Lussier v. Maryland Racing Com'n

• Decision Date: 01 September 1994
• Docket Number: No. 96,96
• Parties: Frank P. LUSSIER v. MARYLAND RACING COMMISSION. ,
• Court: Maryland Court of Appeals

Page 681

343 Md. 681

684 A.2d 804

Frank P. LUSSIER v. MARYLAND RACING COMMISSION.

No. 96, Sept. Term, 1994.

Court of Appeals of Maryland.

Nov. 8, 1996.

Glenn E. Bushel (Brocato, Price & Bushel, P.A., on brief), Baltimore, for Petitioner.

Bruce C. Spizler, Assistant Attorney General (J. Joseph Curran, Jr., Attorney General, on brief), Baltimore, for Respondent.

ELDRIDGE, RODOWSKY, CHASANOW, KARWACKI, BELL and RAKER, JJ., and JOHN F. McAULIFFE, Judge (Retired), Specially Assigned.

ELDRIDGE, Judge.

The single issue before us in this case concerns the validity, as applied to a racehorse owner, of a Maryland Racing Commission regulation which authorizes the Commission to impose a monetary penalty not exceeding $5,000 upon a person subject to its jurisdiction who, inter alia, violates the Commission's regulations. ¹

I.

The petitioner, Frank P. Lussier, is a Vermont resident who purchased three thoroughbred racehorses in the spring of 1991. Later in 1991, the three horses were shipped to Maryland where they raced at the Laurel Race Course in three races on November 26, 1991, December 29, 1991, and December 31, 1991. Lussier was licensed by the Maryland Racing Commission as an owner of racehorses, and his license expired at the end of 1991. Lussier did not renew his Maryland license for 1992 or thereafter. ² In February 1992, the Maryland Racing Commission and the Thoroughbred Racing Protective Bureau commenced an investigation with regard to the races on November 26, December 29, and December 31, to determine whether the true owner or trainer of the three horses had been concealed and whether falsified workout reports for the three horses had been published. Upon the completion of the investigation, and after a hearing before the Commission on July 1, 1992, the Commission found that Lussier had participated in "improper acts in relation to racing in violation of COMAR 09.10.01.11(A)(3);" that Lussier transferred two of his horses "from himself to the name of another person for a purpose other than the legitimate sale of the horses in violation of COMAR 09.10.01.11(A)(14);" and that Lussier perpetrated "dishonest acts in connection with his activities, responsibilities and duties on the race track, and has engaged in conduct detrimental to racing in violation of COMAR 09.10.01.25(B)(8)." In an order issued on July 24, 1992, the Commission imposed a $5,000 fine upon Lussier. ³

Lussier filed an action in the Circuit Court for Baltimore County for judicial review of the Commission's decision, challenging the administrative decision on several grounds. After a hearing, the circuit court upheld the Commission's order imposing a $5,000 fine upon Lussier. Lussier appealed to the Court of Special Appeals, again raising numerous issues. The intermediate appellate court rejected each of Lussier's contentions and affirmed. Lussier v. Maryland Racing Comm'n, 100 Md.App. 190, 640 A.2d 259 (1994). Lussier then filed in this Court a petition for a writ of certiorari, presenting all of the issues which he had raised in both courts below. This Court granted the petition limited to a single question, namely whether the Commission could, in accordance with its regulation, impose a fine as a sanction for misconduct absent a statutory provision expressly authorizing the imposition of a fine.

II.

Lussier argues that it is an "elementary" principle of Maryland law that administrative agencies lack the authority to fix "penalties in the absence of specific statutory authorization from the Legislature," and that "it has always been the Legislature's exclusive province to fix penalties ... for transgressions of the law, either directly or via specific delegation." (Petitioner's brief at 10, 17). Lussier cites three cases which he claims support this alleged principle of Maryland administrative law. They are Holy Cross Hosp. v. Health Services, 283 Md. 677, 393 A.2d 181 (1978); Gutwein v. Easton Publishing Co., 272 Md. 563, 325 A.2d 740 (1974), cert. denied, 420 U.S. 991, 95 S.Ct. 1427, 43 L.Ed.2d 673 (1975); and County Council v. Investors Funding, 270 Md. 403, 312 A.2d 225 (1973). According to Lussier, since the General Assembly did not explicitly authorize the Commission to impose a fine upon a racehorse owner, the Commission's order in this case "is a nullity" (Petitioner's brief at 10). Lussier asserts that the Commission's regulation authorizing the imposition of a fine, COMAR 09.10.04.03D, is invalid except as applied to those licensed racetrack operators who have been awarded racing dates. (Petitioner's brief at 16-18). See Maryland Code (1992, 1995 Supp.), § 11-308(d) of the Business Regulation Article (expressly authorizing the Commission to impose a monetary penalty not exceeding $5,000 upon racetrack operators who, inter alia, violate the statute or the Commission's regulations).

As pointed out by the Court of Special Appeals, Lussier v. Maryland Racing Comm'n, supra, 100 Md.App. at 203-204, 640 A.2d at 266, this Court's prior cases relied upon by Lussier neither recognize nor support the assertion that, under Maryland law, an administrative agency lacks authority to impose a particular penalty unless it has explicit authorization from the Legislature to do so. Holy Cross Hosp. v. Health Services, supra, was not concerned with the imposition of penalties; instead, the question in that case was whether, as a matter of statutory construction, an administrative agency's statutory authority to regulate hospital rates extended to fees charged by physicians to hospital patients. In Gutwein v. Easton Publishing Co., supra, 272 Md. at 576, 325 A.2d at 747, the issue was whether, under the pertinent statutory provisions and "[i]n view of the [Human Relations] Commission's legislative background," the Human Relations Commission was authorized to make an award of compensatory damages to a victim of employment discrimination. Neither a penalty nor a regulation adopted by the agency was involved in the Gutwein case. The portion of County Council v. Investors Funding, supra, 270 Md. at 441-443, 312 A.2d at 246-247, relating to monetary penalties, had nothing to do with an administrative agency's imposition of a particular type of penalty without express statutory authorization. In fact, in Investors Funding there was express statutory authorization for the agency to impose monetary penalties. The issue in that case concerned the validity of the statute in light of constitutional delegation of powers and due process principles.

Neither the Maryland cases relied on by Lussier, nor any other decisions of this Court which have been called to our attention, set forth or support a general principle that a state administrative agency lacks authority, by regulation, to fix a civil penalty for misconduct subject to its jurisdiction unless the General Assembly has expressly authorized the agency to fix that type of penalty.

Instead, the cases invoked by Lussier, as well as numerous other decisions by this Court, indicate that, in determining whether a state administrative agency is authorized to act in a particular manner, the statutes, legislative background and policies pertinent to that agency are controlling. See, e.g., Comptroller v. Washington Restaurant, 339 Md. 667, 670-673, 664 A.2d 899, 900-902 (1995); Luskin's v. Consumer Protection, 338 Md. 188, 196-198, 657 A.2d 788, 792-793 (1995); Fogle v. H & G Restaurant, 337 Md. 441, 654 A.2d 449 (1995); Christ v. Department of Natural Resources 335 Md. 427, 437, 440, 644 A.2d 34, 38, 40 (1994); McCullough v. Wittner, 314 Md. 602, 610-612, 552 A.2d 881, 885-886 (1989); Consumer Protection v. Consumer Pub., 304 Md. 731, 756-759, 501 A.2d 48, 61-63 (1985); Holy Cross Hosp. v. Health Services, supra, 283 Md. at 683-689, 393 A.2d at 184-187; Gutwein v. Easton Publishing Co., supra, 272 Md. at 575-576, 325 A.2d at 746-747. Moreover, with regard to the validity of a regulation promulgated by an administrative agency, the governing standard is whether the regulation is " 'consistent with the letter and spirit of the law under which the agency acts.' " Christ v. Department of Natural Resources, supra, 335 Md. at 437, 644 A.2d at 38, quoting Department of Transportation v. Armacost, 311 Md. 64, 74, 532 A.2d 1056, 1061 (1987). See also Fogle v. H & G Restaurant, supra, 337 Md. at 453, 654 A.2d at 455, and cases there cited.

III.

Turning to the statutes applicable to the Maryland Racing Commission, title 11, subtitle 2, of the Business Regulation Article of the Maryland Code establishes the Commission, provides for its membership and staff, and sets forth generally the authority of the Commission. Instead of particularizing various powers of the Commission with regard to racehorse owners, trainers, jockeys, and others involved in Maryland racing, the statutory provisions, in § 11-210, broadly authorize the Commission to "adopt regulations ... to govern racing and betting on racing in the State," and then specify four types of regulations which the Commission may not adopt. Thus, § 11-210 of the Business Regulation Article states in relevant part as follows:

" § 11-210. Regulatory power of Commission.

(a) In general.--Except as provided in subsection (b) of this section, the Commission may:

(1) adopt regulations and conditions to govern racing and betting on racing in the State ...

(b) Prohibited regulations.--The Commission may not adopt regulations that allow:

(1) racing a breed of horse not now authorized by law; or

(2) holding currently unauthorized:

(i) intertrack betting;

(ii) off-track betting; or

(iii) telephone betting other than telephone account betting."

This Court has consistently held that, where the Legislature has delegated such broad authority to a state administrative agency to promulgate regulations in an area, the agency's regulations are valid under the statute if they do not contradict the statutory language or purpose. We have repeatedly rejected the...