Nev. Dep't of Health & Human Servs. v. Samantha Inc.

• Decision Date: 14 December 2017
• Docket Number: No. 71123,71123
• Citation: 407 P.3d 327
• Parties: The STATE of Nevada DEPARTMENT OF HEALTH AND HUMAN SERVICES, DIVISION OF PUBLIC AND BEHAVIORAL HEALTH MEDICAL MARIJUANA ESTABLISHMENT PROGRAM, Appellant, v. SAMANTHA INC., d/b/a Samantha's Remedies, a Domestic Corporation, Respondent.
• Court: Nevada Supreme Court

407 P.3d 327

The STATE of Nevada DEPARTMENT OF HEALTH AND HUMAN SERVICES, DIVISION OF PUBLIC AND BEHAVIORAL HEALTH MEDICAL MARIJUANA ESTABLISHMENT PROGRAM, Appellant,

v.SAMANTHA INC., d/b/a Samantha's Remedies, a Domestic Corporation, Respondent.

No. 71123

Supreme Court of Nevada.

FILED DECEMBER 14, 2017

Adam Paul Laxalt, Attorney General, and Linda C. Anderson, Chief Deputy Attorney General, Carson City, for Appellant.

Cooper Levenson, P.A., and Kimberly R. Maxson–Rushton, Las Vegas, for Respondent.

BEFORE THE COURT EN BANC.

OPINION

By the Court, PICKERING, J.:

The Nevada Department of Health and Human Services appeals from an order granting the petition for judicial review filed by respondent Samantha Inc. under NRS Chapter 233B, the Nevada Administrative Procedure Act (APA). NRS 233B.130 limits the right to petition for judicial review under the APA to "contested cases." Because the application process provided by NRS 453A.322 does not constitute a contested case as defined by NRS 233B.032, the district court did not have authority to grant APA-based relief. We therefore vacate the district court's order granting the petition for judicial review and remand with instructions to grant the Department's motion to dismiss Samantha's petition for judicial review.

I.

The Division of Public and Behavioral Health, Medical Marijuana Establishment Program is a part of Nevada's Department of Health and Human Services. The Department evaluates applications to operate medical marijuana dispensaries and issues "registration certificates" to successful applicants. NRS 453A.322 (governing the registration of medical marijuana establishments); see NRS 453A.116(4) (including medical marijuana dispensaries in the definition for "medical marijuana establishment"). A "[m]edical marijuana establishment registration certificate" is "a registration certificate that is issued by the Department pursuant to NRS 453A.322 to authorize the operation of a medical marijuana establishment." NRS 453A.119. The Department accepts applications for registration certificates once a year over the course of 10 business days. NRS 453A.324(5). The Department can issue up to 40 certificates for Clark County dispensaries, NRS 453A.324(1)(a), but only 12 of those certificates can be allotted to establishments located in the City of Las Vegas. NRS 453A.326(1).¹

The Department evaluates and ranks applications according to considerations set forth in NRS 453A.328 and accompanying regulations. See NRS 453A.322 ; NRS 453A.328 ; NRS 453A.370 ; see also NAC 453A.306 ; NAC 453A.310 ; NAC 453A.312(1). The highest scoring applicants receive registration certificates until the available permits are exhausted. NAC 453A.310(1) ; NAC 453A.312(1). Samantha submitted an application, but its score did not rank high enough to receive a Las Vegas registration certificate.

Samantha petitioned for judicial review of the Department's decision not to issue it a registration certificate. Its petition was based exclusively on the Nevada Administrative Procedure Act, stating: "This Petition for Judicial Review is filed pursuant to [NRS] 233B.130, which provides for judicial review of contested final decisions in Administrative Agency Cases. See, NRS 233B.032." Only the Department, not any of the other applicants, was named as the respondent.

In response, the Department moved to dismiss, arguing that the APA only affords judicial review in contested cases, which the marijuana dispensary application process does not involve. The district court denied the Department's motion and ordered the Department to submit its confidential protocols for reviewing applications. The district court then re-reviewed Samantha's application and concluded that the Department's scoring of Samantha's application was not based on substantial evidence and that the Department's application process, particularly its review of Samantha's application, was arbitrary and capricious. In its order granting judicial review, the district court directed the Department to reevaluate Samantha's application using criteria different from those used for other applicants and to issue a registration certificate to Samantha if the revised score placed Samantha in the top 12 Las Vegas applicants.

The Department appeals, challenging both the district court's denial of its motion to dismiss and its decision on the merits. We sustain the Department's challenge to the district court's denial of its motion to dismiss and vacate the district court's decision on that basis, without reaching the merits.

II.

A.

A party seeking to challenge an administrative agency's decision may pursue such judicial review as is available by statute or, if appropriate, equitable relief. Compare Crane v. Cont'l Tel. Co., 105 Nev. 399, 401, 775 P.2d 705, 706 (1989) ("Courts have no inherent appellate jurisdiction over official acts of administrative agencies except where the legislature has made some statutory provision for judicial review."), with Richard J. Pierce Jr., Administrative Law Treatise, 1700 (5th ed. 2010) ("[Equitable remedies] have become the most common nonstatutory remedies for unlawful agency action."). The availability of a legal remedy depends on the statutes comprising the jurisdiction's Administrative Procedure Act and the agency-specific statutes involved. Crane, 105 Nev. at 401, 775 P.2d at 706 ("When the legislature creates a specific procedure for review of administrative agency decisions, such procedure is controlling."); see Mineral Cty. v. State, Bd. of Equalization, 121 Nev. 533, 536, 119 P.3d 706, 707–08 (2005) (harmonizing judicial review provisions in Nevada APA and NRS Chapter 361). Equitable remedies, such as declarative and injunctive relief, or a petition for mandamus, may be available "in the discretion of the court and only when legal remedies, such as statutory review, are not available or are inadequate." Pierce, supra, at 1701.

Samantha challenged the denial of its medical marijuana registration certificate in the district court through a petition for judicial review pursuant to Nevada's APA, NRS Chapter 233B. The procedures and requirements that apply to a petition for judicial review under the APA are set out specifically in NRS Chapter 233B and include directions for joinder of parties, NRS 233B.130(2)(a) ; transmittal of the agency record, NRS 233B.131 ; and the scope and extent of available judicial review, NRS 233B.135. Because Samantha did not seek equitable or declaratory relief from the district court, we evaluate this appeal solely on the basis of Samantha's entitlement to judicial review under the APA and the laws governing medical marijuana, NRS Chapter 453A.

B.

NRS 233B.130 provides that a party is entitled to judicial review of an administrative decision when identified as a party of record by an agency and aggrieved by a final decision in a contested case. The Department argues that its decision to deny Samantha a certificate of registration for a medical marijuana establishment did not result from a contested case, so the district court lacked the authority to consider Samantha's petition for judicial review. Samantha responds that nothing suggests the Legislature intended to preclude judicial review, citing federal cases that establish a "presumption of availability" of judicial review of agency decisions. E.g., Abbott Labs. v. Gardner, 387 U.S. 136, 140, 87 S.Ct. 1507, 18 L.Ed.2d 681 (1967), abrogated on other grounds by Califano v. Sanders, 430 U.S. 99, 97 S.Ct. 980, 51 L.Ed.2d 192 (1977). But, with the exception of Checker Cab Co. v. State, Nevada has not endorsed this presumption. Compare 97 Nev. 5, 8, 621 P.2d 496, 498 (1981) ("All presumptions are in favor of a right to judicial review for those who are injured in fact by agency action."), with Private Investigator's Licensing Bd. v. Atherley, 98 Nev. 514, 515, 654 P.2d 1019, 1020 (1982) ( "Pursuant to the [APA], not every administrative decision is reviewable.").

NRS 233B.130(1)(a) affords a right of judicial review to a party of record in an administrative proceeding who is "[a]ggrieved by a final decision in a contested case." NRS 233B.032 defines a contested case as:

a proceeding, including but not restricted to rate making and licensing, in which the legal rights, duties or privileges of a party are required by law to be determined by an agency after an opportunity for hearing, or in which an administrative penalty may be imposed.

Giving NRS 233B.130 and NRS 233B.032 their plain meaning, only final agency decisions from a proceeding requiring an opportunity for a hearing or imposing an administrative penalty are judicially reviewable contested cases. See Westpark Owners' Ass'n v. Eighth Judicial Dist. Court, 123 Nev. 349, 357, 167 P.3d 421, 427 (2007) ("When the language of a statute is unambiguous, the courts are not permitted to look beyond the statute itself when determining its meaning.").

This court previously held that when the statutory scheme governing an administrative proceeding fails to require notice and opportunity for a hearing, the agency's final decision in that proceeding was not made in a contested case and thus was not subject to judicial review. See Citizens for Honest & Responsible Gov't v. Sec'y of State, 116 Nev. 939, 952, 11 P.3d 121, 129 (2000) (statutes governing Secretary of State's review of recall petition did not require notice or hearing, thus decision was not reviewable under the APA as a contested case); State of Nevada, Purchasing Div. v. George's Equip. Co., 105 Nev. 798, 804, 783 P.2d 949, 953 (1989) (statute providing discretionary hearing within 10 days of unsuccessful bid to purchase property from the State did not create a contested case); Atherley, 98 Nev. at 515, 654 P.2d at 1020 (denial of private investigator's license was not a contested case because no notice or hearing was required before decision). This court is "loath to depart from the doctrine of stare decisis and will overrule precedent...