ATCL 1, L.L.C. v. State of Ohio Bd. of Pharmacy

[Cite as ATCL 1, L.L.C. v. State of Ohio Bd. of Pharmacy, 2023-Ohio-59.]

STATE OF OHIO ) IN THE COURT OF APPEALS

)ss: NINTH JUDICIAL DISTRICT

COUNTY OF SUMMIT )

ATCL 1, LLC C.A. No. 30049

Appellee

v. APPEAL FROM JUDGMENT

ENTERED IN THE

STATE OF OHIO BOARD OF COURT OF COMMON PLEAS

PHARMACY COUNTY OF SUMMIT, OHIO

CASE No. CV-2019-08-2960

Appellant

DECISION AND JOURNAL ENTRY

Dated: January 11, 2023

HENSAL, Presiding Judge.

{¶1} The State of Ohio Board of Pharmacy (“the Board”) appeals a judgment of the

Summit County Court of Common Pleas that granted ATCL 1, LLC’s administrative appeal from

an order of the Board. For the following reasons, this Court affirms.

I.

{¶2} ATCL applied to the Board for one of a limited number of licenses to dispense

medical marijuana. The Board hired reviewers to score applications across several categories and

awarded licenses to the applicants who scored the highest within a specific geographic area.

Because ATCL placed fifth among the applicants in an area of the state that the Board had

determined would receive only three licenses, its application was denied. ATCL sought review of

the Board’s decision, which went before a hearing examiner. The examiner issued a report

recommending that ACTL’s application be denied, which the Board adopted. ACTL then filed an

administrative appeal with the common pleas court. Following a hearing, the court found that the

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grading of the applications had been inconsistent and granted the appeal. It ordered the matter be

remanded so that the Board could reevaluate the scoring of ATCL’s application. The Board has

appealed, assigning four errors.1

II.

ASSIGNMENT OF ERROR I

CAN A COURT FIND THAT AN ADJUDICATION ORDER IS NOT

SUPPORTED BY RELIABLE, PROBATIVE AND SUBSTANTIAL EVIDENCE

WHEN THERE ARE NO MATERIAL FACTS IN DISPUTE?

ASSIGNMENT OF ERROR II

OHIO ADM.CODE 3796:6-2-04(A) REQUIRED THE PHARMACY BOARD TO

USE COMPETITVE SCORING TO DECIDE WHO SHOULD BE AWARDED

A MEDICAL MARIJUANA DISPENSARY LICENSE. THE COURT

IMPLICITLY REQUIRED THE PHARMACY BOARD TO STRICTLY

COMPLY WITH ITS REQUEST FOR APPLICATIONS. DID THE COURT

ERR?

{¶3} In its first and second assignments of error, the Board argues that the common pleas

court incorrectly found that its decision was not supported by reliable, probative, and substantial

evidence. Under Revised Code 119.12(A)(1), “any party adversely affected by any order of an

agency issued pursuant to an adjudication * * * denying the issuance * * * of a license * * * may

appeal * * * to the court of common pleas of the county in which the place of business of the

licensee is located * * *.” “The court may affirm the order of the agency * * * if it finds, upon

consideration of the entire record and any additional evidence the court has admitted, that the order

is supported by reliable, probative, and substantial evidence and is in accordance with law.” R.C.

119.12(M). “In the absence of this finding, it may reverse, vacate, or modify the order or make

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We note that the Board has argued its first and second and its third and fourth assignments

of error together, contrary to Appellate Rule 12(A)(2) and 16(A)(7). Nevertheless, this Court will

exercise its discretion to consider its combined arguments. See State v. Torrence, 9th Dist. Summit

No. 30099, 2022-Ohio-3024, ¶ 13.

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such other ruling as is supported by reliable, probative, and substantial evidence and is in

accordance with law.” Id. On further appeal by an agency, this Court “may * * * review and

determine the correctness of the judgment of the court of common pleas that the order of the agency

is not supported by any reliable, probative, and substantial evidence in the entire record.” R.C.

119.12(N).

{¶4} Appellate Rule 9(A) provides that “[t]he original papers and exhibits thereto filed

in the trial court, the transcript of proceedings, if any, including exhibits, and a certified copy of

the docket and journal entries prepared by the clerk of the trial court shall constitute the record on

appeal in all cases.” In the first paragraph of its order, the common pleas court noted that it had

“held a hearing in this matter.” The Board did not seek preparation of the transcript of that hearing

in accordance with Rule 9(B)(1) and (3). Instead, in its docketing statement, the Board indicated

that the record would only consist of “the original papers, exhibits, a certified copy of the docket

and journal entries, and any transcript of proceedings that were filed in the trial court prior to final

judgment.”

{¶5} At a hearing under Section 119.12, “counsel may be heard on oral argument, briefs

may be submitted, and evidence may be introduced if the court has granted a request for the

presentation of additional evidence.” R.C. 1191.12(L). The record in this case does not contain

any written requests for the presentation of additional evidence. Nevertheless, without a transcript

of the hearing, this Court is unable to review all the arguments that were made to the common

pleas court regarding whether the Board’s decision was supported by reliable, probative, and

substantial evidence and was in accordance with law.

{¶6} “When portions of the transcript necessary for resolution of assigned errors are

omitted from the record, the reviewing court has nothing to pass upon and thus, as to those assigned

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errors, the court has no choice but to presume the validity of the lower court’s proceedings, and

affirm.” Knapp v. Edwards Laboratories, 61 Ohio St.2d 197, 199 (1980); see also Cook v. Bell,

9th Dist. Summit No. 25092, 2010-Ohio-3579, ¶10 (“[I]n the absence of a complete record, this

Court must presume regularity in the trial court’s proceedings and accept its judgment.”). Upon

review of the record, we conclude that, without a transcript of the hearing before the common pleas

court, we are unable to undertake a complete review of the soundness of the court’s decision.

Accordingly, we have no choice but to presume that it did not err. The Board’s first and second

assignments of error are overruled.

ASSIGNMENT OF ERROR III

OHIO ADM.CODE 3796:6-2-04(A) PLACES THE BURDEN ON THE

APPLICANT TO SHOW THAT IT WAS PREJUDICED BY ANY ERRORS IN

SCORING. THE COURT BELOW FOUND THAT THERE WAS

INCONSISTENT SCORING BY EVALUATORS BUT DID NOT REQUIRE

THE APPLICANT TO SHOW THAT THOSE INCONSISTENCIES WERE

PREJUDICIAL. DID THE COURT ERR?

ASSIGNMENT OF ERROR IV

THE COURT FOUND THAT EVALUATORS SOMETIMES GAVE

DIFFERENT ANSWERS TO IDENTICAL SCORES (SIC) AND REMANDED

FOR THE PHARMACY BOARD TO “REEVALUATE THE SCORES”

WITHOUT EXPLAINING HOW IT SHOULD DO SO. DID THE COURT ERR?

{¶7} In its third and fourth assignments of error, the Board argues that the common pleas

court should have determined that ATCL did not establish that it was harmed by any variations in

the scoring of its application. It also argues that the common pleas court exercised improper

discretion when it remanded the matter back to the Board for the Board to reevaluate ATCL’s

scores.

{¶8} As with the Board’s first and second assignments of error, because the record on

appeal does not contain a transcript of the hearing before the common pleas court, we are unable

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to undertake a complete review of the court’s decision. Accordingly, we have no choice but to

presume the decision’s validity. Knapp at 199; Cook at ¶ 10. The Board’s third and fourth

assignments of error are overruled.

III.

{¶9} The Board’s assignments of error are overruled. The judgment of the Summit

County Court of Common Pleas is affirmed.

Judgment affirmed.

There were reasonable grounds for this appeal.

We order that a special mandate issue out of this Court, directing the Court of Common

Pleas, County of Summit, State of Ohio, to carry this judgment into execution. A certified copy

of this journal entry shall constitute the mandate, pursuant to App.R. 27.

Immediately upon the filing hereof, this document shall constitute the journal entry of

judgment, and it shall be file stamped by the Clerk of the Court of Appeals at which time the period

for review shall begin to run. App.R. 22(C). The Clerk of the Court of Appeals is instructed to

mail a notice of entry of this judgment to the parties and to make a notation of the mailing in the

docket, pursuant to App.R. 30.

Costs taxed to Appellant.

JENNIFER HENSAL

FOR THE COURT

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POWELL, J.

CONCURS IN JUDGMENT ONLY.

CALLAHAN, J.

DISSENTING.

{¶10} I disagree with the lead opinion’s conclusion that this Court cannot consider the

merits of the Board’s assignments of error. In the context of an administrative appeal, a court of

common pleas acts in an appellate capacity. See generally R.C. 119.12. In an appeal arising under

R.C. Chapter 119, a trial court’s review “is confined to the record as certified to it” unless the

consideration of new evidence is provided by law. R.C. 119.12(K). In this case, the trial court

conducted a hearing solely for the purpose of hearing arguments on the merits of the appeal. The

trial court did not consider any new evidence. Given the trial court’s appellate function, the

transcript of that oral argument is not necessary to resolve the assignments of error.

{¶11} I am also gravely concerned that the relief fashioned by the trial court did not take

into consideration the potential effects on other applicants. For these reasons, I must respectfully

dissent.

(Powell, J., of the Twelfth District Court of Appeals, sitting by assignment.)

APPEARANCES:

DAVE YOST, Attorney General, and HENRY G. APPEL, Principal Assistant Attorney General,

for Appellant.

THOMAS BEVAN, Attorney at Law, for Appellee.

ALEX J. MCCALLION, DONALD W. DAVIS, JR., JASON A. BUTTERWORTH, and

MATTHEW R. DUNCAN, Attorneys at Law, for Appellee.

JOHN IZZO, Attorney at Law, for Appellee.