Prince George's County v. Ray's Used Cars

⁶³⁵ ELDRIDGE, J. This case concerns a challenge to the constitutionality of a zoning ordinance establishing a minimum lot size of 25,000 square feet for used motor “jyjehicle, mobile home, or camping trailer sales lot[s].” 1 The dispositive issue in the case, however, is whether the ordinance’s challengers were first required to invoke and exhaust administrative remedies. The petitioner, Prince George’s County, argues that a judicial determination of the constitutionality of the zoning ordinance is premature because the respondent used car dealers failed to invoke and exhaust their administrative remedies. The respondents claim that pursuit and exhaustion of administrative remedies were not required in this case and that the zoning ordinance is unconstitutional on the ground that it violates due process and equal protection principles. We shall hold that the respondent used car dealers were required to invoke and exhaust administrative remedies prior to obtaining judicial review.

I. The Maryland General Assembly, by the Regional District Act, Maryland Code (1957, 2003 Repl.Vol.), Article 28, §§ 7-101 et seq., delegated zoning power for most of Prince George’s County to the Prince George’s County District Council. 2 Pursuant to § 8-101(2) of the Act, the District Council ⁶³⁶ “may by ordinance adopt and amend the text of the zoning ordinance and may by resolution or ordinance adopt and amend the map or maps accompanying the zoning ordinance text to regulate, in the portion of the regional district lying within its county ... (ii) the size of lots, yards, courts and other open spaces____” The Regional District Act also creates the Prince George’s County Board of Zoning Appeals (§ 8-107), provides for the Board of Zoning Appeals to extend or continue “nonconforming uses” (§§ 8-108 and 8-109), and authorizes the Board of Zoning Appeals to grant “special exceptions and variances to the provisions of the zoning regulations.” (§§ 8-110 and 8-111). Section 27-229 of the Prince George’s County Code, enacted by the District Council, also authorizes the Prince George’s County Board of Zoning Appeals to grant variances. Under the Regional District Act, decisions of the Prince George’s County Board of Zoning Appeals are final administrative decisions, are subject to judicial review in the Circuit Court, and the Circuit Court’s decision is subject to an appeal to the Court of Special Appeals (§ 8-111.1 of the Regional District Act).

On November 14, 2000, the District Council amended the Prince George’s County Zoning Ordinance and approved Council Bill 87-2000 (“CB 87”). The new zoning bill imposed a minimum lot size requirement of 25,000 square feet on used vehicle, mobile home, and camping trailer dealerships. CB 87 also contained a three-year amortization period, requiring all such dealerships to comply by August 31,2003. On August 29, 2003, Ray’s Used Cars, along with seventeen other used car dealers throughout Prince George’s County, brought this action in the Circuit Court for Prince George’s County, challenging the constitutionality of CB 87 and seeking declaratory and injunctive relief.

All of the plaintiff used car dealers operated used car lots that did not meet the new minimum lot size requirement of 25,000 square feet. The plaintiffs contended that CB 87 violated due process and equal protection principles. They did not, however, assert that CB 87 effected an unconstitutional taking of property in violation of Article III, § 40, of the Maryland Constitution and Article ⁶³⁷ 24 of the Declaration of Rights, or in violation of the Fifth Amendment to the United States Constitution. Specifically, the plaintiffs alleged in pertinent part as follows: “22.

That the Plaintiffs maintain that they are entitled to the continued operation of their businesses because CB 87 2000 arbitrarily and unreasonably denies equal protection of the law to Plaintiffs, in that new vehicle, mobile home,[ 3 ] camping trailer sales and service lots, are allowed in commercial zones on lots less than Twenty Five Thousand square feet (25,000 sf) and used vehicles are not. “23. That Plaintiffs also contend the prohibition of used care [sic] lots smaller than Twenty Five Thousand square feet (25,000 sf) in commercial zones is an abuse of the [governmental] power because it has no relation to the public health, safety, general welfare and morals in the effected area [sic]. “24. The Plaintiffs assert that the ‘amortization period’ is also invalid because the overall reasonableness bears not [sic] rationale [sic] relationship to the factual circumstances and public gain is far outweighed by the private loss of the Plaintiffs. “25. That there exists an actual controversy of justiciable issue between the parties within the jurisdiction of this Court involving the constitutionality and/or validity of CB-87-2000. “26.

That the Plaintiffs’ rights are affected by CB-87-2000 in that they are owners and/or operators of used car lots which might be closed if said statute is not declared unconstitutional. “27. That Defendant’s action[s] in approving CB-87-2000 were arbitrary and capricious and unconstitutional. There exist the strong likelihood that the Plaintiffs will succeed on the merits of their claim. ⁶³⁸ “28. That unless the Defendant is restrained by this Court from enforcing CB-87-2000 which is arbitrary and capricious and unconstitutional, Plaintiffs will suffer immediate, substantial and irreparable injury.” The plaintiffs did not institute any administrative proceedings seeking variances or other administrative remedies.

The Circuit Court held a three-day nonjury trial at which the plaintiffs’ case focused on the negative impact CB 87 would have on their particular businesses. In his opening statement, the attorney for the plaintiffs explained: “Some [of the plaintiffs] have been in business at their locations for more than thirty years. Some own their businesses. All of the businesses obviously are on lots that are less than 25,000 square feet, and some lease their businesses.

This ordinance affects them all in different ways, all of them bad.” Five of the plaintiffs testified at trial. Typical testimony offered by the plaintiff used car dealers concerned the size of their car sales lots (all under 25,000 square feet), the profitability of their businesses, the hardship of relocating, and the statements that they were compliant with county regulations other than the minimum lot size requirement in CB 87. In his closing argument, the plaintiffs’ attorney delineated the issues that he was raising (emphasis added): “And the first issue is whether or not CB-87-2000 is constitutional, does it violate the provisions of Article 24 of the Maryland Constitution. Following the case law does it bear, number one, a substantial relationship to its intended purpose, and is it constitutional when you weigh the good it was intended to accomplish against the damage it causes the public and these plaintiffs in particular. “The second issue of the case, Your Honor, is whether or not CB 87 is constitutional as to these particular plaintiffs, and the third issue in this case is whether or not CB 87 is constitutional with reference to the amortization schedule which is—was essentially three years ending on August 31st, 2003.” ⁶³⁹ The Circuit Court filed a declaratory judgment concluding that CB 87 violated “substantive due process” and equal protection principles.

The court also enjoined its enforcement. Relying upon language in Levinson v. Montgomery County, 95 Md.App. 307, 319-321 , 620 A.2d 961, 967-968 , cert. denied, 331 Md. 197 , 627 A.2d 539 (1993), and older cases from an era when courts frequently struck down economic and land use regulatory legislation on so-called “substantive due process” grounds (see, e.g., Goldman v. Crowther, 147 Md. 282, 307-308 , 128 A. 50 (1925)), the Circuit Court took the position that “state courts have shown a greater willingness than their federal counterparts to find that, as a matter of due process, a zoning restriction is arbitrary and unreasonable” and that “ ‘Maryland courts [under Article 24 of the Declaration of Rights] employ a heightened level of scrutiny—something over and above the “minimum rationality” test under the federal constitution.’ ” 4 Later in the declaratory judgment, the Circuit Court reiterated “that Maryland has adopted a heightened level of scrutiny for the review of a zoning ordinance.” Applying this “heightened scrutiny analysis,” the Circuit Court declared that CB 87 denied the plaintiffs due process and equal protection of the laws because it did not bear a “substantial relation to the public health, morals, safety, comfort, or welfare.” In addition, the court declared that, “as it applies, CB-87 is arbitrary, unduly oppressive, fundamentally unfair, and unreasonable, and its enforcement will work greater hardship upon the public than that which it endures under existing conditions.” Addressing the three-year amortization period set forth in CB 87, the court declared that it was not reasonable because the plaintiffs’ loss would far outweigh the public gain. Prince George’s County appealed to the Court of Special Appeals, contending that the plaintiffs’ failure to invoke and ⁶⁴⁰ exhaust their administrative remedies precluded this action for a declaratory judgment and injunction. Prince George’s County alternatively argued that the Circuit Court erred in holding CB 87 unconstitutional.

The Court of Special Appeals affirmed in an unreported opinion. Regarding the exhaustion argument, the Court of Special Appeals held that the plaintiffs’ challenge to CB 87 fell under the “constitutional exception” to the rule requiring the pursuit and exhaustion of administrative remedies “because they asserted a facial challenge to the validity of CB 87. Accordingly, this ‘constitutional exception’ allowed them to file a complaint for declaratory and injunctive relief in the Circuit Court, without first applying for variances and litigating their cases before the Board of Appeals.” Turning to the constitutionality of CB 87, the Court of Special Appeals held that the ordinance violated so-called “substantive due process” principles. Like the Circuit Court, the Court of Special Appeals relied heavily upon language in Levinson v. Montgomery County, supra, 95 Md.App. at 319-321 , 620 A.2d at 967-968 . 5 Because the intermediate appellate ⁶⁴¹ court held the ordinance unconstitutional under “substantive due process principles,” it decided that it was “not necessary to address the constitutionality of CB 87 under equal protection principles.” The Court of Special Appeals similarly did not reach the issue regarding the validity of the amortization period.

Although the appellate court did not expressly hold the amortization period unconstitutional, the court noted “that the appellees are correct in their contention that the record does not show any rational basis for the three-year amortization period. Further, Prince George’s County Code’s seven-year amortization period for an investment of $20,000 indicates that an amortization period of three years for an investment in excess of $100,000 is not rational.” 6 Following the decision of the Court of Special Appeals, Prince George’s County filed a petition for a writ of certiorari, which this Court granted. Prince George’s County v. Ray’s Used Cars, 391 Md. 577, 894 A.2d 545 (2006). The plaintiff ⁶⁴² used car dealers did not file a cross-petition for a writ of certiorari.

II

Prince George’s County argues that the judgments below violated the rule requiring the invocation and exhaustion of administrative remedies whenever such administrative remedies are exclusive or primary. Prince George’s County maintains that variance and other administrative procedures are available to the plaintiff used car dealers, that the Legislature intended that these remedies be pursued and exhausted prior to filing an action in court, but that none of the plaintiffs sought such administrative relief. The County contends that this Court has repeatedly enforced the exhaustion rule in zoning cases like the present one, and that the Regional District Act sets out a comprehensive and detailed scheme of administrative procedures for such land use issues. In oral argument before us, Prince George’s County represents that the plaintiffs may now institute administrative proceedings for variances or other relief.

The County alternatively asserts that the courts below reached the wrong conclusion on the merits because the 25,000 square foot minimum lot size requirement is constitutional. The respondent used car dealers contend that they were not required to invoke and exhaust administrative remedies. First, they argue that the available administrative “remedies are neither exclusive [n]or primary.” In so arguing, they rely on the fact that the applicable statutes do not expressly state that the administrative remedies are exclusive or primary, and they rely on the principle that, where there exists an alternative judicial remedy, “there is no presumption that the administrative remedy was intended to be exclusive.” Zappone v. Liberty Life, 349 Md. 45, 63 , 706 A.2d 1060 (1998). Second, the used car dealers claim that they challenged the constitutionality of CB 87 “as a whole, and not its application to their particular facts,” and that, therefore, the case fell within the “constitutional exception” to the rule requiring invocation and exhaustion of administrative remedies.

The ⁶⁴³ dealers, relying heavily upon Pressman v. State Tax Commission, 204 Md. 78 , 102 A.2d 821 (1954), one of the few cases falling within the “constitutional exception” to the exhaustion rule, argue that there was “a clear necessity for a prior judicial decision” and that the pertinent “factual determinations” were “not within the expertise of the Board of Appeals or the Planning Board.” On the merits, the used car dealers argue that the court below correctly held that CB 87 was unconstitutional. 7 III. We shall reject the used car dealers’ alternative contentions (1) that the available administrative remedies are neither ⁶⁴⁴ exclusive nor primary and (2) that the case falls within the “constitutional exception” to the exhaustion rule. The Circuit Court will be directed to dismiss the complaint for failure to pursue and exhaust administrative remedies. We shall not, therefore, reach the constitutional issues presented.

If the plaintiffs decide to institute appropriate administrative proceedings, those issues, as well as any other issues which the plaintiffs desire to present, may be raised in the administrative proceedings. A. This Court has often dealt with the relationship between legislatively created administrative remedies and alternative statutory, common law or equitable judicial remedies. Thus, in Zappone v. Liberty Life, supra, 349 Md. at 60-61 , 706 A.2d at 1067-1068 , we summarized as follows: “Whenever the Legislature provides an administrative and judicial review remedy for a particular matter or matters, the relationship between that administrative remedy and a possible alternative judicial remedy will ordinarily fall into one of three categories. “First, the administrative remedy may be exclusive, thus precluding any resort to an alternative remedy. Under this scenario, there simply is no alternative cause of action for matters covered by the statutory administrative remedy. “Second, the administrative remedy may be primary but not exclusive.

In this situation, a claimant must invoke and exhaust the administrative remedy, and seek judicial review of an adverse administrative decision, before a court can properly adjudicate the merits of the alternative judicial remedy. “Third, the administrative remedy and the alternative judicial remedy may be fully concurrent, with neither remedy being primary, and the plaintiff at his or her option may ⁶⁴⁵ pursue the judicial remedy without the necessity of invoking and exhausting the administrative remedy.” 8 In arguing that the administrative remedies under the Regional District Act and the Prince George’s County Code are neither exclusive nor primary, but are merely concurrent with the judicial remedies sought in this case, the respondent used car dealers rely on the absence of language in the Regional District Act and the Prince George’s County Code expressly stating that the administrative remedies are exclusive or primary. They also invoke the principle that administrative remedies are not ordinarily presumed to be exclusive. As we have pointed out, however, “[wjhile sometimes the Legislature will set forth its intent as to whether an administrative remedy is to be exclusive, or primary, or simply a fully concurrent option, most often statutes fail to specify the category in which an administrative remedy falls.” Zappone, 349 Md. at 62 , 706 A.2d at 1068 (emphasis added). The absence of express statutory language is a consideration in determining whether an administrative remedy is intended to be exclusive, although it is clearly not the only consideration.

It is entitled to little weight in determining whether the administrative remedy is primary. Moreover, while there is no presumption that an administrative remedy is intended to be exclusive when a recognized alternative judicial remedy exists, there is a strong “presumption that the administrative remedy is intended to be primary, and ... a claimant cannot maintain the alternative judicial action without first invoking and exhausting the administrative remedy.” Zappone, 349 Md. at 63 , 706 A.2d at 1069 . See, e.g., Maryland Reclamation v. Harford County, 382 Md. 348, 362 , 855 A.2d 351, 359 (2004) (“[Wjhen adminis ⁶⁴⁶ trative remedies, exist in zoning cases, they must be exhausted before other actions, including requests for declaratory judgments, mandamus, and injunctive relief, may be brought,” citing Josephson v. City of Annapolis, 353 Md. 667, 674-678 , 728 A.2d 690, 693-695 (1998)); Fosler v. Panoramic Design, Ltd., 376 Md. 118, 128 , 829 A.2d 271, 277 (2003) (“[T]he presumption that a statutory administrative remedy is primary is reflected in the Declaratory Judgment Act”); Brown v. Fire & Police Employees Retirement System, 375 Md. 661, 669 , 826 A.2d 525, 530 (2003) (“This Court adheres firmly to the rule that statutorily prescribed administrative remedies ordinarily must be pursued and- exhausted. * * *. This principle that statutory administrative remedies normally must be exhausted is a policy embedded in various enactments by the General Assembly and is supported by sound reasoning”); Dorsey v. Bethel A.M.E. Church, 375 Md. 59, 76 , 825 A.2d 388, 397 (2003) (A “principle of administrative law ... is the requirement that administrative remedies must be exhausted before bringing an action in court”); Furnitureland v. Comptroller, 364 Md. 126, 133 , 771 A.2d 1061, 1065 (2001) (“[W]here the Legislature has provided an administrative remedy for a particular matter or matters, there is a presumption that the Legislature intended such remedy to be primary and intended that the administrative remedy must be invoked and exhausted before resort to the courts”), and cases there cited.

See also PSC v. Wilson, 389 Md. 27, 88-94 , 882 A.2d 849, 885-889 (2005) Converge v. Curran, 383 Md. 462, 482-486 , 860 A.2d 871, 882-885 (2004); Moose v. F.O.P., 369 Md. 476, 493-495 , 800 A.2d 790, 796-802 (2002); Bell Atlantic v. Intercom, 366 Md. 1, 12 , 782 A.2d 791, 797 (2001). We have stated that the “Regional District Act is the exclusive source of zoning authority” in the Regional District. Mossburg v. Montgomery County, 329 Md. 494, 502 , 620 A.2d 886, 890 (1993). See, e.g., County Council of Prince George’s County v. Brandywine Enterprises, 350 Md. 339, 342 , 711 A.2d 1346, 1347 (1998) (“The Regional District Act ... is the exclusive source of zoning authority in those areas of Prince George’s County which it covers”); Montgomery County v. ⁶⁴⁷ Revere, 341 Md. 366, 383 , 671 A.2d 1, 9-10 (1996); Council of Chevy Chase View v. Rothman, 323 Md. 674, 685 , 594 A.2d 1131, 1136 (1991); Northampton v. Prince George’s County, 273 Md. 93, 96 , 327 A.2d 774, 776 (1974).

In addition, the adjudicatory administrative and judicial review procedures under the Regional District Act and the Prince George’s County Code are available to furnish relief to each of the plaintiff used car dealers whose particular sales lots are adversely affected by CB 87, to the extent that such dealers may be entitled to relief on constitutional or non-constitutional grounds. See, e.g., District Council v. Brandywine, supra, 350 Md. 339 , 711 A.2d 1346 ; Hartman v. Prince George’s County, 264 Md. 320 , 286 A.2d 88 (1972); Gingell v. Board of County Commissioners for Prince George’s County, 249 Md. 374 , 239 A.2d 903 (1968); Hertelendy v. Montgomery County Board of Appeals, 245 Md. 554 , 226 A.2d 672 (1967); Town of Somerset v. Montgomery County Bd. of Appeals, 245 Md. 52 , 225 A.2d 294 (1966); Hyson v. Montgomery County, 242 Md. 55, 64-65 , 217 A.2d 578, 584 (1966); Woodlawn Area Citizens Ass’n v. Board of County Com’rs for Prince George’s County, 241 Md. 187, 192-193 , 216 A.2d 149, 153 (1966). Consequently, fully adequate administrative adjudicatory remedies could have been pursued by the plaintiff used car dealers, and, as stipulated by Prince George’s County, can still be pursued by the plaintiffs. Whether or not such remedies are exclusive, at the very least they are presumed to be primary.

Although the Regional District Act is the exclusive source of zoning in the geographical area encompassed by the Regional District, we have not expressly held whether the adjudicatory remedies under that Act are exclusive or whether they are simply primary. Furthermore, there is no need to resolve that issue in this case. Whether exclusive or primary, this Court’s opinions have made it clear that the adjudicatory remedies provided by the Regional District Act, for the resolution of zoning issues like those presented here, must be pursued and exhausted before resort to the courts. Our cases have applied this principle even when zoning ordinances enact ⁶⁴⁸ ed by the District Council have been challenged on the ground that they were invalid or unconstitutional.

We have also held that no action maybe maintained under the Declaratory Judgments Act, Maryland Code (1974, 2006 Repl.Vol.), §§ 3-401, et seq., of the Courts and Judicial Proceedings Article, for the resolution of such issues. In Hartman v. Prince George’s County, supra, 264 Md. 320 , 286 A.2d 88 , landowners in Prince George’s County sought from the District Council the grant of a special exception and a variance in order to use their land for a filling station and an automobile repair business. A special exception and a variance were granted, but thereafter several opponents filed with the District Council a petition for reconsideration. The petition was not filed within the time period previously specified in the zoning ordinance, but a new enactment arguably extended the time, and the petition was filed within the extended period under the new enactment.

The District Council granted the reconsideration petition and scheduled the case for an administrative hearing. The landowners, instead of further contesting the matter at the administrative hearing, filed a bill of complaint in the Circuit Court for Prince George’s County for declaratory and injunctive relief. They argued, inter alia, that the new enactment extending the reconsideration time was invalid. The Circuit Court, instead of dismissing the case for failure to exhaust administrative remedies, decided the case on the merits.

This Court, however, directed the Circuit Court to enter “an order dismissing the bill and remitting the [landowners] to their special statutory remedies.” Hartman v. Prince George’s County, supra, 264 Md. at 326 , 286 A.2d at 90 . The Court, in an opinion by Chief Judge