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Professionals can be subpoenaed despite consumer law exemption, Maryland court says

Though exempt from the Maryland Consumer Protection Act, lawyers and other licensed professionals must still obey subpoenas from the state attorney general’s office when it is investigating their alleged violations of the MCPA, Maryland’s second-highest court ruled Wednesday.

In its decision, the Court of Special Appeals distinguished the broad authority the attorney general’s Consumer Protection Division has to investigate unfair or deceptive trade practices under the MCPA from the law’s constraint on the agency’s ability to subsequently enforce the law against professional service providers.

The division’s authority and its limits under the MCPA are contained in Section 13-405 of the state’s Commercial Law article, which enables the agency to subpoena witnesses and compel document production, and Section 13-104, which exempts certain professionals from MCPA liability when engaged in “professional services,” the appellate court said in concluding the two provisions can co-exist.

“Stated another way, CL Section 13-405 grants the division the authority to investigate someone for potential MCPA violations via a subpoena, whereas CL Section 13-104 exempts that person from liability if it is determined that the violation was related to the professional services of an enumerated professional,” Judge Glenn T. Harrell Jr. wrote in the court’s reported 3-0 opinion.

“When read that way, the two (sections) are not in conflict, and any analysis as to which is the more ‘specific’ provision is unnecessary,” added Harrell, a retired judge sitting by special assignment. “Importantly, such a reading harmonizes the two (sections) in a manner that is consistent with the purpose, aim, and policy of the legislature in enacting the MCPA.”

The court rendered its decision in upholding a Harford County Circuit Court judge’s order that real estate salesperson Robert A. Podles produce all documents the Consumer Protection Division has requested in its investigation of whether he was involved in any improper lease-to-own or installment contracts.

The division is investigating allegations of illegal fees and contract provisions shifting to the tenant the duty to maintain leased property and enabling Podles to terminate contracts without refunding payments, according to the Court of Special Appeals opinion.

Podles, who denies the allegations, has refused to surrender the documents, citing Section 13-104’s MCPA enforcement exemption for real estate salespersons, among other professionals.

The circuit court judge rejected that argument, as did the Court of Special Appeals.

“(W)e cannot imagine that the General Assembly, in enacting CL Section 13-104, intended to curtail the division’s ability to investigate potential MCPA violations in cases in which the individual target of the subpoena claims exemption pursuant to CL Section 13-104,” Harrell wrote. “Such an interpretation would be inconsistent with the General Assembly’s clear mandate in enacting the MCPA and would frustrate its intended purpose, which is to improve the division’s enforcement capabilities, increase the division’s authority, and provide the division broad powers to enforce and interpret the MCPA.”

Podles’ appellate attorney, Jamar R. Brown, declined to comment Thursday on the Court of Special Appeals decision but said he plans to speak with his client about seeking review by the Court of Appeals.

Brown is with Rosenberg Martin Greenberg LLP in Baltimore.

The attorney general’s office said in a statement Thursday that it “does not comment on investigations, but we are pleased the court affirmed the trial court’s enforcement of our subpoena.”

The CL Section 13-104 exemption applies to about 20 professions, including law and realty, whose activities are overseen by licensing agencies. These enumerated professions include accountants, architects, chiropractors, dentists, optometrists, physicians and podiatrists.

Harrell was joined in the opinion by Judges Douglas R.M. Nazarian and Melanie Shaw Geter.

The Court of Special Appeals issued its decision in Robert A. Podles v. Consumer Protection Division, Office of the Attorney General of Maryland, No. 184, September Term 2021.