Background
National Waste Managers has spent decades seeking approval to operate a rubble landfill in Odenton. In 1993, the Anne Arundel County Board of Appeals granted National a special exception subject to conditions, including fee-simple access from Conway Road. The ensuing dispute generated numerous appeals concerning the landfill’s zoning status, its inclusion in the County’s solid-waste plan, and the County’s obligation to provide the Maryland Department of the Environment with a statement of zoning and land-use compliance.
In 2020, as National approached the end of MDE’s permit-review process, the County Executive and County Attorney informed MDE that the landfill did not satisfy applicable zoning requirements because National had not obtained the required access. MDE halted its review and denied the application. National sued, and the circuit court voided the County’s letters, ordered MDE to resume its review, and concluded that the County had improperly bypassed the process for addressing or rescinding a special exception. The circuit court later awarded National $491,984.35 in attorneys’ fees under Maryland Rule 1-341.
The Court’s Holding
The Appellate Court of Maryland affirmed. It held that the circuit court was not clearly erroneous in finding that the County defended the litigation in bad faith and without substantial justification. The parties’ 30-year history was relevant circumstantial evidence of intent, including the County’s repeated resistance to prior rulings and its decision to send letters it knew would cause MDE to halt National’s permit application.
The County’s characterization of its 2020 letters as mere “advice” was not fairly debatable or colorable. The County Code required issues concerning rescission or modification of the special exception to be addressed through a hearing process, and the County admitted that the access condition was a matter for the Board. The court also held that the County was a necessary party because MDE could not resume processing without the County’s compliance statement. Finally, the circuit court acted within its discretion by reviewing the billing records, removing duplicative work, applying a $395 hourly rate, and awarding fees attributable to the County’s misconduct.
Key Takeaways
- A court may infer bad faith under Maryland Rule 1-341 from the surrounding circumstances, including the full history of a long-running dispute.
- A losing argument does not alone justify sanctions, but a defense that is neither fairly debatable nor supported by a colorable legal basis may lack substantial justification.
- A party sued as a defendant may be liable for fees when it defends a proceeding in bad faith or without substantial justification.
- A Rule 1-341 fee award must correspond to the misconduct and rest on record findings concerning the fees incurred and their reasonableness.
Why It Matters
The decision confirms that Maryland courts may examine a litigant’s broader course of conduct when determining whether its litigation position reflects intentional obstruction or delay. A government party cannot avoid Rule 1-341 merely by describing an action with direct legal consequences as nonbinding advice or by arguing that it was forced to defend litigation its own conduct precipitated.
The opinion also illustrates the scrutiny required for a substantial fee award. Here, the circuit court conducted an in-camera review, excluded duplication, selected a locally appropriate hourly rate, and explained how the remaining fees resulted from the County’s unjustified defense.