Heery v. Montgomery County

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Heery In ternatio nal, Inc. v . Mon tgome ry Coun ty, No. 15 , Sept. T erm, 20 04. ADMINISTRATIVE LAW - EXHAUSTION OF ADMINISTRATIVE REMEDIES AGENCY PALPABLY WITHOUT JURISDICTIO N OR A UTHO RITY TO HEAR CLAIM Montgom ery County (the County ) file d a claim in th e Coun ty s administrative dispute resolution process against two contractors, Heery International, Inc. and Hellmuth, Obata & Kassabaum, P.C. (collectively Heery ), alleging damages arising from their mismanagement of other trade contractors during the construction of a detention center. Heery responded by filing an action in the Circuit Court for Montgomery County claiming that the Cou nty s administrative dispute resolution process did not have jurisdiction over claims brought by the Cou nty, and instead only contemplated claims initiated by a contractor against the C oun ty. In order to circumvent an administrative remedy, a party must demonstrate that an administrative agency is palpably without jurisdiction to hear the claim. An administrative agency is palpably without jurisdiction only if it clearly lacks fundamental subject matter jurisdiction or is clearly and unequivocally in violation of statutory or judicial authority. If the jurisdictiona l dispute is in essence an issue o f statutory interpretation, or if questions linger abou t the applicatio n of a statute or ordinance, those questions must first be decided in the ad ministra tive pro cess. Circuit Co urt for Mo ntgomery C ounty Case # 245047 IN THE COURT OF APPEALS OF MARYLAND No. 15 September Term, 2004 HEER Y INT ERN ATIO NAL , INC., et al. v. MO NTG OM ERY COU NTY , MAR YLA ND, et al. Bell, C.J. Raker Wilner Cathell Harrell Battaglia Greene, JJ. Opinion by Harrell, J. Filed: December 6, 2004 This case repres ents an initiative by Heery International, Inc. ( Heery International ) and Hellmuth, Oba ta & Kassaba um, P.C. ( HO K ) (sometimes collectively referred to as Heery ) to circumvent Montgomery County s (the County ) administra tive dispute resolution process for claims relating to local public works contracts. They seek to truncate that process on the ground that the process and the County s designated administrative adjudicato r are palpa bly without jurisdiction to decide the particular dispute in this case. Heery sh all not su cceed . I. On 1 December 1989, Heery Program Management, Inc. entered into a contract with the County to provide construction management services relating to a proposed detention center in Clark sburg, M aryland. N ine years later, on 9 October 1998, that contract was assigned to the related e ntity of Heery International. Approximately one year earlier, HOK entered into a separate contract with the County to provide architectural and engineering services relating to the design of the detention center. Believing that it furthered the goal of facilitating construction of the detention center, the County aw arded sep arate contrac ts to various construction trade contractors rather than contracting with one prime contractor who th ereafter w ould arrang e for subc ontracts w ith more specialized tra de contrac tors. Unde r this multi-prime arrangem ent, Heery International and HOK were responsible to the County to manage the various trade contractors, including preparing detailed schedules, determining the cause of delays, and managing payment and claim matters. Before it became aware of any alleged deficiencies in Heery International s or HO K s perform ance, the C ounty paid Heery International mo re than $5,680,000 and HOK more than $5,370,00 0, representin g full payme nt for their services. In a letter dated 17 July 2003, the Co unty made a form al demand on Heery International and HOK for payment in the amounts of $2,450,959 and $3,804,163, resp ectiv ely. These amounts represented damage s the Cou nty allegedly suffered as a result of lost productivity and delay caused by Heery International and HOK s mismanagement of the trade contractors. The letter also demanded that Heery International and HOK, pursuant to provisions in their respective contracts with the County, provide a legal defense and indemnify the County with regard to claims totaling over $13 million lodged by some of the trade contractors.1 Moreover, the letter demanded an additional $915,168 for the actual legal costs incurred by the County, up to that point, in defense of the trade contractors claims. The letter conclud ed by stating tha t, if the claims were not resolved within thirty days, the County would file its claims with the Coun ty s Director of the Depa rtment of P ublic Works and Transportation ( DPW&T ), as provided for by both Heery International s and 1 Included in both Heery International and HOK s contracts with the Cou nty were provisions requiring that each indemnify and provide legal defen se for the C ounty in regard to any loss, cost, damage and other expenses, including attorney s fees and litigation expenses, suffered or incurred d ue to the contractor s negligence or failure to perform any of its contractual obligations. The contracts also stated that, at the County s request, the contractor must defend the Coun ty in any action or suit brought against the County arising out of the contractor s negligence, errors, acts or omissions under this contract. 2 HK s contracts an d the M ontgom ery County Pro curemen t Regulations ( Procurement Regulations ). 2 The relevant provision of the Heery International contract3 stated: 8. DISPUTES. A ny dispute arising under this contract which is not disposed of by agreement must be decided under The M ontgomery Coun ty Code and The M ontgomery Coun ty Procur emen t Regu lations. Heery Internationa l and HO K, in letters dated 13 August 2003 and 12 August 2003, resp ectiv ely, denied resp onsibility for the County s substantive claims. They also denied that the County s claims were subject to the dispute resolution process outlined in the Montgom ery County C ode ( County Code ) and Procurement Regulations. Although acknowledging that their respective contracts with the County authorized the use of the County administrativ e contract d ispute resolu tion proces s, Heery Intern ational and HOK claimed that the County Co de and the Procurem ent Regu lations applie d solely to contractor claims agains t the Co unty and are inap plicable to claim s by the C ounty ag ainst a co ntractor . Although the Coun ty Procurem ent Regu lations expre ssly allow the County to implead other responsible contract ors in to the adm inistrativ e pro cess initia ted a gain st the Cou nty by a contractor, Heery International an d HOK claimed tha t this mecha nism wa s not relevan t in their situation because the Co unty initiated the proceeding. In support of their assertion, the 2 At oral argument, coun sel for the County conce ded that, although the con tracts provided that any dispute would be decided under the County ordinance s administrative dispute resolution process, the provisions in the contracts did not enlarge the jurisdiction of the County administrative agency beyond that supported by the language of the ordinance and regulations. 3 The HOK contract includes near-identical language. 3 contractors relied on Maryland case law that they claimed construed identical language in the State s procurement regulations to exclude claims that are asserted by the gov ernme nt. On 14 August 2003, the County submitted its claims to its Dir ector of DPW &T. Four days later, Heery filed a complaint in the Circuit Court for Montgomery County seeking declaratory and equitable relief preventing the County or the Director from pursuing any remedy through the administrative dispute resolution process outlined in the County Code and Procurement Regulations. The County responded with a motion to dismiss, asserting that any question of an administrative agency s jurisdiction should be decided in the first instance during the pertinent administrative process. On 3 November 2003, the C ircuit Court denied Heery s reques t for equ itable reli ef, and entered a declaratory judgment that the administrative agency is not palpably without jurisdiction to adjudicate the underlying dispute . The court also den ied Heery s request for a stay of the administrative proceedings, concluding instead that they were required to exhaust their administrative remedies bef ore seeking judicial review or intervention. Heery noted an appeal to the Court of Special Appeals. Before the intermediate appellate court could decide the c ase, this Cou rt, on its initiative, issued a writ of certio rari, 381 Md. 324, 849 A.2d 473 (2004), in order to consider the following question, rephrased for the sa ke of cla rity: Did the trial court err in holding that the M ontgomery County Department of Public Works and Transportation was not palpably without jurisdiction to adjudica te a dispute b rought by the C ounty against a contractor? 4 II. Chapter 11B of the County Code, in conjunction with the County s Procurement Regulations, outlines the administrative dispute resolution process for disputes arising between contract ors a nd th e Co unty. 4 Mont. Co. Code § 11B (2004); Mont. Co. Proc. Regs. § 14.2 (2004). Section 11B-35 of the County Code states that a contractor must submit any dispute arising under a contract to the Director [o f the Off ice of Proc urement]. Mont. Co. Code § 11B-35(a). The County Code defines a contractor as any person that is a party to a contrac t with th e Cou nty. Id. § 11B-1(f). Moreover, the Procurement Regulations define a dispute as a timely complaint filed by a contractor disagreeing with a decision made by an authorized government official regarding the contrac t. Mont. Co. Proc. Regs. § 2.4.40. When a dispute arises between a contractor and the County, the Procurement Regulations mandate that the con tractor and th e contract ad ministrator m ust attempt to resolve the claim . Id. § 14.2.2.1. If the parties are unable to resolve the dispute, the contractor must subm it the dispute to the Director of the Office of Procurement ( Director ) within 30 days of the event giving rise to the cla im, unle ss the pa rties con tract oth erwise . Id. The Director then reviews any docume nts submitted with the f iled d ispu te an d within 45 d ays either renders a decision on the claim or makes a determination that the claim involves factual disp utes and is beyond the a bility o f the Direc tor to mak e a dec ision. 4 Id. § There are no material differences in the 2004 Code and Regulations and the versions in place at the time of occurrence of the operative facts in this case. 5 14.2.2.3(a). Regardless of the Director s decision, a contractor may then file a contract dispute appea l with th e Cou nty s Chi ef Ad ministra tive Of ficer ( C AO ). Id. § 14.2.2.3(b). During the contract dispute appeal process, the CAO reviews the disp ute de n ovo. Id. § 14.2.2.9. If, ba sed on the paper reco rd, the CA O is able to determine whether the claim has merit, the CA O may, with in 30 days, eithe r den y the c laim or or der a n approp riate remedy. Id. § 14.2.2.9(a )-(b). If the CA O is unab le to decide a claim on the paper record, the CAO may conduct a hearing or designate a hearing office r to hear the claim . Id. § 14.2.2.9(c). During the hearing process, the parties may take advantage of discovery and other procedures outlined in the Procurement Regulations intended to insure a fair adv ersarial h earing. Id. § 14.2.3. If the CAO designates a hearing officer to hear the dispute, the hearing officer must make recommended findings of fact and conclusions, which are then submitted to the CAO. Id. § 14.2.2.9(c). The CAO then has 30 days to render a written decision on the a ppeal. Id. Once the CAO renders a written decision, that decision is final for administrative purposes and subjec t to judic ial review in the C ircuit Co urt for M ontgom ery Cou nty. Id. § 14.2.2.9(d). III. Heery claims that, be cause the C ounty Cod e and Pro curemen t Regulations do not authorize the Coun ty to utilize its admin istrative dispute resolution p rocess to litigate a claim that it asserts agains t a party with which it has contracted, the agency is acting clearly outside the bounds of its jurisdiction by entertaining the County s claim. Therefore, Heery deems 6 itself entirely justified in seeking to sidestep what it perceives as an unauthorized admin istrative p rocess. We have long held that [w]here an administrative agency has primary or exclusive jurisdiction over a controversy, the parties to the controversy must ordinarily await a final administrative decision before resorting to the courts for resolution of the controversy. State v. Bd. of Contrac t Appeals , 364 Md. 446, 457, 773 A.2 d 504, 51 0 (2001); Converge Services Group, LLC v. Curran, __ Md. __, __ A.2d __ (2004) (Slip op. No. 13, 2004 Term) (stating that [w]hen a statute explicitly directs an administrative process and remedy, our policy is set clearly by the General Assembly to maintain the uniformity of the regulatory scheme by requiring ex haustion o f administra tive remed ies); see also Soley v. State Comm n on Human Relations, 277 Md. 521, 526-27, 356 A.2d 254, 257-58 (1976) (detailing the policy reasons behind the exhaustion requirement). This rule, however, is not without exceptions. For example, our case law indicates that exhaustion of administrative remedies will not be required w hen a party ca n demon strate that an ad ministrative tribu nal is palpably without jurisdicti on. See, e.g., State Comm n on Human Relations v. Freedom Express/Domegold, Inc., 375 Md. 2, 19, 825 A.2d 354, 364 (2003) (finding that this Court has consistently taken the position that judicial review of [an] issue must await a final administrative decision unless the agency is palpably withou t jurisdiction ). Although the palpably without jurisdiction standard, described as such, was first recognized in Maryland case law in Maryland Comm ission on Human Relations v. Mass 7 Transit Administration, 294 Md. 225 , 449 A.2d 385 (1982) ( MTA ), the notion of an administrative tribunal being assailed in Maryland courts prior to a final agency decision, based on an assertion that the agency was engaged in an action outside of its jurisdiction or auth ority, was discussed earlier in Soley, 277 Md. at 526-27, 356 A.2d at 257-58. In Soley, a landlord, charged by the Commission on Human Relations with unlawful discrimination challenged the Commission s issuance of subpoenas during a preliminary investigation as exceeding the scope of statu tory autho rity granted to the C omm ission. The Court held that because the statute provided an administrative remedy, the landlord was required to exhaust that remedy, even if the interlocutory act of the ad ministrative agency was alleged to be ultra vires or i llegal. Soley, 277 M d. at 528 , 356 A .2d at 25 8. The Court in MTA reaffirmed the principle that administrative remed ies ordinarily must be exhausted, absent certain extraordinary circumstances. 294 Md. at 230-35, 449 A.2d at 387-90. In MTA, three women were denied employment by the MTA because they were overwe ight. When the women filed complaints with the Maryland Commission on Human Relations, the Commission investigated and determined that there was probable cause to believe that the MTA had discriminated unlawfully against the women based on a physical handicap. Before th e Comm ission could hold a hearing on the w omen s claims, how ever, the MTA filed a bill for declaratory and injunctive relief in the C ircuit Court for Baltimore City asking the court to declare that obesity was not a physical handicap under the relevant statute and that the Commission has neither the pow er, authority nor jurisdiction to consider 8 obesity as a physical handicap. Id. at 228, 449 A.2d at 38 6. The C ommissio n filed a demurrer, 5 arguing that the MTA was required to exhaust the administrative remedy before resort to a judicial fo rum. The circuit court rejected the Commission s argument, concluding instead that exhaustion of administrative remedies was not necessary because the issue here is purely one of statutory interpretation. Id. We, however, rejected that argument as contrary to the settled law of Maryland, opining instead that Maryland law favored the resolution of issues of statutory interpretation in the first instance by the administrative agen cy. Id. at 232-33, 449 A.2d at 389. The Court reas oned that a llowing the MTA to circumvent the administrative process would be inconsistent with the principle that the agency s construction of a statute w hich it administers is entitled to weight. Id. at 233, 449 A.2d at 389. The Court also disagreed with the MTA s characterization of the dispute: The MTA in the present case has co uched the statutory interpretation issue in terms of the Commission s authority or power or jurisdiction, and has charged that the Commission is attempting to expand its jurisdiction and proceed in an unauthorized manner. Nevertheless, many, if not most, statutory interpretation issues arising in administrative proceedin gs could be phrased in terms of the agency s authority, power or jurisdiction to take a certain type of action in a specific case. A party s argumen t that an agen cy will be exce eding its 5 A dem urrer was a pleading in which a p arty asserted that, as a matter of law, relief could not be gran ted on the f acts alleged in the comp laint. Paul V. Niemeyer & Linda M. Schuett, Maryland Rules Commen tary 206 (3rd ed. 2003). The demurrer s m odern counterpa rt, the motion to dismiss for failure to state a claim upon which relief can be granted , is codif ied in M aryland R ule 2-3 22(b)(2 ). 9 authority if it ultimately interprets the statute and decides the case contrary to that party s position, does not excuse the failure to await a final agency decision. Id. The possibility that extrao rdinary circum stances cou ld provide a basis for absolving the usual o bligatio n to exh aust av ailable a dminis trative re medie s was n ot forec losed. Id. at 235, 449 A.2d at 390. Borrowing language from Professor Davis 1958 Administrative Law Treatise, the Court assumed that exhaustion of administrative remedies would not be required where it is shown that an ag ency is pa lpably w ithout ju risdiction . 6 Id. (citing Kenne th Culp 6 Maryland appears to be one of a small group of jurisdictions that continue to use the descriptive palpably without jurisdiction for the threshold principle. Based on a national search, only 17 judicial opinions were found that utilize the palpably without jurisdiction language in an ad ministrative context (including the p resent one). More th an half of those opinions are from this Co urt. Of the ten opinions that have use d this phrase in the last twe nty years, eight of these opinions are from th is Cou rt, with th e other tw o from Idaho c ourts. See, e.g., Regan v . Kootena i County , 2004 W L 2418 337 (Idah o Oct. 20, 2 004); Fairway Dev. Co. v. Banno ck Coun ty, 804 P.2d 294 (Ida ho 1990). These cases all derive their use of the exact phrase fro m the follo wing pa ssage in Professor Davis s 1958 edition of his Administrative Law Treatise: The law embodied in the [Supreme Court] holdings clearly is that sometimes exhaustion is required and sometimes not. No court requires exhaustion when exhaustion will involve irreparable injury and when the agency is palpably without jurisdiction; probably every court requires exhaustion when the question presented is one within the agency s specialization and when the administrative remedy is as like ly as the judicial remedy to provide the wanted relief. In between these extremes is a vast array of problems on which judicial action is variable and dif ficult or impos sible to p redict. Kenn eth Cu lp Dav is, Administrative Law Treatise, § 20.01 (1958) (em phasis added). (contin ued...) 10 Davis, Administrative Law Treatise, § 20.01 (1958)). Although the Court in MTA did not elaborate on the meaning or scope of such a standard, it did conclude that because the Commission indeed had jurisdiction over employment discrimination cases, it therefore had jurisdicti on ove r any attem pt to inte rpret a sta tute relati ng to th at regula ted field . Id. In Montgomery Cou nty v. Ward, 331 Md. 521 , 629 A.2d 619 (1993), Judge Eldridge, writing for the Court, confirmed 7 the availability of the palpably without jurisdiction 6 (...continued) It is curious to note, however, that the exact wording, i.e. palpably without jurisdicti on, noticeably is absent from subsequent editions of the treatise. The 2002 edition, for example , fails to make use of the palpably without jurisdiction descriptive phrase, even though it discusses an d expand s upon the three-part tes t proposed in the 1958 treatise for when administrative exhaustion is not require d. Richa rd J. Pier ce, Jr., Administrative Law Treatise, § 15.2 (4th ed. 2002) (revised edition of Kenneth Culp Davis & Richard J. Pierce, Jr., Administrative Law Treatise, § 15.2 (3rd ed. 1994)). Although Professor Davis and his subsequent collaborators apparently abandon ed this choice of langua ge beginn ing with the 1983 edition (one year after this Court first utilized the palpably without jurisdiction standard in MTA, 294 Md. at 235 , 449 A.2d at 390 ), Maryland courts retained the description and developed a standard that shares some of the principles of, but does not completely mirror, the exhaustion doctrine outlined in the most recent e dition o f the trea tise. 7 Although some of the discuss ion in o ur case s merel y assum es, with out dec iding, the existence as part of Maryland administrative law of the palpably without jurisdiction exception to the normal requirement of administrative exhaustion, the evolution of the standard indicate s its availa bility in the a pprop riate cas e. Compare MTA, 294 Md. at 235, 449 A.2d at 390 (stating that [i]t may well be tha t exhaustion of admin istrative reme dies is not required where an agenc y is palpab ly withou t jurisdict ion. ), Bd. of License Comm rs v. Corrid or Win e, Inc., 361 Md. 403, 418, 761 A .2d 916, 924 (200 0) (finding that this Court has assumed, without deciding, that there may be an exception to this [exhaus tion] principle where an administrative agency is palpably without jurisdiction. ), and State v. Bd. of Contract Appeals , 364 M d. 446, 457 -58, 773 A .2d 504, 51 1 (2001) (s tating that [i]n situations where a controversy or matter is pending before an adjudicatory administrative agen cy, we have assumed, without deciding, that a party need n ot await a final administrative (continued...) 11 exception to the princip le of adm inistrativ e exha ustion in Marylan d. Id. at 527, 629 A.2d at 622. In Ward, the Workers Compensation Commission, after denying a worker s claims for compensation, also denied his motion for a rehearing. A fe w weeks later, the w orker, Ward, requested that the Commission reconsider its denial of the rehearing. The Commission complied, and rescinded the earlier order denying the rehearing. Ward s employer filed an action for judicial review in circuit court, arguing that the granting of a rehearing was not authorized by either the Workers Compensation statute or the Commission s rules. After the circuit court g ranted sum mary judgm ent to Wa rd on the m erits of the case, Ward s employer appealed the judgment to the Court of Special Appeals, which also concluded that the Com mission ha d continuin g jurisdiction o ver Ward s claim to grant a r ehearin g. Id. at 525, 62 9 A.2d at 621. (...continued) decision where the administrative agency is palpa bly witho ut jurisd iction. ), with Ward, 331 Md. at 527, 629 A.2d at 622 (stating that [w]e have held that the exception relied upon by the employer is applicable only under circum stances w here an a gency is palpa bly without jurisdicti on ) , SEFAC Lift & Equip. Corp. v. Mass Transit Admin., 367 Md. 374, 382-83, 788 A.2d 192, 197 (2002) (stating that the Court has recognized that a party need not await a final administrative decision when the agency is palpably without jurisdiction ), and Freedom Express/D omego ld, 375 M d. at 19, 825 A.2d at 36 4 (stating that this Court has consistently take n the position that judicial rev iew of the issue must a wait a final administrative decisio n unles s the ag ency is p alpably w ithout ju risdiction ). In no case, however, has this Co urt ultimately con cluded tha t an administrative agency actually was palpably without jurisdicti on to a djudica te in any ca se the p articular claim a t issue. But see Ward, 331 M d. at 529-30 , 629 A.2d at 623 (M cAuliffe , J., dissenting) (rea soning that Workers Compensation Co mmission wa s palpably without jurisdiction to rehea r a worker s claim when the rehearin g powe r under the c ircumstanc es was be yond the auth ority of the comm ission). 12 This Court declined to rule on the merits and vacated the judgment, determining instead that Ward s employer was not entitled to resort to a judicial forum while the administrative proces s was p ending . Id. at 527-29, 629 A.2d at 622-23. The Court held that, in order for the employer to sid estep the ad ministrative p rocess, it mus t demons trate that the Commission was pal pably without jurisdicti on to a djudica te War d s claim s. Id. at 527, 629 A.2d at 622. Relying on the distinction made in MTA, the Court e xpansive ly concluded that, because the jurisdiction of the Commission embraced matters involving workers compensation claims, the Comm ission therefore was not palpa bly without jurisd iction to decide claims in volvin g wor kers co mpen sation m atters. Id. We faced a similar question of statutory interpretation in State v. Board of Contract Appeals , 364 Md. 446, 773 A.2d 504 (2001), in which a private law firm filed a complaint with the Board of Con tract Appe als concerning the proper interpretation of a contingent fee contract to represent the State in litigation against the tobacco industry. The State brought a judicial action in circuit court, arguing that the Board did not have jurisdiction over the complaint because the Board was only authorized to hear disputes concerning procurement contracts. The legal representation agreement, the State argued, could not be characterized as a procurement contract. The circuit court granted declaratory relief stating that the contract in question wa s in fact a procureme nt contract, and therefore the B oard possessed primary jurisdiction over the claim. This Court, however, held that declaratory relief was premature, and that the proper forum for initial adjudication of the claim was the 13 administrative proces s. Id. at 457-58, 773 A.2d at 510-11. The Court held that it was obvious that the Board was not palpably without jurisdiction, and that because the Board was authorized to hear disputes involving procurement contracts, any judicial consideration of the threshold issue whether the contract was a procurement contract should abide an initial determ ination b y the adm inistrativ e agen cy. Id. Although the cases dis cussed ab ove held th at the particular issues of statutory interpretation should be decided in the first instance by the administrative agency charged with interpreting the particular statute, the Court also indicated that an agency may be palpably without jurisdiction if a party challenges the underlying fundamental subject matter jurisdiction of the agency. The Ward Court, for instance, expounded on the concept of jurisdiction for purposes of administrative exhaustion, holding that, in order to invoke the palpably without jurisdiction standard, the agency s actions must concern the agency s fundamental jurisdiction. 331 Md. at 527, 629 A.2d at 622. As in MTA, the Court found that the procedural dispute in Ward did not involve necessarily an issue of jurisdiction, but rather an issue of statutory interpretation or authority that was best addressed initially by the agenc y charge d with r esolvin g claim s unde r that statu te. Id. at 527-28, 629 A.2d at 622. In Board of License Commissioners v. Corridor Wine, Inc., 361 Md. 403, 761 A.2d 916 (2000), this Court further explored the interplay between issues of statutory interpretation and those of jurisdiction. The Court narrowed the notion of what constitutes a purely jurisdictio nal question by holding tha t 14 [s]imply 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 s tatute directs the court or agen cy, under certain circumstances, to exercise its jurisdiction in a particular w ay, or to rule in fav or of a resp ondent, 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 ag ency. Id. at 417-18, 761 A.2d at 923. In Freedom Express/D omego ld, the Court added further clarity to the concept of fundamental jurisdiction for purposes of challenging the normal expectation of administrative exhaustion. 375 Md. at 19-20, 825 A.2d at 364-65. The Court held that an agency may be pa lpably withou t jurisdiction on ly where it lacks a clear autho rity to adjudicate a given class of claims. Id. As a hypothetical example of an agency lacking palpable jurisdiction, the Court c onjured the notion of a probate c ourt, invested only with authority over wills and the estates of deceased perso ns, attempting to try someone fo r a criminal offense. Id. at 19-20, 825 A.2d at 364. Therefore, a party wishing to circumvent the administrative process must demonstrate that an agency is operating indisputably beyond its autho rity, and dis tinctly outs ide its fu ndam ental jur isdiction . Whether the County Code and Procurement Regulations in the present case contemp late a claim initiated by the County against a contractor is a typical statutory 15 interpretation or application issue to be determined by a final administrativ e decision a nd to be judicially reviewed only after the adm inistrativ e reme dy has be en exh austed . Id. at 13, 825 A.2d at 361. We consistently have held that statutes should be interpreted in the first instance in contested cases by the ad ministrative ag ency, especially in tho se instances in which the agency possesses specialized knowledge or expertise regarding the underlying subject matter of the statute. Id. at 19-20, 82 5 A.2d a t 364-65. A llowing an agency to interpret a statute in the first instance not only provides the court with a complete record and hopefully a rationalized interpretation, but also aids in judicial economy by preventing piecemeal and interlocutory appea ls from admin istrative d ecision s. Soley, 277 Md. at 526, 356 A.2d at 257 (stating that to permit interruption for purposes of judicial intervention at various stages of the administrative process might well undermine the very efficiency which the Legislature intended to achieve in the first instance ). Heery s claim that the Co unty s administrative dispute resolution process is without jurisdiction must yield to the requirement that all administrative remedies be exhausted. The agency should be given an o pportunity to interpret its ow n statutes, and the admin istrative process allowed to proceed without improvident interruption. Even though the present dispute involves what could be characterized as a matter of s tatutory interpretatio n, the agen cy is in the best po sition to provide an initial determination as to whether the County Code and Procurement Regulations confer authority on the County to bring a claim against a contractor via that process. See MTA, 294 Md. at 233, 449 A.2d at 389 (holding that the interpretation of the agency charged 16 with administering a statute should be given w eight by a review ing cou rt). The Director and CAO are charged with interpreting and applying the County Code and the Procurement Regulations on a regular basis, and therefore their ability to render an informed decision should not be discounted. Although the Maryland judiciary is indeed capable of adjudicating the matter at hand, the courts and Heery should wait to weigh-in until the administrative process has been exhausted. IV. Hee ry, however, persists that they should not be forced to suffer through a futile administrative process when there exists clear case law supporting the notion that the agency s consideration is without color of authority. On this score, Heery offers by analogy as conclusive the holding in University of Maryland v. MFE, Inc., 345 Md. 86, 691 A.2d 676 (1997 ). A. In MFE, the University of Maryland informed one of its contractors, MFE, that the University was asserting a claim against the contractor for costs related to delay and design deficiencies in the construction of a cam pus library building. MFE denied responsibility, and the University submitted the claim to the S tate administrative process. Pursuant to that process, the director o f the Univ ersity s Departm ent of Pro curemen t and Sup ply determined that the State was entitled to be indemnified for costs relating to MFE s deficiencies. The administrative regulations provided that, after an adverse decision was made by the 17 administrative agency, the de cision could be appea led, within 30 days, to the State Board of Contract Appeals ( BCA ). MFE noted an appeal to the BCA, but the University moved to dismiss the appeal on the gro und that i t was unt imel y.8 The BCA agreed and dismissed MFE s appeal. MFE sought judicial review in the C ircuit Court for Baltimore Cou nty, which reversed the BCA ruling on the timeliness issue. An a ppeal to the Court o f Special A ppeals ensued. This Court, taking the case from the intermediate appellate court before it decided the matter, decline d to con sider the timeline ss issue. Id. at 92, 691 A.2d at 679. Instead, the Court framed and decided an issue of its own creation, holding that the State s administrative adjudicatory scheme lacked jurisdiction over the University s claim because neither the Maryland Code nor its regulations contemplated an affirmative claim by a governmental entity aga inst a co ntractor . Id. The dispute in MFE implicated th e administra tive process outlined in Md. Code (1985, 20 01 Rep l. Vol.), §§ 15 -201 - 15-2 23 of the S tate Financ e and Pro curemen t Article ( State Procurement Statute ). Under this statutory scheme, a person who has been awarded a procurement con tract may submit a contract claim to the procurement officer. § 15217(a)(2). The Court ob served that there is no provision in § 15-217 or, to our knowledge, in any other part of the subtitle, permitting the State unit to file either a protest or a contract 8 The timeliness issue asserted by the Unive rsity in MFE concerned whether the use of a fax machine and telephone follow-up satisfied the regulation governing notice and filing of an administrative appeal. 345 Md. at 91-92, 691 A.2d at 678-79. 18 claim. MFE, 345 Md. at 92-93, 691 A.2d at 679. In concluding that the statutory language demonstrated that there was no statutory basis of BCA jurisdiction over a claim filed by ... the State un it, the Court reasoned, from an extensive legislative history, that the Legislature did not intend for the State to have the authority to instigate a claim through the admin istrative p rocess. Id. at 94, 69 1 A.2d at 680. As detailed in MFE, the Legislatu re s determ ination not to provide ex pressly for State initiation of its claims via the administrative proces s was n ot inadv ertent. Id. The basis of the law at issue was the American Bar Association s Model Procurement Code for State and Local Governme nts ( Model C ode ), which attemp ted to bring greater coordination, simp licity, and unifo rmity to State purch asing and procurem ent process es, to consolidate and integrate the existing diverse laws and regula tions, and to recommend which processes should be in the law and which should be in regulations. Id. The second draft of the Model Code, introduced concurrently in 1978 in the Maryland House of Delegates and Senate, allowed for the administrative adjudication of claims both against and by a contra ctor. Id. at 95-96, 691 A.2d at 680-81. Although the House Bill was not acted on, the Senate passed the procurement bill with several amendments. Id. at 96, 691 A.2d at 681. One of these amendm ents was the addition of language that limited access to the administrativ e dispute resolution process to only those claim s made by contra ctors ag ainst the State. Id. The amen ded bill, h owev er, died in a Hou se com mittee la te in the le gislative session . Id. 19 During the same 1978 legislative session, a different bill creating a Board of Contract Appea ls for the Maryland Department of Transportation was enacted and became law. That law gave the Board jurisdiction over all disputes other than labor disputes arising und er a contract with the department, or as a result of a breach of a con tract with the department. Id. at 97, 691 A.2d at 681. As a result, the Department of T ransportation contract disp ute proces s clearly co ntemp lated cla ims initia ted by eith er the S tate or co ntractor s. Id. The amended bill that failed in the 1978 session was reintroduced in 1979. The Court in MFE put great weight on the fact that, during its consideration, the assistant attorney general representing the Department of General Services ex pressed concern to counsel to the House Constitutional and Administrative Law Committee and the Governor s office, among others, about the lack of an administrative remedy for contract claims brought by the State. Id. at 97-98, 691 A.2d at 681-82. The assistant attorney general specifically raised the issue of the potential for duplicitous litigation, and suggested two amendments to the bill that possibly would c ure the def ect. 9 Id. at 99, 69 1 A.2d at 682. None o f the ame ndments was acted u pon. T he bill fa iled to pa ss again . Id. The bill was reintroduced once more in the 1980 legislative session with the same language as the faile d bills fro m the 1 978 an d 1979 session s. Id. This tim e, how ever, it 9 These two amendments involved amending the State Procurement Statute to add the State as one of the parties en titled to demand a negotiation and settlement of disputes and adding a new [p rovision] pe rmitting the S tate, in any appe al to the BCA by a contracto r, to assert any counterclaim it may have against the contractor and any third-party claim arising out of the facts. MFE, 345 Md. at 99, 691 A.2d at 682. 20 passed. The bill also repealed and superseded the Department of Transportation contract dispute proces s enacte d in 197 8. Id. Prior to the 1980 enactment, the ABA published recommended regulations to acc ompany its M odel Proc urement C ode that un equivoca lly provided for administrative resolution of claims against a contractor by the gov ernme nt. Id. at 99-10 0, 691 A .2d at 68 2-83. Furthermore, the federal government had enacted legislation that expressly recognized agency claims against a contractor as amenable under the federal admin istrative p rocess. Id. at 100, 691 A.2d at 683. The MFE Court held that the Maryland Leg islature s conscious and consistent refusal to amend its procurement laws provided conclusive proof that the Legislature did not intend to embrace administrative claims initiated by the State ag ainst a co ntractor . Id. at 102, 691 A.2d at 684. The Court refused to opine whether such a procurement scheme was the best approa ch, but did find that a reading of the statute that foreclosed claims brought by the State was not one that would make a plain reading of the statute absurd. Id. B. Had Hee ry been able to demonstrate that the MFE decision was completely and clearly analogous to the circumstances of the present case, w e would be more in clined to intervene in the adm inistrativ e proce ss here. See, e.g., Perdue Farms, Inc. v. NLRB, 108 F.3d 519, 521 (4th Cir. 1997) (holding that under the reasoning in Leedom v. Kyne, 358 U.S. 184, 79 S. Ct. 180 , 3 L. Ed . 2d 210 (1958 ), a cour t has ju risdiction ... to review ... decisio ns ... only where the [agency] exceeds its delegated powers or ignores a statutory mandate, and 21 the absence of judicial review would sacrifice or obliterate a right created by [the legislature] ); New York M ercantile Exch. v. Commodity Futures Trading Com m n, 443 F.Supp. 326, 329 (S.D.N.Y. 1977) (finding that the Supreme Court has held the doctrine of exhaustion of administrative remedies inapplicable to situations in which an agency s action was entirely outside its statutory jurisdiction ). We, however, are not so persuaded. It is a long and arduous road that must be traversed in order to arrive at the conclusion that a particular agency s actions are so clearly and unequivocally without authority as to be characteriz ed as palpab ly without jurisdic tion. It is imper ative that a pa rty wishing to circumvent the administrative process demonstrate that it will experience some apparent injury as a result of its involvement in that ad ministra tive pro cess. See West v. Bergland, 611 F.2d 710, 718 (8 th Cir. 1979) (stating that [c]ourts have traditionally required the individual to make a cogent sh owing th at denial of im mediate judicial review will subject h im either to irreparable injury or a n inad equate remed y ). Although extraordinary litigation expense, . . . unreas onable admin istrative d elay, . . . and the immediate destruction or loss of the very substantive right that the ind ividual seek s to protect have been considered examples of irreparable injury, the inevitable costs of administrative litigation are not factored into such a finding . Id. A party also may be able to d emonstra te the requisite irreparable injury by demonstrating that the challenged administrative process will provide no adequate remedy or relief. This exception to the administrative exhaustion requirement, however, will be recognized only under the most equitable of circumstances as the exception works against 22 the sound policy favoring completion of available administrative processes and prevention of disruption of those processes. C. Despite Heery s contentions, we can not find at this stage that the County administrative process is palpably without jurisdiction, based on an analogy to the MFE decision. Heery has f ailed to demonstrate that the County ordinance and its legislative history are so strikingly similar to the State statute at issue in MFE as to find that the Co unty agency s consideration of the County s cla ims is clearly an d unequivoc ally w ithout au thority. Although the County Code and Procurement Regulations contain language and structure similar to the State Procurement Statute in MFE, there are several differences that erode our confidence that the two enactments are sufficiently identical as to warrant judicial intervention in the adm inistrative proc ess in the po sture of this c ase as it reache s us. The State statute in MFE contained permissive language allowing the contractor the option of submitting a claim to the pr ocurem ent off icer or p ursuing anothe r remed y. See Md. Code (1985, 2001 R epl. Vol.), § 1 5-217(a)(2 ) of the Sta te Finance and Procurement Article (stating that [a] person who has been awarded a procurement contract may submit a co ntract claim to the procurement officer (emphasis added)). The County Code in the present case, however, contains a mandatory provision un der which a con tractor must submit any dis pute arising under a contract to the Director. Mon t. Co. Code § 11 B-35(a) (emph asis added). In addition, the County s Procurement Regulations contain a provision a llowing the County to 23 implead a contractor into the administrative process; the State statute in MFE did not. Mon t. Co. Proc. R egs. § 14.2.2.8. Such a provision partakes of the characteristics of the cure suggested by the assistant attorney general in the legislative history in MFE, and may ind icate that the Montgomery County Council ( Coun ty Council ) here contemplated that its code and regulations allow for administrative adjudications of claims brought by the County against a contractor. 10 345 Md. at 99, 691 A.2d at 682. Furthermore, unlike in MFE, Heery has not produced any legislative history that unmistaka bly demonstrates that the County Council did not intend for the County Code and Procurement Regulatio ns to provid e for adm inistrative adjud ication of co ntract dispute 10 It is clear that the County Code authorizes (and perhaps mandates) a contractor initially to bring a claim against the Cou nty using the adm inistrative proc ess. Now here in the County Co de or Proc urement Regulations, however, is there express language authorizing or mandating the use of the administrative process for claims brought affirmatively by the Cou nty. At the circuit court hearin g on the County s motion to dismiss, counsel for the County acknowledged that such language was absent from the C ounty Code. He explained that this was because th e Coun ty never con templated th e situation w here the C ounty wou ld have to bring a claim against a contractor. Under the County s normal ex pectation in contract-related disputes, counsel explained further, the County would retain funds when there is a dispute, fo rcing unpaid contractors to initiate claims under the administrative process against the County. Coun sel for the County further indicated th at although the County took the position that the administrative process allowed for claims initiated by the County, this case was the first time in the n ine years since the process was enacted that the County utilized it to bring a claim against a contractor. Nonetheless, we conclude that enough uncertainty about the agency s jurisdiction exists on this record to prevent us from ruling in Heery s favor at this stage in the dispute. Our disposition, however, is without prejudice to Heery s maintenance of a jurisdictional challenge in the course of the administrative proceedings and any subsequent judicial review. All we decide, at this juncture, is tha t the C ounty process is not palpably without jurisdiction to consider the County s claims. 24 claims brought by the County against a contractor. Although this Court interpreted similar language in the State Procurement Statute to foreclose claims brought by a government entit y, we did so only after analyzing a rich and thorough legislative history. MFE, 345 Md. at 94-102, 691 A.2d at 680-84. The Court in MFE made no indication that the mere text of the statute unqu estionably foreclosed such claims, and made a decision on the merits of the jurisdictional question only after detailing a legislative history that left no question as to what the Legisla ture inte nded. Id. at 94, 691 A.2d at 680. In the present case, however, questions linger.11 Heery also has made no showing that its involvement in the County administrative dispute resolution proce ss will result in a ny irreparable in jury cognizab le by this Court. Likewise, Heery failed to demon strate that the C ounty administrativ e process f ails to provide an adequate remedy or judicial review of an asse rtedly errone ous rulin g. See Soley, 277 Md. at 527, 356 A.2d at 258 (finding that administrative remedies ne ed not be exhau sted where there is no adequate administrative remedy or provision for review of the age ncy decision ). In fact, the record before us indicates that Heery initiated its action in the circuit court before the Cou nty ag ency h ad an opportunity to consider and render a decision on whether it had authority over a claim brought by the Co unty. See New York Mercantile Exchange, 443 11 It is also worth noting that in MFE, unlike here, the parties availed themselves of the relevant administrative process. In MFE, the Unive rsity utilized its internal re view process and MFE appealed that result to the BCA, which dismissed MFE s appeal for untimeliness. A com parison of the relative procedural postures alone distinguishes MFE from the present case. 25 F.Supp. at 331 (stating that even w here the agency has grossly ex ceeded its a uthority, it would seem that first resort should be to the [administrative process] ). After the final decision of the CAO, Heery is entitled to judicial review in the circuit court of an adverse administrative decision. Mont. Co. Code § 11B-35(d); Md. Rule 7-201. In the circuit court, Heery s claims of a lack of au thority or jurisdiction may be considered de novo. Any adverse decision there may be appealed further to the Court of Special Appeals. Our task in the present case is to determine whether the County administrative process is clearly an d uneq uivoca lly withou t author ity. Based on this record, we are unable to reach this conclusion. Heery s desire to avoid the uncertainty of the administrative process must yield, for the moment, to the deep-rooted principle that ordinarily the administrative process must b e exha usted b efore a party may e xpect ju dicial rev iew. JUDGMENT OF THE CIRCUIT COURT FOR MONTGOMERY COUNTY AFFIRMED. COSTS TO BE PAID BY APPELLANT. 26

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