Circuit Co urt for Baltim ore City
Case No. 24-C-01-001405
IN THE COURT OF APPEALS
September Term, 2003
LINDA ANN SPENCER
MARYLAND STATE BOARD
Rodowsky, Lawrence F.
(retired, specially assigned)
Bloom, Theodore G.
(retired, specially assigned),
Opinion by Raker, J.
Bell , C.J., con curs in the jud gme nt on ly
Filed: March 11, 2004
This case arises o ut of a dec ision by the M aryland State Board of Pharmacy, an
administrative agency. The decision was reviewed first by the Circuit Court for Baltimore
City and then by the Court of Special Appeals, 150 Md.A pp. 138 , 819 A.2d 38 3 (2003).
Petitioner sought review of the decision by the Court of Special Appeals because the remedy
that court fash ioned, she c ontends, ex ceeded its a uthority and vio lated the Maryland
Constitution and Administrative Procedure Act, Md. Code (1984, 1999 Repl. Vol., 2003
Cum. Supp .) §§ 10-101 to 10-30 5 of the State Gov ernment Article [herein after APA]. 1
Whether a court has exceeded its statutory and judicial authority over an
administrative agency is a question that involves the constitutional balance of power between
the judiciary and executive administrative agencies. That balance of power is governed by
an established area of administrative law dealing with the scope of judicial review over the
various types of administrative agency decisions. In this case , we consider w hether the Court
of Special App eals exercised the proper stan dard of judicial review over an administrative
agency decision in a matter that is committed, ultimately, to the agency’s discretion.
Linda Ann Spencer, a pharmacist, continued to practice pharmacy after her license
expired on July 1, 1999. On August 16, 199 9, Spencer’s supervisor , having co nfirmed w ith
the Maryland State Board of Pharmacy (“the Board”) the expiration and non-renewal of
Except where o therwise in dicated, all fu ture statutory refe rences sha ll be to
provisions in the Administrative Procedure Act, Md. Code (1984, 1999 Repl. Vol., 2003
Cum. Supp.) §§ 10-101 to 10-305 of the State Government Article.
Spencer’s pharmacy license, instructed Spencer to cease practicing pharmacy, which she did.
Spencer then contacted the B oard to inquire why her license had not been renewed, asserting
that she had timely submitted the required renewal application. An internal review of the
Board’s office records, however, indicated that no application or accompanying fee was
received. Spencer surmised that her application had been lost in the m ail and therefore
submitted a renewal application to the Board on August 30, 1999. Although her application
included certification that she had acquired the requisite number of continuing education
credits, the majority of those credits were obtained after her license had expired in June.
Nevertheless, the Board granted Spencer’s renewal application on September 14, 1999, after
whi ch S pencer resum ed her practic e of p harm acy.
The Court of Specia l Appeals described the remaining events that led to this appeal
as follows (referring to the B oard as “appellant” and to Spencer as “app ellee”):
“Appellant issued charges against appellee on February 16,
2000, alleging that she had practiced p harmacy w ithout a license
for a period of six weeks and that she had failed to maintain
records of required continuing education credits. Appellant
scheduled a case resolution conference (CRC ) to attempt to
resolve the matter without the necessity of a hea ring. Mr.
Stanton Ades and Ms. Laura Schneider, two members of the
Board, represented appellant at the CRC. The settlement
negotiations were unsuccessful. Both Mr. Ades and M s.
Schneider sat on the panel of Board members who e ventually
heard this con tested ca se. On ma ny occasions , beginning in July
2000, appellee sent letters to counsel for appellant, seeking to
have the matter referred to the Office of Administrative
Hearings (OAH). Appellee believed appellant incapable of
giving her a fair and impartial hearing because appellant had
been intimately involved in s ettlement ne gotiations w ith
appellee and may have prejudged the case. Appellant repeatedly
denied appellee’s requests to move the case to OAH, stating that
appellant’s knowledge of settlement negotiations did not
disqualify it from hearing evidence. In further justification for
refusing to move the case, appellant stated that appellee ‘failed
to assign any specific facts indicating the Board would not be an
impartial arbiter,’ and also noted that the Board ‘ha[d] never
delega ted a m atter to th e Off ice of A dminis trative H earings .’
“Fin ally, on Aug ust 14, 200 0, appellee filed a motion to refer
the case to the Office of Administrative Hearings or, in the
alternative, to recuse members of the Board. Appellant denied
that motion on September 15, 2000.
“Appellant held a hearing on the matter on September 20, 2000,
and resumed the hearing on January 8, 2001. Counsel for
appellant had given books containing exhibits to the members
of the Board on the morning of the hearing. When counsel for
appellee arrived for the hearing, he noticed that at least one
member of the Board was reviewing evidence before the start of
the hearing . Counsel for appellee complained about the member
reviewing documents that were not in evidence, and asked that
member to recuse himself. This request was denied. He then
renewed the motion to move the case to OAH and appellant
denied that mo tion also . Fina lly, counsel for appellee asked that
the two mem bers who were inv olved in settlement negotiations
recuse themselves, and that request was also denied.
“Appellee did not dispute that she had practiced pharmacy
without a license for a period of six weeks. Her counsel argued,
however, that her prac tice of pha rmacy without a license was
authorized under Md. Code (1984, 1999 Repl. Vol.), §
10-226(b) of the State Government Article, because she had
submitted a timely renewal application. Appellee did not
present any evidence, other than her testim ony, that she had filed
a renewal a pplication prior to the expiration of her license on
July 1, 1999 . Appellant’s records did not reveal any application,
check, or money order from appellee prior to July 1, 1999.
Appellant determined that appellee's testimony on the matter
lacked credibility and found that she had not filed a timely
“During the hearing, counsel for appellee accused members of
the Board of prejudging the case, of sleeping during the hearing,
and of not paying attention to testimony. After the accusation
about sleeping, the hearing deteriorated to the p oint where
several membe rs of the B oard eng aged in a heated conversation
with counsel for appellee involving demands for apologies and
chastiseme nts about finger pointing from cou nsel and mem bers
of the Board. Finally, one of the Board members asked counsel
for appellee to leave the room, but he remained and continued
arguing. Eventually, counsel was asked if he would act
appropriately, and he said he would, so the hearing continued.
“Later, counsel for appellee objected to the entry of a mail log,
and argued that it ‘does not go to [appellee’s] credibility.’ Ms.
Hawkins, one of the Board m embe rs, stated ‘sure it d oes.’
When counsel then said to the Board, ‘Ms. Hawkins already said
out loud it went to credibility,’ Ms. Hawkins denied saying it
and then adde d, ‘I did not [s ay that], and you're a b old-faced
liar.’ Counsel for appellee objected to being called a liar during
the proceeding and attempted to have Ms. Hawkins removed
from hearing the case, but that request was denied.
“On February 21, 2001, appellant issued its Final Decision and
Order, finding that appellee had violated Md. Code (1981, 2000
Repl. Vol.), §§ 12-301, 12-701, 12-707(e), and 12-313(b)(24) of
the Health Occupations Article. Appellant placed appellee on
probat ion, imp osed a f ine, and reprim anded her.”
150 Md.A pp. at 142-46, 819 A .2d at 385-87 (footno tes omitted).
Spencer then filed a Petition for Judicial Review in the Circuit Court for B altimore
City, alleging , inter alia, that she had been deprived of procedural due process because M r.
Ades and Ms. Schneider participated both as representatives of the Board in settlement
negotiations and as memb ers of the panel adjudica ting her case. Agreeing with Spencer’s
arguments, the Circuit Court vacated and reversed the B oard’s Final Decision a nd Order.
The Circuit Court ruled that there w as not subs tantial eviden ce in the reco rd to support the
Board’s decision; that the Board’s renewal of Spencer’s license pending the outcome of the
investigation operated as a waiver of the violations subsequently found by the Board; and that
Spencer had been deprived of due process as a result of the arguments that took place at the
Board hearing between her attorney and two Board members.
The Board appealed the Circuit Court’s ruling to the Court of Special Appeals. The
Court of Special Appeals agreed with the Circuit Cou rt that Spenc er was de nied her righ t to
a fair and unbiased hearing, focusing on Ms. Hawkins’ accusation that Spencer’s counsel was
a “bold-faced liar.” The intermediate appellate court reversed the Circuit Court’s ruling that
the Board’s renew al of Spencer’s license h ad foreclosed the B oard from taking disciplinary
action against her. Consequently, it remanded the case to the Circuit Court “with instructions
to remand the case to the Board, directing [the Board] to delegate the authority to conduct
the contested case hearing and to issue the final administrative decision in this case to the
OAH.” 150 Md.App. at 155, 819 A.2d at 393.
Spencer then filed a petition for writ of ce rtiorari in this Court. 376 Md. 49, 827 A.2d
112 (2003). Although petitioner has phrased the first question for our review as whether the
Court of Special Appeals, by its order to the administrative agency to refer the case to the
OAH, violated Article 8 of the Declarati on of Rights and § 10-205 of the A PA, a more
accurate way of formulating the question, as we explain infra, is whether the Court of Special
Appea ls afforded the administrative agency the proper level of deference in a matter
committed to the agen cy’s discretion. P etitioner’s seco nd questio n is whether the order to
remand the matter to the OAH contravened either res judicata or double jeopardy principles
as applied to administrative proceedings.
Petitioner argues that th e Court of Special A ppeals exc eeded its jud icial authority
when it fashioned a remedy that interfered with the Board’s discretion to determine whether
her case should be remanded to the OAH. She contends that the Co urt of Spe cial Appe als
violated Article 8 of the Declaration of Rights in ordering the Board to send the case to the
OAH, because in so doing , that court performed a “non-judicial function,” violating the
constitutional mandate that the power of the three branches of government in Maryland “be
forever separate and distinct.” See Dep’t of Nat. Res. v. Linchester, 274 Md. 211, 334 A.2d
514 (1975). Petitioner also argues that because § 10-205 of the APA does not explicitly
authorize the courts to delegate matters to the OAH, the Court of Special Appeals did not
have authority to do so.
Although the Board, as respondent, initially opposed these
argumen ts in its Answ er to Petition f or Writ of C ertiorari, in its brief, respondent reversed
course and now ag rees with petitioner that the Court of Special Appeals performed a nonjudicial f unction in violat ion of A rticle 8.
This Court, of course, is not bound by the concessions made by the parties on issues
of law, which we may inde pende ntly review . See In re Heather B., 369 Md. 257, 266 n.9,
799 A.2d 397, 402 n.9 (2002). But w e agree with both p arties that the Court of Special
Appea ls exceeded its authority when it compelled the Board to exercise discretion the
Legislature explicitly g ranted to the adm inistrativ e agen cy. We therefore will reverse in part
the intermediate appellate court’s judgment and remand the matter to the Board.2
We address first the procedural and analytical posture of this case as it com es before
this Court. W hen this C ourt sits in review of an adm inistrative agency decision, we
reevaluate the decision of the agency under the same statutory standards as would the circuit
court; we do not employ those standards to reevaluate the decision of the circuit or
intermediate appellate co urt. See Divisio n of Labo r v. Triangle , 366 Md. 407, 416, 784 A.2d
534, 539 (200 1); Dept. of Health v. Campbell, 364 Md. 108, 123, 771 A.2d 1051, 1060
(2001) (noting that it is the final decision at the administrative level, not the decision of the
reviewing court, which is the focus of each level of judicial review). Thus, as to the merits
of such a matter, ordinarily and primarily, the inquiry is not whether the Court of Special
Appeals erred, but whether the administrative agency erred.
In the present case, in what w ay might the B oard hav e erred? T he answ er to this
question lies with the two disputed a dministrative actions taken by the B oard that were
Because of the reasoning of our opinion, we will decline to address the constitutional
argumen ts posed by the parties, for this Court regularly has adhered to the principle that we
will not reach a constitutiona l issue when a case can be disposed of properly on a
non-constitutional ground. Piscatelli v. Liquor Board, 378 Md. 623, 629-30, 837 A.2d 931,
reversed by the Court of Special Appeals. Petitioner’s original motion to the Board requested
either (a) that her case be referred to the Office of Administrative Hearings or, in the
alternative, (b) that the Board members who participated in the settlement negotiations recuse
themselves. Petitioner asked the Circuit Court to review both the denial of the recusal
motion and the denial of the motion to remove to the OAH. These two denials by the Board
constitute the two administrative decisions which petitioner asked the Circuit Court and the
Court o f Spec ial App eals to re view.
The Court of Special Appeals, disagreeing with the Board’s denial of both of those
requests, held as follows:
“In light of the actions by the Board that caused an appearance
of impropriety in the proceedings in this case before the Board,
this Court holds that the circuit court did not err by finding that
appellee was denied d ue proce ss in that h earin g. Co nseq uently,
we remand this case to the Circuit Co urt for Baltim ore City with
instructions to remand the case to the Board, directing appellant
to delegate the authority to conduct the contested case hearing
and to issue the final administrative decision in this case to the
150 Md.App. at 155, 819 A.2d at 393. Critical to understanding this case is the observation
that the intermed iate appellate c ourt’s analysis am ounted to a simultaneous review of two
separate administrative actions: (1) the Board’s failure to recuse certain members of the
panel and (2) the Board’s failure to refer the case to the OAH. Although the Court of Special
Appea ls apparently considered th e agency’s fa ilure to recuse the biased p anel mem bers to
go hand-in-hand with the failure to refer the case to the OAH, we think it clear that the
determination that “the actions of the Bo ard members created an appearan ce of imp ropriety
and unfairness” is separate and distinct from the determination that “the case must be retried
before [the OA H].” For e ven if the Board was required to recuse the biased members from
the adjudicating panel, it was not logically bound to refer the case to the OAH . The Board
could have easily complied with the court’s judgment by replacing the biased members, yet
persisted in its decision to forgo the OAH. Thus, those determinations were two distinct
decisions by the agency, both of which were reviewed by the Court of Special Appeals.
With respect to the agency decision denying the recusal motion, the Court of Special
Appea ls held that “the actions by the Board that caused an appearance of impropriety in the
proceedings in this case before the Bo ard . . . denied [petitioner] due proces s in that h earing.”
Id.; cf. Maryland State Police v. Zeigler, 330 Md. 540, 559, 625 A.2d 914, 923 (1993)
(stating that “[p]rocedural due process, guaranteed to persons in this State by Article 24 of
the Maryland Declaration of Rights, requires that administrative agencies performing
adjudicatory or quasi-judicial functions observe basic principles of fairness as to parties
appearing before them”). Petitioner, of course, is satisfied with that ruling and did not raise
that issue in the petition for certiorari, and neither did respondent cross-petition on that issue.
Acc ordingly, we do not review that ruling b y the Cou rt of Sp ecial A ppeals . See Mehrling
v. Nationwide, 371 Md. 40, 44 n.3, 806 A.2d 662, 665 n.3 (2002) (noting that the Court of
Appeals will not norm ally address a qu estion not pr esented in p etition for certio rari), and
upon remand, the Board must adhere to the court’s ruling as it bears on th e defects in
procedural due process at petitioner’s hearing.
It is the second administrative decision taken by the Board, and its review by the Court
of Special Appeals, that concerns us in the case sub judice. By this we mean the Court of
Special Appeals’s holding “directing [the Board] to delegate the authority to conduct the
contested case hearing an d to issue the final ad ministra tive dec ision in th is case to the OA H.”
The key point here is that the Court of Special Appeals judicially reviewed the Board’s
decision to deny the m otion to refe r the case to the OA H, and it found that decision to be
wanting. The court’s reasoning behind its determination is made in a footnote to its opinion:
“We recognize that ‘under the APA, the delegation of matters to
the OAH is not a man datory functio n but a function within the
discretion of the administrative agen cy.’ [Regan v. Board of
Chiropra ctic, 120 Md.App. 494, 513, 707 A.2d 891, 900
(1998 ).] In light of the facts of this p articular case, h oweve r, it
would not be appro priate to remand the case to the same tribunal
that heard the case originally. * * * In this case, we have held
that the actions of the Boa rd members created an appearance of
impropriety and unfairness, and for that reason, the case must be
retried b efore a differe nt tribun al.”
150 Md.App. at 156 n.14, 819 A.2d at 393 n.14. W e do not think it so obvious that this case
“must” be retried before the OA H, and th e Court of Special Appeals did not discuss the
appropriate standard of judicial review of the Board’s decision not to refer. Because the
Court of Special Appeals did not consider the appropriate standard of judicial review and
whether, under that standard, the agency’s decision must be overturned, that task is now
before this Court, as we sit in review of the agency’s action and not so much the decision by
the intermediate appellate court. Therefore, this case requires us (1) to determine the proper
standard of review to apply to the Board’s decision not to refer the case to the OAH and (2)
applying that stan dard, to determ ine wh ether the Board ’s decisi on sho uld be u pheld.
Whether the administrative agency’s refusal to delegate to the OAH was improper
requires us to determine the standard o f review for such an agency decision. The standard
of review for an agency decision, in turn, will depend upon the level of discretion delegated
to the admin istrative agen cy with respect to such decisio ns. See MTA v. King, 369 Md. 274,
293-94, 799 A.2d 1246, 1257 (20 02) (Wilner, J., concurring); Hecht v. Crook, 184 Md. 271,
280-81, 40 A.2d 673, 677 (1945); see gener ally A. Ro chvarg , Maryland Administrative Law,
§§ 4.29–4 .38 (20 01); E. T omlins on, The Maryland Administrative Procedure Act, 56 Md.
L. Rev . 196 (1 997).
To discover the proper stand ard of judicial review, we begin with the APA. Becau se
this case involves an agency acting in a “quasi-ju dicial” capacity, adjudicating the personal
rights of petitioner, judicial review is governed by § 10-222, which is applicable to final
decisions in contested cases. See § 10-222 (a). Were w e reviewin g the agen cy acting in its
policymaking or “quasi-legislative” capacity, a wholly different analysis governs the
decision. See § 10-125 ; Fogle v. H & G Restaurant, Inc., 337 Md. 441 , 654 A.2d 449 (1995).
Section 10-222(h) governs the scope of judicial review of final administrative agency
decisions in contested c ases as follo ws:
(h) Decision. — In a proceeding un der this section, the court
(1) remand the case for further proceedings;
(2) affirm the final decision; or
(3) reverse or modify the decision if any
substantial right of the petitioner may have been
prejudiced because a finding, conclusion, or
(i) is unconstitu tional;
(ii) exceeds th e statutory autho rity
or jurisdiction of the final decision
(iii) results from an unlawful
(iv) is affected by any other error of
(v) is un supp orted by competent,
material, and substa ntial evidence
in light of the entire record as
(vi) is arbitrary or capricious.
Section 10-222(h)(3)(i)–(vi) provides a statutory framework for understanding the scope of
judicial review of agency decisions and is of particular interest to the case sub judice.
Section 10-222(h)(3)(i)–(iv) deals with judicial review of agency conclusions of law. Section
10-222(h)(3)(v) deals with judicial review of agency factual determinations. Section 10222(h)(3)( vi) deals with judicial review of any other agency determination—for instance, as
in the case sub judice, determinations over matters committed to the agency’s discretion. Our
jurisprudence has expanded on the meaning of these statutory provisions and provided
guidance for their application by the courts.
When an agency makes “conclusions of law” in a contested case, the court, on judicial
review, decides the correctness of the agency’s conclusions and m ay substitute the court’s
judgment for that of the a gency’s. Total AV v. Dept. of Labor, 360 Md. 387, 394, 758 A.2d
124, 127-28 (2 000) (notin g that questio ns of law addressed by administrative agency are
complete ly subject to review by courts, although agency’s interpretation of a statute may be
entitled to some deference). This established principle of administrative law is exemplified
in § 10-222(h)(3)(i)–(iv), which permits judicial modification or reversal of agency action
that (i) is unconstitu tional; (ii) exceeds the agency’s jurisdiction; (iii) results from unlawful
procedure; or (iv) is a ffecte d by “any o ther” er ror of la w. See Tomlinson, supra, at 215 n.131
(“Questio ns of law encomp ass the first fo ur ground s listed in the judicial review provision
of the APA”). Section 10-222(h)(3)(iv), by authorizing correction of “any other error of
law,” implicitly indicates (a) that courts retain a uthority to correc t all (“any”) errors of law
and (b) an understanding that agency errors based upon the previous three provisions are also
considered to be legal errors (“a ny other error of law”).3
In contrast, when an agency is not interpreting law but instead makes a “finding of
fact,” we have applied “substa ntial evid ence” review . Substantial evidence review of agency
factual findings is e mbodied in § 10-22 2(h)(3)(v). T hat provisio n grants a co urt authority
Even in the case of an agency interpreting law, our jurisprudence has shown a level
of deferenc e to an agency’s interpretation of law, provided the agency is interpreting its own
regulations, MTA v. King 369 Md. 27 4, 288-89, 799 A .2d 1246, 1254 (2 002), or is
interpreting the statu te it adm inisters, Jordan v . Hebbville , 369 Md. 439, 450, 800 A.2d 768,
775 (2002). Nevertheless, erroneous interpretations of law are never binding upon the courts.
State Ethics v. Antonetti, 365 Md. 428 , 447, 780 A.2d 1 154, 1166 (200 1).
to overrule an agency’s fac tual finding only when the finding is “unsupp orted by com petent,
material, and substa ntial evidenc e in light of the entire record as submitted .” Accord ing to
this more deferential standard of review, judicial review of agency factual findings is limited
to ascertainin g wheth er a reason ing mind c ould have reached the same factual conclusions
reached by the ag ency on t he reco rd befo re it. See Stansbury v. Jones, 372 Md. 172,
182-185, 812 A.2d 312, 318-320 (2002) (dis cussing su bstantial evid ence revie w in
Fina lly, there are circumstances when an agency acts neither as a finder of fact nor as
an interpreter of law but rather in a “dis cretiona ry” capac ity. See, e.g., Maryland State Police
v. Zeigler, 330 Md. 5 40, 625 A.2d 9 14. Logically, the courts owe a higher level of deference
to functions specifically comm itted to the agency’s discretion than they do to an a gency’s
legal conclusions or fa ctua l find ings . The refo re, th e discreti onary functions of the agency
must be reviewed under a standard more deferential than either the de novo review afforded
an agency’s legal conclusions or the substantial evidence review afforded an agency’s factual
findings. In this regard, the standard set forth in § 1 0-222(h)(3)(vi), review of “arbitrary or
capricious” agency actions, provides guidance for the courts as they seek to apply the correct
standard of re view to discretionary fu nctio ns of the a gency. 4
Although a few of our cases a ppear to co nflate subs tantial eviden ce review with
arbitrary or capric ious rev iew, see, e.g., Insurance Comm’r v. Nat’l Bureau, 248 Md. 292,
300-01, 236 A.2d 282, 286 (1967), it does not follow that they are one and the same. The
substantial evidence test applies to agency findings of fact, as indicated by the very language
of § 10-222(h)(3)(v) (“evidence” supported by the whole “record” ). Arbitrary and capricious
This Court recently applied the arbitrary or capricious stand ard of review to
discretionary functions of the agency in a case closely analogous to this one. Maryla nd State
Police v. Zeigler involved a n administra tive agency’s d ecision to reopen a hearing after it had
already begun deliberations on the matter. In that case, we first determined that the decision
to reopen a hearing for add itional ev idence was co mmitte d to the a gency’s d iscretion . 330
Md. at 557-58, 625 A.2d at 922. As a discretionary function of the agency, the decision to
reopen the hearing , we said, w as subject to ju dicial review , but only unde r the arbitrary or
capricious s tandard. Jud ge Eldridg e, writing fo r the Cour t, observed:
“[A]s long as an administrative agency’s exercise of discretion
does not violate regulations, statutes, common law principles,
due process an d other con stitutional requ irements, it is
ordinarily unreviewable by the co urts. It is only when an
agency’s exercise of discretion, in an adjudicatory proceeding,
review, on the other hand, could conceivably apply to any action of the agency not covered
by the other provisions of § 10 -222(h)(3).
We do not encoun ter, or decide, this issue of whethe r the arbitrary and capricious
standard in § 10-222(h)(3)(vi) w ill govern every type of agency action not encompassed by
§ 10-22 2(h)(3) (i)–(v). See Maryland State Police v. Zeigler, 330 Md. 540, 569-570, 625
A.2d 9 14, 928 (1993 ) (Bell, J., d issentin g); A. R ochva rg, Maryland Administrative Law, §
4.38 (2001). It is notable, however, that in contrast to the first five grounds for judicial
review in § 10-222(h)(3)(i)–(v), § 10-222(h)(3)(vi) does not delineate the type of agency
decision to whic h it appli es, cf. § 10-222 (h)(3)(i)-(iv) (imp licitly and necessarily involving
legal determinations by the agen cy); § 10-2 22(h )(3)( vi) (e xplicitly applying to evid entia ry,
factual finding s), and could conceivably be a “catch-all” standard of review for any other
agency action. And even in the absence of an applicable statutory scheme providing for
judicial review, we have held an implied limitation upon an administrative agency’s authority
is that its decisions “be not arbitrary or capricious.” Bucktail v. Talbot County , 352 Md. 530,
550, 723 A.2d 440, 449 (1999); see also our line of cases explaining mandamus actions as
they apply to ministerial or non-discretionary functions of administrative agencies, discussed
in Crimina l Inj. Comp . Bd. v. Gou ld, 273 Md. 486 , 500-504, 331 A .2d 55, 65-66 (197 5).
is ‘arbitrary’ or ‘capr icious’ that co urts are authorize d to
intervene [citing the provision now codified as 10-222(h)(vi),
the arbitrary and capricious standard of review].”
Id. (citation s omitte d).
Similarly, in MTA v. King, we held that an agency’s discretion to determine the
magnitude of a sanction could only be review ed purs uant to § 10-22 2(h)(3) (vi), i.e., for
arbitrariness or capriciousness. 369 Md. at 291, 799 A.2d at 1255-56. Even if the court felt
the punishm ent to be “d isproportion ate” to the violation, the agency’s determination of the
amount or level of sanction could not be second-guessed, unless the sanction “was so
extreme and egregious that the reviewing court can properly deem the decision to be
‘arbitrar y or capric ious,’” a s set for th in § 1 0-222 (h)(3)(v i). Id.
The case sub judice does not differ significantly from Zeigler or King in that the
decision being reviewed is also one committed to the agency’s discretion and is to be
reviewed under the same arbitrary or capricious standard set forth in 10-2 22(h)(3)(vi).
Whether an action is in fact deeme d arbitrary or capricious will vary depending upon the
amount of disc retion g ranted a n agen cy, a matte r of sub stantive law, see King, 369 M d. at
293-94, 799 A.2d at 1257 (Wilner, J., concurring); thus, the level of discretion afforded an
agency’s decision to re open a he aring, as in Zeigler, may differ from the discretion afforded
an agency’s decision to forgo the OAH, as in the instant case. Arbitrary and capricious
review will apply to both types of decisions, but whether the agency’s decision in each case
is actually arbitrary or ca pricious w ill correspond to the discretio n afforde d it
Applying the legal principles outlined above, we hold that (1) the determination by
an agency to refer a case to the OAH is a matter committed to its discretion and that (2) the
Board did not abuse that discretion under the arbitrary or capricious standard.
First, it is clear that the Board’s refusal to refer the case to the OAH was not a legal
conclusion or a factual finding but rather a f unction of the Bo ard’s discretion. The discretion
is granted to the Board in § 10-205(b)5 which declares an “age ncy may delegate to the Office
[of Administrative Hearings] the auth ority” (emphasis added) to hear the case.6 The word
“ma y” connotes a permissive, discretionary function of the agency when it delegates a case
to the OA H. See Brodsky v. Brodsky, 319 Md. 92, 98, 570 A.2d 1235, 1237 (1990);
Planning Comm. v. Silkor Corp., 246 Md. 516, 522, 229 A.2d 135, 139 (1967) (construing
the word “may” to signa l the ordinary meaning of permission unless the context or the
Section 10-205(b) provides for the delegation of a contested case to the OAH:
(b) Scope of authority delegated. — An agency ma y delegate to
the Office [of Administrative Hearings] the authority to issue:
(1) propos ed or final f indings of fact;
(2) proposed or final conclusions of law;
(3) proposed or final findings of fact and
conclusions of law;
(4) proposed or final orders or orders under
Article 49B of the Code; or
(5) the final administrative decision of an agency
in a contested case.
Although it is our understanding that, as a matter of practice, most state agencies
subject to the APA exercise their authority to delegate duties to the OAH by regulation or
administrative order and usually in broad categories of case types, there appe ars no reason
why an agency may not do so on an ad hoc basis in a given case. We do not here address
whether an agency’s viola tion of its own established protocol with regard to OAH delegation
may somehow amount to arbitrary or capricious agency action.
purpose of the statute show s that it is meant to be imperative); see also Regan, 120 Md.App.
at 513, 707 A.2d at 900 (noting that under the APA, the delegation of matters to the OAH
is not a man datory functio n but a fun ction within the discretion of the administrative agen cy).
Nor was the Board required to send the case to the OAH, because logically there existed
other options to the Board, such as rec using the offending members and replac ing them w ith
different members, or, pursuant to § 10-20 5(b), referring to the OAH the authority to make
a proposed decision bu t retaining fo r itself the ultimate auth ority to decide the case. In fac t,
the Board may very well decide to send the case to the OAH; but if it does so, it shall not be
under the aus pice s or c omp ulsio n of the ju dicia ry.
Second, it is clear that the Board’s decision to forgo the OAH was not arbitrary or
capricious. An age ncy’s preroga tive with respect to case referra l to the OA H is similar in
scope to that of the agency’s prerogative in determining the severity of sanctio ns, see King,
369 Md. at 291, 799 A.2d at 1255-56; Resetar v. State Bd. of Education, 284 Md. 537, 562,
399 A.2d 225, 238 (1979) (“It is impossible to catalogue just what would or would not
constitute arbitrary action on the part of an administrative agency . . . in imposing
sanctions”), or to that of forgoing prosecution of a particu lar individua l. In such cas es, it is
most difficult to apply or even articulate a judicial standard b y which the agency’s
discretionary decision might be deemed arbitrary or capricio us, cf. Heckler v. Chaney, 470
U.S. 821, 105 S.Ct. 1649, 84 L.Ed.2d 714 (1985) (holding that the FDA’s decision not to
take enforcement actions was not subject to judicial review under the federal APA because
such enforcement decisions are “comm itted to agenc y discretion by law ” and do n ot supply
the courts w ith “law to apply,” that is, a legal standard to which the agency can be held). The
reviewing court, absent some sho wing of fraud or egregious behavior on behalf of the
agen cy, will be hard pressed to articulate a reason why the agency acted arbitrarily or
capriciously when it did not send the case to the OAH. This is true for the case before us
toda y. Even conceding the error of the Board’s failure to recuse certain members from the
panel, that alone does not suffice to render arbitrary or capricious the Board’s decision not
to refer to the OAH. The Court of Special Appeals erred when it reviewed this discretionary
function and found the a gency wanting and incapable of cond ucting a fair hearing and
render ing a fa ir decisio n.
To be sure, because of the nature of th e Board m embers p articipating, it was improper
for those members who participated in the settlement negotiations to remain as panel
members adjudicating petitioner’s case, and tho se members may not constitute a part of the
panel if or when petitioner’s case is reheard.7 But that did not by itself require referral to the
We do not adopt a per se rule of recu sal, nor do w e intend ou r holding o r comme nts
to imply that recusal is mandatory when a trial judge participates in settlement negotiations.
See Maryland Rule 16-813, Maryland Code of Judicial Conduct, Canon 3 (setting forth the
situations requiring m andatory recu sal); see also Anno t., Judge’s C omme nts—U rging
Settlement, 6 A.L.R.3d 1457 (1966). In the instant c ase, as the C ourt of Sp ecial App eals
aptly noted, two of the Board members participated in settlement discussions with S pencer.
150 Md.A pp. 138, 150, 819 A.2d 383, 390 (2003). The Board considered the settlement
negotiations in rendering its final decision, noting in the Order that “[a]lthough the
Respondent agreed to a proposal at the conference, she later rejected it.” It is the overall
appearan ce of imp ropriety in this case that requires re cusal.
OAH, as any number of other options lay open to the Board. The proper course, in view of
the Board’s d iscretion to ref er, was to remand th e case to the Board w ith instructions to cure
the defects the reviewing court found at the original hearing, bu t without a mandate requiring
referral of the case to the OAH. That is what we shall do, and the lower court’s direction
regarding referral of the case to the OAH is reversed.
Petitioner’s final argum ent, that a rem and will create issues of res judicata or double
jeop ardy, is witho ut merit a nd friv olous. The Board’s enforcement of its licensing and
disciplinary requirements serve pu rposes essential to the protection of th e public, which are
deemed remedial, rather than punitive, and therefore are not subject to double jeopardy
principles. See State v. Jones, 340 Md. 23 5, 666 A.2d 12 8 (1995); Ward v. D ept. of Pub . Saf.
& Cor. S ervices , 339 Md. 343, 350, 663 A.2d 66, 69 (1995) (holding that where the purpose
of the penalty is remedial, it is not punishment for doub le jeopardy purp oses); McDonnell v.
Comm ’n on Medical Discipline, 301 Md. 426, 436, 483 A.2d 76, 81 (1984) (noting that the
“purpose of disciplinary proceedings against licensed professionals is not to punish the
offender but rather as a catharsis for the profes sion and a prophylactic for the public”). Even
if double jeopardy was applicable, which it is not, the rehearing would not be precluded, as
a new trial (or rehearing) ordinarily is not precluded by double jeopardy principles when a
conviction is reversed on grounds other th an suf ficienc y of the ev idence . Huffington v. State,
302 Md. 184, 189, 486 A.2d 200, 203 (1985). The remand was not based on insufficiency
of evidence but on defects in procedure.
Neither is res judicata applicable in this case because there is no final judgment—the
case is still on appellate review—and because issue and claim preclusion require a
subsequent cause of action in w hich those d octrines ma y take effect; this appeal is no t a
subsequent cause of actio n but all p art of th e same case. See Murray International v.
Graham, 315 Md. 543, 547, 555 A.2d 502, 504 (1989) (noting that res judicata principles
preserve the conclusive effect of judgments, “except on appeal or other direct review,” and
quoting Restatement (Second) of Judgments § 27 (1982) that “[w]hen an issue of fact or law
is actually litigated and determined by a valid and final judgmen t, and the dete rmination is
essential to the judgm ent, the determination is conclusive in a subsequent action between the
parties, whether on the sam e or a different claim”).
JUDGMENT OF THE COURT OF
SPECIAL APPEA LS REV ERSED IN
PART. CASE REMANDED TO THAT
COURT WITH DIRECTIONS TO
VACATE THE JUDGMENT OF THE
CIRCU IT COURT FOR BALTIMORE
CITY AND TO REMAND THE CASE
TO THE CIRCUIT COURT WITH
INSTRUCTIONS TO REMAND THE
CASE TO THE STATE BOARD OF
PHARMACY FOR FURTHER
PROCEEDINGS CONSISTENT WITH
COSTS TO BE
EVENLY DIV IDED BETWEE N
PETITIONER AND STATE BOARD OF
Chief Ju dge Bell concurs in the jud gme nt on ly.