People's Counsel v. Public Service Commission

Wilner, J., delivered the opinion of the Court. People’s Counsel to the Public Service Commission pursues this appeal from an order of the Commission granting a rate increase to taxicabs operating in Baltimore City. His complaint is that, in deciding to grant the increase, the Commission looked at only one item of expense — the cost of gasoline — and did not consider the overall financial condition of the taxicab companies. As a result, he says, the Commission failed to act in accordance with Md. Code Ann. ⁷¹⁷ art. 78, §§ 69 and 84, and passed an order "that is without statutory authority, arbitrary and capricious, made upon unlawful procedure, and unsupported by substantial evidence on the record considered as a whole.” These arguments were presented to the Circuit Court of Baltimore City without success.

The Commission believes that the lower court acted properly in rejecting People’s Counsel’s complaint. In a cross-appeal, it argues also that, because People’s Counsel failed to comply with Maryland Rule B12 in prosecuting his appeal to the Circuit Court, that court should never have entertained the appeal in the first place. We shall affirm the judgment entered below. (1) Commission’s Cross-Appeal The Commission’s order, from which the initial appeal was taken, was issued December 11, 1980.

People’s Counsel took his appeal to the Circuit Court of Baltimore City on January 8, 1981, by sending to the clerk of that court an order for appeal and a "Petition On Appeal.” See Maryland Rule B2. Presumably in an attempt to comply with Maryland Rule B7a, the Commission’s Executive Secretary, on February 2, 1981, sent the record in the case to: "Mr. Elmer O. Harris, Clerk Circuit Court of Baltimore City Room 425, Civil Court Building 111 N. Calvert Street Baltimore, Maryland 21202” Mr. Harris was not the clerk of the Circuit Court; nor was Room 425 the office of that court. Mr. Harris was the clerk of the Baltimore City Court, and Room 425 was the office of the clerk of the Baltimore City Court. Notwithstanding that the Executive Secretary’s covering letter clearly noted that the case was docketed in the Circuit Court (and even made reference to the correct docket and file numbers), Mr. Harris or one of his assistants redocketed the appeal in the Baltimore City Court and proceeded to recaption all of the pleadings accordingly. ⁷¹⁸ The next day — February 3, 1981 — Mr. Harris sent to People’s Counsel a "Notice Sent In Accordance With Maryland Rule B-12,” advising that on February 3 he had received "from the Administrative Agency, the record in the above captioned case.” The case was captioned properly in all respects save one: It showed the case as being in the Baltimore City Court.

People’s Counsel made no response to the clerk’s notice. On February 6, the Commission and "The Taxicab Owners of Baltimore City” filed answers, in the Circuit Court, to the appeal. On March 13, 1981, the Commission moved, in the Baltimore City Court, to dismiss the appeal on the ground that it was filed in the wrong court. With the consent of all parties, Judge Albert Sklar remedied that problem by transferring the case to the Circuit Court where, in accordance with Md. Code Ann. art. 78, § 91, the case belonged.

On April 3, 1981, the Commission struck again at the appeal, moving to dismiss because of People’s Counsel’s failure to file a memorandum of law within thirty days of the clerk’s February 3 notice, as required by Maryland Rule B12. People’s Counsel, with justifiable embarrassment, responded that he had failed to comply with the rule because he was unaware of it. He argued in mitigation, however, that (1) the rule was a new one, having taken effect on January 1, 1981; (2) it had not, as of then, been published in Vol. 9C of the Maryland Code, where the other rules are located; (3) the notice in any event was a nullity since it was sent by a clerk who had no jurisdiction over the case; (4) the Commission was not prejudiced by the lapse; and (5) dismissal of the appeal was an unnecessarily harsh sanction. The required memorandum of law was filed with that response on April 10, 1981.

The court denied the Commission’s motion. Acknowledging that the memorandum was thirty-nine days late, the court noted: "[I]t is also true that this Rule became effective a little more than one month before the said 30 day period begain to run. Appellant should have been ⁷¹⁹ more diligent in apprising himself of the Rules of Procedure; but the imposition of the ultimate sanction of dismissal appears too harsh under the particular facts and circumstances present here.” Carefully ignoring its own negligence in transmitting the record to the wrong person (thereby violating its duty under Maryland Rule B7), the Commission continues to play "hardball” with People’s Counsel by analogizing Maryland Rule B12 to other rules specifying time limits and insisting that the Circuit Court had an absolute duty to dismiss the appeal. Before commenting on the Commission’s argument, we should take note of the rule itself.

Maryland Rule B12, which is part of the rules governing appeals from administrative agencies, provides, in relevant part, that: "Within 30 days after being notified by the clerk of the filing of the record, the appellant shall file a memorandum setting forth a concise statement of all issues raised on appeal and argument on each issue, including citations of legal authorities and references to pages of the transcript and exhibits relied on.” The rule, patterned after a local second circuit (upper Eastern Shore) rule, was formally adopted by the Court of Appeals on October 1, 1980, to become effective, along with a number of other new and amended rules, on January 1, 1981. Notice thereof was given in the Maryland Register on October 17, 1980 (7:21 Md.R. 1975, 1980). It has often been said that the Rules of Procedure adopted by the Court of Appeals "are not guides to the practice of law but precise rubrics 'established to promote the orderly and efficient administration of justice and [that they] are to be read and followed.’ ” Countess v. State, 286 Md. 444, 463 (1979), quoting from earlier cases. It has also been made clear that when such a rule says that something "shall” be done, the Court jolly-well means for it to be done; the direc ⁷²⁰ tion is a "mandatory” one and must be obeyed.

Cf. In Re James S., 286 Md. 702 (1980), involving a statutory time requirement. •Maryland Rule B12 is such a rule. It is a "precise rubric” adopted by the Court "to promote the orderly and efficient administration of justice,” and it is meant to be obeyed. But the rule does not specify or mandate any particular sanction for its violation.

It is true, as the Commission points out, that the appellate courts in this State have, on frequent occasion, dismissed proceedings or otherwise precluded the admission of evidence or the consideration of issues because of a litigant’s failure to comply with mandatory time or procedural requirements. See, for example, Salisbury Bd. v. Bounds, 240 Md. 547, 553 (1965); Warmack v. Bradley Club, 242 Md. 394 (1966); Jacober v. High Hill Realty, Inc., 22 Md.App. 115 , cert. den. 272 Md. 743 (1974), and cases cited therein; Laukenmann v. Laukenmann, 17 Md.App. 107 (1973); State v. Hicks, 285 Md. 310 , and on reconsideration 285 Md. 334 (1979). In some instances, the applicable rules either require or expressly permit an extreme sanction for violation of the procedural requirements which they or other rules establish. See, for example, Maryland Rules 835, 1035, B5.

In other cases, the rules provide either no specific sanction or offer a range of alternative sanctions, in which event the courts have tended to balance the purpose and importance of the requirement against the circumstances of its violation. State v. Hicks, supra was such a case, as was In Re Dewayne H., 290 Md. 401 (1981). We would regard dismissal of an administrative appeal as an appropriate, and perhaps even a preferred, sanction for failure to comply with Maryland Rule B12; but we do not believe that it is a mandatory sanction required to be applied indiscriminately in all cases. The trial court, we think had some discretion in the matter.

The time period specified in the rule is not jurisdictional in nature, and we regard it of some significance that, in light of the controversy surrounding its more or less contemporaneous decision in ⁷²¹ Hicks (and Johnson v. State, 282 Md. 314 (1978)), the Court of Appeals chose not to specify dismissal as a required sanction. There is no evidence in this record that either the court or the Commission was seriously inconvenienced, much less prejudiced, by People’s Counsel’s lateness in filing the memorandum of law. The rate increase remained in effect pending the appeal. Given the newness of the rule, its limited publication, and the Commission’s own dereliction in transmitting the record to the wrong court, we do not believe that the court abused its discretion in declining to dismiss the appeal.

(2) People’s Counsel’s Appeal Having won the procedural battle, People’s Counsel will now proceed to lose the war. The jurisdiction and powers of the Public Service Commission extend to all public service companies operating a utility business, to the full extent permitted by the Constitution and laws of the United States. Md. Code Ann. art. 78, §§ 1, 23. The Commission is authorized, and obliged, by § 56 of art. 78, to "supervise and regulate all public service companies subject to its jurisdiction to assure their operation in the interest of the public and to promote adequate, economical, and efficient delivery of utility services in the State without unjust discrimination, giving consideration to the public safety, the economy of the State, the conservation of natural resources, and the preservation of environmental quality.” (Emphasis supplied.) A major component of the Commission’s overall regulatory authority is the power conferred by § 68 (a) of art. 78 "to determine just and reasonable rates of public service companies, whether as maximum, minimum!,] or maximum and minimum, respectively.” Section 69 (a) defines "just and reasonable rates” as those ⁷²² "which are not in violation of any of the provisions of this article [78], which fully consider and are consistent with the public good, and which will result in an operating income to the public service company ... yielding, after reasonable deduction for depreciation and other necessary and proper expenses and reserves, a reasonable return upon the fair value of the company’s property used and Useful in rendering service to the public.” If a public service company proposes a new rate, the Commission may suspend it and institute "proceedings as to the justice and reasonableness of the rate suspended.” Section 70 (a) and (b).

Under § 71 (a), the Commission may also, after "due hearing,” fix temporary rates for a public service company that are either higher or lower than those currently in effect. Such action may be taken only if "(1) the Commission finds pending a final rate proceeding, that the rates in force are either higher or lower than just