John Doe v. Alt. Med. Md., LLC, No. 98

• Court: Court of Special Appeals of Maryland
• Writing for the Court: Opinion by Watts, J.
• Parties: JANE AND JOHN DOE ET AL. v. ALTERNATIVE MEDICINE MARYLAND, LLC ET AL.
• Docket Number: No. 98
• Decision Date: 25 August 2017

JANE AND JOHN DOE ET AL.
v.
ALTERNATIVE MEDICINE MARYLAND, LLC ET AL.

No. 98

COURT OF APPEALS OF MARYLAND

Argued: July 27, 2017
September Term, 2016
August 25, 2017

MARYLAND RULE 2-214(a)(2) - INTERVENTION AS OF RIGHT - MD. CODE ANN., CTS. & JUD. PROC. (1973, 2013 REPL. VOL.) § 3-405(a)(1) - MARYLAND RULE 2-211(a) - MARYLAND RULE 2-214(b) - PERMISSIVE INTERVENTION - REMAND - Court of Appeals held that petitioner growers, who had been granted pre-approvals for medical cannabis grower licenses, and in one instance a license, by Natalie M. LaPrade Medical Cannabis Commission, were entitled to intervention as of right under Maryland Rule 2-214(a)(2) and, as such, that trial court erred in denying intervention as of right. Court of Appeals determined that petitioner growers were entitled to be made a party under Md. Code Ann., Cts. & Jud. Proc. (1973, 2013 Repl. Vol.) ("CJ") § 3-405(a)(1) and to joinder under Maryland Rule 2-211(a). The trial court also abused its discretion in denying permissive intervention under Maryland Rule 2-214(b), as to petitioner growers. Court of Appeals concluded that trial court did not err or abuse its discretion in denying intervention as of right or permissive intervention as to two patients and two trade associations, and that patients and trade associations were not entitled to be made a party under CJ § 3-405(a)(1). Court of Appeals remanded case to trial court for further proceedings, including determination of issues raised by petitioner growers in motion to dismiss that had been denied as moot, namely, applicability of doctrine of laches, whether action is action for administrative mandamus, i.e., petition for judicial review, which was not timely filed, and if not dismissed, whether complaint for declaratory judgment should be considered petition for judicial review subject to on-the-record review under substantial evidence test.

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Circuit Court for Baltimore City
Case No. 24-C-16-005801

Barbera, C.J. Greene McDonald Watts Hotten Getty Wilner, Alan M. (Senior Judge, Specially Assigned), JJ.

Opinion by Watts, J.

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This case arises out of a dispute regarding the unique process of pre-approving and licensing medical cannabis growers in Maryland for the first time under Md. Code Ann., Health Gen. (1982, 2015 Repl. Vol.) ("HG") § 13-3301 et seq. In 2013, the General Assembly authorized the Natalie M. LaPrade Medical Cannabis Commission ("the Commission"), Respondent, originally entitled the Natalie M. LaPrade Medical Marijuana Commission, to be responsible for pre-approving and licensing medical cannabis growers in Maryland. See 2013 Md. Laws 3625 (Vol. IV, Ch. 403, H.B. 1101). The General Assembly directed that the Commission would be independent, but would function within the Department of Health and Mental Hygiene ("the Department"),¹ Respondent.² See id. at 3623. In 2015, the General Assembly gave the Commission its current name, the Natalie M. LaPrade Medical Cannabis Commission. See 2015 Md. Laws 1164 (Vol. II, Ch. 251, H.B. 490).

The Commission, its members, and the Department were sued by Alternative Medicine Maryland, LLC ("AMM"), Respondent, a business that applied for, but did not receive pre-approval for, a medical cannabis grower license. In a complaint for declaratory judgment and preliminary and permanent injunctive relief, AMM contended that, during the pre-approval process, the Commission failed to follow applicable law with respect to the requirement to consider racial and ethnic diversity, and requested that the Commission

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be prohibited from issuing final approvals for the first group of medical cannabis grower licensees until the Commission took corrective action, consisting of actively seeking racial and ethnic diversity among medical cannabis grower licensees and conducting a study on the existence of discrimination with respect to the medical cannabis statutes. Essentially, AMM requested that the Commission be required to reconduct the pre-approval process.

Notably, this case does not involve resolution of the issue of whether AMM is correct in its contention that the Commission had failed to consider racial and ethnic diversity of potential medical cannabis grower licensees. Instead, we must determine, chief among other issues, whether the Circuit Court for Baltimore City ("the circuit court") erred in denying a motion to intervene that was filed by medical cannabis growers that had received pre-approvals for medical cannabis grower licenses, a coalition and trade association that advocate for the use of medical cannabis, and patients who would potentially receive medical cannabis as treatment for illnesses.

To better understand this case, it is helpful to provide an introductory review of the statutes that govern the pre-approval and licensing of medical cannabis growers, as well as the underlying facts and procedural history of the case. The Commission, a sixteen member body that functions within the Department, HG §§ 13-3302(b), 13-3303(a), is responsible for licensing medical cannabis growers, dispensaries, and processors, HG §§ 13-3306, 13-3307, 13-3309. "The purpose of the Commission is to develop policies, procedures, guidelines, and regulations to implement programs to make medical cannabis available to qualifying patients in a safe and effective manner." HG § 13-3302(c). HG § 13-3306(a)(1) provides that the Commission "shall license medical cannabis growers that

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meet all requirements established by the Commission[.]" Currently, "the Commission may license no more than [fifteen] medical cannabis growers." HG § 13-3306(a)(2)(i). Starting on June 1, 2018, "the Commission may issue the number of licenses necessary to meet the demand for medical cannabis[.]" HG § 13-3306(a)(2)(ii). Of particular significance to this case is HG § 13-3306(a)(9)(i), which provides that: "The Commission shall: 1. Actively seek to achieve racial, ethnic, and geographic diversity when licensing medical cannabis growers; and 2. Encourage applicants who qualify as a minority business enterprise, as defined in § 14-301 of the State Finance and Procurement Article."³ (Paragraph breaks omitted). In other words, HG § 13-3306(a)(9)(i)1 requires that the Commission, in licensing medical cannabis growers, actively seek to achieve racial, ethnic, and geographic diversity.

After HG § 13-3306(a)(9)(i)1 became effective, during the 2015 legislative session, a member of the General Assembly representing Baltimore County, Delegate Christopher R. West, requested that the Office of Counsel to the General Assembly—a division of the

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Office of the Attorney General—provide advice as to whether HG § 13-3306(a)(9)(i)'s requirement for racial and ethnic diversity was constitutional. In a letter⁴ dated March 13, 2015, Assistant Attorney General Kathryn M. Rowe ("Rowe") responded to Delegate West that the legislative history of the medical cannabis statute indicated that, in a bill review letter, the Attorney General of Maryland had previously advised that the statute must be implemented consistent with constitutional provisions described in Richmond v. J.A. Croson Co., 488 U.S. 469 (1989) and Fisher v. Univ. of Tex. at Austin, 133 S. Ct. 2411 (2013). According to Rowe, in Croson, the Supreme Court held that, for a state entity to take action to correct discrimination, there must be a strong basis in evidence of past discrimination at the time a race conscious selection program is established. Rowe advised that, in the area of government contracting, to implement a race- or ethnicity-based selection process, a study is required "showing a significant statistical disparity between the availability of . . . minority subcontractors" and the use of the minority subcontractors by the governmental entity. (Citation and internal quotation marks omitted). Rowe added

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that, in Fisher, the Supreme Court indicated that it would "closely scrutinize a government's justification of a race-conscious program and its evidence in support of that program." Rowe concluded that "[c]onstitutional limits [] would prevent the Commission from conducting race- or ethnicity[-]conscious licensing in the absence of a disparity study showing past discrimination in similar programs."

Rowe's letter was provided to the Commission. On September 14, 2015, the Commission adopted Md. Code Regs. ("COMAR") 10.62.08.05, which governs the Commission's review of applications for medical cannabis grower licenses. COMAR 10.62.08.05 does not identify racial or ethnic diversity as factors to be considered in issuing medical cannabis grower licenses, but provides that "[f]or scoring purposes, the Commission may take into account the geographic location of the growing operation to ensure there is geographic diversity in the award of licenses." COMAR 10.62.08.05J.

On August 5, 2016, the Commission voted to issue pre-approvals for the applications for medical cannabis grower licenses of the top fifteen applicants, including the following eight Petitioners: Curio Cultivation, LLC ("Curio Cultivation");⁵ Doctor's Orders Maryland, LLC ("Doctor's Orders"); ForwardGro, LLC ("ForwardGro"); Green Leaf Medical, LLC ("Green Leaf Medical"); Holistic Industries, LLC ("Holistic Industries"); Kind Therapeutics, USA, LLC ("Kind Therapeutics"); SunMed Growers,

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LLC ("SunMed Growers"); and Temescal Wellness, LLC ("Temescal Wellness") (together, "the Growers"). AMM was one of the businesses whose application for a medical cannabis grower license was not pre-approved. AMM contends that it is more than 80% African-American owned.

On October 31, 2016, in the circuit court, AMM filed a complaint against the Commission, its members, and the Department contending that the Commission failed to consider racial and ethnic diversity in pre-approving applications for medical cannabis grower licenses, and that, as such, the Commission had violated HG § 13-3306(a)(9)(i)1. AMM sought an order prohibiting the Commission from issuing final...