Blue Water Cannabis Company LLC v. City of Westland

If this opinion indicates that it is “FOR PUBLICATION,” it is subject to

revision until final publication in the Michigan Appeals Reports.

STATE OF MICHIGAN

COURT OF APPEALS

BLUE WATER CANNABIS COMPANY, LLC, UNPUBLISHED

doing business as PUFF CANNABIS COMPANY, April 13, 2023

H.O.D. WESTLAND, LLC, HENNDOGS

HOLDINGS, LLC, doing business as GREEN VIBE,

and ATTITUDE WELLNESS, LLC,

Plaintiffs,

and

MHS WESTLAND, LLC, HARPER VENTURES,

LLC, and EXCLUSIVE BRANDS, LLC,

Plaintiffs-Appellants,

and

COMBINED CANNABIS OF MICHIGAN, LLC,

Intervening Plaintiff-Appellant,

and

CANDID LABS, LLC,

Intervening Plaintiff,

v No. 359144

Wayne Circuit Court

CITY OF WESTLAND, WESTLAND CITY LC No. 21-003413-CZ

COUNCIL, WESTLAND MARIJUANA

SELECTION COMMITTEE, JAMES HART,

JAMES GODBOUT, TASHA GREEN, MICHAEL

LONDEAU, PETER HERZBERG, MIKE

MCDERMOTT, and ANDREA RUTKOWSKI,

Defendants-Appellees,

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and

QUALITY ROOTS, INC., MPM-R VIII, LLC, and

KARVOL ENTERPRISES, LLC,

Intervening Defendants-Appellees.

BLUE WATER CANNABIS COMPANY, LLC,

doing business as PUFF CANNABIS COMPANY,

H.O.D. WESTLAND, LLC, HENNDOGS

HOLDINGS, LLC, doing business as GREEN VIBE,

MHS WESTLAND, LLC, HARPER VENTURES,

LLC, and EXCLUSIVE BRANDS, LLC,

Plaintiffs,

and

ATTITUDE WELLNESS, LLC,

Plaintiff-Appellant,

and

CANDID LABS, LLC, and COMBINED

CANNABIS OF MICHIGAN, LLC,

Intervening Plaintiffs,

v No. 359168

Wayne Circuit Court

CITY OF WESTLAND, LC No. 21-003413-CZ

Defendant-Appellee,

and

WESTLAND CITY COUNCIL, WESTLAND

MARIJUANA SELECTION COMMITTEE, JAMES

HART, JAMES GODBOUT, TASHA GREEN,

MICHAEL LONDEAU, PETER HERZBERG,

MIKE MCDERMOTT, and ANDREA

RUTKOWSKI,

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Defendants,

and

QUALITY ROOTS, INC., MPM-R VIII, LLC, and

KARVOL ENTERPRISES, LLC,

Intervening Defendants-Appellees.

Before: CAVANAGH, P.J., and BOONSTRA and RIORDAN, JJ.

PER CURIAM.

In these consolidated appeals, plaintiffs and intervening plaintiffs are applicants who were

denied licenses to sell marijuana in the city of Westland (“the City”). Five separate actions

challenging the City’s licensing application process were filed in the trial court, which

consolidated the cases into one action under LC No. 21-003413-CZ. The City, the Westland City

Council, individual council members, and the City’s Marijuana Selection Committee (the

“Selection Committee”) were all named as defendants.1 Intervening defendants Quality Roots,

Inc., and MPM-R VIII, LLC (collectively the “intervening defendants”),2 are applicants who

successfully obtained conditional licenses to operate a marijuana business in Westland. In Docket

No. 359144, plaintiffs MHS Westland, LLC (“MHS Westland”), Harper Ventures, LLC

(“Harper”), and Exclusive Brands, LLC (“Exclusive”), and intervening plaintiff Combined

Cannabis of Michigan, LLC (“Combined Cannabis”) (hereinafter collectively referred to as

“appellants”), appeal as of right the trial court’s September 20, 2021 order granting summary

disposition in favor of defendants and intervening defendants pursuant to MCR 2.116(C)(7) and

(8). In Docket No. 359168, plaintiff Attitude Wellness, LLC (“Attitude Wellness”), appeals the

same order as of right. For the reasons set forth in this opinion, we affirm.

I. RELEVANT FACTUAL AND PROCEDURAL BACKGROUND

In October 2019, the City adopted the Westland Uniform Marijuana Business Ordinance,

§ 27-1 et seq., to exercise its police, regulatory, and licensing powers over both medical-use and

adult-recreational-use businesses selling marijuana to the extent permissible under state law,

specifically the Medical Marihuana Facilities Licensing Act, MCL 333.27101 et seq., and the

Michigan Regulation and Taxation of Marijuana Act (MRTMA), MCL 333.27951 et seq.

Westland Code, §§ 27-1, 27-2. The City created three types of licenses and allowed licenses to be

issued for up to eight business locations. Westland Code, §§ 27-5(a) and 27-6.

1

For ease of reference, all references to “the City” shall include all other defendants associated

with the City, unless otherwise indicated.

2

Karvol Enterprises, LLC, was also an intervening defendant, but it has not filed a brief on appeal.

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Applicants were required to submit an application with the City and pay a fee of $5,000,

up to $2,500 of which was refundable if an application was denied. Applicants were required to

provide proof that they had secured rights to any property intended to be used for their business

locations. Applicants were also required to submit proof of prequalification through the Michigan

Marijuana Regulatory Agency. Applicants were required to sign and attest that the application,

under penalty of perjury, was true to each applicant’s information, knowledge, and belief.

Westland Code, §§ 27-4 and 27-9.

Completed applications were evaluated on the basis of a written policy approved by the

City Council. That policy was required to contain rules for evaluation and selection of the

competing applications, and the ordinance also provided that a selection committee would carry

out the policy. Westland Code, § 27-12(a). The ordinance provides that “[t]he selection committee

shall score and rank applications for each category of business location based on the rules in the

application consideration policy.” Westland Code, § 27-12(b).

On May 18, 2020, the City adopted the Marijuana Business Application Consideration

Policy (the “Policy”) after it was approved by the City Council, which set forth the rules for

evaluating license applications. Section 1.11 of the Policy established a Selection Committee as

an administrative subcommittee, comprised of three city administrative employees appointed by

the mayor, to sort, review, and score the applications, among other duties outlined in the Policy.

The Policy specifically provided that the Selection Committee shall not make a final decision

regarding the awarding of licenses. Policy, § 1.11.

The Selection Committee was required to conduct a prereview of all applications, and all

properly filed applications were to be separated into different licensing categories. Policy, §§ 3.1-

3.6. The Selection Committee was then required to review and score the applications according

to the Policy’s guidelines. Policy, § 3.7. The Selection Committee was required to score the

applications using the scoring rubric adopted by the City, which defined certain categories to

consider for each planned business and the points to award in order to arrive at a ranking of the

applications in each license category. Policy, § 4.1. The Policy also adopted procedures to follow

in the event of ties among applicants. This included first giving greater weight to certain scores

under the scoring rubric. Policy, §§ 4.8-4.10. If there was still a tie after those adjustments, the

Policy required that a blind lottery drawing be held to determine the ranking of applications.

Policy, §§ 4.11, 4.12, and 4.13. The Selection Committee was required to compile a list of the

applicants and their scores, ranking them from highest to lowest, and to send that list to the City

Council and to each applicant. Policy, §§ 5.1 and 5.2.

Each applicant had a 10-day period from notice of its right to appeal to file an appeal with

the Marijuana Business Review Board (the “Review Board”) to challenge its score. Policy, §§ 5.3

and 5.4. The Review Board was to consider each written appeal at a public hearing and applicants

appealing also had a right to orally address the Review Board for 10 minutes. Policy, §§ 5.5 and

5.6. After hearing all appeals, the Review Board was required to issue its recommendation to

either uphold the list or make modifications. Any ties were to be resolved in the same manner that

the Selection Committee used to resolve ties. After the Review Board’s recommendations were

forwarded to the City Council, the City Council was to consider and certify the list with any

adjustments. The City Council’s decision regarding the list was final. Policy, §§ 5.7 and 5.8.

Only the highest ranked applicants in each license category would be considered for and offered a

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conditional license. The City would not maintain a waiting list for unsuccessful applicants. Policy,

§§ 6.1-6.3.

Plaintiffs and intervening plaintiffs are unsuccessful applicants for marijuana licenses in

Westland. MHS Westland, Harper, and Exclusive asserted multiple claims against the City, the

City Council, the Selection Committee, and individual council members for (1) violation of their

rights to due process, (2) violation of the Open Meetings Act (OMA), MCL 15.261 et seq., (3)

violation of the MRTMA, (4) violation of the City’s own marijuana business ordinance, (5) gross

negligence, and (6) breach of contract.3

Briefly, the substance of the factual allegations made by MHS Westland, Harper, and

Exclusive in their amended complaints was primarily that the criteria adopted by the City in its

ordinance did not comply with the MRTMA requirement that applicants who are best suited to

operate a facility within a city be selected, because points were awarded on the basis of property

characteristics and development plans, which are not factors contemplated by the MRTMA,

thereby allowing the City to award licenses on the basis of its subjective belief of what was best

for the City, given its aesthetic and economic development aspirations. They further alleged that

defendants failed to properly follow or apply the selection criteria when scoring the individual

applications. For instance, plaintiffs alleged that defendants fabricated or gave their own meaning

to the term “property” as not including buildings and structures, but rather just land or vacant land.

According to the amended complaints, this difference resulted in MHS Westland and Harper both

receiving scores that eliminated them from qualifying for a license in the area north of Ford Road.

MHS Westland and Harper alleged that they would have received scores of 100 points, not 92 out

of a possible 100 points, if the criteria had been properly applied. Further, the applicants who were

awarded licenses were selected after the applicants with the highest scores participated in a lottery.

MHS Westland and Harper alleged that if not for the scoring errors, they would have been placed

in the top tier and allowed to advance to the lottery to determine the licensees.

MHS Westland and Harper further alleged that decisions on the applications were made in

secret by the Selection Committee. They also claimed that there was bias and favoritism in the

application process, although examples were not provided. Plaintiffs alleged that several

applicants appealed the Selection Committee’s final scoring decisions to the Review Board, but

the Review Board simply “rubber stamped” the committee’s scoring decisions and none of their

scores were changed. Plaintiffs also alleged that some council members raised questions about

the selection process and were provided only three days to review the final recommendations of

the Selection Committee before voting on the final licenses, which involved reviewing 21,000

pages of application materials. Furthermore, plaintiffs questioned the appellate process because

the Review Board did not include participation by attorneys. On March 15, 2021, defendant and

council member Tasha Green raised concerns about the selection process, including the

interpretation of the term “property” and the lack of time to review the applications. Defendant

and council member Peter Herzberg also took issue with the fact that all appeals were denied at

once and no changes were made through the appellate process. On March 15, 2021, the City

3

An additional claim for violation of the Freedom of Information Act, MCL 15.231 et seq., is not

at issue on appeal.

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Council voted to approve a resolution awarding the licenses to those applicants originally

recommended by the Selection Committee. Exclusive made similar allegations in its amended

complaint. Exclusive received a score of 81 out of 100 points, but believed that it should have

received 100 points if its application had been properly scored.

Attitude Wellness also asserted in its complaint that the City’s scoring criteria conflicted

with the MRTMA and that the use of a blind-draw lottery also did not comply with the MRTMA.

Combined Cannabis alleged violations of the MRTMA in the licensing process and also due-

process violations related to the scoring of the applications and awarding of licenses.

The City moved for summary disposition under MCR 2.116(C)(7) and (8), primarily

arguing that all of the complaints were barred because the applications submitted by each plaintiff

or intervening plaintiff contained a waiver clause that prohibited the actions, and reflected their

acknowledgment that the application process is a competitive process for which the applicant

waived any right to challenge the City’s selection process or selection criteria. Intervening

defendants also moved for summary disposition under MCR 2.116(C)(8), arguing that plaintiffs’

various claims failed as a matter of law.

The trial court ruled that the City and intervening defendants were entitled to summary

disposition on the basis of the waivers in the application forms. The court also ruled that the OMA

was not violated and that the City’s ordinance did not conflict with the MRTMA.

II. JURISDICTIONAL CHALLENGES

Preliminarily, we address intervening defendants’ argument that this Court does not have

jurisdiction over either appeal. Whether this Court has jurisdiction to hear an appeal is a question

of law, which this Court reviews de novo. Tyrrell v Univ of Mich, 335 Mich App 254, 260-261;

966 NW2d 219 (2020).

The claims of appeal in Docket Nos. 359144 and 359168 were filed from the trial court’s

September 20, 2021 order granting summary disposition for defendants and intervening

defendants. Intervening defendants argue, however, that res judicata bars the instant appeals

because an earlier application for leave to appeal the same order was denied by this Court in Docket

No. 358632. We disagree.

The prior application was filed for the limited purpose of requesting a stay or a status quo

order because plaintiffs intended to pursue postjudgment motions in the trial court. While the

application was pending, MHS Westland, Harper, and Exclusive filed a motion for reconsideration

of the September 20, 2021 order, which the trial court denied on October 14, 2021. The instant

appeals were filed within the 21-day period after the trial court denied the motion for

reconsideration. Thereafter, this Court denied the application in Docket No. 358632 “for failure

to persuade the Court of the need for immediate appellate review.” Bluewater [sic] Cannabis Co

LLC v City of Westland, unpublished order of the Court of Appeals, entered November 10, 2021

(Docket No. 358632).

Initially, there is no merit to intervening defendants’ argument that these appeals are barred

by res judicata. “Res judicata bars a second action on the same claim if (1) the prior action was

decided on the merits, (2) both actions involve the same parties or their privies, and (3) the matter

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in the second case was, or could have been, resolved in the first.” Mecosta Co Med Ctr v Metro

Group Prop & Cas Ins Co, 509 Mich 276, 282; 983 NW2d 401 (2022) (quotations and citations

omitted). The flaw in intervening defendants’ res judicata argument is that the prior application

in Docket No. 358632 was not decided on the merits. This Court’s order states that the application

was denied “for failure to persuade the Court of the need for immediate appellate review.” When

an application is denied for failure to persuade the Court of the need for immediate appellate

review, it is not a decision on the merits. See Rott v Rott, 508 Mich 274, 288-289; 972 NW2d 789

(2021). Therefore, res judicata does not apply.

Furthermore, intervening defendants do not dispute that the trial court’s September 20,

2021 order granting summary disposition for defendants and intervening defendants is a final order

under MCR 7.202(6), and is appealable as of right under MCR 7.203(A)(1). The claims of appeal

were timely filed because they were filed within the 21-day period after the trial court denied a

timely filed motion for reconsideration. See MCR 7.204(1)(d). Therefore, this Court has

jurisdiction over these appeals.

To the extent that intervening defendants argue that the claim of appeal in Docket No.

359144 should be deemed to have been untimely filed with respect to Combined Cannabis because

it did not join in the motion for reconsideration filed by MHS Westland, Harper, and Exclusive,

we are not persuaded that Combined Cannabis’s failure to join in that motion precludes its

participation in this appeal because it did not file a claim of appeal within the 21-day period from

the entry of the September 20 order, while the motion for reconsideration was still pending. The

court rules do not clearly compel such a conclusion. In any event, considering the lack of clarity

in the court rules and because Combined Cannabis is similarly situated with the other plaintiffs, to

the extent that there may be any uncertainty regarding whether the claim of appeal was timely filed

with respect to Combined Cannabis, thereby affecting this Court’s jurisdiction as of right, we will

exercise our discretion to treat Combined Cannabis’s claim of appeal as an application for leave

and grant that application, thereby providing this Court with jurisdiction with respect to Combined

Cannabis. See Wardell v Hincka, 297 Mich App 127, 133 n 1; 822 NW2d 278 (2012).

III. WAIVERS

Appellants and Attitude Wellness argue that the trial court erred by granting summary

disposition for defendants and intervening defendants on the basis that their claims were barred by

the waiver clauses in the applications that each plaintiff and intervening plaintiff submitted when

applying for a license.

A trial court’s decision on a motion for summary disposition is review de novo. El-Khalil

v Oakwood Healthcare, Inc, 504 Mich 152, 159; 934 NW2d 665 (2019). Summary disposition of

a claim may be granted under MCR 2.116(C)(7) if the claim is barred by a release. When

reviewing a motion under MCR 2.116(C)(7), this Court considers all documentary evidence

submitted by the parties and accepts the allegations in the complaint as factually accurate unless

affidavits or other documents specifically contradict them. Shay v Aldrich, 487 Mich 648, 656;

790 NW2d 629 (2010). This issue also involves the interpretation of the City’s application form,

as well as constitutional and statutory questions. These are all questions of law for this Court to

decide, which are reviewed de novo. City of Grand Rapids v Brookstone Capital, LLC, 334 Mich

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App 452, 457; 965 NW2d 232 (2020); Aguirre v Michigan, 315 Mich App 706, 713; 891 NW2d

516 (2016); Cole v Ladbroke Racing Mich, Inc, 241 Mich App 1, 13; 614 NW2d 169 (2000).

The City argued in its motions that appellants’ claims were barred by waivers in the

applications that appellants submitted. The City argued that the waivers were unambiguous and

were binding on any applicants who signed them under contract principles, entitling the City to

summary disposition under MCR 2.116(C)(7). The application form submitted by each plaintiff

or intervening plaintiff contained the following terms:

The Applicant and Authorized Representative agree to the following on

behalf of themselves and their owners, operators, directors, officers, agents,

shareholders, investors, heirs, assigns, estates, successors, parents, subsidiaries, and

any other holder of any interest whatsoever (collectively, the “Applicant”):

A. Definitions. As used in Part VIII, the following terms have the following

meanings:

Claim, means any cause of action or potential cause of action that arises out

of the operation of or in any way relates to one or more state or local licenses for

medical marijuana facilities or adult-use marijuana establishments within the City

of Westland, including, causes of action or potential causes of action relating to the

City of Westland’s application, licensing, inspection, enforcement, renewal,

amendment, suspension, or revocation process. This definition includes, but is not

limited to, lawsuits arising under statutory, constitutional, contractual, and/or

equitable law.

City, includes the City of Westland and its representatives, agents,

employees, appointed and elected officials, department heads, insurers, contractors,

and all boards, commissions, committees, and the members thereof.

B. All of the following apply to all Claims against the City:

(i) Applicant waives its right to a trial of any kind, in both federal and state

court, including the right to participate in any class action litigation.

(ii) Applicant consents to individual arbitration of all Claims against the

City. Under no circumstances will class action or joint action of any kind be

permitted.

(iii) Arbitration will be in accordance with the then-current rules of JAMS

or AAA, or as otherwise agreed to by the parties in writing. An award by the

Arbitrator may be entered as a judgment by any court having jurisdiction.

Arbitration shall take place in Westland, Michigan and shall be governed by the

laws of the State of Michigan, notwithstanding any conflict of law provisions.

(iv) Claims against the City must be brought within six months from the

date that a final decision is issued by the City, or such claim will be waived and

permanently barred.

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(v) If the City prevails on any Claim, the Arbitrator shall award the City its

costs and attorney fees for the Claim or Claims.

* * *

F. Applicant has reviewed the Westland Uniform Marijuana Business Ordinance,

the Westland Marijuana Business Application Consideration Policy, and this

Application, all in their entirety, and has had the opportunity to consult with legal

counsel. By submitting this Application, Applicant agrees that the Application

Consideration Policy is a competitive process and Applicant waives any right to

challenge the City’s selection process or selection criteria.

G. The issuance of a License or conditional License will be contingent on the

Applicant agreeing to any other conditions imposed by the City on the Applicant.

Under penalty of perjury, I attest, to the best of my information, knowledge,

and belief, that I have read and understood the foregoing, and that I am duly

authorized to sign this application and bind the Applicant to its terms.

[Emphasis added.]

The trial court agreed with the City that the waivers barred appellants’ and Attitude Wellness’s

claims.

Appellants and Attitude Wellness argue that the waivers are unconstitutional and should

not be enforced because they infringe on an applicant’s right to free speech under the First

Amendment and Const 1963, art 1, § 5, and right to seek redress for injuries inflicted by a

government’s decisions under Const 1963, art 6, § 28.

First, appellants argue that the waivers are unenforceable under the doctrine of

unconstitutional conditions. In AFT Mich v Michigan, 497 Mich 197, 225-228; 866 NW2d 782

(2015), our Supreme Court explained:

Individuals may under most circumstances voluntarily waive their

constitutional rights. Individuals also have no constitutional right to receive any

particular governmental benefits. Falk v State Bar of Mich, 411 Mich 63, 107; 305

NW2d 201 (1981) (opinion by RYAN, J.), quoting Elrod v Burns, 427 US 347, 361;

96 S Ct 2673; 49 L Ed 2d 547 (1976). However, under limited circumstances, the

government may be prevented from denying a benefit to an individual because that

person has exercised a constitutional right; this is known as the “doctrine of

unconstitutional conditions.” Dolan v City of Tigard, 512 US 374, 385; 114 S Ct

2309; 129 L Ed 2d 304 (1994). Not every condition attached to a governmental

benefit is an unconstitutional one, and although the exact boundaries of the doctrine

are difficult to define, the fundamental principle underlying the doctrine is clear:

the governmental cannot attach conditions to government benefits that effectively

coerce individuals into relinquishing their constitutional rights.

The United States Supreme Court has applied the doctrine of

unconstitutional conditions to claims arising under the Takings Clause of US Const,

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Ams V and XIV and has created a specific test of sorts: a governmental benefit

given in exchange for a seemingly voluntary transfer of private property interests

to the government may violate the doctrine of unconstitutional conditions if the

condition lacks a nexus between the burden that the condition imposes on the

property owner and the government’s interest advanced by the condition, or if the

burden that the condition imposes is not roughly proportionate to the governmental

interest advanced by the condition. Thus far, the Court has only applied this test in

the context of “land-use decisions conditioning approval of development on the

dedication of property to public use.” City of Monterey v Del Monte Dunes at

Monterey, Ltd, 526 US 687, 702-703; 119 S Ct 1624; 143 L Ed 2d 882 (1999).

This Court has never applied the doctrine of unconstitutional conditions to

Const 1963, art 10, § 2. Because plaintiffs have not argued that we should analyze

their unconstitutional conditions argument in a manner in any way distinct from the

United States Supreme Court’s application of the doctrine to claims arising under

US Const Ams V and XIV, we decline to do so here. For the immediate purposes

of plaintiff’s unconstitutional conditions argument, we analyze Const 1963, art 10,

§ 2 and US Const Ams V and XIV coextensively, although we are not bound to do

so. [Footnotes omitted.]

See also Tallman v Dep’t of Natural Resources, 421 Mich 585; 365 NW2d 724 (1984).

The parties acknowledge that the unconstitutional conditions doctrine has been applied in

limited circumstances in this state, none of which involve a local government requiring applicants

to accept the terms of a release or waiver as a condition of applying for a business license.

However, the parties refer this Court to Barden Detroit Casino, LLC v Detroit, 59 F Supp 2d 641,

643, 648-649 (ED Mich, 1999), aff’d 230 F3d 848 (CA 6, 2000), in which the court reviewed a

release that the plaintiff, Barden Detroit Casino, LLC (“BDC”), was required to sign to participate

in a competitive process for the selection and licensing of casino developers in the city of Detroit.

The release in that case barred all claims “arising out of or directly or indirectly related to . . . the

selection and evaluation of” the submitted proposals, as well as the release and use of any

information submitted by applicants. Id. at 658. One of the claims raised by BDC was a

constitutional challenge to the city’s ordinance, which gave preference in the casino licensing

process to applicants that had campaigned on behalf of the voter initiative that legalized casinos.

This preference, and a similar one under state law, were challenged on First Amendment grounds.

Id. at 643, 645-648.

The court declined to follow the unconstitutional conditions doctrine and instead relied on

Town of Newton v Rumery, 480 US 386, 398; 107 S Ct 1187; 94 L Ed 2d 405 (1987), in which the

Supreme Court recognized that an individual may release constitutional claims so long as the

release is entered into voluntarily and is not the product of misconduct by the municipality.

Barden, 59 F Supp 2d at 661-665. Lower courts must evaluate such agreements on a case-by-case

basis and determine (1) whether the agreement was voluntary, (2) whether the agreement was the

product of misconduct, and (3) whether enforcement of the agreement would adversely affect the

relevant public interest. Id. In Barden, the court ultimately followed the Rumery line of cases,

rather than applying the unconstitutional conditions doctrine, concluding that BDC was not

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obligated to forfeit its First Amendment rights by signing the release. Instead, BDC released the

right to bring suit and challenge the casino selection process. Id. at 665.

The court in Barden went on to evaluate the Rumery factors and Detroit’s requirement that

developers accept the release as part of the selection process, for which they did not have a right

to negotiate, and concluded that this requirement did not leave BDC without options. BDC could

have opposed signing the release and challenged it immediately or signed the release while

reserving its rights and brought suit if its proposal was not accepted. Instead, BDC, with time to

review the release and the assistance of counsel, opted to sign it and proceed. Id. at 665-666. The

record showed that BDC voluntarily and intelligently signed the release and should have known

that it released all claims, including constitutional claims. Id. at 666-667. Further, there was no

evidence of misconduct by Detroit, such as burying the release or attempting to mislead any

prospective developers. Id. at 667-668. Finally, the court explained that there were important

public policy reasons that supported the release because of the high stakes involved in casino

development and the likelihood that spurned developers would pursue litigation, exposing

taxpayers to high legal expenses. Thus, “it was perfectly reasonable for the Detroit Defendants to

require a broad release of all claims” and “it would have been irresponsible not to require a

release.” Id. at 668. Furthermore, BDC had options to challenge the proceedings without signing

the release. Id. at 668-669.

On appeal, the Sixth Circuit Court of Appeals affirmed the district court’s decision to grant

summary disposition for the defendants, but based its decision on the ground that BDC lacked

standing to sue the defendants because the claimed preference for developers who supported the

legislation authorizing the development of casinos was never actually applied. Barden Detroit

Casino, LLC v Detroit, 230 F3d 848, 849-855 (CA 6, 2000). Because the Sixth Circuit held that

BDC lacked standing, it declined to reach the question of the enforceability of the release. Id. at

849. However, the court briefly discussed the issue as follows:

This is not to suggest endorsement of either the preference provision or the

release that prospective casino operators were required to sign. . . .

As for the validity of the release, we observe that waivers of constitutional

rights are not to be presumed lightly. See, e.g., D.H. Overmyer Co. v. Frick Co.,

405 U.S. 174, 185, 92 S.Ct. 775, 31 L.Ed.2d 124 (1972); Brookhart v. Janis, 384

U.S. 1, 4, 86 S.Ct. 1245, 16 L.Ed.2d 314 (1966); Johnson v. Zerbst, 304 U.S. 458,

464, 58 S.Ct. 1019, 82 L.Ed. 1461 (1938); Ohio Bell Tel. Co. v. Public Utils.

Comm’n, 301 U.S. 292, 307, 57 S.Ct. 724, 81 L.Ed. 1093 (1937) (“We do not

presume acquiescence in the loss of fundamental rights”). Insistence upon

execution of the release as a condition of participation in the selection process may

or may not be constitutional, but Barden would be out of the running in any event.

[Barden, 230 F3d at 855.]

Because the Sixth Circuit ultimately did not express an opinion on the issue, the district court’s

decision in Barden is instructive.

Appellants argue that this case is distinguishable from Barden because that case involved

a contract, not legislation or an application for a license. They contend that consideration is lacking

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in this case to support the existence of any contract. We disagree. The City’s agreement to review

the license applications and provide appellants and Attitude Wellness with a potentially lucrative

business opportunity constituted consideration for the waivers. Thus, the waivers are not void for

lack of consideration. See Barden, 59 F Supp 2d at 669-670.

Appellants and Attitude Wellness have not identified a significant or fundamental

constitutional right that has been impacted by the waivers they signed when submitting their

applications for marijuana licenses. Appellants and Attitude Wellness argue that their right to seek

judicial review of their claims in a court of law is a constitutionally protected right. In support of

this argument, they cite Thaddeus-X v Blatter, 175 F3d 378, 391 (CA 6, 1999), which involves the

First Amendment’s protection of the right to petition the government for a redress of grievances

and prisoners’ constitutional right of access to the courts. The due-process right to access the

courts and the First Amendment’s right to petition government officials through the courts for

redress of grievances are fundamental rights. Morales v Turman, 326 F Supp 677, 680 (ED Tex,

1971). See also Const 1963, art 1, § 5.

Even accepting as true the argument that the waiver clauses implicate constitutional rights

to petition the government through the courts, the record does not allow appellants and Attitude

Wellness to now avoid enforcement of those waivers. As explained in Barden, Rumery and cases

following that line of reasoning recognize that voluntary agreements to waive constitutional rights

can be enforced if the necessary conditions are met. Accordingly, any right by appellants and

Attitude Wellness to seek redress against the City through the courts is waivable. Appellants

voluntarily submitted their applications, knowing that the terms of the applications clearly stated

that they would be waiving judicial review of the scoring decisions related to the applications.

Moreover, the waiver provisions did not completely foreclose any review, but provided that all

claims against the City would be subject to arbitration. The City also provided for immediate

appeals by applicants dissatisfied with the scoring decisions, which would expedite the application

process for all involved. Furthermore, as discussed in Barden, appellants could have challenged

the waiver clauses before signing them and submitting their applications. Instead, they voluntarily

chose to submit their applications and abide by the terms set by the City.

Furthermore, there are no allegations that appellants or Attitude Wellness were misled

about the nature of the waiver provision before submitting their applications, or allegations of

misconduct by the City. As for the public interest, there is nothing in the waivers that supports the

conclusion that they are against public interest. If appellants disagreed with the scoring decisions,

they had a right to an immediate appeal of those decisions to the City or through arbitration.

Because those methods would be more expedient and less expensive that judicial intervention,

they are not against public policy.

Appellants and Attitude Wellness also argue that the waiver language in the application

violates Const 1963, art 6, § 28, which provides, in relevant part:

All final decisions, findings, rulings and orders of any administrative officer

or agency existing under the constitution or by law, which are judicial or quasi-

judicial and affect private rights or licenses, shall be subject to direct review by the

courts as provided by law. This review shall include, as a minimum, the

determination whether such final decisions, findings, rulings and orders are

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authorized by law; and, in cases in which a hearing is required, whether the same

are supported by competent, material and substantial evidence on the whole

record. . . .

This provision does not apply to the licensing application process in this case because the licensing

process is not a judicial or quasi-judicial proceeding, given that the underlying matter is not an

adversarial proceeding. The application process in these matters does not involve the hallmarks

of a court proceeding, as described in Natural Resources Defense Council v Dep’t of

Environmental Quality, 300 Mich App 79, 86; 832 NW2d 288 (2013). Thus, appellants’ and

Attitude Wellness’s reliance on art 6, § 28 is misplaced.

Appellants further argue that the waivers should be declared invalid on the ground that they

violate public policy as expressed in the MRTMA. We disagree.

In Brooklyn Savings Bank v O’Neil, 324 US 697, 704; 65 S Ct 895; 89 L Ed 1296 (1945),

the United States Supreme Court observed:

It has been held in this and other courts that a statutory right conferred on a

private party, but affecting the public interest, may not be waived or released if such

waiver or release contravenes the statutory policy. Midstate Horticultural Co. v.

Pennsylvania Railroad Co., 320 U.S. 356, 361, 64 S.Ct. 128, 130, 88 L.Ed. 96; A.

J. Phillips Co. v. Grand Trunk Western Ry., 236 U.S. 662, 667, 35 S.Ct. 444, 446,

59 L.Ed. 774. Cf. Young v. Higbee Company, 324 U.S. 204, 65 S.Ct. 594. Where

a private right is granted in the public interest to effectuate a legislative policy,

waiver of a right so charged or colored with the public interest will not be allowed

where it would thwart the legislative policy which it was designed to effectuate.

Appellants rely on Cudnik v William Beaumont Hosp, 207 Mich App 378; 525 NW2d 891

(1994), in which this Court held that an exculpatory agreement that a patient was required to sign

before undergoing medical treatment was void as against public policy. This Court stated:

The question whether a hospital may absolve itself from liability for the

negligence of its employees via an exculpatory agreement signed by a patient is an

issue of first impression in Michigan. The overwhelming majority of other

jurisdictions that have addressed this question have held that such agreements are

invalid and unenforceable because medical treatment involves a particularly

sensitive area of public interest. Tunkl v Regents of the Univ of California, 60 Cal

2d 92; 32 Cal Rptr 33; 383 P2d 441 (1963); Ash v New York Univ Dental Center,

164 AD2d 366; 564 NYS2d 308 (1990); Smith v Hosp Authority of Walker, Dade

& Catoosa Cos, 160 Ga App 387; 287 SE2d 99 (1981); Meiman v Rehabilitation

Center, Inc, 444 SW2d 78 (Ky App, 1969). Today we join in the view of these

jurisdictions.

The leading case on this subject, Tunkl, supra, is often cited for its list of

factors constituting the “public interest,” as follows:

In placing particular contracts within or without the category

of those affected with a public interest, the courts have revealed a

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rough outline of that type of transaction in which exculpatory

provisions will be held invalid. Thus the attempted but invalid

exemption involves a transaction which exhibits some or all of the

following characteristics. It concerns a business of a type generally

thought suitable for public regulation. The party seeking

exculpation is engaged in performing a service of great importance

to the public, which is often a matter of practical necessity for some

members of the public. The party holds himself out as willing to

perform this service for any member of the public who seeks it, or

at least for any member coming within certain established standards.

As a result of the essential nature of the service, in the economic

setting of the transaction, the party invoking exculpation possesses

a decisive advantage of bargaining strength against any member of

the public who seeks his services. In exercising a superior

bargaining power the party confronts the public with a standardized

adhesion contract of exculpation, and makes no provision whereby

a purchaser may pay additional reasonable fees and obtain

protection against negligence. Finally, as a result of the transaction,

the person or property of the purchaser is placed under the control

of the seller, subject to the risk of carelessness by the seller or his

agents. [Id. at 98-101.]

Although noting that an agreement need only fulfill some of the foregoing

characteristics to be held unenforceable, the court in Tunkl found that the agreement

in that case fulfilled all of the relevant criteria.

As in Tunkl, supra, we find that the agreement in this case also fulfills all

of the relevant characteristics of a contract affecting the public interest. It is clear

that hospitals and the medical profession have been thought to be suitable for public

regulation. MCL 333.21501 et seq. . . . , MCL 333.17001 et seq. . . . . The

performance of medical services is of great importance to the public, and is a matter

of practical necessity for some members of the public. Defendant hospital holds

itself out as willing to perform medical services to members of the public.

Defendant hospital certainly possesses an advantage in bargaining strength against

any member of the public who seeks its services. Defendant hospital presented

plaintiff’s decedent with the standardized contract of exculpation, without any

provision for some other type of protection against negligence. Finally, it is readily

apparent that plaintiff’s decedent placed himself under the control of defendant

hospital, subject to the risk of carelessness by the hospital or its agents.

Accordingly, for the foregoing reasons we find that the exculpatory

agreement in this case is contrary to public policy. The exculpatory agreement

constitutes a contract of adhesion, and is unenforceable. Tunkl, supra at 102.

[Cudnik, 207 Mich App at 384-387 (footnotes omitted).]

Some of the factors discussed in Cudnik are present in this case. The legal sale of marijuana

is a business that is subject to public regulation. Those licensed to sell marijuana (particularly for

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medicinal uses) are providing a public service that can, according to some, be deemed of great

importance. However, the essential nature of the service is questionable, particularly for the

recreational use of marijuana, even if it could decrease the illegal sale of marijuana. The City also

has an advantage in bargaining power over those applying for licenses, but the public is not

affected by that bargaining disparity.

The only impact on the general public that appellants can point to is the risk that a business

licensed to act as a distributor of marijuana may not be as qualified as another applicant because

an applicant who was denied a license cannot challenge the scoring process in a court of law. But

to the extent that this scenario may implicate health or other risks to the general public, there are

other ways to protect the public from an unqualified licensee because this industry is highly

regulated. Other regulations can protect the general public from a licensee who does not meet or

comply with industry or legal standards, including the loss of a license that could be awarded to

another applicant.

Although appellants argue that enforcing the waivers will prevent municipalities from

being held accountable for factors that do not comply with the MRTMA when reviewing

applications, as discussed later in this opinion, the MRTMA allows municipalities to exercise

discretion in deciding what factors are relevant to a particular community when evaluating

competing applications for a license. Furthermore, ultimate decisions on awarding licenses can be

left to the discretion of the municipality. In this case, appellants and Attitude Wellness cannot

establish that the City’s criteria for evaluating applications violates the MRTMA. For these

reasons, we do not believe that the waivers violate public policy. The waivers primarily limit

applicants to appealing scoring decisions directly to the Review Board, and scoring decisions are

not the type of decision that courts should be reviewing because they primarily involve decisions

left to the municipality’s discretion.

Although appellants and Attitude Wellness also argue that summary disposition was

premature, they do not identify any possible evidence to support invalidating the waivers. In

Marilyn Froling Revocable Living Trust v Bloomfield Hills Country Club, 283 Mich App 264,

292-293; 769 NW2d 234 (2009), this Court explained:

Generally, summary disposition under MCR 2.116(C)(10) is premature if it

is granted before discovery on a disputed issue is complete. However, the mere

fact that the discovery period remains open does not automatically mean that the

trial court’s decision to grant summary disposition was untimely or otherwise

inappropriate. The question is whether further discovery stands a fair chance of

uncovering factual support for the opposing party’s position. In addition, a party

opposing summary disposition cannot simply state that summary disposition is

premature without identifying a disputed issue and supporting that issue with

independent evidence. The party opposing summary disposition must offer the

required MCR 2.116(H) affidavits, with the probable testimony to support its

contentions. [Footnotes omitted.]

Appellants’ and Attitude Wellness’s challenges to the validity of the waiver provision are mostly

based on legal arguments, rather than grounds that involve any factual inquiry. Moreover, any

factual evidence that could support a basis for finding the waivers invalid, such as whether the

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applications were signed involuntarily, would be within the control of appellants and Attitude

Wellness, but they have not submitted or identified any evidence, such as affidavits from those

involved in the application process or other offers of proof, to show that they were misled or that

there was any misconduct by defendants that would support a finding that the waivers are not

enforceable. Even on appeal, appellants and Attitude Wellness have not offered any factual

reasons why the waivers would not be enforceable. Accordingly, we are not persuaded that

summary disposition on the basis of the waiver provisions was either inappropriate or premature.

Although appellants claim that the trial court did not engage in the necessary rigorous

scrutiny before deciding that their claims were barred by the waivers, the trial court’s ruling was

consistent with Rumery and addressed the arguments made by appellants. Thus, there was no need

for the court to further address this issue.

Appellants and Attitude Wellness further argue that the waivers are not enforceable

because neither the MRTMA nor the City’s own ordinance expressly allow a municipality to

enforce such waivers. Appellants contend that the Selection Committee imposed the waivers on

its own, which involved an ultra vires, unauthorized act, rendering the waivers unenforceable. We

disagree.

In Vermilya v Delta College Bd of Trustees, 325 Mich App 416, 418-419; 925 NW2d 897

(2018), this Court stated:

The foundational principles of statutory interpretation are well established:

When interpreting a statute, we follow the established rules of

statutory construction, the foremost of which is to discern and give

effect to the intent of the Legislature. To do so, we begin by

examining the most reliable evidence of that intent, the language of

the statute itself. If the language of a statute is clear and

unambiguous, the statute must be enforced as written and no further

judicial construction is permitted. Effect should be given to every

phrase, clause, and word in the statute and, whenever possible, no

word should be treated as surplusage or rendered nugatory. Only

when an ambiguity exists in the language of the statute is it proper

for a court to go beyond the statutory text to ascertain legislative

intent. [Whitman v City of Burton, 493 Mich 303, 311-312; 831

NW2d 223 (2013) (citations omitted).]

Additionally, statutory language “cannot be read in a vacuum” and instead “must

be read in context with the entire act, and the words and phrases used there must be

assigned such meanings as are in harmony with the whole of the statute . . . .” G C

Timmis & Co v Guardian Alarm Co, 468 Mich 416, 421; 662 NW2d 710 (2003)

(quotation marks and citation omitted; ellipsis in original).

Appellants argue that the Westland Code, § 27-10a, only authorizes a waiver requirement

for applicants who are awarded a license, whereas the portion of the ordinance addressing

applications, Westland Code, § 27-9, does not require a waiver provision as part of the application

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process. Accordingly, appellants argue that because waivers are specifically addressed in § 27-

10a, the omission of a similar provision in § 27-9 compels the conclusion that inclusion of a waiver

provision in an application form is an ultra vires act. However, “[t]he maxim expressio unius est

exclusio alterius (the expression of one thing is the exclusion of another) ‘has force only when the

items expressed are members of an associated group or series, justifying the inference that items

not mentioned were excluded by deliberate choice, not inadvertence.’ ” Mich Ambulatory Surgical

Ctr v Farm Bureau Gen Ins Co of Mich, 334 Mich App 622, 632; 965 NW2d 650 (2020). The

City’s inclusion of a waiver and release provision with regard to licensees is not an indication that

the failure to include a waiver clause in its ordinance with regard to application forms demonstrates

that the City intended to prohibit waiver clauses in application forms, such that the inclusion of

those clauses is ultra vires. The City otherwise approved the application form and, as discussed

earlier, there is no per se prohibition on a municipality relying on a waiver or a release.

Appellants and Attitude Wellness also argue that the waiver clauses are not enforceable

because the MRTMA does not expressly permit a municipality to enforce waivers against those

applying for licenses. Appellants and Attitude Wellness further argue that waivers related to

decisions by municipalities violates the requirement that municipalities offer a competitive process

for selecting licensees. MCL 333.27959(4). First, although nothing in the MRTMA expressly

permits a municipality to include a waiver or release as part of the application process, it also does

not expressly prohibit them. Thus, appellants have not shown that any provision of the MRTMA

clearly prohibits the waivers adopted by the City.

The waivers at issue are limited in scope and permit a claim against the City to be resolved

by arbitration, as opposed to a judicial action. In addition, applicants and Attitude Wellness waived

the right to challenge the City’s selection process or selection criteria. This still allowed them to

utilize the appeals procedure to challenge the scoring of applications. To the extent that appellants

and Attitude Wellness claim that public policy should bar enforcement of the waivers, we disagree.

In fact, there are public policy considerations that would support the waivers. As already indicated,

applicants are entitled to challenge the scoring of applications as part of the administrative appeals

process. They also are entitled to submit claims to arbitration. However, they cannot challenge

the selection criteria and process, which primarily involves the City’s deliberative process at

arriving at its decisions. It is apparent that the limitations imposed by the City on challenges to its

licensing decisions are intended to expedite the process and reduce costs to those involved, which

benefits all parties involved.

In sum, we agree with the trial court that the waivers are valid and enforceable. Thus, those

claims made by appellants and Attitude Wellness that relate to the City’s selection process and

criteria are barred. However, it is necessary to address the claims for violation of the OMA and

gross negligence. A party may not insulate itself from liability for gross negligence or willful and

wanton misconduct. Lamp v Reynolds, 249 Mich App 591, 594; 645 NW2d 311 (2002).

Furthermore, any OMA claims do not fall within the scope of the waiver clause relating to the

selection process, and allowing waiver of claims under the OMA would also be inconsistent with

public policy because it would defeat the purpose of that act.

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IV. CONFLICTS WITH THE MRTMA

Appellants and Attitude Wellness argue that the trial court erred by rejecting their

arguments that the City’s ordinance and the criteria it adopted to evaluate and score licensing

applications conflicted with the MRTMA. We disagree.

Appellants and Attitude Wellness argue that the City did not comply with MCL

333.27959(4), which provides:

If a municipality limits the number of marihuana establishments that may

be licensed in the municipality pursuant to section 6 of this act and that limit

prevents the department from issuing a state license to all applicants who meet the

requirements of subsection 3 of this section, the municipality shall decide among

competing applications by a competitive process intended to select applicants who

are best suited to operate in compliance with this act within the municipality.

Appellants and Attitude Wellness argue that this statute only permits municipalities to adopt

scoring criteria that consider whether an applicant is suited to operate in compliance with the

MRTMA, and thus does not permit consideration of other factors identified by the City, such as

the type of proposed property for the marijuana business, whether the property is owned or leased,

whether contaminated property will be remediated, or a property’s architectural design, because

these factors are not relevant to an applicant’s suitability to operate in compliance with the

MRTMA. The trial court correctly rejected this argument.

Appellants and Attitude Wellness emphasize that MCL 333.27959(4) provides that

competition between applicants should be decided on the basis of which applicants “are best suited

to operate in compliance with this act,” but they ignore the last portion of this sentence that adds

“within the municipality.” Read as a whole, MCL 333.27959(4) plainly permits a municipality to

also consider criteria that are important or relevant to the municipality.

The only additional basis for invalidating the criteria adopted by the City are the general

limitations on the powers of municipalities set forth in MCL 333.27956, which provides, in

relevant part:

2. A municipality may adopt other ordinances that are not unreasonably

impracticable and do not conflict with this act or with any rule promulgated

pursuant to this act and that:

(a) establish reasonable restrictions on public signs related to marihuana

establishments;

(b) regulate the time, place, and manner of operation of marihuana

establishments and of the production, manufacture, sale, or display of marihuana

accessories;

(c) authorize the sale of marihuana for consumption in designated areas that

are not accessible to persons under 21 years of age, or at special events in limited

areas and for a limited time; and

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(d) designate a violation of the ordinance and provide for a penalty for that

violation by a marihuana establishment, provided that such violation is a civil

infraction and such penalty is a civil fine of not more than $500.

3. A municipality may adopt an ordinance requiring a marihuana

establishment with a physical location within the municipality to obtain a municipal

license, but may not impose qualifications for licensure that conflict with this act

or rules promulgated by the department.

4. A municipality may charge an annual fee of not more than $5,000 to

defray application, administrative, and enforcement costs associated with the

operation of the marihuana establishment in the municipality.

5. A municipality may not adopt an ordinance that restricts the

transportation of marihuana through the municipality or prohibits a marihuana

grower, a marihuana processor, and a marihuana retailer from operating within a

single facility or from operating at a location shared with a marihuana facility

operating pursuant to the medical marihuana facilities licensing act, 2016 PA 281,

MCL 333.27101 to 333.27801.

MCL 333.27953(x) defines “unreasonably impracticable” to mean “that the measures necessary

to comply with the rules or ordinances adopted pursuant to this act subject licensees to

unreasonable risk or require such a high investment of money, time, or any other resource or asset

that a reasonably prudent businessperson would not operate the marihuana establishment.”

Statutes that are unambiguous must be enforced in accordance with their plainly expressed

meaning. DeRuiter v Byron Twp, 505 Mich 130, 139; 949 NW2d 91 (2020). Local governments

are permitted to control and regulate matters of local concern when such power is conferred by the

state. Const 1963, art 7, § 22 provides that,

[u]nder general laws the electors of each city and village shall have the power and

authority to frame, adopt and amend its charter, and to amend an existing charter of

the city or village heretofore granted or enacted by the legislature for the

government of the city or village. Each such city and village shall have power to

adopt resolutions and ordinances relating to its municipal concerns, property and

government, subject to the constitution and law. No enumeration of powers granted

to cities and villages in this constitution shall limit or restrict the general grant of

authority conferred by this section. [Emphasis added.]

Furthermore, laws concerning municipalities shall be liberally construed in their favor, Const

1963, art 7, § 34. See also Assoc Builders & Contractors v City of Lansing, 499 Mich 177, 185-

187; 880 NW2d 765 (2016).

However, the state may preempt local regulations either expressly or by implication.

DeRuiter, 505 Mich at 140. As this Court explained in DeRuiter:

Implied preemption can occur when the state has occupied the entire field of

regulation in a certain area (field preemption) or when a local regulation directly

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conflicts with state law (conflict preemption). . . . In the context of conflict

preemption, a direct conflict exists when “the ordinance permits what the statute

prohibits or the ordinance prohibits what the statute permits.” People v Llewellyn,

401 Mich 314, 322 n 4; 257 NW2d 902 (1977). [DeRuiter, 505 Mich at 140

(citation omitted).]

There is nothing in the language of MCL 333.27956 or MCL 333.27959(4) that suggests

that the state intended to restrict the criteria a municipality can consider when evaluating

competing licensing applications, other than those limitations specifically prescribed in MCL

333.27956. Thus, a municipality may consider criteria unique to its own community and citizens,

subject to the restrictions in MCL 333.27959(4).

Recently, in Yellow Tail Ventures, Inc v City of Berkley, ___ Mich App ___, ___; ___

NW2d ___ (2022) (Docket Nos. 357654, 357666, & 358242); slip op at 7-8, this Court rejected

the argument that MCL 333.27959(4) restricts a municipality from adopting scoring criteria that

is important to or tailored to the community, stating:

First, plaintiffs argue that the City ordinance does not comply with MCL

333.27959(4) . . . . Plaintiffs argue that this provision prohibits the City from

adopting scoring criteria focused on community concerns, such as green

infrastructure, sustainability, aesthetics, and economic goals. The City’s scoring

criteria have no relation to whether an applicant is suited to operate a marijuana

establishment in compliance with the MRTMA because the competitive process

must select applicants that are “best suited to operate in compliance with this act.”

(Emphasis added.) Thus, for example, whether an establishment has solar panels

has nothing to do with compliance with the act, according to plaintiffs.

But plaintiffs read the MRTMA too narrowly. They would have this Court

stop short in its reading of MCL 333.27959(4) and omit the following emphasized

phrase: “. . . best suited to operate in compliance with this act within the

municipality.” (Emphasis added.) The statute could have been drafted to omit this

qualifying language, and the provision would have made grammatical sense. But,

the statute was not written that alternative way, and the statute does include the

qualifier “within the municipality.” We read this qualifier as permitting a

municipality to craft criteria suited to its own local concerns, provided that the

criteria conform to the other provisions of the MRTMA.

Against this reading, plaintiffs suggest that this Court treat the phrase

“within the municipality” as nugatory. This we will not do. It is a long-standing

principle of statutory construction that a court must avoid a “construction that

would render any part of the statute surplusage or nugatory.” West St Joseph Prop,

LLC v Delta Twp, 338 Mich App 522, 535; 980 NW2d 727 (2021). The plain and

ordinary reading of MCL 333.27959(4) authorizes a municipality to adopt a

competitive process to select applicants that are best suited to operate within the

municipality. This includes concerns specific to that community, including green

infrastructure, sustainability, aesthetics, and economic goals.

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Plaintiffs next argue that MCL 333.27956 cabins a municipality’s authority

to impose local regulations on a marijuana establishment. As a general proposition,

this is true; but as applied, the City’s ordinance does not stray outside the cabin. To

see this, consider subsections (2) and (3) of MCL 333.27956, specifically the

following emphasized language:

2. A municipality may adopt other ordinances that are not

unreasonably impracticable and do not conflict with this act or with

any rule promulgated pursuant to this act and that:

(a) establish reasonable restrictions on public signs related

to marihuana establishments;

(b) regulate the time, place, and manner of operation of

marihuana establishments and of the production, manufacture, sale,

or display of marihuana accessories;

(c) authorize the sale of marihuana for consumption in

designated areas that are not accessible to persons under 21 years of

age, or at special events in limited areas and for a limited time; and

(d) designate a violation of the ordinance and provide for a

penalty for that violation by a marihuana establishment, provided

that such violation is a civil infraction and such penalty is a civil fine

of not more than $500.

3. A municipality may adopt an ordinance requiring a

marihuana establishment with a physical location within the

municipality to obtain a municipal license, but may not impose

qualifications for licensure that conflict with this act or rules

promulgated by the department.

These provisions of the MRTMA do not prohibit or restrict a municipality

from considering the scoring criteria that plaintiffs complain are improper. Instead,

the provisions expressly permit a municipality to adopt an ordinance so long as it

(1) is not unreasonably impracticable, (2) does not directly conflict with the

MRTMA or promulgated rules, and (3) regulates the time, place, and manner of

operation of a marijuana establishment. Id.

The criteria used by a municipality to evaluate an application can certainly

reflect and anticipate whether that proposed licensee will be willing and able to

conform to the local “time, place, and manner” regulations enacted by that

municipality. And, so long as those regulations do not impose unreasonably

impracticable requirements or conflict with the MRTMA or promulgated rules,

then the use of criteria that reflect those local concerns is permissible.

Here, there is nothing in the record to suggest that the criteria of which

plaintiffs complain are unreasonably impracticable or conflict with any provision

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of the MRTMA or a promulgated rule. Rather, the criteria fit neatly within a

reasonable understanding of the MRTMA’s “time, place, and manner” provision.

Accordingly, the trial court did not err when it granted summary disposition to

defendants on this issue.

Accordingly, we reject appellants’ and Attitude Wellness’s arguments that the City was not

permitted to adopt criteria for evaluating an applicant’s suitability to operate a marijuana business

within the community that were not directly relevant to the applicant’s suitability to operate a

business in compliance with the MRTMA.

Appellants further claim that some of the criteria is unreasonably impracticable to those

who apply for licenses, primarily because some of the factors involve significant costs, such as the

construction of new buildings, remediating environmental contamination, providing

improvements that benefit the public, and charitable contributions. As noted earlier, a factor will

qualify as “unreasonably impracticable” if it will “subject licensees to unreasonable risk or require

such a high investment of money, time, or any other resource or asset that a reasonably prudent

businessperson would not operate the marihuana establishment.” MCL 333.27953(x). It is not

unreasonable to expect that some financial investment will be necessary to operate a business

establishment. And while the scoring rubric recognizes that some business proposals could

involve significant investment, and gives greater weight to proposals that demonstrate a financial

investment that will enhance the community, no particular investment is required as a condition

for a license. Simply because greater weight is given to new construction or proposals that involve

rehabilitation of an existing structure does not impose an unreasonably impracticable requirement

for licensure, particular where the choice of investment is left to the applicant. The choice of

financial investment behind a proposed business is a legitimate consideration because the City has

an interest in assuring that an applicant has the commitment and financial ability to operate a

business establishment safely, legally, properly, and in a way that enhances the community.

Appellants note that Combined Cannabis alleged in its complaint that it, “through its

owners, has invested hundreds of thousands of dollars in order to obtain a marijuana business

license from Westland, including thirty thousand dollars ($30,000.00) in application fees to

Westland.” Combined Cannabis submitted an unsigned affidavit from its owner, who simply

stated that it paid the City $30,000 in application fees. However, appellants do not specify the

basis for these alleged fees or costs, or explain how they relate to any requirements of the City’s

ordinance. Notably, Westland Code, § 27-9(b) and (g), requires an application fee of $5,000, and

provides that an applicant “whose application is not approved may be entitled to a partial refund

of up to $2,500.” Appellants do not explain what the additional fees that Combined Cannabis

allegedly paid were for, or how they relate to any requirements of the City’s ordinance or the

scoring of applications and selection of a licensee. “It is not sufficient for a party ‘simply to

announce a position or assert an error and then leave it up to this Court to discover and rationalize

the basis for his claims, or unravel and elaborate for him his arguments, and then search for

authority either to sustain or reject his position.’ ” Wilson v Taylor, 457 Mich 232, 243; 577 NW2d

100 (1997), quoting Mitcham v Detroit, 355 Mich 182, 203; 94 NW2d 388 (1959). Accordingly,

appellants have not demonstrated a basis for appellate relief with respect to this argument.

Appellants also appear to argue that the City made errors in the scoring of their

applications, which they ask this Court to review. This is not an issue that a court may review. As

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discussed earlier, the MRTMA permits municipalities to develop selection criteria based on factors

important to each community when selecting licenses to operate businesses within a community.

The scoring of licensing applications is both a fact-intensive and discretionary process.

Nonetheless, the City established an appellate process for applicants to challenge scoring decisions

by the Selection Committee before final decisions were made on applications. The weight given

to each factor by the Selection Committee and how the City Council eventually arrived at its

decisions are not the type of matters that should be judicially reviewed. While the MRTMA

provides that the licensing process before a municipality should be competitive, it does not

establish standards that a court could apply that would not involve injecting itself into a

municipality’s discretionary evaluation of the applications. In Cary Investments, LLC v City of

Mount Pleasant, ___ Mich App ___, ___; ___ NW2d ___ (2022) (Docket Nos. 356707 & 357862);

slip op at 7, this Court stated:

Finally, plaintiff’s allegations of arbitrary scoring by the selection committee ring

hollow and do nothing to support a due-process claim. The right to due process

guaranteed by the United States Constitution and the Michigan Constitution of

1963 does not empower courts to micromanage the decision-making of

governmental entities. See Krohn, 175 Mich App at 198. Asking this Court to

second-guess the selection committee’s scoring of the numerous applicants

competing for three licenses fundamentally misapprehends our role in enforcing

the constitutional right to due process. Accordingly, because we conclude that the

trial court acted correctly in granting the City summary disposition under MCR

2.116(C)(8) based upon the pleadings and that the materials beyond the pleadings

justified an award of summary disposition under MCR 2.116(C)(10), we shall

affirm the trial court’s decision to grant summary disposition to the City.

Thus, to the extent that appellants ask this Court to review the scoring of the applications, we

decline to do so.

Appellants and Attitude Wellness further argue that the City improperly adopted a lottery

system to determine the licensees. The City’s Policy provides the following procedure for

resolving ties among applicants who have the same, highest scores:

4.8 If any two or more Applicants within the same category are tied, they

shall be ranked against other tied Applicants within their category according to 4.9-

4.13.

4.9 Applicants in the same category whose overall scores are tied shall be

ranked in order of their scores in section two (2) of the Scoring Rubric, titled

“Financial Investment.”

4.10 If the above section of this Policy results in a tie among Applicants in

the same category, then the tied Applicants shall be ranked in order of their scores

in section three (3) of the Scoring Rubric, titled “Community Benefit and

Investment.”

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4.11 Any Applicants that remain tied after Sections 4.9 to 4.10 are applied

shall proceed to a blind lottery draw to determine ranking. Affected Applicants

shall be notified of the lottery draw at least 5 business days before the draw.

Applicants may be present during the lottery draw.

4.12 The lottery procedure shall be as follows for each category in which a

tie exists: Applicant names shall be printed on separate slips of rectangular paper

of the same size. The slips shall be at or near 3” x 5” in size. The paper slips shall

not be folded, and all slips shall be placed into a covered box or receptacle of

sufficient size to allow a mixing or randomness to the selection of the Applicant

names. The paper slips shall be withdrawn one piece at a time from the box by a

member of the Selection Committee. The order in which the names of the

Applicants are drawn shall be recorded. The first name drawn shall be the most

highly ranked Applicant among those tied in a category and so on until all

Applicants’ names are drawn.

4.13 The Selection Committee shall repeat this process until all ties within

the categories are resolved.

After all appeals to the Review Board, any new ties again were to be resolved using the above

procedures, Westland Code, § 5.7. After the appeals, the recommendations are to be forwarded to

the City Council for it to certify the list with adjustments, Westland Code, § 5.8.

Appellants and Attitude Wellness argue that this tiebreaking procedure conflicts with the

MRTMA. However, nothing in the MRTMA prohibits this limited form of a tiebreaker.

Significantly, the City’s lottery system is used only to decide ties among equally ranked applicants

after all applications have been reviewed, scored, and ranked under the City’s competitive

application process. Only equally ranked applicants participate in the lottery. The City’s

ordinance otherwise complies with the MRTMA requirement that applicants for licenses be

selected as part of a competitive process, MCL 333.27959(4), and the limited use of a lottery

system to break ties among equally ranked applicants does not conflict with this requirement. A

lottery is not used, for example, to determine who, among all applications submitted, will receive

a license. Furthermore, the City Council still retains discretion to make the final decision on the

licensees. Accordingly, appellants have not demonstrated that the City’s ordinance is invalid

because it conflicts with the MRTMA.

Finally, appellants argue that the factors included in the City’s scoring rubric violate their

right to just compensation under the Fifth Amendment, US Const, Am V, “by requiring Appellants

to incur hundreds of thousands of dollars in costs to comply with a municipal ordinance and

application Process.” Initially, appellants did not assert this claim either in their amended

complaints, or in response to the motions for summary disposition. Therefore, this issue may be

deemed waived. St Clair v XPO Logistics, Inc, ___ Mich App ___, ___; ___ NW2d ___ (2022)

(Docket Nos. 356954 & 356968); slip op at 5 (“unpreserved issues raised for the first time on

appeal may be deemed waived”), lv pending. In any event, this argument is without merit.

“It is well settled that when the government directly seizes property in which a person has

a property interest, a Fifth Amendment taking occurs, requiring the government to pay just

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compensation.” AFT Mich v Michigan, 315 Mich 602, 622; 893 NW2d 90 (2016). In this case,

appellants do not identify a property interest that was seized. Although appellants suggest that the

City imposed conditions that required them to incur hundreds of thousands of dollars to comply

with the City’s ordinance and application process, they do not specify what conditions required

them to incur such costs. As explained earlier, although some of the scoring criteria allowed the

Selection Committee to consider the extent of an applicant’s proposed financial investment in

developing property to operate a business establishment, no particular investment was required as

a condition for obtaining a license. Therefore, we reject this claim of error.

In sum, appellants and Attitude Wellness have not demonstrated that they are entitled to

relief on the ground that the City’s adopted criteria for evaluating applications conflicts with the

MRTMA.

V. APPELLANTS’ OTHER CLAIMS

The City and intervening defendants also moved to dismiss the additional claims raised by

MHS Westland, Harper, and Exclusive under MCR 2.116(C)(7) and (8). The trial court did not

err by dismissing these claims.

MHS Westland, Harper, and Exclusive alleged that the City’s Selection Committee

violated the OMA when it met in private to score the applications and arrive at the

recommendations it made to the City Council regarding which applications qualified for licenses.

We disagree.

The OMA provides that a public body must hold its meetings open to the public and

deliberate and make its decisions at a meeting open to the public, MCL 15.263. In two recent

cases, this Court held that the OMA does not apply to a municipality’s review of marijuana license

applications where that review is done by an individual or entity that does not constitute a public

body. In Pinebrook Warren, LLC v City of Warren, ___ Mich App ___, ___; ___ NW2d ___

(2022) (Docket Nos. 355989, 355994, 355995, 356005, 356011, 356017, 356023, 359269, &

359285); slip op at 18-23, lv pending, this Court held that the City of Warren’s Review

Committee’s review of applications for medical marijuana licenses was not subject to the OMA

because that committee was not a public body, given that it was not a legislative or governing body

with authority to effective or formulate public policy. The Warren City Council established the

Review Committee to handle the application-review process, but it did not delegate its authority

to make or administer public policy and the city council retained its authority to make final

decisions on the applications. As an advisory board to the city council, the Review Committee

was not obligated to comply with the OMA because it was not operating as a public body.

Similarly, in Yellow Tail Ventures, ___ Mich App at ___; slip op at 8-9, this Court held

that Berkley’s city manager, assisted by other city employees, was not acting as a public body for

purposes of the OMA when reviewing marijuana license applications. Although Berkley’s

ordinance allowed the city manager to review the applications before sending them to the city

council, the OMA did not apply to the city manager’s review process because he was not acting

as a public body and the ultimate decision on which applications to approve was made by the city

council.

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In the case at bar, the City’s ordinance created a Selection Committee to evaluate the

applications under a written policy adopted and approved by the City Council. Westland Code,

§ 27-12(a). The role of the Selection Committee was to score and rank the applications in

accordance with the approved Policy. Westland Code, § 27-12(b). The Selection Committee

consisted of three public servants or employees, not elected officials, and it was not acting as a

public body for purposes of the OMA. The Selection Committee’s role was to act as an advisory

board to the City Council, similar to the process in Pinebrook Warren. Because the Selection

Committee was not operating as a public body, it was not required to comply with the OMA.

Appellants argue that the manner in which their applications were evaluated did not

comport with due process. In Pinebrook Warren, ___ Mich App at ___; slip op at 26-28, this

Court addressed and rejected due-process claims similar to those raised in this case, stating:

Plaintiffs variously alleged claims involving the violation of the rights

afforded by substantive and procedural due process. The touchstone of due process

involves the protection of the individual against arbitrary government action.

Bonner, 495 Mich at 224; Cary Investments, ___ Mich App at ___; slip op at 4-5.

Due process includes both a substantive component and a procedural component;

the “substantive component protects against the arbitrary exercise of governmental

power, whereas the procedural component is fittingly aimed at ensuring

constitutionally sufficient procedures for the protection of life, liberty, and property

interests.” Bonner, 495 Mich at 224; see also Cary Investments, ___ Mich App at

___; slip op at 4-5. The initial inquiry for both components is to identify the interest

allegedly infringed to determine whether it falls within the definition of life, liberty,

or property. If the interest at issue does not involve a life, liberty, or property

interest, then the Due Process Clause affords no protection and the claim must fail.

Bonner, 495 Mich at 224; Cary Investments, ___ Mich App at ___; slip op at 4-5.

Plaintiffs’ due-process claims, though alleged in varying terms, each

involved claims that the City violated their right to have the facility licenses issued

consistent with the requirements of the Marijuana Ordinance. Stated another way,

each of their claims involved whether the City failed to follow its own laws in the

issuing of the licenses and violated the due-process protections afforded to

applicants for a license. The question, therefore, is whether an applicant’s

application for a license involves a life, liberty, or property interest for which the

Due Process Clause provides protection.

In general terms, a license does not convey property rights under Michigan

law. See Morse v Liquor Control Comm, 319 Mich 52, 66; 29 NW2d 316 (1947).

Our Supreme Court, however, has recognized that once the government issues a

license, the holder of a license has a sufficient property interest in the license to

invoke the protections of the Due Process Clause. See Bundo v Walled Lake, 395

Mich 679, 688-696; 238 NW2d 154 (1976). The Court explained that, although the

license holder holds the license by the grace of the government, once issued, the

license holder can reasonably assume that the government will renew the license

when the renewal procedure provides for renewal as a matter of course. Id. at 692,

693, 695. The same is not true for a first-time applicant for a license. This Court

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has explained that first-time applicants for licenses are not entitled to minimal due

process. Cary Investments, ___ Mich App at ___ (citation omitted); slip op at 5.

This is because a property right must be premised on more than a “mere unilateral

expectation.” Bundo, 395 Mich at 692. A person must have more than an “

‘abstract need or desire’ ” for a benefit in order to have a property interest in it; he

or she must have a “ ‘legitimate claim of entitlement’ ” to the benefit. Id., quoting

Bd of Regents of State Colleges v Roth, 408 US 564, 577; 92 S Ct 2701; 33 L Ed

2d 548 (1972). Because a first-time applicant for a license cannot show that he or

she has an entitlement to the license, a first-time applicant has no property interest

in the issuance of the license. See Maxwell v Dep’t of Environmental Quality, 264

Mich App 567, 572; 692 NW2d 68 (2004); see also Wong v City of Riverview, 126

Mich App 589, 592-593; 337 NW2d 589 (1983); Barr v Pontiac City Comm, 90

Mich App 446, 451; 282 NW2d 348 (1979) (“We agree with defendant’s contention

that there is no protected interest in a mere expectation a new license applicant or

transferee might possess.”). For that reason, the procedural protections of the Due

Process Clause do not apply to the determination whether to issue a license in the

first instance. This Court’s review of a city’s decisions regarding first-time

applicants is “extremely narrow[,]” . . . “limited only to whether the city has acted

arbitrarily and capriciously.” Cary Investments, ___ Mich App at ___ (citation

omitted); slip op at 5.

In this case, because plaintiffs were first-time applicants for a facilities

license, they had no property interest in a license that required the City to provide

them procedural due process. Id. For that reason, plaintiffs’ procedural due-

process claims premised on the failure to follow the Marijuana Ordinance or the

OMA failed as a matter of law because the City followed the process prescribed by

the Marijuana Ordinance, the Review Committee did its part, and the City Council

made the ultimate decisions regarding selection of the applicants to receive

licenses. As explained in Cary Investments, “due process merely ensures a fair

procedure, not any particular outcome.” Cary Investments, ___ Mich App at ___;

slip op at 6. “The right to due process guaranteed by the United States Constitution

and the Michigan Constitution of 1963 does not empower courts to micromanage

the decision-making of governmental entities.” Id. at ___; slip op at 7. [Footnote

omitted.]

Applying this analysis to this case, appellants, as first-time applicants, do not possess any property

rights in the licenses themselves that required procedural due process.

The Court in Pinebrook Warren, ___ Mich App at ___; slip op at 28-30, also addressed

whether applicants have a due-process claim with regard to the procedures adopted by a

municipality, stating:

On appeal, plaintiffs assert that, notwithstanding the law involving first-

time applicants for a license, they had an interest in the procedures for obtaining a

license for two reasons. They first assert that when the procedures for issuing a

license so circumscribe the issuing agency’s authority that an applicant has a

reasonable expectation of receiving the license, due process protects the applicant’s

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right to have the issuing agency follow the procedures. See, e.g., Med Corp, Inc v

City of Lima, 296 F3d 404 (CA 6, 2002); Walz v Town of Smithtown, 46 F3d 162,

168 (CA 2, 1995); Yale Auto Parts, Inc v Johnson, 758 F2d 54, 58-59 (CA 2, 1985)

(stating that even a violation of a state’s own laws does not give rise to a due-

process violation; there must be a very strong likelihood that the application would

be granted absent the violation). These authorities recognize that a government can

create a property interest in an application process by establishing a rule or policy

that circumscribes the authority to deny the benefit to an applicant who meets the

requirements of the law or policy. See Med Corp, 296 F3d at 409-411; Walz, 46

F3d at 168 (“We believe the discretion of the Superintendent of Highways to deny

an excavation permit is so circumscribed that the Walzes possessed an entitlement

to a permit.”). Even if these authorities applied in Michigan, this case does not fall

within those rules.

The Marijuana Ordinance includes numerous requirements for the

applicant, but it does not guarantee a license to any applicant, even if the applicant

submits the required materials and otherwise meets the minimum requirements for

a license. Indeed, the Marijuana Ordinance allows the City Council to disapprove

applications depending on the scoring of the 17 factors and its further analysis of

the applications and the applicants’ plans and qualifications. Marijuana Ordinance,

§ 19.5-14(1) and (2) (giving the City Council the final authority to approve an

application and requiring the City Council to confirm compliance and rank

applications under certain circumstances, but not requiring the City Council to

approve applicants on the basis of rankings). The Marijuana Ordinance provided

the City Council with unfettered discretion to approve or disapprove the grant of a

license. In fact, the City Council had no obligation to issue any licenses, no matter

how qualified the applicants. See Marijuana Ordinance, § 19.5-7(3) (setting the

maximum number of provisioning centers and then stating that the City has no

obligation to issue licenses and further providing that the City can issue them

“whenever they want”). Under these circumstances, it cannot be said that the

Marijuana Ordinance contained rules that so limited the discretion of the decision-

makers that any applicant had a reasonable expectation that he or she would receive

a license if he or she complied with the application process. Indeed, under the plain

terms of the Marijuana Ordinance, no applicant can be said to have had a reasonable

expectation of receiving a license no matter how qualified.

Plaintiffs also suggest that they had a protected property interest because

they expended funds in complying with the application process and purchased

interests in real property as part of that process. The fact that plaintiffs spent sums

and acquired property in the hope that they would receive a license, however, does

not establish that they were entitled to a license. See Bundo, 395 Mich at 692. Such

expenditures do not give rise to a property interest in a license that has yet to be

issued. For these reasons, the trial court did not err when it determined that

plaintiffs’ claims that the City violated procedural due process failed as a matter of

law. No first-time applicant has an interest in the procedures for obtaining a license

under the Marijuana Ordinance protected by the Due Process Clause. See Maxwell,

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264 Mich App at 572; Wong, 126 Mich App at 592-593; Barr, 90 Mich [A]pp at

451.

Plaintiffs also variously asserted that the City violated substantive due

process in the manner by which they denied the licenses at issue. The substantive

component of due-process protections protects a person from the arbitrary exercise

of government power. See Bonner, 495 Mich at 224; Cary Investments, ___ Mich

App at ___; slip op at 4-5. The substantive protections protect a person from both

arbitrary laws and the arbitrary exercise of government authority; the distinction

depends on whether the plaintiff is attacking the constitutionality of a law or

attacking an act by a governmental agent. See Mettler Walloon LLC v Melrose

Twp, 281 Mich App 184, 198; 761 NW2d 293 (2008). For laws that do not affect

a fundamental liberty interest, a plaintiff must demonstrate that the law is not

reasonably related to a legitimate governmental interest. See Bonner, 495 Mich at

227. If the plaintiff is attacking a governmental action rather than a law, then the

plaintiff must show that the governmental actor took action that was so arbitrary as

to shock the conscience. Mettler Walloon, 281 Mich App at 200; Cary Investments,

___ Mich App at ___ (citation omitted); slip op at 4. But in both instances the

plaintiff must still establish that the law or act affected an interest protected by due

process. See Bonner, 495 Mich at 225 (stating that the first inquiry is whether the

plaintiff has identified an interest that has been infringed by the law or act, which

comes within the definition of life, liberty, or property). Because plaintiffs failed

to identify such an interest, their due-process claims failed as a matter of law. But

even if the protections of substantive due process were to apply to any and all acts

or laws without regard to whether the law or act infringed an interest protected by

due process, plaintiffs did not allege a claim for such a violation.

In this case, plaintiffs did not raise a claim that the Marijuana Ordinance

was not reasonably related to a legitimate government interest—that is, they do not

challenge the constitutionality of the ordinance. Rather, they alleged that the

Review Committee’s handling of the applications was so arbitrary that it shocked

the conscience. Plaintiffs assert that the Review Committee and City Council did

not follow the Marijuana Ordinance and that the individual members of the Review

Committee had no legitimate reasons for scoring the factors beyond applying their

own personal preferences. Those allegations, however, were not sufficient to state

a violation of substantive due process.

As this Court has noted, substantive due process does not protect persons

from every governmental action that infringes liberty or damages property. Rather,

the plaintiff must allege facts that—if true—would show that the actor used

governmental power to oppress or acted so irrationally that its conduct lacked any

legitimate state interest; the key consideration is that the conduct shocks the

conscience. See Mettler Walloon, 281 Mich App at 202. Picking winners and

losers, although it might seem unfair, does not amount to irrational conduct or

oppression; and does not shock the conscience. Id. Even a violation of state law

by the governmental actor will not, absent more, cause the act to meet the shocks-

the-conscience standard. Id. at 202-203.

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Plaintiffs did not allege any acts that were so irrational or so egregious that

it could satisfy a shocks-the-conscience standard. They merely alleged that the

Review Committee and City Council did not properly follow the law and acted, in

their view, arbitrarily when it selected the 15 entities that received licenses. Some

argue that the individual members of the Review Committee changed scores to alter

which entities would receive a license. A decision to award licenses to a group of

preferred entities over a group of entities that were not preferred, even if done

selfishly and with complete disregard for the law, does not ordinarily rise to the

level of shocking the conscience. Id.

Plaintiffs also argue that the trial court’s decision to grant summary

disposition and dismiss their due-process claims was premature. They maintain

that the trial court should have granted them the opportunity to amend their

complaints to allege the facts necessary to support a claim premised on substantive

due process, and they maintain that the order dismissing their claims was premature

because discovery had not been completed.

The trial court had an obligation to give plaintiffs an opportunity to amend

their complaints to better state their due-process claims. See MCL [sic, MCR]

2.116(I)(5). However, the trial court had no obligation to do so if the evidence then

before the court showed that amendment would not be justified. Id. The trial court

stated that, given the absolute discretion provided under the Marijuana Ordinance,

no one had the right to expect anything under the ordinance, such that no change in

the allegations could establish a due-process violation. The trial court correctly

identified the flaw in plaintiffs’ claims. Therefore, the trial court did not have to

afford plaintiffs an opportunity to amend their complaints before it could grant the

City’s motion and dismiss the due-process claims under MCR 2.116(C)(8).

Moreover, although a motion under MCR 2.116(C)(10) might be premature if done

before the close of discovery, Liparoto Constr, Inc v Gen Shale Brick, Inc, 284

Mich App 25, 33-34; 772 NW2d 801 (2009), a motion under MCR 2.116(C)(8)

accepts the facts alleged in the complaint as true. Indeed, a motion under MCR

2.116(C)(8) cannot be opposed or supported with affidavits, depositions,

admissions, or other documentary evidence. MCR 2.116(G)(2). Accordingly,

whether the parties completed discovery lacked relevance to the court’s decision

regarding if plaintiffs alleged a claim on which relief could be granted. The trial

court, therefore, did not err when it dismissed plaintiffs’ due-process claims under

MCR 2.116(C)(8). [Footnote omitted.]

See also Cary Investments, ___ Mich App at ___; slip op at 4-7.

As discussed earlier, appellants, as unsuccessful applicants for licenses, did not have

property interests in any licenses, but they had limited due-process rights associated with the

application process. Appellants seem to suggest that the application process used by the City was

arbitrary and capricious. The primary basis for this argument is that the criteria used by the City

violated the MRTMA because it involved consideration of factors other than whether an applicant

was best suited to operate a business in compliance with the MRTMA. But as explained earlier,

the City was permitted to consider criteria suited to its own local concerns not specifically

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mentioned in that act. Furthermore, the MRTMA allows municipalities to exercise some

discretion, consistent with the MRTMA, when selecting among competitive applications.

Appellants further argue that the selection criteria violates due process as applied to them,

but they fail to elaborate on this argument. To the extent that they are challenging actual scoring

decisions, they cannot establish a due-process violation on this basis because a court will not

involve itself with the discretionary decision-making process of local government leaders. Cary

Investments, ___ Mich App at ___; slip op at 7 (“Asking this Court to second-guess the selection

committee’s scoring of the numerous applicants competing for three licenses fundamentally

misapprehends our role in enforcing the constitutional right to due process.”).

MHS Westland, Exclusive, and Harper asserted claims for gross negligence, which were

based on the following allegations

178. Defendants, including city council members, are a legislative body

charged with fairly exercising its discretion in a manner that is not arbitrary,

capricious, or unreasonable.

179. Defendants, through its City Council, Administrative Office, and

Committee, owed a duty to all applicants and/or licensees to properly process said

applications, properly adhere to the Defendants’ own Ordinances, properly comply

with applicable state law, and properly administer and issue licenses to applicants

in a lawful and legal manner.

180. Defendants breached their duties to Plaintiff through its wrongful

actions which rubber stamped the committee’s recommendations without review or

consideration as mandated by the Ordinance.

181. Defendants blatantly ignored numerous comments made by council

person Green related to the fraud and recklessness surrounding the marihuana

process. These allegations were made several times over the past several years and

the remaining council refused to investigate further.

182. Defendants had a duty to investigate these allegations prior to rubber

stamping the marihuana licenses.

183. Defendants’ conduct was willful, wanton and intentionally reckless

without justification or excuse.

184. Defendants’ conduct was reckless and demonstrated a substantial lack

of concern for whether injury or harm to Plaintiff or other applicants would result.

185. Defendants’ conduct was the proximate, immediate, and direct cause

of the foreseeable harm and injury suffered by Plaintiff.

186. Defendants’ wrongful conduct as described above constitutes gross

negligence.

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187. As a direct and proximate result of Defendants’ gross negligence,

Plaintiff has suffered immediate and irreparable harm.

188. Additionally, City Council owed a duty of care and diligence to the

residents and business owners in the City of Westland, including Plaintiff.

189. A reasonably prudent person acting with ordinary care and diligence

would have investigated any alleged flaws in the process and otherwise reached the

decision to table the license and conduct a proper investigation before voting.

190. Defendants breached their duty of care by failing to properly review

the process and instead rushed a vote to rubber stamp licenses.

191. Defendants’ decision to pass the license resolution demonstrated a

careless disregard for the rights of Plaintiff, other similarly situated licensees, and

the tax paying residents of the City of Westland.

192. In a three-day period, Defendants allegedly reviewed 21,000 pages of

documents and approved applicants. However, several Defendants stated that they

did not actually review the documents but nonetheless still approved applicants.

193. Defendants’ decision to pass the marijuana license resolution on March

15, 2021 was a willful, wanton, and intentionally reckless and was made without

justification or excuse.

194. As a proximate result of Defendants conduct, Plaintiff has suffered

damages.

In its motions for summary disposition, the City argued that there was no question that the

allegations involved a governmental function, entitling defendants to summary disposition under

MCR 2.116(C)(7) on the basis of governmental immunity. Appellants’ allegations involved the

passage of a local ordinance and the City’s application of that ordinance. The City and its officials

were clearly engaged in the exercise of a governmental function and the City, as a governmental

agency, is therefore immune from tort liability. MCL 691.1407(1). The City also argued that the

individual council members were entitled to immunity under the “legislator” exception in MCL

691.1407(5) because they were acting within the scope of their legislative authority. MCL

691.1407(5). Judges, legislators, and the highest-ranking executive appointed official at any level

of government are entitled to absolute immunity under MCL 691.1407(5). Odom v Wayne Co,

482 Mich 459, 479; 760 NW2d 217 (2008). The individual council members fall within the scope

of the “legislator” exception in MCL 691.1407(5). Accordingly, the City Council members are

also entitled to immunity.

In response to the motions for summary disposition, MHS Westland, Harper, and Exclusive

argued that because they alleged a claim for gross negligence, further discovery should be allowed

on this issue. However, they cited only their complaints and the City’s ordinance in support of

their argument that further factual development could establish support for a gross-negligence

claim. They claimed that the City, the City Council, and the individual council members failed to

investigate allegations by one of their members, defendant Tasha Green, of fraud or other

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improprieties in the selection process. However, there were no allegations that any of the

defendants were responsible for any of the allegedly fraudulent acts, only that they failed to take

action to investigate these allegations before voting. Because these defendants are protected by

absolute immunity when acting within the scope of their positions, and there are not allegations

that they were not acting within the scope of their authority as council members, the trial court did

not err by dismissing this claim under MCR 2.116(C)(8). While MHS Westland, Harper, and

Exclusive argue that further discovery should be permitted on this issue, they fail to specify any

facts that are likely to reveal support for their claims. See Marilyn Froling Trust, 283 Mich App

at 292-293.

MHS Westland, Harper, and Exclusive also asserted a claim for breach of contract, which

was based on the following allegations:

196. Plaintiff pleads this count in the alternative in the event the Court finds

there is a valid contract between the parties.

197. Defendants in its first responsive pleading filed on July 7, 2021 are of

the opinion that a contract exists between Plaintiff and Defendants.

198. Based on Defendants[‘] allegation that a contract exists, Defendants

breached the terms of the contract by not adhering to the four comers of the contract

and unilaterally applying definitions that do not exist to words such as property.

199. As a proximate result of Defendants’ conduct, Plaintiff has suffered

damages which are still being calculated.

200. Plaintiff requests that the Court enter an order in favor Plaintiff.

MHS Westland, Harper, and Exclusive argue that if they have a contract claim, the City

breached it by the manner in which it interpreted and applied its ordinance and the criteria to select

licensees. This claim is based on the same arguments discussed earlier regarding whether the

City’s ordinance and scoring criteria violate the MRTMA. We have already rejected those

arguments. Accordingly, they also fail to establish an independent claim for breach of contract.

Therefore, the trial court properly dismissed this claim under MCR 2.116(C)(8).

Affirmed.

/s/ Mark J. Cavanagh

/s/ Mark T. Boonstra

/s/ Michael J. Riordan

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