Supreme Court declares DHSS must disclose information to denied marijuana business applicants in appeals

 

On Tuesday, Missouri’s highest court issued a formal opinion affirming the judgment of the circuit court, requiring the Department of Health and Senior Services to make available information submitted by medical marijuana license applicants during the application process.

In the opinion, written by Judge George W. Draper III, the court writes, “Because the plain language of article XIV, section 1.3(5) allows confidential information to be used for purposes of appealing Department’s decision to deny a license, the AHC did not err in sustaining Kings Garden’s motion to compel and ordering the production of certain confidential information pursuant to a protective order. Consequently, the circuit court did not err in denying Department’s petition for a writ of prohibition.”

“Article XIV, passed by the voters of Missouri, directs the Department to protect information obtained from medical marijuana patients and business applicants.  The Department welcomes the clarity provided by the Missouri Supreme Court on disclosure of certain information in appeals of denied business applicants. Compliance with the Supreme Court’s order will demonstrate that applications were scored consistently,” Section for Medical Marijuana Director, Lyndall Fraker, said of the decision.

 

In December, the court heard testimony from James Layton, representing the State of Missouri’s Department of Health and Senior Services, and Joshua Hill, representing Kings Garden. Kings Garden had requested in discovery of its appeal to the Administrative Hearing Commission that the Department provide complete and unredacted copies of successful cultivation license applications. That request, and the following decisions which compelled the Department to comply with a modified version of the request, set the foundation for the case to be heard.

 

Background

The Department denied Kings Garden’s request, citing its interpreted constitutional duty, to protect the information of applicants. As a result, Kings Garden filed a motion to compel the state to produce the requested documentation.

AHC Commissioner Renee T. Slusher granted a motion to compel after Kings Garden agreed to limit the scope of its request to only questions where they did not receive full points. The Department was ordered to produce the corresponding documentation.

The Department continued to contend that it is bound by the constitution to keep private the information of applicants. In efforts to provide security and ensure the Department’s duty was upheld – Commissioner Slusher entered a protective order covering the produced documents and offered the Department the option to redact identifying information.

   

DHSS filed a petition for writ of prohibition, asking the circuit court to bar enforcement of Commissioner Slusher’s order compelling it to produce the information. The circuit court did enter a preliminary order in prohibition to “refrain from all action in the  premises until further order.”

The court quashed the preliminary writ and denied the DHSS’ petition after deliberation. The judgment stayed and the Department appealed.

 

The appellate decision 

DHSS argued only one point on appeal, maintaining their constitutionally mandated duty to protect the information of applicants, that “the circuit court erred in quashing the preliminary writ and denying its petition for a permanent
writ of prohibition because it claims that Commissioner Slusher acted outside of her authority,” arguing that the Department cannot be compelled to disclose applicant information.

The court affirmed the decision of the circuit court, writing in its judgment, “Article XIV, Section 1.3(5) expressly allows the constitutionally mandated confidential information in this case to be “used” for a purpose authorized by the section. The second sentence of Article XIV, Section 1.3(5) states, “Such reports or other information may be used only for a purpose authorized by this section.” In that sentence, “this section” refers to Section 1.3. Subsection (23) of Section 1.3 gives denied license applicants the right to appeal the Department’s denial to the AHC and, following the exhaustion of administrative remedies, the right to seek judicial review. Because an appeal to the AHC and the courts is authorized by Section 1.3, the plain language of Section 1.3(5) allows the confidential information to be used for the purpose of an appeal of a license denial. Furthermore, because Section 1.3(5) does not limit the use of the information in an appeal of a license denial, the information is subject to discovery as provided in 1 CSR 15-3.420, the regulation governing discovery in contested cases before the AHC.”

“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. Without all of the information that formed the basis of the Department’s decision, no meaningful review of that decision can occur,” reads part of the judgment handed down by the Appellate Court.

The Department sought to transfer the May decision to the Supreme Court of Missouri.

Briefs

Harvest of Missouri LLC, which successfully obtained cultivation and other licenses, filed a brief as a friend of the Court. It argues the constitution guarantees confidentiality of applicant information and prohibits the department from disclosing such information with no exception during an unsuccessful applicant’s appeal. Alternatively, the company argues its applications contain trade secrets warranting “attorney eyes only” protection such that the information can be seen only by the attorneys and not their clients.

DHSS Brief