Banach v. State Commission on Human Relations

356 A.2d 242, 277 Md. 502, 1976 Md. LEXIS 982, 11 Empl. Prac. Dec. (CCH) 10,903, 30 Fair Empl. Prac. Cas. (BNA) 1829

• Court: Court of Appeals of Maryland
• Decided: April 14, 1976
• Docket: [No. 133, September Term, 1975.]
• Status: Published

Opinions

Levine, J.,

delivered the opinion of the Court. Murphy, C. J., dissents and filed a dissenting opinion at page 517 infra.

This appeal stems from a proceeding to enforce a subpoena duces tecum issued by the State of Maryland Commission on Human Relations (the commission) directing the A. S. Abell Company, publisher of the Baltimore Sun newspapers, and its personnel manager (collectively referred to herein as appellants) to produce certain employment records in connection with a preliminary investigation then being conducted by the commission into alleged discriminatory practices. When appellants failed to produce the records on the designated date, the commission successfully petitioned the Circuit Court of Baltimore City (Ross, J.) for an order requiring compliance with the subpoena. After an appeal was taken from that order, we granted a writ of certiorari prior to a consideration of the case by the Court of Special Appeals. We affirm.

Between October 1973 and August 1974, four persons filed complaints with the commission alleging various discriminatory practices by appellants in their employment policies. Allegations in the complaints ran the gamut from specific instances of discrimination based on sex, race and religion to general charges made on behalf of certain groups or classes. These complaints were brought to the attention of appellants in November 1974 when they apparently received copies from the commission together with requests for information pertaining to personnel policies. When the requests were not met to the satisfaction of the commission, one of its staff members forwarded an “interrogatory,” containing a series of questions, in connection with each of the complaints. Appellants, through counsel, objected at this point to the requests for information, primarily on the grounds that the four complaints were couched in general and conclusory language and thus failed to comply with the statutory requirement that “the particulars” of each complaint be set forth.¹

Appellants’ objections triggered an elaborate exchange of correspondence between their counsel and counsel for the commission in which each outlined at great length the merits of his client’s position. Commission counsel at one point proposed as an alternative that, if response to the interrogatories appeared too burdensome to appellants, an investigative unit be permitted “a site inspection,” which might include “a review of relevant files and interviews with company officials.” Appellants declined this offer on the basis that, in any event, inadequate particularization of the charges prevented “preparation” for the suggested site inspection.

Ultimately, the chairman authorized in writing “a preliminary investigation” pursuant to Maryland Code (1957,1972 Repl. Vol.) Art. 49B, § 12 (b), citing receipt by the commission of “reliable information” that appellants “ha[d] been engaged, or [are] engaging in discriminatory practices within the scope of Article 49B . ...”² When a renewed request to obtain the previously sought information proved unsuccessful, the chairman signed the subpoena duces tecum which precipitated this dispute. The subpoena directed appellants to produce an assortment of records and documents relating to their recruitment, hiring and promotion policies. When appellants refused to comply with the subpoena, the commission filed a petition in the circuit court recounting the efforts that had been made to obtain the desired information and requesting enforcement.

In ordering production of the documents sought in the subpoena, Judge Ross interpreted § 14 (d) of Art. 49B as authorizing the use of subpoenas in the preliminary investigation stage preceding the issuance of a formal complaint. Appellants attack this decision on three grounds:

I That the commission lacks the power to issue subpoenas in connection with a preliminary investigation conducted pursuant to § 12 (b) of Art. 49B and prior to the filing of a formal complaint.

II That absent compliance with the requirement of particularity applicable to complaints of alleged discrimination, the commission cannot compel production of documents by subpoena.

III That § 12 (b) requires a determination, which was not made here, that the information received by the commission is “reliable” before it can initiate a preliminary investigation.

I

In Okla. Press Pub. Co. v. Walling, 327 U. S. 186, 208, 66 S. Ct. 494, 90 L. Ed. 614 (1946), the Supreme Court articulated a threefold test for determining the validity of a subpoena issued by an administrative agency: Whether the inquiry is authorized by statute, the information sought is relevant to the inquiry, and the demand is not too indefinite or overbroad. It is the first requirement, statutory authority, that appellants contend is lacking here. They maintain that the subpoena power of the commission does not extend to a preliminary investigation, but is available only for an investigation conducted pursuant to § 13 or in connection with a hearing under § 14 of Art. 49B following the issuance of a formal complaint, i.e. a complaint which is sufficiently particularized.³

That the Legislature may validly confer upon administrative agencies such as the Human Relations Commission the power to compel production of information for purposes of preliminary investigation is well settled. United States v. Morton Salt Co., 338 U. S. 632, 642-43, 70 S. Ct. 357, 94 L. Ed. 401 (1950); Vulcan, Inc. v. Md. Home Imp. Comm’n, 253 Md. 204, 210, 252 A. 2d 62 (1969). We look first, then, to the applicable statute to determine whether it authorizes issuance of the subpoena duces tecum in question here. Section 14 (d) of Art. 49B, entitled “Power of Commission to administer oaths, etc.; subpoenas,” provides in relevant part:

“In the administration and enforcement of the provisions of these several subtitles, the Commission has power to administer oaths and to issue subpoenas, to compel the attendance and testimony of witnesses and the production of books, papers, records and documents relevant or necessary for proceedings under the particular subtitle. ...” (emphasis added).

The statute then provides that enforcement of a subpoena, in the event of refusal to comply, may be sought in the circuit court, which, upon a finding that the matters or documents sought are “relevant or necessary for the proceedings of the Commission,” may compel obedience under the penalty of contempt, (emphasis added.)⁴

Appellants advance two arguments in support of their contention that § 14 (d) does not contain the authority attributed to it by the commission. First, they say, the subpoena power is granted only to the commission itself, whereas it is the commission’s staff that is authorized by § 12 (b) to conduct the preliminary investigation for which the subpoena is sought here. The short answer to this argument is that it was the commission chairman, who, after authorizing the preliminary investigation in accordance with § 12 (b), signed the subpoena duces tecum on behalf of the commission. Thus it is the commission, not its staff, which authorizes the issuance of subpoenas in connection with preliminary investigations. As the presiding officer of the commission, and the only member ¡permitted by law to be compensated for his services, the ^chairman was logically contemplated by the Legislature to be the person who would execute such papers on behalf of the commission when such issuance has been authorized. Cf. Kansas Commission on Civil Rights v. Carlton, 216 Kan. 735, 533 P. 2d 1335, 1338-39 (1975). Nothing in § 14 (d) requires the individual members of the commission to sign all subpoenas issued in its name.

Secondly, it is argued that the only “proceedings” for which subsection (d) authorizes subpoenas are the investigation prescribed by § 13 and the § 14 hearing. This contention that the subpoena power is limited to the post-complaint investigation and hearing stages finds no support in the language of § 14 (d) itself. First, the opening sentence, “In the administration and enforcement of the provisions of these several subtitles,” suggests a distinction between the “administrative” and “enforcement” functions of the commission. Since only §§ 12-16 of Art. 49B are grouped under the “enforcement” subtitle, the General Assembly apparently intended to extend the use of subpoenas even to areas beyond enforcement investigations and hearings. One such area is suggested by § 3 which empowers the commission, “[w]henever any problem of racial discrimination arises, [to] hold an investigatory hearing” for the purpose of promptly resolving the problem “by the gathering of all the facts from all the interested parties and making such recommendations as may be necessary.” The “enforcement” subtitle, in any event, is merely one of five subtitles contained in Art. 49B.

Even more significant, in terms of the statutory language, is the use of the word “proceedings” in § 14 (d) rather than “hearings.” In our view, this further reflects an intent on the part of the Legislature to authorize subpoenas beyond the narrow limits urged by appellants. Administrative investigations, a vital part of the administrative function, are commonly referred to as “proceedings.” See 1 K. Davis, Administrative Law § 3.01 (1958). The word “proceedings” is a term of broad scope, encompassing both the investigative and adjudicative functions of an administrative agency. United States v. Fruchtman, 421 F. 2d 1019, 1021 (6th Cir.), cert. denied, 400 U. S. 849 (1970); Rice v. United States, 356 F. 2d 709, 715 (8th Cir. 1966). Our conclusion that the word “proceedings” was used in its broad sense here is reinforced by the provision in the Maryland Administrative Procedure Act, Code (1957, 1971 Repl. Vol.) Art. 41, § 244 (c), which, in defining the term “contested case,” clearly ascribes a somewhat broader meaning to the term “proceedings” than to “an agency hearing.”

We find no support for appellants’ position in State, Colo. Civil Rights Com’n v. Adolph Coors Corp., 29 Colo. App. 240, 486 P. 2d 43, cert. denied, Colo. Sup. Ct. (1971), or in Pennsylvania H.R. Com’n v. United States Steel Corp., 458 Pa. 559, 325 A. 2d 910 (1974), where the courts were faced with a similar question. Although in both cases the courts found the requisite statutory authority lacking, the statutes in question differed markedly from Art. 49B.⁵ Not surprisingly, therefore, in view of the statutory language confronting those courts, they concluded in each instance that the subpoena power was not available in the preliminary investigation stage.

In Yellow Freight Sys., Inc. v. Kansas Com’n on Civil Rts., 214 Kan. 120, 519 P. 2d 1092, 1095 (1974), however, where the relevant statutory provision bore a striking resemblance to the Pennsylvania statute, the Supreme Court of Kansas, in the face of a contention similar to that advanced here, stated:

“General tenets of administrative law recognize that an agency charged with investigatory duties to ferret out violations of the law can issue subpoenas and make such investigations, even though no formal administrative hearing be pending.” (citations omitted).

The Kansas court reasoned that the specific statutory mention of the subpoena power in connection with a scheduled formal hearing should not be read to exclude that power in the preliminary investigation stage, since the power to investigate “necessarily implies the use of . . . subpoena authority.” Id. See Nevada Com’n on Equal Rights of Citizens v. Smith, 80 Nev. 469, 396 P. 2d 677, 679 (1964); Application of Broido, 40 Misc. 2d 419, 243 N.Y.S.2d 101, 104 (1963). As Mr. Justice Jackson said for a unanimous Supreme Court in United States v. Morton Salt Co., supra, 338 U. S. at 642-43:

“The only power that is involved here is the power to get information from those who best can give it and who are most interested in not doing so. Because judicial power is reluctant if not unable to summon evidence until it is shown to be relevant to issues in litigation, it does not follow that an administrative agency charged with seeing that the laws are enforced may not have and exercise powers of original inquiry. It has a power of inquisition, if one chooses to call it that, which is not derived from the judicial function. It is more analogous to the Grand Jury, which does not depend on a case or controversy for power to get evidence but can investigate merely on suspicion that the law is being violated, or even just because it wants assurance that it is not. When investigative and accusatory duties are delegated by statute to an administrative body, it, too, may take steps to inform itself as to whether there is probable violation of the law.”

What appellants overlook, in our judgment, is the emphasis which Art. 49B places upon the investigatory function of the commission. Section ,12 (b) requires a “preliminary investigation” before the commission may issue a complaint, and § 13 (a) requires a further investigation by the staff “[a]fter the filing of any complaint.” In requiring the commission to conduct a “preliminary investigation” to satisfy itself as to the reliability of the information received from an individual, the Legislature took pains to insure that no potential respondent would ever be subjected to a commission complaint without a “preliminary investigation,” even though § 13 (a) mandates a further investigation. Also, the Legislature undoubtedly recognized that discrimination, in its many forms, is frequently practiced in a subtle manner. Without the right to compel production of evidence, the commission’s power to investigate unlawful discriminatory practices would be reduced to a meaningless gesture.

We hold, therefore, that the Human Relations Commission possesses statutory authority to issue a subpoena duces tecum in connection with a preliminary investigation under Art. 49B, § 12 (b).

II

The argument that appellants were not provided the “particulars” required by § 12 (a) is, at least in part, attenuated by our holding that subpoenas may be issued during the investigative stage preceding the filing of a formal complaint. In essence, appellants contend that since the four individual complaints are defective due to the absence of the necessary particulars, the commission is not empowered to issue the subpoenas. This argument misconceives the role of the administrative complaint and the relationship between the investigative and adjudicatory functions of the commission.

Notwithstanding the “particulars” requirement, a complaint filed with the commission under § 12 (a) merely triggers the investigative process. If, as we have seen, the commission then wishes on the strength of such a complaint to issue a complaint in its own name, it must first conduct a preliminary investigation. In any event, an investigation is mandated by § 13 (a) “after the filing of any complaint,” and it is only after the results of that investigation are reduced to written findings that the statute requires notice to be given the respondent against whom the complaint has been made. A finding of probable cause to believe that a discriminatory act within the scope of Art. 49B has been committed may then produce an agreement through conciliation or alternatively may result in service of the complaint upon the respondent with written notice requiring him to answer the charges contained therein at a public hearing. In this case, as we have emphasized, the proceedings have barely reached the “preliminary investigation” stage contemplated by § 12 (b), which must precede the filing of a formal complaint by the commission. Nor, of course, have any of the steps outlined in §§ 13 and 14 been initiated.

The question, therefore, is whether the complaints filed by the four individuals pursuant to § 12 (a) must meet the “particulars” requirement before the commission may conduct a preliminary investigation. We do not think so. Pursued to its logical conclusion, the argument advanced by appellants would mean that a formal complaint, at least one capable of meeting the “particulars” test, must be filed prior to the commencement of a preliminary investigation. This notion is at odds with the carefully conceived scheme enacted by the Legislature, authorizing the commission to make the inquiry necessary to determine whether more formal proceedings are in order.

In enacting the enforcement subtitle of Art. 49B, the Legislature recognized that complaints would frequently be filed by individuals unschooled in the legalistic complexities of the pleading process. It was never intended, therefore, that such administrative complaints should be required to pass muster at the threshold. It was assumed that the investigative process would flesh out the charges made by the individual before the respondent was initially called upon to answer them. Cf. Graniteville Co. (Sibley Div.) v. Equal Employ. Op. Com’n, 438 F. 2d 32, 37-39 (4th Cir. 1971). This contrasts with the more exacting requirements applied to pleadings filed in judicial proceedings. Consequently, most of the authorities relied upon by appellants to support their position are inapposite since they involved, not administrative complaints, but civil actions filed in federal courts under the Federal Civil Rights Act and were thus subject to the rubrics of the Federal Rules of Civil Procedure.⁶

Nor do Pennsylvania H.R. Com’n v. United States Steel Corp., and State, Colo. Civil Rights Com’n v. Adolph Coors Corp., both supra, heavily relied upon by appellants, afford support for their position. As we observed earlier, in both cases the applicable statute tied the subpoena power to the hearing stage, and this goes far to explain the result reached by the two courts. In United States Steel, the commission had already issued its formal complaint, which was found wanting in the “particulars” requirement. Similarly in Coors, the Colorado commission had there scheduled the complaint for hearing after attempts at conciliation had failed. It was not until notice of the hearing had been given that the subpoena in controversy was issued and only at that point was the complaint challenged as lacking in “particulars.”

Moreover, the posture in which this case reaches us is far different from that which prevailed in Ferguson v. United Parcel Serv., 270 Md. 202, 311 A. 2d 220 (1973), cert. denied, 415 U. S. 1000 (1974), and in St. Comm’n on Human Rel. v. Malakoff, 273 Md. 214, 329 A. 2d 8 (1974). In each of those cases, we were confronted with decisions of the commission in the quasi-judicial role envisioned by the hearing provisions of § 14. As Ferguson clearly demonstrates, it is at the adjudicatory stage of the administrative proceeding that the parties must be accorded such traditional elements of fair play as notice of charges and opportunity to be heard.

The distinction we make here was also drawn in Atchison, T. & S.F. Ry. Co. v. Kansas Com’n on Civil Rts., 215 Kan. 911, 529 P. 2d 666, 673 (1974), in which the court noted that the term “hearing” refers to quasi-judicial proceedings where the “traditional safeguards” of fairness must be observed, while the same test need not be met in the “nonjudieial” investigative stage. It is only when the conciliation process prescribed by § 13 fails and the hearing stage contemplated by § 14 is invoked that the investigative yields to the adjudicative function. See Atchison, Topeka and Santa Fe Railway Co. v. Lopez, 216 Kan. 108, 531 P. 2d 455, 462 (1975). Only at that juncture must the charges be capable of withstanding attack for lack of particularity.

The power to conduct the preliminary investigation and to issue the subpoena duces tecum, therefore, cannot be denied because of any possible lack of particularity in the four individual complaints.

Ill

For their final argument, appellants contend that § 12 (b), which provides for a preliminary investigation upon receipt by the commission of “reliable information from any individual,” must be read to require “that such reliability be established as a prerequisite to a preliminary investigation ... ..” In essence, this amounts to a contention that the commission is charged with finding “probable cause” before it may institute a preliminary investigation. To that extent, the short answer is that no such requirement appears in § 12; it is expressly provided in § 13 (b) that a finding of probable cause to believe that a discriminatory act has been committed be made, but only after the completion of all investigations and the filing of a formal complaint. Section 12 (b) can only be read to mean that receipt of. reliable information and a preliminary investigation are together preconditions to the filing of a formal complaint, not that a determination of reliability is a prerequisite to the preliminary investigation.

The statutory scheme aside, the cases afford no support for appellants’ position. The determination whether the information received from individuals is “reliable” can only rest within the sound administrative discretion of the commission. See Application of Waterfront Com. of New York Harbor, 32 N. J. 323, 160 A. 2d 832, 838-39 (1960); cf. Vulcan, Inc. v. Md. Home Imp. Comm’n, supra, 253 Md. at 210. As we said in Sollins v. Baltimore County, 253 Md. 407, 411, 252 A. 2d 819 (1969):

“ ‘It is a well established principle that where the action of an administrative agency is within the scope of its delegated authority, and does not affect the vested rights of liberty or property, the Court will not review its exercise of discretion unless its power was fraudulently or corruptly used.

Clearly, there was no abuse of discretion here where the commission has received four separate complaints which appellants now concede were sufficient to warrant a preliminary investigation. As a practical matter, it is difficult to see how reliability of the information received can be reasonably established without the preliminary investigation mandated by § 12 (b). To accept appellants’ argument would require that yet another investigative layer be read into § 12 (b) to serve the narrow function of enabling the commission to ascertain whether the information was sufficiently “reliable” to justify a “preliminary investigation,” clearly an absurd result.

We hold, therefore, that the circuit court acted properly in ordering production of the documents and information specified in the subpoena duces tecum served upon appellants.

Judgment affirmed; appellants to pay costs.

1 . This was a reference to Maryland Code (1957, 1972 Repl. Vol.) Art. 49B» § 12 (a) which provides:

“(a) Any person claiming to be aggrieved by an alleged discrimination prohibited by any section of this article may make, sign and file with the Human Relations Commission ... a complaint in writing under oath. The complaint shall state the name and address of the person, firm, association, partnership, corporation, State agency, department or board alleged to have committed the act of discrimination together with the particulars thereof; and the complaint also shall contain such other information as may be required from time to time by the Commission.” (emphasis added).

2 . Section 12 (b) provides:

“(b) Whenever the Commission has received reliable information from any individual or individuals that any person has been engaged or is engaged in any discriminatory practice within the scope of this article, and after a preliminary investigation by the Commission’s staff authorized by the chairman or vice-chairman it is satisfied that said information warrants the filing of a complaint, the Commission, on its own motion, and by action of not less than four commissioners, may issue a complaint in its name in the same manner as if the complaint has been filed by an individual.” (emphasis added).

3 . In pertinent part, § 13 provides:

“(a) After the filing of any complaint the executive director shall consider the complaint and shall refer it to the Commission’s staff for prompt investigation and ascertainment of the facts. The results of the investigation shall be made as written findings. A copy of the findings shall be furnished to the complainant and to the person, firm, association, partnership or corporation (hereinafter referred to as the ‘respondent’), against whom or which the complaint is made.

“(b) If the finding is that there is probable cause for believing a discriminatory act has been or is being committed within the scope of any of these subtitles, the Commission’s staff immediately shall endeavor to eliminate the discrimination by conference, conciliation and persuasion.

“(c) If an agreement is reached for the elimination of the discrimination as a result of the conference, conciliation and persuasion the agreement shall be reduced to writing and signed by the respondent, and an order shall be entered by the Commission setting forth the terms of the agreement. The Commission shall not enter an order at this stage of the proceedings unless it is based upon a written agreement. If no such agreement can be reached, a finding to that effect shall be made and reduced to writing with copies furnished to the complainant and to the respondent.”

4 . Subsection (a) of § 14, which is entitled “Hearing,” provides:

“(a) Certification of file; notice to respondent; hearing tribunal; place of hearing; transcript; duty of Commission’s counsel; disqualification to participate in hearing. — In case of failure to ; reach an agreement for the elimination of the acts of ' discrimination and upon the entry of findings to that effect, the \ entire file including the complaint and any and all findings made : shall be certified to. The chairman shall cause a written notice to ■ be issued and served in the name of the Commission together with a copy of the complaint requiring the respondent to answer the charges of the complaint at a public hearing before the Commission at such time and place as may be certified in the notice.

“The chairman shall thereupon appoint a hearing tribunal of five persons who shall be members of the Commission to hear such complaint... in the county where the alleged act of discrimination took place....”

Section 14 (b) accords respondents the full right to be heard at the commission hearing, including the right to file a written answer to the complaint and the right to present their case before the commission either with or without counsel. Testimony at the hearing is required by § 14 (c) to be under oath and recorded. The commission is empowered by § 14 (e), upon finding that the respondent has engaged in any discriminatory act, to issue “an order requiring the respondent to cease and desist from the discriminatory acts and to take such affirmative action as will effectuate the purposes of the particular subtitle.” Should the commission lind that no discriminatory act was committed by the respondent, an order is to be filed, under § 14 (f), dismissing the complaint. In either case the commission is required to state its findings of fact.

5 . In relevant part, the Colorado statute, C.R.S. § 80-21-5 (1963), granted the following powers and duties to the Colorado Antidiscrimination Commission:

“(4) To receive, investigate, and pass upon complaints alleging discrimination in employment, ... or the existence of a discriminatory or unfair employment practice ....

“(6) (a) To hold hearings upon any complaint made against... an employer, ... to subpoena witnesses and compel their attendance, to administer oaths and take the testimony of any person under oath, and to compel such employer ... to produce for examination any books and papers relating to any matter involved in such complaint. Such hearings may be held by the commission itself, or by any commissioner, or by the coordinator, or by any hearing examiner appointed by the commission. If a witness either fails or refuses to obey a subpoena issued by the commission, the commission may petition the district court having jurisdiction for issuance of a subpoena in the premises . ...” (emphasis added).

The Pennsylvania statute, Pa. Stat. Ann. Tit. 43, § 957 (1964, 1975 Supp.), authorized the Human Relations Commission in pertinent part:

“(f) To initiate, receive, investigate and pass upon complaints charging unlawful discriminatory practices.

“(g) To hold hearings, subpoena witnesses, compel their attendance, administer oaths, take testimony of any person under oath or affirmation and, in connection thereunth, to require the production for examination of any books and papers relating to any matter under investigation where a complaint has been properly filed before the Commission. The Commission may make rules as to the issuance of subpoenas by individual Commissioners. In case of contumacy or refusal to obey a subpoena issued to any person, the Court of Common Pleas of Dauphin County or any court of common pleas within the jurisdiction of which the hearing is to be held ... may issue to such person an order requiring such person to appear before the Commission, there to produce documentary evidence, if so ordered, or there to give evidence touching the matter in question ....” (emphasis added).

6 . See, e.g., Ogletree v. McNamara, 449 F. 2d 93, 98 (6th Cir. 1971); Edwards v. North American Rockwell Corp., 291 F. Supp. 199 (C.D. Cal. 1968).