Title: Spencer v. Board of Pharmacy

State: maryland

Issuer: Maryland Supreme Court

Document:

Circuit Court for Baltimore City
Case No. 24-C-01-001405
IN THE COURT OF APPEALS
OF MARYLAND
No. 36
September Term, 2003
LINDA ANN SPENCER
v.
MARYLAND STATE BOARD 
OF PHARMACY
Bell, C.J.
Raker
Wilner
Cathell
Battaglia
Rodowsky, Lawrence F.
  (retired, specially assigned)
Bloom, Theodore G.
  (retired, specially assigned),
JJ.
Opinion by Raker, J.
Bell, C.J., concurs in the judgment only 
 
Filed:   March 11, 2004               
1Except where otherwise indicated, all future statutory references shall be to
provisions in the Administrative Procedure Act, Md. Code (1984, 1999 Repl. Vol., 2003
Cum. Supp.) §§ 10-101 to 10-305 of the State Government Article.
This case arises out of a decision by the Maryland State Board of Pharmacy, an
administrative agency.  The decision was reviewed first by the Circuit Court for Baltimore
City and then by the Court of Special Appeals, 150 Md.App. 138, 819 A.2d 383 (2003).
Petitioner sought review of the decision by the Court of Special Appeals because the remedy
that court fashioned, she contends, exceeded its authority and violated the Maryland
Constitution and Administrative Procedure Act, Md. Code (1984, 1999 Repl. Vol., 2003
Cum. Supp.) §§ 10-101 to 10-305 of the State Government Article [hereinafter APA]. 1
Whether a court has exceeded its statutory and judicial authority over an
administrative agency is a question that involves the constitutional balance of power between
the judiciary and executive administrative agencies.  That balance of power is governed by
an established area of administrative law dealing with the scope of judicial review over the
various types of administrative agency decisions.  In this case, we consider whether the Court
of Special Appeals exercised the proper standard of judicial review over an administrative
agency decision in a matter that is committed, ultimately, to the agency’s discretion.
I.
Linda Ann Spencer, a pharmacist, continued to practice pharmacy after her license
expired on July 1, 1999.  On August 16, 1999, Spencer’s supervisor, having confirmed with
the Maryland State Board of Pharmacy (“the Board”) the expiration and non-renewal of
2
Spencer’s pharmacy license, instructed Spencer to cease practicing pharmacy, which she did.
Spencer then contacted the Board to inquire why her license had not been renewed, asserting
that she had timely submitted the required renewal application.  An internal review of the
Board’s office records, however, indicated that no application or accompanying fee was
received.  Spencer surmised that her application had been lost in the mail and therefore
submitted a renewal application to the Board on August 30, 1999.  Although her application
included certification that she had acquired the requisite number of continuing education
credits, the majority of those credits were obtained after her license had expired in June.
Nevertheless, the Board granted Spencer’s renewal application on September 14, 1999, after
which Spencer resumed her practice of pharmacy.
The Court of Special Appeals described the remaining events that led to this appeal
as follows (referring to the Board as “appellant” and to Spencer as “appellee”):
“Appellant issued charges against appellee on February 16,
2000, alleging that she had practiced pharmacy without a license
for a period of six weeks and that she had failed to maintain
records of required continuing education credits.  Appellant
scheduled a case resolution conference (CRC) to attempt to
resolve the matter without the necessity of a hearing.  Mr.
Stanton Ades and Ms. Laura Schneider, two members of the
Board, represented appellant at the CRC.  The settlement
negotiations were unsuccessful.  Both Mr. Ades and Ms.
Schneider sat on the panel of Board members who eventually
heard this contested case.  On many occasions, beginning in July
2000, appellee sent letters to counsel for appellant, seeking to
have the matter referred to the Office of Administrative
Hearings (OAH).  Appellee believed appellant incapable of
giving her a fair and impartial hearing because appellant had
been intimately involved in settlement negotiations with
3
appellee and may have prejudged the case.  Appellant repeatedly
denied appellee’s requests to move the case to OAH, stating that
appellant’s knowledge of settlement negotiations did not
disqualify it from hearing evidence.  In further justification for
refusing to move the case, appellant stated that appellee ‘failed
to assign any specific facts indicating the Board would not be an
impartial arbiter,’ and also noted that the Board ‘ha[d] never
delegated a matter to the Office of Administrative Hearings.’
“Finally, on August 14, 2000, appellee filed a motion to refer
the case to the Office of Administrative Hearings or, in the
alternative, to recuse members of the Board.  Appellant denied
that motion on September 15, 2000.
“Appellant held a hearing on the matter on September 20, 2000,
and resumed the hearing on January 8, 2001.  Counsel for
appellant had given books containing exhibits to the members
of the Board on the morning of the hearing.  When counsel for
appellee arrived for the hearing, he noticed that at least one
member of the Board was reviewing evidence before the start of
the hearing.  Counsel for appellee complained about the member
reviewing documents that were not in evidence, and asked that
member to recuse himself.  This request was denied.  He then
renewed the motion to move the case to OAH and appellant
denied that motion also.  Finally, counsel for appellee asked that
the two members who were involved in settlement negotiations
recuse themselves, and that request was also denied.
“Appellee did not dispute that she had practiced pharmacy
without a license for a period of six weeks.  Her counsel argued,
however, that her practice of pharmacy without a license was
authorized under Md. Code (1984, 1999 Repl. Vol.), §
10-226(b) of the State Government Article, because she had
submitted a timely renewal application.  Appellee did not
present any evidence, other than her testimony, that she had filed
a renewal application prior to the expiration of her license on
July 1, 1999.  Appellant’s records did not reveal any application,
check, or money order from appellee prior to July 1, 1999.
Appellant determined that appellee's testimony on the matter
lacked credibility and found that she had not filed a timely
4
renewal application.
“During the hearing, counsel for appellee accused members of
the Board of prejudging the case, of sleeping during the hearing,
and of not paying attention to testimony.  After the accusation
about sleeping, the hearing deteriorated to the point where
several members of the Board engaged in a heated conversation
with counsel for appellee involving demands for apologies and
chastisements about finger pointing from counsel and members
of the Board.  Finally, one of the Board members asked counsel
for appellee to leave the room, but he remained and continued
arguing.  Eventually, counsel was asked if he would act
appropriately, and he said he would, so the hearing continued.
“Later, counsel for appellee objected to the entry of a mail log,
and argued that it ‘does not go to [appellee’s] credibility.’  Ms.
Hawkins, one of the Board members, stated ‘sure it does.’
When counsel then said to the Board, ‘Ms. Hawkins already said
out loud it went to credibility,’ Ms. Hawkins denied saying it
and then added, ‘I did not [say that], and you're a bold-faced
liar.’  Counsel for appellee objected to being called a liar during
the proceeding and attempted to have Ms. Hawkins removed
from hearing the case, but that request was denied.
“On February 21, 2001, appellant issued its Final Decision and
Order, finding that appellee had violated Md. Code (1981, 2000
Repl. Vol.), §§ 12-301, 12-701, 12-707(e), and 12-313(b)(24) of
the Health Occupations Article.  Appellant placed appellee on
probation, imposed a fine, and reprimanded her.”
150 Md.App. at 142-46, 819 A.2d at 385-87 (footnotes omitted).
Spencer then filed a Petition for Judicial Review in the Circuit Court for Baltimore
City, alleging, inter alia, that she had been deprived of procedural due process because Mr.
Ades and Ms. Schneider participated both as representatives of the Board in settlement
negotiations and as members of the panel adjudicating her case.  Agreeing with Spencer’s
5
arguments, the Circuit Court vacated and reversed the Board’s Final Decision and Order.
The Circuit Court ruled that there was not substantial evidence in the record to support the
Board’s decision; that the Board’s renewal of Spencer’s license pending the outcome of the
investigation operated as a waiver of the violations subsequently found by the Board; and that
Spencer had been deprived of due process as a result of the arguments that took place at the
Board hearing between her attorney and two Board members.
The Board appealed the Circuit Court’s ruling to the Court of Special Appeals.  The
Court of Special Appeals agreed with the Circuit Court that Spencer was denied her right to
a fair and unbiased hearing, focusing on Ms. Hawkins’ accusation that Spencer’s counsel was
a “bold-faced liar.”  The intermediate appellate court reversed the Circuit Court’s ruling that
the Board’s renewal of Spencer’s license had foreclosed the Board from taking disciplinary
action against her.  Consequently, it remanded the case to the Circuit Court “with instructions
to remand the case to the Board, directing [the Board] to delegate the authority to conduct
the contested case hearing and to issue the final administrative decision in this case to the
OAH.”  150 Md.App. at 155, 819 A.2d at 393.
Spencer then filed a petition for writ of certiorari in this Court.  376 Md. 49, 827 A.2d
112 (2003).  Although petitioner has phrased the first question for our review as whether the
Court of Special Appeals, by its order to the administrative agency to refer the case to the
OAH, violated Article 8 of the Declaration of Rights and § 10-205 of the APA, a more
accurate way of formulating the question, as we explain infra, is whether the Court of Special
6
Appeals afforded the administrative agency the proper level of deference in a matter
committed to the agency’s discretion.  Petitioner’s second question is whether the order to
remand the matter to the OAH contravened either res judicata or double jeopardy principles
as applied to administrative proceedings.
Petitioner argues that the Court of Special Appeals exceeded its judicial authority
when it fashioned a remedy that interfered with the Board’s discretion to determine whether
her case should be remanded to the OAH.  She contends that the Court of Special Appeals
violated Article 8 of the Declaration of Rights in ordering the Board to send the case to the
OAH, because in so doing, that court performed a “non-judicial function,” violating the
constitutional mandate that the power of the three branches of government in Maryland “be
forever separate and distinct.”  See Dep’t of Nat. Res. v. Linchester, 274 Md. 211, 334 A.2d
514 (1975).  Petitioner also argues that because § 10-205 of the APA does not explicitly
authorize the courts to delegate matters to the OAH, the Court of Special Appeals did not
have authority to do so.  Although the Board, as respondent, initially opposed these
arguments in its Answer to Petition for Writ of Certiorari, in its brief, respondent reversed
course and now agrees with petitioner that the Court of Special Appeals performed a non-
judicial function in violation of Article 8. 
This Court, of course, is not bound by the concessions made by the parties on issues
of law, which we may independently review.  See In re Heather B., 369 Md. 257, 266 n.9,
799 A.2d 397, 402 n.9 (2002).  But we agree with both parties that the Court of Special
2Because of the reasoning of our opinion, we will decline to address the constitutional
arguments posed by the parties, for this Court regularly has adhered to the principle that we
will not reach a constitutional issue when a case can be disposed of properly on a
non-constitutional ground.  Piscatelli v. Liquor Board, 378 Md. 623, 629-30, 837 A.2d 931,
935 (2003).
7
Appeals exceeded its authority when it compelled the Board to exercise discretion the
Legislature explicitly granted to the administrative agency.  We therefore will reverse in part
the intermediate appellate court’s judgment and remand the matter to the Board.2
II.
We address first the procedural and analytical posture of this case as it comes before
this Court.  When this Court sits in review of an administrative agency decision, we
reevaluate the decision of the agency under the same statutory standards as would the circuit
court; we do not employ those standards to reevaluate the decision of the circuit or
intermediate appellate court.  See Division of Labor v. Triangle, 366 Md. 407, 416, 784 A.2d
534, 539 (2001); Dept. of Health v. Campbell, 364 Md. 108, 123, 771 A.2d 1051, 1060
(2001) (noting that it is the final decision at the administrative level, not the decision of the
reviewing court, which is the focus of each level of judicial review).  Thus, as to the merits
of such a matter, ordinarily and primarily, the inquiry is not whether the Court of Special
Appeals erred, but whether the administrative agency erred.
In the present case, in what way might the Board have erred?  The answer to this
question lies with the two disputed administrative actions taken by the Board that were
8
reversed by the Court of Special Appeals.  Petitioner’s original motion to the Board requested
either (a) that her case be referred to the Office of Administrative Hearings or, in the
alternative, (b) that the Board members who participated in the settlement negotiations recuse
themselves.  Petitioner asked the Circuit Court to review both the denial of the recusal
motion and the denial of the motion to remove to the OAH.  These two denials by the Board
constitute the two administrative decisions which petitioner asked the Circuit Court and the
Court of Special Appeals to review. 
The Court of Special Appeals, disagreeing with the Board’s denial of both of those
requests, held as follows:
“In light of the actions by the Board that caused an appearance
of impropriety in the proceedings in this case before the Board,
this Court holds that the circuit court did not err by finding that
appellee was denied due process in that hearing.  Consequently,
we remand this case to the Circuit Court for Baltimore City with
instructions to remand the case to the Board, directing appellant
to delegate the authority to conduct the contested case hearing
and to issue the final administrative decision in this case to the
OAH.”
150 Md.App. at 155, 819 A.2d at 393.  Critical to understanding this case is the observation
that the intermediate appellate court’s analysis amounted to a simultaneous review of two
separate administrative actions:  (1) the Board’s failure to recuse certain members of the
panel and (2) the Board’s failure to refer the case to the OAH.  Although the Court of Special
Appeals apparently considered the agency’s failure to recuse the biased panel members to
go hand-in-hand with the failure to refer the case to the OAH, we think it clear that the
9
determination that “the actions of the Board members created an appearance of impropriety
and unfairness” is separate and distinct from the determination that “the case must be retried
before [the OAH].”  For even if the Board was required to recuse the biased members from
the adjudicating panel, it was not logically bound to refer the case to the OAH.  The Board
could have easily complied with the court’s judgment by replacing the biased members, yet
persisted in its decision to forgo the OAH.  Thus, those determinations were two distinct
decisions by the agency, both of which were reviewed by the Court of Special Appeals.
With respect to the agency decision denying the recusal motion, the Court of Special
Appeals held that “the actions by the Board that caused an appearance of impropriety in the
proceedings in this case before the Board . . . denied [petitioner] due process in that hearing.”
Id.; cf. Maryland State Police v. Zeigler, 330 Md. 540, 559, 625 A.2d 914, 923 (1993)
(stating that “[p]rocedural due process, guaranteed to persons in this State by Article 24 of
the Maryland Declaration of Rights, requires that administrative agencies performing
adjudicatory or quasi-judicial functions observe basic principles of fairness as to parties
appearing before them”).  Petitioner, of course, is satisfied with that ruling and did not raise
that issue in the petition for certiorari, and neither did respondent cross-petition on that issue.
Accordingly, we do not review that ruling by the Court of Special Appeals.  See Mehrling
v. Nationwide, 371 Md. 40, 44 n.3, 806 A.2d 662, 665 n.3 (2002) (noting that the Court of
Appeals will not normally address a question not presented in petition for certiorari), and
upon remand, the Board must adhere to the court’s ruling as it bears on the defects in
10
procedural due process at petitioner’s hearing.
It is the second administrative decision taken by the Board, and its review by the Court
of Special Appeals, that concerns us in the case sub judice.  By this we mean the Court of
Special Appeals’s holding “directing [the Board] to delegate the authority to conduct the
contested case hearing and to issue the final administrative decision in this case to the OAH.”
The key point here is that the Court of Special Appeals judicially reviewed the Board’s
decision to deny the motion to refer the case to the OAH, and it found that decision to be
wanting.  The court’s reasoning behind its determination is made in a footnote to its opinion:
  
“We recognize that ‘under the APA, the delegation of matters to
the OAH is not a mandatory function but a function within the
discretion of the administrative agency.’  [Regan v. Board of
Chiropractic, 120 Md.App. 494, 513, 707 A.2d 891, 900
(1998).]  In light of the facts of this particular case, however, it
would not be appropriate to remand the case to the same tribunal
that heard the case originally. * * *  In this case, we have held
that the actions of the Board members created an appearance of
impropriety and unfairness, and for that reason, the case must be
retried before a different tribunal.”
150 Md.App. at 156 n.14, 819 A.2d at 393 n.14.  We do not think it so obvious that this case
“must” be retried before the OAH, and the Court of Special Appeals did not discuss the
appropriate standard of judicial review of the Board’s decision not to refer.  Because the
Court of Special Appeals did not consider the appropriate standard of judicial review and
whether, under that standard, the agency’s decision must be overturned, that task is now
before this Court, as we sit in review of the agency’s action and not so much the decision by
the intermediate appellate court.  Therefore, this case requires us (1) to determine the proper
11
standard of review to apply to the Board’s decision not to refer the case to the OAH and (2)
applying that standard, to determine whether the Board’s decision should be upheld.  
III.
Whether the administrative agency’s refusal to delegate to the OAH was improper
requires us to determine the standard of review for such an agency decision.  The standard
of review for an agency decision, in turn, will depend upon the level of discretion delegated
to the administrative agency with respect to such decisions.  See MTA v. King, 369 Md. 274,
293-94, 799 A.2d 1246, 1257 (2002) (Wilner, J., concurring); Hecht v. Crook, 184 Md. 271,
280-81, 40 A.2d 673, 677 (1945); see generally A. Rochvarg, Maryland Administrative Law,
§§ 4.29–4.38 (2001); E. Tomlinson, The Maryland Administrative Procedure Act, 56 Md.
L. Rev. 196 (1997). 
To discover the proper standard of judicial review, we begin with the APA.  Because
this case involves an agency acting in a “quasi-judicial” capacity, adjudicating the personal
rights of petitioner, judicial review is governed by § 10-222, which is applicable to final
decisions in contested cases.  See § 10-222(a).  Were we reviewing the agency acting in its
policymaking or “quasi-legislative” capacity, a wholly different analysis governs the
decision.  See § 10-125; Fogle v. H & G Restaurant, Inc., 337 Md. 441, 654 A.2d 449 (1995).
Section 10-222(h) governs the scope of judicial review of final administrative agency
decisions in contested cases as follows: 
12
(h) Decision. — In a proceeding under this section, the court
may:
(1) remand the case for further proceedings;
(2) affirm the final decision; or
(3) reverse or modify the decision if any
substantial right of the petitioner may have been
prejudiced because a finding, conclusion, or
decision:
(i) is unconstitutional;
(ii) exceeds the statutory authority
or jurisdiction of the final decision
maker;
(iii) results from an unlawful
procedure;
(iv) is affected by any other error of
law;
(v) is unsupported by competent,
material, and substantial evidence
in light of the entire record as
submitted; or
(vi) is arbitrary or capricious.
Section 10-222(h)(3)(i)–(vi) provides a statutory framework for understanding the scope of
judicial review of agency decisions and is of particular interest to the case sub judice.
Section 10-222(h)(3)(i)–(iv) deals with judicial review of agency conclusions of law.  Section
10-222(h)(3)(v) deals with judicial review of agency factual determinations.  Section 10-
222(h)(3)(vi) deals with judicial review of any other agency determination—for instance, as
in the case sub judice, determinations over matters committed to the agency’s discretion.  Our
jurisprudence has expanded on the meaning of these statutory provisions and provided
guidance for their application by the courts.
When an agency makes “conclusions of law” in a contested case, the court, on judicial
3Even in the case of an agency interpreting law, our jurisprudence has shown a level
of deference to an agency’s interpretation of law, provided the agency is interpreting its own
regulations, MTA v. King 369 Md. 274, 288-89, 799 A.2d 1246, 1254 (2002), or is
interpreting the statute it administers, Jordan v. Hebbville, 369 Md. 439, 450, 800 A.2d 768,
775 (2002).  Nevertheless, erroneous interpretations of law are never binding upon the courts.
State Ethics v. Antonetti, 365 Md. 428, 447, 780 A.2d 1154, 1166 (2001).
13
review, decides the correctness of the agency’s conclusions and may substitute the court’s
judgment for that of the agency’s.  Total AV v. Dept. of Labor, 360 Md. 387, 394, 758 A.2d
124, 127-28 (2000) (noting that questions of law addressed by administrative agency are
completely subject to review by courts, although agency’s interpretation of a statute may be
entitled to some deference).  This established principle of administrative law is exemplified
in § 10-222(h)(3)(i)–(iv), which permits judicial modification or reversal of agency action
that (i) is unconstitutional; (ii) exceeds the agency’s jurisdiction; (iii) results from unlawful
procedure; or (iv) is affected by “any other” error of law.  See Tomlinson, supra, at 215 n.131
(“Questions of law encompass the first four grounds listed in the judicial review provision
of the APA”).  Section 10-222(h)(3)(iv), by authorizing correction of “any other error of
law,” implicitly indicates (a) that courts retain authority to correct all (“any”) errors of law
and (b) an understanding that agency errors based upon the previous three provisions are also
considered to be legal errors (“any other error of law”).3
In contrast, when an agency is not interpreting law but instead makes a “finding of
fact,” we have applied “substantial evidence” review.  Substantial evidence review of agency
factual findings is embodied in § 10-222(h)(3)(v).  That provision grants a court authority
4Although a few of our cases appear to conflate substantial evidence review with
arbitrary or capricious review, see, e.g., Insurance Comm’r v. Nat’l Bureau, 248 Md. 292,
300-01, 236 A.2d 282, 286 (1967), it does not follow that they are one and the same.  The
substantial evidence test applies to agency findings of fact, as indicated by the very language
of § 10-222(h)(3)(v) (“evidence” supported by the whole “record”).  Arbitrary and capricious
14
to overrule an agency’s factual finding only when the finding is “unsupported by competent,
material, and substantial evidence in light of the entire record as submitted.”  According to
this more deferential standard of review, judicial review of agency factual findings is limited
to ascertaining whether a reasoning mind could have reached the same factual conclusions
reached by the agency on the record before it.  See Stansbury v. Jones, 372 Md. 172,
182-185, 812 A.2d 312, 318-320 (2002) (discussing substantial evidence review in
Maryland).
Finally, there are circumstances when an agency acts neither as a finder of fact nor as
an interpreter of law but rather in a “discretionary” capacity.  See, e.g., Maryland State Police
v. Zeigler, 330 Md. 540, 625 A.2d 914.  Logically, the courts owe a higher level of deference
to functions specifically committed to the agency’s discretion than they do to an agency’s
legal conclusions or factual findings.  Therefore, the discretionary functions of the agency
must be reviewed under a standard more deferential than either the de novo review afforded
an agency’s legal conclusions or the substantial evidence review afforded an agency’s factual
findings.  In this regard, the standard set forth in § 10-222(h)(3)(vi), review of “arbitrary or
capricious” agency actions, provides guidance for the courts as they seek to apply the correct
standard of review to discretionary functions of the agency.4
review, on the other hand, could conceivably apply to any action of the agency not covered
by the other provisions of § 10-222(h)(3).
We do not encounter, or decide, this issue of whether the arbitrary and capricious
standard in § 10-222(h)(3)(vi) will govern every type of agency action not encompassed by
§ 10-222(h)(3)(i)–(v).  See Maryland State Police v. Zeigler, 330 Md. 540, 569-570, 625
A.2d 914, 928 (1993) (Bell, J., dissenting); A. Rochvarg, Maryland Administrative Law, §
4.38 (2001).  It is notable, however, that in contrast to the first five grounds for judicial
review in § 10-222(h)(3)(i)–(v), § 10-222(h)(3)(vi) does not delineate the type of agency
decision to which it applies, cf. § 10-222(h)(3)(i)-(iv) (implicitly and necessarily involving
legal determinations by the agency); § 10-222(h)(3)(vi) (explicitly applying to evidentiary,
factual findings), and could conceivably be a “catch-all” standard of review for any other
agency action.  And even in the absence of an applicable statutory scheme providing for
judicial review, we have held an implied limitation upon an administrative agency’s authority
is that its decisions “be not arbitrary or capricious.”  Bucktail v. Talbot County, 352 Md. 530,
550, 723 A.2d 440, 449 (1999); see also our line of cases explaining mandamus actions as
they apply to ministerial or non-discretionary functions of administrative agencies, discussed
in Criminal Inj. Comp. Bd. v. Gould, 273 Md. 486, 500-504, 331 A.2d 55, 65-66 (1975).
15
This Court recently applied the arbitrary or capricious standard of review to
discretionary functions of the agency in a case closely analogous to this one.  Maryland State
Police v. Zeigler involved an administrative agency’s decision to reopen a hearing after it had
already begun deliberations on the matter.  In that case, we first determined that the decision
to reopen a hearing for additional evidence was committed to the agency’s discretion.  330
Md. at 557-58, 625 A.2d at 922.  As a discretionary function of the agency, the decision to
reopen the hearing, we said, was subject to judicial review, but only under the arbitrary or
capricious standard.  Judge Eldridge, writing for the Court, observed: 
“[A]s long as an administrative agency’s exercise of discretion
does not violate regulations, statutes, common law principles,
due process and other constitutional requirements, it is
ordinarily unreviewable by the courts.  It is only when an
agency’s exercise of discretion, in an adjudicatory proceeding,
16
is ‘arbitrary’ or ‘capricious’ that courts are authorized to
intervene [citing the provision now codified as 10-222(h)(vi),
the arbitrary and capricious standard of review].” 
Id. (citations omitted). 
Similarly, in MTA v. King, we held that an agency’s discretion to determine the
magnitude of a sanction could only be reviewed pursuant to § 10-222(h)(3)(vi), i.e., for
arbitrariness or capriciousness.  369 Md. at 291, 799 A.2d at 1255-56.  Even if the court felt
the punishment to be “disproportionate” to the violation, the agency’s determination of the
amount or level of sanction could not be second-guessed, unless the sanction “was so
extreme and egregious that the reviewing court can properly deem the decision to be
‘arbitrary or capricious,’” as set forth in § 10-222(h)(3)(vi).  Id.  
The case sub judice does not differ significantly from Zeigler or King in that the
decision being reviewed is also one committed to the agency’s discretion and is to be
reviewed under the same arbitrary or capricious standard set forth in 10-222(h)(3)(vi).
Whether an action is in fact deemed arbitrary or capricious will vary depending upon the
amount of discretion granted an agency, a matter of substantive law, see King, 369 Md. at
293-94, 799 A.2d at 1257 (Wilner, J., concurring); thus, the level of discretion afforded an
agency’s decision to reopen a hearing, as in Zeigler, may differ from the discretion afforded
an agency’s decision to forgo the OAH, as in the instant case.  Arbitrary and capricious
review will apply to both types of decisions, but whether the agency’s decision in each case
is actually arbitrary or capricious will correspond to the discretion afforded it
5Section 10-205(b) provides for the delegation of a contested case to the OAH:
(b) Scope of authority delegated. — An agency may delegate to
the Office [of Administrative Hearings] the authority to issue:
(1) proposed or final findings of fact;
(2) proposed or final conclusions of law;
(3) proposed or final findings of fact and
conclusions of law;
(4) proposed or final orders or orders under
Article 49B of the Code; or
(5) the final administrative decision of an agency
in a contested case.
6Although it is our understanding that, as a matter of practice, most state agencies
subject to the APA exercise their authority to delegate duties to the OAH by regulation or
administrative order and usually in broad categories of case types, there appears no reason
why an agency may not do so on an ad hoc basis in a given case.  We do not here address
whether an agency’s violation of its own established protocol with regard to OAH delegation
may somehow amount to arbitrary or capricious agency action.
17
Applying the legal principles outlined above, we hold that (1) the determination by
an agency to refer a case to the OAH is a matter committed to its discretion and that (2) the
Board did not abuse that discretion under the arbitrary or capricious standard.
First, it is clear that the Board’s refusal to refer the case to the OAH was not a legal
conclusion or a factual finding but rather a function of the Board’s discretion.  The discretion
is granted to the Board in § 10-205(b)5 which declares an “agency may delegate to the Office
[of Administrative Hearings] the authority” (emphasis added) to hear the case.6  The word
“may” connotes a permissive, discretionary function of the agency when it delegates a case
to the OAH.  See Brodsky v. Brodsky, 319 Md. 92, 98, 570 A.2d 1235, 1237 (1990);
Planning Comm. v. Silkor Corp., 246 Md. 516, 522, 229 A.2d 135, 139 (1967) (construing
the word “may” to signal the ordinary meaning of permission unless the context or the
18
purpose of the statute shows that it is meant to be imperative); see also Regan, 120 Md.App.
at 513, 707 A.2d at 900 (noting that under the APA, the delegation of matters to the OAH
is not a mandatory function but a function within the discretion of the administrative agency).
Nor was the Board required to send the case to the OAH, because logically there existed
other options to the Board, such as recusing the offending members and replacing them with
different members, or, pursuant to § 10-205(b), referring to the OAH the authority to make
a proposed decision but retaining for itself the ultimate authority to decide the case.  In fact,
the Board may very well decide to send the case to the OAH; but if it does so, it shall not be
under the auspices or compulsion of the judiciary.
Second, it is clear that the Board’s decision to forgo the OAH was not arbitrary or
capricious.  An agency’s prerogative with respect to case referral to the OAH is similar in
scope to that of the agency’s prerogative in determining the severity of sanctions, see King,
369 Md. at 291, 799 A.2d at 1255-56; Resetar v. State Bd. of Education, 284 Md. 537, 562,
399 A.2d 225, 238 (1979) (“It is impossible to catalogue just what would or would not
constitute arbitrary action on the part of an administrative agency . . . in imposing
sanctions”), or to that of forgoing prosecution of a particular individual.  In such cases, it is
most difficult to apply or even articulate a judicial standard by which the agency’s
discretionary decision might be deemed arbitrary or capricious, cf. Heckler v. Chaney, 470
U.S. 821, 105 S.Ct. 1649, 84 L.Ed.2d 714 (1985) (holding that the FDA’s decision not to
take enforcement actions was not subject to judicial review under the federal APA because
7We do not adopt a per se rule of recusal, nor do we intend our holding or comments
to imply that recusal is mandatory when a trial judge participates in settlement negotiations.
See Maryland Rule 16-813, Maryland Code of Judicial Conduct, Canon 3 (setting forth the
situations requiring mandatory recusal); see also Annot., Judge’s Comments—Urging
Settlement, 6 A.L.R.3d 1457 (1966).  In the instant case, as the Court of Special Appeals
aptly noted, two of the Board members participated in settlement discussions with Spencer.
150 Md.App. 138, 150, 819 A.2d 383, 390 (2003).  The Board considered the settlement
negotiations in rendering its final decision, noting in the Order that “[a]lthough the
Respondent agreed to a proposal at the conference, she later rejected it.”  It is the overall
appearance of impropriety in this case that requires recusal.
19
such enforcement decisions are “committed to agency discretion by law” and do not supply
the courts with “law to apply,” that is, a legal standard to which the agency can be held).  The
reviewing court, absent some showing of fraud or egregious behavior on behalf of the
agency, will be hard pressed to articulate a reason why the agency acted arbitrarily or
capriciously when it did not send the case to the OAH.  This is true for the case before us
today.  Even conceding the error of the Board’s failure to recuse certain members from the
panel, that alone does not suffice to render arbitrary or capricious the Board’s decision not
to refer to the OAH.  The Court of Special Appeals erred when it reviewed this discretionary
function and found the agency wanting and incapable of conducting a fair hearing and
rendering a fair decision.  
To be sure, because of the nature of the Board members participating, it was improper
for those members who participated in the settlement negotiations to remain as panel
members adjudicating petitioner’s case, and those members may not constitute a part of the
panel if or when petitioner’s case is reheard.7  But that did not by itself require referral to the
20
OAH, as any number of other options lay open to the Board.  The proper course, in view of
the Board’s discretion to refer, was to remand the case to the Board with instructions to cure
the defects the reviewing court found at the original hearing, but without a mandate requiring
referral of the case to the OAH.  That is what we shall do, and the lower court’s direction
regarding referral of the case to the OAH is reversed.
IV.
Petitioner’s final argument, that a remand will create issues of res judicata or double
jeopardy, is without merit and frivolous.  The Board’s enforcement of its licensing and
disciplinary requirements serve purposes essential to the protection of the public, which are
deemed remedial, rather than punitive, and therefore are not subject to double jeopardy
principles.  See State v. Jones, 340 Md. 235, 666 A.2d 128 (1995); Ward v. Dept. of Pub. Saf.
& Cor. Services, 339 Md. 343, 350, 663 A.2d 66, 69 (1995) (holding that where the purpose
of the penalty is remedial, it is not punishment for double jeopardy purposes); McDonnell v.
Comm’n on Medical Discipline, 301 Md. 426, 436, 483 A.2d 76, 81 (1984) (noting that the
“purpose of disciplinary proceedings against licensed professionals is not to punish the
offender but rather as a catharsis for the profession and a prophylactic for the public”).  Even
if double jeopardy was applicable, which it is not, the rehearing would not be precluded, as
a new trial (or rehearing) ordinarily is not precluded by double jeopardy principles when a
conviction is reversed on grounds other than sufficiency of the evidence.  Huffington v. State,
21
302 Md. 184, 189, 486 A.2d 200, 203 (1985).  The remand was not based on insufficiency
of evidence but on defects in procedure.
Neither is res judicata applicable in this case because there is no final judgment—the
case is still on appellate review—and because issue and claim preclusion require a
subsequent cause of action in which those doctrines may take effect; this appeal is not a
subsequent cause of action but all part of the same case.  See Murray International v.
Graham, 315 Md. 543, 547, 555 A.2d 502, 504 (1989) (noting that res judicata principles
preserve the conclusive effect of judgments, “except on appeal or other direct review,” and
quoting Restatement (Second) of Judgments § 27 (1982) 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”).
JUDGMENT OF THE COURT OF
SPECIAL APPEALS REVERSED IN
PART.  CASE REMANDED TO THAT
COURT 
WITH 
DIRECTIONS 
TO
VACATE  THE JUDGMENT OF THE
CIRCUIT COURT FOR BALTIMORE
CITY AND TO REMAND THE CASE
TO THE CIRCUIT COURT WITH
INSTRUCTIONS TO REMAND THE
CASE TO THE STATE BOARD OF
P H A R M A C Y  
F O R  
F U R T H E R
PROCEEDINGS CONSISTENT WITH
THIS OPINION.  COSTS TO BE
EVENLY  
DIV IDED 
BETWEE N
22
PETITIONER AND STATE BOARD OF
PHARMACY.
Chief Judge Bell concurs in the judgment only.