A Missouri appeals court has ruled that individuals and companies challenging denials of medical-marijuana licenses may obtain through discovery information from successful license applications in their appeals before the Administrative Hearing Commission.
On May 18, the Court of Appeals Western District unanimously affirmed a lower-court ruling denying the Missouri Department of Health and Senior Services’ petition for a permanent writ of prohibition barring the AHC from requiring it to turn over records in the case of Kings Garden Midwest LLC.
Kings Garden sought two medical marijuana licenses for cultivation facilities, both of which were denied by DHSS. The company appealed the denials to the commission, arguing their applications were subjected to an arbitrary and capricious scoring process in which other applicants received different scores for answers that were the same or substantially the same as Kings Garden’s answers.
To prove its claim, Kings Garden requested in discovery that DHSS provide complete and unredacted copies of successful cultivation license applications. After DHSS objected, Kings Garden agreed to limit its request to only questions on successful applications for which it did not receive a full 10-point score.
Commissioner Renee T. Slusher ordered DHSS to produce substantially all the documents the company requested, giving the department the option to redact applicants’ identifying information and also entering a protective order for the documents.
DHSS sought and obtained a preliminary writ of prohibition from Cole County Circuit Judge Jon E. Beetem. After briefing and arguments, Beetem quashed the preliminary writ and denied DHSS’ petition for a permanent writ. DHSS then appealed the matter to the Western District.
DHSS argued that disclosing the data would violate provisions of Article XIV of the state constitution that require confidentiality of information submitted by applicants and licensees. The Western District disagreed.
Judge Lisa White Hardwick said a section of the constitutional article expressly allows the confidential information sought by Kings Garden to be “used” for a purpose authorized by the section.
Hardwick said that the same section gives denied license applicants the right to appeal denials to the AHC and to seek judicial review.
The panel additionally concluded that the information is subject to discovery as provided by regulations governing discovery in contested cases before the AHC.
Hardwick noted that Article XIV and DHSS’ regulations direct the department to score and rank qualified applications against each other to decide which licenses to grant or deny.
As such, she said the only way to determine whether the department denied Kings Garden’s applications in an arbitrary and capricious manner is to compare its applications against information from those of successful applications.
“To interpret Section 1.3(5) as not allowing the discovery of information from the successful applications in the appeals process would lead to the unreasonable and absurd result that unsuccessful applicants pursuing an appeal — and, in turn, the AHC and the courts — would be denied access to information that was an integral part of the Department’s decision to deny their applications,” she wrote. “Without all of the information that formed the basis of the Department’s decision, no meaningful review of that decision can occur.”
Chief Judge Cynthia L. Martin and Judge W. Douglas Thomson joined the opinion.
James Layton of Tueth Keeney in St. Louis, who represented DHSS, did not respond to a message seeking comment. Joshua Hill of Newman, Comley & Ruth in Jefferson City, who represented Kings Garden, declined to comment on the ruling.
The case is State ex rel. Missouri Department of Health and Senior Services v. Slusher, WD84247.