Buckeye Relief, L.L.C. v. Ohio Pharmacy Bd.
160 N.E.3d 767
Ohio Ct. App.2020Background:
- Ohio Board of Pharmacy ran an RFA process to award limited medical-marijuana dispensary licenses under the MMCP; applications were scored by multi-member evaluator teams on a 0–10 scale for specific questions.
- Buckeye Relief applied for three dispensaries; two applications in District Northeast 2 were denied. Five licenses were awarded in that district; Buckeye’s scores missed the last qualifying score by 0.5 and 1.0 points.
- Central contested item: question C-5.5 (capital-commitment/liquidity). Buckeye submitted documentation pledging roughly $12 million in bond holdings (about $4M per site) plus cash reserves; 91% of pledged accounts were bonds with put options allegedly redeemable within days.
- Several evaluators gave Buckeye low scores (many 6s) on C-5.5; by contrast, similarly capitalized applicants (e.g., GTI Ohio) received higher scores. Buckeye argued evaluators misapplied the RFA rubric and Ohio Adm.Code liquidity definition.
- The hearing officer found the bonds had put options and that some evaluators misunderstood Buckeye’s liquidity, recommending relief; the board disagreed and denied relief; the trial court affirmed the board. The court of appeals reversed and remanded for reevaluation of C-5.5.
Issues:
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Did evaluators misapply RFA/adm. rule on liquidity for C-5.5? | Buckeye: evaluators ignored put-option liquidity and misapplied the rule, producing erroneous low scores that affected overall ranking. | Board: scores were within evaluators’ discretion; Buckeye didn’t prove put options or that scoring relied on liquidity. | Court: Evaluators misapplied the board’s criteria; some scores were demonstrably wrong. Remand for reevaluation of C-5.5. |
| Does a burden-shifting rule require the board to justify denial once applicant meets the floor? | Buckeye: meeting the $250k (and far more) creates inference entitling higher score; burden should shift to board to explain denial. | Board: applicant bears burden under Ohio Adm.Code; Danis Clarkco standard controls; no burden-shift to agency. | Court: declined to resolve Danis Clarkco’s full application here but held the trial court abused discretion because the board misapplied its rule; remand required. |
| May appellate court itself re-score C-5.5 and award licenses? | Buckeye: asks court to assign corrected scores and grant licenses. | Board/Trial ct.: courts must defer to evaluators’ honest judgment; courts should not reweigh evidence or substitute scores. | Court: refused to assign new scores or award licenses; remanded so evaluators can apply correct criteria and rescore. |
Key Cases Cited
- Danis Clarkco Landfill Co. v. Clark Cty. Solid Waste Mgt. Dist., 653 N.E.2d 646 (Ohio 1995) (framework treating disappointed bidders after RFAs; discussed burden and review in bid-type contests)
- Bartchy v. State Bd. of Edn., 897 N.E.2d 1096 (Ohio 2008) (describes R.C. 119.12 standard: reliable, probative, and substantial evidence and appellate scope of review)
- State ex rel. Dir. v. Forchione, 69 N.E.3d 636 (Ohio 2016) (addresses agency exclusivity over certain MMCP licensing matters)
- Blakemore v. Blakemore, 450 N.E.2d 1140 (Ohio 1983) (defines abuse-of-discretion standard)
- Rohde v. Farmer, 262 N.E.2d 685 (Ohio 1970) (appellate review limits for administrative appeals)