Insurance Commissioner v. Equitable Life Assurance Society of the United States

ELDRIDGE, Judge. The Insurance Commissioner held in this case, inter alia, that portions of Ch. 479 of the Acts of 1975, codified in Maryland Code (1957, 1994 RepL.VoL.), Art. 48A, §§ 223(b)(2), ⁶⁰¹ 226(c)(2) and 234A(b), authorizing differentials in certain insurance rates and underwriting based on gender if actuarially justified, are unenforceable in light of Article 46 of the Maryland Declaration of Rights (the Equal Rights Amendment or “E.R.A.”). The Circuit Court for Baltimore City, in an action for judicial review of the Insurance Commissioner’s determination, reversed in part the Commissioner’s decision and held that Ch. 479 did not violate the E.R.A. We issued a writ of certiorari primarily to review the Insurance Commissioner’s and circuit court’s constitutional determinations. For reasons hereinafter set forth, we shall not reach the constitutional issues decided below.

Instead, we shall direct that this case be remanded to the Insurance Commissioner. I. When this controversy began in 1975, the Maryland Human Relations Commission was authorized to enforce, in its entirety, Code (1957, 1994 Repl.Vol.), Art. 49B, § 8(a), which states as follows: “(a) It is unlawful for any person, business, corporation, partnership, copartnership or association or any other individual, agent, employee, group or firm which is licensed or regulated by a unit in the Department of Licensing and Regulation as set out in § 2-108 of the Business Regulation Article 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, national origin, marital status, or physical or mental handicap of any person. Nothing in this section shall be construed or interpreted to prohibit any person, business, corporation, partnership, copartnership, association or any other individual, agent, employee, group or firm which is licensed or regulated by the Department of Licensing and Regulation from the right to refuse, withhold from, or deny any person for failure to conform to the usual and regular requirements, standards, and regulations of any person, business, corporation, partnership, copartnership, or association contemplated by this section so long a the denial ⁶⁰² is not based upon discrimination on the grounds of race, sex, color, creed, or national origin, marital status, or physical or mental handicap.” The Human Relations Commission began an investigation into alleged discriminatory practices of the Equitable Life Assurance Society of the United States in 1975. In 1978, the Commission issued a written finding of probable cause, charging that Equitable was discriminating on the basis of sex in setting rates for life insurance policies and discriminating on the bases of sex and race in setting rates and underwriting practices with regard to disability income insurance policies.

Equitable challenged the Human Relations Commission’s jurisdiction, arguing that insurers were already subject to the jurisdiction and regulation of the Insurance Commissioner, and that the General Assembly did not intend to grant concurrent jurisdiction to the Human Relations Commission. Ultimately, Equitable’s challenge came before this Court, Equitable Life v. State Comm’n, 290 Md. 333 , 430 A.2d 60 (1981). Our opinion in Equitable Life held that ( 290 Md. at 337 , 430 A.2d at 63 ) “one’s ability to obtain an insurance policy is an advantage, and since under Art. 41, § 211A(a) the Insurance Division is included within the Department of Licensing and Regulation, it is plain that § 8 grants the Commission on Human Relations jurisdiction to investigate alleged unfair discriminatory practices by insurers.” 1 ⁶⁰³ In April 1982, subsequent to the proceedings in this Court, the Human Relations Commission filed an amended statement of charges, and a public hearing was held before a Commission hearing examiner during June and July 1982. 2 Equitable’s principal argument regarding the charges of sex discrimination was based on the amendments to the Insurance Code enacted by Ch. 479 of the Acts of 1975. Chapter 479 amended Art. 48A by adding new subsections § 223(b)(2) and § 226(c)(2).

The new subsections, identically worded, read as follows: “(2) Notwithstanding any other provisions in this section, an insurer may not make or permit any differential in ratings, premium payments or dividends for any reason based on sex of an applicant or policyholder unless there is actuarial justification for the differential.” In addition, Ch. 479 amended Art. 48A, § 234A(b), to read as follows: “(b) No insurer shall require the existence of special conditions, facts, or situations as a condition to its acceptance or renewal of, a particular insurance risk or class of risks in an arbitrary, capricious, unfair or discriminatory manner based in whole or part upon the race, creed, color, sex, religion, national origin, or place of residency. Actuarial justification may be considered with respect to sex.” Equitable argued that by enactment of Ch. 479, the General Assembly expressly authorized discrimination in rate setting and underwriting based on gender if there existed an actuarial basis for the differentials. As to the charges of race discrimination in connection with its disability income policies, Equitable’s primary contention was that the charges were based on inaccurate factual information. On August 31, 1982, the Human Relations Commission’s hearing examiner issued an opinion and order dismissing the ⁶⁰⁴ amended statement of charges because the original statement had not been made under oath.

This decision was appealed to the Commission’s Appeal Board which reversed and remanded the case to the hearing examiner for further proceedings. Meanwhile, the original hearing examiner had resigned, and a new hearing examiner was directed to render an opinion based on the record. On April 28, 1986, the new hearing examiner issued a opinion and order finding that Equitable was engaged in unlawful discrimination on the basis of sex, in violation of Art. 49B, § 8, in setting rates for its life insurance policies because of its reliance on gender based mortality tables. Moreover, the hearing examiner found that Equitable was discriminating on the bases of race and sex, with regard to the issuance of its disability income insurance policies, because of its occupation and income eligibility requirements. 3 In addition, the hearing examiner held that the exclusion of pregnancy from coverage as a disability under Equitable’s disability income insurance policies violated Art. 49B, § 8, as impermissible gender discrimination.

Equitable was ordered to cease and desist from the discriminatory practices found by the hearing examiner. On September 17, 1986, Equitable requested that the Human Relations Commission transfer the gender discrimination portion of the case to the Insurance Commissioner. The basis for Equitable’s transfer request was the enactment of Ch. 856 of the Acts of 1986, amending Art. 48A, § 25(4)(a), as follows: “Notwithstanding any other provision of law, the [Insurance] Commissioner shall have exclusive jurisdiction to enforce by administrative action the laws of the State as they relate to the underwriting or rate setting practices of an insurer, except that the Human Relations Commission shall have concurrent jurisdiction with the Commissioner over ⁶⁰⁵ alleged discrimination on the basis of race, creed, color or national origin.” After hearing oral argument, the Human Relations Commission’s Appeal Board denied Equitable’s request for a transfer, holding that the saving statute, Code (1957, 1987 Repl.Vol.), Article 1, § 3, “permits the provisions of Article 49B to remain in effect for the purpose of prosecuting cases before the Commission prior to the amendment of Article 48A.” Equitable had also taken an appeal to the Human Relations Commission’s Appeal Board from the hearing examiner’s findings and conclusions that Equitable was engaged in unlawful discrimination. The Appeal Board rendered its opinion in May 1990, affirming the decision of the hearing examiner as to all charges.

Equitable then brought an action for judicial review of the Human Relations Commission’s decision in the Circuit Court for Baltimore City. The circuit court (Joseph Kaplan, J.) did not reach the merits of the case; rather, it agreed with Equitable’s contention that Ch. 856 of the Acts of 1986 had deprived the Human Relations Commission of jurisdiction over claims of sex discrimination in insurance rate making and underwriting. The court explained that, “[b]y enacting Chapter 856 the General Assembly could not have spoken more clearly; as of July 1, 1986, the [Human Relations] Commission was to have no decision making authority with respect to insurance underwriting and rate setting practices in cases involving sex discrimination.” Moreover, the circuit court determined that Ch. 856 was intended to be applied retroactively. Thus, the court “transferred” jurisdiction over the sex discrimination claims to the Insurance Commissioner.

Jurisdiction over the race discrimination claims was also transferred to avoid a bifurcated proceeding. 4 ⁶⁰⁶ In its transfer order, the circuit court noted that Art. 48A, §§ 223(b)(2), 226(c)(2) and 234A(b), “specifically provide[ ] that an insurer may make a differential in ratings, premium payments, [etc.] ... based on the gender of the applicant, if there is actuarial justification for the differential.” These provisions, according to the court, were in apparent conflict with Art. 49B, § 8. The court determined that the Insurance Commissioner, therefore, must reconcile the apparently conflicting statutory provisions. The circuit court also ordered the Insurance Commissioner to consider the effect of the E.R.A. on these statutory provisions. In a subsequent conference among all the parties to this action, the Insurance Commissioner, and the circuit judge, the judge explained that the court’s directive to the Insurance Commissioner to consider the E.R.A. did not authorize the Commissioner “to declare” portions of the Insurance Code unconstitutional; rather, the Commissioner could make a determination that certain parts of the Insurance Code could not be interpreted or applied in a manner inconsistent with the Constitution, and, that, therefore, the Commissioner could decide not to apply the statutory provisions in the present case.

After the circuit court’s transfer order, but prior to the hearing before the Insurance Commissioner, the Commissioner requested that the parties submit briefs addressing the following issue: ⁶⁰⁷ “What effect, if any, does Article 46 of the Declaration of Rights in the Maryland Constitution, the Equal Rights Amendment have on the provisions of Article 48A, §§ 223(b)(2) and § 226(c)(2), which permit the gender-based differentials in rates, premium payments or dividends, if there is actuarial justification for the differential?” The Maryland and Baltimore chapters of the National Organization of Women moved to intervene as parties prior to the hearing. Their motions were granted. 5 Hearings were held before the Insurance Commissioner in January, March and April 1992, pursuant to Art. 48A, § 35. The Commissioner issued a Memorandum and Order on July 27, 1992. As a preliminary matter, the Commissioner held that the controversy regarding Equitable’s disability income insurance policies was moot because Equitable had been using unisex rate tables for its disability income policies since 1986, and was no longer applying the alleged discriminatory occupation and income classifications.

Furthermore, the Commissioner ruled that any relief he awarded was to have a prospective effect only. The Insurance Commissioner’s opinion then considered whether “Equitable [had] actuarially justified its gender-based life insurance rates under Maryland Article 48A, Sections 223(b)(2), 226(c)(2) and 234A(b).” The Commissioner determined that it was an undisputed fact that women on average live longer than men. In fact, according to the Commissioner, “[e]ven women who smoke live longer than men who don’t smoke. In 1988, for instance, men lived an average of 71.5 years and women lived an average of 78.3 years.” The Insurance Commissioner went on to find, however, that the differential in longevity could not be explained or determined to be attributable to an “immutable physical difference[] between men and women.... [I]t [does not] hold true for each and every woman.” ⁶⁰⁸ In addition, the Commissioner found that Equitable conducted its own mortality studies using its own insureds as its data pool.

The data from these studies, according to the Commissioner, was used by Equitable in determining its life insurance rates. He found that these rates were based on the standard practices utilized by actuaries, and, therefore, met the “actuarial justification” requirement set forth in §§ 223(b)(2), 226(c)(2) and 234A(b). The Commissioner also determined that, if unisex rates were implemented, women would pay higher rates for life insurance. The Insurance Commissioner’s opinion then considered what effect, if any, the prohibition against sex discrimination in Art. 49B, § 8, had with respect to insurance rate making.

The Commissioner held that Art. 49B, § 8, cannot be read as an absolute prohibition, because Art. 48A, §§ 223(b)(2), 226(c)(2) and 234A(b), each contained an express provision authorizing discrimination on the basis of sex in rate making and underwriting where it is aetuarially justified. Therefore, according to the Commissioner, “aetuarially justified” rates were all that was required to satisfy the antidiscrimination provision in Art. 49B, § 8, with regard to gender based rates. The Insurance Commissioner next addressed the contention that he was without authority to pass on the constitutional validity of §§ 223(b)(2), 226(c)(2) and 234A(b) of the Insurance Code. The argument before the Commissioner was “that only a court may declare a statute unconstitutional.” The Commissioner, however, held that it was his duty pursuant to Art. 48A, § 25(4)(a), to consider all “the laws of the State” relative to the issues before him.

In addition, the Commissioner reasoned that his constitutional determination was not a declaration of rights; rather, it was merely an application of the pertinent law to the case before the Commissioner. Moreover, the Commissioner pointed to the availability of judicial review as providing an adequate safeguard from erroneous constitutional determinations. The Insurance Commissioner then turned to Equitable’s argument that the state’s involvement in rate setting did not ⁶⁰⁹ rise to the level of “state action,” so that Equitable’s conduct was private action beyond the reach of the E.R.A. The Commissioner rejected the argument, holding that state action was present with respect to rate making and underwriting. According to the Commissioner, Art. 48A, §§ 223(b)(2), 226(c)(2) and 234A(b), expressly made distinctions based on sex, and “[s]tate action sufficient to invoke the ERA may take the form of ‘the enactment of legislation which on its face draws classifications based on sex,’ ” quoting State v. Burning Tree Club, Inc., 315 Md. 254, 293 , 554 A.2d 366, 386 , cert. denied, 493 U.S. 816 , 110 S.Ct. 66 , 107 L.Ed.2d 33 .

Finally, the Insurance Commissioner considered the effect of the E.R.A. “on the provisions of Article 48A, Sections 223(b)(2), 226(c)(2) and 234A(b).” The Commissioner held that the E.R.A.’s mandate against sex discrimination was irreconcilable with §§ 223(b)(2), 226(c)(2) and 234A(b) of the Insurance Code which, according to the Commissioner, permit insurers to utilize gender based insurance rates. The Commissioner relied on what he viewed as the similarity between these sections of the Insurance Code and the statutory schemes held unconstitutional in Burning Tree v. Bainum, 305 Md. 53 , 501 A.2d 817 (1985), and State v. Burning Tree, supra, 315 Md. 254 , 554 A.2d 366 . Equitable offered a number of justifications in support of the provisions. The Commissioner, however, rejected them all, stating: “Equitable has offered a number of rationales for its differential treatment based on sex.

These so-called justifications ... are no more than ‘generalizations’ of the type previously rejected by the Maryland Court of Appeals____ [T]he Maryland E.R.A. prohibits disparate treatment of men and women based upon generalizations about differences between ‘most’ or ‘average’ men and women, unless those differences are narrowly based on immutable, inarguable physical characteristics never found in one sex. State v. Burning Tree [Club, Inc.], 315 Md. 254 [, 554 A.2d 366 (1989)].” ⁶¹⁰ The Commissioner explained further that the “public policy” embodied in the State’s E.R.A. is “that sex may not be a factor in allocating benefits and burdens in our society. The practice of charging men and women different rates for insurance coverage is unlawful discrimination____ The Insurance Code provisions at issue in this case are a vestige of the past. They reflect the antiquated view that discrimination on the basis of sex, if actuarially justified, is lawful and acceptable.” Therefore, according to the Insurance Commissioner, life insurance rate classifications based on sex, authorized by Art. 48A, §§ 223(b)(2), 226(c)(2) and 234A(b), cannot be constitutionally harmonized with the public policy contained in the E.R.A. The Commissioner ordered Equitable to cease utilizing gender based life insurance rates.

Equitable, the Human Relations Commission, and NOW filed actions in the Circuit Court for Baltimore City for judicial review of the Insurance Commissioner’s determinations. After receiving briefs and hearing oral argument, the circuit court (Hammerman, Ch. J.) affirmed in part and reversed in part the Insurance Commissioner’s action. The circuit court agreed with the Insurance Commissioner that the issues relating to Equitable’s disability income policies were moot.

The circuit court also agreed with the Insurance Commissioner that, in light of Art. 48A, §§ 223(b)(2), 226(c)(2) and 234A(b), actuarially justified gender based insurance rates did not violate Art. 49B, § 8. In addition, the circuit court upheld the Insurance Commissioner’s findings and conclusion that Equitable’s gender based life insurance rates were actuarially justified. Furthermore, the circuit court agreed with the Insurance Commissioner that an insurer’s gender based insurance rates, in light of the regulation by the Insurance Commissioner and the enactment of Ch. 479 of the Acts of 1975, constituted “state action” for purposes of the E.R.A. The circuit court, however, disagreed with the Insurance Commissioner’s conclusion that the Commissioner had the ⁶¹¹ authority to rule on the constitutionality of a statute. The circuit court took the position that the Insurance Commissioner could not refuse, on constitutional grounds, to apply the provisions of Ch. 479 of the Acts of 1975.

With regard to the earlier order of the circuit court transferring the case to the Insurance Commissioner and stating that the Insurance Commissioner should consider the effect of the E.R.A., the circuit court in this judicial review action held that “this Court is not bound by the directive that may have been given to the Commissioner in that regard.” 6 Alternatively, the circuit court held that Ch. 479 did not violate the E.R.A. While agreeing with the Insurance Commissioner that strict scrutiny was the appropriate test, the circuit court held that gender based life insurance rates, if actuarially justified, were valid under a strict scrutiny standard. The court reasoned as follows: (1) women’s additional longevity is an immutable physical characteristic, 7 and classifications based on such characteristics do not violate the E.R.A.; (2) the government has a legitimate interest in preventing women from paying insurance premiums which do not represent their risk, and, as the ⁶¹² Commissioner found, unisex rates would cause such a result; and (3) the legislation in question was narrowly tailored to achieve this goal because it was limited by the term “actuarial justification.” Therefore, the circuit court held, Ch. 479 lawfully permits discrimination on the basis of sex for life insurance rates. The Insurance Commissioner, the Human Relations Commission and NOW appealed to the Court of Special Appeals, and Equitable cross-appealed to contest the circuit court’s state action holding. 8 Prior to any proceedings in the intermediate appellate court, all parties filed in this Court petitions for a writ of certiorari. We granted all of the petitions and issued a writ of certiorari.

Before we consider the statutes specifically challenged in this case, however, we shall first address two threshold issues raised by the parties: (1) whether the Insurance Commissioner was justified in holding that issues concerning Equitable’s disability income insurance policies were moot and in not expressing an opinion on such issues; (2) whether the Insurance Commissioner is authorized to determine that provisions of the Insurance Code are unconstitutional and, therefore, to refuse to apply such provisions.

II

First, we address the Human Relations Commission’s and NOWs contention that the issues concerning the disability ⁶¹³ income insurance policies should be decided. At the hearing before the Insurance Commissioner, Equitable offered evidence that it had abandoned gender based rates and the other alleged discriminatory practices related to its disability income insurance policies. The Human Relations Commission and NOW offered no evidence before the Insurance Commissioner to refute this contention. Moreover, Equitable has represented, without contradiction, that it has sold the disability income insurance portion of its business and is no longer issuing new disability income insurance policies.

This Court explained in Attorney General v. Anne Arundel County School Bus, 286 Md. 324, 327 , 407 A.2d 749, 752 (1979), as follows: “A question is moot if, at the time it is before the court, there is no longer an existing controversy between the parties, so that there is no longer any effective remedy which the court can provide.... Accordingly, an injunction should not issue if the acts sought to be enjoined have been discontinued or abandoned.” See also State v. Parker, 334 Md. 576, 584 , 640 A.2d 1104, 1108 (1994); Adkins v. State, 324 Md. 641, 646 , 598 A.2d 194, 197 (1991); Robinson v. Lee, 317 Md. 371, 375 , 564 A.2d 395, 397 (1989). In light of the uncontradicted facts concerning Equitable’s disability income insurance business, the Insurance Commissioner was fully warranted in finding that the issues regarding the disability income insurance policies are moot. The Human Relations Commission and NOW argue that, even if the matter of Equitable’s disability income insurance business “is technically moot, ‘if the issue is recurring, likely to be raised again, and involves a matter of important public concern,’ a court will decide the question.” (Human Relations Commission’s brief as appellant, at 45, quoting from Kindley v. Governor of Maryland, 289 Md. 620, 631 , 426 A.2d ⁶¹⁴ 908, 915 (1981)). 9 Nevertheless, a court ordinarily will not express an opinion on a moot issue.

It is only in “ ‘rare instances,’ ” and “ ‘only where the urgency of establishing a rule of future conduct in matters of important public concern is imperative and manifest, will there be justified a departure from the general rule and practice of not deciding academic questions.’ ” Mercy Hosp. v. Jackson, 306 Md. 556, 562-563 , 510 A.2d 562, 565 (1986), quoting Lloyd v. Supervisors of Elections, 206 Md. 36, 43 , 111 A.2d 379, 382 (1954). Moreover, application of the general rule against resolving moot issues is particularly appropriate where, as in this case, the moot issues involve constitutional questions. This “Court’s established policy is to decide constitutional issues only when necessary.” Mercy Hosp. v. Jackson, supra, 306 Md. at 565 , 510 A.2d at 566 , and cases there cited. See State v. Lancaster, 332 Md. 385 , 404 n. 13, 631 A.2d 453 , 463 n. 13 (1993) (“this Court has regularly adhered to the principle that we will not reach a constitutional issue when a case can properly be disposed of on a non-constitutional ground”).

Finally, those “rare instances” when this Court has expressed its views on moot issues have involved proceedings which originated in a court. The present case involves judicial review of an administrative proceeding before the Insurance Commissioner. Consequently, under the Insurance Code, Art. 48A, § 40, and the Administrative Procedure Act, Code (1984, 1993 Repl.Vol., 1994 Cum.Supp.), § 10-222(h)(3) of the State Government Article, the issue before a reviewing court is whether the Insurance Commissioner’s finding of mootness, and his refusal to express an opinion on a moot controversy, involve an error of law, or are unsupported by substantial evidence, or are “arbitrary or capricious.” For the reasons previously set forth, the Commissioner’s finding of mootness and his refusal to express an opinion on moot issues were not ⁶¹⁵ legally erroneous, were supported by the evidence, and were not arbitrary or capricious. We note that the Insurance Commissioner’s determination that the issues regarding disability income insurance are moot removed all allegations of discrimination in underwriting from the case.

The mootness finding also removed from the case any allegations of racial discrimination. The contentions of discrimination in underwriting and racial discrimination made by the Human Relations Commission and NOW concerned only disability income insurance policies. No issues of discrimination in underwriting or racial discrimination have ever been raised with respect to Equitable’s life insurance policies.

III

In his opinion, the Insurance Commissioner stated that he was not authorized “to declare” a statute unconstitutional. On the other hand, the Commissioner determined that he “cannot consider Article 48A in a vacuum and ignore the supreme law of this State, the Constitution of Maryland, particularly Article 46 of the Declaration of Rights. If the statutory provisions of the Insurance Code cannot be harmonized with the ERA, then the Commissioner must so find.” The circuit court, however, took the position that an administrative agency or official was required to apply pertinent statutory provisions even if, in the opinion of the agency or official, application of the statutory provisions would clearly be unconstitutional. The view of the Insurance Commissioner, and not that of the circuit court, is in accordance with present Maryland law.

It is sometimes said, as Judge Kaplan did at an earlier stage of this controversy and as the Insurance Commissioner stated, that an administrative agency or official has no authority “to declare” a statute unconstitutional. This is a correct statement of Maryland law in the sense that an administrative agency or official is not empowered to render a declaratory judgment with respect to the constitutionality of a statute. ⁶¹⁶ The Maryland Declaratory Judgment Act, Code (1974, 1995 Repl.Vol.), § 3-403 of the Courts and Judicial Proceedings Article, vests jurisdiction to render declaratory judgments only in certain courts which are established under Article IV of the Maryland Constitution. Although the Maryland Administrative Procedure Act authorizes some state administrative agencies to issue a “Declaratory Ruling” as to how the agency would apply a regulation, order, or statute under specified circumstances, the authorization does not extend to a “Declaratory Ruling” concerning the application of a constitutional provision. See § 10-304 of the State Government Article.

Nevertheless, the lack of authority to issue a declaratory judgment or ruling on the constitutionality of a statute does not mean that an administrative agency or official, in the course of rendering a decision in a matter falling within the agency’s jurisdiction, must ignore applicable law simply because the source of that law is the state or federal constitution. The Insurance Code, Art. 48A, § 25(4)(a), in giving the Insurance Commissioner “jurisdiction to enforce by administrative action the laws of the State as they relate to the underwriting or rate setting practices of an insurer,” has no exclusion for constitutional law. The Administrative Procedure Act’s requirement that state administrative agencies must render conclusions of law in contested cases contains no exception for constitutional issues. See §§ 10-205(b)(2), 10-220, and 10-221(b) of the State Government Article.

In fact, under both the Insurance Code and the Administrative Procedure Act, a constitutional error in an administrative decision, as well as “other error of law,” is included among the grounds for judicial review of administrative decisions. Art. 48A, § 40(4); § 10-222(h) of the State Government Article. 10 ⁶¹⁷ In addition, the Insurance Commissioner, like judges, the Governor, members of the General Assembly, and others elected or appointed to “any office of profit or trust,” must take an oath to “support the Constitution” of Maryland and to “execute [his or her] office ... according to the Constitution ... of this State.... ” Article I, Section 9, of the Constitution of Maryland. See Marbury v. Madison, 1 Cranch 137, 180 , 2 L.Ed. 60, 74 (1803) (public official’s taking a prescribed oath to discharge his duties “agreeably to the constitution ” requires that the official apply the Constitution, and not a statute, when the two are in conflict). The Insurance Commissioner in the present case was obligated to apply the relevant law, and the relevant law does not exclude Article 46 of the Maryland Declaration of Rights. 11 Moreover, over the past fifty years, when many statutes have provided for quasi-judicial administrative proceedings to resolve the innumerable controversies and problems associated with our modern age, this Court has consistently taken the position that constitutional issues, including the constitutionality of applying particular statutes, can and often must be raised and initially decided in the statutorily prescribed administrative proceedings.

For example, in Hoffman v. City of Baltimore, 197 Md. 294, 305-306 , 79 A.2d 367, 372 (1951), a property owner contended that the application of a zoning statute to his property was ⁶¹⁸ unconstitutional and that, for this reason, he was entitled to an exception. This Court noted the view expressed in some earlier cases that an administrative agency cannot pass upon the constitutionality of a statute and then held that the zoning board could grant an exception “by holding the ordinance pro tanto invalid,” and its ruling on the constitutional issue would be fully subject to judicial review. In Baltimore v. Seabolt, 210 Md. 199 , 123 A.2d 207 (1956), property owners again contended that the application of a zoning statute to their property would be unconstitutional. Instead of invoking and exhausting the statutorily prescribed administrative and judicial review remedy, the property owners brought a declaratory judgment action.

The trial court rendered a declaratory judgment that “the Zoning Ordinance resulted in a taking of the appellees’ property without compensation” and that it was not necessary for the property owners to invoke and exhaust the administrative procedure “where a constitutional question was involved.” 210 Md. at 203 , 123 A.2d at 208 . This Court, however, reversed, ordered that the declaratory judgment action be dismissed, and held that the property owners were required to have the constitutional issue resolved in the statutorily prescribed administrative and judicial review proceedings. The Court repeated the statement from the Hoffman case that the administrative agency, if it agreed with the property owners’ constitutional argument, was authorized to grant “ ‘exceptions by holding the ordinance pro tanto invalid.’ ” Baltimore v. Seabolt, supra, 210 Md. at 207 , 123 A.2d at 210 . A similar case was Poe v. Baltimore City, 241 Md. 303 , 216 A.2d 707 (1966), where the property owners, contending that the application of a zoning statute to their property was unconstitutional, brought a declaratory judgment action without having exhausted their administrative remedy.

They argued “that they had no effective remedy before the Board [of Municipal and Zoning Appeals], because the Board is an administrative agency, not a court, and only a court can decide a question of constitutional law.” 241 Md. at 307 , 216 A.2d at 407 . This Court, in affirming the trial court’s order sustain ⁶¹⁹ ing a demurrer to the bill of complaint, flatly rejected the argument that the Board could not initially decide the constitutional issue. In an opinion by Judge Oppenheimer, the Court stated ( 241 Md. at 307-308 , 216 A.2d at 709 ): “It is particularly within the expertise of an administrative body such as the Board to marshal and sift the evidence presented in a hearing ... and to make an administrative finding as to whether, on the evidence, the application of the ordinance to the property involved deprives the owner of any reasonable use of it. Such a finding is subject to court review on the question of constitutionality, as a matter of law.” This Court noted that, in some other jurisdictions, courts have held that administrative agencies cannot rule on the constitutionality of statutes and that, therefore, it is not necessary for a litigant to invoke and exhaust the administrative remedy.

The Court then stated ( 241 Md. at 311 , 216 A.2d at 711 ): “In this state, however, we regard it as settled law on principle and authority that, absent most unusual circumstances, ... the court will not take jurisdiction even though a constitutional issue is raised, until the administrative remedy has been exhausted.” In accord with the Seabolt and Poe cases, where a party is not challenging the validity of a statute as a whole, but is arguing that the statute as applied in a particular situation is unconstitutional, and where the legislature has provided an administrative remedy, this Court has regularly held that the constitutional issue must be raised and decided in the statutorily prescribed administrative and judicial review proceedings. See, e.g., Goldstein v. Time-Out Family Amusement, 301 Md. 583, 591 , 483 A.2d 1276, 1281 (1984) (with regard to the argument that “neither the Comptroller nor the Maryland Tax Court can decide constitutional issues,” this Court simply stated that “Time-Out’s argument is without merit”); Prince George’s Co. v. Blumberg, 288 Md. 275, 293 , 418 A.2d 1155, 1165 (1980), cert. denied, 449 U.S. 1083 , 101 S.Ct. 869 , 66 L.Ed.2d 808 (1981) (“This Court has held on many occasions, when faced with a claim of an ... unconstitutional taking of ⁶²⁰ property, that such issues must still go through the administrative process”); State Dep’t of A. & Tax. v. Clark, 281 Md. 385, 404 , 380 A.2d 28, 39 (1977) (“a court shall not take jurisdiction unless the administrative remedies have been exhausted. This is so even though a constitutional issue has been raised, when that issue goes to the application of a general statute to a particular situation”); Arnold v. Prince George’s Co., 270 Md. 285, 294, 297 , 311 A.2d 223, 227-229 (1973) (requiring that a property owner, arguing that a statute was unconstitutional as applied to his property, first exhaust his administrative remedy); Hartman v. Prince George’s Co., 264 Md. 320, 323-325 , 286 A.2d 88, 89-90 (1972) (reviewing numerous cases holding that constitutional arguments must be made in the statutorily prescribed administrative proceedings); Gingell v. County Commissioners, 249 Md. 374, 376 , 239 A.2d 903, 904 (1968) (reaffirming the principle of the Poe case, and rejecting the plaintiffs argument that she need not exhaust her administrative remedy on the theory that only a court may declare the statute unconstitutional); Tanner v. McKeldin, 202 Md. 569, 577 , 97 A.2d 449, 453 (1953); Bogley v. Barber, 194 Md. 632, 641 , 72 A.2d 17, 20-21 (1950). In addition, there are numerous cases in which the constitutionality of a statute, as applied to particular circumstances, has been resolved in the statutorily prescribed administrative proceedings and judicially reviewed on the merits by this Court.

See, e.g., Sapero v. City of Baltimore, 235 Md. 1, 3 , 200 A.2d 74, 76 (1964) (“we think the Board ... [was] justified in concluding that a denial of the variance would not amount to a taking in the constitutional sense”); Baltimore v. Sapero, 230 Md. 291, 297 , 186 A.2d 884, 887 (1962); Frankel v. City of Baltimore, 223 Md. 97, 101, 103-104 , 162 A.2d 447, 449, 451 (1960) (administrative agency erred by not holding ordinance unconstitutional as applied); Marino v. City of Baltimore, 215 Md. 206, 221 , 137 A.2d 198, 204 (1957); Serio v. City of Baltimore, 208 Md. 545, 552-553 , 119 A.2d 387, 390 (1956) (agency correctly resolved “the claim of the appellants as to the unconstitutional and invalid impingement of the ordinance”); City of Baltimore v. Cohn, 204 Md. 523, 530-533 , 105 ⁶²¹ A.2d 482, 486-487 (1954) (agency erred in not holding ordinance invalid as applied);