McKelvey v. Pa. Dep't of Health

255 A.3d 385

Wallace MCKELVEY and PennLive and the Patriot-News

v.PENNSYLVANIA DEPARTMENT OF HEALTH, and Mission Pennsylvania, LLC, KW Ventures Holding, LLC, Cresco Yeltrah, LLC, SMPD Manufacturing, LLC/SMPB Retail, LLC and Terrapin Investment Fund, 1, LLC (Direct Interest Participants)

Appeal of: Terrapin Investment Fund 1, LLC

Wallace McKelvey and PennLive and the Patriot-News

v.Pennsylvania Department of Health, and Mission Pennsylvania, LLC, KW Ventures Holding, LLC, Cresco Yeltrah, LLC, SMPD Manufacturing, LLC/SMPB Retail, LLC and Terrapin Investment Fund, 1, LLC (Direct Interest Participants)

Appeal of: SMPD Manufacturing, LLC and SMPB Retail, LLC

Wallace McKelvey and PennLive and the Patriot-News

v.Pennsylvania Department of Health, and Mission Pennsylvania, LLC, KW Ventures Holding, LLC, Cresco Yeltrah, LLC, SMPD Manufacturing, LLC/SMPB Retail, LLC and Terrapin Investment Fund, 1, LLC (Direct Interest Participants)

Appeal of: Pennsylvania Department of Health

No. 3 MAP 2020

No. 4 MAP 2020

No. 5 MAP 2020

Supreme Court of Pennsylvania.

Argued: September 15, 2020

Decided: July 21, 2021

Judith Darlene Cassel, Esq., Melissa Ann Chapaska, Esq., Hawke McKeon & Sniscak, LLP, Kevin James McKeon, Esq., Harrisburg, for Amicus Curiae Pennsylvania Cannabis Coalition.

Melissa Bevan Melewsky, Esq., Pennsylvania NewsMedia Association, Harrisburg, for Amicus Curiae Pennsylvania NewsMedia Association.

Katie Rosetta Jacobs, Esq., Alice Birmingham Mitinger, Esq., Cohen & Grigsby, PC, Clifford B. Levine, Esq., Pittsburgh, for Appellant Terrapin Investment Fund 1, LLC.

Joshua D. Bonn, Esq., Nauman, Smith, Shissler & Hall, LLP, Harrisburg, for Appellee PennLive, Wallace McKelvey, et al.

Kevin Joseph Hoffman, Esq., Jonathan David Koltash, Esq., Mark Kovalcin, Esq., Harrisburg, Carol J. Mowery, Esq., Alison Taylor, Esq., PA Department of Health, Harrisburg, for Appellee.

BAER, C.J., SAYLOR, TODD, DONOHUE, DOUGHERTY, WECHT, MUNDY, JJ.

OPINION

JUSTICE TODD

In this appeal by allowance, we consider the contours of the Pennsylvania Right-to-Know Law ("RTKL")¹ with respect to the disclosure of information contained in applications to grow, process, or dispense medical marijuana pursuant to the Pennsylvania Medical Marijuana Act ("Medical Marijuana Act").² For the reasons that follow, we affirm in part, vacate in part, and remand for further proceedings.

I. Facts

As described more fully below, the General Assembly enacted the Medical Marijuana Act to establish a framework for the legalization of medical marijuana in the Commonwealth. Appellant, the Department of Health ("Department"), is the agency responsible for administering the statute, and it promulgated temporary regulations to aid in this endeavor.³ 28 Pa. Code §§ 1131.1 et seq . Relevantly, beginning in 2017, the Department established a general application process for businesses seeking to operate as medical marijuana organizations, with additional criteria specific to those acting as either a grower/processor ("GP") or a dispensary ("DS"). The applications for this inaugural issuance of permits required extensive information pertaining to various facets of the applicant's intended business, including, inter alia , financial and operational capabilities; community impact plans; site and facility plans; the verification of an applicant's principals, operators, financial backers, and employees; a description of the business activities in which the applicant intended to engage; and a statement that the applicant was able to maintain effective security and prevent diversion or other illegal conduct related to their medical marijuana business. 35 P.S. § 10231.602(a). This information was used to evaluate the relative capabilities of competing applicants for the award of DS and GP permits. The Department received dozens of permit applications composed of thousands of pages. In June 2017, it awarded 12 GP permits and 27 DS permits, including a GP permit to Appellant Terrapin Investment Fund 1, LLC ("Terrapin"); and a DS permit to Appellants SMPB Retail, LLC and SMPD Manufacturing, LLC (collectively, "Harvest").

Prior thereto, in May 2017, PennLive reporter Wallace McKelvey, PennLive, and the Patriot-News (collectively, "Appellees") requested disclosure of all of the medical marijuana business permit applications pursuant to the RTKL. The Medical Marijuana Act, as well as the Department's temporary regulations, explicitly provide that permit applications are public records subject to disclosure under the RTKL. See 35 P.S. § 10231.302(b) ; 28 Pa. Code § 1141.22. Additionally, in the application instructions, the Department advised all applicants to submit redacted and unredacted copies of their applications, stating that the redacted versions of the applications would be posted on the Department's website. As discussed below, the RTKL places a duty to disclose records sought by a requester on the governmental agency, here the Department, unless the records are exempt, privileged, or fall into an exemption under the statute. 65 P.S. §§ 67.706, 708(b).⁴ Furthermore, the Department's regulations provided that information that falls within an exemption to the RTKL, or is "considered to be confidential proprietary information by other law," or is "[i]nformation regarding the physical features of, and security measures installed in, a [medical marijuana] facility" is not subject to disclosure except by court order. 28 Pa. Code § 1141.22(b)(8), (9).

On July 10, 2017, the Department denied Appellees’ RTKL request, in part, referring Appellees to the redacted copies of the GP applications which had been posted on its website, and denied access to the DS applications, which had not yet been posted. As described more fully below, the Department, inter alia , did not independently review the applicants’ redactions, but accepted all applicants’ redactions that they deemed confidential or proprietary, or otherwise subject to redaction under the RTKL. This resulted in a disparity in redactions across the various applications.

II. Procedural History

A. Office of Open Records

On July 26, 2017, Appellees appealed to the Office of Open Records ("OOR"),⁵ limiting their appeal to records regarding the Department's partial denial of two successful GP applications — Cresco Yeltrah, LLC ("Cresco") and Appellant Terrapin — and four successful DS applications — Cresco, KW Ventures Holding, LLC ("KW Ventures"), Mission Pennsylvania II, LLC ("Mission"), and Appellant Harvest. For ease of identification, these six permit awardees that are the subject of Appellees’ RTKL request will be referred to as "Applicants."

Appellees asserted that the Department lacked a legal basis for its redactions, particularly given the disparity in redactions among applications. Appellees also maintained that the OOR should conduct an in camera review of the records, require the Department to submit a privilege log identifying the reasons why the redacted material was exempt from disclosure, and conduct a hearing so that they could confront any evidence offered by the Department or third-party participants. The OOR invited parties to supplement the record and directed the Department to notify any third parties of their ability to participate in the appeal, 65 P.S. § 67.1101(c), but declined Appellees’ request for in camera review.

For its part, the Department notified the Applicants of their right to participate in the proceedings, and all asked to do so. Additionally, the Department submitted a position statement, with a supporting affidavit of Director of the Office of Medical Marijuana John Collins, which described the redactions and the Department's redaction process. Collins explained that the Department redacted only information that the Applicants had marked in their applications as confidential proprietary information; as personal and financial information; or as information related to building and infrastructure security. Collins noted, however, that the Department did not make its own assessment; rather, it relied upon the redacted versions of Applicants’ applications due to the sheer volume of records sought in Appellees’ request. He also offered that the Department added redactions if necessary, and posted the redacted applications on its public website. As a result, there was disparity in the degree to which individual applications were redacted, with entire sections of applications redacted in some instances, and not in others.

Due to the Department's limited review of the applications, including the fact that the Department did not review the applications in unredacted form prior to asserting its exemptions, and concluding that the Department did not conduct a good faith effort to determine if the redacted information was subject to public access, on September 11, 2017, the OOR stayed the matter until November 20, 2017 (as requested by the Department), in order to allow the Department to evaluate the propriety of Applicants’ redactions, assert any applicable exemptions, and submit supporting evidence. On November 9, 2017, the Department provided a revised response explaining that it removed redactions it deemed to be improper, whether made by the Applicants or the Department, but retained redactions of information that Applicants had characterized as trade secrets, confidential proprietary information, or security information, claiming that it was unable to stand in the shoes of an applicant when assessing these exemptions. The Department also provided legal argument regarding the redactions it made, as well an exemption log as to each application,⁶ but did not submit affidavits describing the information redacted or the risks of disclosure, and suggested that the OOR determine the merits of the redactions by holding a hearing or by conducting in camera review; the OOR declined to do so.

The OOR granted Applicants’ request to participate and provided them until December 13, 2017 to submit additional evidence beyond what the Department or...