Wash. Home Remodelers, Inc. v. State
| Decision Date | 22 May 2012 |
| Docket Number | No. 82,Sept. Term, 2011.,82 |
| Citation | 426 Md. 613,45 A.3d 208 |
| Parties | WASHINGTON HOME REMODELERS, INC. v. STATE of Maryland, OFFICE OF the ATTORNEY GENERAL, CONSUMER PROTECTION DIVISION. |
| Court | Maryland Court of Appeals |
OPINION TEXT STARTS HERE
Levi S. Zaslow (Timothy F. Maloney of Joseph, Greenwald & Laake, P.A., Greenbelt, MD), on brief, for appellant.
Philip D. Ziperman, Asst. Atty. Gen. (Douglas F. Gansler, Atty. Gen., and Elizabeth J. Koenig, Asst. Atty. Gen., Baltimore, MD), on brief, for appellee.
Argued before BELL, C.J., HARRELL, BATTAGLIA, GREENE, ADKINS, BARBERA and ARRIE W. DAVIS (Retired, Specially Assigned), JJ.
We granted certiorari in this case to determine the scope of authority of the Attorney General's Consumer Protection Division (the Division) to issue administrative subpoenas in aid of its investigation into potential unfair and deceptive trade practices. Washington Home Remodelers, Inc. v. Consumer Protection Div., 423 Md. 450, 31 A.3d 919 (2011). We shall hold that the Division has the authority to issue the administrativesubpoena at issue in this case, and shall therefore affirm the circuit court's enforcement order.1
In this case, we are asked to address a problem of potentially overlapping agency jurisdiction in the context of “shared regulatory space.” 2 The Division seeks documents that it claims are relevant to its investigation into potential unfair and deceptive trade practices that are within the ambit of its regulatory and enforcement authority under the Maryland Consumer Protection Act (CPA). See Md.Code (1975, 2005 Repl.Vol., 2011 Supp.), § 13–405 of the Commercial Law Article (Com.Law). Washington Home Remodelers (WHR), the target of the Division's investigation, has demurred, asserting that the Division has overreached by seeking discovery into matters in which the regulatory authority resides exclusively with either the Commissioner of Financial Regulation of the Department of Labor, Licensing and Regulation (DLLR) or the Maryland Home Improvement Commission under their respective enabling statutes.3 WHR insists that the Division subpoena is therefore not authorized by law and maintains that the circuit court erred in ordering its enforcement. Because we shall hold that the Division's subpoena is authorized by the Consumer Protection Act, we need not delve into conflicting investigatory prerogatives of separate administrative agencies.
WHR is a licensed home improvement contractor based in College Park, Maryland. Acting on complaints from former WHR employees and consumers concerning WHR's sales solicitation practices, the Division initiated an investigation. Three former employees complained that WHR had misrepresented the individual licensing status of its sales people.4 Consumers also alleged that WHR accessed their credit histories without their knowledge and consent before soliciting a business relationship. For example, as stated in the Division's brief, one consumer alleged that
On 3/4/08 Washington Home Remodelers contacted me by phone offering home remodeling services—including deck building.... The caller said they wanted to know if I would be interested in having a “free” estimate on a deck for my home. I told him that I would like an estimate. We scheduled an appointment for Sat. 3/8/08 @ 4 pm.... I was unable to keep that appointment so we rescheduled for Thurs. 3/13/08 @ 7 pm. On Wednesday, 3/12/08 I was notified by the fraud alert service that I use that my credit report had been accessed by Washington Home Remodelers. I was alarmed by this since I had not met with their representative nor given them any personal information or made a request over the phone or given them permission verbally or in writing to access my credit. On Thursday 3/13/08 I contacted [Washington Home Remodelers'] offices and spoke to Greg Troy, who identified himself as the Customer Service Manager. I told him that I was calling because I learned that they had accessed my credit without my permission and I was upset. I explained that I had neither met with their representative and had completed no paperwork nor request for their financing regarding a deck or any other service they provided. I told him I would be filing a complaint with the Maryland's [sic] Consumer Protection office because I thought this business practice was unlawful. He told me that they work through Equifax and apologized because ‘someone jumped the gun’ by running my credit report. I reminded him that each time someone's credit is accessed it affects their credit score....
This was apparently not an isolated example. On May 29, 2009, a second prospective customer scheduled an appointment for an estimate for constructing a deck to his home, but, although no one appeared for the appointment, the prospective customer received an alert from the credit bureau that it had received an inquiry for his credit file, without his permission. On August 19, 2009, based on these complaints and those of former WHR employees, and acting on its perceived authority to investigate unfair and deceptive trade practices prohibited by the CPA, the Division served WHR with an administrative subpoena. 5
In response to this subpoena, WHR produced some of its form sales documents and sales agreements, but otherwise refused to comply further with the Division's demand. For example, WHR declined to provide documents that identified the licensing history of its current and former employees, information concerning its lending and credit practices, and the advertisements, scripts, forms and other documents it uses to communicate with consumers. Resisting any further disclosure, WHR maintained that the information sought was beyond the Division's authority, and contended that investigation and enforcement of the law regarding the licensure of its agents lies exclusively within the jurisdiction of the Maryland Home Improvement Commission and that the enforcement of the law proscribing unauthorized access to credit reports is a matter exclusively within the authority of the Commissioner of Financial Regulation of the DLLR. The information thus sought by the Division instead could only be requested by, and provided to, those latter agencies, WHR asserted.
On December 4, 2009, after informal efforts by the Division and WHR to resolve the dispute were unsuccessful, the Division sought judicial enforcement of its administrative subpoena by filing a Complaint for Enforcement of Administrative Subpoena in the Circuit Court for Prince George's County. The Division accompanied this filing with a motion for summary judgment. WHR, in turn, moved to dismiss and filed a cross-motion for summary judgment, based on its claim that the Division's subpoena was without legal authority.
Following a hearing on September 21, 2010, the circuit court, although initially agreeing with WHR, ultimately determined to enforce the Division's subpoena. The court, painting the Division's investigative authority with a broad brush, upheld the Division's authority to investigate the alleged unauthorized accessing of credit reports and employment of unlicensed salesmen. With a nod to the extensive reach necessary for an agency to address the potential adverse effects on consumers, the circuit court harbored
[n]o doubt the division has the investigatory authority regarding consumers and the consumer's welfare. And I think for me the salient word should be or phrase should be consumer welfare and everything turns on whether what the division is doing is for the consumer welfare. They're not in this case they haven't charged anyone with anything. They're looking into complaints. And the legislature has determined that the division has the right to initiate an investigatory process to determine what is actually happening in the consumer area as far as consumers are concerned to see if in fact consumers are being taken advantage of by particular acts by companies.
* * *
[A]t the end of the day the balance goes in favor of the division because the legislature has given it the mandate to be the protector of the consumer.
WHR noted a timely appeal to the Court of Special Appeals, and, as noted above, this Court issued a writ of certiorari, before action by the intermediate appellate court, to consider the following questions presented 6 :
1. Does the Consumer Protection Division have investigative and enforcement authority over the access and use of consumer credit reports in Md.Code Ann., State Gov. § 14–1201, et seq. when that authority is specifically vested with the Commissioner of Financial Regulation of the Department of Labor, Licensing, and Regulation?
2. Does the Consumer Protection Division have investigative and enforcement authority over the Maryland Home Improvement Law, Md.Code Ann., Bus. Reg. § 8–101, et seq. when that authority is specifically vested with the Maryland Home Improvement Commission?
By contrast, the Division asks:
Did the circuit court correctly hold that the Division had authority under the Maryland Consumer Protection Act to issue a subpoena to investigate potential unfair or deceptive trade practices in consumer transactions involving the unlicensedsale of home improvement services and the unauthorized access of consumers' credit records?
This Court has recognized the following “threefold test for determining the validity of a subpoena issued by an administrative agency” as set forth by the Supreme Court in Oklahoma Press Publ'g Co. v. Walling, 327 U.S. 186, 208, 66 S.Ct. 494, 505, 90 L.Ed. 614, 629 (1946): “Whether the inquiry is authorized by statute, the information sought is relevant to the inquiry, and the demand is not too indefinite or overbroad.” Banach v. State Comm'n on Human Relations, 277 Md. 502, 506, 356 A.2d 242, 246 (1976). See Arnold Rochvarg, Principles and Practice of Maryland Administrative Law,
§ 5.7 at 62 (2011). This appeal invokes only the first element of the...
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