U.S. Health, Inc. v. State

¹¹⁸ BLOOM, Judge. These consolidated appeals by U.S. Health, Inc., are from an order of the Circuit Court for Baltimore City (Ross, J.) summarily dismissing, without argument, an administrative appeal from a ruling made by the appeal board of appellee, Maryland Commission on Human Relations. We shall affirm the judgment of the circuit court, since Judge Ross was absolutely correct in holding that there was no right of appeal to the court from the ruling in question and that the propriety of the ruling could be challenged on appeal from the agency’s final order. We shall also grant appellee’s motion for sanctions under Md.Rule 1-341, having concluded that there was no justification for bringing this appeal.

Background The statute that created and defined the duties and powers of the Maryland Commission on Human Relations was first enacted as Chapter 548 of the Laws of 1951 and has been amended several times since. It is now codified as Article 49B of the Annotated Code of Maryland (1957, 1986 Repl.Yol., 1990 Cum.Supp.). On 17 September 1984, Richard P. Arnold filed a complaint with the Commission alleging sexual discrimination based upon the fact that, although he is a member of appellant’s Holiday Spa in Greenbelt, Maryland, he was excluded from the women’s aerobics classes at that facility. On 27 November 1985, Bruce Gabler filed a similar complaint based upon his exclusion from the women’s aerobics class at appellant’s Bethesda facility.

After a protracted delay, the Commission eventually found probable cause to believe that appellant discriminated against complainants Arnold and Gabler, respectively, in violation of Article 49B of the Annotated Code of Maryland. On 1 July 1987, and 29 March 1988, the Commission notified appellant that, as a result of the parties’ failure to conciliate, a public hearing would be scheduled. On 10 April 1989, the Hearing Examiner granted appellee’s Motion to Consol *? idate the cases for hearing before the agency, which was scheduled for 22-25 May 1989. Prior to that scheduled hearing, appellant filed with the designated hearing officer a profusion of motions in each case, including motions to compel depositions of the complainants and the Commission’s investigator and motions to enforce discovery.

The Commission opposed all the motions; with respect to depositions and discovery, it asserted that there was no statutory authority for the relief sought by appellant. By order dated 26 September 1989, the hearing examiner denied appellant’s depositions and discovery motions on the grounds that, pursuant to COMAR 14.03.01.07J, the discovery available to any party prior to a hearing before an agency is limited to production of documents and things. With respect to appellant’s argument that the Commission obtained discovery during its investigative process, the hearing examiner concluded that the fact-finding conference and interrogatories were investigative tools used by the Commission to determine whether probable cause exists to believe a discriminatory act has occurred, and are not part of the hearing process. Appellant filed a Notice of Appeal, requesting review by the Commission’s appeal board of the hearing examiner’s decision denying appellant’s motions.

The appeals board granted appellee’s Motion to Strike the Notice of Appeal, holding that “there is no provision in Article 49B or the Commission’s regulations for an appeal to the Commissioners from a Hearing Examiner’s order governing pre-hearing discovery matters such as whether the taking of depositions would be permitted.” Appellant next appealed to the Circuit Court for Baltimore City from the ruling of the appeals board. The court granted appellee’s Motion to Dismiss, holding that “no appeal lies from discovery orders of the nature entered by the hearing examiner in this case.” The court further indicated that “all issues raised including constitutional ¹²⁰ issues can be resolved on appeal from the agency’s final order.” Appellant then brought these appeals, which, we consolidated for purposes of briefing and oral argument. I Pellucidly, the appeal board’s ruling on appellant’s request for discovery was not a final order that could be appealed to the circuit court. It is equally transpicuous that denying appellant immediate appeal did not violate its due process rights.

A. It is the general rule that “an action for judicial review of an administrative order will lie only if the administrative order is final.” Mission Helpers v. Beasley, 82 Md.App. 155, 161 , 570 A.2d 382 (1990) (quoting Holiday Spas v. Montgomery County, 315 Md. 390, 395 , 554 A.2d 1197 (1989)). “To be ‘final’ for purposes of judicial review, the order must ‘leave nothing further for the agency to do.’ ” Id. (quoting Md. Comm’n on Human Rel. v. B.G. & E. Co., 296 Md. 46, 56 , 459 A.2d 205 (1983)). The appeal board’s order simply denied appellant’s request to depose certain individuals and its request for production of certain documents. Obviously, the denial of appellant’s request for pre-hearing discovery in no way terminated the proceedings “[leaving] nothing further for the agency to do.” A hearing on the merits was to follow.

Appellant contends that the denial of its request for prehearing discovery is analogous to an interlocutory order entered by a circuit court granting an injunction and, should, therefore, although nonfinal, be treated as an exception to the general rule. In Holiday Spas v. Montgomery County, 315 Md. 390 , 554 A.2d 1197 (1989), the Court of Appeals addressed a situation in which an administrative order, after determining liability, required Holiday Spas, inter alia, to alter its ¹²¹ practices almost at once, but did not resolve the issue of damages. According to the Commission, a panel hearing would be conducted on that issue in the near future. The Court held that not every administrative order which determines rights and liabilities, or from which legal consequences flow, is final and thus subject to judicial review.

Generally, to be final, an administrative order must also “leave nothing further for the agency to do.” (Citations omitted.) That requirement was clearly not met here. Id. at 396 , 554 A.2d 1197 . According to the Court, some courts have taken the position that administrative agency orders equivalent to injunctions should be deemed final and appealable because they result in irreparable injury, even though there is no statute comparable to § 12-303(c)(l). In Papago Tribal Util.

Auth. v. Federal Energy, 628 F.2d 235, 240 (D.C.Cir), cert. denied, 449 U.S. 1061 [ 101 S.Ct. 784 , 66 L.Ed.2d 604 ] (1980), the United States Court of Appeals for the District of Columbia Circuit said with regard to administrative orders: “Only when parties face the prospect of irreparable injury, with no practical means of procuring effective relief after the close of the proceeding, might they be entitled to immediate review of a nonfinal order.” 315 Md. at 397 , 554 A.2d 1197 . In Holiday Spas , the order requiring Holiday to post notices and to provide men and women “with at least a substantially similar opportunity to engage in aerobic dance classes within ten days” was held to have “inflicted upon Holiday sufficient irreparable injury to be deemed final.” Id. at 399 , 554 A.2d 1197 . In the case at bar, appellants contend that the consequences of being denied the opportunity to depose the agency’s investigator and the two complainants were similar to those outlined in several cases cited by the Court in Holiday Spas, supra. ¹²² For example, in Isbrandtsen Co. v. United States, 211 F.2d 51 (D.C.Cir.), cert. denied 347 U.S. 990 , 74 S.Ct. 852 , 98 L.Ed. 1124 (1954), a Federal Maritime Board order tentatively approved a dual rate system which was to go into effect in 48 hours. Although a hearing for permanent approval was scheduled for a future date, the impact was such that Isbrandtsen’s business would suffer immediate harm.

Likewise, in Nevada Airlines, Inc. v. Bond, 622 F.2d 1017 (9th Cir.1980), the Federal Aviation Administration suspend-, ed the airline’s air carrier operating certificate pending a further appeal. The Ninth Circuit permitted immediate review because, practically speaking, Nevada’s business would suffer immediate adverse harm. 315 Md. at 399 , 554 A.2d 1197 . The Court of Appeals cited the following language from Isbrandtsen, 211 F.2d at 55 , with approval: Whether or not the statutory requirements of finality are satisfied in any given case depends not upon the label affixed to its action by the administrative agency but rather upon a realistic appraisal of the consequences of such action. “The ultimate test of reviewability is not to be found in an overrefined technique, but in the need of the review to protect from the irreparable injury threatened in the exceptional case by administrative rulings which attach legal consequences to action taken in advance of other hearings and adjudications that may follow, the results of which the regulations purport to control.” 315 Md. at 398 , 554 A.2d 1197 . Appellant also relies on County Comm’rs v. Schrodel, 320 Md. 202, 211 , 577 A.2d 39 (1990), in which the Court of Appeals held that the circuit court’s order that did not simply postpone the trial but effectively stayed the condemnation action until the county obtained a permit to construct a landfill on the Schrodel’s property was appealable under the collateral order doctrine. ¹²³ We note first of all that the order appealed from in Schrodel was not issued by an administrative agency but was that of a court of law, as to which the collateral order doctrine is well settled.

Secondly, the circumstances in Schrodel clearly satisfied the four requirements of an appealable collateral order. In the case at bar, appellant was merely required to proceed through a hearing on the merits in which it would have been afforded an opportunity to cross-examine the persons it wished to depose. If appellant were to prevail at the hearing, there would be no reason to appeal; if unsuccessful, then it would have the right to raise the issue of the denial of an opportunity to take the depositions. In any event, it is absurd to suggest that appellant suffered immediate and irreparable harm of such magnitude as described in the above-cited cases that would make the decision to deny pre-hearing discovery final and appealable.

B. On the issue of whether denying appellant the right to take an immediate appeal constituted a violation of its due process rights, we find Maryland Department of Human Resources, Maryland Department of Health and Mental Hygiene, Harford County Health Department v. Bo Peep Day Nursery, 317 Md. 573 , 565 A.2d 1015 (1989), cert. denied, — U.S.-, 110 S.Ct. 1784 , 108 L.Ed.2d 786 (1990), dispositive. In Bo Peep, prior to a hearing on the merits, the agency’s hearing officer denied appellee’s request for discovery by way of psychological interview of the alleged victims by an expert selected by appellee. None of the alleged victims of child abuse had testified at any of the proceedings. 1 Instead, their out-of-court statements were admitted through their parents and others who had spoken to them. The ¹²⁴ circuit court found that since the children’s statements were “foundational,” Bo Peep’s request for such pre-trial discovery would have afforded them a “meaningful opportunity to test the credibility of the out-of-hearing statements.” Although it recognized that the hearing examiner had no authority to order the type of discovery requested by Bo Peep, the circuit court nevertheless concluded that under those circumstances the hearing officer should not have considered any of the evidence which was dependent on the foundational out-of-hearing statements where circumstances prevented an opportunity to challenge.

The circuit court remanded the revocation order, concluding that the agency’s denial of the discovery request violated appellee’s constitutional right to procedural due process. The Court of Appeals reversed, holding that a straightforward application of the principles of Mathews v. Eldridge, 424 U.S. 319 , 96 S.Ct. 893 , 47 L.Ed.2d 18 (1976), demonstrated that due process had not been violated. 317 Md. at 596-97 , 565 A.2d 1015 . Quoting Mathews, supra, 424 U.S. at 334-35 , 96 S.Ct. at 903 , the Court of Appeals said: More precisely, our prior decisions indicate that identification of the specific dictates of due process generally requires consideration of three distinct factors: first, the private interest that will be affected by the official action; second, the risk of an erroneous deprivation of such interests through the procedures used, and the probable value, if any, of additional or substitute procedural safeguards; and finally, the Government’s interest, including the function involved and the fiscal and administrative burdens that the additional or substitute procedural requirement would entail. Bo Peep, 317 Md. at 596 , 565 A.2d 1015 .

The Court further stated: Before examining the balancing test in operation, one should note the different elements of the adversary process which may be required as part of the “due process” which must be afforded to an individual when the govern ¹²⁵ ment deprives him of life, liberty or property. The essential elements are: (1) adequate notice of the charges or basis for government action; (2) a neutral decision-maker; (3) an opportunity to make an oral presentation to the decision-maker; (4) an opportunity to present evidence or witnesses to the decision-maker; (5) a chance to confront and cross-examine witnesses or evidence to be used against the individual; (6) the right to have an attorney present the individual’s case to the decision-maker; (7) a decision based on the record with a statement of reasons for the decision. (Quoting 2 R. Rotunda, J. Nowak & N. Young, Treatise on Constitutional Law, Substance and Procedure § 17.8, at 250 (1986).) [Footnote omitted.] The authors list six additional procedural safeguards, including “a right to pre-trial discovery of evidence,” which the authors state “tend to appear only in connection with criminal trials or formal judicial process of some type.” Id. at 597, 565 A.2d 1015 . There is no liberty interest or property interest at stake in the case sub judice.

The only private interest to be affected is appellant’s ability to take three depositions prior to the hearing. Appellant contends that the right to take depositions and to