79 N.E.3d 383
Ind. Ct. App.
2017

SPIRITED SALES, LLC v. INDIANA ALCOHOLIC BEVERAGE COMMISSION

Supreme Court of Indiana

October 10, 1954

233 Ind. 563, 122 N.E.2d 9

right in a wholesaler‘s, retailer‘s, or dealer‘s permit of any type“). In other words, no inherent property right in a liquor permit exists because the issuance or revocation of such permit is within the power of the Legislature to prescribe. State ex rel. Indiana Alcoholic Beverаge Comm‘n v. Superior Court of Marion Cty., 233 Ind. 563, 565, 122 N.E.2d 9, 10 (1954).

Given that we find no irregularities in the process afforded to Spirited, and we otherwise find Spirited has no cognizable property interest in a permit, we need not explore Spirited‘s constitutional claims further.

In sum, because none of the alternаtive theories Spirited proposes compel us to uphold the trial court‘s reversal, we decide this issue based on our finding that the Commission‘s denial was tethered to the mandates of the statute‘s unambiguous language and nothing else.

Conclusion

The Twenty-First Amendment to the United States Constitution authorizes States to regulate the production, distributiоn, and sale of alcoholic beverages. There can be no doubt that Indiana is empowered to do what the Commission has urged here—which is to bar companies with same ultimate owners from simultaneously holding both beer and liquor-wholesaler permits. However, over the years, Indiаna‘s alcohol code has become diluted, reflecting many policy choices and resulting amendments, dating back to the 1930s.

Nonetheless, we have not measured any public policy considerations or assessed the efficacy of prohibited interest laws on the goals outlined by the statute—doing so would be inappropriate. We recognize that businesses have long iobbied this very contentious point before our General Assembly, and will likely continue to do so, but deciding whether the regulatory scheme in place is still relevant or still necessary or in nеed of overhaul are matters to be resolved through the political process, which we trust would take into account the policy arguments made by opposing sides on this issue.

As for today‘s decision, it rests purely on our interpretation of the statute‘s language, which we believe is clear on its face. We hold the Commission‘s denial conformed with the clear and unambiguous language of the statute. We further hold that the Commission did not act arbitrarily or capriciously in initially denying the applicant‘s request. Finally, we hold that the Commission‘s denial was not based on political grounds and we decline Spirited‘s invitation to affirm the trial court on constitutional grounds. Accordingly, we reverse the trial court‘s order directing the Commission to issue the applicant a liquor wholesaler‘s permit, and we reinstate the Commission‘s order denying the permit.

Rush, C.J., and Slaughter, J., concur.

Massa, J., not participating.

Roy Lee WARD, Appellant-Plaintiff, v. Robert E. CARTER, Jr., Commissioner of the Indiana Department of Correction, and Ron Neal, Superintendent of the Indiana State Prison, in their official capacities, Appellees-Defendants

Court of Appeals Case No. 46A03-1607-PL-1685

Court of Appeals of Indiana.

June 1, 2017

ATTORNEY FOR APPELLANT: David W. Frank, Christopher C. Myers & Associates, Fort Wayne, Indiana.

ATTORNEYS FOR APPELLEE: Curtis T. Hill, Jr., Attorney General of Indiana, ‍​‌‌‌‌​‌​​​‌​​‌‌​​‌​​‌‌​​​​‌​‌​‌‌​​​​​‌‌‌‌​​‌‌‌​‌‍Stephen R. Creason, Chief Counsel, Indiаnapolis, Indiana.

Baker, Judge.

Roy Lee Ward is an Indiana inmate on death row. In 2014, the Department of Correction (DOC) internally adopted a new method of lethally injecting inmates; the new method includes a cocktail of drugs that has never been administered in an execution in the United States. Ward filed a claim seeking injunctive and declaratory relief, arguing that the DOC was required to promulgate this new policy as a rule under the Administrative Rules and Procedure Act (ARPA).1 The State filed a motion to dismiss the claim, which the trial court granted. Ward now appeals. Finding that the General Assembly has not exempted the DOC from ARPA and that the statutory definition of “rule” clearly includes the DOC‘s execution protocols, we reverse.

Facts2

In 2007, Ward was sentenced to death by execution in Indiana. He is currently imprisoned at Indiana State Prison in LaPorte County. State officials, through the DOC, administer all statе executions, which occur by the intravenous injection of lethal substances. In May 2014, State officials announced that they had adopted a new rule in their execution protocol. The new rule was not promulgated under ARPA but was instead adopted informally as an internal DOC poliсy.

This new rule, which was effective immediately, provided that all prisoners sentenced to death in Indiana (including Ward) would be executed by a new combination of three drugs—methohexital (known by the brand name Brevital), pancuronium bromide, and potassium chloride. No prisoner of any state nor of the federal government has ever been executed with this particular combination of drugs.

On December 22, 2015, Ward filed a complaint seeking injunctive relief and a declaratory judgment. His essential argument was that because this new rule was not promulgated under ARPA, it is unlawful and violates his rights under ARPA and his right to due process under the state and federal constitutions. On March 29, 2016, the State filed a motion to dismiss pursuant to Indiana Trial Rule 12(B)(6), arguing that Ward had failed to state a claim on which relief could be granted. Essentially, the State contended that ARPA did not apply to the adoptiоn of this new rule and that, consequently, no due process violation had occurred. Following a hearing, the trial court granted the motion and dismissed Ward‘s complaint.3 Ward now appeals.

Discussion and Decision

We apply a de novo standard of review to a trial court‘s order granting a Rule 12(B)(6) motion to dismiss a complaint for failure to state a claim. Allen v. Clarian Health Partners, Inc., 980 N.E.2d 306, 308 (Ind. 2012). A motion to dismiss for failure to state a claim tests the legal sufficiency of the complaint, not the facts supporting it. Id. In conducting our review, we must take all allegations of the complaint as true, construing them in the light most favorable to the plaintiff, to determine whether the complaint states any facts upon which the trial court conceivably could have granted relief. Id. We will reverse an order granting such a motion if there is any set of circumstances under which a plaintiff would be entitled to relief. Id.

Ward argues that the method in which the State adоpted this new execution policy violated his rights under ARPA and his due process rights under the state and federal constitutions.

I. Relevant ARPA Provisions

Under ARPA, a “rule” is defined as follows:

[T]he whole or any part of an agency statement ‍​‌‌‌‌​‌​​​‌​​‌‌​​‌​​‌‌​​​​‌​‌​‌‌​​​​​‌‌‌‌​​‌‌‌​‌‍of general applicability that:

  1. has or is designed to have the effect of law; and
  2. implements, interprets, or prescribes:
    1. law or policy; or
    2. the organization, procedure, or practice requirements of аn agency.

Ind. Code § 4-22-2-3(b). An administrative rule is one that has (1) general applicability; (2) prospective application; (3) the effect of law; and (4) affects a class of individuals’ rights. Blinzinger v. Americana Healthcare Corp., 466 N.E.2d 1371, 1375 (Ind. Ct. App. 1984).

An Indiana agency takes “rulemaking action” when it engages in “the process of formulating or adopting a rule.” I.C. § 4-22-2-3(c). When an agency takes rulemaking action, it must promulgate the rule according to the process set forth in ARPA, with certain exceptions. I.C. § 4-22-2-13(a). Relevant to this case is an exception stating that an agency does not have to comply with ARPA if the rulemaking action results in “[a] resolution or directive ... that relates solely to internal policy, internal agency organization, or internal procedure and does not have the effect of law.” I.C. § 4-22-2-13(c)(1).

To enforce compliance, ARPA creates individual rights in the administrative procedure, voids the legality of unlawfully adopted agency rules, and provides a cause of action in the instance a state agency violates the law‘s provisions. I.C. §§ 4-22-2-14, -44, -45.

II. Does ARPA Apply to the DOC?

On appeal, the State abandons its position taken before the trial court and instead argues that ARPA does not apply to the DOC‘s execution protocols. The State directs our attention to the lethal injection statute, which provides, in relevant part, as follows:

(a) The punishment of death shall be inflicted by intravenous injection of a lethal substance or substances into the convicted person:

  1. in a quantity sufficient tо cause the death of the convicted person; and
  2. until the convicted person is dead.

* * *

(d) The department of correction may adopt rules under IC 4-22-2 necessary to implement subsection (a).

Ind. Code § 35-38-6-1 (emphasis added). The State focuses on the word “may” in subsection (d), arguing that this permissive word means that, ‍​‌‌‌‌​‌​​​‌​​‌‌​​‌​​‌‌​​​​‌​‌​‌‌​​​​​‌‌‌‌​​‌‌‌​‌‍while the DOC has the option of promulgating execution protocol rules under ARPA, it is not required to do so.

We disagree. Initially, we note that the lethal injection statute must be read in conjunction with ARPA. ARPA explicitly excludes two state agencies from its provisions, and neither is the DOC. I.C. § 4-22-2-13(b) (excluding any military officer or board and any state educational institution frоm ARPA). If the legislature intended to exempt the DOC from the purview of ARPA altogether, or even to exempt the DOC‘s execution protocols, it could have easily done so, but it has not. The DOC insists that requiring it to comply with ARPA in the context of the death penalty is burdensome and unworkable. But it is not the role of the judiciary to determine the statutory obligations of State agencies; that rests with the General Assembly. We can only conclude that, by omitting the DOC from the list of entities excluded from ARPA, the General Assembly has determined that the DOC is, indeed, bound to follow it.4

Having reached that conclusion, the plain meaning of Indiana Code section 35-38-6-1(d) becomes clear. The DOC is not required tо adopt rules. But if it chooses to do so, it is bound to follow ARPA. The DOC‘s approach would require us to ignore ARPA altogether, which we may not and shall not do. The legislature has determined that DOC is not exempt from ARPA; consequently, when it adopts rules, it must comply with the procedures set forth in ARPA.5 What we must dеtermine next, therefore, is whether the DOC‘s lethal injection protocol constitutes a rule.

III. Are DOC‘s Execution Protocols Rules?

When the parties argued this issue before the trial court, the State contended that changes in execution protocols were simply changes in internal agency policy rather than rules falling under ARPA. On appeal, the State is entirely silent on this argument. It does not contend that changes in execution protocols are internal agency policies, nor does it address Ward‘s contention that the execution protocols are rules.

As noted above, a “rule,” for the purpose of ARPA, is

[T]he whole or any part of an agency statement of general applicability that:

  1. has or is designed to have the effect of law; and
  2. implements, interprets, or prescribes:
    1. law or policy; or
    2. the organization, procedure, or practice requirements of an agency.

Ind. Code § 4-22-2-3(b). An administrative rule is one that has (1) general applicability; (2) prospective application; (3) the effect of law; and (4) affects a class of individuals’ rights. Blinzinger, 466 N.E.2d at 1375.

It is readily apparent that the definition of “rule” encompasses the DOC‘s execution protocol. The protocol has general applicability (as opposed to applicability only to a specific case) and prospective application. It has the effect of law in that it is binding on DOC employees and death row inmates. And it certainly affects a class of individuals’ rights—all prisoners scheduled to be put to death in Indiana following the 2014 announcement.

In another case related to an agency policy that was changed without promulgating a rule under ARPA, this Court found that the changed policy did not “relate primarily to the [agency‘s] internal policies, procedures, or organization. The primary impact of the [new] requirements is external, and it is the primary impact that is paramount.” Villegas v. Silverman, 832 N.E.2d 598, 609 (Ind. Ct. App. 2005) (emphasis added). Herе, likewise, the primary impact of the change in execution protocols is external—its most significant impact is on the death row inmates who will be executed according to its terms. Although the State attempted to argue below that the primary impact of this policy is not on inmаtes such as Ward, we agree with Ward ‍​‌‌‌‌​‌​​​‌​​‌‌​​‌​​‌‌​​​​‌​‌​‌‌​​​​​‌‌‌‌​​‌‌‌​‌‍that “[i]t is unclear what, if any, effect a change in lethal injection substances would have on the state employees who execute prisoners” aside from a slight change in behavior in that the employees might have to reach into a differеnt drawer, open a different package, or read an alternate list of instructions. Appellant‘s Br. p. 19.

The General Assembly has defined what a rule is in the context of ARPA. That definition clearly includes the DOC‘s execution protocol. A change in that execution protocol, thеrefore, is a new rule that may not be implemented until the DOC complies with ARPA. Given the legislature‘s determination that the DOC is not exempt from ARPA, as well as the way in which it has defined “rule,” we are compelled to reverse the trial court‘s order granting the dismissal of Ward‘s complaint.6 As a matter of law, DOC must comply with ARPA when changing its execution protocol, and its failure to do so in this case means that the changed protocol is void and without effect.

The judgment of the trial court is reversed and remanded for further proceedings.

Barnes, J., and Crone, J., concur.

BARNES, J.

CRONE, J.

Notes

1
Ind. Code ch. 4-22-2 et seq.
2
We held oral argument in Indianapolis on May 17, 2017. We thank counsel for both parties for their written and oral presentations.
3
In its order, the trial court relied heavily on federal cases grounded in arguments related to cruel and unusual punishment under the Eighth Amendment to the United States Constitution. Appellant‘s App. p. 12-13. Ward, however, is not making an argument related to the Eighth Amendment.
4
The DOC submitted a nоtice of additional authority, contending that this authority “evidences present legislative intent to further exempt from the ordinary practice of public access, administrative process, and discovery the decisions and details related to the process undertaken by thе [DOC] leading up to the execution of a sentence of death.” Notice of Add‘l Auth. p. 1-2. This authority includes section 158 of House Enrolled Act (HEA) 1001, which (1) gives the DOC authority to enter into a contract for the issuance of substances used for lethal injection and (2) protects the identity of the pеrson with whom DOC contracts for that purpose. In our view, HEA 1001 is not germane to the issue at hand, which is whether DOC must comply with ARPA. Therefore, we are not persuaded by this additional authority.
5
The DOC emphasizes that death row inmates have the right to challenge the fact and method of their execution under Section 1983 and the Eighth Amendment to the United States Constitution. But the case before us is something entirely different—a civil suit against the State for alleged violations of administrative agency law, “and the cause of action he brings, and the rights he asserts, are recognized by the ARPA.” Reply Br. p. 9. ARPA notes that the procedural rights it crеates in citizens and the procedural duties it imposes on state agencies are “in addition to those created and imposed by other law,” I.C. § 4-22-2-14. Therefore, the fact that Ward has other rights, under other statutes and constitutions, does not vitiate his rights under ARPA.
6
Because we have found that Ward‘s complaint prevails based on relevant ‍​‌‌‌‌​‌​​​‌​​‌‌​​‌​​‌‌​​​​‌​‌​‌‌​​​​​‌‌‌‌​​‌‌‌​‌‍statutory language, we need not consider his due process arguments.
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