Can Maryland suspend a lawyer's license to practice law for failing to pay workers' compensation assessments?

Plain-English summary

Maryland's Uninsured Employers' Fund pays workers' compensation awards that uninsured employers fail to cover, and it recoups the money through mandatory assessments on those employers. To give the Fund leverage to collect, Article 101, §91 requires suspension of a delinquent employer's "license to do business in this State." The Fund's Executive Director asked the Attorney General whether this reaches attorneys who employ staff, since a law firm is an "employer" under the workers' compensation law, and if so, what procedure the Fund should follow.

The Attorney General concluded the suspension provisions do apply to attorneys. Bar admission, the opinion reasoned, is commonly understood and has been described by both the Maryland Court of Appeals and the U.S. Supreme Court as a form of "license," so a delinquent lawyer-employer's bar admission counts as a "license to do business" subject to suspension under the statute. The opinion then confronted a harder question: does requiring the judiciary (which controls bar admission and discipline) to suspend a lawyer for a legislatively created reason violate Maryland's separation of powers? Distinguishing an earlier case that struck down a law barring certain retired judges from practicing, the opinion found several features that saved this statute: it leaves the actual suspension decision to the courts rather than suspending lawyers automatically, it doesn't single out attorneys but applies to every trade and profession, it doesn't conflict with existing rules of professional conduct, and unpaid legal obligations bear some relationship to a person's fitness to practice law, unlike the arbitrary criterion at issue in the earlier case. The opinion also traced a centuries-long history of Maryland's legislature and judiciary sharing authority over bar admission, reinforcing that this kind of cooperative arrangement is the historical norm, not the exception. Procedurally, the opinion concluded the Fund should route its notification through Bar Counsel, since attorney discipline flows through the established BV Rules process.

Currency note

This opinion was issued in 1990. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here. Article 101 has since been recodified into the Labor and Employment Article, and Maryland's attorney discipline rules (the "BV Rules" discussed here) have since been substantially reorganized under the Maryland Attorneys' Rules of Procedure.

Common questions

Can a Maryland lawyer's bar license really be suspended over an unpaid workers' compensation assessment?
Yes, according to this opinion, if the lawyer is an "employer" under the workers' compensation law and fails to pay a required assessment to the Uninsured Employers' Fund. The AG concluded that bar admission counts as a "license to do business" within the meaning of the suspension statute.

Doesn't having the Legislature dictate a bar suspension violate separation of powers?
The opinion concluded no, distinguishing an earlier Maryland case that struck down a different law targeting lawyers. Here, the actual suspension decision still belongs to the judicial branch, the law applies to all licensed trades and professions rather than singling out attorneys, it doesn't conflict with existing professional conduct rules, and failing to pay a legal obligation bears some relationship to fitness to practice law.

How does the Uninsured Employers' Fund actually go about suspending a delinquent attorney?
By notifying Bar Counsel, according to the opinion, since attorney discipline in Maryland runs through the established BV Rules process (complaint to Bar Counsel, review by an inquiry panel and the Review Board, charges filed in the Court of Appeals, and ultimately a Court of Appeals order).

Has Maryland always let the Legislature play a role in attorney licensing?
Yes, according to the opinion's historical review. It traced legislative involvement in admitting and regulating attorneys back to 1674, alongside judicial admission practices, describing a long history of cooperation between the two branches rather than exclusive judicial control.

Background and statutory framework

The Uninsured Employers' Fund, created in 1967, pays workers' compensation awards uninsured employers fail to cover and recovers the money through mandatory assessments; Article 101, §91 requires the Fund's Director to notify a delinquent employer, forward notice to any licensing agency that issued the employer a business license, and, after any hearing required by law, suspend that license until the assessment is paid. Because attorneys who employ staff are "employers" under Article 101, §21, and because Maryland courts (Attorney General v. Waldron) and the U.S. Supreme Court (Supreme Court of Virginia v. Friedman) have both described bar admission using the vocabulary of "license" and "licensure," the opinion concluded a delinquent attorney-employer's bar admission is a "license to do business" within the statute's reach.

The harder question was whether requiring the Court of Appeals, which controls attorney admission and discipline under its constitutional judicial authority, to suspend a lawyer for a legislatively defined reason violates Article 8 of the Declaration of Rights' separation-of-powers guarantee. The opinion worked through Attorney General v. Waldron, where the Court of Appeals struck down a statute barring certain retired judges from practicing law because it revoked a license based on a criterion "entirely unrelated" to fitness to practice and effectively bypassed the judiciary's control over attorney discipline. The opinion distinguished the assessment-suspension statute on several grounds: it leaves the actual suspension in the judiciary's hands rather than acting automatically; it doesn't conflict with the existing Rules of Professional Conduct; it applies generally to every licensed trade and profession rather than singling out lawyers, consistent with the principle that courts' authority over the practice of law doesn't exempt attorneys from generally applicable civil and criminal statutes (Heslin v. Connecticut Law Clinic of Trantolo); and, unlike a person's past judicial service, a person's failure to pay lawful financial obligations bears some relationship to moral fitness to practice law. The opinion buttressed this conclusion with an extensive history of Maryland's Legislature sharing authority over bar admission with the courts since 1674, including statutes governing admission criteria, fees, and even (in an episode the opinion noted without endorsing) a racially discriminatory admission bar the Court of Appeals gave effect to in the 1877 Taylor case because the statute controlled.

Citations and references

Statutes:

• Article 101, §91 of the Maryland Code (license suspension for failure to pay Fund assessments)
• Article 101, §21 of the Maryland Code (definition of "employer" and covered employees under workers' compensation law)
• Article 8 of the Maryland Declaration of Rights (separation of powers)

Cases:

• Attorney General v. Waldron, 289 Md. 683 (1981) (a law revoking bar membership for reasons unrelated to fitness to practice violates separation of powers; distinguished here)
• Supreme Court of Virginia v. Friedman, 487 U.S. 59 (1988) (bar admission described as "professional licensure")
• State ex rel. Robeson v. Oregon State Bar, 291 Or. 505 (1981) (upholding a required attorney suspension for failure to pay a professional liability fund assessment)
• Bastian v. Watkins, 230 Md. 325 (1963) (bar admission may constitutionally be regulated by statute)

Source

• Landing page: https://oag.maryland.gov/resources-info/Pages/attorney-general%E2%80%99s-opinions.aspx
• Original PDF: https://oag.maryland.gov/resources-info/Documents/pdfs/Opinions/1990/Volume75_1990.pdf (this opinion appears at printed pages 472-482 of the bound annual volume; Maryland's site does not publish a standalone PDF of this opinion)

Original opinion text

Best-effort transcription from a scanned PDF. Minor errors may remain, the linked PDF is authoritative.

WORKER'S COMPENSATION

Uninsured Employer's Fund -- Constitutional Law -- Separation of Powers -- Procedures for License Suspension for Failure to Pay Assessments Apply to Attorneys

July 18, 1990

Marshall H. Feldman
Executive Director
Uninsured Employers' Fund Board

You have requested our opinion concerning the application of a provision of the Workers' Compensation Law to attorneys. Specifically, you have asked (i) whether the portions of Article 101, §91 of the Maryland Code that require the suspension of an employer's license to do business if the employer fails to pay certain assessments to the Uninsured Employers' Fund applies to attorneys; and (ii) if so, what procedure the Fund would follow to pursue such a suspension.

For the reasons that follow, we conclude that (i) the suspension provisions do apply to attorneys and (ii) the Fund should file the required notification with the Bar Counsel pursuant to Maryland Rule BV6 a 1.

I

License Suspension

The Uninsured Employers' Fund was formed in 1967 to pay workers' compensation awards that were not promptly paid by the employer. Once the Fund pays the award, it is subrogated to the rights of the claimant against the uninsured employer and may institute a civil action to recover its payment. Article 101, §90(d). The Fund is maintained by means of assessments against uninsured employers whose awards are paid by the Fund. Article 101, §91(d).

The General Assembly sought to assure that licensed employers would pay their assessments by requiring the suspension of a delinquent employer's license:

    (e) If the employer shall fail to pay these assessments ...[t]he Director [of the Fund] shall notify the employer that the employer is in default and that the employer's license to do business in this State may be suspended....

    (h) Notwithstanding any other provision of this article, if an employer fails to pay an assessment required under this section, the Director ... shall notify the employer by certified mail, return receipt requested, that the employer's license to do business in this State may be suspended. The Director shall forward a copy of the notification to each State, county, or municipal licensing agency that has issued a license or permit to the employer for an activity for which workmen's compensation coverage is required by law. Within 15 days after receipt of the notification, the licensing agency shall provide the employer with such notice and opportunity for a hearing as may be otherwise required by law.

    (i) If a hearing is required by law to be held by the licensing agency, the licensing agency shall send written notice of the hearing date to the Director .... Upon a finding of the licensing agency that an employer has failed to pay an assessment as required in this section, the licensing agency shall suspend the license of the employer until the employer pays, or agrees to pay, the assessment in a manner approved by the Uninsured Employers' Fund Board.

Article 101, §91.[1]

II

Application of Suspension Provisions to Attorneys

Attorneys are required by law to maintain worker's compensation coverage for their employees. Article 101, §21(a)(1) defines employer to include every person that has "in the State one or more employees subject to this article." Employees subject to the article include, among others:

    (1) Every person ... in the service of an employer under any contract of hire ... [and]

    (5) Every person performing services for remuneration in the course of the trade, business, profession or occupation of an employer at the time of the injury, provided such person in relation to this service does not maintain a separate business, does not hold himself out to and render service to the public and is not himself an employer subject to this article.

Article 101, §21(b). Just as attorneys who are employers are generally subject to the workers' compensation law, so we conclude that they are subject to the sanctions in Article 101, §91.

"[T]he beginning point of statutory construction is the language of the statute itself." Morris v. Prince George's County, 319 Md. 597, 603, 573 A.2d 1346 (1990). "[T]he words of the statute are intended to have their natural, ordinary and generally understood meaning in the absence of evidence to the contrary." Brodsky v. Brodsky, 319 Md. 92, 98, 570 A.2d 1235 (1990).

Article 101, §91 speaks broadly of "a license to do business in this State." A "license" is "the formal permission granted by the sovereign ... to pursue some occupation or to carry on some business without which the act permitted would be illegal." ACORN v. City of New Orleans, 407 So. 2d 1225, 1228 (La. 1981). See also Sea Lar Trading Co., Inc. v. Michael, 433 N.Y.S.2d 403 (Sup. Ct. 1980); Black's Law Dictionary 829 (5th ed. 1979).

Attorneys are commonly referred to as "licensed" to practice law. Indeed, the Court of Appeals has written of an attorney's "license," Attorney General v. Waldron, 289 Md. 683, 701, 426 A.2d 929 (1981), and not long ago the Supreme Court referred to an attorney's "professional licensure." Supreme Court of Virginia v. Friedman, 487 U.S. 59, 67 (1988). See also, e.g., 7 Am. Jur. 2d Attorneys at Law §25, at 79 (1980) (discussing "conduct rendering [an attorney] unfit to hold a license to practice ...").

Under §10-101(b) of the Business Occupations and Professions Article ("BOP" Article), "admission to the bar" means authorization by the Court of Appeals to practice law in this State. Admission to practice and a license to practice "are inseparable and refer to the same thing." In re H.S., 165 S.W.2d 300 (Mo. App. 1942). And the specific authority to practice law in a jurisdiction constitutes a license. State Bar of Georgia v. Haas, 133 Ga. App. 311, 211 S.E.2d 161 (1974). Thus, the statutory language leads us to conclude that admission to the bar is a "license" that may be suspended pursuant to Article 101, §91.

The context of the statute supports this conclusion. See Morris v. Prince George's County, 319 Md. at 604. Testimony in committee showed that the Fund sought the legislation in order to give it extra leverage to collect overdue assessments from employers.[2] This purpose would be ill-served if an entire class of employers, attorneys, were excluded simply because their authorization to practice, for whatever historical reasons, is not specifically referred to as a "license" in the Maryland Code.

III

Separation of Powers

Article 8 of the Maryland Declaration of Rights provides that "the Legislative, Executive and Judicial powers of Government ought to be forever separate and distinct from each other, and no person exercising the functions of one of said Departments shall assume or discharge the duties of any other." We next consider whether the General Assembly violated this separation of powers provision by requiring the Court of Appeals to suspend an attorney for failure to pay the assessment.

The most recent case to address the relative powers of the legislative and judicial branches to regulate the admission and actions of attorneys was Attorney General v. Waldron, 289 Md. 683, 426 A.2d 929 (1981), which concerned a statute that barred the practice of law by certain retired judges. The Court began with the premise that "the regulation of the practice of law, the admittance of new members to the bar, and the discipline of attorneys who fail to conform to the established standards governing their professional conduct are essentially judicial in nature, and, accordingly, are encompassed in the constitutional grant of judicial authority to the courts of this State." 289 Md. at 692.

However, the Court of Appeals also noted that the flexibility inherent in the doctrine of separation of powers allows for some limited exertion of legislative authority. Therefore, the General Assembly may act pursuant to its police or other legitimate power to aid the courts in the performance of their judicial functions and may establish minimum criteria for the learning and character of persons admitted to the bar. 289 Md. at 699.[3]

The Court concluded that the prohibition at issue in Waldron did not fall into either of these categories and did not merit the creation of a new category, observing that the problem it addressed had been extensively addressed in the Court's rules. The statute, in effect, revoked the license of certain members of the bar based on criteria "entirely unrelated to their educational or moral fitness to engage in the practice of law." 289 Md. at 703. The Court further stated that once a person has met the criteria for admission to the bar and been so admitted, that attorney may be deprived of his or her license only through judicial action for proper cause. 289 Md. at 701. Thus, the Court held the provision to be unconstitutional.

In our view, a number of factors differentiate Article 101, §91 from the provision found invalid in Waldron.

First, the statute does not itself act to suspend the attorney but leaves the actual suspension to the judicial branch. Courts in other states have upheld similar required suspensions. For example, in State ex rel. Robeson v. Oregon State Bar, 291 Or. 505, 632 P.2d 1255 (1981), the Oregon Supreme Court upheld a statute that required suspension of an attorney for failure to pay a professional liability fund assessment, finding nothing in the statute that would "'unduly burden or substantially interfere with the judiciary' ... in performing its judicial functions ...." 632 P.2d at 1258 (quoting Sadler v. Oregon State Bar, 275 Or. 279, 285, 550 P.2d 1218 (1976)). Statutes that require suspension or disbarment for certain criminal convictions have also been upheld. In re Casebier, 284 P. 611 (Kan. 1930); Bryant v. State, 457 S.W.2d 72 (Tex. Civ. App. 1970). Cf. People v. Buckler, 453 P.2d 404 (Colo. 1968).

Furthermore, while a person's prior service as a judge is "entirely unrelated to their educational or moral fitness to engage in the practice of law," a person's failure to pay lawful obligations is clearly relevant to their moral fitness to engage in such practice. Moreover, unlike the situation in Waldron, the Rules of Professional Conduct do not expressly regulate the matter in question. Although the preamble to the rules states that a "lawyer's conduct should conform to the requirements of the law, both in professional service to clients and in the lawyer's business and personal affairs," the rules do not specifically address legal shortcomings that fall short of criminal misconduct and that do not involve clients. Thus, enforcement of the section would not be likely to hinder the judiciary's disciplinary power. See Heslin v. Connecticut Law Clinic of Trantolo, 461 A.2d 938 (Conn. 1983); Knight v. Margate, 431 A.2d 833 (N.J. 1981).

Finally, unlike the situation in Waldron, Article 101, §91 is a general law applicable to all trade, professional, and occupational licensees and does not single out the practice of law for special regulation. It is generally accepted that the judicial power over the practice of law does not act to exempt attorneys from civil or criminal statutes of general application. Heslin v. Connecticut Law Clinic of Trantolo, (consumer protection statute); Davis v. Ogden City, 215 P.2d 616 (Utah 1950) (license tax); Short v. Demopolis, 109 Wash. 2d 52, 691 P.2d 163 (1984) (consumer protection statute).[4]

In fact, Waldron forms the sole exception to a long history of cooperation between the legislative and judicial branches in regulating admission to the practice of law. From the earliest times, Maryland followed the English practice of having courts admit the attorneys who are to practice before them.[5] Yet legislative regulation also dates from early in the history of the State.

In 1674, the General Assembly passed two similar acts, Chapters 20 and 31, providing for "a certain number of honest and able Attorneys [to be] admitted nominated and sworne" by the Governor for the Provincial Court and by the commissioners of the County Courts for the local courts. The acts also set maximum attorney's fees, to be paid in tobacco, and provided that an attorney who charged a larger amount was to be disbarred. Both acts were repealed in 1676.

In 1707 the Governor and Council became "[c]onvinced by dayly Experience that her Majestys Subjects of this province Suffer Extremely by the Corruption Ignorance and Extortion of Severall Attorneys Admitted to practice in the provinciall and County Courts without any Qualification of Honesty Experience or Learning...." Proceedings of the Council of Maryland 1707, XXV Archives of Maryland at 224. As a result, the Governor and Council ordered that no person should be admitted to practice law unless they are members of the Inns of Court or Chancery in England or until "they have previously undergone an Examination of their Capacities honesty and good behavior" before the Governor and Council.[6] The House of Delegates objected to this change and asked that the Governor "order and restore the Several Courts to their antient Rights of admitting & Suspending the Attorney and Practitioners ...." XXVII Archives of Maryland at 247.

A debate between the two houses ensued as to whether admission and suspension of attorneys historically rested with the judiciary.[7] The debate ended in 1708 with the enactment of a law, Chapter 8, similar in content to the 1674 Act, except that it barred admission of those previously denied by the Governor and Council. This latter provision was repealed in 1709 and the entire law was repealed in 1715 and replaced by a law that gave the justices power to admit or suspend attorneys "until his majesty's pleasure shall be known therein" and once again barred admission of those previously denied by the Governor and Council. Chapter 48, Laws of Maryland 1715, §§12 and 13.

In 1783 the General Assembly passed a law empowering the courts to examine applicants to determine their knowledge, abilities and integrity, and provided an appeal for applicants who were denied. Chapter 17, Laws of Maryland 1783. Subsequently, the General Assembly imposed a requirement of two years legal study and provided that admission to any court in the State would serve as admission to all of them. Chapter 268 of the Laws of Maryland 1831. The modern system, in which all admissions are supervised by the Court of Appeals, was created in 1898. Chapter 139, Laws of Maryland 1898.[8]

Decisions of the Court of Appeals indicate that the Court viewed these statutes as defining and limiting its power over the admission of attorneys. For example, in State v. Johnston, 2 H. & McH. 160 (1786), the Court held that only the applicant could appeal from an admissions decision, as that was the only appeal granted by statute. Later, in In the Matter of Charles Taylor, 48 Md. 28 (1877), the Court gave effect to a statute barring the admission of a black applicant with the following statement: "The power and duty of this court being thus limited and defined by law, nothing is left for us except to deny the present application...." 48 Md. at 31. See also In re Maddox, 93 Md. 727 (1901) ("If we should say that females are entitled to be admitted to the bar, when the Legislature has not said so, we would exceed our authority and usurp the functions of a different and an independent department of the State government.").

Given this long history of judicial recognition of the exercise of legislative power in this area; and given the fact that Article 101, §91 leaves suspension in the judicial branch, does not conflict with existing rules, does not apply solely to attorneys, and involves a matter that is not irrelevant to a person's fitness to practice, it is our view that §91 does not violate the requirement of separation of powers.

IV

Complaint Procedures

Disciplinary actions against attorneys are conducted pursuant to the BV Rules. Under those rules, complaints are to be filed with the Bar Counsel, Rule BV6 a 1. In most cases, the complaint is then referred to an inquiry panel. Rule BV6 a 4. The panel may recommend to the Review Board dismissal, reprimand, or the filing of charges. Rule BV6 d 4(b). The Board may approve, reject, or modify the recommendation, or remand or dismiss the complaint. Rule BV7 b. If the Review Board approves a recommendation that charges be filed, they are filed by the Bar Counsel in the Court of Appeals. Rule BV9 a, b. The Court of Appeals may direct that the charges be transmitted to and heard by any court and designates the judge or judges to hear the charges. Rule BV9 b. The findings of fact and conclusions of law are then filed with the Court of Appeals, which may then order disbarment, suspension, reprimand, inactive status, dismissal, or remand. Rule BV11.

Because Article 101, §91 requires that the normally available hearing procedures be applied to suspensions for non-payment, this procedure would apply to actions brought under that section. Therefore, the Fund should notify the Bar Counsel when payment has not been made.

V

Conclusion

In summary, it is our opinion that:

(1) Article 101, §91 in its entirety applies to, and may be enforced against, attorneys; and

(2) The notification required by that statute should be sent to the Bar Counsel.

                                          J. Joseph Curran, Jr.
                                          Attorney General

                                          Kathryn M. Rowe
                                          Assistant Attorney General

Jack Schwartz
Chief Counsel
Opinions & Advice

[1] Article 101, §90(e) and (f) provide a similar mechanism for the recovery of awards paid by the Fund.

[2] See Testimony of William T. S. Bricker, then-Director of the Uninsured Employers' Fund Board, on House Bill 379 (1985 Session).

[3] Different states have reached varying conclusions about this balance. At one extreme, some courts have held all legislative action in the area to be invalid. See Re Opinion of the Justices, 180 N.E. 725, 81 A.L.R. 1059 (Mass. 1932); In re Day, 54 N.E. 646, 50 L.R.A. 519 (Ill. 1899). At the other extreme, courts have held the legislative qualifications to be exclusive, recognizing no power in the courts to add to them. See Re Applicants for License to Practice Law, 55 S.E. 635, 10 L.R.A. (N.S.) 288 (N.C. 1906).

[4] An express exemption renders the Maryland Consumer Protection Act inapplicable to the "professional services" of lawyers and various other professionals. §13-104(1) of the Commercial Law Article.

[5] The practice was apparently established in England in 1292 by order of Edward I, who directed the justices to appoint a "sufficient" number of attorneys for each county. Attorneys remained essentially unregulated, however, until 1402, when Parliament passed 4 Henry IV, ch. 18, which directed the justices to examine all attorneys "and they that be good and virtuous, and of good Fame, shall be received." The act also provided the power to remove attorneys. See State v. Johnston, 2 H. & McH. 160 (1786); see also In re Day, 54 N.E. 646, 50 L.R.A. 519 (Ill. 1899); Rhode Island Bar Ass'n v. Automobile Service Ass'n, 119 A. 139, 100 A.L.R. 226 (R.I. 1935).

[6] In addition to acting as an advisory body for the Governor, the Council acted as the Upper House of the Legislature and constituted the Provincial Court.

[7] This debate was repeated in early separation of powers cases concerning regulation of the bar. Compare Matter of Cooper, 22 N.Y. 67 (1860); Re Applicants for License to Practice Law, 55 S.E. 635, 10 L.R.A. (N.S.) 288 (N.C. 1906); with In re Day, 54 N.E. 646, 50 L.R.A. 519 (Ill. 1899); Rhode Island Bar Ass'n v. Automobile Service Ass'n, 179 A. 139, 100 A.L.R. 226 (1935). The Maryland Court of Appeals has recognized that the power is essentially judicial, Public Service Commission v. Hahn Transportation, Inc., 253 Md. 571, 253 A.2d 845 (1969), but as recently as 1963 the Court referred to admission as "a legislative, not a judicial function in that the right may constitutionally be regulated by statute." Bastian v. Watkins, 230 Md. 325, 329, 187 A.2d 304 (1963).

[8] This act also extended the education requirement to three years.