WAYNE GARRITY, SR.
MARYLAND STATE BOARD OF PLUMBING
Argued: December 4, 2015
Circuit Court No. 24-C-13-004631 for Baltimore City
Barbera, C.J., [*] Battaglia, Greene, Adkins, McDonald, Watts, Harrell, Jr., Glenn T., (Retired, Specially Assigned), JJ.
To date, Maryland has not adopted formally the doctrine of offensive non-mutual collateral estoppel. We are asked to decide in the present case whether the doctrine is permissible in this State and, further, whether it can be invoked to grant preclusive effect to an administrative order. We hold that offensive non-mutual collateral estoppel was properly applied in this case, and that a Final Order issued by an administrative body constitutes a "final judgment" for purposes of granting that order preclusive effect. We also hold that the civil penalty imposed upon Petitioner, for the same conduct for which Petitioner was civilly sanctioned in an earlier proceeding, does not violate the Double Jeopardy Clause.
On February 23, 2012, the Consumer Protection Division of Maryland's Office of the Attorney General ("CPD") issued a Statement of Charges and Petition for Hearingagainst Petitioner, Wayne Garrity, Sr., and his companies, All State Plumbing, Inc. and All State Plumbing, Heating & Cooling, Inc. ("All State"). The CPD alleged that Petitioner and All State engaged in unfair and deceptive trade practices in violation of the Maryland Consumer Protection Act ("CPA"). See Md. Code Ann., Com. Law ("CL") § 13-303 (2011, 2013 Repl. Vol.). The CPD alleged that, over a period spanning at least five years, Petitioner, through All State, retained unlicensed plumbers; failed to obtain required permits and inspections for job sites; misrepresented to consumers that his employees were licensed and would obtain the requisite permits and inspections; and charged consumers for services he did not provide. Also on February 23, 2012, the CPD entered an Order Granting Hearing and Notification of Hearing, designating the Office of Administrative Hearings to conduct the hearing on the Statement of Charges.
The CPD and Petitioner participated in a hearing on June 5 and 6, 2012, before an Administrative Law Judge ("ALJ"), as the designee of the CPD. At the hearing, the CPD submitted 84 exhibits and called 24 witnesses to testify. Petitioner submitted only one exhibit and called no witnesses and, when called upon to testify by the CPD, invoked his Fifth Amendment right against compelled self-incrimination. Both parties submitted post-hearing Proposed Findings of Fact and Conclusions of Law. The ALJ submitted a Proposed Decision on November 7, 2012, finding that Petitioner violated the CPA as charged by the CPD. Neither party filed exceptions to the Proposed Decision.
Consequently, on January 3, 2013, the final decision maker designated by the CPD in its quasi-judicial capacity issued written findings of fact and conclusions of law. The designee found that Petitioner, through All State, "engaged in a longstanding and disturbing pattern of conduct involving deception and deceit." The CPD designee found in particular that Petitioner employed three plumbers whose licenses had either expired or been suspended, and who performed more than 6, 000 plumbing jobs without a license. The CPD further found that Petitioner charged customers between $95 and $175 for permits for certain plumbing services, yet regularly failed to obtain the required permits or schedule the required inspections for water heaters installed in at least 697 Maryland homes. The CPD designee concluded by a preponderance of the evidence that Petitioner committed at least 7, 079 violations of the CPA through the above-described conduct.
The CPD contemporaneously issued a Final Order adopting those findings and conclusions and issuing sanctions for Petitioner's violations of the CPA. The CPD ordered Petitioner to cease and desist engaging in unfair and deceptive trade practices and pay $250, 000 in restitution to the victims. The CPD also imposed $707, 900 in civil penalties and assessed costs in the amount of $65, 129.54. See CL § 13-410(a) (providing that an individual who violates the CPA "is subject to a fine of not more than $1, 000 for each violation"); CL § 13-409 ("In any action brought by the Attorney General under the provisions of this title, the Attorney General is entitled to recover the costs of the action for the use of the State."). Neither Petitioner nor the CPD sought judicial review of the CPD's decision.
Thereafter, Respondent, the Maryland State Board of Plumbing ("the Board"), upon review of the decision of the CPD, opened a complaint against Petitioner. Following unsuccessful efforts to obtain requested information from Petitioner, the Board issued a Notice of Charges and Order for Hearing ("Charge Letter"). The Charge Letter alleged that Petitioner had violated the Maryland Plumbing Act ("MPA") by providing incompetent or negligent plumbing services; failing to obtain permits required by local jurisdictions; engaging in unfair trade practices; knowingly permitting employees to work outside the scope of their licenses; and employing unlicensed persons to participate in the provision of plumbing services. See Md. Code Ann., Bus. Occ. & Prof. ("BOP") §§ 12- 312(a)(1) and 12-602(a) (2004, 2010 Repl. Vol.). The Charge Letter incorporated by reference the CPD's Final Order. At the hearing before the Board, counsel for the Board moved to admit the CPD's Final Order as evidence in its case in chief. Although the Board admitted eight exhibits and called two witnesses-one of whom was Petitioner, who again refused to testify pursuant to his Fifth Amendment privilege-the Board's case largely consisted of the CPD's findings and conclusions.
Petitioner's counsel objected to the introduction of the CPD's Final Order, arguing that the Board must conduct its own evidentiary hearing and prove independently the violations of which Petitioner was charged. Counsel for the Board responded that Petitioner was collaterally estopped from relitigating the same facts as were litigated before the CPD and determined finally in the CPD's Final Order. The Board admitted the CPD's Final Order but did not state specifically that the Board would give that Final Order preclusive effect. Petitioner did not seek to postpone the hearing until the Board ruled on that issue.
The Board issued a Final Decision and Order on July 9, 2013. The Board, by application of the doctrine of collateral estoppel, adopted the findings of fact made by the CPD and, based upon those findings, concluded that Petitioner had committed "pervasive, numerous and egregious" violations of the MPA as alleged in the Charge Letter. The Board revoked Petitioner's master plumber license and imposed a $75, 000 civil penalty.
Petitioner petitioned for judicial review of the Board's decision in the Circuit Court for Baltimore City, which ruled that the Board properly invoked collateral estoppel in adopting the CPD's findings of fact. The Court of Special Appeals affirmed, Garrity v. Md. State Bd. of Plumbing, 221 Md.App. 678, 681 (2015), and we granted Petitioner's petition for a writ of certiorari to answer two questions, which we have rephrased:
1. Did the Maryland State Board of Plumbing correctly invoke the doctrine of offensive non-mutual collateral estoppel and use it to preclusive effect against Petitioner?
2. Were Petitioner's double jeopardy protections violated when the Maryland State Board of Plumbing and the Consumer Protection Division both fined him for the same conduct?
We answer yes to the first question and no to the second, and consequently affirm the judgment of the Court of Special Appeals.
Application of Collateral Estoppel
In our review of an administrative action, we look through the decision of the circuit court and review that agency action directly. People's Counsel for Balt. Cty. v. Surina, 400 Md. 662, 681 (2007). We review the Board's adjudicatory decision for whether there was "substantial evidence in the record as a whole to support the agency's findings and conclusions" and whether the Board's decision was "premised upon an erroneous conclusion of law." Md. Aviation Admin. v. Noland, 386 Md. 556, 571 (2005). Whether it was appropriate to grant preclusive effect to the CPD's Final Order, however, is a legal conclusion that this Court reviews de novo. See Spencer v. Md. State Bd. of Pharmacy, 380 Md. 515, 528 (2004).
The doctrine of collateral estoppel provides that, "[w]hen an issue of fact or law is actually litigated and determined by a valid and final judgment, and the determination is essential to the judgment, the determination is conclusive in a subsequent action between the parties, whether on the same or a different claim." Cosby v. Dep't of Human Res., 425 Md. 629, 639 (2012) (alteration in original) (quoting Murray Int'l Freight Corp. v. Graham, 315 Md. 543, 547 (1989)). The doctrine is based on two principles: judicial economy and fairness. Treating adjudicated facts as established "protect[s] litigants from the burden of relitigating an identical issue with the same party or his privy and . . . promot[es] judicial economy by preventing needless litigation." Parklane Hosiery Co. v. Shore, 439 U.S. 322, 326 (1979). The collateral estoppel doctrine has several permutations, each dependent upon the posture of the party attempting to assert it.
Traditionally, collateral estoppel contemplates a "mutuality of parties, " meaning that an issue that was litigated and determined in one suit will have preclusive effect in a second suit when the parties are the same as, or in privity with, those who participated in the first litigation. Rourke v. Amchem Prods., Inc., 384 Md. 329, 340-41 (2004); Welsh v. Gerber Prods., Inc., 315 Md. 510, 516 (1989). The mutuality requirement has been relaxed, however, so long as the other elements of collateral estoppel are satisfied. See Rourke, 384 Md. at 349. If either the defendant or the plaintiff in the second proceeding was not a party to the first proceeding, we refer to that application of collateral estoppel as "non-mutual." Id. at 341. Mutual and non-mutual collateral estoppel are further characterized as either "defensive" or "offensive: estoppel is "defensive" if applied by a defendant and "offensive" if invoked by a plaintiff. See Shader v. Hampton Improvement Ass'n, 443 Md. 148, 162-63 (2015). Regardless of the particular permutation, this Court has required that four questions be answered affirmatively before collateral estoppel can be applied:
1. Was the issue decided in the prior adjudication identical with the one presented in the action in question?
2. Was there a final judgment on the merits?
3. Was the party against whom the plea is asserted a party or in privity with a party to ...