Montgomery County v. Broadcast Equities, Inc.

ELDRIDGE, Judge. The petitions for a writ of certiorari in this action for a declaratory judgment and injunctive relief present three questions pertaining to the authority of a charter county to prohibit employment discrimination. Montgomery County’s petition seeks review of the Court of Special Appeals’ holding that the Montgomery County employment discrimination ordinances, which allow the County’s Commission on Human Relations to award monetary damages in addition to back pay, conflict with the state statute prohibiting employment discrimination, which restricts the type of damages that can be awarded by the Maryland Commission on Human Relations. Broadcast Equities, Inc.’s cross-petition asks us to decide whether our holding in McCrory Corp. v. Fowler, 319 Md. 12 , 570 A.2d 834 (1990), invalidated the entire Montgomery County statutory scheme prohibiting employment discrimination or merely invalidated the provision which purported to create a new cause of action in the circuit courts.

Alternatively, Broadcast Equities contends that, even if the McCrory holding was limited to the provision relating to a new circuit court cause of action, the ⁴⁴¹ entire Montgomery County statutory scheme concerning employment discrimination violates Article XI-A of the Maryland Constitution because it does not constitute a “local law.” 1 The instant dispute between Montgomery County and Broadcast Equities also involves numerous other issues which have not been presented to us and which are to be resolved in a separate adjudicatory administrative proceeding now pending before the Montgomery County Commission on Human Relations. We shall not, under the circumstances of this case, reach the three questions that have been presented by the certiorari petitions. Instead, all of the issues should be resolved in a single case, namely in the administrative proceeding now pending before the Montgomery County Commission on Human Relations and in any circuit court action that may be filed seeking judicial review of a final decision by the County’s Commission on Human Relations. 2 I. Before setting forth the facts and arguments in the present controversy, it would be useful to review some of the Montgomery County and the state statutory provisions concerning employment discrimination. ⁴⁴² Article I, Chapter 27, of the Montgomery County Code (1994 ed.), establishes the Montgomery County Commission on Human Relations and provides for its jurisdiction. The initial sections of Article I, Chapter 27, §§ 27-1 through 27-7B, recite the County’s general anti-discrimination policy and set forth the administration, procedures, and duties of the Commission.

The remainder of Article I is divided into four divisions, with each addressing a specific area of discrimination, namely in places of public accommodation, in real estate matters, in employment, and racial and religious intimidation. The case at bar concerns the third division, employment, which is codified at §§ 27-17 through 27-26. Section 27-18(b) of the Montgomery County Code defines “employer” as “any person, wherever situated, who employs more than six (6) employees within the county, ... or who recruits individuals within the county to apply for employment within the county or elsewhere____” Section 27-19(a) makes it an unlawful employment practice for an employer to “fail or refuse to hire or fail to accept the services of or to discharge any individual or otherwise to discriminate against any individual with respect to compensation, terms, conditions or privileges of employment” because of, inter alia, the “sexual orientation of any individual.” Section 27 — 19(f), however, contains an exception to this prohibition as follows: “(f) The provisions of this division that prohibit discrimination in employment on the basis of sexual orientation do not apply to: (1) Positions of employment that are related to religious activities of an employer if: a. The employer is: 1.

A religious corporation, association, or society; 2. An organization that is affiliated with a religious corporation, association, or society; and b. The primary purpose of the religious activity is not commercial; and (2) Any position of employment in a religious school.” ⁴⁴³ Section 27-25 of the Montgomery County Code authorizes the awarding of compensatory damages and other relief for employment discrimination, providing in relevant part as follows: “Upon a finding by the commission panel that there has been a violation of this division, it may order, in its discretion, and if appropriate, the hiring, reinstatement or upgrading of employees, with or without back pay;.... The commission panel may ... also make the following monetary awards determined by the commission panel from evidence of record as the actual damages, costs or losses involved or in such amounts as may be specified below: (a) The complainant may be awarded damages not exceeding all income that would have been received from an employer or any other source of income, whether or not that employer or source of income is a respondent hereunder....

This category shall also include the monetary equivalent of all sick leave, annual leave, retirement benefits, annuities, health benefits and every other normal and usual employee benefit, lost during the period of violation; provided, however, back pay liability shall not accrue from a date more than two (2) years prior to the filing of a charge with the commission. Interim earnings, unemployment compensation and/or amounts earnable with reasonable diligence by the person or persons discriminated against shall operate to reduce the back pay otherwise allowable.” Finally, § 27-7(k) generally authorizes the Commission to award various kinds of monetary relief in any case of unlawful discrimination, in addition to the awards provided for in § 27-25 specifically relating to employment discrimination. Section 27-7(k)(4) also provides as follows: “(4) Damages may also be awarded to compensate complainant or respondent for humiliation and embarrassment suffered in an amount determined by the commission panel to be appropriately and reasonably warranted considering all of the circumstances, but in ⁴⁴⁴ no event shall the amount be in excess of one thousand dollars ($1,000.00).” Article I, §§ 2A-11 and 27-7(g) of the Montgomery County Code authorize an action in the Circuit Court for Montgomery County for judicial review of a final decision by the Commission. Section 2A-11 also authorizes an appeal to the Court of Special Appeals from the Circuit Court’s decision in such an action. 3 The State’s anti-discrimination statutes, Code (1957, 1998 Repl.Vol., 1999 Supp.), Art. 49B, §§ 1-39, establish the Maryland Commission on Human Relations and set forth its jurisdiction with regard to discrimination in housing, public accommodations, and employment.

In contrast to the employment discrimination provisions in the Montgomery County Code, the state law, although it prohibits employment discrimination on the basis of an individual’s race, gender, national origin, and certain other characteristics, does not prohibit employment discrimination because of sexual orientation. See Art. 49B, §§ 14 and 16. Another difference between the state and county statutes is that the authority granted to the Maryland Human Relations Commission in the “Enforcement Powers of Commission,” Art. 49B, §§ 9-13, is more limited. In proceedings involving employment discrimination, the Maryland Human Relations Commission may award only breach of contract-type damages, including back pay, for a period up to 36 months.

Article 49B, § 11(e), provides in relevant part as follows: “The hearing examiner shall issue and cause to be served upon the respondent an order requiring the respondent to cease and desist from the discriminatory acts and to take affirmative action to effectuate the purposes of the particular subtitle. If the respondent is found to have engaged in or to be engaging in an unlawful employment practice charged in the complaint, the remedy may include, but is ⁴⁴⁵ not limited to, reinstatement or hiring of employees, with or without back pay (payable by the employer, employment agency, or labor organization, as the case may be, responsible for the unlawful employment practice), or any other equitable relief that is deemed appropriate. The award of monetary relief shall be limited to a 36-month period. The complainant may not be awarded monetary relief for losses incurred between the time of the Commission’s final determination and the final determination by the circuit court or higher appellate court, as the case may be.” This Court has indicated that the above-quoted language does not authorize the Commission to award “tort damages” such as “punitive damages” or compensatory “damages for ‘pain of mental anguish and humiliation.’ ” Makovi v. Sherwin-Williams Co., 316 Md. 603, 625-626 , 561 A.2d 179, 190 (1989).

Consequently, in employment discrimination cases, the Montgomery County Commission on Human Relations is authorized by local law to award monetary damages for humiliation and embarrassment up to $1,000, whereas the Maryland Commission on Human Relations, under Art. 49B, § 11(e), is not authorized to award monetary damages for humiliation and embarrassment.

II

From 1990 to 1993, Broadcast Equities, Inc., a Virginia corporation and a subsidiary of The Christian Broadcasting Network Inc., operated a radio station in Silver Spring, in Montgomery County, Maryland. In January 1990, the station employed Richard J. Mangus as a senior producer and “on call” control board operator. Mangus’s employment was terminated on November 29, 1990. In October 1991, Mangus filed a complaint with the Montgomery County Commission on Human Relations, in which he alleged that he was discriminated against and his employment terminated because of his sexual orientation.

The Commission then notified Broadcast Equities of Mangus’s complaint, and Broadcast Equities responded by denying any discrimination. ⁴⁴⁶ In the summer and fall of 1994, the Commission contacted Broadcast Equities again, stating that its investigation was nearing completion and that the evidence gathered to date supported a finding that unlawful discrimination had occurred in the termination of Mangus’s employment. The Commission also asked Broadcast Equities to contact the Commission if it was interested in pursuing a negotiated settlement, which Broadcast Equities declined. On March 23, 1995, the Commission issued a written determination that the record supported Mangus’s allegations and that reasonable grounds existed to believe that Broadcast Equities had engaged in an unlawful employment practice, as defined in Chapter 27 of the Montgomery County Code. After subsequent conciliation efforts proved unsuccessful, the Commission’s executive director certified the March 1995 determination for a public hearing.

The County Attorney filed a Statement of Charges with the Commission, seeking on behalf of Mangus back pay in the amount of $134,592.24 and damages for humiliation and embarrassment in the amount of $1,000.00. On August 28, 1996, before the Commission’s public hearing was scheduled to take place, Broadcast Equities instituted the present action by filing in the Circuit Court for Montgomery County a complaint for a declaratory judgment and injunctive relief against Montgomery County, the Montgomery County Commission on Human Relations, the Commission Hearing Panel, a Commission Hearing Examiner, the County Attorney, and an Assistant County Attorney (hereafter collectively referred to as “the County”). Broadcast Equities did not, however, name Mangus as a defendant, and he has not been a party to this case. In its complaint, Broadcast Equities asserted that the enforcement of Chapter 27 of the Montgomery County Code against Broadcast Equities would violate its “freedom of association, freedom of religion, and freedom of speech, all as guaranteed by the” First Amendment to the United States Constitution, and would infringe its right to equal protection of the laws and due process of law protected by the Fourteenth Amendment to the United States Constitution.

Broad ⁴⁴⁷ cast Equities sought, under the Civil Rights Act of 1871, 42 U.S.C. § 1988 , a declaratory judgment and injunctive relief. Broadcast Equities also requested a declaration that the enforcement of Chapter 27 against it would violate its rights to equal protection of the laws, due process of law, freedom of association, freedom of religion, and freedom of speech in violation of the Maryland Constitution. In addition, Broadcast Equities contended that the employment discrimination provisions of the Montgomery County Code had been held unconstitutional in McCrory Corp. v. Fowler, supra, 319 Md. 12 , 570 A.2d 834 , that these provisions violated Article XI-A of the Maryland Constitution, and that the local statutory provisions were inconsistent with state law in several respects. Finally, the employer claimed that the administrative hearing before a panel of the Montgomery County Commission on Human Relations had been scheduled in violation of the time requirements of the Montgomery County Code and that, alternatively, the administrative proceeding is “barred by the equitable doctrine of laches.... ” In addition to a declaratory judgment and a permanent injunction, Broadcast Equities requested “an interlocutory injunction enjoining defendants from proceeding with the hearing currently scheduled for September 23, 1996, until such time as all matters raised in this Complaint are addressed by this Court.” Attached to the complaint as exhibits were Mangus’s complaint filed with the Commission on Human Relations and various other documents in connection with the pending administrative proceeding.

In answering the complaint, the defendants asserted that the Circuit Court “should refuse to exercise jurisdiction over this matter because Plaintiff has failed to exhaust its administrative remedies.” The defendants also claimed that the constitutional issues were not ripe for judicial decision, stated that the administrative hearing had been timely scheduled, denied all of Broadcast Equities’ contentions relating to the validity of the Montgomery County statutory scheme dealing with employment discrimination, and requested a declaratory ⁴⁴⁸ judgment that all of the applicable provisions of Chapter 27 of the Montgomery County Code were valid and enforceable. Following motions for summary judgment, a hearing was held before the Circuit Court for Montgomery County. Thereafter the Circuit Court granted the defendants’ motion for summary judgment, denied the requests for injunctive relief, and rendered a declaratory judgment. 4 The court declared that all of the federal constitutional issues and the action under 42 U.S.C. § 1983 “are premature” and “are not ripe for judicial review, as plaintiff has not been denied any property right or liberty interest protected by the Constitution and laws of the United States.” The Circuit Court further declared that, as to the state constitutional issues paralleling the federal constitutional issues (ie., those involving equal protection, due process, freedom of association, freedom of religion, ahd freedom of speech), Broadcast Equities must first exhaust its administrative remedies. The Circuit Court did reach the issues concerning the scope of the holding in McCrory Corp. v. Fowler, supra, 319 Md. 12 , 570 A.2d 834 , concerning Art. XI-A of the Maryland Constitution, and relating to the alleged inconsistency between the pertinent Montgomery County ordinances and state law.

The court declared that the applicable Montgomery County statutory scheme had not been invalidated in the McCrory case, that the challenged employment discrimination ordinances were local laws authorized by Article XI-A of the Maryland Constitution and the Express Powers Act, Maryland Code (1957, 1998 Repl.Vol.), Art. 25A, and that the challenged ordinances did not conflict with Art. 49B of the Maryland Code or with any other state law. Upon Broadcast Equities’ appeal, the Court of Special Appeals affirmed in part and reversed in part. Broadcast v. ⁴⁴⁹ Montgomery County, 123 Md.App. 363 , 718 A.2d 648 (1998). Although recognizing that exhaustion of administrative remedies is not ordinarily required before a court will consider claims under the federal constitution and 42 U.S.C. § 1983 , 5 the Court of Special Appeals nevertheless pointed out that a federal constitutional claim must be “ripe” for judicial decision before a court will entertain an action to resolve the controversy. 6 The Court of Special Appeals agreed with the Circuit Court’s holding that Broadcast Equities’ federal constitutional claims are not ripe for judicial decision.

Broadcast v. Montgomery County, supra, 123 Md.App. at 398-405 , 718 A.2d at 665-668 . Furthermore, the Court of Special Appeals affirmed the other portions of the Circuit Court’s judgment with one exception. That exception related to the provisions of the Montgomery County Code authorizing the Commission on Human Relations, upon a finding of employment discrimination, to award monetary relief in addition to back pay. The intermediate appellate court held “that, to the extent that ⁴⁵⁰ County Code, §§ 27-7 and 27-25 authorize the Commission to award monetary relief in addition to back pay, they conflict with State law [ie., Art. 49B, § 11(e) ] and are thus invalid.” Broadcast v. Montgomery County, supra, 123 Md.App. at 398 , 718 A.2d at 664 .

As indicated at the beginning of this opinion, the County filed in this Court a petition for a writ of certiorari which raised a single issue, namely whether the provisions of the Montgomery County Code which authorize the Montgomery County Commission on Human Relations, upon a finding of employment discrimination, to award damages beyond back pay, conflict with Art. 49B, § 11(e), of the Maryland Code. Broadcast Equities filed a cross-petition for a writ of certiora-ri, presenting only two issues. They are: “1. Whether this Court in McCrory Corp. v. Fowler, 319 Md. 12 , 570 A.2d 834 (1990), declared that Montgomery County’s anti-employment discrimination ordinance was unconstitutional? “2.

Whether Sections 27-17 through 27-26 of the Montgomery County Code are ‘local laws’ under Article XI-A of the Maryland Constitution?” We granted both the petition and the cross-petition. Montgomery County v. Broadcast Equities, 352 Md. 305 , 721 A.2d 712 (1998). Our order granting the petition and cross-petition neither narrowed nor enlarged the scope of the issues presented.

III

The parties, by presenting to us only three state law questions relating to Article XI-A of the Maryland Constitution and Art. 49B, § 11(e), of the Maryland Code, have substantially limited the issues in this action for declaratory and injunctive relief. 7 To the extent that the other issues ⁴⁵¹ which have been raised may ultimately have to be reached, the parties have acquiesced in the holdings of the courts below that those issues must be resolved in the pending administrative proceeding and in any judicial action which may be brought to review a final decision by the Montgomery County Commission on Human Relations. Thus, the various federal constitutional issues, the state constitutional issues paralleling the federal constitutional issues, and the timeliness issue under the Montgomery County Code and the doctrine of laches, will have to be resolved, if at all, in the pending administrative proceeding and in any future judicial review action. 8 Moreover, as the complainant Richard J. Mangus has not been made a party to this action for declaratory and ⁴⁵² injunctive relief, any resolution by us of the three questions presented, adverse to Mangus’s interests, would not be binding upon him in the pending administrative proceeding. It should be emphasized that this case is not a statutory or common law action for monetary or other affirmative relief which is independent of, and a concurrent alternative to, the administrative and judicial review remedy provided by Chapter 27 of the Montgomery County Code. Cf.

Zappone v. Liberty Life, 349 Md. 45, 61-62, 65-68 , 706 A.2d 1060, 1068, 1070-1072 (1998); Md.-Nat’l Cap. P. & P. Comm’n v. Crawford, 307 Md. 1, 19-31 , 511 A.2d 1079, 1088-1094 (1986). Instead, the defendant in the Montgomery County administrative proceeding, prior to a final administrative decision and on the eve of the administrative hearing, is attempting to use the Circuit Court’s declaratory and equitable jurisdiction solely to abort that administrative proceeding. Under such circumstances, the administrative remedy is primary, with the parties normally being required to exhaust that remedy before resorting to the courts.

See, e.g:, Josephson v. Annapolis, 353 Md. 667, 675-678 , 728 A.2d 690, 693-695 (1998); Zappone v. Liberty Life, supra, 349 Md. at 63-66 , 706 A.2d at 1069-1071 ; Md. Reclamation v. Harford County, 342 Md. 476, 493 , 677 A.2d 567 , 576 (1996) (“this Court has ‘ordinarily construed the pertinent [legislative] enactments to require that the administrative remedy be first invoked and followed’ before resort to the Courts”). Although the parties in their certiorari petitions raised no issue concerning the need to exhaust the administrative remedy, as previously noted, supra n. 7, this is an issue which the Court will address sua sponte. The Court of Special Appeals addressed the exhaustion question with regard to some of the state constitutional and state law issues, and concluded that this action fell within an exception to the normal exhaustion rule. The intermediate appellate court relied upon Harbor Island Marina v. Calvert Co., 286 Md. 303 , 407 A.2d 738 (1979).

At the oral argument before us, when the exhaustion question with regard to the non-federal ⁴⁵³ issues was raised by members of the Court, the parties agreed with the Court of Special Appeals that the action fell within the Harbor Island Marina v. Calvert Co. exception to the exhaustion requirement. We, however, disagree. Harbor Island Marina v. Calvert Co. was a declaratory judgment action challenging on its face the validity of a local zoning ordinance enacted by the County Commissioners which zoned and placed restrictions on certain marine facilities such as piers, mooring piles, floats, etc. The plaintiff, which was the operator of a marina subject to the zoning ordinance, instituted an administrative zoning proceeding by filing an application with the appropriate county officials “for a zoning revision,” Harbor Island, 286 Md. at 306 , 407 A.2d at 740 . After a final administrative decision denying its application, Harbor Island filed in the Circuit Court for Calvert County an action for judicial review of the administrative decision.

While the judicial review action was pending, Harbor Island filed in the Circuit Court for Calvert County a declaratory judgment action raising the single issue of whether state law authorized “the county’s power to zone and regulate tidal waters and wetlands within its borders.” 286 Md. at 307 , 407 A.2d at 740 . Thereafter, in Harbor Island’s declaratory judgment action, the Circuit Court declared that Calvert County did have the power under state law to enact the challenged zoning ordinance. Harbor Island took an appeal from the declaratory judgment “and, at the same time, dismissed its [action for judicial review of] the administrative agency’s denial of its application for a zoning revision.” Ibid. 9 The Court of Special Appeals, in an unreported opinion, vacated the declaratory judgment and ordered that the declaratory judgment action be dismissed on the ground that the issue of the County’s authority to enact the zoning ordinance should have been decided in ⁴⁵⁴ the statutorily authorized judicial review action. 10 The Court of Special Appeals, inter alia, relied upon Fertitta v. Brown, 252 Md. 594 , 251 A.2d 212 (1969), where, on somewhat similar facts, this Court affirmed an order