance of the public interest than they are accustomed to go when only private interests are involved.” Space Aero Products Co., Inc. v. R.E. Darling Co., Inc., 238 Md. 93, 128 , ⁴⁵⁷ 208 A.2d 74 , cert. denied, 382 U.S. 843 , 86 S.Ct. 77 , 15 L.Ed.2d 83 (1965).

On the record before us, we conclude that the Appellees have little likelihood of prevailing on the merits in any of the counts they set forth in their complaint. It is, therefore, unnecessary for us to address the other three Armacost requirements, and, consequently, we shall vacate the interlocutory injunction. (A) The Commissioner’s Statutory Authority to Promulgate Occupational Safety and Health Standards The Appellees argue that the Commissioner exceeded his statutory authority as a matter of law by failing to adhere to certain applicable state and federal requirements for the promulgation of occupational safety and health standards, thereby rendering COMAR 09.12.23 invalid. We find that the Commissioner did not exceed his statutory authority in promulgating the regulation.

(1) The “Significant Risk” Test The Appellees contend that the Commissioner disregarded federal precedent on the promulgation of occupational safety and health standards that was binding on him. They claim that the Commissioner did not properly apply the “significant risk” test set forth by the United States Supreme Court in the so-called Benzene case, Industrial Union Dep’t, AFL-CIO v. American Petroleum Institute, 448 U.S. 607 , 100 S.Ct. 2844 , 65 L.Ed.2d 1010 (1980), 7 as he was required to do. The Appellees maintain that the Commissioner did not establish by the “best available evidence” in the rule-making record: (1) that workplace exposure to ETS, the alleged health hazard at ⁴⁵⁸ issue in this case, creates a “significant risk” of material health impairment at levels currently found in Maryland workplaces, and (2) that all the requirements imposed by COMAR 09.12.23, which include a zero exposure limit for non-smoking employees, are “reasonably necessary and appropriate” to significantly reduce a significant risk of material health impairment in Maryland workplaces, as is required by Benzene. Furthérmore, the Appellees argue that the Commissioner did not show that completely eliminating ETS from the workplace was reasonably necessary to reduce a significant risk of material health impairment as Benzene requires and, therefore, he exceeded his statutory standard-setting authority in promulgating COMAR 09.12.23.

They further maintain that before the Commissioner can completely ban ETS from all Maryland workplaces, he must establish in the rule-making record that a less than total elimination of ETS would not adequately reduce the risk of material health impairment to employees and that he did not do so in this case. According to the Appellees, the Commissioner was required to demonstrate that eliminating any level of ETS, no matter how minute the exposure, was necessary to yield a significant discernible benefit. As to this, the Appellees argue that there is no evidence in the rule-making record that a total elimination of ETS is necessary. The Appellees further suggest that the Commissioner did not consider less restrictive alternatives to a complete ban on smoking in the workplace that might reduce the alleged health risk from ETS to an insignificant level and he also did not provide an adequate explanation for why he chose the provisions that he ultimately promulgated.

As earlier observed, our review of the validity of the new regulation is limited to determining whether it was promulgated in accordance with the governing law. Thus, if the legislative facts are adequate to sustain the Commissioner’s rule-making, we do not substitute our judgment on the conclusions to be drawn from the legislative facts. In this regard, we afford great deference to the Commissioner’s findings concerning occupational safety and health standards, which