State of Maryland Commission on Human Relations v. Freedom Express

ELDRIDGE, Judge. The issue in this case concerns the scope of a trial court’s authority in an action by the Maryland Commission on Human Relations to enforce an administrative subpoena pursuant to Maryland Code (1957, 1998 RepLVol.), Art. 49B, § 11(d). ⁴ I. Prior to May 27, 1997, Mrs. Marvinette Karasek was employed by the defendant-appellee, Freedom Express/Dome-gold, Inc., the operator of a pharmacy, as a “pharmacist technician.” On June 6, 1997, Mrs. Karasek filed with the Commission on Human Relations a complaint against the defendant, asserting discrimination because of her gender and because of pregnancy, in violation of Art. 49B, § 16. 1 Mrs. Karasek’s complaint alleged that prior to May 27, 1997, she had never had any complaints about her work performance, that on May 19, 1997, she informed Harvey Goldberg, the owner of the defendant corporation, that she was pregnant, and that on May 27, 1997, Mr. Goldberg informed her that she “was being terminated because [her] work was not up to par.” The complaint further alleged that another female pharmacist technician, who was having work problems but who was not pregnant, was “sent ... to another pharmacy to be retrained, according to company policy.” The complaint also stated that Mr. Goldberg “told a co-worker that ‘pregnant women are walking law suits.’ ” Finally, the complaint alleged that the defendant had between 15 and 100 employees. Sometime later in 1997, Mrs. Karasek filed with the Human Relations Commission a second complaint alleging further unlawful discrimination in the form of retaliation for filing the first complaint. The second complaint alleged that, upon being terminated in May 1997, Mrs. Karasek filed for and ⁵ began receiving unemployment benefits, that “[o]n 6/28/97, I received a letter from the Unemployment Office stating that my employer Freedom Express/Domegold had filed an objection to my unemployment benefits,” and that “I believe that my employer’s objection was in retaliation for filing the original charge of discrimination.” In accordance with Art. 49B, § 10, the Executive Director of the Commission referred the complaints to the Commission’s staff for investigation. 2 In attempting to investigate and obtain information from the defendant, the Commission’s staff was consistently met with a refusal based on the defendant’s assertion that the Commission had “no jurisdiction” over the defendant.

The “no jurisdiction” assertion was based upon the defendant’s allegation that it had less than fifteen employees and that, therefore, it was not an “employer” within the meaning of the “Discrimination In Employment” subtitle of Art. 49B, §§ 14-18. 3 In response, the Commission asked for ⁶ documentation concerning the allegation of having fewer than fifteen employees, as well as information relating to Mrs. Karasek’s complaints. In one 1999 letter, the Commission stated: “It is fully understood that Respondent operates more than one pharmacy, with each being a separate corporation and operating as such. This does not negate the fact that personnel is not being shared among each pharmacy. Thus, ownership is not irrelevant. “Every effort should be made on Respondent’s part to provide this information within five (5) days from the date of this letter.

Failure to do so will result in the issuance of a subpoena.” Having received no further information from the defendant, the Commission on December 22, 1999, issued a subpoena duces tecum to the defendant, seeking documents concerning the defendant’s corporate structure, the employer’s quarterly federal tax returns for businesses owned or operated by Harvey Goldberg, and documents relating to the discharge of Mrs. Karasek. 4 The defendant did not furnish the documents ⁷ sought by the subpoena, and on February 28, 2000, the Commission’s Assistant General Counsel wrote to the defendant’s attorney, stating, inter alia, as follows: “As you have been advised, operations between separate and distinct legal entities may be integrated as to constitute a single employer for purposes of ... Article 49B. Four factors generally are considered: (1) interrelation of operations; (2) centralized control of labor relations and personnel; (3) common management; and (4) common ownership and financial control. ⁸ “The only information you have provided to support your allegation of lack of jurisdiction is the number of employees for one entity owned or operated by Harvey Goldberg. Information must also be provided regarding Mr. Goldberg’s other businesses, including all Freedom Express, Freedom Pharmacy and Freedom Drug stores.

Relevant and necessary information includes, but is not limited to: (1) Articles of Incorporation, (2) source of payroll checks, workers’ compensation, unemployment and other benefits, (3) hiring practices, (4) personnel forms and procedures, and (5) the legal counsel, for each entity owned or operated by Mr. Goldberg. “Despite repeated requests, you have failed to provide this relevant and necessary information. Unfortunately, your client has failed even to respond to the Commission’s subpoena seeking relevant and necessary information. In addition to the assertion of lack of jurisdiction, you indicate that your client’s position is that the Commission is not entitled to all of the information sought by the subpoena. However, you do not specify what information your client believes the Commission is not entitled to or why your client believes the Commission is not entitled to it.

Accordingly, on March 6, 2000, the Commission will file an action for the issuance of a court order compelling compliance, unless the subpoenaed documents are delivered prior to that date.” The defendant then turned over to the Commission articles of incorporation and redacted employer’s quarterly federal tax returns “For Harvey Goldberg’s Corporations: Domegold, Aerogold, Norgold and Bergold.” None of the other requested documents were submitted to the Commission. Next, the Commission informed the defendant that the documents . submitted indicated that the four corporations were “integrated entities so as to constitute a single employer for purposes of ... Article 49B.” The Commission pointed to documents showing that Mr. Goldberg was the president of ⁹ each corporation, that they all had the same principal place of business, and that the wages and benefits were the same with respect to each corporation. The Commission requested that the defendant comply with the other parts of the subpoena “in order that the Commission’s investigation of this matter can be completed.” The defendant replied by refusing to supply additional documents and asserting: “there is no jurisdiction over Domegold and the subpoenaed items going to the issue of jurisdiction have been provided.... ” Pursuant to Art. 49B, § 11(d)(3), the Commission filed, in the Circuit Court for Baltimore City, the present action to enforce the administrative subpoena. 5 The Commission’s “Pe ¹⁰ tition for Enforcement” stated that the “subpoena is to obtain information necessary and relevant to the Commission’s investigation as required pursuant to Article 49B, § 10,” and that the defendant Freedom Express/Domegold, Inc. “has refused to produce the requested documents.” The Commission’s petition went on to set forth in detail the factual allegations of Mrs. Karasek’s complaints, the history of the case, and the correspondence between the Commission and the defendant.

The defendant’s answer in the Circuit Court repeatedly stated, inter alia, that the Commission “has received the subpoenaed information which establishes that the Petitioner does not have jurisdiction, as Domegold, Inc. did not have ‘fifteen or more employees....’” The defendant requested that the court dismiss the petition for “lack of jurisdiction over the subject matter----” Following a hearing, the Circuit Court issued an order which neither enforced the subpoena, nor denied enforcement, nor dismissed for lack of jurisdiction. Instead, the court “ORDERED that the case be remanded to the Maryland Commission on Human Relations for the purpose of conducting an evidentiary hearing to determine whether a sufficient basis existed at the time the subject complaints were filed to treat the then extant corporate entities owned and controlled by Harvey Goldberg as a ‘single employer’ for purposes of establishing jurisdiction by the Commission. The exhibits which were entered into the record before this Court by stipulation are insufficient to determine more than the common ownérship and financial control of the various corporate entities by Mr. Goldberg. The other factors which courts have deemed relevant to this inquiry cannot be determined on the basis of the record before the Court and the Court’s suspicion that the operations of these entities ¹¹ were sufficiently integrated is an insufficient predicate upon which to establish the Commission’s jurisdiction at this juncture.

Accordingly, the case must be remanded to the Commission for an evidentiary hearing----” On the day after the Circuit Court’s order, the Commission filed a motion for reconsideration, arguing, among other things, “that there is no authority under Article 49B for the Court to order the Commission to conduct an evidentiary hearing” at this stage of the case and that there had been no exhaustion of administrative remedies. In response, the defendant urged the Circuit Court to deny the motion for reconsideration and dismiss the petition for enforcement, arguing that Equitable Trust Co. v. State Commission on Human Relations, 287 Md. 80 , 411 A.2d 86 (1980), was “clearly the applicable case” and warranted a dismissal of the Commission’s petition for enforcement of the administrative subpoena. The Circuit Court entered an order simply denying the Commission’s motion for reconsideration. The Commission appealed to the Court of Special Appeals.

Prior to any proceedings in that intermediate appellate court, this Court issued a writ of certiorari. Commission on Human Relations v. Freedom Express, 364 Md. 461 , 773 A.2d 513 (2001). 6 II. A. Art. 49B, § 11(d), authorizes the Commission, “[i]n the administration and enforcement of the ... subtitles” of Art. 49B, “to issue subpoenas” and “(iii) [cjompel the production of books, papers, records and documents relevant or necessary ¹² for proceedings under the particular subtitle.” (Emphasis added). The Commission’s investigation of an employment discrimination complaint is a proceeding under Art. 49B and, therefore, is a proceeding for which the Commission is empowered to compel the production of books, papers, records and documents.

See, e.g., Banach v. State Commission on Human Relations, 277 Md. 502 , 356 A.2d 242 (1976). The only prerequisites expressly set forth in Art. 49B, § 11, for the issuance and judicial enforcement of a Commission subpoena are certain formal requirements, proper service of process, and a finding that “the production of the books, papers, records and documents is relevant or necessary for the proceedings” (§§ ll(d)(l)(iii), ll(d)(3)(ii)). The requirement of “relevance” in § 11(d) is the same as the requirements of “relevance” or “reasonableness” which are generally applied by the courts in determining whether to enforce administrative subpoenas. Banach v. State Commission on Human Relations, supra, 277 Md. at 506-507 , 356 A.2d at 245-246 .

See, e.g., United States v. Morton Salt Co., 338 U.S. 632 , 70 S.Ct. 357 , 94 L.Ed. 401 (1950); Oklahoma Press Publishing Co. v. Walling, 327 U.S. 186 , 66 S.Ct. 494 , 90 L.Ed. 614 (1946); Equitable Trust Co. v. State Commission on Human Relations, supra, 287 Md. at 91-94 , 411 A.2d at 92-94 ; Vulcan Waterproofers’, Inc. v. Maryland Home Improvement Commission, 253 Md. 204, 210 , 252 A.2d 62, 65 (1969). In the case at bar, there has never been a contention that the above-mentioned § 11(d) prerequisites for the issuance and enforcement of a Commission’s subpoena were not present. On the contrary, during the hearing before the Circuit Court, the defendant’s counsel agreed that, if there was a judicial finding that the Commission had “jurisdiction” in light of the statutory definition of employer, the defendant would “not contest” that “the subpoena should be enforced, [and] that those [documents] are relevant.” The defendant’s counsel stated that, upon a finding of jurisdiction, “then their investigation would go forward as to the underlying claim. ¹³ And yes, if there was that finding, then yes, we do not dispute that we would have to give them that information.” Moreover, even if a final resolution of the “employer” issue were a prerequisite for the issuance and/or enforcement of the subpoena (and it clearly is not such a prerequisite), nothing in Art. 49B or in the Maryland Administrative Procedure Act, Code (1984, 1999 RepLVol.), § 10-222 of the State Government Article, would authorize the Circuit Court, while the case is pending before the agency at the investigatory stage, to remand the case and order the agency to conduct a hearing. As later discussed, a court’s authority to remand a case to the Human Relations Commission for further proceedings is ordinarily limited to actions for judicial review of final administrative decisions.

See §§ 10-222(a) and (h)(1) of the State Government Article. In an action under Art. 49B, § 11(d), the court’s authority is to either enforce the subpoena, or modify the subpoena and, as so modified, enforce it, or to dismiss the Commission’s petition for enforcement. See Equitable Trust Co. v. State Commission on Human Relations, supra, 287 Md. at 100 , 411 A.2d at 97 ; Banach v. State Commission on Human Relations, supra, 277 Md. at 517 , 356 A.2d at 251 . B. Whether the defendant was an “employer” within the meaning of Art. 49B, § 15(b), rather than an issue to be resolved in a subpoena enforcement action, is a typical statutory interpretation or application issue to be determined by a final administrative decision and to be judicially reviewed in an action under the Administrative Procedure Act, § 10-222 of the State Government Article. 7 Depending upon the adminis ¹⁴ trative record, and particularly the transcript of the hearing under Art. 49B, §§ 11(a), 11(b), and 11(c), the issue may turn out to be one of fact, or one of law, or a mixed factual and legal issue. 8 ¹⁵ The disputed “employer” issue in the present case is also not a “jurisdictional” question.

Instead, it is similar to many other issues which, under this Court’s opinions, ordinarily cannot be judicially reviewed until there is a final administrative decision. For example, Board of License Commissioners v. Corridor, 361 Md. 403 , 761 A.2d 916 (2000), involved an administrative proceeding against the holder of an alcoholic beverage license, based on the sale of alcoholic beverages to a minor, by an employee of the licensee. A statute provided that, if a court found the employee not guilty of the offense or placed the employee “on probation without a verdict,” the “finding operates as a complete bar to any proceeding by any alcoholic beverage law enforcement or licensing authorities against the licensee on account of the alleged violation.” Immediately prior to the administrative hearing, the Maryland District Court disposed of the criminal charge against the licensee’s employee by entering “a verdict of ‘Probation Before Judgment.’ ” Corridor, 361 Md. at 407 , 761 A.2d at 917 . The licensee then argued, at the administrative hearing, that this District Court verdict was a statutory bar to the administrative proceedings and that the proceedings should be dismissed.

The agency rejected the argument and scheduled a resumption of the hearing to deal with the merits. Before the administrative hearing could resume, the licensee filed a Circuit Court action, seeking an order requiring the agency to dismiss the administrative proceedings. Like the defendant in the case at bar, the licensee asserted that, under the statute, the District Court ¹⁶ verdict “deprived the Board of jurisdiction.” 361 Md. at 409 , 761 A.2d at 919 . The Circuit Court agreed, held “that the Board ‘lacks jurisdiction to proceed in the pending administrative matter,’ ” and ordered the administrative agency to dismiss the proceedings.

Ibid. This Court in Corridor, 361 Md. at 417-418 , 761 A.2d at 923-924 , reversed the Circuit Court’s decision, held that “the statutory interpretation issue underlying this case does not relate to the subject matter jurisdiction of the Board,” and held that judicial review of the issue “ ‘will lie only if the administrative order is final,’ ” quoting Driggs Corp. v. Md. Aviation, 348 Md. 389, 407 , 704 A.2d 433, 442 (1998), and Holiday Spas v. Montgomery County, 315 Md. 390, 395 , 554 A.2d 1197, 1199 (1989). In holding that the type of issue raised in Corridor was not jurisdictional, we explained (Corri dor, 361 Md. at 417-418 , 761 A.2d at 923-924 ): “Judge J. Dudley Digges for this Court, in First Federated Commodity Trust Corp. v. Commissioner, 272 Md. 329, 335 , 322 A.2d 539, 543 (1974), set forth the general test for determining the subject matter jurisdiction of a tribunal: ‘If by that law which defines the authority of the court, a judicial body is given the power to render a judgment over that class of cases within which a particular one falls, then its action cannot be assailed for want of subject matter jurisdiction.’ “See also Board of Nursing v. Nechay, 347 Md. 396, 405-407 , 701 A.2d 405, 410-411 (1997). Art. 2B of the Maryland Code clearly gives the Board the power to render a decision over the class of cases within which the present case falls. “Simply because a statutory provision directs a court or an adjudicatory agency to decide a case in a particular way, if certain circumstances are shown, does not create an issue going to the court’s or agency’s subject matter jurisdiction.

There have been numerous cases in this Court involving the situation where a trial court or an adjudicatory agency has jurisdiction over the subject matter, but where a statute directs the court or agency, under certain circumstances, to ¹⁷ exercise its jurisdiction in a particular way, or to rule in favor of a respondent, or to dismiss the case, and the tribunal erroneously refuses to do so because of an error of statutory interpretation or an error of fact. In these situations, this Court has regularly held that the matter did not concern the subject matter jurisdiction of the trial court or the agency. See, e.g., Montgomery County v. Ward, 331 Md. 521, 527-528 , 629 A.2d 619, 622 (1993); Md. Comm’n On Human Relations v. Beth. Steel, supra, 295 Md. [586] at 594-595, 457 A.2d [1146] at 1150-1151; Comm’n On Human Relations v. Mass Transit, 294 Md. 225, 233-235 , 449 A.2d 385, 389-390 (1982); Parks v. State, 287 Md. 11, 16-17 , 410 A.2d 597, 601 (1980); Block v. State, 286 Md. 266, 268-271 , 407 A.2d 320, 321-323 (1979).” More recently, Judge Wilner for the Court in Carey v. Chessie Computer, 369 Md. 741, 755-756 , 802 A.2d 1060, 1068-1069 (2002), underscored the narrowness of the “lack of jurisdiction” concept: “In earlier days, courts seemed more willing to view limitations on their authority or discretion as jurisdictional in nature.

We have moved away from that view in the past few decades, however, in part because of the consequences of such an approach. “That characteristic \i.e., that rulings are void if the tribunal lacked jurisdiction] — the utter nullity of rulings that the court had no jurisdiction to make — necessarily follows from the very concept of the rule of law, the protection of which is a court’s predominant, if not only,