HARRELL, J.
Table of Contents *
I. Background Facts ..............................................................413
II. The Procedural Path of the Present Case .......................................418
III. Appellees' Motion to Dismiss the Appeal .......................................424
IV. Applicable Standards of Appellate Review ......................................426
V. Analysis ......................................................................427
A. JUSTICIABILITY ............................................................427
1. Procurement Claims Brought By Appellees As Plaintiffs .................430
2. Are The Statutory Administrative Remedies Really "Available"
Here? ...............................................................433
3. Private Right of Action ...............................................438
4. Property Owner & Taxpayer Standing Doctrines ..........................439
a. Property owner standing ...........................................440
i. Whether property owner standing doctrine applies here? .....442
ii. Whether Appellees alleged sufficient facts for "special
aggrievement" to confer property owner standing? ..........445
(1) Prima facie aggrieved property owners? ................446
(2) Almost prima facie aggrieved property owners? .........448
(3) Nebulous third category of property owner
standing? ............................................450
b. Taxpayer standing .................................................451
i. Taxpayer standing & procurement claims: is a private
right of action required for taxpayer suits? .............453
ii. The necessary party plaintiffs for taxpayer standing
doctrine ..................................................457
iii. A governmental action that is illegal or ultra vires .......462
iv. Specific injury sufficient .................................463
(1) What types of "harm" amount to a pecuniary loss? ......465
(2) Nexus .................................................472
(3) Amount of pecuniary harm ..............................477
B. THE FATAL FLAW — THE DOCTRINE OF LACHES ................................479
1. Propriety of Addressing Laches .........................................479
2. Standard of Review .....................................................480
3. The Fatal Flaw .........................................................480
a. Whether laches applies to taxpayer suits? ...........................481
b. Delay in filing .....................................................482
i. The starter's gun sounds .....................................483
ii. Whether the delay was unreasonable ...........................491
c. Prejudice from the delay ............................................494
* Every novella-length appellate opinion warrants one.
The State Center Project (the "Project") is a $1.5 billion, multi-phase redevelopment project intended to replace aged and obsolete State office buildings with new facilities for State use and to revitalize an approximately 25-acre property owned by the State of Maryland in midtown Baltimore ("City"), without burdening unduly the State's capital budget. To these ends, in 2005, the State issued a public Request for Qualifications ("RFQ") to solicit a "Master Developer" who would be granted the exclusive right to negotiate with the State to execute the entire project, which included the reconstruction of older deteriorating buildings currently on the site of the project, as well as the receipt of a 75-90 year leasehold interest. The State Center, LLC, was chosen as the Master Developer. The Maryland Department of General Services ("DGS"), the Maryland Department of Transportation ("MDOT") and the State Center, LLC, negotiated for the Project, entering into a series of agreements between 2007 and 2010 for the purpose of completing the Project in a timely manner. These agreements, thus far, are: (1) the Master Development Agreement ("MDA"); (2) the First Amendment to the MDA ("First Amendment"); (3) two Phase I ground leases; and, (4) four approved Phase I occupancy leases.
In 2010, fifteen plaintiffs, property owners in downtown Baltimore (many with available office space for rent) and taxpayers of the State, filed suit in the Circuit Court for Baltimore City against the DGS, MDOT, and the State Center, LLC, and its subsidiaries, seeking a declaratory judgment that the formative contracts for the Project were void and an injunction to halt the Project. The result of the suit in the trial court was the voiding of the formative contracts of the Project on the grounds that they violated the State Procurement Law. On appeal, we are asked to address the Circuit Court's denials of Defendants' Motions to Dismiss and the trial court's partial grant and partial denial of their Motion for Summary Judgment. Embedded in these questions are justiciability issues of taxpayer and property owner standing; the requirements for the exhaustion of administrative remedies and, if necessary to be reached, whether a private right of action existed; and, lastly, the equitable doctrine of laches. If the resolution of any of these threshold issues is not dispositive, there waits potentially at the end of the day questions regarding the interpretation of the State Procurement Law.
The State Center complex, as it currently blights the skyline of midtown Baltimore, consists of five Soviet-block style buildings and approximately 1,300 parking spaces. It was built in the 1950s and 60s to house a number of State agencies. Today, it is agreed widely that these buildings are long past their useful lives. Although the State Center may be deemed fairly a "concrete wasteland,"
In anticipation of the need for more modern structures and the currently unrealized potential of the property, the State Center Project was conceived in 2004 during the administration of Governor Robert L. Ehrlich. In September 2005, the DGS and MDOT (hereinafter, collectively, "State Agencies") issued a public RFQ to solicit and select a "Master Developer" for the purpose of redeveloping comprehensively the State Center complex. The RFQ envisioned, as its overarching goal, "through new TOD [Transit-Oriented Development]
The RFQ expected "[t]he Master Developer and a team [to] assemble resources and a team that can entitle, design, finance, construct, and market mixed-use, mixed-income urban TOD that supports surrounding neighborhood needs and is acceptable to the various regulatory agencies." The prospective "Master Developer" was described in the document as "a development entity or entities with the capacity and demonstrated experience to acquire the State-owned properties and successfully handle all aspects of the development process, including planning, community involvement, design, negotiation of public/private partnerships, structuring of private and public financing sources, construction, sales and leasing, and ongoing management." Moreover, the RFQ required the responding statements to include information on the "Project Team," defined as "the lead developer plus any other developers and key team members such as architects, engineers, economists, contractors, bankers, etc. who are critical for consideration by the State."
To implement this wide-range of purposes, the RFQ envisioned "sustained collaboration
Ultimately, the State "anticipated that the resulting project will be privately owned and managed." The RFQ emphasized that prior experience and background were critical to the State's consideration of the responding statements submitted by applicants.
The State explained, in the RFQ, that the envisioned need for sustained collaboration was also the reason a RFQ process was being used to select a Master Developer, instead of "the more traditional" Request for Proposals ("RFP"). The RFQ emphasized that it sought responding statements "only from experienced developers of large scale urban mixed use, mixed income projects." The RFQ reemphasized this point in stating, "[p]rofessional service providers, building contractors or others should not respond to this RFQ."
The RFQ provided that it "[was] not conducted under the provisions of Maryland Procurement Law (COMAR Title 21)." (Emphasis in the original.) Instead, according to the State, "[b]ecause the mixed-use real-estate development is to be privately owned and privately managed, the State's conveyance of a 75-90 year real estate leasehold interest to the Developer, with conditions for redevelopment of the site in order to achieve the State's economic development goals for the community, [fell] under the authority of § 10-305 of the State Finance and Procurement Article."
Four applicants, including the State Center, LLC, submitted responses to the RFQ. Pursuant to the selection procedure provided in the RFQ, the Evaluation Committee reviewed the responses, interviewed the applicants, and provided recommendations to the State that ranked State Center, LLC, above the other applicants. On 21 March 2006, Governor Ehrlich announced that the team was selected for the exclusive initial right to negotiate definitive agreements with the State to develop the Property. After announcement of the selection of the team, but prior to entering the MDA, the State Center, LLC, and the State Agencies executed a series of prefatory agreements. On 22 June 2007, the BPW approved a Memorandum of Understanding ("MOU"), which outlined how the negotiation process between the parties would unfold and the activities to be undertaken by each during the interim period. On 12 December 2007, the BPW approved an Interim Development Agreement ("IDA") between the DGS and State Center, LLC. The IDA confirmed the continued negotiations of the parties, outlined interim duties and responsibilities, and, among other things, contemplated that State Center, LLC, would submit a Preliminary Development Plan ("PDP"), as a preliminary concept plan for the Project, to the DGS. On 3 March 2008, the DGS acknowledged receipt of a PDP from the State Center, LLC, and approved the PDP, through the issuance on 2 September 2008 of a Letter of Intent ("LOI"), as the overall conceptual plan for the redevelopment of the Property. The LOI stated that it did not create "a binding contract or agreement of any sort, preliminary, final or otherwise," and that no binding development agreement would exist "unless and until a [MDA] was agreed to by the parties and approved by the BPW."
In March 2009, after the execution of the IDA and prior to entering into the MDA, the ownership structure of the State Center, LLC, changed.
On 15 June 2009, with the BPW's approval, the State Center, LLC (hereinafter, "Developer"),
The MDA "specifically contemplate[d] the disposition of the Property pursuant to phased Ground Leases (each a `Phase Ground Lease') or fee simple dispositions, and set forth the procedural and pragmatic requirements for taking down and developing each Phase, the parties agree[d] that,
The MDA endowed the Developer "with exclusive development rights to the Property for the duration of while this Agreement is in effect and in order to complete development of the Project." The MDA provided that the "Developer anticipates acquiring portions of the Property by Phases...." Moreover, the MDA conceived that, "Each Phase Ground Lease will be generally consistent with the terms of the Phase Ground Lease attached hereto as Exhibit 2.3 and the Approved Concept Plan, except as to further details such as the description of the property, the uses permitted or required for that Phase and the economic terms negotiated between the parties. The parties anticipate that each Phase Ground Lease will be submitted to the BPW for approval...." The MDA specified also the terms of compensation payable to the State under a Phase Ground Lease.
The State committed, in the MDA, "to pursue leasing" for State agencies of office space on two of the site's six parcels.
Following execution of the MDA, the parties to the agreement commenced negotiation and preparation of the first phase of redevelopment of the Project ("First Phase"). The First Phase was the redevelopment of Parcels G and I-2, as identified on the PDP of the Approved Concept Plan. Furthermore, pursuant to the MDA, the Developer commenced the architectural and engineering design work necessary to construct the First Phase.
In September 2010, with the approval of the BPW, the State, by and through the
On 28 July 2010, the BPW considered and approved three ground leases, which were executed on 1 September 2010. One of these leases, the garage ground lease agreement, the DGS agreed, pursuant to State Finance and Procurement Article of the Maryland Code, § 10-304,
The Project was designated as a TOD, pursuant to Transportation Article, § 7-101(m)(3), by the Maryland Secretary of Transportation on 19 October 2010, and by the Mayor and City Council of Baltimore on 5 November 2010.
On 17 December 2010, fifteen Plaintiffs
The State Agencies and the Developers each moved to dismiss the Original Complaint on numerous grounds. One ground, which both sets of defendants asserted in their respective motions, was that the Circuit Court lacked jurisdiction because the Plaintiffs were required to exhaust administrative remedies before a state procurement officer and the Maryland State Board of Contract Appeals ("Appeals Board") prior to presenting their claims to the Circuit Court. On 28 January 2011, the Plaintiffs amended the complaint ("Amended Complaint"), and, among other changes, added a new Plaintiff, David And Dad's Inc.
The Amended Complaint set forth eight counts. Counts I — VII of the Amended Complaint sought declaratory judgment for the following propositions:
Count VIII of the Amended Complaint sought injunctive relief to enjoin the Defendants from proceeding under the formative contracts of the Project (including
The State Agencies and the Developers moved to dismiss the Amended Complaint, as they had the Original Complaint. On 6 April 2011, a trial court judge held a hearing on the Defendants' Motions to Dismiss. On 19 July 2011, the Circuit Court entered two orders denying both Motions.
First, the Circuit Court rejected the Defendants' challenge to the Plaintiffs' taxpayer standing raised by both Motions to Dismiss:
Second, in ruling on another common challenge in the Motions to Dismiss, the Circuit Court rejected the Defendants' exhaustion of administrative remedies defense because the Plaintiffs' claim "is not the type of `contract claim' contemplated to be within the [Appeals Board's] jurisdiction."
Reasoning further, the Circuit Court distinguished State v. State Board of Contract Appeals & Law Offices of Peter G. Angelos, 364 Md. 446, 773 A.2d 504 (2001), on the bases that the "Plaintiffs are not a party to the contracts at issue in the case sub judice. Furthermore, Plaintiffs are neither assignees nor parties in line to benefit from the contracts at issue."
Third, in regards to both sets of Defendants' laches argument, the Circuit Court rejected their argument that "Plaintiffs adopted a `wait and see attitude' and should have brought their claims following the issuance of the [RFQ] in 2005." The judge noted that "[w]hen considering a motion to dismiss, the court must assume the truth of Plaintiffs' well-pleaded factual allegations in the complaint." The trial judge stated that "Plaintiffs assert[ed] that the [MDA], executed and approved in June 2009, was the first binding agreement related to the State Center Project and that the operative documents giving rise to this suit were the September 1, 2010 First Amendment ... and the Phase I Occupancy Leases, approved July 28, 2010 and
Then, the Circuit Court rejected the argument, advanced by the Developers' Motion to Dismiss only, that Plaintiffs lack standing to seek a declaration that the State's commitment to pursue future Occupancy Leases is unenforceable as "agreements to agree" because they are not parties to the contract. The judge reasoned that, because "Plaintiffs challenge the agreements as being ultra vires acts, which are part of an `unlawful procurement conspiracy,'" they "are neither required to be a party to the contract nor in privity with a party to the contract in order to make such a challenge."
Lastly, the Circuit Court ruled on arguments raised only in the State Agencies' Motion to Dismiss. The judge concluded that "the Plaintiffs' claims, concerning the interpretation and implementation of State procurement laws, and seeking declaratory and injunctive relief, are within the province of judicial review" and, thus, rejected the DGS's and DOT's "purely political question" assertion. Then, the Circuit Court found "that Plaintiffs' claims for declaratory and equitable relief are not barred by the doctrine of sovereign immunity" because "[s]overeign immunity is not a bar to Plaintiffs challenging `the legality of State laws and regulations, or the alleged unlawful implementation of such law and regulations by a State official.'" (Citations omitted.)
Almost two years of discovery followed the trial court's rejection of the Motions to Dismiss. Throughout this time, and even prior to the court's order denying the Motions to Dismiss, the Defendants sought to expedite the litigation in the hope to proceed with the development in as timely a manner as possible.
On 2 September 2011, the State Agencies filed a $100,000,000 Counterclaim against the Plaintiffs/Counter-Defendants for Tortious Interference with Economic Relationships. The State Agencies averred that the filing and prosecution of Plaintiffs' suit was "wrongful, illegal, and in bad faith" because the suit's purpose was to cause the State Agencies damage and loss, and "to restrain trade and competition and the public and private benefits thereof." Moreover, "[Plaintiffs/Counter-Defendants] filed [the suit] after unreasonable and unexcusable delay, having waited six years since the inception of the Project, until the Project reached a critical juncture in its development, all in order to maximize the resulting disruption to progress and funding of the Project." The State Agencies averred that "DGS and [M]DOT have suffered, and will continue to suffer, actual and prospective damage and loss as a result of the tortious acts of Plaintiffs/Counter-Defendants in bringing and maintaining this suit."
On 7 November 2012, the State Agencies and Developers moved collectively for summary judgment on several grounds: (1) "Because The [MDA] And First Amendment Are Not Procurement Contracts, The Defendants Are Entitled To Summary Judgment On Counts I, II, and V Of The Amended Complaint;" (2) "Plaintiffs' Claims About Future Occupancy Leases Are Not Ripe and Will Be Invalid If They Ever Ripen;" (3) "Contrary To Count IV, Regulations For The Disposition Of Land Were Properly Promulgated As A Matter Of Law"; (4) "The [TOD] Designation Is Within The Exclusive Discretion Of The Secretary Of Transportation: Count VI Is Without Basis In Law"; and (5) "The Construction of the State Center Parking Garage Is Not Subject To The Maryland Procurement Code: Count VII Is Invalid."
On 15 January 2013, the Circuit Court held a hearing on the Motion for Summary Judgment. Two days later, the judge entered an order granting the motion in part and denying it in part. She noted that there were no disputes of material fact. Therefore, she stated, "the parties' contentions present only issues of law, and the question before the court is whether either party is entitled to judgment as a matter of law upon the undisputed facts."
The judge granted partial summary judgment in favor of the Plaintiffs on
Then, the judge entered partial summary judgment in favor of the Defendants with respect to Counts VI, VII, and VIII. With regard to Count VI of the Plaintiffs' Amended Complaint, claiming that the projects conceived in the MDA and the First Amendment cannot be designated as TOD, the Circuit Court stated that Md. Code (1977, 2008 Repl.Vol.), Transportation Art., § 7-101, et seq. "permit[s] the Maryland Secretary of Transportation and local governments or multicounty agencies discretion in applying TOD designation" and, thus, found no merit in the argument. As to Count VII, the Circuit Court found that the provisions of the MDA and the First Amendment "are principally funded by the Maryland Economic and Development Corporation, which carries out its corporate purposes without the consent of any State unit and without being subjected to General Procurement Law," pursuant to Md.Code (2008), Economic Development Art., § 10-111. Lastly, as to Count VIII, the judge found that "the extraordinary remedy of injunctive relief is not necessary or appropriate because Defendants have voluntarily refrained from acting under the [MDA] and the First Amendment ..., and the legal issue is resolved by the declaratory relief granted herein."
The State Agencies and the Developers (now Appellants) appealed timely to the Court of Special Appeals, but also petitioned contemporaneously this Court for a writ of certiorari and sought expedited review of three questions:
Appellees objected to the second and third questions presented by Appellants on the grounds that "[they] present ordinary issues that are not certworthy and arise from rulings on Petitioners' Motions to Dismiss that were not raised in Petitioners' Motions for Summary Judgment or addressed by the [C]ircuit [C]ourt's summary judgment." As to Appellees' Cross-Petition, they sought review of the following question:
We issued, prior to a decision in the Court of Special Appeals, a Writ of Certiorari regarding the three questions tendered in Appellants' Petition for Writ of Certiorari and the additional question tendered in Appellees' conditional Cross-Petition. 430 Md. 344, 61 A.3d 18 (2012). Thus, on appeal, we confront the following questions, if necessary to reach them all in order to decide this case:
On 1 February 2013, the State Agencies and the Developer moved for an immediate stay of enforcement of the judgment of the Circuit Court for Baltimore City entered on 24 January 2013. We denied this Motion on 12 February 2013.
Appellees included in their brief a Motion to Dismiss certain arguments mounted in the State Agencies' appeal on the basis, provided in Maryland Rule 8-602(a)(l), that the arguments are not permitted by the Maryland Rules or other
The alleged shortcomings (that certain arguments were unpreserved and/or not presented properly in the Petition for Writ of Certiorari) are not proper grounds for the dismissal of an appeal, as provided by Maryland Rule 8-602(a). Instead, the points advanced in the Motion to Dismiss are addressed by Maryland Rule 8-131, which provides the proper context for our appellate review and governs the manner in which this Court deals with alleged arguments that are unpreserved and not presented properly in the grant of the Writ of Certiorari. As will be seen after examining these rules, the proper scope of our appellate review under Rule 8-131 is not co-extensive with the bases for granting a motion to dismiss, as provided in Rule 8-602. Thus, although Maryland Rule 8-131 states explicitly that it limits the Court's jurisdiction, a motion to dismiss is not the proper method to ask this Court not to address an assertedly unpreserved or improperly presented argument.
Maryland Rule 8-602(a) governs the grounds for which this Court may dismiss an appeal. It provides:
Md. Rule 8-602(a).
Instead of calling for dismissal of an unpreserved question or argument, the applicable Maryland Rules and our case law governing consideration of unpreserved issues and issues not raised in the petition for certiorari grant this Court the discretion to address the issue in its opinion. Specifically, Md. Rule 8-131(a) provides that, where an issue or argument was not preserved for appellate review, this Court possesses discretion whether to reach and resolve the matter. Moreover, Md. Rule 8-131(b) governs whether this Court will determine an issue or argument not raised in the petition for writ of certiorari or cross-petition.
Because Appellees failed to allege any grounds that warrant dismissal of an appeal under Md. Rule 8-602(a), we deny Appellees' Motion to Dismiss. Instead, we shall address, pursuant to the applicable Md. Rule 8-131, the State Agencies' alleged failures (both to preserve all issues in the Circuit Court and to raise them properly in the Petition for Writ of Certiorari), and the propriety of addressing such issues on the record before us, at appropriate places in this opinion.
This appeal arises from both the Circuit Court's denial of the State Agencies' and the Developers' Motions to Dismiss and its partial grant and partial denial of their collective Motion for Summary Judgment (we shall attribute hereafter the Motions to the State Agencies, with the understanding that the Developers joined them as well). Thus, the standard of review differs depending on context. We relate briefly the overarching principles that guide our review of the Circuit Court's judgment here, but may repeat later the relevant portions in our discussion of the individual questions presented and related arguments.
In reviewing whether the Circuit Court denied properly the State Agencies' Motions to Dismiss, we employ the following principles:
RRC Ne., LLC v. BAA Maryland, Inc., 413 Md. 638, 643-44, 994 A.2d 430, 433-34 (2010) (internal citations omitted).
With regard to the partial grant and partial denial of the summary judgment Motion, Barclay v. Briscoe, 427 Md. 270, 47 A.3d 560 (2012), serves as an apt authority iterating our standard of review:
427 Md. at 281-82, 47 A.3d at 566-67 (some internal citations omitted).
"Concepts of justiciability have been developed to identify appropriate occasions for judicial action." Charles A. Wright, et al., Federal Practice and Procedure § 3529, at 611 (2008). "Numerous doctrines have evolved under the justiciability umbrella which are aimed at isolating those circumstances in which courts should withhold decision, either from deference to the particular authority and competence of another branch of government, or from recognition of the functional limitations of the adversary system." Reiman Corp. v. City of Cheyenne, 838 P.2d 1182, 1186 (Wyo.1992).
In the present case, the parties throw the textbook on standing at the Court. Unfortunately, the chapters in that textbook regarding Maryland law are often confusing and contradictory. One aspect of this confusion stems from the very definition of the concept of standing and its relation to other justiciability concepts. In particular, "the concept of the cause of action figures prominently in debates over how courts should analyze standing issues." Anthony J. Bellia, Jr., Article III and the Cause of Action, 89 Iowa L.Rev. 777, 779 (2004). Thus, we begin with a general discussion of these concepts, as presented in this State and comparatively or analogously in the federal courts.
"Under current [Supreme Court] doctrine, federal courts determine whether a plaintiff has standing by asking whether the plaintiff has suffered an injury in fact that is fairly traceable to the defendant's conduct and that is likely to be redressed by a decision in the plaintiff's favor." Bellia, supra, at 779 n. 5 (citing Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61, 112 S.Ct. 2130, 2136, 119 L.Ed.2d 351 (1992)). Under this doctrine, the concepts of jurisdiction, standing, cause of action,
Davis v. Passman, 442 U.S. 228, 239 n. 18, 99 S.Ct. 2264, 2274 n. 18, 60 L.Ed.2d 846 (1979) (internal citations omitted). That a plaintiff may satisfy one of these requisites does not mean necessarily that he can meet the other requirements. For example, the Supreme Court explained, "[a] plaintiff may have a cause of action even though he be entitled to no relief at all, as, for example, when a plaintiff sues for declaratory or injunctive relief although his case does not fulfill the `preconditions' for such equitable remedies." Id. (citing Trainor v. Hernandez, 431 U.S. 434, 440-43, 97 S.Ct. 1911, 1916-17, 52 L.Ed.2d 486 (1977)).
In Davis v. Passman, the Supreme Court concluded that the petitioner had standing to bring the suit because, "[i]f the allegations of her complaint are taken to be true, she has shown that she `personally has suffered some actual or threatened injury as a result of the putatively illegal conduct of the defendant.'" Id. (quoting Gladstone Realtors v. Village of Bellwood, 441 U.S. 91, 99, 99 S.Ct. 1601, 1608, 60 L.Ed.2d 66 (1979)). Despite concluding that the petitioner had standing, the Supreme Court emphasized that "[w]hether petitioner has asserted a cause of action, however, depends not on the quality or extent of her injury, but on whether the class of litigants of which petitioner is a member may use the courts to enforce the right at issue. The focus must therefore be on the nature of the right petitioner asserts." Id.
This approach, which analyzes standing and cause of action as separate concepts, has not been embraced by all courts and has been criticized by many scholars.
Apparently, the appellate courts in Maryland have adopted the "cause-of-action"
As such, we must understand the claims that are brought by a plaintiff prior to attempting to answer a challenge of standing. Thus, we provide first an overview of the procurement claims brought by Appellees, prior to analyzing whether they are required to exhaust administrative remedies or to aver a private right of action, and whether they have standing under either the taxpayer or property owner standing doctrines.
The State Finance and Procurement Article of the Maryland Code, see SFP §§ 11-101 to 17-402, and its regulations,
Where a contract is a "procurement contract," the Procurement Code sets forth various methods for procuring goods and services: competitive sealed bidding; competitive sealed proposals; non-competitive negotiation for human, social or educational services; sole source procurement; emergency or expedited procurement; small procurement; intergovernmental cooperative purchasing; auction bids; and unsolicited proposals. See SFP § 13-102. A "procurement contract" is defined as "an agreement in any form entered into by a unit for procurement ...,"
The Procurement Code's general requirements are subject to many exceptions. For example, certain agencies are not subject to the State's general procurement laws. See, e.g., Building Materials Corp. of America v. Bd. of Educ. of Baltimore Cnty., 428 Md. 572, 576, 53 A.3d 347, 349 (2012) (noting that local schools boards are not subject to the State's general procurements laws). Procurement by those agencies are governed generally by other State statutes. See, e.g., Md.Code (1978, 2008 Repl.Vol.), Education Article § 5-112 (requiring local school boards to comply with competitive bidding procedures in certain circumstances). The Executive Branch is permitted to enter contracts, which do not fall within the definition of a "procurement contract," without compliance with the aforementioned provisions, but which are subject sometimes to other restrictions. One example, which is relevant for purposes of this appeal, is SFP § 10-305, which provides that, subject to certain exceptions not pertinent here, "any real or personal property of the State or a unit of the State government may be sold, leased, transferred, exchanged, granted, or otherwise disposed of" to "any person ... for a consideration the Board [of Public Works] decides is adequate." SFP § 10-305(a)(1). Additionally, certain types of transactions (none of which are relevant here) are exempted from the procurement law altogether. See SFP § 11-203(a).
In the present case, the State issued a RFQ to solicit a "Master Developer" to carry-out the State Center Project. The State asserts that the Project — and its solicitation and formative contracts — were not subject to the Procurement Law because the transaction was principally a transfer of an interest in real property. According to the State Agencies, a RFQ was used as the initiating mechanism in light of the anticipated need for continued cooperation between the Developers and the State over the course of a multi-phase development. The MDA, First Amendment, and ground and occupancy leases were entered into by the parties according to the envisioned plan as described in the RFQ. Future occupancy leases would be awarded via the "sole source" authority pursuant to SFP § 13-107.
Appellees counter that the term "RFQ," a term which does not appear in SFP
In challenging these aspects of the Project, Appellees did not challenge in their Original Complaint the RFQ because "it was not a binding development agreement for the Project." Instead, they waited until late 2010 to challenge the "swap-out" of the members of the Developers' group, as well as the MDA, the First Amendment, two ground leases, four occupancy leases, and the future occupancy leases — all in a fell swoop. This approach triggers an additional level of analysis because, for each issue, we must decide whether we view the issue in light of the "essence" of the entire State Center Project or as individual challenges to each binding document. As will be seen later in this opinion, the appropriate approach depends on which challenge we are analyzing.
We address first the claims by the State Agencies that, because the Legislature established an administrative agency (the Maryland State Board of Contract Appeals) to review protests relating to procurement contracts, Appellees were required to exhaust the available statutory administrative remedies. Because the Appellees failed to do so here, the State Agencies argue, they lacked the ability to prosecute their claims before the Circuit Court. Next, we shall address the State Agencies' contention that Appellees lack the right to bring their claim to the Circuit Court because they have no private right of action. Based on our disposition of these points, we move to addressing those predicates, as claimed by Appellees' complaint, that they have the right to maintain their claims under the property owner standing and/or taxpayer standing doctrines.
One ground upon which a claimant may seek to redress an alleged wrong is through an administrative process, if one is provided to the claimant by the Legislature.
Maryland Comm'n on Human Relations v. Mass Transit Admin., 294 Md. 225, 231, 449 A.2d 385, 388 (1982) (internal brackets omitted) (quoting Prince George's Cnty. v. Blumberg, 288 Md. 275, 283-84, 418 A.2d 1155, 1160 (1980)).
In response, Appellees plead ineligibility to file a protest with the Appeals Board. Therefore, the Appeals Board could not entertain their claims. Accordingly, they are not required to exhaust the administrative remedy alleged by the State Agencies because that road was closed to them.
The Circuit Court found that "[w]hile it is arguable that Plaintiffs' complaint may be in the nature of a `protest,' given that Plaintiffs are not prospective bidders or offerors, or bidders or offerors, they would not be entitled to submit such a protest to the Appeals Board." Further, the Circuit Court reasoned that, "the absence of a procurement contract arguably precludes the submission of a contract claim." The Court explained,
The Circuit Court concluded that, "[u]pon review of [SFP] §§ 15-215, 217 and COMAR 21.02.02.02, ... [the] Plaintiffs are not required to bring their claims before the Maryland State Board of Contract Appeals."
In reviewing whether the Circuit Court denied properly the State Agencies' Motion to Dismiss, we "assume the truth of, and view in a light most favorable to the non-moving party, [Appellees,] all wellpleaded facts and allegations contained in the complaint, as well as all inferences that may reasonably be drawn from them...." RRC Ne., LLC, 413 Md. at 643, 994 A.2d at 433 (citations omitted). Dismissal is proper "only if the allegations and permissible inferences, if true, would not afford relief to the plaintiff, i.e., the allegations do not state a cause of action for which relief may be granted." Id. (citations omitted). Upon appellate review, the trial court's decision to grant or deny such a motion is analyzed to determine whether the court was legally correct.
We conclude that the Circuit Court's denial of the Motions to Dismiss was correct as a matter of law. In deference to the Legislature, we hold consistently that "`[w]here an administrative agency has primary or exclusive jurisdiction over a controversy, the parties to the
This requirement for exhaustion of administrative remedy applies, however, only if the Appeals Board has jurisdiction of the claim under scrutiny. Where there is no statutory basis for the Appeals Board's jurisdiction over a claim, the Appeals Board may not entertain the claim. See, e.g., MFE Inc., 345 Md. at 104-05, 691 A.2d at 685 (holding that, because the Procurement statutes did not include governmental agencies in the list of those parties who could appeal the final action of a unit, the Appeals Board lacked subject matter jurisdiction over the governmental agency's claim relating to a procurement contract). Where the jurisdiction of the administrative agency is an issue, the court must determine "whether, under all of the circumstances, the parties are entitled to a judicial decision concerning the nature of the contract prior to a final decision by the [Appeals Board]." Peter G. Angelos, 364 Md. at 457, 773 A.2d at 510. We have required the courts to "await a final decision by the agency before reviewing the matter unless the administrative agency is palpably without jurisdiction.'" MFE Inc., 345 Md. at 104-05, 691 A.2d at 685 (quoting Peter G. Angelos, 364 Md. at 458, 773 A.2d at 511) (internal quotation marks omitted). Thus, we are tasked here with determining whether, under the SFP, the Appeals Board was "palpably without jurisdiction" with regard to Appellees' claims.
Peter G. Angelos provides instructive guidance for our analysis. In that case, a fee dispute arose out of a contract between the Office of the Maryland Attorney General and a private law firm, pursuant to which the firm represented the State in tobacco litigation. The firm filed three separate contract claims to the Attorney General, who denied all three claims. The firm appealed administratively the Attorney General's denials to the Appeals Board. The Attorney General argued that the contract was not a procurement contract and, thus, the Appeals Board had no jurisdiction.
Prior to any action by the Board, the State and the Attorney General filed in the Circuit Court for Baltimore City a complaint seeking an injunction and a declaration that the Board had no jurisdiction. The firm intervened. Additionally, the State and the Attorney General filed a motion with the Appeals Board to dismiss the Firm's appeal to the Board for lack of jurisdiction. The Appeals Board determined that the disputed contract was subject to the Procurement Code and denied the motion. Thus, at the time the judicial appeal was heard, the administrative action was pending before the Board.
While the primary question on appeal was "whether the Attorney General's authority
In the present case, whether the formative enforceable contracts of the Project are "procurement contracts" is "reasonably debatable." Thus, if that were the only element of the Appeals Board's jurisdiction requiring consideration, then we would resolve that the Appeals Board was not "palpably without jurisdiction" and the Circuit Court was required to await a final decision of the Appeals Board prior to issuing any judicial decision. The analysis, however, does not end there.
Section 15-211(a)(1) of the SFP provides, in pertinent part, that "[t]he Appeals Board shall have jurisdiction to hear and decide
SFP § 15-220(a) (emphasis added). Therefore, a person who is not "a bidder or offeror, a prospective bidder or offeror, a unit or a contractor" may not appeal the final action of a unit to the Appeals Board.
The Circuit Court found that none of the Plaintiffs/Appellees in this case was "a bidder or offeror, a prospective bidder or offeror, a unit or a contractor" to the challenged contracts and, thus, could not appeal the final action of the relevant unit to the Appeals Board. Both in the trial court and on appeal, the State Agencies latch onto the fact that "[i]n [Appellees'] first Complaint, the [Appellees] themselves alleged they were `excluded from the bidding process' for the State Center contract. The [Appellees] further contended
We disagree with the State Agencies' interpretation of precedent on the effect of amended pleadings. In MEMC, the Court of Special Appeals restated the well-established principle that "[f]or pleading purposes, an amended complaint that does not incorporate or otherwise reference a prior complaint supersedes prior complaints and becomes the operative complaint." 196 Md.App. at 348, 9 A.3d at 526 (citing Shapiro v. Sherwood, 254 Md. 235, 239, 254 A.2d 357, 359 (1969)). The intermediate appellate court went on to recognize that "[t]his does not necessarily mean, however, that the contents of a superseded pleading may not be admissible in evidence as an admission or for purposes of impeachment." Id. The court explained, "[a]s is true with all questions of admissibility, ... the admissibility of complaints has to be determined on a case by case basis, after due consideration of relevance, potential prejudice, and any rule of exclusion that might be applicable to specific content." Id. The court found, in that case, "the [circuit court's] ruling [to not admit the contents of a superseded pleading into evidence] was within the trial court's discretion." MEMC, 196 Md.App. at 349, 9 A.3d at 526.
Applying those principles to the present case, we conclude that the Circuit Court's ruling that Appellees were not debatably "bidders or offerors" or "prospective bidders or offerors,"
Because we agree with the Circuit Court that none of the Appellees were "a bidder or offeror, a prospective bidder or offeror, a unit or contractor," we conclude that the Appeals Board lacked jurisdiction over their claims advanced in this litigation. Because the Appeals Board was "palpably without jurisdiction" over Appellees' claims, Appellees were not required to exhaust any administrative remedy in this case and the propriety of the Circuit Court's consideration of their claims depended solely upon whether the court had jurisdiction otherwise. See Schley v. Lee, 106 Md. 390, 403-04, 67 A. 252, 257-58 (1907) (finding that, where the taxpayer could not avail himself of the right of appeal of an unlawful assessment to the Comptroller and Treasurer, which was given to the corporation, but that which would have a serious loss and injury upon the taxpayers of the country through the consequent reduction of the basis of taxation for county purposes, the taxpayer had a right to relief in equity by injunction to restrain the proposed unlawful act of the public official).
The State Agencies argued that Appellees lacked the right to bring their claims before the Circuit Court because the Procurement Code that forms the foundation of Appellees' complaint did not create a private right of action by which they could avoid the administrative authority, and that taxpayer standing is not a substitute. We note first that, as explained further below, whether a private right of action exists for Appellees to bring any procurement claim to the Circuit Court is a different question than whether taxpayer standing doctrine permits Appellees to bring their procurement claims to the Circuit Court.
Preliminarily, we address the propriety of addressing these issues because Appellees urge this Court, in their Motion to Dismiss, to dismiss that portion of the State's brief to this Court devoted to the argument of an asserted absence of a private cause of act under the Procurement Law because it was not preserved in the Circuit Court and it was not presented properly to this Court in the Petition for Writ of Certiorari. In reviewing the lengthy record extract, we find that the State Agencies and Developers argued extensively that the administrative remedies provided in the Procurement Law are the sole remedies available for "all disputes arising under a contract with any State agency ..." and that, because no other private right of action existed, Appellees could not bring their claims to the Circuit Court. Moreover, the Developers argued, albeit briefly, in their Reply in Support of their Motion to Dismiss, filed on 9 March 2011, that taxpayer standing did not provide a substitute path to the Circuit Court. See Reply in Support of [their] Motion to Dismiss Amended Complaint, at 9 ("The [Appeals Board] thus has primary jurisdiction
Moreover, the questions presented in the State's Petition for Writ of Certiorari focused on whether the Circuit Court lacked jurisdiction because the claims fell within the primary or exclusive jurisdiction of the Appeals Board and did not address explicitly the alleged lack of a private right of action. Despite this focus, we find that these issues are more properly labeled as sub-issues of the questions presented in the Petition for Writ of Certiorari and, thus, are included properly.
Because the State Agencies and Developers touched upon both of these arguments before the trial judge in their Motions to Dismiss and we find the private right of action argument fairly to be a subpart of the questions presented in the Petition for Writ of Certiorari, we find that it would be proper for us to address them, but nonetheless we do not reach the merits ultimately. In this section of the opinion, we address solely the State Agencies' argument that a private right of action does not exist for Appellees to bring any procurement claim to the Circuit Court. Later, as part of our consideration of taxpayer standing, we address whether that doctrine permits Appellees to bring their procurement claims to the Circuit Court.
A private right of action is a basis upon which a claimant may bring a claim. In the past, this Court addressed this basis for standing when a plaintiff alleged standing specifically on this ground. We held repeatedly that, for purposes of standing, the claimant alone is responsible for raising the grounds for which his right to access to the judiciary system exists. See, e.g., Kendall, 431 Md. at 607-08, 66 A.3d at 694 (refusing to address taxpayer standing because petitioners did not assert it). Because Appellees insist that an implied private right of action is not the basis for their standing, we do not address further the argument.
Two additional doctrines permit a property owner or tax-paying inhabitant to bring a claim where his, her or its proprietary interests are injured by an alleged ultra vires or illegal governmental act. These doctrines are unique in that, essentially, where conferred upon a complainant, the doctrines provide the "cause of action" standing sufficient for justiciability. In other words, these doctrines, when asserted properly, provide both the cause of action (or claim) and the right of the individual to assert the claim in the judicial forum. Moreover, both doctrines provide avenues for a complainant to challenge what may be termed as a "public wrong," the allegedly unlawful actions of the government. As Professor Jaffe explained, the line distinguishing a "public" and "private" right is fuzzy at best:
Louis L. Jaffe, Standing to Secure Judicial Review: Public Actions, 74 Harv. L.Rev. 1265, 1267 (1961).
In light of the "public" nature of the alleged wrongs under these doctrines, it is important to remember that the general rule that "`... where the duty about to be violated by the corporation or its officers is public in its nature, and affects all of the inhabitants alike, that one not suffering any special injury cannot in his own name or by uniting with others maintain a bill to enjoin it'" still applies in both of these doctrines. Kelly v. City of Baltimore, 53 Md. 134, 141 (1880)
The implication of this requirement is that a major component of each of the doctrines is the definition of a sufficient "injury" to confer standing upon a complainant. While these doctrines share such basic similarities, the requisites for a sufficient "standing" differs, such that each doctrine has a set of its own requisites. Thus, a taxpayer who owns property within a municipality or other governmental district (such as a State) may allege a sufficient injury to bring suit for an illegal or ultra vires municipal act under the taxpayer standing doctrine, but not under the property owner standing doctrine, or vice versa.
Despite the differences, complainants who allege property owner standing will assert, and often successfully establish, taxpayer standing as well. The overlapping nature of these doctrines has led this Court to issue many opinions addressing both of these doctrines in a somewhat convoluted, mixed result manner. Such an approach, which, at times, suggests that the requirements to establish the applicability of each doctrine blend together, has led to some confusion. As discussed below, however, each doctrine has separate requirements. When a complainant alleges standing under both doctrines, the issues related to each doctrine should be analyzed separately, even if this renders repetitive portions of the discussion of the facts.
The property owner standing doctrine recognizes that owners of real property may be "specially harmed" by a decision or action (usually related to land use) in a manner different from the general public. The basis of this type of "standing" is found in the zoning law concept of "special aggrievement," which stems, in turn, from the State's statutory zoning laws. Recently, in Ray v. Mayor of Baltimore, 430 Md. 74, 59 A.3d 545 (2013), we analyzed who qualifies as a "person aggrieved" for purposes of standing for judicial review of a planned unit development ("PUD") ordinance, under Md.Code (1957, 2010 Repl.Vol.), Article 66B, § 2.09(a)(1)(ii), which provided:
430 Md. at 80, 59 A.3d at 549 (emphasis added in Ray) (quoting Md.Code (1957, 2010 Repl.Vol.), Art. 66B, § 2.09(a)(1)(ii)). The Ray Court described a "person aggrieved" by the decision of a board of zoning appeals as:
430 Md. at 81, 59 A.3d at 549 (emphasis added in Ray) (quoting Bryniarski v. Montgomery Cnty. Bd. of Appeals, 247 Md. 137, 144, 230 A.2d 289, 294 (1967)).
Ray continued to summarize a long line of cases analyzing the zoning law concept of an "aggrieved person." Guiding this precedent are the roots of the concept which is found in the laws pertaining to the tort action of public nuisance.
430 Md. at 82, 59 A.3d at 549 (emphasis added in Ray) (internal brackets and quotation marks omitted) (quoting Ziegler, supra, § 63:14). "Without the special damage, `a private citizen has no standing to champion the right of the public in abating a public nuisance.'" Ray, 430 Md. at 82, 59 A.3d at 549-50 (quoting Ziegler, supra, § 63:14 n. 1). Similarly, in the property owner standing doctrine, unless the complainant alleges sufficient "special aggrievement," the complainant has no standing to challenge the act, but rather is merely "generally aggrieved," in a similar manner as the rest of the public.
With this background in mind, a long line of cases in this State developed principles governing property owner standing in Maryland to be used to analyze who qualifies as a "person aggrieved" for purposes of standing for judicial review of zoning ordinances and regulations. See Ray, 430 Md. at 80-87, 59 A.3d at 548-52 (summarizing the governing principles). Before considering these principles here, however, we must determine first whether the principles, which were limited traditionally to judicial review of the decisions of zoning
As a preliminary matter, the State Agencies aver (briefly) in their brief that the property owner standing doctrine is inappropriate altogether to the type of challenge mounted in this case. According to the State Agencies, property owner standing is available only to challenges of pure-bred land-use decisions, such as zoning and nuisance claims. Because this case does not involve such a land-use decision, the State Agencies aver that this species of standing cannot support a claim grounded on the Procurement Law. Appellees counter that this argument is meritless because this Court provided property owner standing to challenge an ultra vires Baltimore City development project in 120 West Fayette Street, LLLP v. Mayor of Baltimore, 407 Md. 253, 270-72, 964 A.2d 662, 671-73 (2009) ("Superblock I").
As previously mentioned, the principles of property owner standing in Maryland stem from the State's statutory zoning laws, which grant an "aggrieved person" the right to challenge many zoning actions. See Ray, 430 Md. at 80-81, 59 A.3d at 548-49 (analyzing the definition of an "aggrieved person" under the then-current zoning enabling statute, Md.Code (1957, 2010 Repl. Vol.), Article 66B, § 2.09(a)(1)(ii)); Bryniarski, 247 Md. at 143-44, 230 A.2d at 294 (analyzing the definition of a "person aggrieved" under the then-current zoning law, Md.Code (1957, 1965 Cum.Supp.), Article 66B, § 7(j)).
Id. (citations omitted). We held that "120 West Fayette had standing to challenge the legality of the City's entry into a Land Disposition Agreement (LDA) to sell to Lexington Square Partners, LLC (Lexington Square) property in the Superblock," an urban redevelopment area in downtown Baltimore. 120 West Fayette St., LLLP v. Mayor of Baltimore, 426 Md. 14, 43 A.3d 355 (2012) ("Superblock III") (citing Superblock I, 407 Md. at 258, 964 A.2d at 664-65).
This holding of Superblock I was limited, however, when we addressed the same issue in the third iteration of the Superblock project litigation. In round three of the Superblock project litigation, 120 West Fayette asserted, inter alia, that Superblock I provided it with the grounds for legal standing under its facts. Superblock III, 426 Md. at 25-26, 43 A.3d at 362. The Court rejected that argument and, first, found Superblock I "fundamentally distinguishable":
Superblock III, 426 Md. at 27-29, 43 A.3d at 363-64 (emphasis added). Next, the Superblock III Court explained why the property owner standing principles did not apply in that case to confer standing, namely, the challenged execution of the Memorandum of Agreement (MOA) was not a land use action. The Court stated that, "[g]enerally defined, a land use decision is a decision (typically an ordinance or regulation) enacted or promulgated by a legislative or administrative body for the purpose of directing the development of real estate." Id. The majority found, in that case, that the "MOA ... is not an ordinance, variance or permit. Furthermore, the MOA binds only two parties (as opposed to the general public). The MOA was not enacted by a legislative or administrative body." Superblock III, 426 Md. at 33, 43 A.3d at 366. Most importantly, the Court found that the "the MOA does not direct the use or development of real estate in the Superblock," even though the MOA purported to vest the Historic Trust with the authority to control demolition of regulated structures in a historic area. Id. The statute which established the Trust and described its responsibilities did not empower the Trust to direct the development of real estate, but rather required a State unit that issues permits or licenses for demolition to "cooperate" with the Trust by providing it with notice and consulting with it before taking any final action to permit demolition. Superblock III, 426 Md. at 33-35, 43 A.3d at 366-68. Thus, the majority concluded that the MOA was not a land use decision or action and, therefore, "120 West Fayette cannot rely on the principles that extend standing to an adjoining landowner in review of land use decisions." Superblock III, 426 Md. at 35, 43 A.3d at 368.
In the present case, unlike the three Superblock cases, each of which challenged
In regards to the MDA and the First Amendment, although not traditional land use regulations or ordinances, these formative contracts to the Project govern the development of real estate at the State Center. See Long Green Valley Ass'n v. Bellevale Farms, Inc., 205 Md.App. 636, 687-88, 46 A.3d 473, 504 (2012), aff'd on other grounds, 432 Md. 292, 68 A.3d 843 (2013) (concluding that "[a]lthough not a traditional land-use regulation, the [challenged] program[, which] provides a financial incentive to landowners to voluntarily restrict their land to agricultural and woodland use rather than commercial, industrial, or residential use," is a "land use decision" under Superblock I). As in Superblock I, land use is patently one of "the prime considerations" in the urban renewal project at the State Center and its formative documents and agreements intend to bind the general public to the Project with the Developers. See Superblock I, 407 Md. at 272, 964 A.2d at 673. Moreover, Appellees' complaint alleges a violation of the Procurement Law, not of any contractual obligations between two parties.
In contrast, however, the ground and occupancy leases do not constitute a "land use decision" or action for the same reasons set forth in Superblock III, 426 Md. at 27-29, 43 A.3d at 363-64. The ground and occupancy leases do not direct the development of any real property. Rather, they commit the State (in a similar manner as any lessee who enters into a lease) to lease the property once the development is accomplished. Thus, Appellees may allege, if they did, a claim under the property owner standing doctrine to challenge the MDA and the First Amendment, but not the ground or occupancy leases.
Because we conclude that the principles governing property owner standing apply to Appellees' challenges to the MDA and the First Amendment, we apply those relevant principles to scrutinize what Appellees alleged to support such standing. First, we consider what constitutes "special aggrievement," as established in precedent interpreting the zoning version of a "person aggrieved." Then, we analyze whether Appellees' allegations in the Amended Complaint confer property owner standing upon them. In this analysis, Appellees need only allege sufficient facts that at least one of them qualifies as "specially aggrieved" because "`[w]here there exists a party having standing to bring an action or take an appeal, we shall not ordinarily inquire as to whether another party on the same side also has standing.'" Long Green Valley Ass'n, 205 Md.App. at 652, 46 A.3d at 483 (quoting Bd. of License Comm'rs v. Haberlin, 320 Md. 399, 404, 578 A.2d 215, 217 (1990)).
We begin by reiterating a brief overview of the "special aggrievement" requirement, found largely in Ray's recent and thorough discussion of this requirement. In discussing the "special aggrievement" principles, the Ray Court restated two general guiding principles:
430 Md. at 81, 59 A.3d at 549 (some alterations in original). Beyond these general guiding principles, the standard for "what it means to be `specially affected' or how one proves that his harm is different from the public harm ... is flexible in the sense that it is based on a fact-intensive, case-by-case analysis." Id.
The Ray Court reviewed comprehensively the facts of prior cases discussing property owner standing and found that, in sum, "Maryland courts have accorded standing to challenge a rezoning action to two types of protestants: those who are prima facie aggrieved and those who are almost prima facie aggrieved." 430 Md. at 85, 59 A.3d at 551. The Court defined the first category of a "prima facie aggrieved" protestant as one whose "proximity makes him an adjoining, confronting, or nearby property owner." Id. Second, "[a] protestant is specially aggrieved when she is farther away than an adjoining, confronting, or nearby property owner, but is still close enough to the site of the rezoning action to be considered almost prima facie aggrieved,
In addition to the two types of protestants accorded standing by this Court previously, the Ray Court noted that "[d]icta in Maryland cases suggest a third, poorly-defined category of protestants with standing who, despite being `far removed from the subject property,'" may be able nevertheless "to establish `the fact that his personal or property rights are specially and adversely affected by the board's action.'" Ray, 430 Md. at 85-86, 59 A.3d at 552 (quoting Bryniarski, 247 Md. at 145, 230 A.2d at 295). Despite this observation,
First, we consider whether Appellees are "prima facie aggrieved" or, in other words, whether "[their] proximity makes [them] ... adjoining, confronting, or nearby property owner[s]." Ray, 430 Md. at 85, 59 A.3d at 551. Appellees argue that the allegations in their Complaint that "they own or operate property, not only affected, but directly targeted, by the Project" were sufficient to qualify them as "prima facie aggrieved." Although Appellees acknowledge that, "[i]n prior cases the test for proximity has been measured by distance," they contend that "the test `is not readily reduced to a set of rules,' [Ray, 430 Md. at 77, 59 A.3d at 547,] and in this case it should be a functional one." As Appellees see it, this case is unique, and unlike the PUD in Ray, because "the Project directly and uniquely harms [Appellees] as surely as if they were located directly across the street from it."
The "functional" test for proximity that Appellees urge us to adopt in evaluating whether a property owner is proximate to the project recognizes the "purpose, intent, scope, size, nature, and consequences of the project." Illustrating these considerations, they hypothecate an example of "a property owner 3,000 feet from a nuclear waste dump or odiferous slaughterhouse is likely `proximate,' while one the same distance from a child's tot lot likely is not." Specifically, Appellees argue that the TOD nature of the Project demands that the area of the State Center, the subject property from which proximity is analyzed, be expanded to the entire TOD area. Appellees maintain that they "are in the economic, if not literal, shadow of this Project, [and] abut the TOD district," and, thus, are prima facie aggrieved.
The State Agencies counter that Appellees, each of which are located more than 3,000 feet from the outermost boundary of the State Center Project, are not located proximately enough to enjoy property owner standing. Moreover, according to the State Agencies, the challengers' reliance on the "effects" of the project extending into downtown is misplaced because "this Court has never recognized proximity to the effects of a land use as a basis for standing."
We reject Appellees' invitation to extend the test of proximity in this doctrine. While "the test to show standing ... is fact-sensitive and is not readily reduced to a set of rules," the test "has been established in Maryland for more than half a century...." Ray, 430 Md. at 77, 59 A.3d at 547. During this time period, this Court has developed a set analytical framework to determine whether a litigant meets the standing requirements. Contrary to Appellees' wishes, this Court is not inclined to redefine the basis of this framework.
Accordingly, Ray controls this analysis by providing that "[w]hen deciding whether a protestant is prima facie aggrieved, ...
Examining the physical location of Appellees' properties relative to the Project in this case, we conclude that Appellees' properties are too far away from the State Center to be considered as prima facie aggrieved. The physical locations of Appellees' properties are at a range of distances of 0.57 miles at the closest to 0.84 miles at the furthest from the State Center. Such a distance cannot be classified as satisfying the "adjoining, confronting or nearby" test for prima facie aggrievement. See Ray, 430 Md. at 83, 83 n. 6, 59 A.3d at 550, 550 n. 6. Compare with Sugarloaf v. Dep't of Environment, 344 Md. 271, 298-99, 686 A.2d 605, 618-19 (1996) (holding as prima facie aggrieved protestants who owned property
In an attempt to circumvent this clear precedent, Appellees attempt to extend the "lebensraum" of the State Center Project through annexation of the TOD area. This attempt fails, however, to satisfy the "special and adverse[] affect" that is required to transmute the asserted general injury into a specific one. Using the TOD area to define the affected area would provide virtually every property owner in the City with standing. This Court has held multiple times that similarly sweeping definitions of "proximity" destroy the very concept of "special aggrievement." For example, in Ray, this Court rejected the argument that, in analyzing "proximity,"
Id., 430 Md. at 88-89, 59 A.3d at 553-54 (emphasis added) (footnotes omitted). Appellees attempt to distinguish this analysis in Ray by explaining that the TOD area expands the area of the Project, not the class of aggrieved persons. This argument, albeit framed differently than in Ray, similarly fails, though, to explain how such a definition would support the notion of a "special aggrievement." At the core of this argument (and that rejected in Ray) is the failure to recognize that such a wide sweep is not consistent with the "roots" of this concept of special aggrievement, as discussed earlier.
In light of the "roots" of the property owner standing doctrine and our precedent, we reject Appellees' attempt to expand the proximity test to include the "purpose, intent, scope, size, nature, and consequences of the project," specifically by measuring proximity from the entire TOD area.
Second, Appellees claim that they are "almost prima facie aggrieved," defined in Ray as those who are "farther away than an adjoining, confronting, or nearby property owner, but still close enough to the site of the rezoning action to be considered almost prima facie aggrieved,
430 Md. at 83-84, 59 A.3d at 550-51 (emphasis added) (citations omitted).
Appellees lack sufficient proximity to qualify as "almost prima facie aggrieved." The closest Appellee property is over 3,000 feet or 0.57 miles distant. As noted earlier, "[a]lthough there is no bright-line rule for who qualifies as `almost' prima facie aggrieved," this Court recognized in Ray that "we have found no cases, in which a person living over 2000 feet away, has been considered specially aggrieved." 430 Md. at 91, 59 A.3d at 555. In fact, this Court stated in Ray that
430 Md. at 92, 59 A.3d at 555. Rather, the category of "`almost' prima facie aggrieved" "has been found applicable only with respect to protestants who lived 200 to 1000 feet away from the subject property." Ray, 430 Md. at 91, 59 A.3d at 555 (citing Habliston v. City of Salisbury, 258 Md. 350, 352, 354-55, 265 A.2d 885, 885-87 (1970); Chatham Corp. v. Beltram, 252 Md. 578, 579-80, 584, 251 A.2d 1, 2, 4 (1969)).
Under this last category, recognized only in dicta,
Appellees urge us to recognize other factors, which may be grouped as (1) the harm caused by the State relocating its offices and (2) the economic harm caused by the Project's competition, as conferring "special aggrievement" upon them. We find none of them relevant or persuasive here. First, in regards to the relocation of State offices as an "effect" of the State Center Project, we find this factor irrelevant because Appellees failed to show how the State offices' relocation affects them in any manner distinct from the general public (other than perhaps economic competition, which we reject as a proper factor below). See Ray, 430 Md. at 94, 59 A.3d at 557 (finding that petitioners' "complain[t] that commercial establishments now existing in their neighborhood ... will close because of competition from Wal-Mart, and that they will become vacant buildings, which are detrimental to a community.... failed to show that any of these businesses, whether open or closed, affect them in a manner distinct from the general public").
Moreover, to extend property owner standing's definition of "aggrieved persons" to include economic competition and harm is improper. See Bryniarski, 247 Md. at 145, 230 A.2d at 295 ("A person whose sole reason for objecting to the board's action is to prevent competition with his established business is not a person aggrieved.") (citing Kreatchman v. Ramsburg, 224 Md. 209, 167 A.2d 345 (1961)). The property owner standing doctrine has its roots in nuisance and trespass. Those actions do not permit claims on the grounds of mere economic harm. Accordingly, Appellees' allegations that they will be injured financially in a way that is different from the general public, due to the State-subsidized Project that may compete with their businesses, is irrelevant. Competition that results from a land use decision or action is not a factor in either the prima facie aggrieved or almost prima facie aggrieved analyses.
Accordingly, because Appellees' standing allegations do not fit within any of the three categories of property owner standing in our case law, they must look elsewhere for standing.
The common law taxpayer standing doctrine permits taxpayers to seek the aid of courts, exercising equity powers, to enjoin illegal and ultra vires acts of public officials where those acts are reasonably likely to result in pecuniary loss to the taxpayer. See, e.g., Superblock I, 407 Md. at 267, 964 A.2d at 669-70. In the present case, the State Agencies argued, in their Motions to Dismiss, that Appellees lacked taxpayer standing. The Circuit Court denied the Motions to Dismiss, finding, among other things, that Appellees enjoyed standing under the taxpayer standing doctrine. In analyzing each of the State Agencies' arguments that Appellees lack taxpayer standing, we find all of them wanting. Therefore, we conclude that denial of the Motions to Dismiss on grounds of lack of taxpayer standing was proper.
Kelly, 53 Md. at 141 (quoting 2 Dillon, § 736a).
In our 1869 benchmark case on taxpayer standing, this Court explained the purpose of this long-standing doctrine:
Citizens Planning & Housing Ass'n v. Cnty. Exec. of Baltimore Cnty., 273 Md. 333, 339, 329 A.2d 681, 684 (1974) (citing Gill, 31 Md. at 395), superseded by statute on other grounds as stated in Patuxent Riverkeeper v. Maryland Dep't of Environment, 422 Md. 294, 29 A.3d 584 (2011).
Most recently, we re-characterized this well-established principle of taxpayer standing doctrine as having two general requirements:
Kendall v. Howard Cnty., 431 Md. 590, 605, 66 A.3d 684, 693 (2013) (quoting Superblock I, 407 Md. at 267, 964 A.2d at 669-70). Beyond those two general requirements, which have been repeated in nearly every taxpayer standing doctrine case, the doctrine has been disorganized largely and, at times, seemingly contradictory, particularly in the application of these requirements.
In an attempt to clarify this doctrine, we shall engage here in a general discussion of the principles and case law on taxpayer standing doctrine in Maryland and answer the parties' plethora of arguments concerning the doctrine raised in this case. We begin by analyzing the State Agencies' argument that taxpayers may not challenge violations of the Procurement Code due to the statutory language and history and the case law governing the State's procurements. Because we find that taxpayer standing may exist for such challenges, we analyze next the requisites for eligibility to assert standing under this doctrine or, in other words, the requisites to establish taxpayer status. Then, we move to the two requirements that provide the taxpayer with a "special interest" distinct from that of the general public.
The authority for taxpayer suits in this State stems from the common law, see Gill, 31 Md. at 395, and is not governed generally by statute.
Comment, Taxpayers' Actions: Public Invocation of the Judiciary, 13 Wake Forest L.Rev. 397, 397-98 (1977) (emphasis added) (footnotes omitted). Because of this nature of the suit, courts often require that the complainant not have an adequate remedy at law. See id., at 398 n. 11. Where the complainant does not have an adequate remedy at law, however, the common law demands that we permit the suit unless the General Assembly has pre-empted this common law right.
In this case, the State Agencies and Developers argue that Appellees, even though taxpayers, cannot bring this suit because the Procurement Code does not provide them a private right of action (and, as discussed above, Appellees have no right to the statutory administrative remedies). Much of their argument on this issue focuses on alleging that the Procurement Code does not authorize or permit private causes of action. Determining whether the Procurement Code permits private causes of action is irrelevant in this case, however, because, as discussed above, taxpayer suits do not require private causes of action. Accordingly, the State Agencies' arguments regarding whether the Procurement Code implies a private right of action are irrelevant.
Most illustrative of the irrelevancy of much of their argument against taxpayer standing is the fact that none of the cases cited by the State Agencies involved standing based on taxpayer suits. Instead, those cases involve private litigants alleging an injury caused by a violation of a statute and seeking a remedy provided under that statute.
Moreover, the State Agencies cited in their initial brief also Baker v. Montgomery Cnty., 427 Md. 691, 716, 50 A.3d 1112, 1126-27 (2012), as support for their proposition that "[l]ast year, this Court left open the question whether a private right of action is necessary to seek injunctive or declaratory relief, at least where there is taxpayer standing;" and cited 1000 Friends of Md. v. Ehrlich, 170 Md.App. 538, 548, 907 A.2d 865, cert. denied, 396 Md. 12, 912 A.2d 648 (2006) and Sugarloaf Citizens Ass'n, Inc. v. Gudis, 78 Md.App. 550, 554 A.2d 434 (1989), aff'd, 319 Md. 558, 573 A.2d 1325 (1990), for the proposition that "[t]he Court of Special Appeals already has resolved this question, demanding that plaintiffs seeking a declaration that a Maryland statute was violated or an injunction against future violations of the statute have a private right of action under that statute." The State Agencies misinterpreted woefully these cases: 1000 Friends of Maryland never mentioned taxpayer standing,
First, Baker's analysis of why the petitioners lacked standing supports, albeit not explicitly, the fact that taxpayer standing is an alternative to possessing a private right of action. In that case, the litigation focused on whether a private cause of action existed under the relevant statute. After the Court concluded that the relevant statute did not provide the petitioners with a private cause of action, and even though petitioners did not allege taxpayer standing, the Court discussed taxpayer standing in the final paragraph of the opinion. The Court pointed out that
Baker, 427 Md. at 716, 50 A.3d at 1126 (emphasis added). Immediately thereafter, the Court repeated the basic rule for taxpayer standing doctrine: "`A taxpayer may invoke the aid of a court of equity to restrain the action of a public official or an administrative agency when such action is illegal or ultra vires, and may injuriously affect the taxpayer's rights and property.'" Id. (quoting Citizens Planning, 273 Md. at 339, 329 A.2d at 684). Then, the Court concluded that "
Next, Sugarloaf, cited extensively by the State Agencies, rather than supporting the State Agencies' arguments, demonstrates the importance of the particular basis of the complainant's alleged standing. In Sugarloaf, the Sugarloaf Citizens Association and two private individuals (hereinafter referred to collectively as "Sugarloaf") filed an amended complaint against the County Council of Montgomery County and Michael Gudis, an individual County Council member. The amended complaint alleged that a County Council resolution, promulgated to implement an earlier 4-3 vote of the County Council members, should be rendered void under section 19A-22(b) of the Montgomery County Code. According to Sugarloaf, Gudis had a
On appeal, in its reply brief, Sugarloaf "stated that the basis for their complaint was their common law right as taxpayers `to challenge legislative action that is procedurally or otherwise defective.'" Id. The intermediate appellate court disagreed. The court pointed out that "[t]he sole relief requested, other than a general request for `such other and further relief as the Court deems just and proper,' is to void the action taken by the Council, consistent with the remedy provided by Section 19A-22(b)." Id. Thus, the court found that it was clear that "[t]he violation complained of and the relief requested are found within the ethics law provisions." Id. The court acknowledged that Sugarloaf "may have otherwise possessed standing to invalidate alleged legislative action," such as through the common law taxpayer doctrine, "their standing, as evidenced by their amended complaint, is based upon the Montgomery County Public Ethics Law." Id.
As such, the intermediate appellate court went on to analyze whether the Montgomery County Public Ethics Law, upon which Sugarloaf's alleged standing was based, provided either an explicit or implicit private cause of action, and found that it did not. The court noted, however, that it did not view Sugarloaf's complaints as based on taxpayer standing:
Sugarloaf, 78 Md.App. at 560, 554 A.2d at 439.
In the present case, Appellees do not rely on the provisions of the Procurement Code to confer standing. Rather, they assert standing as taxpayers (as well as separately property owners) and they seek relief granted traditionally to taxpayers: declaratory relief that the governmental action is illegal and ultra vires and that the action thus taken should be voided; and injunctive relief to preclude further illegal and ultra vires governmental actions that will cause pecuniary harm to their taxes. Because taxpayer suits in this State do not require also a separate private right of action,
"The fundamental aspect of standing is that it focuses on the party seeking to get his complaint before the court...." Pollokoff v. Maryland Nat. Bank, 288 Md. 485, 497, 418 A.2d 1201, 1208 (1980) (citing Flast v. Cohen, 392 U.S. 83, 99, 88 S.Ct. 1942, 1952, 20 L.Ed.2d 947 (1968)). For purposes of taxpayer standing doctrine, the conceptual basis of the doctrine is that the action is brought by complainants, as taxpayers and on behalf of all other similarly situated taxpayers. In other words, under the taxpayer standing doctrine, a complainant's standing rests upon the theoretical concept that the action is brought not as an individual action, but rather as a class action by a taxpayer on behalf of other similarly situated taxpayers.
To establish eligibility to bring a suit under the taxpayer standing doctrine, the case law establishes that the complainant must allege two things: (1) that the complainant is a taxpayer and (2) that the suit is brought, either expressly or implicitly, on behalf of all other taxpayers. See, e.g., Holt v. Moxley, 157 Md. 619, 622-26, 147 A. 596, 597-99 (1929). Where a complainant fails to allege such a basis adequately, this Court has refused repeatedly to address taxpayer standing as a basis to maintain suit. See, e.g., Baker, 427 Md. at 716, 50 A.3d at 1126-27 (declining to address the issue of taxpayer standing doctrine after the "[p]etitioners maintained steadfastly, albeit quixotically ... that they were not asserting standing as taxpayers, relying instead solely on their claimed private cause of action theory"); Kendall, 431 Md. at 607-08, 66 A.3d at 694 (refusing to address taxpayer standing doctrine because petitioners did not assert taxpayer standing and, instead, asserted that "the ability to enforce the right to referendum in the Charter should not be restricted to persons with specially affected property rights or taxpayers who may suffer pecuniary harm."); Long Green Valley Ass'n v. Bellevale Farms, Inc., 205 Md.App. 636, 689 n. 30, 46 A.3d 473, 505 n. 30 (2012) (declining to consider appellants' "taxpayer standing" argument which was mentioned on appeal, but not argued before the circuit court as a basis for conferring standing). Thus, we determine whether Appellees alleged sufficiently here that they were taxpayers and that they brought the action pursuant to equitable grounds, under the taxpayer standing doctrine, on behalf of other taxpayers.
First, we address the requirement that, for taxpayer standing to exist, the complainant must allege sufficient facts to prove that he or she or it is, in fact, a taxpayer.
Appellees retort that the State Agencies failed to preserve their argument that Appellees are not taxpayers because they did not advance that argument in the Circuit Court. Consequently, we should dismiss the argument because, if the State Agencies had raised properly this issue in the Circuit Court, Appellees would have had an opportunity to present evidence that they were, in fact, taxpayers. Moreover, according to Appellees, the State Agencies' argument lacks any merit because they are taxpayers in Maryland.
As a preliminary matter, we address the non-preservation contention. "Ordinarily, the appellate court will not decide any other issue unless it plainly appears by the record to have been raised in or decided by the trial court." Md. Rule 8-131(a). This general rule is appropriate, particularly for cases in which both parties were not given the opportunity to produce relevant evidence in the trial court that might have rebutted the tardy argument. Appellees believe this case falls into that category. Although we might agree that this case falls in that category generally, we note also the exception that "the Court may decide such an [unpreserved] issue if necessary or desirable to guide the trial court or to avoid the expense and delay of another appeal" is applicable to this case. Id. The record is adequate to those ends for our conclusion in this case (in which we may resolve the matter without reaching the merits of the State Agencies' argument that the limited liability entities may not claim taxpayer standing).
For purposes of taxpayer standing doctrine, "[i]t is a long established rule that `where there exists a party having standing to bring an action or take an appeal, we shall not ordinarily inquire as to whether another party on the same side also has standing.'" Bd. of Sup'rs of Elections
Next, we consider whether Appellees alleged taxpayer standing as a basis for bringing their complaint, either implicitly or explicitly. We do so not in response to any of the parties' arguments. Rather, we analyze this requirement to illustrate the importance of the distinction between an individual's complaint and a derivative complaint brought on behalf of all other taxpayers similarly situated. This distinction, found in the nature of the pleadings' description of the party plaintiffs, becomes important in our subsequent analysis of the injury sufficient for the taxpayer standing doctrine to apply in a given case.
In this case, Appellees did not plead explicitly in either the Original or Amended Complaint that they brought their claims on behalf of other, unnamed taxpayers similarly situated. Rather, Appellees' allegations claimed merely that they are harmed as taxpayers of the State of Maryland and the City of Baltimore. See Amended Complaint, at ¶ 35. Where a complainant brings a claim as a taxpayer, but not explicitly as a class representative of other taxpayers as well, the question arises whether the suit is private in nature (and, thus, the doctrine of taxpayer standing would not confer standing). The importance of the nature of the complaint is revealed by our earliest cases addressing the taxpayer standing doctrine.
In Kelly v. City of Baltimore, 53 Md. 134 (1880), a disappointed bidder, allegedly the low bidder which should have been granted the contract, sought an injunction voiding the municipal contract, awarded allegedly as a result of a fraudulent bid-rigging conspiracy between the successful bidder and mid-level municipal contracting officers. 53 Md. at 136-39. The Court described the nature of the complaint filed as follows:
Kelly, 53 Md. at 136 (emphasis added). The importance of the private nature of the complaint was described further:
Kelly, 53 Md. at 139; see also Kelly, 53 Md. at 140 ("`It is certainly well settled that public wrongs cannot be redressed at the suit of individuals, who have no other interest in the matter than the rest of the public.'") (quoting Gill, 31 Md. at 393). The Court explained that Gill sustained the taxpayers' suit "only upon the principle that if such a remedy was denied citizens and property holders, residing within the limits of a municipality, would be liable to injury and damage from unauthorized and illegal acts of the corporation." Id.
Our predecessors emphasized, though, that "th[e] Court has not undertaken to declare that every abuse of a legal authority by a municipal corporation, to the prejudice of a tax-payer, is a ground for equitable interference to prevent injury." Kelly, 53 Md. at 140. Instead, Gill was an "exceptional case" because the Court found that "`it appears from the averments of the bill, that these
The Kelly Court concluded that, in that case, "[t]he bill ... presents no such claim to the exercise of the preventive power of the court." 53 Md. at 142. Instead, "[r]educed to its elementary facts, it is a controversy between rival tradesmen for the custom of the Mayor and City Council, in supplying the departments with stationery and printed matter." Id. Thus, Kelly concluded that "
Although Kelly exemplifies the importance of the nature of the complaint for purposes of analysis under the taxpayer standing doctrine (i.e., who the plaintiffs are in the complaint), the Court does not order any technical requirement that the plaintiff(s) plead explicitly that the suit is brought on behalf of other taxpayers similarly situated. We held in Holt that the requirement is that "the action must `either expressly
An additional requirement for the taxpayer standing doctrine to confer standing upon a plaintiff is that the complainant must be challenging an action by a public official that is asserted to be illegal or ultra vires. This requirement has been applied leniently and seems rather easy to meet, particularly in the context of reviewing a trial court's case was brought on behalf of other taxpayers, denial of a motion to dismiss, as is the case here. We assume that the facts well-pleaded in Appellees' Amended Complaint are true and, therefore, we must assume further that the complained-of State officials' actions were, in fact, ultra vires. See, e.g., RRC Ne., LLC, 413 Md. at 643-44, 994 A.2d at 433-34.
That Appellees' allegations may be unproven at trial or Appellants' evidence found more credible or persuasive (i.e., that the State Center Project and its formative documents were proper under the relevant state laws and regulations) does not figure in the analysis. See Funk v. Mullan Contracting Co., 197 Md. 192, 196, 78 A.2d 632, 635 (1951) (stating that the taxpayer's right "to invoke the aid of a court of equity to restrain the action of an administrative agency of the State, when such action is illegal and may injuriously affect the taxpayer's rights or his property... does not depend upon the result; that is, he may be wrong in his contention, but nevertheless he has the right to invoke the aid of the courts to make it"). So long as the plaintiffs allege, in good faith, an ultra vires or illegal act by the State or one of its officers, as was done here, such allegations are sufficient to confer taxpayer standing doctrine, so as to entitle the plaintiff to get its foot in the courthouse door and receive potentially a merits hearing
It is well-settled that the taxpayer must allege also a special interest distinct from the general public. See, e.g., Harlan v. Employers' Ass'n of Maryland, 162 Md. 124, 131, 159 A. 267, 270 (1932) (citing Gill, 31 Md. at 375). This requirement "has been interpreted repeatedly to require a showing that the action being challenged results in a pecuniary loss or an increase in taxes." Citizens Planning, 273 Md. at 339, 329 A.2d at 684 (citations omitted).
Gill, 31 Md. at 394 (emphasis added). In other words, the special interest that is distinct from the general public is the increased burden of taxation.
This Court has clarified this special interest requirement many times since Gill. For example, in Ruark v. International Union of Operating Engineers, Local Union No. 37, 157 Md. 576, 146 A. 797 (1929), we clarified the rule, explaining the requirement as follows:
Id., 157 Md. at 589-90, 146 A. at 802-03 (emphasis added) (footnotes omitted). See also Harlan, 162 Md. at 131, 159 A. at 270 ("If it appears that the wrong complained of may result in imposing an additional burden on the taxpayer, then he, with others similarly situated, constitute a class entitled to relief, and courts of equity will take cognizance of their complaint.") (citing Gill, 31 Md. at 375).
This requirement is the foundation of the taxpayer standing doctrine. As the Supreme Court of Alabama explained:
Broxton v. Siegelman, 861 So.2d 376 (Ala. 2003) (emphasis added) (citations and internal quotation marks omitted).
Taxpayers, like any plaintiffs, may not "`restrain official acts upon the mere ground that they are ultra vires.'" Ruark, 157 Md. at 588, 146 A. at 802 (quoting Bauernschmidt v. Standard Oil Co., 153 Md. 647, 651, 139 A. 531, 533 (1927)). Rather, the ultra vires or illegal acts must cause a special damage to the taxpayer-complainant which differs from that impressed on the general public. See, e.g., Ruark, 157 Md. at 592-93, 146 A. at 804 (concluding that "these taxpayers will not sustain any special damage" because "their interest in the subject matter of the eight contracts is merely that of every resident of Baltimore").
"[T]he taxpayer plaintiff is not required to allege facts which
These general requirements are reiterated in almost every taxpayer standing doctrine case. Beyond these general requirements, though, the cases fail to articulate further guidance. The cases, while
This Court has recognized repeatedly that taxpayers have the right to bring a lawsuit in this State to prevent waste or unlawful use of public property and funds.
Generally, the Court has exhibited great leniency in its interpretation of "potential pecuniary loss." See, e.g., Baltimore Retail Liquor Package Stores Ass'n v. Kerngood, 171 Md. 426, 429, 189 A. 209, 210 (1937) ("The courts of the State will entertain jurisdiction of suits by citizens and taxpayers for the writ of mandamus, or that of injunction, to correct unlawful action by municipal officers when the action may injuriously affect rights and property of the parties complaining.
"[I]t is no longer an open question in this state that, if [a] statute is invalid and injurious to him, he has a clear right, as a taxpayer, to maintain this suit." Dahler v. Washington Suburban Sanitary Comm'n, 133 Md. 644, 646, 106 A. 10, 11 (1919)) (citing Painter v. Mattfeldt, 119 Md. 466, 87 A. 413 (1913); Baltimore v. Keyser, 72 Md. 106, 19 A. 706 (1890)); see also id. (holding that the plaintiff enjoyed taxpayer standing doctrine status because, "[a]s [a] taxpayer [the plaintiff] is liable for the assessments and taxation for the general purposes of the act," which created a suburban sanitary district); Graf v. Hiser, 144 Md. 418, 423, 125 A. 151, 153 (1924) ("The right of taxpayers to protect their interests by a suit in equity, for an injunction against taxation under an invalid or ineffective law, is not open to question.").
Invalid statutes are not, however, the only types of harm that may be a foundation for taxpayer standing. For example, in James v. Anderson, 281 Md. 137, 377 A.2d 865 (1977), the Court held that the plaintiff's pointing to an alleged "decrease in efficiency which would result from the alleged ultra vires acts" was "sufficient for a taxpayer of the county involved to maintain a suit." 281 Md. at 142, 377 A.2d at 868. In that case, the plaintiff sought declaratory judgment that the law "preclude[d] the County Executive from using the bond proceeds for the construction of the new courthouse on a new site." James, 281 Md. at 140, 377 A.2d at 867. The defendants countered that the plaintiff lacked taxpayer standing because "the expenditure planned by the County Executive would in fact be less than the expenditure required to renovate the old courthouse, and that, as such, the plaintiff had not alleged any special damages or pecuniary loss which would entitle him, as a taxpayer, to maintain the action." Id.
This Court disagreed. It noted that the plaintiff alleged "that it would be more efficient for the courts and their supporting agencies to operate in close proximity, as is called for in the renovation project." James, 281 Md. at 140, 377 A.2d at 867. In other words, "[t]he plaintiff challenges, as ultra vires, the actions of a County Executive, and points to a claimed decrease in efficiency which would result from the alleged ultra vires acts." James, 281 Md. at 142, 377 A.2d at 868. The Court held that "this is sufficient for a taxpayer of the county involved to maintain a suit." Id.
We have gone so far as to hold that a potential need to fend off charges of illegality may be sufficient to establish taxpayer standing. In Citizens Planning, we noted that "it is not illogical to expect that the county might incur some expense or loss, to the detriment of taxpayers, including appellants, in an errort to fend off the charges of illegality." Citizens Planning, 273 Md. at 343, 329 A.2d at 687. We observed that "[s]uch potential losses alone may be sufficient to establish standing." Id. (citing Castle Farms Dairy Stores v. Lexington Market Auth., 193 Md. 472, 482, 67 A.2d 490, 493 (1949)).
Sun Cab Co. v. Cloud, 162 Md. 419, 159 A. 922 (1932), exemplifies one of the most lenient interpretations of what may constitute a sufficient plea of potential pecuniary
Sun Cab Co., 162 Md. at 426, 159 A. at 925.
Similarly, in Harlan v. Employers' Ass'n of Maryland, 162 Md. 124, 159 A. 267 (1932), the Court concluded, "the facts alleged on behalf of the taxpayers [are] sufficient to allow them to maintain this suit." 162 Md. at 132, 159 A. at 270. The facts in that case were as follows:
Harlan, 162 Md. at 131-32, 159 A. at 270.
In the present case, the State Agencies argue that Appellees failed to allege any "harm" sufficient to confer taxpayer standing. According to the State Agencies, Appellees should have challenged the entire project, in order to allege taxpayer standing properly, because challenging only the formative contracts and the process by which the State conducted its search for a developer of the State Center project is improper for attainment of taxpayer standing. We find no merit in this contention. From our precedent, we are able to summarize that the issue is not what "type" of harm is sufficient necessarily, but rather a much more forgiving question of whether the type of harm is one that may affect the complainant's taxes. To determine that, Appellees' claims, framed as discrete challenges, are the proper focus of our analysis.
In analyzing Appellees' challenges, we begin with those challenges alleging violations of the Procurement Law. See Amended Complaints' Counts I, II, III, and VI. At the heart of all of these challenges are the competitive bidding requirements, which exist for the benefit of the taxpayers. See 120 W. Fayette St., LLLP v. Mayor of Baltimore City, 413 Md. 309, 333, 341, 992 A.2d 459, 474, 479 (2010) ("Superblock II") (noting that the purpose of the competitive bidding requirements is "`to prevent favoritism and collusion'" as well as "to eliminate ... government overspending" and thereby ensure that public works projects are procured at the lowest cost to taxpayers) (quoting Bd. of Educ. v. Allender, 206 Md. 466, 475, 112 A.2d 455, 459 (1955)) (citing Bennett v. Baltimore, 106 Md. 484, 68 A. 14 (1907)); Hylton v. Mayor of Baltimore, 268 Md. 266, 277, 300 A.2d 656, 661 (1972) ("The general purpose of competitive bid requirements is `to obtain unrestricted competitive bidding for contracts ... and thereby to safeguard public funds by preventing favoritism, collusion and extravagance.'") (quoting Hanna v. Bd. of Educ., 200 Md. 49, 54, 87 A.2d 846, 848 (1952)). As this Court stated in Hylton, quoting McQuillin's summary of the law of competitive bid requirements for contracts:
268 Md. at 277-78, 300 A.2d at 661-62 (emphasis added) (quoting 10 McQuillin, Municipal Corporations 321-22, § 29.29 (3d. Ed.rev.vol.1966)). See generally Livingston & Hoover, supra, at 1-12 (discussing, throughout their examination of Maryland Procurement Law, the underlying driving motivation for the law to benefit the taxpayers). Accordingly, in the context of taxpayer suits challenging governmental acts for failing allegedly to abide by competitive bidding requirements, this Court has conferred a particularly broad interpretation of "potential pecuniary loss." See, e.g., Mayor of Baltimore v. Keyser, 72 Md. 106, 19 A. 706; Bennett v. City of Baltimore, 106 Md. 484, 68 A. 14 (1907); Hanna, 200 Md. 49, 87 A.2d 846. Therefore, where it is alleged that the State or municipality fails to abide by the requirements for competitive bidding, we presume (at least for present purposes) that the taxpayers are injured directly in that they are responsible for the claimed extra expenses attendant to whatever other method was adopted.
An important distinction exists, however, between a taxpayer's challenge of a contract or statute as ultra vires, as discussed above, and that of a contract or statute as not being administered correctly. We explained this difference in Ruark:
Ruark, 157 Md. at 593, 146 A. at 804 (citations omitted). Although the distinction made in Ruark dealt with the equitable right to injunction, it also appears to apply with equal force to taxpayer standing to seek the injunction. We clarified this distinction (somewhat) in our recent decision in Superblock III, which precluded taxpayer standing where the complainants challenged the administration of a contract and distinguished Superblock I on the grounds that the complainants in the earlier iteration of the litigation were maintaining that the government failed to comply with an ordinance or statute. See Superblock III, 426 Md. at 27-29, 43 A.3d at 363-64.
The rationale is partially that, at a certain point, the requirement that the ultra vires act result reasonably in a potential pecuniary loss is much more difficult to prove if there is merely an officer or unit administering a program. The reason this situation is more difficult is because
Coddington v. Helbig, 195 Md. 330, 337, 73 A.2d 454, 456-57 (1950) (emphasis added) (citations omitted). Similarly, in Hanna, we stated:
Hanna, 200 Md. at 50, 87 A.2d at 847 (citations omitted). In that case, we held that the taxpayers had standing to challenge a contract awarded in violation of a statute requiring public works contract to be let to the lowest bidder.
In contrast, in Coddington, several taxpayers sought to enjoin the Board of Commissioners of Garrett County from expending certain borrowed money for the construction of two high school buildings. The taxpayers argued that the Commissioners were authorized to borrow the money to build new schools and to improve and/or make additions to existing schools. The Commissioners planned, however, to use all of the borrowed money to build two new schools, leaving no money to make improvements to existing schools. The Court of Appeals found that this was "an administrative function to be exercised by the officials to whom the Legislature has delegated authority over the administration of the schools." Coddington, 195 Md. at 337, 73 A.2d at 457 (citations omitted). The Court reasoned, however, that
Coddington, 195 Md. at 337-38, 73 A.2d at 457 (quoting Wiley v. Bd. of School Comm'rs, 51 Md. 401, 404 (1879)). The Court concluded:
Coddington, 195 Md. at 338, 73 A.2d at 457.
Thus, because challenges of "a secondary error" do not fall necessarily within the same category of the well-settled doctrine in this State that taxpayers may seek the aid of a court of equity to "prevent[] [] public officials from doing a primary act, which is ultra vires or unlawful, [such] as the making of a contract ...," Ruark, 157 Md. at 593, 146 A. at 804, we must analyze Appellees' individual challenges with this distinction in mind. With regard to Appellees' claims involving violations of the Procurement Law, we conclude that their Amended Complaint does not fall prey to the same flaws as identified in Superblock III and other cases. Appellees alleged, throughout their Amended Complaint, that the State violated the Procurement Law by entering into the formative contracts for the Project other than through public bidding. This alone was sufficient (for pleading purposes) to meet this element of the requisite injury component of the taxpayer standing doctrine as to Appellees for those challenges.
In contrast, Appellees' challenge of the State Center's TOD designation is, if error at all, a "secondary error" that is not subject to our review.
Lastly, Appellees alleged that they were damaged by the presumed competition that the completed State Center
Perhaps the most frequent stumbling block for a taxpayer to bring a suit under the doctrine is that the challenged act must affect potentially a tax that the taxpayer-plaintiff pays, i.e., this nexus must be alleged sufficiently. A review of the cases reveals that the taxpayer must be asserting a challenge and seeking a remedy that, if granted, would alleviate the tax burden on that individual and others;
Many cases emphasize that standing cannot exist if the remedy sought would not decrease the taxpayer's monetary burden. For example, in Citizens Committee of Anne Arundel County, Inc. v. County Commissioners of Anne Arundel County, 233 Md. 398, 197 A.2d 108 (1964), the Court held that the taxpayer did not prove or show that he had a sufficient interest to test the constitutionality or validity of the pertinent statute because
It is important to note also that, even where a plaintiff may aver he is bringing the suit as a taxpayer, a court must examine whether he alleges that his tax burden is hurt by the allegedly illegal act or statute. For example, in Baltimore Retail Liquor Package Stores Ass'n v. Kerngood, 171 Md. 426, 429, 189 A. 209, 209-10 (1937), the plaintiffs, as owners of licensed retail liquor stores and as taxpayers of the City, protested the renewal of a purchased license for a competing store on the grounds that such renewal violated a statute. Although the plaintiffs brought the suit as taxpayers of the City, the Court pointed out that, even though the courts in this State have found the "interest or injury which support [a taxpayer doctrine] suit is broadly comprehensive," "[i]n this instance, there is no levy of taxes or outlay of public money to affect the petitioners as taxpayers." Id., 171 Md. at 429, 189 A. at 210.
The requirement that the remedy sought, if granted, must alleviate the taxpayer's burden must be viewed also in light of the general principles that require the doctrine to extend to all similarly-situated taxpayers. In other words, the remedy sought, if granted, must alleviate all similarly situated taxpayers' burden, not just the plaintiffs' personal burdens. This Court concluded that taxpayer standing did not exist in those cases where the plaintiffs sued in equity, allegedly as taxpayers, but failed to explain how the injury would extend to all taxpayers as a class generally. In such cases, "the ground of complaint is limited to their own injury." Cook v. Normac Corp., 176 Md. 394, 395, 4 A.2d 747, 748 (1939). Because "[p]rivate individuals cannot redress the mere public wrong from disregard of the ordinances [or other statutes]," the only injury that the Court finds in such cases is that of the individual.
In Cook, the individual injury alleged was "only that which may result from competition.... But mere competition is not an evil which business men may enjoin as a wrong to them. Competition without full compliance with the law has been enjoined at the suit of private individuals, but only under some conditions...." Cook, 176 Md. at 397, 4 A.2d at 749. Similarly, in Fisher & Carozza Bros. Co. v. Mackall, 138 Md. 586, 114 A. 580 (1921), the Court emphasized the importance that the alleged injury must be alleged to affect potentially all similarly-situated taxpayers:
138 Md. at 597, 114 A. at 584.
When, however, the complainant alleges that he or she will suffer as a taxpayer due to increased taxpayer burdens and the government alleges that the taxpayers will not suffer any increased taxpayer burden, but rather the taxes would be diminished likely, "the court will not weigh potential gains against potential losses and speculate on a net result" "in determining a taxpayer's pecuniary injury resulting from a claimed unlawful governmental act."
When the complainant alleges a reasonable potential for increased taxes or pecuniary loss, this Court has not hesitated to find (repeatedly) that such minimal allegations are sufficient. See, e.g., Boitnott v. Mayor of Baltimore, 356 Md. 226, 234, 738 A.2d 881, 885 (1999) (finding that "[t]he allegation by the petitioners that the City has expended Twenty million dollars
In the present case, the State Agencies aver that Appellees' claims of taxpayer harm lack any "nexus" to the alleged illegal acts of the public officials. This is not accurate. While it is true that the total cost exposure to the State is difficult to ascertain, see Amended Complaint, at ¶ 14 (quoting the Department of Legislative Services ("DLS"), State Center — Transit-oriented Development Briefing (Feb.2009), as stating that "the total cost exposure to the State may never be known"), such a difficulty is the reason that we do not require taxpayers to demonstrate in pleading the exact pecuniary loss or increase in taxes.
In this case, Appellees alleged in their Amended Complaint that the Project is expected to cost $1.5 billion. Amended Complaint, at ¶ 2. "By virtue of the First Amendment, MDOT assumed that obligation [for the design, financing, construction, operation and maintenance of an underground garage for the Project] and also agreed to contribute up to $28 million taxpayer dollars toward the cost of the garage design and construction." Amended Complaint, at ¶ 10. On 15 December 2010, "the BPW approved the issuance of $33 million in MEDCO Bonds supported by taxpayer revenues to build a Phase I parking garage at State Center...." Amended Complaint, at ¶ 17. More specifically, Appellees allege that they will suffer a property tax increase due to this Project:
Amended Complaint, at ¶ 19 (emphasis added) (footnote omitted). Additionally, Appellees assert that, because,
Amended Complaint, at ¶ 20 (quoting DLS, State Center Transit Oriented Development Briefing (May 2009) (hereinafter "DLS May 2009 Briefing")).
In this case, the State Agencies aver that, even if Appellees alleged a proper type of "harm," the amount of pecuniary loss asserted was too speculative to confer taxpayer standing. The State Agencies suggest that, because the State is the actor in this case, the amount of increase in Appellees' taxes is too attenuated or diluted to confer taxpayer standing. This argument continues that the taxpayers have more of a direct interest in challenging a municipal action (like one taken by the City only) than the State's action because, when the damage is spread across all of the City's taxpayers, the individual taxpayer will feel more of an impact than when spreading an alleged injury across all of the State's taxpayers.
It is well-settled that the individual's monetary burden does not need to be calculable at the time of filing suit. Equally well-settled, however, is the requirement that there must be a "clear showing" that a monetary burden is alleged. This Court has noted repeatedly that the taxpayers are not required to prove an exact amount of pecuniary damage that he or she or they will suffer. In fact, we have gone so far as to state that the amount of individual loss is largely irrelevant. See, e.g., Citizens Planning, 273 Md. at 344, 329 A.2d at 687 ("The property loss may be small when apportioned among all of them, especially where... the suit is instituted by one or more taxpayers in representation of all those similarly situated."). As we said in Citizens Planning,
273 Md. at 344, 329 A.2d at 687 (emphasis added). Moreover, in reviewing a circuit court's action on a motion to dismiss, the appellate courts "accept as true the reasonable inferences which may be drawn from the facts alleged...." Citizens Planning, 273 Md. at 345, 329 A.2d at 687. Accordingly, it is not "essential that the amount of the loss of revenue be specifically set forth." Id., 273 Md. at 344, 329 A.2d at 687. The important requirement is that the plaintiff allege that, as a taxpayer, he or she "would be pecuniarily affected." See Funk, 197 Md. at 196, 78 A.2d at 635 (distinguishing that case from Phillips v. Ober, 197 Md. 167, 78 A.2d 630 (1951)). As discussed above, Appellees pleaded sufficiently a loss of revenue from the public funds contributed by them as taxpayers.
We also reject the State Agencies' contention that the alleged loss is too miniscule relative to the State action challenged. The relevant line of decisions in this State do not appear to us to support this assertion.
Sun Cab Co., 162 Md. at 427, 159 A. at 925 (emphasis added). See also Christmas v. Warfield, 105 Md. 530, 540-41, 66 A. 491, 492 (1907) (concluding that taxpayer standing doctrine conferred standing upon the complainant, a taxpayer and resident of the State, alleging a State's action as illegal).
In sum, we conclude that Appellees pleaded taxpayer standing doctrine sufficiently and, thus, the Circuit Court denied properly the State Agencies' Motions to Dismiss on standing grounds.
After climbing the foothills to this point and with the mountain almost in sight, Appellees' surviving claims on the merits shall stumble and fall to a figurative death in the crevasse that is the equitable doctrine of laches. The State Agencies moved to dismiss Appellees' Amended Complaint in the Circuit Court, arguing, inter alia, that the claims were barred by the doctrine of laches due to an unreasonable delay in bringing their claims, causing prejudice to the defendants. In dismissing the State Agencies' Motion on this ground, the Circuit Court stated:
In Appellees' Motion to Dismiss this appeal, they argued that this Court should not entertain this argument because the State Agencies failed to present properly this argument in the State Agencies' Petition for Writ of Certiorari. Thus, we consider first the propriety of addressing this issue. Because we find such a review proper in this case, we will move then to analyzing the merits of the laches argument.
Although this issue was not presented in the Petition for Writ of Certiorari,
In reviewing whether the doctrine of laches bars Appellees' claims, we review the Circuit Court's determination without deference. See Liddy, 398 Md. at 248-49, 919 A.2d at 1287 ("[W]here the issue is whether a party is precluded by laches from challenging an action of another party, we shall review the trial court's ultimate determination of the issue de novo...."). Although assuming the truth of the well-pleaded facts (such as the pertinent dates alleged in the Amended Complaint) for purposes of laches analysis, we review the Circuit Court's legal determination of whether any delay was reasonable and whether the State Agencies and/or Developers were prejudiced, without deference to Appellees' conclusory characterization of the delay as reasonable. Thus, we examine well-pleaded facts in the Amended Complaint to determine whether the delay was unreasonable and the State Agencies and Developers were prejudiced, so as to preclude this action.
"Laches `is a defense in equity against stale claims, and is based upon grounds of sound public policy by discouraging fusty demands for the peace of society.'" Ross v. State Bd. of Elections, 387 Md. 649, 668, 876 A.2d 692, 703 (2005) (quoting Parker v. Bd. of Election Supervisors, 230 Md. 126, 130, 186 A.2d 195, 197 (1962)). "[T]he word [`laches'], itself, derives from the old French word for laxness or negligence." Buxton v. Buxton, 363 Md. 634, 645, 770 A.2d 152, 158 (2001). In Liddy v. Lamone, 398 Md. 233, 919 A.2d 1276 (2007), this Court summarized recently the "well settled" law in this State on the doctrine of laches:
Liddy, 398 Md. at 244-45, 919 A.2d at 1283-84. Thus, generally, we must analyze whether, (1) in the context of an equitable claim, (2) there was an unreasonable delay in the filing and, if so, (3) whether there was any prejudice. Because Appellees' broadest standing rested upon the doctrine of taxpayer standing, their claims — both those seeking declaratory judgment and injunctive relief — sound in equity and, thus, are subject to this doctrine, we are concerned primarily with the latter two elements. Before we may reach those elements, however, we analyze briefly whether laches applies in taxpayer suits generally despite some foreign authority to the contrary.
While neither party raised the contention that laches may not be applicable in taxpayer suits, we find it necessary to examine this issue prior to our further analysis of laches here. Some authority in other jurisdictions does not permit the doctrine of laches to bar a taxpayer's right to invoke the powers of a court of equity to prevent the unlawful dissipation of public funds. For example, the Supreme Court of North Dakota reached such a conclusion in a Nineteenth Century case, explaining,
Storey v. Murphy, 9 N.D. 115, 81 N.W. 23, 27 (1899) (internal citations omitted); see also Dahl v. City of Grafton, 286 N.W.2d 774, 777 (N.D. 1979) (restating the court's refusal to apply the doctrine of laches in class-action suits, such as taxpayer suits, and citing part of the language quoted above as the rationale).
Moreover, this Court has stated that limitations is unavailable as a defense against the state, or its agency or subdivision, asserting public rights on behalf of all the people of the State. In Goldberg v. Howard Cnty. Welfare Bd., 260 Md. 351, 272 A.2d 397 (1971), the Court quoted favorably the following quotation from 51 Am.Jur.2d, Limitation of Actions, s. 412,
260 Md. at 358-59, 272 A.2d at 401. Because a taxpayer suit is analogized to such a governmental suit based upon public rights, it could be argued that laches, a defense similar to a statute of limitations defense, should not be allowed as a defense in taxpayer suits.
In Gloyd v. Talbott, 221 Md. 179, 156 A.2d 665 (1959), a taxpayer brought suit in equity, on behalf of himself and all other taxpayers, seeking a declaratory decree that certain payments of money from municipal funds to certain individuals were illegal and ultra vires. Appellants in that case answered contending that the payments were legal and asserting limitations and laches. Regarding the laches argument, this Court stated,
Gloyd, 221 Md. at 186, 156 A.2d at 668-69.
Even considering the foregoing, we conclude that it is inappropriate to adopt a bright line or per se rule that laches may not be asserted as a defense in a taxpayer suit. Rather, the application of the doctrine of laches should be determined by what equity demands in a given case. For example, where a taxpayer seeks an injunction prior to a state agency entering a contract, courts might be more inclined to finding that laches should not apply. In this case, however, due to the five-year period between the beginning of the official process for the development of the State Center Project and Appellees filing of their lawsuit (and due to the extensive, public communications regarding both the visions and the process for the Project throughout the five-year period), it would be unequitable to foreclose consideration of the doctrine of laches in this case.
In order for laches to bar a claim, "`there [must be] an unreasonable delay in the assertion of one's rights ...'"
In determining whether a delay is unreasonable, we must analyze (i) when, if ever, the claim became ripe (i.e., the earliest time at which Appellees were able to bring their claims); and (ii) whether the passage of time between then and when the Appellees filed the complaint was unreasonable.
We begin by considering when Appellees' claims became ripe in this case. In order for a circuit court to entertain an action, a justiciable controversy must exist.
Justiciability has been described as a "concept embodying `numerous hurdles.'" Boyds, 309 Md. at 690, 526 A.2d at 602 (quoting E. Borchard, Declaratory Judgments 770 (2d ed.1941)). One of these "hurdles" is that of ripeness. Id. "Generally, an action for declaratory relief lacks ripeness if it involves a request that the court `declare the rights of parties upon a state of facts which has not yet arisen, [or] upon a matter which is future, contingent and uncertain.'" Id. (alteration in original) (quoting Brown v. Trustees of M.E. Church, 181 Md. 80, 87, 28 A.2d 582, 586 (1942)) (some internal quotation marks omitted). The purpose of ripeness is "to ensure that adjudication will dispose of an actual controversy in a conclusive and binding manner." Id., 309 Md. at 691, 526 A.2d at 602. Where an issue is not ripe, the issue is not justiciable and, thus, a court will not entertain the claim. For purposes of the present case, the relevance of this prerequisite to justiciability is that there could be no "delay" until a claim was ripe such that a court could entertain it.
One of the first steps in the ripeness analysis is to analyze what interests Appellees claim have been injured. It is important to remember the limited basis upon which Appellees stand. Namely, Appellees bring their claims on the grounds of taxpayer standing; the implications of this is that the only claims that might be before this Court on the merits properly (and, thus, that could be barred by the doctrine of laches) are those claims brought under the taxpayer standing doctrine and on appeal in this case.
We reject ultimately the parties' arguments. We begin by addressing Appellees' assertion that their claims were not ripe until the execution of the binding MDA. The ripeness analysis depends upon the type of lawsuit, which, in this case, is a taxpayer suit. A traditional remedy sought in a taxpayer suit is an injunction to preclude the government from acting in an illegal or ultra vires manner. As such, the taxpayer suit is unique and, although there must be substantial certainty that the government will act in an illegal or ultra vires manner, taxpayers are not required to wait until the government has acted in an illegal or ultra vires manner prior to filing suit. Such a holding would
In answering this question in the context of the present case, we find Boyds most applicable and very instructive. In Boyds, Montgomery County amended a master plan to provide that certain described land might be suitable for imposition of a mineral resource recovery zone, as prerequisite to adoption of that zoning for a specific area. The complainants sought in their action for declaratory judgment a declaration that the master plan amendment was illegal and unconstitutional, and of no force or effect, because "[it] was approved and adopted in contravention of state and county laws requiring notice and public hearings at certain stages of the amendment process." Boyds, 309 Md. at 687-88, 526 A.2d at 600. "The circuit court in that case dismissed the claim as not presenting a justiciable controversy" and the Court of Special Appeals affirmed. Id.
The Court of Special Appeals and the respondents perceived the case to be governed by Anne Arundel County v. Ebersberger, 62 Md.App. 360, 489 A.2d 96 (1985). As we summarized in Boyds,
309 Md. at 695-96, 526 A.2d at 604-05 (alterations in the original). In Boyds, the respondents argued that, because
309 Md. at 696, 526 A.2d at 605.
This Court disagreed, stating:
Boyds, 309 Md. at 696-97, 526 A.2d at 605 (emphasis added).
Similar to Boyds, in the present case, several earlier steps were initiated, approved, and executed in furtherance of the envisioned State Center Project. In this sense, the State Center Project would not have gone forward if certain earlier steps had not taken place. At several points prior to the actual execution of the formative and binding documents regarding the Project, "[t]he prospect of a controversy... lay well beyond the realm of matters `future, contingent and uncertain.'" Id.
This approach, which recognizes that certain earlier stages in a series of envisioned overall stages may reach a level of substantial certainty prior to the government executing a binding document, fits properly within the realm of Procurement Law. This State's Procurement Law recognizes that filing and resolving disputes earlier, rather than later, is best. Taxpayers filing suits based on violations of the Procurement Law should not be encouraged to delay airing their claims because delay may cost taxpayers more money where the announced path to the binding contract for a procurement is set and, as in this case, takes many years to reach fruition. If the government acted illegally in an early stage that sets the stage for (and serves as a condition precedent to) its later execution of a binding contract, then the alleged illegality has "occurred" for purposes of laches analysis.
Contrary to Appellees' assertions, this approach to the ripeness analysis does not contradict either Inlet Associates or Superblock II. Neither of those cases held that a final or binding document was a prerequisite to ripeness. Rather, the specific facts of those cases illustrate when a controversy may be "future, contingent and uncertain" and when one may become ripe. We consider these cases further.
In Superblock II, 120 West Fayette alleged that a proposed plan for the Superblock would violate the MOA and the Renewal Plan. The plan was a mere proposal, however; the City had not yet adopted, approved, or authorized any plans. The Court stated that "[a] declaratory relief action that requests adjudication based on facts that have yet to occur or develop lacks ripeness and should be dismissed for failure to allege a justiciable controversy." Superblock II, 413 Md. at 356, 992 A.2d at 488 (citing Hickory Point P'ship v. Anne Arundel Cnty., 316 Md. 118, 130, 557 A.2d 626, 632 (1989)); see also id. ("In a declaratory judgment proceeding, the court will not decide future rights
Inlet Associates involved a taxpayer action to enjoin the conveyance of a municipality's public right-of-way that was part of a dedicated street, together with riparian rights purported to accrue as a result of the municipality's interest in the dedicated street. In that case, this Court rejected Inlet's argument that the doctrine of laches barred the plaintiffs' action. In so holding, the Court stated,
Inlet Assocs., 313 Md. at 439, 545 A.2d at 1309. The analysis, viewed in light of the facts and the taxpayers' claims in that case, makes apparent that the material changes in the amendments approved by the City Council on 6 October 1986 constituted the violation that the taxpayers challenged. At the time of the action, no "formal documentation" was extant. Rather, the taxpayers brought suit specifically to enjoin the City from entering into a binding contract to convey the municipality's public right-of-way or riparian rights.
Although no binding written agreement is required necessarily for a claim to achieve ripeness, some of Appellees' claims rest on governmental actions which were not envisioned specifically by earlier stages of the State Center Project and did not occur until after the MDA and/or First Amendment were executed. Appellees' suggestion, in their brief, that these latter-arising claims save all claims (even those which arose at an earlier date) is without merit. Although the doctrine of laches
The majority of the claims arose out of events or actions envisioned in (or foretold by) the RFQ. The public issuance of the RFQ standing alone, however, is not substantially certain for ripeness purpose. Under the Procurement Law (assuming for argumentative purposes it applies), prior to the issuance of an award, prospective bidders are permitted generally to file a complaint (until the time the bid is awarded) concerning the information listed in an RFP. Normally, up until the time of the awarding of a bid, the State may withdraw an RFP and change some of the provisions. By analogy, the awarding of a bid under an RFP is similar to the selection of the Master Developer under the RFQ in the present case. Thus, we must look to some further action by the State Agencies (other than the public issuance of the RFQ) to determine the time that the claims accrued as to subsequent actions predicated upon what the RFQ predicted would follow.
First, the State's intentions to select a Master Developer in the manner prescribed in the RFQ is not considered as finalized until the public announcement of the selection of the Developers on 21 March 2006. The procedures for the original selection of the Master Developer were set forth explicitly in the publicly issued RFQ in 2005. Although construction and leasing of the Project was not enforceable between the State and the Developers merely upon selection of the Developers, the awarding of the exclusive right to negotiate was the intended first stage in a series of envisioned stages required for the Project to reach fruition. The claimed illegality that caused Appellees asserted harm stemmed from this stage and, thus, it is the proper starting point for ripeness as to those claims related to those actions. In other words, the significance — and the alleged violation of the Procurement Law — does not occur when the MDA and/or the First Amendment were executed, but rather when the State Agencies agreed to negotiate only with the Developers in pursuit of the later stages outlined in the RFQ. After the Developers were selected, these taxpayers could have filed suit seeking an injunction to preclude the State from expending further resources in the form of negotiations with the Master Developer chosen in an ultra vires manner, as well as the intended execution of the MDA with the Master Developer after the period of negotiations.
Second, those claims regarding the nature of the Project as envisioned in the RFQ became finite at the very least by the time the BPW authorized the State Agencies to enter into the MDA. Although the earlier contracts (such as the LOI) were not binding, it is undisputable that the MDA bound the State and the Developers to the State Center Project. The taxpayers did not need to abide the date of execution of the MDA, but rather only
At that time the MDA was executed on 15 June 2009, there is no doubt that an enforceable, binding contract existed. All claims relating to the envisioned stages set forth in the RFQ accrued at that point. Particularly in light of the taxpayers' knowledge of what the 2005 RFQ envisioned, the selection of the Master Developer in 2006, and the BPW authorization of the State Agencies to enter the MDA, Appellees could have filed suit more promptly in an effort to forestall further allegedly illegal pursuit of unauthorized objectives. Instead, Appellees continued to bide their time.
The third group of claims includes those which related to alleged "material changes" in the First Amendment (departed from the terms set forth in the MDA). Appellees allege that these changes were so substantial that they could not have been envisioned at the time of the MDA and, thus, no claim existed prior to the adoption of these changes in the First Amendment. We agree that, to the extent that such changes were not predicted or called for in the MDA, they would accrue generally at the time of the First Amendment, rather than at the time of the execution of the MDA. Because we conclude ultimately that the time period between the First Amendment and the filing of the present lawsuit was unreasonable and prejudicial to the State Agencies and Developers, however, we do not consider whether these changes were so "material" as to warrant requiring a new selection of a Master Developer (assuming again, argumentatively, that the Procurement Law applies). Rather, we find it sufficient to assume that Appellees are correct that these changes were so material that the First Amendment represented a new violation upon which Appellees' related claims ripened.
Lastly, the fourth group consists of various claims Appellees allege arose after the execution of the First Amendment. Appellees note that the BPW approved amendments on 15 December 2010 to four leases approved originally in July 2010. According to Appellees, the sample leases contained in the MDA and the First Amendment did not include sufficient details upon which their claims related thereto could be described as ripe. Perhaps had Appellees's alleged violations relied upon the specific details set forth in either the original or amended leases, we might find some merit in their contention. In this case, however, Appellees' argument is based on an alleged violation of the Procurement Code, which, for all practical purposes as regards their claims, was envisioned clearly in the RFQ and then set forth again — at great length — in the MDA and First Amendment. Because Appellees did not need to wait until the final binding document to file suit, these claims accrued, it seems to us, at the same time the State Agencies were authorized to enter into the MDA (alongside the third group of claims (the "material changes") in the First Amendment).
In sum, we group certain claims together that fall under the same umbrella of accrual. The first group, those claims envisioned by the RFQ that came to pass with the selection of the Developers, accrued
Next, we consider the proper approach for determining what amount of time constitutes an unreasonable and unjustified delay. Although there is no bright-line rule, the doctrine of laches and statutes of limitations have an intertwined relationship that we must consider as a first step in this portion of the analysis. This Court has recognized that, where appropriate, we should look to the General Assembly for guidance in determining what amount of time is reasonable. Schaeffer v. Anne Arundel Cnty., 338 Md. 75, 81, 656 A.2d 751, 754 (1995); see also Frederick Rd., 360 Md. at 117, 756 A.2d at 985 ("When a case involves concurrent legal and equitable remedies, `the applicable statute of limitations for the legal remedy is equally applicable to the equitable one.'") (quoting Schaeffer, 338 Md. at 81, 656 A.2d at 754). We analyzed the principles for analogizing statutes of limitations to the equitable defense of laches in Schaeffer v. Anne Arundel County, 338 Md. 75, 656 A.2d 751 (1995). There, we stated:
Schaeffer, 338 Md. at 81, 656 A.2d at 754 (citing Rettaliata v. Sullivan, 208 Md. 617, 621, 119 A.2d 420, 422 (1956); Dugan v. Gittings, 3 Gill 138, 161-62 (1845)). Thus, "[i]n most cases involving an exclusively equitable remedy, we refer to the limitations period for the cause of action at law most analogous to the one in equity." Id.
Id. (quoting Stevens v. Bennett, 234 Md. 348, 351, 199 A.2d 221, 223-24 (1964)).
"Generally, if there is no action at law directly analogous to the action in equity, the three-year statute of limitations found in Maryland Code (1974, 1989 Repl. Vol., 1994 Cum.Supp.), § 5-101 of the Courts and Judicial Proceedings Article[
Id., 303 Md. at 563, 495 A.2d at 39.
In this case, the State Agencies urge an analogy to the timeliness requirements in the Procurement Law's Regulations. Title 21 of the Code of Maryland Regulations promulgates the State Procurement Regulations. COMAR 21.10.02.03B requires protests relating to the formation of a contract to be filed "no[] later than 7 days after the basis for protest is known or should have been known, whichever is earlier." COMAR 21.10.02.03B.
Before we confront the proffered analogy to the Procurement Law vel non, we conclude that, under the more generous analogy to the three-year statute of limitations, many of Appellees' claims succumb to laches on that basis. The challenges to the selection of the Developers were justiciable by no later than 21 March 2006. Laches bars those claims because Appellees did not file their Original Complaint until 17 December 2010. The State was open and transparent with the entire "unique" procurement process. The local newspapers covered the matter extensively. If the announced process was illegal, Appellees could have — and should have — brought their complaints on that score to court sooner than they did.
In regards to the second group (those claims arising from events or actions envisioned in either the RFQ or MDA and made actual in the MDA) and third group (those claims arising from events or actions that represented allegedly "material changes" from the MDA to the First Amendment), we consider whether the less generous analogy to COMAR 21.10.02.03B makes sense in the context of this case. We note first that a strict timeliness requirement is reasonable generally for protests of alleged procurement infractions, as the COMAR section makes evident. Procurements are issued for services or goods that the government
In light of Washington Suburban, which held that the statutory limitation for an administrative remedy was not appropriate for a claim for which a circuit court had original jurisdiction, we decline here to adopt the direct analogy to the COMAR provision. Rather, adhering to the flexible nature of the laches doctrine, we conclude nonetheless that, at least in this case involving time-sensitive procurement issues,
Such a conclusion fits comfortably within our taxpayer standing doctrine jurisprudence. Although the motive of a taxpayer bringing suit is immaterial to whether the complainant has standing, the motive is not immaterial as to the relief sought in taxpayer standing suits. As the Court stated in Konig v. City of Baltimore, 128 Md. 465, 97 A. 837 (1916):
128 Md. at 478, 97 A. at 841 (emphasis added).
Similarly, in this case, when analyzing what constitutes an unreasonable delay, we note that significant motivations of Appellees appear to be a "desire to stave off competition." Their initial objections to the Project stemmed from the selection of the Master Developer, which was announced publicly by Governor Ehrlich on 21 March 2006, more than three years prior to Appellees' filing of the Original Complaint. That they alleged additional violations should not save their complaint for equitable relief based on taxpayer standing. If the First Amendment's "material" changes, which were approved and executed in September 2010, were the first stage of the alleged violations, we might be more likely to find reasonable the short time period between September 2010 and December 2010. Equity is not limited, however, to such a tunneled vision of the circumstances. Instead, we are permitted to weigh all the facts. In doing so, the motivations of the parties matter and indicate that Appellees' delay in bringing their claims was unreasonable and unjustified.
The State Agencies assert on appeal that "[the Plaintiffs] waited to file while the State of Maryland and the Developer spent millions executing a contract the plaintiffs believe is void." Appellees retort that there was no prejudice to the State Agencies and that State Agencies made merely a "conclusory assertion of prejudice..., claiming to have spent `millions,' without any citation to the record to support such assertion." Moreover, Appellees argue that "[a]mong the reasons the State Parties may have been unable to so demonstrate prejudice was that the State-funded parking garage that literally forms the foundation of the Project was not even authorized by BPW until December 15, 2010. The Project could not be constructed without the authorization and subsequent issuance of State bonds for the garage."
We find that the State Agencies in this case were prejudiced by Appellees' unreasonable delay in bringing the suit.
As this Court stated many years ago:
Hall v. Clagett, 48 Md. 223, 243-44 (1878). "`Under the equitable doctrine of laches, a lack of diligence on the part of a party who fails to assert his rights may result in his being equitably precluded from later asserting these same rights if the opposing party has incurred prejudice or injury.'" Allied Inv. Corp. v. Jasen, 123 Md.App. 88, 111, 716 A.2d 1085, 1096 (1998), rev'd on other grounds, 354 Md. 547, 731 A.2d 957 (1999) (quoting Shah v. HealthPlus, Inc., 116 Md.App. 327, 336, 696 A.2d 473 (1997)). The record in this case convinces us that, regardless of how we group Appellees' claims, they slumbered unreasonably in asserting their claims.
Therefore, the present claims were improperly before the Circuit Court. We decline to address the merits of the procurement issue (Question #1, see supra at 492, 92 A.3d at 424).
BATTAGLIA, J., joins in judgment only.
Md.Code (1985, 2009 Repl.Vol.), State Fin. & Proc. Article ("SFP"), § 10-305(a).
SFP § 10-304.
The parties listed as Plaintiffs changed on several occasions during the proceedings in the Circuit Court. The collective term "Plaintiffs," as used in this opinion, refers to the moveable feast of Plaintiffs as they changed throughout the proceedings.
Hamot v. Telos Corp., 185 Md.App. 352, 367 n. 13, 970 A.2d 942, 951 n. 13 (2009).
Anthony J. Bellia, Jr., Article III and the Cause of Action, 89 Iowa L.Rev. 777, 778 (2004) (footnotes omitted).
Bellia, supra, at 778-79 (emphasis added) (footnotes omitted).
430 Md. at 82 n. 5, 59 A.3d at 550 n. 5.
Bryniarski, 247 Md. at 145-46, 230 A.2d at 295 (internal citation omitted).
We conclude that economic harms resulting from the subject land use actions are not the type of injury to be analyzed in these cases. Thus, the reasoning and result in Superior Outdoor Signs, 150 Md.App. at 490, 822 A.2d at 485, is apt. We conclude that such allegations do not raise Appellees' status to "special aggrievement."
Moreover, to the extent that Appellees assert that the special harm suffered is an increase in their taxes to subsidize competitors, that type of harm falls more aptly (if anywhere) within the taxpayer standing doctrine, not the property owner standing doctrine.
Joseph H. Langhirt, Corporate Income Tax, in 1 Maryland Taxes § 4-5 (Robert A. Rombro et al. eds., 4th ed. 2005 & Supp.2008) (footnote omitted). In other words, "the income of a... corporation is deemed to `pass through' to the shareholders who are then directly taxed on that income" in the same manner as other income. Maryland State Comptroller of Treasury v. Wynne, 431 Md. 147, 154, 64 A.3d 453, 456-67 (2013).
In Maryland, a "pass-through entity" is defined as "(i) an S corporation; (ii) a partnership; (iii) a limited liability company that is not taxed as a corporation under this title; or (iv) a business trust or statutory trust that is not taxed as a corporation under this title." Md.Code (1988, 2010 Repl.Vol.), Tax-General Art., § 10-102.1(a)(7).
The Court found that the second taxpayer's challenge was precluded by the first suit because the first suit was brought under the taxpayer standing doctrine and, thus, on behalf of all other taxpayers "by necessary implication." In other words, because the first challenge was based on the taxpayer standing doctrine, which is an equitable doctrine, "[the Holt Court] applied the concept, traditional to equity practice, of virtual representation...." See Gardner v. Bd. of Cnty. Comm'rs, 320 Md. 63, 79, 576 A.2d 208, 216 (1990) (discussing Holt).
The fact that the earlier case did not state explicitly it was brought on behalf of other taxpayers was not dispositive. Because "[t]he defendants ... in the [earlier case] did not demur to the bill for want of the averment that it was brought on behalf of other interested taxpayers and property owners," it was "a formality which we can consider waived by the only parties who could have objected." Holt, 157 Md. at 625, 147 A. at 599. The rationale was that, if the defendant had demurred on the grounds that the bill was defective in this respect, the bill could have been amended. If amended, the "`only effect [of such an amendment would be] to make the bill profess to be what in law it was, and what in point of fact it had been considered to be.'" Id., 157 Md. at 625, 147 A. at 598 (citations omitted).
Under this reasoning, the Holt Court distinguished Kelly by noting that the plaintiffs in Kelly were disappointed bidders for a city contract and "the wrongs complained of were personal to the plaintiffs, concerned only with matters of administration in which the plaintiffs had no interest as taxpayers differing from those of the general public...." Id. Thus, in that case, there was no "necessary implication" that the
Citizens Comm., 233 Md. at 403-04, 197 A.2d at 111 (alterations and emphasis in the original). Other cases decided since Citizens Committee have relied upon Green and Castle Farms Dairy as taxpayer standing doctrine cases. This confusion in whether they represent taxpayer or property owner standing analyses is yet another example of the convoluted approach to these doctrines fomenting greater confusion in some of the later cases.
Id. (internal citations omitted).
Such arguments are not within the purview of this Court. Taxpayer standing doctrine is not a method by which litigants may ask this Court to review the feasibility or wisdom of legislative decisions made properly within the Legislature's authority — under the guise of a loss of tax revenues due to the alleged lack of wisdom in the decision. The taxpayer standing doctrine does not grant standing to every taxpayer who may allege a general harm. Thus, the Plaintiffs' allegations of the general harm suffered by taxpayers of the State are irrelevant as well. See, e.g., Amended Complaint, at ¶ 33 ("[T]he Project will have a devastating financial impact on the CBD, its Commercial Property Owners and Retail Merchants,
In this case, Appellees wasted a great deal of everyone's time attempting to establish the infeasibility and the imprudence of the Project, as well as general harms unrelated to expenditures from the public coffers.
Additionally, Kerpelman found that a taxpayer of the State and of Baltimore City did not have sufficient interest in the subject matter, a piece of property in Worcester County, because "Mrs. Kerpelman alleges no interest in that property as a local taxpayer." Kerpelman, 261 Md. at 442, 276 A.2d at 59-60. That case is distinguishable also. The Court found there that, when considering the tax implications of the challenged conveyance of the property,
Id., 261 Md. at 443, 276 A.2d at 60.
Superblock II, 413 Md. at 355-56, 992 A.2d at 487-88.
Moreover, Counts VII (seeking declaratory judgment that "the selection of the architect, engineer and/or contractor for the parking garage was required to have been procured by the State Center Agencies through mandatory methods of source selection under the General Procurement Law ... and that the State Center Agencies' actions failed to comply with [the Procurement Law], and as such, the parking garage selections are void and invalid") and VIII (seeking injunctive relief for alleged violations of the Procurement Law), on which the Circuit Court granted summary judgment in favor of the State Agencies, are not before us. Therefore, the State Center actions in 2010 involving the financing and development of the parking garage do not factor into our laches analysis.
Notably, this second "stage" of the "switch-out" of the Developers, referred to in (n), is not included in the Amended Complaint, but is raised in Appellees' briefs. Regardless of its lack of inclusion in the Amended Complaint, we find that such actions were envisioned in the MDA and, thus, are felled by the same sword as many of the other claims, as discussed infra.
Md.Code (1973, 2013 Repl.Vol.), Courts & Judicial Proceedings Art., § 5-101 (emphasis added).
