Barbera’s statute-of-limitations suspension was unconstitutional, attorney says

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Maryland’s then top judge violated the state Constitution by suspending the deadline for filing civil claims when she closed the clerks’ offices to stanch the spread of the COVID-19 virus, a civil-defense attorney told Maryland’s top court Monday.

In papers filed with the Court of Appeals, Joseph L. Katz said the constitutional authority to alter the statute of limitations rests solely with the General Assembly under the Constitution’s separation of powers among the legislative, judicial and executive branches.

Thus, former Court of Appeals Chief Judge Mary Ellen Barbera’s administrative order that suspended from March 16, 2020, to July 20, 2020, the three-year-time limit for filing claims was constitutionally void regardless of the high court’s adoption of a rule empowering her to issue such an emergency directive due to the COVID-19 pandemic, Katz added.

“It is self-evident that the Judiciary cannot cloak unconstitutional conduct inside the guise of its rule-making authority,” wrote Katz, a Bethesda solo practitioner. “To suspend, toll or otherwise abrogate the statute of limitations during the COVID-19 pandemic was squarely the province of the legislature.”

Katz cited Articles 8 and 9 of the Constitution’s Declaration of Rights, which call for the three governmental branches “to be forever separate and distinct from each other” and which assert that “no power of suspending laws … ought to be exercised or allowed” except by the legislature.

Katz made his argument in defense of J.M. Murphy Enterprises Inc. and the construction company’s president, Jesse J. Murphy, who are being sued in federal court based on their alleged obligation to indemnify an underwriter for financial losses it sustained because of them.

Katz said the federal court lacks jurisdiction because the underwriter’s alleged losses would not have crossed the jurisdictional threshold of $75,000 if the three-year statute of limitations had not been suspended, or tolled – an argument that places the constitutionality of Barbera’s order in question.

To help resolve the issue, the judge presiding over the federal case has asked the Court of Appeals to decide whether the order was constitutional. In certifying the question to the high court, U.S. District Judge Stephanie A. Gallagher explained why she is unwilling to supply the answer herself.

“(T)here are overwhelming federalism concerns implicated by a federal district court potentially concluding, on entirely state law grounds, that Chief Judge Barbera did not have the authority to toll the statute of limitations in the fashion she did,” Gallagher wrote in July.

“Such a decision would dramatically alter Maryland’s legal landscape, possibly upending myriad cases in Maryland state court that have up to this point been allowed to proceed due to the tolled limitations period,” Gallagher added. “The Court of Appeals is indisputably better positioned to interpret Maryland’s Constitution on this question and is better equipped to analyze the interplay between the state’s laws and the state court’s administrative and procedural authority given the far-reaching consequences for the Maryland court system.”

Barbera reached Maryland’s mandatory retirement age of 70 on Sept. 10. She has been succeeded by Chief Judge Joseph M. Getty.

In the underlying lawsuit, Liberty Mutual Insurance Co. provided surety bonds to Murphy for its installation of concrete at the Maryland State Police Flight Training Facility at Martin State Airport in Middle River. As a condition of receiving the bonds, Murphy agreed to indemnify Liberty Mutual against any claims that would arise, according to the underwriter’s complaint.

Liberty Mutual said equipment suppliers brought claims against it for Murphy’s allegedly unpaid bills.

Liberty Mutual said it paid out more than $75,000 in compensation and then sued Murphy in U.S. District Court on July 2, 2020, seeking indemnification as provided under the bond agreement.

Massachusetts-based Liberty Mutual asserted federal court jurisdiction based on its diversity of citizenship with Maryland-based Murphy and an amount in controversy exceeding $75,000.

Murphy subsequently challenged the federal court’s jurisdiction, saying Liberty Mutual’s payments did not exceed $75,000 during the three-year span that began on July 2, 2017, and ended on the filing date of July 2, 2020.

Liberty Mutual has countered that the three-year span’s end date was not July 2, 2020, but three and half months earlier, on March 16, 2020, when Barbera suspended the statute of limitations – an action Murphy has alleged was unconstitutional.

Liberty Mutual, which contends it satisfied the more than $75,000 threshold regardless of either end date, has until Nov. 2 to file its response with the Court of Appeals. The company’s attorneys, with Smith, Currie & Hancock LLP in Tysons, Virginia, did not immediately respond to a request for comment on the case Tuesday.

The high court is scheduled to hold arguments on the constitutionality question Dec. 3. The court is expected the render its decision by Aug. 31 in the case Jesse J. Murphy et al. v. Liberty Mutual Insurance Co., Misc. No. 5, September Term 2021.