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Reliable Contracting Co., Inc. v. Maryland Underground Facilities Damage Prevention Authority

Court of Appeals of Maryland

March 28, 2016

RELIABLE CONTRACTING COMPANY, INC.
v.
MARYLAND UNDERGROUND FACILITIES DAMAGE PREVENTION AUTHORITY

Argued: January 8, 2016.

Circuit Court for Anne Arundel County Case No. 02-C-13-182390AA.

Barbera, C.J., Battaglia, Greene, Adkins, McDonald, Watts, Rodowsky, Lawrence F. (Retired, Specially Assigned), JJ.

OPINION

McDonald, J.

Underground infrastructure, such as the cables and pipes that distribute water, gas, electricity, and other substances essential to modern life, is susceptible to damage during excavations. To prevent such incidents, State law has established a "one-call system, " sometimes referred to as "Miss Utility." Maryland Code, Public Utilities Article ("PU"), §12-101 et seq. Under that law, advance notice must be given to the one-call system of certain types of excavation so that the location of nearby pipes, cables, and related structures can be identified and marked. Those who fail to do so and damage underground pipes or cables are subject to civil penalties assessed by Respondent Maryland Underground Damage Prevention Authority ("the Authority").

This case arose when the Authority cited Petitioner Reliable Contracting Company, Inc., ("Reliable Contracting") for violating the statute and imposed a civil monetary penalty. Reliable Contracting challenges the constitutionality of the statutory provisions that empower the Authority to adjudicate violations and assess penalties. It argues that the statutory scheme violates the separation of powers set forth in the Maryland Constitution because it vests judicial power in a non-judicial body – the Authority. Reliable Contracting also contends that the statute fails to provide adequate guidance to the Authority for the assessment of penalties, which would also render it unconstitutional under a prior decision of this Court.

We hold that the statutes that govern the Authority suffer from neither constitutional defect. Like many other administrative agencies, the Authority's quasi-judicial powers are limited and subject to judicial review. It is true that the statute authorizing the Authority to impose civil penalties does not itself specify the criteria for the Authority to consider in setting the amount of a civil monetary penalty. However, the General Assembly has enacted a general statute providing criteria for assessment of civil penalties by State administrative agencies when no other statute or regulation does so. Although the Authority itself questions whether that statute applies to it, we agree with the Court of Special Appeals that it does.

I

Background

A. Statutory Framework

One-Call System to Protect Underground Facilities

In the modern world, electricity, gas, oil, water, sewage, and other substances are transmitted underground via pipes, cables, and accessories that are subsumed under the generic statutory phrase "underground facilities."[1] Damage or dislocation of underground facilities can result in death or injury to individuals, damage to property, and the loss of essential public services.[2] To protect underground facilities, the General Assembly has enacted a comprehensive statutory scheme for regulating excavation or demolition that could damage them. PU §12-101 et seq. The statute applies to all excavation or demolition unless the "excavation or demolition is performed or to be performed: (1) entirely on the land on which the private residence of the owner or lessee is located; and (2) without the use of machinery." PU §12-103.

The statute creates a one-call system, colloquially known as "Miss Utility, " which notifies owners of underground facilities of a planned demolition or excavation that may affect those facilities. PU §12-101(i) (definition of "one-call system"). Anyone who intends to perform a covered excavation or demolition must notify the one-call system in advance. PU §12-124(a). After notifying the one-call system, "[a] person may begin excavation or demolition only after the person receives notification from the underground facilities information exchange system of the one-call system confirming that all applicable owner-members have" marked any facilities or parts of facilities they have in the vicinity of the excavation or demolition. PU §12-127(a). "If a person knows or has reason to know that an underground facility in the area of a planned or ongoing excavation or demolition is not marked as required by this subtitle, the person may not begin or continue the excavation or demolition unless the person" takes certain precautions not relevant here. PU §12-127(e).[3]

The Authority

The statute creates the Authority to carry out certain enforcement and public education facets of the one-call system. The Authority consists of nine members appointed by the Governor from lists submitted by organizations representing various types of stakeholders. PU §12-107.[4] The members serve staggered two-year terms. "On the recommendation of the Authority, the Governor may remove a member for incompetence or misconduct." PU §12-107(e).

In carrying out its functions under the statute, the Authority is authorized to conduct hearings, at which testimony is to be given under oath and recorded. PU §12-113(a). The statute authorizes the Authority to issue subpoenas in conjunction with its hearings and its members may administer the oath to witnesses. PU §12-113(b)-(c). The Authority's decisions are to be made in writing and are subject to judicial review in accordance with the State Administrative Procedure Act. PU §12-113(d)-(e).

To the extent that the Authority requires funding to carry out its responsibilities, the General Assembly has directed the Authority not to look to appropriations in the State budget, but rather to obtains funds from "(1) a federal or State grant; (2) filing fees and administrative fees for complaints heard by the Authority ...; and (3) any other source." PU §12-111(a); see also PU §12-106.

Enforcement of the One-Call System by the Authority

The Authority is charged with enforcing compliance with the notice provisions of the one-call system. It conducts hearings on complaints of violations, may assess a civil penalty when a violation is found, and may also enter into settlements in lieu of assessing a civil penalty. PU §12-112(a). For performing "an excavation or demolition without first providing the [required] notice ... and damag[ing], dislocat[ing], or disturb[ing] an underground facility, " the Authority may assess a penalty of up to $2, 000 for a first offense and up to $4, 000 for each subsequent offense. PU §12-135(a)(1).[5] Other violations of the one-call system are subject to a civil penalty of up to $2, 000. PU §12-135(a)(3). The Authority may also require a violator to participate in special training or adopt certain procedures to mitigate damage, in addition to or in lieu of a monetary penalty. PU §12-135(a)(2). As noted above, the Authority's decisions are subject to judicial review. PU §12-113(e).

In addition to its enforcement function, the Authority also administers a special, non-lapsing fund devoted to public education and the development of safety procedures. PU §12-117.[6]

B. Facts and Procedural History

In February 2013, a local utility notified the Authority that Reliable Contracting had violated the statute by undertaking an excavation without using the one-call system and, as a result, had damaged the utility's facilities. On April 16, 2013, after an investigation, the Authority notified Reliable Contracting that it would assess a civil monetary penalty of $2, 000 for a violation of PU §12-124(a) (excavating without notifying the one-call system) and a penalty of $1, 000 for a violation of PU §12-127(e) (excavating with knowledge of an underground facility and without following proper procedures). The Authority indicated that the $1, 000 penalty would be waived if Reliable Contracting completed damage prevention training offered by the Maryland Damage Prevention Committee. The notice stated that Reliable Contracting had the right to a formal hearing before the Authority.

Reliable Contracting requested a hearing. At the hearing in September 2013, it did not contest any of the Authority's findings; instead, it challenged the constitutionality of the Authority's enabling statute. Specifically, Reliable Contracting asserted that, in permitting the Authority to adjudicate violations and assess civil penalties, the statute conferred judicial power on a non-judicial body and thereby violated the separation of powers required by the State Constitution. Reliable Contracting also asserted that the statute failed to provide adequate guidance to the Authority for assessment of such penalties. On September 16, 2013, the Authority issued a written decision that confirmed its earlier finding of violations and ...


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