Solomon Cultivation Corporation, Appellant-Appellant, v. Ohio Department of Commerce, Appellee-Appellee.
No. 20AP-175 (C.P.C. No. 19CV-7657)
IN THE COURT OF APPEALS OF OHIO TENTH APPELLATE DISTRICT
January 12, 2021
[Cite as Solomon Cultivation Corp. v. Ohio Dept. of Commerce, 2021-Ohio-46.]
(REGULAR CALENDAR)
Rendered on January 12, 2021
On brief: Manos, Martin & Pergram Co., LPA, and Dennis L. Pergram, for appellant. Argued: Dennis L. Pergram.
On brief: Dave Yost, Attorney General, and Christie Limbert, for appellee. Argued: Christie Limbert.
APPEAL from the Franklin County Court of Common Pleas
LUPER SCHUSTER, J.
{¶ 1} Appellant-appellant, Solomon Cultivation Corporation (“Solomon“), appeals from a judgment of the Franklin County Court of Common Pleas affirming the denial of Solomon‘s application for a medical marijuana cultivator level I provisional license by the Ohio Department of Commerce (“the department“). For the following reasons, we affirm.
I. Factual and Procedural Background
{¶ 2} In June 2017, Solomon applied for a medical marijuana cultivator level I provisional license. In December 2017, the department notified Solomon of its intent to deny Solomon‘s application. The notice indicated that Solomon did not meet the minimum required scores as to its operational and security plans. Solomon timely requested an administrative hearing, which was held in October 2018 before a hearing officer. The
{¶ 3} Solomon timely appeals.
II. Assignments of Error
{¶ 4} Solomon assigns the following errors for our review:
- [1.] The Common Pleas Court erred by not finding that the Department violated Solomon‘s right to due process of law under the Fourteenth Amendment to the United States Constitution.
- [2.] The Common Pleas Court committed prejudicial error by excusing the Department from following its own rules and prior decision.
- [3.] The trial court erred in not reversing the Department‘s order because at the administrative hearing, Solomon proved by a preponderance of the evidence that it was entitled to be awarded the points necessary to meet the required minimum of points.
- [4.] It was legal error to place the burden of proof on Solomon at the administrative hearing.
III. Discussion
A. Standard of Review
{¶ 5} Applications for licenses to cultivate medical marijuana must be submitted to, and acted upon by, the department in accordance with its promulgated rules.
{¶ 6} The common pleas court‘s “review of the administrative record is neither a trial de novo nor an appeal on questions of law only, but a hybrid review in which the court ‘must appraise all the evidence as to the credibility of the witnesses, the probative character of the evidence, and the weight thereof.’ ” Lies v. Ohio Veterinary Med. Bd., 2 Ohio App.3d 204, 207 (1st Dist.1981), quoting Andrews v. Bd. of Liquor Control, 164 Ohio St. 275, 280 (1955). On questions of law, the common pleas court conducts a de novo review, exercising its independent judgment in determining whether the administrative order is ” ‘in accordance with law.’ ” Ohio Historical Soc. v. State Emp. Relations Bd., 66 Ohio St.3d 466, 471 (1993), quoting
{¶ 7} An appellate court‘s review of an administrative decision is more limited. Pons v. Ohio State Med. Bd., 66 Ohio St.3d 619, 621 (1993). While the common pleas court must examine the evidence, “[s]uch is not the charge of the appellate court.” Rossford Exempted Village School Dist. Bd. of Edn. v. State Bd. of Edn., 63 Ohio St.3d 705, 707 (1992). The appellate court is to determine only whether the common pleas court abused its discretion. Id.; Blakemore v. Blakemore, 5 Ohio St.3d 217, 218 (1983). An abuse of discretion implies that the court‘s attitude was unreasonable, arbitrary, or unconscionable. Blakemore at 219. On review of purely legal questions, including whether the common pleas court applied the proper standard of review, an appellate court has de novo review. Big Bob‘s, Inc. v. Ohio Liquor Control Comm., 151 Ohio App.3d 498, 2003-Ohio-418, ¶ 15 (10th Dist.); Univ. Hosp., Univ. of Cincinnati College of Medicine v. State Emp. Relations Bd., 63 Ohio St.3d 339, 343 (1992) (“it is the prerogative and the responsibility of the court entertaining the appeal to investigate whether the lower court accorded due deference to the factfinder“).
B. Ohio‘s Medical Marijuana Control Program
{¶ 8} In 2016, the General Assembly enacted
{¶ 9} Pursuant to
{¶ 10} A marijuana cultivator provisional license application must be submitted in accordance with
C. First Assignment of Error
{¶ 11} In Solomon‘s first assignment of error, it alleges the trial court erred in not finding the department violated its due process rights in denying its application. This assignment of error is not well-taken.
{¶ 12} The Due Process Clause of the Fifth Amendment to the United States Constitution, as applicable to the states through the Fourteenth Amendment, provides: “No person shall * * * be deprived of life, liberty, or property, without due process of law.” But “[f]or all its consequence, ‘due process’ has never been, and perhaps can never be, precisely defined. * * * Rather, the phrase expresses the requirement of ‘fundamental fairness,’ a requirement whose meaning can be as opaque as its importance is lofty.” Lassiter v. Dept. of Social Servs. of Durham Cty., North Carolina, 452 U.S. 18, 24-25 (1981). Although “due process” lacks a precise definition, courts have long held that due process requires both notice and an opportunity to be heard. In re Thompkins, 115 Ohio St.3d 409, 2007-Ohio-5238, ¶ 13.
{¶ 13} “Due process requires that an individual in an administrative proceeding is entitled to a fair hearing before an impartial tribunal.” Serednesky v. Ohio State Bd. of Psychology, 10th Dist. No. 05AP-633, 2006-Ohio-3146, ¶ 21, citing In re Murchison, 349 U.S. 133, 136 (1955). “It is well-settled that a reviewing court must presume that the
{¶ 14} Solomon asserts the process used by the department in reviewing its application was deficient. In support, Solomon argues it was not sufficiently informed of the scoring process because the operational and security plans were evaluated by separate review teams, and the scoring of each team was reached by consensus in an undisclosed manner. Solomon contends the process for reaching that consensus was not guided by any published plan or administrative rule, thus creating possible disparity between review teams as to how they reached a consensus in scoring. Solomon also asserts it did not know that non-rule required criteria would be used in the scoring process, and that this augmentation of the licensure standards outside the administrative rule-making process was improper.
{¶ 15} We find the trial court did not err in concluding Solomon failed to demonstrate the department violated its due process rights. Solomon was on notice of the department‘s process for scoring medical marijuana cultivator license applications. The rules for the scoring were reasonably definite and clearly outlined in the department‘s application instructions. Solomon had notice of the factors the department would consider in the application process and was provided the opportunity to present information in support of its application.
{¶ 16} Further, evidence at the administrative hearing demonstrated that the department assigned three-person teams to score separate categories of the license applications. Each of the three individuals reviewed his or her assigned application part and then conferred as a team to reach a consensus as to scoring. Each team scored the assigned category for each of the 185 applications that were submitted. That is, the same team of three reviewed all 185 applications as to each category. While Solomon asserts it should know more about each team member‘s review and the score each assigned to each factor, the operative scores were the scores reached by the team. And as to the team‘s reaching of a consensus, Solomon faults the department for not explaining exactly how teams reached their findings. But Solomon cites no legal authority indicating that due process required such an explanation.
{¶ 18} Therefore, we overrule Solomon‘s first assignment of error.
D. Second Assignment of Error
{¶ 19} Solomon‘s second assignment of error alleges the trial court erred in not finding the department failed to follow its rules and a prior decision. We disagree.
{¶ 20} Solomon argues the department did not follow its prior decision in In re Pure OH, LLC, Ohio Dept. of Commerce No. MMCP-C-201706-0042 (July 17, 2018). In that case, the department found that the hearing officer had erred in concluding that “if an applicant for a [level II medical marijuana cultivator provisional] License does not meet all mandatory application criteria listed in law and rule, it is automatically disqualified from consideration for a License.” In re Pure OH at ¶ 6. The director resolved: “Instead, an applicant may still be considered for a License even if it does not meet all mandatory application criteria listed in rule and law so long as every plan it submits in its application meets or exceeds the minimum score required for that plan.” Id. Based on the evidence presented at the administrative hearing, the director concluded the applicant had proven by a preponderance of evidence its entitlement to an extra point as to its security plan, thereby meeting the minimum raw score (12 out of a possible 20) for that plan as required according to the department‘s application form.
{¶ 21} Solomon‘s reliance on Pure OH is unavailing. First, Pure OH was not binding on the trial court, nor is it binding on this court. Second, the department‘s reasoning in that case was flawed because it discounts the mandatory nature of certain requirements in the rules.
{¶ 22} Solomon also argues the department application review teams arbitrarily assigned scores. For example, as to Solomon‘s security plan, the review team awarded zero points for physical security criteria. Solomon argues this was improper because the review team found it to be compliant with six of the eight delineated plan features in the physical security topic. Certain plan features, which are italicized on the score sheet, correspond to required elements of a license application pursuant to rule. Solomon asserts the review team arbitrarily awarded zero points for this topic based on the determination that Solomon did not meet all the italicized features. Solomon contends it should have received three points for the physical security criteria. But, to receive the three points, the score sheet required the plan to address “all of the required elements established in rule and adequately demonstrates 4-7 of the elements above, inclusive of the required elements.” (Record of Proceedings at E3112-K75.)
{¶ 23} The review team determined Solomon was not compliant with two requirements within the physical security criteria, namely “[f]encing and lighting meets requirements of 2-2-05,” and “[p]olicies and procedures to ensure a secure, safe, facility to prevent theft, loss, or diversion and protect facility personnel 2-1-03(B)(4)(a).” Id. These two requirements correspond to required elements for an application. See
{¶ 24} Accordingly, we overrule Solomon‘s second assignment of error.
E. Third Assignment of Error
{¶ 25} In its third assignment of error, Solomon contends the trial court erred in not reversing the department‘s order because it proved by a preponderance of the evidence that it met and exceeded the minimum required scores for each of its plans, including its security plan and operations plan. We are unpersuaded.
{¶ 26} Solomon‘s appellate brief details the evidence that, in its view, establishes the existence of numerous criteria pertinent to the department‘s scoring of its security plan and operations plan. However, as a threshold matter, Solomon‘s score on the department‘s scoring rubric only became pertinent, under the statutory and regulatory framework, if Solomon‘s application met all requirements. That is, Solomon‘s score on the rubric was secondary to the mandatory rule requirements. And evidence supported the department‘s denial of Solomon‘s application because it did not meet all mandatory qualification requirements.
{¶ 27} The department‘s application instruction document indicates the department‘s review process would first involve a review of the application to determine if all mandatory qualification criteria were met. If an application met the mandatory qualification criteria, the department then would score the application. Solomon‘s application went through the second round of this process, suggesting it met all the mandatory qualification criteria. But the department‘s scoring of the application reflected a finding that Solomon did not meet all the mandatory qualification criteria.
{¶ 28} That the department proceeded to score Solomon‘s application did not absolve Solomon of the mandatory requirements. For example,
{¶ 29} Solomon‘s argument raises two issues. One is whether Solomon had experience specific to cannabis cultivation, and the other, more importantly, is whether Solomon had experience in agriculture for the purpose of the rule requirement. The department considered agricultural experience to include the following: “Has worked on, managed, or owned a farm similar in scale to application[;] Has worked in, managed, or owned a greenhouse[;] Has maintained a large garden or small family farm[;] Can be fulfilled by cannabis-specific cultivation experience.” (Record of Proceedings at E3112-G34, Operations Plan Detailed Criteria Sheet.) As the trial court noted, Solomon did not dispute it had no owner, operator, or worker with agricultural experience. Solomon argues its hiring of the consultant satisfies the agriculture experience requirement of
{¶ 30} We also reject Solomon‘s suggestion that the agricultural experience requirement was specific to experience in the cannabis industry and therefore unfair to applicants like it. Solomon seems to make a policy argument that it was unreasonable for the department to require experience in the cannabis industry when this industry is only now emerging, which necessarily limits the number of those with such experience. But that is not what the rule requires. It requires experience in agriculture, generally. While experience in the cannabis industry warranted additional points in the department‘s scoring rubric, that particular experience is not required under the rule.
{¶ 31} Because the evidence demonstrated Solomon did not meet all licensure eligibility conditions, the department‘s denial of Solomon‘s application was supported by reliable, probative, and substantial evidence. Consequently, we overrule Solomon‘s third assignment of error.
F. Fourth Assignment of Error
{¶ 32} Solomon‘s fourth assignment of error alleges the trial court erred in not finding the department committed legal error in placing the burden of proof on Solomon at the administrative hearing. Solomon argues it was not its burden to prove its entitlement to a license, or to disprove the department‘s basis for denying its application. We disagree, as the burden was on Solomon to demonstrate the department should have granted it the requested license. See St. Augustine Catholic Church v. Atty. Gen. of Ohio, 67 Ohio St.2d 133, 138 (1981) (bingo license applicant had the burden to show it was entitled to a license). See also Smith v. Columbus, 10th Dist. No. 02AP-1219, 2003-Ohio-3303, ¶ 24 (“It is a fundamental concept in administrative law and procedure that the party asserting the affirmative of an issue bears the burden of proof.“).
{¶ 33} Therefore, we overrule Solomon‘s fourth assignment of error.
{¶ 34} Having overruled all four of Solomon‘s assignments of error, we affirm the judgment of the Franklin County Court of Common Pleas.
Judgment affirmed.
BROWN and BEATTY BLUNT, JJ., concur.