Maryland Aggregates Ass'n v. State
ORDER For reasons to be stated in an opinion later to be filed, it is this 7th day of November, 1994, ORDERED, by the Court of Appeals of Maryland, a majority of the Court concurring, that the judgment of the Circuit Court for Anne Arundel County is affirmed; and it is further ORDERED, that the injunction issued on August 16, 1994 by the Circuit Court for Anne Arundel County prohibiting the State from implementing the statute in question while the appeal was pending be, and it is hereby, vacated, and it is further ORDERED, that the mandate shall issue forthwith and the costs shall be paid by the appellants. ELDRIDGE, Judge. This case presents several constitutional challenges to Maryland Code (1973, 1989 Repl.Vol., 1994 Cum.Supp.), §§ 7-6A-10.1 and 7-6A-10.2 of the Natural Resources Article, which 663 relate to the appropriation of water in connection with certain surface mining operations. I. Any individual, business, or governmental entity in Maryland “which may appropriate or use any waters of the State, whether surface water or groundwater,” must first obtain a water appropriation permit from the Department of Natural Resources.
Code (1973, 1990 Repl.Vol.), § 8-802 of the Natural Resources Article. 1 A surface mine must have a water appropriation permit to pump away water that would otherwise accumulate in the mine. The pumping process is known as “dewatering,” 2 Surface mine dewatering removes groundwater, rainfall and other surface water runoff from the surface mine pit. If the rock to be mined lies beneath the water table, the mine operator must pump away a sufficient quantity of water to lower the water table around the pit. Several Maryland counties include areas of karst terrain.
In karst terrain, pockets of limestone and other carbonate rocks are slowly dissolved by water flowing or percolating underground, leaving behind underground cavities and channels. 3 Increasing the rate of water flow, for example by pumping, accelerates the formation of underground channels and of sinkholes. 664 The legislation challenged in this case, §§ 7-6A-10.1 and 7-6A-10.2 of the Natural Resources Article, is intended to protect landowners in karst terrain from the effects of surface mine dewatering. During the legislative process, the General Assembly received testimony from over fifty individuals, both lay and expert, and considered a number of technical reports concerning the effects of surface mine dewatering in karst terrain. Groups opposed to the proposed legislation, principally enterprises involved in surface mining, and groups pressing for its adoption, principally individual property owners and community associations from regions close to quarries, each engaged in vigorous lobbying. Ultimately, the General Assembly enacted the legislation regulating surface mine dewatering in karst terrain.
The Act contains the following legislative findings (§ 7-6A-10.1(a)): “[I]n certain regions of the State dewatering of surface mines located in karst terrain may significantly interfere with water supply wells and may cause in some instances sudden subsidence of land, known as sinkholes. Dewatering in karst terrain may result in property damage to landowners in a definable zone of dewatering influence around a surface mine.” The Act protects “affected property owners in Baltimore, Carroll, Frederick, and Washington Counties where karst terrain is found,” by establishing “zones of dewatering influence around surface mines____” § 7-6A-10.1(b). The Department of Natural Resources must establish the zone of dewatering influence when it issues the water appropriation permit for dewatering to the operator of a surface mine affected by the Act. § 7-6A-10.2(b)(1). The Department must scientifically determine the area affected by the mine’s pumping activity, based on “local topography, watersheds, aquifer limits, and other hydrogeologic factors____” § 7-6A-10.2(b)(2).
The statute contemplates that the zone of dewatering influence may extend beyond the land owned by the mining 665 operation itself. Accordingly, subsection (c)(1) of § 7-6A-10.2 provides that, within the zone of dewatering influence, mine operators must “[r]eplace, at no expense to the owner of real property that is affected by the surface mine dewatering, a water supply that fails as a result of declining ground water levels.... ” An exception is made where the failure of the water supply is not caused by the surface mine operation (§ 7-6A-10.2(f)): “The Department may not require a [mine operator] to replace water supplies, as provided in this section, if the [mine operator] demonstrates to the Department by clear and convincing evidence that the proximate cause of the loss of water supply is not the result of pit dewatering.” The Act also establishes a scheme to compensate landowners for sinkhole damage that occurs within the zone of dewatering influence. Subsection (c)(2) of § 7-6A-10.2 provides as follows: “Upon a determination by the Department of proximate cause after the [mine operator] has received proper notice and an opportunity to respond and provide information, [the mine operator shall] pay monetary compensation to the affected property owner or repair any property damage caused as a result of the sudden subsidence of the surface of the land.” Furthermore, the Act directs the Department to create, by regulations, an administrative process for resolving claims brought under the Act, § 7-6A-10.2(h), and requires the Department to “provide opportunity for a contested case hearing,” § 7-6A-10.2(g).
II
This litigation was commenced by Maryland Aggregates Association, Inc., an organization that represents the interests of the surface mining industry, and by the individual operators of hard rock quarries located in karst terrain in Baltimore, 666 Carroll, Frederick and Washington Counties. 4 Maryland Aggregates filed suit in the Circuit Court for Anne Arundel County on July 1, 1991, the day after the Act took effect, naming as defendants the State of Maryland, the Governor, the Attorney General, and the Secretary of the Department of Natural Resources. 5 Maryland Aggregates sought a declaratory judgment holding the Act unconstitutional on a number of grounds and an injunction against the enforcement and implementation of the Act. In the circuit court, Maryland Aggregates contended that the Act violated numerous provisions of the Constitution of the United States and of the Constitution of Maryland. It contended that the Act violated its right to “substantive due process” because there was no rational basis for the legislation. It argued that the Act violated equal protection principles by making an unreasonable distinction between quarry operators and other large water users.
Maryland Aggregates also claimed that the statute denied equal protection of the laws to the residents of the nineteen Maryland counties unaffected by the Act. The plaintiffs argued that the Act interfered with mine operators’ constitutional rights to jury trial and deprived them of their property without just compensation. They contended that the statutory procedures for establishing zones of dewatering influence and for resolving claims under the Act were constitutionally deficient. Finally, Maryland Aggregates argued that the Act impermissibly granted judicial powers to an administrative agency in violation of the separation of powers requirement set forth in Article 8 of the Maryland Declaration of Rights.
The State responded to Maryland Aggregates’ constitutional arguments on their merits, and also contended that the State 667 of Maryland, the Governor and the Attorney General were not proper parties to the litigation. On March 9, 1992, the Circuit Court for Anne Arundel County granted Maryland Aggregates’ motion for an interlocutory injunction against the enforcement of the Act. On March 7, 1994, however, the circuit court granted summary judgment in favor of the defendants, and filed a declaratory judgment rejecting all of Maryland Aggregates’ constitutional contentions. The circuit court also agreed that the Secretary of the Department of Natural Resources was the only proper defendant. 6 Maryland Aggregates appealed to the Court of Special Appeals and, before any proceedings in the intermediate appellate court, petitioned this Court for a writ of certiorari, raising the same constitutional objections to the Act that it had pressed at trial.
We granted Maryland Aggregates’ petition. 335 Md. 341 , 643 A.2d 441 (1994). Meanwhile, in light of the circuit court’s declaratory judgment in favor of the State, the Department of Natural Resources had begun to enforce the Act. Aggrieved by the Department’s activity, Maryland Aggregates filed in the circuit court a further motion for an injunction against enforcement of the Act pending appeal. On August 16, 1994, observing that the case had been set for argument in this Court in early November 1994, the circuit court granted Maryland Aggregates’ motion and enjoined enforcement of the Act pending appeal.
This Court deferred action on the State’s subsequent motion to dissolve, suspend, modify or stay the injunction until oral argument took place on November 6, 1994. On November 7, 1994, this Court entered an order affirming the judgment of the Circuit Court for Anne Arundel County and vacating the injunction. We now set forth the reasons for our earlier order. 668 III. Maryland Aggregates first contends that the Act violates the Due Process Clause of the Fourteenth Amendment to the federal constitution and Article 24 of the Maryland Declaration of Rights because, according to Maryland Aggregates, there was no rational basis for its enactment. 7 The General Assembly found as a fact that “dewatering of surface mines located in karst terrain may significantly interfere with water supply wells and may cause in some instances sudden subsidence of land, known as sinkholes.” § 7-6A-10.1(a) of the Natural Resources Article.
Nonetheless, Maryland Aggregates maintains that it should be given an opportunity to prove at trial that quarries cause neither water supply failures nor sinkholes, and that “there was no evil at hand for correction” by the Legislature. (Maryland Aggregates’ brief at 11). Maryland Aggregates characterizes its disagreement with the legislative findings as a dispute of material fact which should have precluded the entry of summary judgment. The circuit court, however, held that “[t]he Defendants are not required to prove the wisdom of the statute as a matter of law ... but only that there is a rational basis for the statute as a matter of law.” Since the court held that “[t]he Maryland General Assembly had a substantial rational basis to pass the Act,” it granted summary judgment for the State on the so-called substantive due process contention.
This Court in Bowie Inn v. City of Bowie, 274 Md. 230, 236 , 335 A.2d 679, 683 (1975), in rejecting a similar “substantive due process” challenge to economic regulatory legislation, emphasized that “[t]he wisdom or expediency of a law 669 adopted” by a legislative body “is not subject to judicial review, and the law will not be held void if there are any considerations relating to the public welfare by which it can be supported.” Accord: Dawson v. State, 329 Md. 275, 283-284 , 619 A.2d 111, 115 (1993); Ogrinz v. James, 309 Md. 381, 394-395 , 524 A.2d 77, 84 (1987); Montgomery County v. Fields Road, 282 Md. 575, 583-585 , 386 A.2d 344, 348-349 (1978); Edgewood Nursing Home v. Maxwell, 282 Md. 422, 426-427 , 384 A.2d 748, 751 (1978); Governor v. Exxon Corp., 279 Md. 410, 423-429 , 370 A.2d 1102, 1110-1113 (1977), aff'd, 437 U.S. 117 , 98 S.Ct. 2207 , 57 L.Ed.2d 91 (1978); Westchester West No. 2 v. Mont. Co., 276 Md. 448, 454-455 , 348 A.2d 856, 860 (1975), and cases there cited. See also General Motors Corp. v. Romein, 503 U.S. 181 , 112 S.Ct. 1105, 1112 , 117 L.Ed.2d 328, 340 (1992); Ferguson v. Skrupa, 372 U.S. 726 , 83 S.Ct. 1028 , 10 L.Ed.2d 93 (1963); Williamson v. Lee Optical Co., 348 U.S. 483 , 75 S.Ct. 461 , 99 L.Ed. 563 (1955). In Bowie Inn v. City of Bowie, supra, 274 Md. 230 , 335 A.2d 679 , as in the present case, industry representatives whose lobbying efforts had failed to prevent the enactment of legislation adverse to their interests, later challenged the legislation in court.
Concluding that the plaintiffs in Bowie Inn were, “in effect, asking us to substitute our judgment concerning the wisdom of [the challenged ordinance] for that of the City Council of Bowie,” this Court sustained the ordinance against the due process challenge. 274 Md. at 236 , 335 A.2d at 683 . More recently the Supreme Court, in rejecting a similar due process challenge to a Michigan statute, stated (General Motors Corp. v. Romein, supra, 112 S.Ct. at 1112 , 117 L.Ed.2d at 340 ): “Having now lost the battle in the Michigan Legislature, petitioners wished to continue the war in court. Losing a political skirmish, however, in itself creates no ground for constitutional relief.” Likewise, having failed to convince the General Assembly of the merits of its position, Maryland Aggregates seeks to present its theories in court. Nevertheless, “ ‘courts do not 670 substitute their social and economic beliefs for the judgment of legislative bodies, who are elected to pass laws.’ ” Governor v. Exxon Corp., supra, 279 Md. at 425 , 370 A.2d at 1111 , quoting Ferguson v. Skrupa, supra, 372 U.S. at 730 , 83 S.Ct. at 1031 , 10 L.Ed.2d at 97 .
In particular, factual determinations made by a legislative body are not ordinarily subject to review in the courts. Even in the absence of legislative findings, “the legislature is presumed to have acted within constitutional limits so that if any state of facts reasonably can be conceived that would sustain the constitutionality of the statute, the existence of that state of facts as a basis for the passage of the law must be assumed.” Edgewood Nursing Home v. Maxwell, supra, 282 Md. at 427, 384 A.2d at 751 . As Judge Cawood for the circuit court observed in the present case, the General Assembly heard testimony from geological experts, from representatives of the mining industry, and from concerned citizens and environmental groups. After briefly summarizing the conflicting testimony, Judge Cawood pointed out as follows: “Needless to say, we do not decide whether Plaintiffs’ or Defendants’ experts are more likely to be correct.
The proper forum for that is the Legislature. In passing almost any law, one can argue whether it has a rational basis, and which experts were really correct or really told the truth.” The circuit court properly deferred to the General Assembly’s legislative findings. In Bowie Inn v. City of Bowie, supra, this Court explained why judicial review of legislative decision making must be narrowly circumscribed. Quoting from Justice Frankfurter’s concurring opinion in American Federation of Labor v. American Sash & Door Co., 335 U.S. 538, 553 , 69 S.Ct. 258, 265 , 93 L.Ed. 222, 230-231 (1949), the Court in Bowie Inn stated as follows ( 274 Md. at 238 , 335 A.2d at 684 ): “ ‘Even where the social undesirability of a law may be convincingly urged, invalidation of the law by a court debilitates popular democratic government.
Most laws dealing with economic and social problems are matters of trial and error. That which before trial appears to be demonstrably 671 bad may belie prophesy in actual operation. It may not prove good, but it may prove innocuous. But even if a law is found wanting on trial, it is better that its defects should be demonstrated and removed than that the law should be aborted by judicial fiat.
Such an assertion of judicial power deflects responsibility from those on whom in a democratic society it ultimately rests—the people.’ ” See also Governor v. Exxon Corp., supra, 279 Md. at 428-429 , 370 A.2d at 1113 . In light of these principles, Maryland Aggregates’ disagreement with the factual findings of the General Assembly does not create an issue of fact which is material to the Act’s validity under the due process clauses of the federal and state constitutions. As the circuit court pointed out, the question is not whether the General Assembly was correct; it is whether it was entitled to reach the conclusions embodied in the statute. The surface mine dewatering act establishes a compensation scheme for affected landowners that obviously bears a rational relationship to a problem that the General Assembly identified for redress.
Under these circumstances, there is simply no basis upon which a court could conclude that the Act was beyond the authority of the General Assembly. The circuit court properly granted summary judgment in favor of the State with respect to Maryland Aggregates’ substantive due process argument.
IV
Maryland Aggregates next contends that the Act employs classifications that violate the Equal Protection Clause of the Fourteenth Amendment and the equal protection component of Article 24 of the Maryland Declaration of Rights. 8 In particular, Maryland Aggregates complains that 672 “quarries have been unfairly singled out” from other large consumers of groundwater in a manner that violates equal protection principles. 9 “When social or economic legislation is at issue, the Equal Protection Clause allows the States wide latitude ... and the Constitution presumes that even improvident decisions will eventually be rectified by the democratic processes.” Cleburne v. Cleburne Living Center, Inc., 473 U.S. 432, 440 , 105 S.Ct. 3249, 3254 , 87 L.Ed.2d 313, 320 (1985). Thus, classifications drawn by economic regulatory legislation are 673 ordinarily permissible under equal protection principles if they bear a rational relationship to a legitimate state interest. 10 The Supreme Court recently explained the scope of rational basis review under the Equal Protection Clause in F.C.C. v. Beach Communications, Inc., 113 S.Ct. 2096, 2101 , 124 L.Ed.2d 211, 221 (1993), as follows: “[E]qual protection is not a license for courts to judge the wisdom, fairness, or logic of legislative choices. In areas of social and economic policy, a statutory classification that neither proceeds along suspect lines nor infringes fundamental constitutional rights must be upheld against equal protection challenge if there is any reasonably conceivable state of facts that could provide a rational basis for the classification____ This standard of review is a paradigm of judicial restraint.” See also Nordlinger v. Hahn, 112 S.Ct. 2326 , 120 L.Ed.2d 1 (1992); Gregory v. Ashcroft, 501 U.S. 452 , 111 S.Ct. 2395 , 115 L.Ed.2d 410 (1991). While this Court has not hesitated to strike down discriminatory economic regulation that lacked any reasonable justification, e.g., Verzi v. Baltimore County, 333 Md. 411 , 635 A.2d 967 (1994), and Kirsch v. Prince George’s County, 331 Md. 89 , 626 A.2d 372 (1993), we nevertheless accord to the decisions of legislative bodies a strong presumption of constitutionality.
In Murphy v. Edmonds, 325 Md. 342, 367 , 601 A.2d 102, 114 (1992), we quoted the summary of rational basis review set forth in Whiting-Turner Contract. Co. v. Coupard, 304 Md. 340, 352 , 499 A.2d 178, 185 (1985), which stated that a statute 674 “can be invalidated only if the classification is without any reasonable basis and is purely arbitrary: Further, a classification having some reasonable basis need not be made with mathematical nicety and may result in some inequality. If any state of facts reasonably can be conceived that would sustain the classification, the existence of that state of facts at the time the law was enacted must be assumed.” See also Briscoe v. P.G. Health Dep’t, 323 Md. 439, 448-449 , 593 A.2d 1109, 1113-1114 (1991); Hargrove v. Board of Trustees, 310 Md. 406, 423 , 529 A.2d 1372, 1380 (1987), cert. denied, 484 U.S. 1027 , 108 S.Ct. 753 , 98 L.Ed.2d 766 (1988); Broadwater v. State, 306 Md. 597, 607 , 510 A.2d 583, 588 (1986); State v. Wyand, 304 Md. 721, 726-727 , 501 A.2d 43, 46 (1985), cert. denied, 475 U.S. 1095 , 106 S.Ct. 1492 , 89 L.Ed.2d 893 (1986); Department of Transportation v. Armacost, 299 Md. 392, 409 , 474 A.2d 191, 199 (1984); State v. Good Samaritan Hospital, 299 Md. 310, 328 , 473 A.2d 892, 901 , appeal dismissed, 469 U.S. 802 , 105 S.Ct. 56 , 83 L.Ed.2d 7 (1984). According to Maryland Aggregates, the Act deprives the operators of surface mines of the equal protection of the laws because it fails to regulate other large appropriators of water.
In light of the foregoing legal principles, it is apparent that this constitutional challenge to the Act lacks merit. The legislative distinction between quarries and other large water users is not an irrational one. The General Assembly received evidence that quarries have certain unique features with respect to water use. Quarries pump large amounts of water at a constant pace.
Quarries cannot interrupt their pumping if emergency water conditions arise, since the pit might flood. Moreover, since a quarry must pump water where it wishes to extract rock, a quarry cannot move its pumping site if its appropriation of groundwater begins to damage the surrounding area. Furthermore, even if surface mines were not distinguishable from other water users on the basis of such physical facts, the Legislature could have limited the statute to surface mines for other reasons. The General Assembly might have concluded, for example, that surface mines constituted a discrete and 675 manageable group around which to develop and test an effective compensation scheme, or that a mining operation would be more likely than another water user to have relevant hydrogeological data at hand.
It is not necessary to identify the reasons that actually prompted the General Assembly to legislate as it did. Plainly, the decision to regulate the effects of surface mine dewatering can be justified on a number of grounds. The Act does not violate constitutional guarantees of equal protection, and the circuit court correctly granted summary judgment in favor of the State with regard to Maryland Aggregates’ equal protection contentions. V. Maryland Aggregates next argues that the Act violates the constitutional principle of separation of powers. 11 The statute requires a mine operator to replace failed water supplies within the zone of dewatering influence, unless the operator can demonstrate to the Department of Natural Resources that pit dewatering did not cause the water supply failure. § 7-6A-10.2(c)(1) and (f) of the Natural Resources Article.
Furthermore, mine operators must compensate property owners for sinkhole damage within the zone of dewatering influence if the Department determines that the damage was caused by surface mine dewatering. § 7-6A-10.2(c)(2) of the Natural Resources Article. Maryland Aggregates objects to this method of determining its liability under the Act, arguing that “the Legislature, in authorizing the Department of Natural Resources to sit as the sole fact finder and judge in a dispute between neighboring property owner and quarry operator, has displaced the judicial branch of government in violation of Article 8.” (Maryland Aggregates’ brief at 26). The circuit court rejected this argument, observing, inter alia, that “the right of the Legislature to delegate powers to 676 administrative agencies has been recognized in this State for over 125 years.” It is true, as Maryland Aggregates suggests, that “any attempt to authorize an administrative agency to perform what is deemed a purely judicial function or power, would violate the separation of powers principle.” Shell Oil Co. v. Supervisor, 276 Md. 36, 47 , 343 A.2d 521, 527 (1975). This is so because the judicial power in Maryland is vested entirely and exclusively in the courts enumerated in Art. IV, § 1, of the Maryland Constitution. 12 See generally Shell Oil Co. v. Supervisor, supra, 276 Md. at 44-47, 343 A.2d at 526-527 , and cases there cited.
Nevertheless, Maryland Aggregates’ Article 8 challenge to the Act lacks merit. It is clear from our cases that the power vested in the Department of Natural Resources to determine, in the first instance, factual issues relating to compensation under the Act is not judicial power but quasi-judicial power which may properly be exercised by the Department. This Court has long recognized that the tasks of making factual determinations and resolving disputes are not reserved exclusively to the judicial branch of government. In Shell Oil Co. v. Supervisor, supra, 276 Md. at 45, 343 A.2d at 526 , we quoted the following language from this Court’s opinion in Solvuca v. Ryan & Reilly Co., 131 Md. 265, 282 , 101 A. 710, 715 (1917): “What is a judicial function does not depend solely on the mental operation by which it is performed or the importance of the Act.
In solving this question, due regard must be had to the organic law of the state and the division of powers of government. In the discharge of executive and legislative duties, the exercise of discretion and judgment of the highest order is necessary, and matters of the greatest weight and importance are dealt with. It is not enough to 677 make a function judicial that it requires discretion, deliberation, thought, and judgment.” Later, in Attorney General v. Johnson, 282 Md. 274, 286 , 385 A.2d 57, 64 , appeal dismissed, 439 U.S. 805 , 99 S.Ct. 60 , 58 L.Ed.2d 97 (1978), the Court stated as follows: “As we have already dismissed the notion that judicial power in the constitutional sense is necessarily exercised whenever facts are determined and legal principles are applied to the facts found, we must ascertain what qualities imbue such determinations with judicial power. While we have not, until today, explicitly stated the proposition, we agree with those courts which have said that the essence of judicial power is the final authority to render and enforce a judgment, ... and we think that conclusion is implicit from our own case law.” In modern times, the complexity of governmental obligations has resulted in increasing reliance upon administrative agencies for the performance of both rulemaking and adjudicatory functions.
This Court has recognized the delegation to administrative agencies of both legislative and adjudicatory power as legitimate, “as the separation of powers concept may constitutionally encompass a sensible degree of elasticity and should not be applied with doctrinaire rigor.” Dep’t of Nat. Res. v. Linchester, 274 Md. 211, 220 , 334 A.2d 514, 521 (1975). See also Christ v. Department, 335 Md. 427, 441 , 644 A.2d 34, 40 (1994). Indeed, as Chief Judge Murphy explained for the Court in County Council v. Investors Funding, 270 Md. 403 , 426—443, 312 A.2d 225, 238-247 (1973), the principal focus of constitutional inquiry into the exercise of powers by administrative agencies is the limitation of agency authority, rather than the nature of the authority exercised.
Chief Judge Murphy explained as follows ( 270 Md. at 436 , 312 A.2d at 243 ): “The constitutional doctrine of separation of powers ... does not itself inhibit the delegation to an administrative agency of a blend of executive or legislative powers with powers judicial in nature; the determining factor is not so much the specific powers granted to the administrative 678 agency, but rather the relationship of the courts to the exercise of that power.” Consequently, an agency in the executive branch may ordinarily perform adjudicatory functions in harmony with the principle of separation of powers provided that there is an opportunity for judicial review of the agency’s final determination. See, e.g., Attorney General v. Johnson, supra, 282 Md. at 286-288, 385 A.2d at 64-65 ; County Council v. Investors Funding, supra, 270 Md. at 432-437 , 312 A.2d at 241-243 ; Insurance Comm’r v. Nat’l Bureau, 248 Md. 292, 299-301 , 236 A.2d 282, 286-287 (1967); Burke v. Fidelity Trust Co., 202 Md. 178, 187-189 , 96 A.2d 254, 260 (1953); Johnstown Coal & Coke Co. v. Dishong, 198 Md. 467, 473-474 , 84 A.2d 847, 850 (1951); Heaps v. Cobb, 185 Md. 372, 379 , 45 A.2d 73, 76 (1945). Moreover, Maryland’s courts have inherent power to correct
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