HARRISBURG — A company that challenged Pennsylvania’s marijuana permitting process after losing its bid for a permit last year was too quick to seek remedy through the state's courts, according to a recent ruling filed on April 20 in the Commonwealth Court of Pennsylvania.
The appeal was heard by judges Mary Hannah Leavitt, P. Kevin Brobson, Patricia A. McCullough, Anne E. Covey, Christine Fizzano Cannon, Ellen Ceisler and Michael H. Wojcik, who wrote the court’s decision.
The petitioner in the case, Keystone ReLeaf LLC, was "premature" in appealing its case against a long list of defendants headed by the Pennsylvania Department of Health, according to the decision. Keystone ReLeaf had filed suit under the Pennsylvania Medical Marijuana Act, which took effect in May 2016.
"In sum, [the] petitioner has not made a clear showing that an exception to the doctrine of administrative remedies applies," Wojcik said in the decision. "[The] petitioner has not presented a facial constitutional challenge to the act or temporary regulations nor shown how the administrative remedy before the department is inadequate. Our review of the [health] department's administrative review process satisfies us that it offers unsuccessful applicants an adequate remedy to challenge their permit denials and the permitting process. Because [the] petitioner's administrative appeal is ongoing, a judgment here would be inappropriate."
The court issued an order signed by Wojcik that sustained the defense’s objections that Keystone ReLeaf had not exhausted its administrative remedies. The order also dismissed Keystone ReLeaf's amended petition with prejudice.
Keystone ReLeaf included five counts in its complaint, including allegations that the state health department scores permit applications "inconsistently and arbitrarily and refuses to shed light on how it scored applications or awarded permits," according to the appellate court’s decision.
Keystone ReLeaf further claimed that "[b]y engaging in a secretive permitting process, the department has deprived [it] and all applicants [of] any fair and meaningful administrative review of their decisions in violation of due process," Wojcik wrote in the decision.
The defendants in the case, for their part, claimed that Keystone ReLeaf had not exhausted its administrative remedies before taking the case to court, and the court agreed.
"[The] petitioner has a perfectly suited and adequate administrative remedy to address its complaints regarding the denial and scoring of its dispensary permit applications and rejection of its grower/processor permit application and has availed itself of this remedy," Wojcik wrote in the opinion. "Indeed, [the] petitioner’s administrative appeals are presently pending before the department’s secretary. The asserted grounds for the administrative appeals are the same grounds asserted in this original jurisdiction action."
Keystone ReLeaf is not alone in its administrative appeal, according to the appellate court’s decision.
"There is nothing novel or unique about [the] petitioner's claims in this regard, as more than 140 other unsuccessful applicants feel the same way, i.e., that the department got it wrong and the unsuccessful applicant should have been awarded the permit," Wojcik wrote in the decision. "[The] petitioner's claims amount to little more than a challenge of the department's proper application of the act and temporary regulations."
However, Wojcik also indicated in a footnote in the opinion that this may not be the last time that the court hears about the issues raised by Keystone ReLeaf.
"Notwithstanding, we note that [the] petitioner has raised some troubling allegations regarding the permitting process, which this court takes very seriously," he wrote in the footnote. "Although [the] petitioner has failed to exhaust its administrative remedies, we may have the opportunity to address these issues in the near future in our appellate role."