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Hosford v. Chateau Foghorn LP

Court of Special Appeals of Maryland

September 1, 2016


          Kehoe, Friedman, Wilner, Alan M., (Retired, Specially Assigned), JJ.


          KEHOE, J.

         Wesley Hosford appeals from a judgment entered by the Circuit Court for Baltimore City in favor of Chateau Foghorn LP ("Foghorn"). Hosford presents three issues, which we have re-worded:

1.In an eviction action involving federally-subsidized housing, does federal law preempt the requirement in Maryland Annotated Code Real Property Article ("RP") § 8-402.1 that a court must conclude that a breach of a lease be "substantial" and "warrant eviction" before granting judgment for possession of the leased premises?
2.Was there sufficient evidence in the record to support the circuit court's conclusion that there was no genuine dispute of material fact that Hosford possessed marijuana in his apartment?
3.Does the possession of a small amount of marijuana for medical purposes constitute "drug-related criminal activity" in violation of the terms of Hosford's lease?

         The circuit court answered the first question in the affirmative, but we reach the opposite conclusion. We will therefore reverse the judgment.


         Foghorn owns and manages Ruscombe Gardens, a federally-subsidized apartment building in Baltimore. Hosford has resided there since 1989. Ruscombe Gardens' units are leased exclusively to elderly and disabled individuals. Hosford has been disabled by incomplete quadriparesis as the result of an accident in 1987.

         In 2014, Foghorn hired an extermination company to treat Ruscombe Gardens for a bedbug infestation. Two exterminators entered Hosford's apartment and saw what looked to them like a marijuana plant growing in his bathtub. They reported this to the apartment's management office. Someone in the office contacted the police and Baltimore City Police Officer Phillip G. Tabron responded. Officer Tabron concluded that the plant in the bathtub was marijuana, confiscated it, and issued Hosford a criminal citation for possession of marijuana. The plant was tested by a police chemist, who concluded that the plant was marijuana. Hosford was subsequently charged in the District Court for Baltimore City with possession of less than 10 grams of marijuana, but the charge was later nol prossed.

         In July, 2014, Foghorn initiated an eviction action pursuant to RP § 8-402.1[1] against Hosford in the district court, claiming that Hosford had breached the following term of his lease:

         The Landlord may terminate this Agreement for the following reasons:

[D]rug related criminal activity engaged in on or near the premises, by any tenant, household member, or guest, and any such activity engaged in on the premises by any other person under the tenant's control[.]

         Hosford moved for a jury trial, claiming that the value of his right to continued occupation of his apartment exceeded $15, 000.[2] After the case was transferred to the circuit court, Foghorn filed a motion for summary judgment, asserting that:

1.There was no genuine dispute of fact that appellant had marijuana in his apartment.
2.Possession of marijuana was illegal under Maryland law at the time of Hosford's arrest, and also illegal under federal law, and thus constituted drug-related criminal activity in violation of the lease.
3.Because Ruscombe Gardens was a federally-subsidized housing project, federal law vests discretion in landlords to decide whether a tenant should be evicted for drug-related criminal activity. These same laws preempt RP § 8-402.1's requirement that a court can order eviction only if the breach is substantial and warrants eviction.

         From these premises, Foghorn argued that the only issue before the court was whether Hosford breached the lease. As to that issue, Foghorn asserted that there was no dispute of material fact as to whether Hosford possessed marijuana in his apartment and that his possession of it constituted a "drug-related criminal activity, " in violation of the lease.

         In response, Hosford claimed that there was a dispute of material fact as to whether the plant in his apartment was marijuana. Second, he contended that Foghorn was not entitled to summary judgment as a matter of law because: (a) if he did possess marijuana, it was not a criminal activity, and thus not a breach of the lease; and (b) even if the action did breach the lease, the court must still determine whether the breach was "substantial" and "warrants eviction" pursuant to RP § 8-402.1. Hosford also presented medical records indicating that he suffers from painful muscle spasms as a result of his physical condition, as well as an affidavit from an associate professor at The Johns Hopkins School of Medicine, stating that use of marijuana "is likely to provide . . . therapeutic or palliative relief" for persons suffering from chronic pain and muscle spasticity associated with quadriparesis.

         On March 23, 2015, the circuit court granted Foghorn's motion for summary judgment. In its accompanying written opinion, the court first concluded that the exterminators' affidavits and, most significantly, the police chemist's report, established there was no dispute of material fact that there was a marijuana plant in Hosford's apartment when the exterminators entered the apartment.

         Second, the court was not persuaded by Hosford's arguments that the possession of the marijuana was not criminal. The court noted that, even though Maryland "no longer punishes the possession of less than ten grams of marijuana as a crime, " the pertinent amendment to Maryland Code Criminal Law ("CL") Article § 5-601(c)(2)(ii)[3] became effective on October 1, 2014, that is, after the marijuana plant was discovered in Hosford's apartment.

         The court then turned to Hosford's assertion that possession of marijuana in small amounts for medical purposes was not a criminal offense. The court stated that the statute in question, CL § 5-601(c)(3)(iii)(1), [4] makes "medicinal use for a debilitating medical condition an affirmative defense." (Internal quotation marks omitted).

         Acknowledging that no appellate court had yet addressed the operation and effect of the statute, the court reasoned that, based upon "the ordinary operation of affirmative defenses in criminal cases . . . a defendant successfully asserting the affirmative defense would escape conviction altogether." The court observed, however, that there is no corresponding affirmative medical marijuana defense in the federal Controlled Substances Act.[5] The court reasoned that, because "marijuana remains a federally prohibited Schedule I substance":

[Foghorn] may proceed on the basis that the possession of any quantity of marijuana is a crime under federal law. Defendant Hosford's assertion of the medical use affirmative defense therefore would be irrelevant, unless the jury is allowed to review the landlord's exercise of discretion in treating this particular possession of marijuana as warranting termination of the lease and eviction.

(Emphasis added.)

         The court then turned to whether "the jury is allowed to review the landlord's exercise of discretion in treating this particular possession of marijuana as warranting termination of the lease and eviction." The court decided that the answer to the question was "no." It stated:

Federal law compels [Foghorn] to include in its leases for subsidized housing provisions that forbid tenants from engaging in or permitting any criminal drug activity on the premises and that give it the authority to evict a tenant for breaching that promise. See Dep't of Housing and Urban Dev. v. Rucker, 535 U.S. 125, 130-31 (2002). Although these terms are strict, the severity is tempered by federal regulations giving landlords some measure of discretion in deciding whether to seek eviction. Id. at 128-29. [Foghorn] argues that this federal law preempts RP § 8-402.1(b)(1) to the extent it vests in Maryland courts discretion to determine either that an alleged breach is substantial or that it warrants eviction.[6]

         The court concluded "although federal law vests a landlord renting subsidized housing with discretion not to pursue eviction in all instances of criminal activity, state courts cannot be given discretion to overrule the landlord's exercise of discretion." (Emphasis in original). The circuit court relied upon three decisions, Milwaukee City Housing Authority v. Cobb, 361 Wis.2d 359 (2015); Boston Housing Auth. v. Garcia, 449 Mass. 727 (2007); and Scarborough v. Winn Residential L.L.P./Atlantic Terrace Apts., 890 A.2d 249 (D.C. 2006). (We will discuss these cases, together with additional authorities, later in the opinion.)

         Hosford filed a motion to alter or amend the judgment, which was denied. This appeal followed.


         We will reverse the judgment of the circuit court. As we will explain, RP § 8-402.1 grants to courts the authority to consider equitable and similar factors before granting a landlord's request for an eviction. In order for this portion of RP § 8-402.1 to be preempted by federal law, the exercise of such authority must cause "major damage" to "clear and substantial federal interests." Foghorn asserts that the federal interest at issue in this case is the right of a landlord, at its unfettered discretion, to evict a tenant if that tenant has been engaged in "drug-related criminal activity." Foghorn also argues that the circuit court's conclusion is fully supported by the authority cited in its opinion.

         Foghorn's arguments are not persuasive. As we will explain, the relevant federal statute, its implementing regulations, and the pertinent Department of Housing and Urban Development ("HUD") guidelines, demonstrate that there are two closely-related federal interests at stake in this case. The first is that residents of federally-supported housing be protected against the effects of criminal activity in general, and drug-related criminal activity in particular. The second federal interest is that landlords have discretion to initiate eviction proceedings in such situations. Those same materials, however, make it clear that a landlord may evict a tenant only by recourse to state or local landlord-tenant law and that those laws may provide the tenant with additional protections. The cases relied upon by the circuit court, i.e., Cobb, Garcia, and Scarborough, dealt with state statutes that are conceptually quite different from § 8-402.1. Our research has disclosed only one reported appellate opinion that has considered a preemption challenge to a state statute similar to § 8-402.1. That court concluded that the statute was not preempted.

         1. The Standard of Review

         A trial court's grant or denial of a motion for summary judgment is governed by Md. Rule 2-501. A grant of a motion for summary judgment is appropriate when "there is no genuine dispute as to any material fact and that the party in whose favor judgment is entered is entitled to judgment as a matter of law." Rule 2-501(f). "The purpose of the summary judgment procedure is not to try the case or to decide the factual disputes, but to decide whether there is an issue of fact, which is sufficiently material to be tried." Jones v. Mid-Atl. Funding Co., 362 Md. 661, 675 (2001). "When ruling on a motion for summary judgment, a court must view the facts, including all inferences drawn therefrom, in the light most favorable to the opposing party." Carter v. Aramark Sports & Entm't Servs., Inc., 153 Md.App. 210, 224 (2003).

         Although we will reverse the judgment of the circuit court, we agree with some of its analysis. On the record before it, the circuit court did not err in deciding that there was no dispute of material fact as to whether Hosford was in possession of marijuana on the day that his apartment was inspected. We also agree with the court that Maryland's decriminalization of possession of small amounts of marijuana does not change the fact that possession of any amount of marijuana is a violation of the federal Controlled Substances Act. However, we part company with the circuit court on the issue of preemption.

         2. Preemption

         "Federalism, central to the constitutional design, adopts the principle that both the National and State Governments have elements of sovereignty the other is bound to respect."Arizona v. United States, 132 S.Ct. 2492, 2500 (2012). As a result, there is the potential for conflict or cross-purposes served by co-existing federal and state laws. Id. The Supremacy Clause[7] provides that federal law is supreme over state law and any state law that stands in conflict with the federal law is preempted.

         There are three widely recognized forms of preemption: express, field, and conflict. Farina v. Nokia Inc., 625 F.3d 97, 115 (3d Cir. 2010). Express preemption occurs when Congress has explicitly withdrawn "specified powers from the States by enacting a statute containing an express preemption provision." Arizona, 132 S.Ct. at 2500-01. Field preemption applies when "the federal interest is so dominant that the federal system will be assumed to preclude enforcement of state laws on the same subject." Farina, 625 F.3d at 115. Finally, conflict preemption applies either: "(1) 'where it is impossible for a private party to comply with both state and federal requirements, ' or (2) 'where state law stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.'" Id. at 122 (quoting Fellner v. Tri-Union Seafoods, L.L.C., 539 F.3d 237, 251 (3d Cir. 2008)).

         The "ultimate touchstone" for determining whether federal law preempts state law is Congressional intent. Id. (quoting Medtronic, Inc., v. Lohr, 518 U.S. 470, 485 (1996)). In order to determine Congressional intent, courts start with the "basic assumption that Congress did not intend to displace state law." Id. at 116 (quoting Maryland v. Louisiana, 451 U.S. 725, 746 (1981)). "The presumption against inferring preemption is premised on federalism grounds and, therefore, weighs most heavily where the particular regulatory area is 'traditionally the domain of state law.'" In re Tribune Co. Fraudulent Conveyance Litig., 818 F.3d. 98, 110 (2d Cir. 2016) (quoting Hillman v. Maretta, 133 S.Ct. 1943, 1950 (2013)). In instances where federal law regulates an area traditionally within the domain of state law, the state law must do "'major damage' to 'clear and substantial' federal interests before the Supremacy Clause will demand that state law will be overridden[.]" Hillman, 133 S.Ct. at 1950 (2013) (quoting Hisquierdo v. Hisquierdo, 439 U.S. 572, 581 (1979)).

         Agency regulations, with the force of federal law, can also preempt conflicting state and local laws. Wyeth v. Levine, 555 U.S. 555, 576 (2009). However, in such instances, courts do not necessarily accept the agency's conclusions but instead "perform[] [their] own conflict determination, relying on the substance of state and federal law and not on agency proclamations of pre-emption." Id. Federal agencies sometimes express views regarding preemption questions in ways that lack the formality of regulations, e.g., by compliance handbooks, other guidance materials, and commentaries on regulations. In these instances, courts have afforded some weight to the agency's explanation of its view, but no weight to its conclusion; as the Supreme Court explained in Wyeth, 555 U.S. at 576-77 (internal quotations and citations omitted; emphasis in original):

In prior cases, we have given some weight to an agency's views about the impact of tort law on federal objectives when 'the subject matter is technical and the relevant history and background are complex and extensive. Even in such cases, however, we have not deferred to an agency's conclusion that state law is pre-empted. Rather, we have attended to an agency's explanation of how state law affects the regulatory scheme. While agencies have no special authority to pronounce on pre-emption absent delegation by Congress, they do have a unique understanding of the statutes they administer and an attendant ability to make informed determinations about how state requirements may pose an obstacle to the accomplishment and execution of the full purposes and objectives of Congress. The weight we accord the agency's explanation of state law's impact on the federal scheme depends on its thoroughness, consistency, and persuasiveness.

         The parties agree, as do we, that the concepts of express and field preemption are not applicable to this case. Turning to the doctrine of conflict preemption, Foghorn does not assert that it is impossible to comply with both the state law and the federal law. Moreover, landlord-tenant law is traditionally within the domain of state law, see, e.g., Perry v. Hous. Auth. of City of Charleston, 664 F.2d 1210, 1216 (4th Cir. 1981) ("It would be hard to find an area of the law in which the states have a greater interest or have had greater involvement than in the legal area of landlord-tenant."). As such, the disputed portions of RP § 8-402.1 are preempted only if they cause "'major damage' to 'clear and substantial'' federal interests" embedded in the federal law. This requires us to first identify the federal interests at issue and then to assess the degree to which a trial court's consideration of equitable and similar factors interferes with the federal government's ability to realize those interests. We will begin by considering the state and federal statute and regulations at issue.

         3. The State and Federal Laws

         (A) RP § 8-402.1

         RP § 8-402.1 provides a remedy to allow a landlord to obtain an order evicting a tenant for breaching a term of the lease other than a term calling for the payment of rent. Brown v. Housing Opportunities Comm'n, 350 Md. 570, 584 (1998).[8] In the present case, we are concerned with subsection (b)(1) of the statute, which states in pertinent part

         (emphasis added):

If the court determines that the tenant breached the terms of the lease and that the breach was substantial and warrants an eviction, the court shall give judgment for the restitution of the possession . . . .

         The meaning of the italicized language was the focus of the Court's analysis in Brown. In tracing the evolution of § 8-402.1 from its common law roots, the Court noted that, prior to the enactment of the statute, one remedy for landlords seeking possession was a proceeding for ejectment, and that a tenant had the right to raise equitable defenses in such actions. Id. 582-83. As to the "breach was substantial and warrants eviction" language, the Court concluded:

The inclusion of the phrase in question, conditioning a forfeiture on a finding that the breach in question warranted that relief, is in perfect harmony with those [equitable] considerations, even if it did, to some extent, vest in the District Court a more general discretion to preclude a forfeiture than previously had been exercised by the equity courts. The court is entitled, and indeed directed, to weigh all of the relevant factors before declaring a forfeiture and evicting the tenant, including the actual loss or damage caused by the violation at issue, the likelihood of future violations, and the existence of effective alternative remedies for past or existing violations.

Id. at 584 (emphasis added).

         Thus, Brown held that the "warrants eviction" requirement authorizes a court to exercise its discretion before ordering eviction ...

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