Montgomery County v. Walsh

Murphy, C. J., delivered the opinion of the Court. The Montgomery County Financial Disclosure Ordinance (the County Ordinance), codified as Chapter 20A of the Montgomery County Code (1974), requiring designated elected and appointed officials and employees of the County to disclose certain of their financial interests, was declared “unconstitutional, null and void in its entirety” by the Circuit Court for Montgomery County (Moorman, J.) on October 10, 1974. The court found that the Ordinance was in conflict with a public general law of the State and as such was void; that it violated the constitutional right of privacy of County employees, their spouses and children; that it violated the constitutional right of County employees to hold public employment; that the Ordinance was so vague and indefinite that it violated the due process provisions of the federal and state constitutions; that it denied certain employees the equal protection of the law; and that it violated other constitutional provisions and was in conflict with the Montgomery County Charter and the Code of Professional Responsibility. We granted certiorari prior to decision by the Court of Special Appeals on the appeal taken to that court by the County so that we could promptly ⁵⁰⁵ consider the significant public issues presented in the case.

See Maryland Code (1974) Courts and Judicial Proceedings Article, § 12-201. The seeds of this controversy are found in the 1973 enactment of a public general law by the General Assembly of Maryland requiring certain elected and appointed officials within the State government, and candidates for such elective offices, to file statements with the Secretary of State publicly disclosing designated financial interests held by them. 1 That Act (Chap. 3, 1st Sp. Sess. of 1973), now codified as Code (1971 Repl. Vol., 1974 Cum.

Supp.) Art. 33, §§ 29-1 through 29-11 (the State Act), contains a legislative declaration in § 29-1 “that our system of representative government is dependent in part upon the people maintaining the highest trust in their public officers ... that the people have a right to be assured that the financial interests of holders of and candidates for public office present no conflict with the public trust ... [and that] the purpose of this act [is] to promote the continued trust and confidence of the people of the State of Maryland in the integrity of their public officers.” The State Act requires in § 29-5 that the declarant annually disclose his interests in real property; interests in all corporations; interests in other entities doing business with the State; the receipt of certain gifts; a schedule of all offices, directorships and salaried employment with corporations or other entities doing business with the State; a schedule of all liabilities (other than retail credit accounts) owing to persons doing business with the State, including liabilities incurred by the declarant’s spouse or children if he was involved in the transaction giving rise to the liability; and a list of all members of the declarant’s immediate family who were employed by the State in any capacity. The ⁵⁰⁶ term “interest” is broadly defined in § 29-2 (a) of the State Act to embrace any legal or equitable interest owned or held by the declarant, in whole or in part, jointly or severally, directly or indirectly, at any time during the reporting period; it does not include, however, an interest in a time or demand deposit in a financial institution. Nor does it include an interest in an insurance or endowment policy or a fixed dollar annuity contract. The phrase “[bjusiness with the State” is defined in § 29-2 (d) to mean “any one or any combination of sales, purchases, leases or contracts to, from, or with the State, or any agency thereof, involving consideration of . . . $10,000 or more on a cumulative basis during . . . [the reporting period].” Section 29-6 provides that with respect to interests in real property and corporations and in other entities doing business with the State, any interest held by the spouse or children of the declarant shall be considered his interest if directly or indirectly controlled by him.

Section 29-6 (b) provides, in effect, that the declarant must disclose an interest held by a business entity only if he holds a 30% or greater interest in it. Section 29-10 provides that each county of the State, the City of Baltimore and each incorporated municipality “[is] hereby directed to enact public financial disclosure requirements with respect to any local officials of their respective jurisdictions, including candidates for election to such offices, the standards and requirements of which must be substantially those required by this subtitle for State officials and candidates . . . .” Section 29-11 authorizes the Governor, by Executive Order, to require persons holding “State positions compensated in whole or in part by public funds and noncompensated gubernatorial appointees” to disclose annually, as public records, “such relevant information concerning their financial affairs as he may deem necessary to promote the continued trust and confidence of the people in the executive branch of the State government.” By Executive Order dated April 1, 1974, the Governor ⁵⁰⁷ promulgated an extensive schedule of nonelective “offices and positions” in the State government and required that persons occupying such offices and positions make the same public financial disclosure as that mandated by the provisions of the State Act. The Montgomery County Financial Disclosure Ordinance was enacted by the County Council on June 18, 1974 and became effective on June 28, 1974. It recited in § 20A-1 that it was the purpose of the Ordinance “to implement at the local level the provisions of Chapter 3 of the 1973 Acts of the General Assembly and to promote the continued trust and confidence of the citizens of Montgomery County in the integrity of their public officers.” Section 20A-3 of the Ordinance requires persons holding, and candidates for the elective offices of County Executive, County Surveyor and members of the County Council and County Board of Education, and persons holding or appointed to other designated “offices and positions” in the County, to annually make a public disclosure of their financial interests, and those of their spouses and dependent children, in accordance with the dictates of § 20A-5.

That section requires that the declarant disclose, for the reporting period, interests in real property; interests in any business entity or profession; “all other assets of every nature whatsoever in excess of $1000 each not otherwise reported”; all income received by the declarant and its source, together with a statement of the gross income of the declarant’s spouse and dependent children, “including the source of any portion of such income which may reasonably be expected to have a direct or indirect effect on the activities with the County of the . . . [declarant]”; a schedule of certain gifts received; a schedule of all offices and directorships held in any corporation or other business entity and the amount of compensation received therefrom; a schedule of all liabilities (other than retail accounts) in excess of $1,000 owing to any person doing business with the County or who is regulated, inspected or licensed by the County, including such liabilities incurred by the declarant’s spouse or children if the declarant was involved in the transaction giving rise to the liability; and a ⁵⁰⁸ list of all members of the declarant’s immediate family employed in any capacity by the County. Section 20A-6 provides that with respect to interests in real property and in any business entity or profession, any interest héld by the declarant’s spouse, father, mother, brother, sister, or child shall be considered his interest if directly or indirectly controlled by him at any time during the reporting period. Section 20A-6 (b) provides, in effect, that the declarant must disclose any interest in a business entity in which he held a 30% or greater equity interest during the reporting period. “Interest” is defined in § 20A-2 (a) of the Ordinance in terms similar to those contained in the State Act, except that it includes an interest of over $1,000 in a time or demand deposit, in a financial institution; it also includes an interest in an insurance or endowment policy or fixed dollar annuity contract. In addition to persons required by § 20A-3 to disclose their financial interests, § 20A-3 (c) makes provision for the filing of financial disclosure statements by “[a]ny other official, employee or appointee” of the County where it is determined by designated authority that it is “desirable to promote the trust and confidence of the citizens of the County ....” Financial disclosure statements filed under this subsection need not be made public. § 20A-4 (f).

Provision is also made in § 20A-3 (d) of 'the Ordinance for excusing certain employees, otherwise subject to the filing requirements, from filing disclosure statements where “it is determined [by the appointing authority] that the duties of the position are such that the likelihood of the incumbent’s involvement in a conflict-of-interest situation is remote or if the duties of the position are at such a level of responsibility that the submission of such sworn [disclosure] statement is not necessary because of the degree of supervision and review over the incumbent.” The County Attorney is required by the Ordinance to render advisory opinions “with respect to any matter ... concerning the applicability” of the law, to investigate and process complaints of alleged violations ánd, in the event of a failure to comply> to seek from the circuit court a writ of ⁵⁰⁹ mandamus ordering the violator “to take such actions as will cure the violation.” §§ 20A-7 and 20A-8. Upon issuance of a writ of mandamus, the County Director of Finance or other payroll disbursing officer is directed to suspend the violator’s salary, pending full compliance with the Ordinance. On July 29, 1974, a Bill of Complaint for Declaratory Judgment and Injunctive Relief was filed against the County and various of its officials by seventeen County employees who were required to file the financial disclosure statements mandated by the Ordinance; they were joined in the suit by the spouses of two of the complaining employees. The bill alleged in forty-five particulars that the Ordinance was unconstitutional and void on its face because it conflicted with, or was violative of, numerous provisions of the Federal and State Constitutions, the Maryland Declaration of Rights, the Montgomery County Charter, and specified public general laws of the State.

No evidence was introduced and both parties moved for summary judgment. On October 10, 1974, the court declared the Ordinance unconstitutional and null and void in its entirety and granted summary judgment accordingly. (1) Conflict between the Ordinance and the State Act. The lower court concluded that the Ordinance conflicted with § 29-10 of the State Act because it does not contain, as mandated by that section, “standards and requirements” which are “substantially those required [by the State Act] for State officials and candidates.” The court held that under the purpose clause of the State Act, disclosure requirements are imposed only upon “public officers” or “public officials,” and that the provisions of the Ordinance, expressly enacted to implement the State Act, cannot lawfully be applied to persons like the complaining County employees who do not hold any “office.” Additionally, the court said: “... the State law is more limited in scope than Chapter 20A.

Its coverage is more restrictive and ⁵¹⁰ its requirements concerning disclosure are fewer. The Court therefore finds that Chapter 20A is invalid and void because it does not set forth standards and requirements which are ‘substantially’ those required by the State law.” Section 29-10 of the State Act, as originally proposed, merely “empowered” counties to enact public financial disclosure requirements; as finally enacted, § 29-10’ “hereby directed” the counties to “enact public financial disclosure requirements . . . the standards and requirements of which must be substantially those required by . . . [the State Act].” That section also provides that “the express powers contained and enumerated in Articles 23A, 25A and 25B of the .. . [Maryland] Code .. . are intended and shall be deemed to incorporate and include the power and authority contained in this section.” Nothing in the State Act compels the conclusion that it was intended to be limited in application to persons who, in a strict legal sense, hold “public office”; indeed, § 29-11 expressly provides to the contrary and indicates a legislative intention to cover a broad range of governmental officials and employees who exercise significant governmental authority, whether they be elected or appointed. See 58 Op. Att’y Gen. 343 (1973).

We think the provisions of § 29-10 plainly constitute a legislative mandate that the counties shall enact public disclosure laws which, at a minimum, contain standards and requirements substantially like those imposed by the State Act. 2 Persons other than public officers and officials are covered under both the State Act and the Ordinance, and although there are some differences in the quantum and manner of disclosure required by the two laws, we think the Ordinance does contain public financial disclosure standards and requirements which, in the sense contemplated by the legislature, are “substantially” those required by the State Act for State officials and candidates. Accordingly, we hold that the lower ⁵¹¹ court erred in finding that the Ordinance was void because it was in conflict with the State Act. See County Council for Montgomery County v. Montgomery Association, Inc., 264 Md. 52 , 333 A. 2d 596 (1975). (2) The Constitutional Right to Privacy.

The lower court found that the Ordinance “unduly intrudes into the rights of privacy of County employees, their spouses and children, by requiring the disclosure of relevant and irrelevant private financial affairs and is not limited to only such disclosure regarding holdings as might be affected by duties of a particular public office or employment.” The court said: “The financial disclosure requirements of Chapter 20A before this Court encompass indiscriminately persons holding employment for Montgomery County and its offices, agencies and departments, regardless of the nature or scope of activity of such offices, agencies, and departments. The defendant County Council made no effort to relate the disclosure to financial dealings or assets which might be expected to give rise to a conflict of interest; that is, to such dealings which might have some rational connection with or bearing upon, or which might be affected by, the functions, duties, responsibilities or jurisdictions of any particular employee.” Finding that the restrictions in the Ordinance were broader than those reasonably required to effectuate its purpose, the court held that it violated the 1st, 4th, 9th and 14th amendments to the federal constitution and Articles 2, 7, 8, 19, 23, 35, 40, and 45 of the Maryland Declaration of Rights. In so concluding, the court relied upon Supreme Court cases recognizing a constitutional right of privacy, Roe v. Wade, 410 U. S. 113 , 93 S. Ct. 705 , 35 L.Ed.2d 147 (1973); Griswold v. Connecticut, 381 U. S. 479 , 85 S. Ct. 1678 , 14 L.Ed.2d 510 ⁵¹² (1965), the decision of the Supreme Court of California in City of Carmel-by-the-Sea v. Young, 2 Cal. 3d 259 , 85 Cal. Rptr. 1 , 466 P. 2d 225 (1970), and Maryland cases recognizing invasion of privacy as a tort, Beane v. McMullen, 265 Md. 585 , 291 A. 2d 37 (1972); Carr v. Watkins, 227 Md. 578 , 177 A. 2d 841 (1962).

To overridé an infringement of this right of privacy, the court said that the County had to demonstrate a compelling interest, show that its financial disclosure Ordinance was “necessary and not merely rationally related to, the accomplishment of permissible [County] policy,” and prove that this policy could not be achieved by alternative and narrower means. See Shelton v. Tucker, 364 U. S. 479 , 81 S. Ct. 247 , 5 L.Ed.2d 231 (1960). After examining various provisions of the Ordinance, the court, relying primarily on the latter ground, struck down the Ordinance as violative of the constitutional right of privacy. 3 It is, of course, no longer open to question that the right of privacy is protected by the federal constitution and that where*the right is applicable, regulation limiting it must be justified by a “compelling state interest.” Doe v. Commander, 273 Md. 262 , 329 A. 2d 35 (1974). The Supreme Court emphasized in Roe v. Wade, supra, 410 U. S. at 152 , however, that only personal rights that can be deemed “fundamental” or “implicit in the concept of ordered liberty” are included in the constitutional guarantee of personal privacy.

Stated another way, “[i]f the right of privacy means anything, it is the right of the individual, married or single, to be free from unwarranted ⁵¹³ governmental intrusion into matters so fundamentally affecting a person as the decision whether to bear or beget a child.” Eisenstadt v. Baird, 405 U. S. 438, 453 , 92 S. Ct. 1029, 1038 , 31 L.Ed.2d 349, 362 (1972). If these pronouncements hint that the constitutional right of privacy is of limited scope and not to be lightly applied, Paris Adult Theatre I v. Slaton, 413 U. S. 49 , 93 S. Ct. 2628 , 37 L.Ed.2d 446 (1973), makes it explicit. In that ease, the Court referred to the right of privacy, as developed in Griswold and Wade , as the “right to intimacy” and said that “[t]his privacy right encompasses and protects the personal intimacies of the home, the family, marriage, motherhood, procreation, and child rearing.” 413 U. S. at 65-66 . It is thus clear that the Supreme Court has yet to extend the right to privacy much beyond the context of intimate relationships.

It is not, therefore, coextensive with every intrusion actionable under the tort of invasion of privacy, nor does it protect rights merely “important” and not “fundamental.” Cf. San Antonio Independent School District v. Rodriguez, 411 U. S. 1 , 93 S. Ct. 1278 , 36 L.Ed.2d 16 (1973). That protecting the confidentiality of individual financial matters is important cannot be doubted; that it is a “fundamental” right “implicit in the concept of ordered liberty” is anything but certain. Thus, in Illinois State Employees Association v. Walker, 57 Ill. 2d 512 , 315 N.E.2d 9 (1974), Cert. den. sub. nom., Troopers Lodge No. 41 v. Walker, 419 U. S. 1058 , 95 S. Ct. 642 , 42 L.Ed.2d 656 (1974), a case involving the constitutionality of financial disclosure requirements in Illinois, the Supreme Court of that state rejected the contention that employees’ rights to privacy were implicated, saying: “They [the employees] argue: ‘If, in Griswold , the State could not invade the zone of privacy that a married couple may enjoy on top of the mattress, we might well question what right the State has to invade the zone of privacy that a married couple might enjoy in what they have tucked inside the mattress.’ In our opinion this argument debases the ⁵¹⁴ Griswold opinion, and we find it completely unacceptable.

We do not deal in this case with the most intimate relationships of husband and wife or with an effort by the State to control their decisions as to whether and when to have their children. We deal rather with a requirement that the financial affairs of persons who are paid by the public and who occupy positions of high public trust be disclosed.” 315 N.E.2d at 16 . 4 But even if an individual has legitimate expectations of privacy of his personal finances, California Bankers Association v. Shultz, 416 U. S. 21 , 94 S. Ct. 1494 , 39 L.Ed.2d 812 (1974) (concurring opinion of Justices Powell and Blackmun), we think the County Ordinance facially demonstrates a compelling interest necessary to the accomplishment of County policy to which is subordinated any resulting infringement on the right of privacy. The State Act and Ordinance have a common purpose — to assure that citizens maintain the highest trust and confidence in their public officials. These laws are concerned not just with actual conflicts of financial interest, but also with appearances. 5 More than a mere collection of prohibitions aimed solely at public officials, such legislation seeks to foster a climate of honesty perceptible by the public at large.

It can hardly be denied that the County has a compelling interest, on behalf of its citizens, in ensuring that ⁵¹⁵ its public officials and employees act with honesty, integrity, and impartiality in all their dealings, and that their private financial holdings and transactions present no conflict of interest between the public trust and private interests. For these reasons, it is readily apparent, as stated by Mr. Justice Douglas, who authored Griswold for the Court, that the County has “an undeniably strong interest in placing beyond question the integrity of its public service.” Troopers Lodge No. 41 v. Walker, supra, 95 S. Ct. at 643 (concurring in denial of certiorari). In the first of five decided cases dealing with the constitutionality of public financial disclosure laws, the court in City of Carmel-by-the-Sea v. Young, supra, struck down a statute on the ground that it constituted an overbroad intrusion into the private financial affairs of persons seeking to hold, or holding, public office. The court’s major objection to the statute was that “[n]o effort is made to relate the disclosure to financial dealings or assets which might be expected to give rise to a conflict of interest.” 466 P. 2d at 232 .

The court noted, however, that the legislature, in a properly drawn statute, could constitutionally require “a broad disclosure of assets, income or receipts relevant to the duties and functions of a public officer or employee.” 466 P. 2d at 234 . In Stein v. Howlett, 52 Ill. 2d 570 , 289 N.E.2d 409 (1972), appeal dismissed, 412 U. S. 925 , 93 S. Ct. 2750 , 37 L.Ed.2d 152 (1973), it was held that a statute requiring public officials to publicly disclose various business connections and interests was not overbroad as an unconstitutional invasion of privacy; the court there found that the statute promoted a compelling governmental interest which was paramount to the rights of the individual. In Fritz v. Gorton, 83 Wash. 2d 275 , 517 P. 2d 911 , appeal dismissed, 417 U. S. 902 , 94 S. Ct. 2596 , 41 L.Ed.2d 208 (1974), a statute requiring detailed public disclosure of the financial affairs of elected officials was found to promote a compelling state interest and not to constitute an unwarranted intrusion into the privacy of candidates or public officeholders. The court there noted: ⁵¹⁶ “. ..

The right of the electorate to know most certainly is no less fundamental than the right of privacy. When the right of the people to be informed does not intrude upon intimate personal matters which are unrelated to fitness for public office . .. [citing Griswold v. Connecticut, supra], the candidate or office holder may not complain that his own privacy is paramount to the interests of the people.” 517 P. 2d at 925 . In Illinois State Employees Association v. Walker, supra, no constitutional deprivation of the right of privacy was found to exist by reason of a governor’s executive order compelling designated state employees to make a detailed financial disclosure, which included filing their income tax returns with their disclosure statements. In County of Nevada v. MacMillen, 11 Cal. 3d 662 , 114 Cal.

Rptr. 345 , 522 P. 2d 1345 (1974), the Supreme Court of California, revisiting the ground it had originally tested in City of Carmel, was called upon to review a new conflict of interest and financial disclosure law covering both elected and appointed officials and requiring detailed disclosure of many financial interests. The court found that the new law “seems specially tailored to meet and satisfy the primary concerns of our Carmel ruling”; that it “appears to accomplish its legitimate aims in a less intrusive, and considerably more limited, fashion”; and that it “contains sufficient assurances [on its face] that unnecessary intrusions into personal privacy will not occur.” 114 Cal. Rptr. at 349-50 . Citing Fritz and Stein , the court said: “These cases support our view that neither the right to privacy, nor the right to seek and hold public office, must inevitably prevail over the right of the public to an honest and impartial government.” 114 Cal.

Rptr. at 351 . While the facts and regulatory