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State v. Samantha Inc.

Supreme Court of Nevada

December 14, 2017

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.

         Appeal from a district court order denying a petition for judicial review. Eighth Judicial District Court, Clark County; Douglas Smith, Judge.

          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

          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');">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');">453A.322 (governing the registration of medical marijuana establishments); see NRS 453A.ll6(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');">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');">453A.324(5). The Department can issue up to 40 certificates for Clark County dispensaries, NRS 453A.324');">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');">453A.326(1).[1]

         The Department evaluates and ranks applications according to considerations set forth in NRS 453A.328');">453A.328 and accompanying regulations. See NRS 453A.322');">453A.322; NRS 453A.328');">453A.328; NRS 453A.37');">453A.37O; see also NAC 453A.3O6; NAC 453A.310; NAC 453A.3l2(1). The highest scoring applicants receive registration certificates until the available permits are exhausted. NAC 453A.3lO(1); NAC 453A.3l2(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.O32." 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. Confl 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). ...


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