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Md. seeks dismissal in Schrader, Peters salary lawsuit

Dennis Schrader and Wendi Peters

Dennis Schrader and Wendi Peters

Attorneys representing Treasurer Nancy Kopp are seeking dismissal of a lawsuit that alleges the state is violating the Maryland Constitution by refusing to pay two of Gov. Larry Hogan’s Cabinet appointees.

In a 42-page response, attorneys for Kopp and the state ask Anne Arundel County Circuit Court Judge Ronald Silkworth to dismiss a lawsuit filed by Health Secretary Dennis R. Schrader and former Planning Secretary Wendi W. Peters. The pair are both seeking two months of back pay and a judgement that Kopp acted illegally when she decided earlier this year not to issue them paychecks.

Lawyers from the Office of the Attorney General, which is representing Kopp and the state, argue that the lawsuit is without merit and that Kopp was legally entitled to withhold the salaries based on language placed in the budget. Lawyers also assert that the state and Kopp cannot be sued because they have sovereign immunity.

Additionally, the attorneys argue, a ruling in Schrader and Peter’s favor could have dire constitutional consequences.

“A ruling that this (budget) restriction violates the separation of powers doctrine and exceeds the General Assembly’s powers under the budget amendment would upset the balance of constitutional powers between the executive and legislative branches,” attorneys wrote in the state’s response. “If (Schrader and Peters) were correct, a governor could easily nullify the Senate’s constitutional role in the appointment process. A governor could do this by withdrawing a nomination whenever it appeared that the Senate might reject the nominee, waiting until the end of the legislative session, and then appointing the nominee during the recess. At the same time, the General Assembly would be powerless to protect the Senate’s confirmation power.”

Peters, then the acting planning secretary, and Schrader, who continues to serve as the acting health secretary, filed suit in August seeking a declaratory judgment on their right to be paid.

Timothy Maloney, a partner at Greenbelt-based Joseph Greenwald & Laake who represents Schrader and Peters, declined to comment.

Peters and Schrader, who were appointed by Hogan last year, had their nominations withdrawn during the legislative session. The legislature added language to the budget prohibiting the payment of any appointee who was subject to Senate approval but whose nominations were withdrawn before the full Senate could hold a vote.

Hogan subsequently re-appointed both to their respective positions after the legislative session ended in April.

“Although the text of the constitution does not expressly forbid this practice, the practice nonetheless ‘frustrates the evident design of the Maryland Constitution,'” the state wrote in its response. “Permitting that type of ‘mischief’…would make a mockery of the constitutional scheme.”

Kopp, acting in accordance with the budget language, has refused to pay either since July 1 while they serve in their respective Cabinet positions.

Peters has since been reassigned and is now the special secretary of Smart Growth. Kopp has been paying her since late September.

Schrader was similarly reassigned to the position of deputy secretary of Medicaid at the Department of Health. Kopp, however, has continued to refuse to pay him as he continues as acting Health Department secretary.

Attorneys for Kopp, in their response, called Schrader’s re-assignment “an apparent attempt to circumvent the budget restriction.”

In their lawsuit, Schrader and Peters allege that the language crafted by the legislature violates separation of powers under the Maryland Constitution. Additionally, both allege, Kopp is required to pay them since the Office of the State Comptroller continues to issue salary warrants for their positions.

But attorneys for the state argued that Kopp was obligated not to pay the salaries because the budget language applying to Peters and Schrader prevented an appropriation of the money to pay either.

“In other words, the General Assembly did not intend to appropriate funds for the payment of individuals meeting the criteria set forth in the budget restriction,” attorneys wrote in their response. “Funds were only set aside for the payment of salaries of individuals serving as secretaries of Health and Planning whose appointment, unlike Secretary Schrader and Secretary Peters, did not meet the criteria of the budget restriction.”

The attorneys representing Kopp said the treasurer “had a ministerial duty to decline to violate the law by disbursing the funds to the plaintiffs.”

A hearing is scheduled for Nov. 30 in Anne Arundel County Circuit Court.

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