837 S.E.2d 64
Va. Ct. App.2020Background
- New Age Care, LLC and Dharma Pharmaceuticals, LLC applied to the Virginia Board of Pharmacy for the single pharmaceutical‑processor permit available for Health Services Area III (production/dispensing of cannabidiol/THC‑A oils).
- An ad hoc committee scored applications: New Age scored higher (957.5) than Dharma (861.75), but the Board — after closed sessions and public comment — granted conditional approval to Dharma and denied New Age citing deficiencies in New Age’s security, training, and marketing plans.
- New Age appealed the Board’s decision to Henrico County Circuit Court under the VAPA (Code §§ 2.2‑4000 to ‑4031), alleging regulatory noncompliance, arbitrariness, FOIA violations for closed sessions, and (abandoned on appeal) due process denial.
- Dharma filed a motion to dismiss, arguing New Age failed to designate an error of law as required by Code § 2.2‑4027; the Board joined the motion. The circuit court granted dismissal without an evidentiary hearing, concluding New Age’s assigned errors were insufficient to proceed.
- New Age appealed the dismissal to the Court of Appeals of Virginia; the Court reviewed questions of law de novo and affirmed the circuit court’s dismissal.
Issues
| Issue | Plaintiff's Argument (New Age) | Defendant's Argument (Dharma/Board) | Held |
|---|---|---|---|
| Whether the circuit court could consider Dharma’s unilateral motion to dismiss under Rule 2A:5 | Rule 2A:5 limits dispositive motions to those filed by the agency; if the agency did not timely move, the case is "deemed submitted" and the court must set briefing — so a non‑agency’s motion was improper | Rule 2A:5 does not bar non‑agency parties (especially necessary parties) from filing dispositive motions; Rule 3:8 allows any defendant to file responsive dispositive pleadings; Dharma, as a necessary party, may defend its interests | Court: Circuit court properly considered Dharma’s motion; Rule 2A:5 does not preclude non‑agency dispositive motions and Dharma was a necessary party with authority to defend its permit rights |
| Whether the motion to dismiss could validly assert that New Age failed to designate an error of law under Code § 2.2‑4027 | New Age contends only procedural defects or standing are proper early defenses; its petition showed regulatory noncompliance and arbitrary action requiring merits review | An appellee may challenge the legal sufficiency of a petition for appeal; where the appeal raises pure legal questions, dismissal is proper if appellant fails to designate an error of law | Court: Dismissal proper — New Age failed to demonstrate an error of law sufficient to proceed; appellee may test sufficiency of petition under § 2.2‑4027 |
| Whether dismissal without an evidentiary hearing was improper | New Age argued its claims (regulatory compliance, arbitrariness, FOIA) required an evidentiary hearing | Where only questions of law are presented and the agency’s orders relate to the regulations, the court may dismiss without a hearing; Board’s orders tied findings to regulatory criteria | Court: Dismissal without an evidentiary hearing was appropriate because New Age raised legal issues resolvable on the face of the record and agency orders |
| Whether the Board violated FOIA by going into closed session | New Age argued closed sessions violated FOIA and required reversal | Board and minutes showed closed sessions were invoked under FOIA exceptions and no contemporaneous objection was lodged | Court: FOIA claim procedurally defaulted — New Age failed to preserve the objection at the meeting; Court declined to reach the merits |
Key Cases Cited
- Bragg v. Bd. of Supervisors, 295 Va. 416 (2018) (treatment of demurrer‑style review of administrative petitions and factual‑allegation standards)
- Va. Marine Res. Comm’n v. Clark, 281 Va. 679 (2011) (reviewing sufficiency of petition and agency record on demurrer‑type challenges)
- Browning‑Ferris Indus. of S. Atl., Inc. v. Residents Involved in Saving the Env’t, Inc., 254 Va. 278 (1997) (permit holder is a necessary party whose rights can be defended in administrative appeals)
- Va. Dep’t of Health v. NRV Real Estate, L.L.C., 278 Va. 181 (2009) (affirming dismissal of administrative appeal on purely legal grounds without full evidentiary hearing)
- James v. City of Falls Church, 280 Va. 31 (2010) (definition and review standard for arbitrary and capricious agency action)
- Philip Morris USA Inc. v. Chesapeake Bay Found., Inc., 273 Va. 564 (2007) (standard of review for circuit court’s grant of dispositive motions on demurrer)