Reliable Contracting Company, Inc. v. Maryland Underground Facilities 

Damage Prevention Authority 

No. 47, September Term 2015 

Constitutional Law – Administrative Agencies – Quasi-Judicial Powers –

Public Utilities. The Maryland Underground Facilities Damage Prevention 

Authority is an administrative agency in the executive branch of State government 

and its exercise of quasi-judicial powers is subject to judicial review. Accordingly, its 

exercise of those powers is consistent with the Maryland Constitution and it must 

assess civil monetary penalties in accordance with statutory criteria. Maryland Code, 

Public Utilities Article, §12-101 et seq.; State Government Article, §10-1001. 
Circuit Court for Anne Arundel County 

Case No. 02-C-13-182390AA 

Argued: January 8, 2016 

IN THE COURT OF APPEALS 

OF MARYLAND 

NO. 47 

September Term, 2015 

RELIABLE CONTRACTING 

COMPANY, INC. 

v.

MARYLAND UNDERGROUND 

FACILITIES DAMAGE 

PREVENTION AUTHORITY 

 Barbera, CJ 

 Battaglia 

 Greene

 Adkins 

 McDonald 

 Watts

 Rodowsky, Lawrence F. 

 (Retired, Specially 

 Assigned), 

JJ.

Opinion by McDonald, J. 

Filed: March 28, 2016
Underground infrastructure, such as the cables and pipes that distribute 

water, gas, electricity, and other substances essential to modern life, is susceptible to 

damage during excavations. To prevent such incidents, State law has established a 

“one-call system,” sometimes referred to as “Miss Utility.” Maryland Code, Public 

Utilities Article (“PU”), §12-101 et seq. Under that law, advance notice must be given 

to the one-call system of certain types of excavation so that the location of nearby 

pipes, cables, and related structures can be identified and marked. Those who fail to 

do so and damage underground pipes or cables are subject to civil penalties assessed 

by Respondent Maryland Underground Damage Prevention Authority (“the 

Authority”). 

This case arose when the Authority cited Petitioner Reliable Contracting 

Company, Inc., (“Reliable Contracting”) for violating the statute and imposed a civil 

monetary penalty. Reliable Contracting challenges the constitutionality of the 

statutory provisions that empower the Authority to adjudicate violations and assess 

penalties. It argues that the statutory scheme violates the separation of powers set 

forth in the Maryland Constitution because it vests judicial power in a non-judicial 

body – the Authority. Reliable Contracting also contends that the statute fails to 

provide adequate guidance to the Authority for the assessment of penalties, which 

would also render it unconstitutional under a prior decision of this Court. 

We hold that the statutes that govern the Authority suffer from neither 

constitutional defect. Like many other administrative agencies, the Authority’s 

quasi-judicial powers are limited and subject to judicial review. It is true that the 
2 

statute authorizing the Authority to impose civil penalties does not itself specify the 

criteria for the Authority to consider in setting the amount of a civil monetary 

penalty. However, the General Assembly has enacted a general statute providing 

criteria for assessment of civil penalties by State administrative agencies when no 

other statute or regulation does so. Although the Authority itself questions whether 

that statute applies to it, we agree with the Court of Special Appeals that it does. 

I 

Background 

A. Statutory Framework 

One-Call System to Protect Underground Facilities 

In the modern world, electricity, gas, oil, water, sewage, and other substances 

are transmitted underground via pipes, cables, and accessories that are subsumed 

under the generic statutory phrase “underground facilities.”1 Damage or dislocation 

 

1 See PU §12-101(o). That provision defines “underground facility” to mean: 

 (1)...personal property that is buried or submerged for:

 

 (i) use in connection with the storage or 

conveyance of water, sewage, oil, gas, or other substances; 

or 

 (ii) transmission or conveyance of 

electronic, telephonic, or telegraphic communications or 

electricity. 

 (2) “Underground facility” includes pipes, sewers, 

conduits, cables, valves, lines, wires, manholes, 

attachments, and those portions of poles below ground. 
3 

of underground facilities can result in death or injury to individuals, damage to 

property, and the loss of essential public services.2 To protect underground facilities, 

the General Assembly has enacted a comprehensive statutory scheme for regulating 

excavation or demolition that could damage them. PU §12-101 et seq. The statute 

applies to all excavation or demolition unless the “excavation or demolition is 

performed or to be performed: (1) entirely on the land on which the private residence 

of the owner or lessee is located; and (2) without the use of machinery.” PU §12-103. 

The statute creates a one-call system, colloquially known as “Miss Utility,”

which notifies owners of underground facilities of a planned demolition or excavation 

that may affect those facilities. PU §12-101(i) (definition of “one-call system”). 

Anyone who intends to perform a covered excavation or demolition must notify the 

one-call system in advance. PU §12-124(a). After notifying the one-call system, “[a] 

person may begin excavation or demolition only after the person receives notification 

from the underground facilities information exchange system of the one-call system 

confirming that all applicable owner-members have” marked any facilities or parts of 

facilities they have in the vicinity of the excavation or demolition. PU §12-127(a). “If 

a person knows or has reason to know that an underground facility in the area of a 

planned or ongoing excavation or demolition is not marked as required by this 

 

 (3) “Underground facility” does not include a 

stormwater drain. 

2 PU §12-102. 
4 

subtitle, the person may not begin or continue the excavation or demolition unless 

the person” takes certain precautions not relevant here. PU §12-127(e).3

The Authority 

The statute creates the Authority to carry out certain enforcement and public 

education facets of the one-call system. The Authority consists of nine members 

appointed by the Governor from lists submitted by organizations representing 

various types of stakeholders. PU §12-107.4 The members serve staggered two-year 

 

3 The statute also apportions liability for damages caused to underground 

facilities based in part on whether the owner of the facility and the excavator have 

complied with the statute. PU §12-120. 

4 The statute provides: 

The nine members shall be appointed as follows: 

(1) one member from a list submitted to the 

Governor by the Associated Utility Contractors of Maryland; 

(2) one member from a list submitted to the 

Governor by the Public Works Contractors Association of 

Maryland; 

(3) two underground facility owners that are 

members of a one-call system from a list submitted to the 

Governor by the Maryland members of the Maryland/DC 

Subscribers Committee; 

(4) one member from a list submitted to the 

Governor by the one-call centers operating in the State; 

(5) one member who represents the State’s 

underground utility locator community from a list submitted 

to the Governor by the Maryland members of the Maryland/ 

DC Damage Prevention Committee; 
5 

terms. “On the recommendation of the Authority, the Governor may remove a 

member for incompetence or misconduct.” PU §12-107(e). 

In carrying out its functions under the statute, the Authority is authorized to 

conduct hearings, at which testimony is to be given under oath and recorded. PU 

§12-113(a). The statute authorizes the Authority to issue subpoenas in conjunction 

with its hearings and its members may administer the oath to witnesses. PU §12-

113(b)-(c). The Authority’s decisions are to be made in writing and are subject to 

judicial review in accordance with the State Administrative Procedure Act. PU §12-

113(d)-(e). 

To the extent that the Authority requires funding to carry out its 

responsibilities, the General Assembly has directed the Authority not to look to 

appropriations in the State budget, but rather to obtains funds from “(1) a federal or 

State grant; (2) filing fees and administrative fees for complaints heard by the 

Authority ... ; and (3) any other source.” PU §12-111(a); see also PU §12-106. 

 

(6) one member who has experience in the field of 

underground utilities from a list submitted to the Governor 

by the Maryland Association of Counties; 

(7) one member who has experience in the field of 

underground utilities from a list submitted to the Governor 

by the Maryland Municipal League; and 

(8) one member of the general public from a list 

submitted to the Governor by the other appointed and 

qualified members of the Authority.

PU §12-107(b). 
6 

Enforcement of the One-Call System by the Authority 

The Authority is charged with enforcing compliance with the notice provisions 

of the one-call system. It conducts hearings on complaints of violations, may assess 

a civil penalty when a violation is found, and may also enter into settlements in lieu 

of assessing a civil penalty. PU §12-112(a). For performing “an excavation or 

demolition without first providing the [required] notice ... and damag[ing], 

dislocat[ing], or disturb[ing] an underground facility,” the Authority may assess a 

penalty of up to $2,000 for a first offense and up to $4,000 for each subsequent offense. 

PU §12-135(a)(1).5 Other violations of the one-call system are subject to a civil 

penalty of up to $2,000. PU §12-135(a)(3). The Authority may also require a violator 

to participate in special training or adopt certain procedures to mitigate damage, in 

addition to or in lieu of a monetary penalty. PU §12-135(a)(2). As noted above, the 

Authority’s decisions are subject to judicial review. PU §12-113(e). 

In addition to its enforcement function, the Authority also administers a 

special, non-lapsing fund devoted to public education and the development of safety 

procedures. PU §12-117.6

 

5 The statute provides for an alternative enforcement mechanism when a 

proceeding has not been initiated with the Authority. The Attorney General or the 

owner of a damaged facility may bring an action in court asking the court to assess a 

civil monetary penalty against the violator. PU §12-135(b). In addition, an owner or 

the Attorney General may seek a writ of mandamus or injunctive relief when an 

excavation or demolition threatens to damage a facility. PU §12-134.

6 As with many other special funds, moneys in this fund, known by the 

acronym-resistant name Maryland Underground Facilities Damage Prevention 
7 

B. Facts and Procedural History 

In February 2013, a local utility notified the Authority that Reliable 

Contracting had violated the statute by undertaking an excavation without using the 

one-call system and, as a result, had damaged the utility’s facilities. On April 16, 

2013, after an investigation, the Authority notified Reliable Contracting that it would 

assess a civil monetary penalty of $2,000 for a violation of PU §12-124(a) (excavating 

without notifying the one-call system) and a penalty of $1,000 for a violation of PU 

§12-127(e) (excavating with knowledge of an underground facility and without 

following proper procedures). The Authority indicated that the $1,000 penalty would 

be waived if Reliable Contracting completed damage prevention training offered by 

the Maryland Damage Prevention Committee. The notice stated that Reliable 

Contracting had the right to a formal hearing before the Authority. 

Reliable Contracting requested a hearing. At the hearing in September 2013,

it did not contest any of the Authority’s findings; instead, it challenged the 

constitutionality of the Authority’s enabling statute. Specifically, Reliable 

Contracting asserted that, in permitting the Authority to adjudicate violations and 

assess civil penalties, the statute conferred judicial power on a non-judicial body and 

thereby violated the separation of powers required by the State Constitution. 

Reliable Contracting also asserted that the statute failed to provide adequate 

guidance to the Authority for assessment of such penalties. On September 16, 2013, 

 

Education and Outreach Fund, do not revert to the General Fund at the end of the 

fiscal year. PU §12-117(d). 
8 

the Authority issued a written decision that confirmed its earlier finding of violations 

and imposition of penalties, and that notified Reliable Contracting of its right to seek 

judicial review. The Authority did not explicitly address Reliable Contracting’s 

constitutional arguments. 

Reliable Contracting petitioned for judicial review in the Circuit Court for 

Anne Arundel County, reiterating the constitutional argument it had made to the 

Authority. On June 9, 2014, the Circuit Court issued a memorandum opinion and 

order rejecting those arguments and upholding the Authority’s decision.

7 The Circuit 

Court held that the Legislature could confer quasi-judicial adjudicatory powers on an 

entity outside the judiciary so long as there was an opportunity for judicial review by 

a court, and observed that the Authority’s statute allowed for such review. The 

Circuit Court also held that the grant of discretion to the Authority to assess civil 

monetary penalties without detailed guidance was acceptable because the Authority 

regulated in the area of public health and safety. 

Reliable Contracting then appealed its constitutional claims to the Court of 

Special Appeals, which affirmed the Circuit Court. 222 Md. App. 683, 114 A.3d 303 

(2015). The intermediate appellate court agreed with the Circuit Court that, “because 

the court has the opportunity to review the Authority's decision and render a final 

 

7 In addition to its constitutional argument, Reliable Contracting had also 

asserted in the Circuit Court that the Authority, in assessing the second penalty in 

the amount of $1,000, had exceeded its statutory authority. The Circuit Court 

rejected that contention. Reliable Contracting has not pursued that argument and 

we do not address it. 
9 

decision, the delegation of quasi-judicial adjudicatory power to the Authority is not 

unconstitutional.” 222 Md. App. at 697. However, in contrast to the Circuit Court, 

the Court of Special Appeals did not decide whether “the statute's limitation on the 

circumstances in which the Authority has discretion to impose a civil penalty, along 

with the availability of judicial review of the Authority's decisions, would lead to the 

conclusion that the discretion given to the Authority is constitutional.” Id. at 700. 

Instead, the Court of Special Appeals held that Maryland Code, State Government 

Article (“SG”), §10-10018 provided the necessary standards to guide the Authority’s 

exercise of discretion. Id. at 700-2.9

 

8 SG §10-1001 reads as follows: 

(a) In this section, “unit” means an officer or 

other entity in the Executive Branch. 

(b) Unless otherwise provided by statute or 

regulation, a unit of State government authorized by law 

to impose a civil penalty up to a specific dollar amount for 

violation of any statute or regulation shall consider the 

following in setting the amount of the penalty: 

(1) the severity of the violation for which 

the penalty is to be assessed; 

 (2) the good faith of the violator; and 

 (3) any history of prior violations.

9 One member of the appellate panel would have rested the decision on the 

same ground as the Circuit Court and not addressed the applicability of SG §10-1001 

as the parties had not had an opportunity to brief the application of that statute to 

the Authority. 222 Md. App. at 702-3 (concurring opinion of Judge Arthur). In their 

briefs to us, the parties have now had the opportunity to address the application of 

SG §10-1001. 
10

II

Discussion 

 The material facts in this case are undisputed and the only issues concern the 

alleged constitutional defects in the Authority’s enabling statute. Accordingly, we 

consider the merits of the lower courts’ resolution of those issues without deference. 

See Schisler v. State, 394 Md. 519, 535, 907 A.2d 175 (2006). We consider first the 

contention that the Authority’s statute violates separation of powers in delegating 

judicial power to a non-judicial body. Second, we consider the argument that the 

statute fails to provide adequate guidance for the imposition of civil penalties. 

A. Whether the Authority’s Enabling Act is Unconstitutional 

Article IV, §1, of the Maryland Constitution provides, in pertinent part, “The 

Judicial power of this State is vested in a Court of Appeals, such intermediate courts 

of appeal as the General Assembly may create by law, Circuit Courts, Orphans’

Courts, and a District Court.” This is the Judicial Vesting Clause of the Maryland 

Constitution, analogous to Article III, Section 1, of the federal Constitution. Article 

8 of the Maryland Declaration of Rights states “That the Legislative, Executive and 

Judicial powers of Government ought to be forever separate and distinct from each 

other; and no person exercising the functions of one of said Departments shall assume 

or discharge the duties of any other.” This is the Separation of Powers clause – an 
11

explicit statement of the principle of separation of powers that is only implicit in the 

federal Constitution.10

The Judicial Vesting Clause, together with the Separation of Powers Clause, 

“forbids any power in the Legislature to clothe administrative boards with any 

judicial authority.” Dal Maso v. Board of County Commissioners, 182 Md. 200, 34 

A.2d 464 (1943). However, administrative bodies may exercise quasi-judicial 

authority, which essentially consists of deciding questions of fact and law subject to 

judicial review. Heaps v. Cobb, 185 Md. 372, 378-79, 45 A.2d 73 (1945). “[T]he 

existence of [separation of powers] does not itself inhibit the delegation to an 

administrative agency of a blend of executive or legislative powers with powers 

judicial in nature; the determining factor is not so much the specific powers granted 

to the administrative agency, but rather the relationship of the courts to the exercise 

of that power.” County Council for Montgomery County v. Investors Funding Corp., 

270 Md. 403, 436, 312 A.2d 225 (1973). The availability of judicial review is key 

because “the dangers inherent in government by administrative bodies lie[s] not in 

the blending of powers in a single body but in permitting that body’s power to be 

 

10 Reliable Contracting also cites Article 24 of the Maryland Declaration of 

Rights, which guarantees due process. It refers to that provision in conjunction with 

the Investors Funding case, described in some detail later in the text of this opinion. 

However, in assessing the due process claim in Investors Funding, the Court 

considered the adequacy of the procedural due process afforded by the county 

ordinance at issue in that case and whether it was void as an arbitrary, capricious, 

and unreasonable exercise of the police power. County Council for Montgomery 

County v. Investors Funding Corp., 270 Md. 403, 443-46, 312 A.2d 225 (1973). No 

analogous contention is made here. 
12

beyond check or review.” Insurance Commissioner v. National Bureau of Casualty 

Underwriters, 248 Md. 292, 299, 236 A.2d 282 (1967). 

The parties agree that the Investors Funding case provides a useful point of 

comparison. That case concerned Chapter 93A of the Montgomery County Code, 

entitled “Fair Landlord-Tenant Relations,” which created a Commission on LandlordTenant Affairs (“Commission”) that had the authority to enforce the provisions of 

Chapter 93A through any appropriate means, including powers: 

(1) to impose a civil penalty not exceeding $1,000; 

(2) to award money damages not exceeding $1,000; 

(3) to award payments for temporary substitute housing; 

(4) to terminate leases; 

(5) to order repairs; 

(6) to order the return of security deposits and rental monies paid. 

Investors Funding, 270 Md. at 426-27. A number of landlords in the County, 

including Investors Funding Corporation, sought a declaratory judgment that the 

ordinance was unconstitutional. The landlords alleged that Chapter 93A “vest[ed] in 

an administrative body judicial powers reserved exclusively to the courts by Article 

IV, §1 of the Maryland Constitution.” Id. Because prior cases had allowed for an 

administrative agency to adjudicate cases as long as the courts had the power to 

review the agency’s decisions, the landlords suggested five additional considerations 

that might serve as indicia of judicial power: “(1) the power to make a final rather 

than an initial determination; (2) the power to make binding judgments; (3) the power 
13

to affect the personal or property rights of private persons; (4) the exercise of power 

formerly held by a court; and (5) the fashioning of remedies which are judicial in 

nature.” Id. at 436. 

This Court responded to those arguments as follows: (1) the Commission had 

no power to make a final determination because its decisions were subject to judicial 

review; (2) the Commission had no power to make binding judgments because 

litigants must go to court to enforce compliance with the Commission’s orders; (3) the 

power to affect the personal or property rights of private persons was delegated based 

on a legislative finding of public interest in landlord-tenant relations; (4) the exercise 

of power formerly held by a court was not dispositive; and (5) the Commission’s power 

to fashion remedies was incidental to its regulatory powers. Id. at 437-41.

The Court’s analysis of these five points in Investors Funding underscores the 

core rule arising out of the Court’s prior cases: an administrative agency, as part of 

its administrative functions, may decide cases within the area delegated to it by the 

legislature as long as its decisions are subject to judicial review. See Maryland 

Aggregates Ass’n v. State, 337 Md. 658, 675-79, 655 A.2d 886 (1995). Hence, in this 

case, the Authority’s ability to hold hearings and impose monetary penalties is not 

an unconstitutional vesting of judicial power in a non-judicial body. The Authority 

may decide individual cases, but its decisions are subject to judicial review. PU §12-

113(e). Its power is not judicial, but quasi-judicial, and delegation of quasi-judicial 

power to an agency does not violate Article IV, §1 of the Maryland Constitution or 

Article 8 of the Maryland Declaration of Rights. 
14

. 

Reliable Contracting argues that the Authority’s power is wholly judicial 

rather than quasi-judicial, even though the Authority’s decisions are subject to 

judicial review, because the Authority does nothing but issue and decide citations. 

That is, the Authority’s power to fashion remedies is not incidental to its regulatory 

powers, because it has no other regulatory functions.11 It merely decides cases. 

This contention is not entirely accurate. The legislative history of the 

Authority’s enabling statute indicates that it was created to serve certain educational 

functions as well. Although the statutory one-call system has existed since 1974,12

the Authority was not established until 2010. Chapter 635, Laws of Maryland 2010. 

That 2010 amendment was intended to satisfy standards for federal grants set forth 

in the Pipeline Inspection, Protection, Enforcement, and Safety Act of 2006, 49 

U.S.C. §60134, which required “public education” efforts as well as enforcement 

through civil penalties by a state authority. See Revised Fiscal and Policy Note to 

Senate Bill 911 (April 8, 2010); Bill Review Letter of Attorney General Douglas F. 

 

11 In a related argument, Reliable Contracting “takes issue with having to 

submit to the plenary jurisdiction of an administrative body with which it has no 

relationship[,]” such as a permit or license. However, there is no requirement that a 

quasi-judicial administrative body issue licenses or permits in order to carry out the 

duties assigned to it by the Legislature. The Authority regulates excavations and 

demolitions as provided in the statute. Reliable Contracting performed an excavation 

or demolition subject to the statute that the Authority enforces. To be called to 

account by an administrative agency, an entity need have no more “relationship” with 

an agency than that the entity allegedly violated the statute that the agency enforces. 

12 See Chapter 863, Laws of Maryland 1974. 
15

Gansler to Governor Martin O’Malley concerning Senate Bill 911 (May 12, 2010). In 

that regard, the Authority administers a special fund devoted to public education and 

outreach and it is authorized to allow a violator to mitigate a penalty by participating 

in special training, adopting safety procedures, and carrying out similar measures 

devised by the Authority. 

Even if Reliable Contracting’s description of the Authority’s function were 

accurate, the Authority’s power would still be quasi-judicial. The essence of quasijudicial power is not that it is accompanied by other powers; it is that it is limited and 

initial, rather than plenary and ultimate in its sphere. The Maryland judiciary has 

general jurisdiction, and its final decisions are final; it may decide all cases of State 

law, and no other adjudicative body may reverse its judgments on the basis of State 

law. By contrast, the Authority’s jurisdiction is sharply limited by statute, and its 

decisions are subject to affirmation or reversal by the courts. Thus, the Authority has 

quasi-judicial, rather than judicial, power, and the delegation of quasi-judicial 

authority does not violate Article IV, §1 of the Maryland Constitution or Article 8 of 

the Maryland Declaration of Rights. 

B. Whether There are Guidelines for Exercise of the Authority’s Discretion 

Because agencies with quasi-judicial authority must be subject to judicial 

review, the Investors Funding decision held that an agency with the power to impose 

a civil penalty up to a specified amount must be given guidelines for determining the 
16

penalty. Without such guidelines, there is no way for a reviewing court to determine 

whether the agency assessed a proper penalty. Investors Funding, 270 Md. at 441.13

Reliable Contracting contends that the statute creating the Authority has no 

such guidelines.14 The Authority responds that there are detailed provisions 

specifying the circumstances when a penalty may be assessed, which is accurate but 

beside the point. The question in this case is not whether the statute provides 

adequate notice of the conduct that might subject an entity to a penalty, but whether 

the statute provides adequate guidance to the Authority and a reviewing court in 

order for the court to review the Authority’s assessment of that penalty.

1. SG §10-1001 

As noted above, the Court of Special Appeals held that the necessary guidelines 

are to be found in SG §10-1001, which instructs an administrative agency to consider 

(1) the seriousness of the violation, (2) the intent (“good faith”) of the violators, and 

(3) any past history of violations. There is obviously little to quarrel with in these 

common sense criteria and SG §10-1001 would thus appear to put the issue to rest. 

But, by its terms, SG §10-1001 applies only to an officer or entity in the executive 

branch of State government and the Authority appears to be reluctant to embrace 

 

13 At least one commentator has suggested that subsequent decisions have 

diluted this aspect of the Investors Funding decision. See A. Rochvarg, Principles and 

Practice of Maryland Administrative Law (2011) at 212-14. 

14 Reliable has not argued that the Authority’s determination of liability is 

unreviewable, as opposed to its assessment of the appropriate penalty. 
17

State agency status. Reliable Contracting is, of course, happy to agree that the 

statute does not apply to the Authority. Further analysis is therefore necessary. 

2. Factors that Determine Whether an Entity is a State Agency 

To decide whether the Authority’s discretion is guided by SG §10-1001 we must 

determine whether it is a State agency for the purposes of that statute.15 This Court 

has noted that “there is no single test for determining whether a statutorilyestablished entity is an agency or instrumentality of the State for a particular 

purpose. All aspects of the interrelationship between the State and the statutorilyestablished entity must be examined in order to determine its status.” A.S. Abell 

Pub. Co. v. Mezzanote, 297 Md. 26, 35, 464 A.2d 1068 (1983); see also Central 

Collection Unit v. DLD Associates LP, 112 Md. App. 502, 505-9, 685 A.2d 873 (1996). 

A few examples are instructive. In Moberly v. Herboldsheimer, 276 Md. 211, 

345 A.2d 855 (1977), this Court considered whether the Board of Governors of the 

Memorial Hospital of Cumberland (“Hospital”), was a private corporation or an 

agency of the City of Cumberland within the scope of the Public Information Act. The 

Court concluded that the Hospital was a City agency because: as a medical facility, 

the Hospital served a public purpose; two City officials, the Mayor and the President 

of the Board of Commissioners of Allegany County, served ex officio on the sevenmember Board of Governors for the Hospital; and the Hospital was, by statute, 

 

15 We need not decide whether the Authority is a State agency for any other 

purpose. Cf. Washington Suburban Sanitary Commission v. Phillips, 413 Md. 606, 

632, 994 A.2d 411 (2010) (“[A]n entity may qualify as a State agency for some 

purposes, while being classified as a local agency for other purposes.”). 
18

exempt from tort liability for the negligent operation of the Hospital. 276 Md. at 223-

25.

In Mezzanote, this Court considered whether the Maryland Insurance 

Guaranty Association (“MIGA”) was an agency or instrumentality of the State, also 

for purposes of the Public Information Act. The Court concluded that MIGA was a 

State agency because: it served a public purpose, namely “protect[ing] claimants, 

policyholders, and ... the public, by preventing member insurer insolvency and paying 

claimants on covered claims against an insolvent member insurer”; a public official, 

the State Insurance Commissioner, appointed the Board of Directors; the acts of the 

Board of Directors were generally subject to the State Insurance Commissioner’s 

amendment and approval; and, by statute, it was exempt from State and local taxes 

other than property taxes, and from liability for actions taken in the performance of 

its duties. Mezzanote, 297 Md. at 37-39.

A statement in enabling legislation that disclaims an entity’s connection to 

State government is not conclusive as to whether it is an agency or instrumentality 

of the State for certain purposes. For example, in Napata v. Univ. of Maryland Med. 

Sys. Corp., 417 Md. 724, 12 A.3d 144 (2011) a statute stated that the University of 

Maryland Medical System (“UMMS”) was not “a State agency, political subdivision, 

public body, public corporation, or municipal corporation.” Maryland Code, 

Education Article (“ED”), §13-303(a)(2); see also ED §13-302(5)-(7). Nonetheless, 

applying the criteria developed in the cases described above and others, this Court 
19

held that the UMMS was “an instrumentality of the State” for purposes of the PIA 

rather than a private corporation. 417 Md. at 736-37.

Similarly, in Central Collection Unit v. DLD Associates LP, supra, the Court of 

Special Appeals considered whether the Injured Workers’ Insurance Fund (“IWIF”) 

was a State entity for purposes of sovereign immunity even though IWIF’s enabling 

legislation stated that it was “independent of all State units.”16 After considering 

“the entire relationship between IWIF and the State,” including many of the factors 

considered in Mezzanotte, the court concluded that IWIF was properly characterized 

as a State agency or instrumentality. The intermediate appellate court noted that 

IWIF had been established by the Legislature, that the members of its governing 

board were appointed by the Governor, and that various other obligations were 

imposed on it by statute. Notably, although it was required to submit copies of its 

budget to the Legislature “for informational purposes,” it was not funded by 

appropriations in the State budget. Also, IWIF’s existence could be ended by the 

Legislature. Although various other statutory provisions granted IWIF “self-control” 

– e.g., it was exempt from State personnel laws – the court concluded that the “entire 

relationship” between IWIF and the State indicated that it was a State agency for 

purposes of sovereign immunity. 

 

16 The law relating to IWIF has been substantially amended with the creation 

of the Chesapeake Employers’ Insurance Company in 2012. See Maryland Code, 

Labor and Employment Article, §10-101 et seq.; Insurance Article, §24-301 et seq. 
20

These cases indicate that some of the relevant factors include: the purpose of 

the entity (public or private); the degree of control exercised by the government over 

the membership and decision-making of the entity; and any special immunities from 

tax or tort liability granted the entity. Neither a disclaimer of agency status nor 

funding outside the budget process necessarily precludes status as a State agency or 

instrumentality. The goal of the analysis is to examine the relationship between the 

State and the entity, so these factors are not necessarily exhaustive. 

3. Application to the Authority 

 Public Purpose 

Here, the Authority was created by statute to serve a public purpose, namely 

maintaining public safety in underground facilities. To carry out that purpose, the 

Authority exercises governmental powers – e.g., it issues subpoenas, conducts 

contested case hearings, imposes civil penalties, requires individuals and entities to 

undergo training and adopt safety measures, and oversees a special fund established 

by law. Its decisions in contested cases are reviewable in the same manner as those 

of most other administrative agencies in the executive branch.17 The Authority’s 

officials and employees are designated as “State personnel.” SG §12-101(a)(2)(xiii). 

This factor alone is a strong indication that the Authority is a government agency, in 

 

17 As noted above, under PU §12-113(e), the decisions of the Authority are 

reviewed under the State Administrative Procedure Act (“APA”). The contested case 

provisions of the APA, including those concerning judicial review, apply to executive 

branch agencies (though some executive branch agencies are exempted) and explicitly 

not to agencies of the legislative or judicial branches. See SG §10-203.
21

part because it suggests that the General Assembly actually intended the Authority 

to be part of the government. 

 State Control 

It is argued that the Authority is not subject to the control of other State 

officials or entities. In the first place, it is worth noting that the State need not 

exercise complete control over the Authority in order that the Authority be a State 

agency. See Mezzanote, 297 Md. at 37. Hence, even if the State does not exercise 

complete control over the Authority at every moment and in every respect, that is not 

dispositive. The State still oversees the Authority and retains essential control over 

major actions of the Authority, because the Governor appoints and removes members 

of the Authority, the Authority’s decisions are subject to judicial review, and the 

Authority’s existence depends on the Legislature. 

There is no question that the Authority is a somewhat unusual entity. For 

example, it is at least somewhat financially independent. It is the expressly declared 

intent of the General Assembly that the Authority “not be funded by appropriations 

from the State budget.” PU §12-106(b). But this does not mean that the Authority 

will never receive funding from the State. The Fiscal and Policy Note to the bill 

creating the Authority acknowledged that appropriated funds might be used in some 

circumstances to support the Authority. See Revised Fiscal and Policy Note for 

Senate Bill 911 (April 8, 2010) at 7 (“To the extent other sources are not sufficient to 

cover administrative expenses, it is assumed general funds would be required.”). 
22

Thus, although the Authority ordinarily is financially independent of the State, it 

may receive State funding under some circumstances. 

Moreover, even if the Authority were completely financially independent, there 

can be independently funded government agencies. As noted above, IWIF was not 

funded through the State budget. The hospital in Moberly was effectively financially 

independent: if the Hospital ran a budget deficit in a year, the City of Cumberland 

was empowered, but not required, to cover the gap. See Moberly, 276 Md. at 224. 

For another example of the Authority’s unusual nature, the Governor appoints 

and removes members of the Authority, but the Governor’s discretion is constrained. 

Appointment must be from lists submitted by stakeholders. PU §12-107(b). Removal 

is for cause and “[o]n the recommendation of the Authority[.]” PU §12-107(e). 

Appointment by the Governor from a list or nomination originating with 

another entity is not unprecedented. See, e.g., Maryland Code, Health Occupations 

Article (“HO”), §14-202 (certain members of Board of Physicians to be chosen from 

lists submitted by medical schools)18; HO §4-202 (dentist and dental hygienist 

members of Board of Dental Examiners to be appointed from lists submitted by 

Board); Maryland Code, Criminal Procedure Article (“CP”), §14-102(a)(2), (c)(1) (State 

Prosecutor, whose office is an independent unit in the Office of the Attorney General, 

 

18 In Commission on Medical Discipline v. Stillman, 291 Md. 390, 435 A.2d 747 

(1981), this Court considered a predecessor of the Board of Physicians – the 

Commission on Medical Discipline – whose membership was heavily dependent on 

the State medical society. Nonetheless, even though members were appointed from 

a list submitted by a private entity and some members served ex officio due to their 

positions in that entity, this Court had no doubt that the Commission on Medical 

Discipline was a government agency. 291 Md. at 394. 
23

is appointed by Governor based on nomination by the State Prosecutor Selection and 

Disabilities Commission). 

A statute that provides for removal of a public official for cause by the Governor 

on the recommendation of someone else is unusual, but again it is not unprecedented 

for removal of a member of a State agency to be initiated by someone other than the 

appointing authority. See, e.g., HO §20-202(h)(2) (removal from State Board for 

Certification of Residential Child Care Program Professionals, based on the 

recommendation of the Children’s Cabinet); HO §21-202(g) (removal from the State 

Board of Environmental Health Specialists, based on the recommendation of the 

Secretary of Health and Mental Hygiene); CP §14-102(d) (removal of State 

Prosecutor, based on the recommendation of the State Prosecutor Selection and 

Disabilities Commission).19 Hence, the unusual appointment and removal provisions 

for members of the Authority do not prevent the Authority from being a State agency. 

Thus, the unusual, though not unprecedented budgetary, appointment, and 

removal provisions in the Authority’s statute do not eliminate State control over the 

Authority. On the contrary, the State maintains considerable control over the 

composition and actions of the Authority. 

 

19 We note that Article II, §15 of the State Constitution provides that the 

Governor may remove civil officers for incompetence or misconduct without regard to 

whether removal is recommended by another official or entity. For purposes of this 

opinion, we need not decide whether PU §12-107(e), which states that the Governor 

may remove members of the Authority for incompetence or misconduct “[o]n 

recommendation of the Authority” purports to limit the Governor’s authority contrary 

to the Constitution. 
24

 Immunities

As noted above, the Authority’s officials and employees have been designated 

as “State personnel” in SG §12-101 and accordingly, like others designated as State 

personnel in that statute, have immunity from tort liability under the Maryland Tort 

Claims Act. SG §12-105; Maryland Code, Courts & Judicial Proceedings Article, §5-

522(b). That immunity, of course, is linked to the State’s waiver of its own immunity 

for the particular tortious action. This is another factor that strongly indicates that 

the Authority is a State agency. 

 Consistency with the Purpose Underlying SG §10-1001

A final consideration is that we are deciding whether the Authority is a State 

agency under SG §10-1001, rather than any other statute. As the Court of Special 

Appeals noted, the legislative history of SG §10-1001 shows that the General 

Assembly intended it to apply to agencies like the Authority.20 The 1993 legislation 

was a direct response to Investors Funding, intended to bring every agency that had 

not already adopted its own criteria for monetary penalties into compliance with 

Investors Funding such that the problem identified in that case would never recur. 

See Senate Judicial Proceedings Committee, Bill Analysis, Senate Bill 122 (1993) 

(Senate Bill 122 “is designed to address [Investors Funding] by codifying a basic set 

of guidelines for setting civil penalties while allowing an existing statute, ordinance, 

or regulation to control.”); Letter from Attorney General J. Joseph Curran, Jr. to 

 

20 222 Md. App. at 700-2. 
25

Governor William Donald Schaefer (April 23, 1993) (Senate Bill 122 was passed to 

bring agencies into compliance with Investors Funding “by establishing statutory 

standards, but without impinging on agency discretion to adopt different standards 

by rule.”). The 1993 legislation was meant to cover any administrative agency 

affected by the holding in Investors Funding; it enacted not only SG §10-1001 

applicable to State administrative agencies and officers, but also a similar provision 

applicable to administrative officers and agencies in local governments.21 

 Summary 

In short, the Authority is a State agency for the purposes of SG §10-1001 and 

the standards for the amount of the penalty that the Authority imposes are those set 

forth in SG §10-1001. 

Although we agree with the Court of Special Appeals that, in assessing a civil 

monetary penalty, the Authority is to apply the criteria in SG §10-1001, we differ 

slightly in our disposition of this case, as it is not clear that the Authority applied 

those criteria in this case. The Authority’s decision does not make reference to the 

seriousness of the violation, or the good faith of Reliable Contracting, although the 

Authority’s decision does refer to it as a “first time violation” which indicates no 

history of past violations. Moreover, given the Authority’s position before us that SG 

§10-1001 does not apply to it, we cannot infer that it silently considered the other two 

criteria in that statute. Accordingly, we will remand this case to the Authority for 

 

21 That provision is now codified as Maryland Code, Local Government Article, 

§1-1304. 
26

consideration of those criteria and reassessment of the penalty. In doing so, we do 

not mean to suggest that the Authority must necessarily come to a different result. 

III

Conclusion 

For the reasons set forth above, we hold: 

1 – The Authority is an administrative agency that exercises quasi-judicial 

powers that are subject to judicial review. Accordingly, its enabling law is not 

contrary to either the Judicial Vesting Clause of Article IV, §1, of the Maryland 

Constitution or the Separation of Powers Clause of Article 8 of the Maryland 

Declaration of Rights. 

2 – Because the Authority is an administrative agency in the executive branch 

of State government, SG §10-1001 provides guidelines for the exercise of its discretion 

in assessing civil penalties. 

 

JUDGMENT OF THE COURT OF SPECIAL APPEALS VACATED 

AND CASE REMANDED TO THAT COURT WITH 

INSTRUCTIONS TO REMAND THE CASE TO THE CIRCUIT 

COURT FOR ANNE ARUNDEL COUNTY WITH INSTRUCTIONS 

FOR THAT COURT TO REMAND THE CASE TO THE 

MARYLAND UNDERGROUND DAMAGE PREVENTION 

AUTHORITY FOR REASSESSMENT OF THE CIVIL MONETARY 

PENALTY CONSISTENT WITH THIS OPINION. COSTS TO BE 

PAID BY PETITIONER.