Public Service Commission v. Patuxent Valley Conservation League

ELDRIDGE, Judge. In this case we are asked to decide whether the individual commissioners of the Public Service Commission, a state agency, may be required to appear for pretrial depositions with respect to a Commission decision granting the Potomac Electric Power Company (PEPCO) a Certificate of Public Convenience and Necessity for the construction of a transmission line in Montgomery and Howard Counties. We are also presented with the threshold question of whether the trial court’s discovery order, in an action for judicial review of the administrative decision reached by the Commission, may be immediately appealed by the Commission and the State of Maryland. We hold that the trial court’s order is ²⁰⁴ immediately appealable by the Commission and the State, and that the order constituted an abuse of the trial judge’s discretion.

I. Pursuant to Maryland Code (1957, 1980 Repl.Vol., 1983 Cum.Supp.), Art. 78, § 54A, a public utility must acquire a Certificate of Public Convenience and Necessity from the Commission before commencing construction of any overhead transmission line carrying in excess of 69,000 volts. In this case, PEPCO sought such a certificate from the Commission for the purpose of constructing a 500 kilovolt overhead transmission line between substations in Howard and Montgomery Counties. After taking testimony for approximately one year from more than one hundred lay witnesses and many expert witnesses, the hearing examiner recommended that PEPCO be issued the requested certificate. The Commission, upon extensive review of the testimony, which was detailed in a record of 6,000 pages, agreed.

Howard County, and numerous property owners who would be affected by the transmission line (Patuxent Valley Conservation League, et al.), then filed in the Circuit Court for Howard County an action for judicial review of the Commission’s decision. 1 About a month prior to the circuit court hearing, the Patuxent Valley Conservation League (Patuxent) filed a notice and a request for a summons for the purpose of taking the oral depositions of the commissioners who participated in the Commission’s PEPCO decision. The Commission then filed a motion for a protective order, and a hearing on the motion was held. At the hearing, counsel for Patuxent orally alleged that the Commission had used “improper procedure” and that the administrative record was deficient. The only factual allegations made by coun ²⁰⁵ sel for Patuxent, however, were that a report by the Commission’s engineer was not in the administrative record and that, at some point during the administrative proceedings, an “informal” ex parte communication may have taken place between the hearing examiner and the Chairman of the Commission.

In addition, counsel for Howard County alleged that the hearing examiner “might have been predisposed” and that the case “may even bear down to some question of bad faith.” Counsel for the Commission, on the other hand, argued that “[t]he record speaks for itself,” that Patuxent had raised “only ... spurious allegations,” and that, therefore, the members of the Commission should not be deposed. The circuit court judge, concluding that Patuxent’s assertions amounted to allegations of “bad faith” and “improper procedure,” denied the Commission’s motion and ordered the commissioners to appear for depositions. The Commission immediately asked the circuit court to stay the discovery order so that the Commission could seek appellate review of the decision. The circuit court granted the stay, and both the Commission and the State filed orders of appeal to the Court of Special Appeals.

While the case was pending before the Court of Special Appeals, this Court issued a writ of certiorari. In addition to briefing and arguing the merits, Patuxent has filed in this Court a motion to dismiss the appeals on the ground that the circuit court’s order was interlocutory and not appealable.

II

The threshold question is whether the Commission and the State may appeal from the trial court’s discovery order. 2 ²⁰⁶ As we have repeatedly stated, ordinarily an appeal will lie only from a final judgment, and finality is a matter ultimately to be determined by this Court. Sigma Repro. Health Cen. v. State, 297 Md. 660, 664-666 , 467 A.2d 483 (1983); Peat & Co. v. Los Angeles Rams, 284 Md. 86, 90-91 , 394 A.2d 801 , 5 A.L.R.4th 1238 (1978); Warren v. State, 281 Md. 179, 182-183 , 377 A.2d 1169 (1977). We have also in recent years adopted the so-called “collateral order doctrine,” which treats as final and appealable a limited class of orders which do not terminate the litigation in the trial court.

See, e.g., Kawamura v. State, 299 Md. 276 , 282-283 n. 5, 473 A.2d 438 (1984); Mann v. State’s Atty. for Montgomery Cty., 298 Md. 160, 163-165 , 468 A.2d 124 (1983); Highfield Water Co. v. Wash. Co. San., 295 Md. 410, 417 , 456 A.2d 371 (1983); News American v. State, 294 Md. 30, 45-46 , 447 A.2d 1264 (1982); Clark v. Elza, 286 Md. 208, 212-213 , 406 A.2d 922 (1979), and cases cited therein. This doctrine generally permits an appeal from an order which satisfies four requirements. The four requirements are as follows (Clark v. Elza, supra, 286 Md. at 213 , 406 A.2d 922 ): “ ‘[T]he order must [ (1) ] conclusively determine the disputed question, [ (2) ] resolve an important issue [, (3) be] completely separate from the merits of the action, and [ (4) ] be effectively unreviewable on appeal from a final judgment.’ ” In our view these four criteria were met, and the trial court’s discovery order is appealable by the Commission or the State.

First, the order conclusively determined that individual Commission officials must appear for depositions with respect to their decision to grant PEPCO a certificate. Second, the issue is clearly important. If, in actions for judicial review of administrative decisions, it is permissible for trial courts to order the depositions of the ²⁰⁷ administrative decision makers, upon the type of allegations made in this case, the impact upon administrative agencies of the State and local governments may be quite substantial. Third, the question whether Commission decision makers should be required to stand for depositions is distinct from the merits of Patuxent’s action for judicial review of the agency decision.

Finally, if not appealable until the conclusion of the trial, the claim that Commission members should not be routinely subjected to extensive probing of their individual decisional thought processes would irretrievably be lost. Regardless of the outcome of the trial, the disruption to the administrative process, caused by placing the officials under pretrial scrutiny, is incurred at the first instance. Therefore, it would be impossible to cure the harm done to the Commission once the depositions have been taken. Although in this case we take the position that the order requiring Commission members to stand for pretrial depositions is appealable by the Commission or the State, we continue to adhere to the general rule that discovery orders are interlocutory and ordinarily cannot be appealed prior to a final judgment terminating the case.

See, e.g., Sigma Repro. Health Cen. v. State, supra, 297 Md. at 675 , 467 A.2d 483 (“ordinarily an order denying a motion to quash a subpoena duces tecum in a pending case is not an appealable final order”); Price v. Orrison, 261 Md. 8, 9 , 273 A.2d 183 (1971) (order authorizing plaintiff to take depositions of members of civic association to aid in execution of judgment obtained against association); Kardy v. Shook, 237 Md. 524, 534 , 207 A.2d 83 (1965) (order allowing defendant in criminal case to take pretrial depositions of State’s witnesses); Alford v. Commissioner, 227 Md. 45, 47 , 175 A.2d 23 (1961) (orders denying discovery against Commissioner of Motor Vehicles and employee of insurance company in connection with suit arising out of “hit and run” automobile accident). Rather, we conclude only that the particular facts of this case warrant a departure from the general rule. ²⁰⁸ One reason underlying the general rule against the immediate appeal of discovery orders is that “[ojrdinarily, an order granting or denying discovery does not finally determine the rights of any party____” Alford v. Commissioner, supra, 227 Md. at 47 , 175 A.2d 23 . Also, in the usual case, the party or individual opposing the discovery order does not suffer sufficient immediate harm to warrant an appeal prior to the final termination of the litigation.

Moreover, a party is generally able to seek effective review of the order upon an appeal from an adverse final judgment terminating the case. By contrast, in the case at bar, the harm that will result from deposing Commission members prior to trial, should they be immune from this type of scrutiny, will occur from the instant they are subjected to a probing of their decision making processes. Furthermore, the harm to the State and its agencies, and consequently to the public, because of the disruption of the governmental process which could result from orders such as this, is potentially much greater than the harm to private individuals and entities. While Montgomery Co. Coun. v. Kaslow, 235 Md. 45 , 200 A.2d 184 (1964), would appear to be contrary to our holding today, that case is distinguishable because it was decided before this Court had adopted the collateral order doctrine.

Also, in Kaslow the request to depose the local administrative officials was supported by detailed factual allegations. The facts of the case at bar place it within the line of cases in this Court which have allowed an immediate appeal based on the collateral order doctrine. For example, in Clark v. Elza, supra, 286 Md. 208 , 406 A.2d 922 , we held that the trial court’s denial of a motion to enforce an executory oral settlement agreement between the parties was immediately appealable under the collateral order doctrine. We noted that one of the primary considerations in entering a pretrial settlement agreement was to avoid the expense and inconvenience of a trial, and, therefore, this contractual benefit derived from entering into the agree ²⁰⁹ ment would be lost if the party seeking to enforce the agreement was first required to proceed through an entire trial on the merits. 286 Md. at 213 , 406 A.2d 922 .

Similarly, in the context of administrative decisionmaking, judicial review of Commission decisions is generally based on the record, and the thought processes of individual agency officials are free from scrutiny. See Public Serv. Comm’n v. Balto. Gas & El., 273 Md. 357, 362-363 , 329 A.2d 691 (1974).

It would defeat this principle if agency officials were routinely forced to undergo time-consuming depositions, then proceed to trial, and ultimately, upon a final judgment in the case, attempt to litigate the issue of whether they should have been deposed in the first place. The situation presented in the case at bar is analogous to that of a government official claiming immunity as a defense to a civil action. Where a defense of official immunity has been denied, courts have applied the collateral order doctrine to review the denial prior to the final judgment terminating the case. See Nixon v. Fitzgerald, 457 U.S. 731, 742-743 , 102 S.Ct. 2690, 2698-2699 , 73 L.Ed.2d 349 (1982); Forsyth v. Kleindienst, 700 F.2d 104, 105 (3d Cir. 1983); McSurely v. McClellan, 697 F.2d 309, 315-316 (D.C. Cir. 1982).

The rationale of these cases is to protect the government official from the burden of an unnecessary trial. As the court said in McSurely v. McClellan, supra, 697 F.2d at 316 : “[Pjart of the purpose of immunity, whether absolute or qualified, is to shield government officials from ‘the risks of trial—distraction of officials from their governmental duties, inhibition of discretionary action, and deterrence of able people from public service.’ ” The particular issue in this case has been dealt with by the courts in at least one other state, and they have permitted immediate review of orders which direct the taking of pretrial depositions from administrative decision makers. State of California v. Superior Court, 16 Cal.App.3d 87, 91-92 , 93 Cal.Rptr. 663 (1971). See Board of Dental Examiners v. Superior Court, 55 Cal.App.3d 811 , 127 Cal.Rptr. ²¹⁰ 865 (1976); Board of Administration v. Superior Court, 50 Cal.App.3d 314 , 123 Cal.Rptr. 530 (1975).

Although the California appellate courts review such orders by writs of prohibition rather than invoking the collateral order doctrine, the courts nevertheless have consistently taken the position that orders authorizing “post-administrative hearing discovery” from agency officials should be reviewed before trial on the merits. The court in State of California v. Superior Ct., supra, 16 Cal.App.3d at 91 , 93 Cal.Rptr. 663 , summarized as follows: “[I]f [the order granting discovery] could only be reviewed on appeal from the final judgment entered in the main actions herein or from a judgment for contempt for failing to answer the questions propounded, the determination of the question as to whether post-administrative hearing discovery will lie herein would be unduly delayed and manifestly inadequate.” For the foregoing reasons, we hold that an order in an action for judicial review of an administrative decision, requiring administrative decision makers to stand for depositions, may be immediately appealed by the agency itself or, if a party, by the government of which the agency is a part. 3 We reiterate, however, that our holding is a narrow one. Thus discovery orders, directed at other than high level government decision makers, are ordinarily not appeal-able in accordance with the general rule. Sigma Repro.

Health Cen. v. State, supra. Orders refusing discovery are normally not immediately appealable, whether involving government officials or not. In sum, our holding concerning appealability goes no further than the circumstances presented in this case.

III

We now consider whether the trial court’s discovery order should be reversed. As previously noted, in seeking ²¹¹ to depose the commissioners, Patuxent and Howard County alleged that the Commission had acted improperly and perhaps in “bad faith” in granting the certificate to PEPCO. The trial court, in ordering the depositions, was influenced by the broad scope of discovery set forth in Maryland Rule 400, 4 and by Code (1957, 1980 Repl.Vol.), Art. 78, § 96, which allows the submission of new evidence upon judicial review of Commission actions. 5 The trial judge apparently ²¹² was of the view that Patuxent was entitled to determine whether its suspicions of “bad faith” and “improper procedure” were well-founded by deposing the Commission officials. The Commission and the State opposed the order for depositions because, in their opinion, it was error to require administrative officials to appear for depositions upon a bald allegation of “bad faith” and “improper procedure.” We agree with the position taken by the Commission and the State and, therefore, conclude that the trial judge abused his discretion by ordering named commissioners to appear for depositions.

This Court has never expressly ruled whether a party challenging an administrative decision in court can depose the individual decision makers upon a mere allegation of “bad faith” or “improper procedure.” The issue, however, was discussed in dicta in Montgomery Co. Coun. v. Kaslow, supra, 235 Md. 45 , 200 A.2d 184