Court Opinion

ID: 9785121
Source: CourtListenerOpinion
Date Created: 2023-08-30 21:04:38.585825+00
Date Added: 2024-06-11T07:36:06.427236
License: Public Domain

HARRELL, J., dissenting, in which BATTAGLIA and GREENE, JJ., join.
I dissent. In reaching its holding “that art. 25, § 8(a) does not prohibit the Board from entering into the Asset Purchase Agreements at issue,” 420 Md. 172, 184, 21 A.3d 1116, 1123 (2011) the Majority opinion reads the phrase “no longer *185needed for public use” out of the applicable Maryland statute in its attempt to “harmonize” Maryland Code (1957, 2005 Repl.Vol.), Art. 25 § 8(a) with Art. 25 § 3D(b). The Majority’s succinct analysis disregards, by failing to analogize, distinguish or otherwise address, this Court’s 2005 decision in South Easton Neighborhood Ass’n, Inc. v. Town of Easton (“SENA”), 387 Md. 468, 489, 876 A.2d 58, 71 (2005), which considered a similar provision of the Maryland Code. Application of SENA to the facts and relevant statutory law of the present case compels the conclusion that the Board of County Commissioners of Cecil County, Maryland, does not have the authority to sell the water and wastewater facilities at issue, as the facilities are, and continue to be, “needed for public use.”
I. Background
In August 2008, the Board of County Commissioners of Cecil County, Maryland (“the Board”) granted franchises, through certain “Franchise Agreements,” to Artesian Water Maryland, Inc. and Artesian Wastewater Maryland, Inc. (collectively “Artesian”) for exclusive rights to provide water and wastewater services in the “Original Elkton West Service Area,” which did not have its own service facilities. Both Artesian entities are privately-owned, for-profit, water utility companies. Art. 25 § 3D(b), among other things, gives the Board the authority to grant one or more franchises for water and/or wastewater systems. The Franchise Agreements contemplated the expansion of the service area, as well as a sale of the facilities within the expanded area.
Pursuant to Art. 25 § 8(b), the Board held a public hearing on 30 September 2008, which was advertised in The Cecil Whig, a local newspaper, two weeks prior to the hearing. At this hearing, a member of the Cecil County Chamber of Commerce testified that the transfer would benefit the County and its residents by freeing-up capital and wastewater discharge credits, as well as reducing county debt and taxpayer subsidies. Certain county residents questioned, however, the authority of the Board to sell the land, arguing it was needed *186for public use, quoting Art. 25, § 8(a), which states that the Board may sell property when it is “no longer needed for public use[.]” These taxpayers also noted concerns regarding rate increases and service level decreases. In response to the citizens’ questions and complaints, a member of the Board stated merely that it has “plenary power under Article 25, Section 8 of the Code to sell and convey real property when [the Board] deem[s] it to be in the public interest to do so.” Not once did any of the members of the Board address the requirement that the property be “no longer needed for public use.” Following this hearing, the Board adopted three resolutions, in October 2008, approving the Asset Purchase Agreements, effectuating the expansion and sale of the facilities. Members of the community, joined as Appleton Regional Community Alliance (“Appleton”), filed a petition which sought, among other things, to enjoin the Board from selling the facilities.
II. Applicable Law
The relevant provisions of the Maryland Code are Art. 25, § 3D(b) and Art. 25, § 8(a). Section 3D provides county commissioners the power to “displace or limit competition” in certain sectors, such as public transportation, water and sewerage, and publicly-owned or leased lands. Subsection (b) states:
(1) It has been and shall continue to be the policy of the State to authorize the county commissioners of each county to displace or limit competition in the area of water and sewerage systems in order to assure delivery of adequate, economical, and efficient services to its citizens, to avoid duplication of facilities, and to provide for the health and safety of its citizens....
(2) (i) The county commissioners of each county have the authority to grant one or more franchises or enter into contracts for water and sewerage systems on exclusive or nonexclusive basis to any person....
§ 3D(b). Section 8(a) grants additional powers to the Board specifically to purchase and sell public land. The board may *187“sell at public or private sale or lease any real or leasehold property belonging to the county when in their discretion it is no longer needed for public use ....”§ 8(a).
The Legislature acted presumably with full knowledge of the interplay between these two sections and their respective policy implications. See Bd. of Educ. of Garrett County v. Lendo, 295 Md. 55, 68, 453 A.2d 1185, 1189 (1982) (“The General Assembly is presumed to have had, and acted with respect to, full knowledge and information as to prior and existing law and legislation on the subject of the statute and the policy of the prior law.”). To the extent that two statutes are vague or ambiguous, it is well-settled that they should be read together, within the entire statutory scheme, to ascertain the true intention of the Legislature in a way that will not lead to absurd consequences. See Mayor of Rockville v. Rylyns Enters., Inc., 372 Md. 514, 549-51, 814 A.2d 469, 491 (2002) (“[W]e interpret the meaning and effect of the language in light of the objectives and purposes of the provision enacted. Such an interpretation must be reasonable and consonant with logic and common sense.”). Further, courts must ensure that no word or phrase is “rendered surplusage, superfluous, meaningless, or nugatory.” Lendo, 295 Md. at 63, 453 A.2d at 1189; see also Hurst v. V & M of Virginia, Inc., 293 Md. 575, 578-79, 446 A.2d 55, 57 (1982).
Although the Majority is correct in stating that § 3D(b) and § 8(a) can be harmonized in a way that avoids “a construction that is illogical, or inconsistent with common sense,” see 420 Md. at 183, 21 A.3d at 1122 (2011) (citations omitted), the Majority opinion’s attempt at singing that harmony is off-key. To be sure, § 8(a) does provide discretion to the Board to “structure the transaction for maximum public benefit,” 420 Md. at 183, 21 A.3d at 1123 (2011); however, this discretion is limited to the sale or transfer of properties “no longer needed for public use.” § 8(a). The Majority opinion’s analysis elimi*188nates this limitation from the statute altogether and renders the phrase nugatory, contrary to well-settled rules of statutory interpretation.
In analyzing the sale of public property by the Board, the primary question for the Court is whether the property is still “needed for public use.” See, e.g., SENA, 387 Md. 468, 876 A.2d 58 (2005) (road closure); Inlet Assocs. v. Assateague House Condo. Ass’n, 313 Md. 413, 432, 545 A.2d 1296, 1306 (1988) (sale of public alley and riparian rights); Baltimore County v. Letke, 268 Md. 110, 299 A.2d 781 (1973) (private purchase of public land); Ward v. Mayor of Baltimore, 267 Md. 576, 298 A.2d 382 (1973) (sale of park land to build a highway); Patuxent Oil Co. v. County Comm’rs of Anne Arundel County, 212 Md. 543, 129 A.2d 847 (1957) (proposed purchase of land under a public wharf to construct pipelines). Although the Board need not state explicitly the words “no longer needed for public use,” an equivalent determination that there is no longer a public need for the property is a prerequisite to a valid transfer of the property. See Inlet Assocs., 313 Md. at 431, 545 A.2d at 1305 (“While [sections] of the City Charter separately authorize the City Council to close or abandon a dedicated street, a determination that there is no longer any public need for the street is a requisite to the validity of the Council’s action.”).
III. SENA
The parties to the present case rely heavily on this Court’s decision in SENA to support their respective positions.1 In *189explicating its decision, however, the Majority opinion exerts little effort to analogize, distinguish, or explain this case. The issue in SENA, similar to the issue in the present case, was whether the requirement that the local government must determine that a public road “is no longer needed for any public use”2 prior to conveying public property, prohibits the local government from “conveying public property to a private person or entity if a limited minority of [the] public uses the public property for convenience.” SENA, 387 Md. at 476-77, 876 A.2d at 64.
In SENA, Easton’s Town Council decided to close Adkins Avenue and transfer the land upon which the street laid to a local hospital for an expansion project and to a religious temple. See SENA, 387 Md. at 482, 876 A.2d at 66. Relying on several findings of fact, the Town Council determined ultimately that the road was “no longer needed for any public use.” Id. These facts were incorporated in Ordinance No. 466 and “included: 1) Adkins Avenue is used as a convenience by area residents in lieu of Wye Avenue; [and] 2) SHS would maintain a means of access of transit between [two streets] in the event that an emergency would close access.... ” Id. Further, the Town Council found that “closing a portion of *190Adkins Avenue was in the best interest of the public in providing improved emergency medical services to the Town,” and that there was no benefit to retaining public ownership of the portion to be closed. Id.
The citizens proposed an absolute no-use threshold before the sale of publicly-used land may occur, arguing that because the road was traveled on—albeit only infrequently—the Town Council could not transfer the land. See SENA, 387 Md. at 495, 876 A.2d at 74. The Court dismissed this argument as ignoring unreasonably two principles of statutory interpretation: (1) it replaces “needed” with “used,” thereby changing the plain meaning of the statute; and (2) it would produce absurd results by foreclosing any conveyance regardless of any legislative determinations. See id. The Court also dismissed the citizens’ argument that it was not clear from the record that the Town determined that the road was “no longer needed for public use” because Ordinance No.466 did not use those exact words, explaining that the Ordinance went through several levels of approval “without so much as a suggestion for any other future public use.” See SENA, 387 Md. at 495, 876 A.2d at 74-75.
The facts of SENA are distinguishable readily from the present case in several ways. For one, the road in SENA was such that it was rarely used and citizens had other reasonable alternatives to circumnavigate the area. See SENA, 387 Md. at 479-80, 876 A.2d at 64-65. The water and wastewater facilities in the present case, on the other hand, are the sole source of water for residents in each facility’s service area. Continuous use and need is further emphasized by Sections 6.1 and 4.5(c) of the Asset Purchase Agreements,3 which state *191that the County will operate the facilities as normal on the date immediately preceding the transfer, and, on the date of transfer, Artesian will begin operation seamlessly. These provisions also reinforce the conclusion that there is neither an alternative to the specific facilities in the franchise area, nor a parallel alternative that would give the same service and rate guarantees as if the facilities had not been privatized. See SENA, 387 Md. at 485, 876 A.2d at 68 (the finding of an adequate parallel alternative may support the determination that the public use is “no longer needed”). As the frequency of use and availability of alternatives for the water treatment facilities at issue in the present case differ greatly from those of the road in SENA, the two cases are distinguishable in a meaningful way.
Much like a road is operated by a Town or County for the benefit of the public at large, water conveyance and treatment facilities operated by the County are for the benefit, use, and convenience of the public. See Inlet Assocs., 313 Md. at 430, 545 A.2d at 1305 (applying principles of public roads with publicly-owned riparian land). Whether to close or sell a publicly owned facility or street, therefore, “necessarily turns ‘upon considerations of public benefit, and not by barter and sale of private interests____’ ” Inlet Assocs., 313 Md. at 431, 545 A.2d at 1305 (quoting Perellis v. Mayor of Baltimore, 190 Md. 86, 95, 57 A.2d 341, 346 (1948)); see also Rescue Fire Co. of Cambridge v. County Comm’rs of Dorchester County, 188 Md. 354, 357, 52 A.2d 733, 735 (1947) (counties, incorporated towns, and cities are public corporations “with political powers, to be exercised for purposes connected with the public good” and are the “sole trustees of the public interest”); Van Witsen v. Gutman, 79 Md. 405, 411, 29 A. 608, 610 (1894) (“The Legislature has the power to direct that private property shall be taken for the public use”). The Town in SENA noted that the benefit of closing the road outweighed the *192benefit of retaining public ownership—i.e., the increased quality of medical care projected from the proposed use is more important than the convenience vel non of a small number of residents. SENA 387 Md. at 482, 876 A.2d at 66-67.
In the present case, however, the opposing benefits are not weighed as easily as in SENA. On the one hand, the Board claims that the County will save nine million dollars, as well as the twenty-seven million dollars required to make capital improvements to the facilities. On the other hand, Appleton contends that the franchises will lead to rate increases and high density development in the franchise areas. As a private company, Artesian is held accountable to its investors and not necessarily the citizens using the facilities; therefore, as the argument goes, increasing profits may outweigh maintaining reasonable rates. Another arguable potential negative effect of privatization is that, eventually, Artesian may be unable to maintain the facilities to the proper standards or could go bankrupt. The Board included reversionary provisions in the Asset Purchase Agreement to safeguard against any service stoppage, which evidences the Board’s emphasis on ensuring continuous operation of the facilities as an essential service to County residents. Accordingly, it is not clear whether the benefit to the County outweighs the costs that the citizens may bear, unlike the tradeoff in SENA where the potential benefits outweighed clearly the potential costs.
In the present case, the public use of the facilities forecloses conveyance of the facilities. This outcome, however, does not foreclose any transfer of the water or wastewater facilities, nor does it mandate an “absolute no-use standard,” as the Board suggests. Section 3D(b) authorizes county commissioners to grant one or more franchises for water and sewerage systems. Section 8(a) then provides county commissioners with discretion to sell or transfer publicly owned property that is “no longer needed for public use.” It is still possible, therefore, to transfer facilities, at the discretion of the Board, in the first instance (under § 3D(b))—when the facilities are not yet in public use—or after a finding that already in use facilities are “no longer needed for public use” (under § 8(a)). *193For example, the “Original Elkton West Service Area,” where no County-owned or operated facilities were located, could be sold to Artesian as the service area is not yet “needed for public use.” When the County expanded the franchise area to include service areas that had existing service facilities, however, pursuant to § 8(a), the option to sell the entire franchise area was unavailable. In this way, the two sections may be harmonized to avoid rendering the phrase “no longer needed for public use” nugatory, while giving the Board discretion (if exercised properly) to sell public facilities.
IV. Public Use Status
The primary emphasis in analyzing statutes mandating a determination that property is “no longer needed for public use,” before transfer to a private owner is permitted, is on the actual nature of the use of the property.4 “Public use” is a somewhat vague term and “there is ‘no satisfactory single clear-cut rule ... which can decide all cases....’” SENA, 387 Md. at 492, 876 A.2d at 73 (2005) (quoting Green v. High Ridge Ass’n, Inc., 346 Md. 65, 73, 695 A.2d 125, 128 (1997)); see also Prince George’s County v. Collington Crossroads, Inc., 275 Md. 171, 181, 339 A.2d 278, 284 (1975) (“[E]ven if it *194were possible to formulate such a rule, it would probably not be prudent to do so.”); Riden v. Phila., Balt. & Wash. R.R. Co., 182 Md. 336, 340-41, 35 A.2d 99, 101 (1943) (“[C]ourts have striven to formulate a uniform definition, but without success.”). The question of whether a use is “public,” therefore, is for the judiciary, though legislative determinations will be given some weight. See Green, 346 Md. at 73, 695 A.2d at 128-29 (1997) (citations omitted); see also Collington Crossroads, 275 Md. at 181, 339 A.2d at 284 (“[T]he Legislature cannot make a use public merely by declaring it so.”) (quoting Riden, 182 Md. at 340, 35 A.2d at 101) (citations omitted).
A legislative grant of a franchise, as in the present case, or a closure of a road by a county or municipality, as in SENA, does not “destroy the public character” inherently of the property. Compare Collington Crossroads, 275. Md. at 187, 339 A.2d at 286-87 (“[T]he public character of a condemnation is not necessarily changed because a private entity will .own the property.”) with 420 Md. at 181, 21 A.3d at 1121 (2011) (That the County may grant a franchise to provide water services “made superfluous the continuing ‘public use’ of the facilities by the County by its lawful action in granting the franchises to Artesian.”). Further, stating baldly that the property is “no longer needed for public use” is not enough to transfer validly public property to a private entity. See, e.g., SENA, 387 Md. at 482, 876 A.2d at 66-67 (“[M]ere incantation of the ‘magic words’ of a legal test, as an adherence to form over substance may not cause the Genie to appear and is neither required nor desired if actual consideration ... is apparent....”); Faulk v. Ewing, 371 Md. 284, 305, 808 A.2d 1262, 1276 (2002) (“[W]e shall not elevate form over substance”). A County, town, or municipality (and reviewing courts) must make a determination, based on the facts in the record, that the property is no longer needed in fact for use by the public.5 In the present case, the Board avoided the public *195use issue in all of the various letters and meetings prior to the adoption of the resolutions approving the expansion and sale of the franchise.6 Today, the Majority opinion follows suit.
Where the general public uses the property in a continuous manner (as distinguished from the road in SENA), I would hold that the property is not “no longer needed for public use,” and, therefore, the local government does not have the authority under § 8(a) to sell or transfer the property in question. Therefore, the Board of Commissioners of Cecil County did not have authorization to sell the water and *196wastewater facilities, being that the facilities are still in continuous public use.
Judge BATTAGLIA and Judge GREENE authorized me to state that they join in the views expressed in this dissenting opinion.

. The Board posits that the "Public Need Test” requires two findings of fact:
[FJirst, that the governing body has identified and considered the existing public use [of the] property in question; and second, that the governing body has determined that it no longer needs to own and operate that property for the existing public use.
This interpretation, however, changes the meaning of the test set forth in South Easton Neighborhood Ass’n, Inc. v. Town of Easton ("SENA"), 387 Md. 468, 489, 876 A.2d 58, 71 (2005). The test articulated by the Court in SENA states there are two intertwined legal concepts in play. Id. "The first is the authority of a municipal corporation to convey governmental real property,” i.e., whether there is either inherent or statutory authority. Id. "The second issue is the authority of a municipal corporation to close permanently a public street.” Id. Applied to the present case, the Court must determine whether the Board has the *189authority to convey public property in the first instance and then whether the Board has the authority to privatize these specific water and wastewater facilities.
Appleton relies on factual distinctions between SENA and the present case. In its reply brief, Appleton notes that the two cases are different fundamentally, as SENA deals with a "single obsolete roadbed," and the present case deals with “Cecil County’s vital water and wastewater facilities.” Further, Appleton points out that the closure and conveyance of a road bed is very different from a sale of an entire water and wastewater system under the condition that it continue to operate as a water and wastewater system serving the public. See infra 420 Md. at 178-80, 21 A.3d at 1120-21 (2011).

. Maryland Code (1957, 2005 Repl.Vol.), Article 23A, § 2(b)(24) states that any municipality in Maryland has the power “to sell at a public or private sale after twenty days' public notice and to convey to the purchaser or purchasers thereof any real or leasehold property belonging to the municipality when such legislative body determines that the same is no longer needed for any public use.” *194497, 876 A.2d at 76 (2005). See Perellis v. Mayor of Baltimore, 190 Md. 86, 92-95, 57 A.2d 341, 344-45 (1948).

. The Asset Purchase Agreements provide, in pertinent part:
Section 6.1 requires the County, prior to closing, to "conduct the operations of the Facilities, the Water Transmission and Distribution Systems [Wastewater Collection Systems] and the other Purchased Assets according to its ordinary and usual course of business”. Section 4.5(c) states that, "to the County’s Knowledge, the Owned Real Property, the Leased Property and Easements comprise all of the real property interests necessary for the Buyer to operate the *191Facilities and the Water Transmission and Distribution Systems [Wastewater Collection Systems! after the Closing as they are each presently being conducted by the county and they will each be conducted by the County on the Closing Date.”

. The Board asserts that the pivotal question is "Needed by whom?" The answer, it suggests, is “manifestly” the County as the owner of the property. The Majority opinion accepts impliedly this assertion by the Board, asking only whether the water systems are "needed for the public use by Cecil County," and states:
Artesian, by providing, among other things, the personnel, administration, necessary upkeep and capital improvements, engineering expertise and flexibility as to discharge credits, as well as assuming major liabilities and obligations providing a financial benefit to the County, will essentially remove the existing water and wastewater facilities from the County needs inventory, even though the Facilities will continue to be maintained for a public use, purpose and benefit to the citizens of Cecil County.
See 420 Md. at 181-82, 21 A.3d at 1121-22 (2011) (quoting Circuit Court decision). This is an incorrect reading of the statute after SENA, which emphasizes that the determination in cases involving the transfer of a public function to a private owner is "determined by its use, and not by the private status of the property owner." SENA, 387 Md. at

. See, e.g., SENA, 387 Md. at 482, 876 A.2d at 66-67 (Ordinance 466, authorizing the closure, included factual findings regarding the current public use); Baltimore County v. Letke, 268 Md. 110, 115-16, 299 A.2d *195781, 784 (1973) (requiring departmental clearances, advertisements soliciting written objections, and executive approval prior to a determination that a public property is no longer needed for public use); Inlet Assocs. v. Assateague House Condo. Ass'n., 313 Md. 413, 431, 545 A.2d 1296, 1305 (1988) (‘‘[A] determination that there is no longer any public need for the street is a requisite to the validity of the Council’s action.”); Cristofani v. Bd. of Educ. of Prince George's County, 98 Md.App. 90, 96-97, 632 A.2d 447, 450 (1993) (“[Ujnder the statute, a mere non-use would not authorize the sale or conveyance of public property. There must also be a specific legislative finding that no public need or use for the property remains.”).

. When citizens inquired as to the legality of the transfer, given the limitation in § 8(a), the Board did not state that the property was determined to be ‘‘no longer needed for public use,” much less provide any reasoning for such a determination. Instead, the response was that the Board "ha[sj the plenary power under Article 25, Section 8 of the Code to sell and convey real property when [it] deem[s] it to be in the public interest to do so.” Further, Appleton notes that there was no mention of the lack of need for public use in any of the following documents in the record:
1. Asset Purchase Agreements
2. Commissioner’s Minutes of 5 August 2008
3. Commissioners’ Minutes of 19 August 2008
4. Legal Advertisement for Public Hearing
5. County Administrator’s memorandum of 16 September 2008
6. Commissioners’ Minutes of 16 September 2008
7. Commissioners’ Minutes of 23 September 2008
The Commissioners’ Minutes include a recitation of the Resolutions adopted at the 6 October 2008 meeting. In these Resolutions, the Commissioners explicitly state "the Board of County Commissioners has determined that the facilities and the respective associated parcels of property ... [are] no longer needed for public use....” There, however, is no mention of how this determination was made or what factors led to this determination.