Alabama Department of Public Health and Scott Harris, M.D., in his official capacity as State Health Officer v. TSTL Holdings, LLC (Appeal from Montgomery Circuit Court: CV-23-900643).

Court of Civil Appeals of Alabama·Decided April 25, 2025·No. CL-2024-0604·Published

Opinion

Rel: April 25, 2025

Notice: This opinion is subject to formal revision before publication in the advance sheets of Southern Reporter. Readers are requested to notify the Reporter of Decisions, Alabama Appellate Courts, 300 Dexter Avenue, Montgomery, Alabama 36104-3741 ((334) 229-0650), of any typographical or other errors, in order that corrections may be made before the opinion is published in Southern Reporter.

ALABAMA COURT OF CIVIL APPEALS OCTOBER TERM, 2024-2025

CL-2024-0604

Alabama Department of Public Health and Scott Harris, M.D., in his official capacity as State Health Officer

v.

TSTL Holdings, LLC

Appeal from Montgomery Circuit Court (CV-23-900643)

EDWARDS, Judge.

In July 2022, TSTL Holdings, LLC ("TSTL"), began manufacturing and distributing various foods containing cannabinoids found in

industrial hemp, as that term is defined in Ala. Code 1975, § 2-8-381(4). 1 In January 2023, after receiving a complaint that TSTL was manufacturing foods without a proper license from the Alabama Department of Public Health ("ADPH"), Rita Wagnon, the food-protection supervisor employed by the Etowah County Department of Health, visited TSTL's premises to perform an inspection. Wagnon explained to TSTL's personnel that ADPH had regulatory authority over the production of food in Alabama and that ADPH took the position that cannabinoids could not legally be added to food products in the State of Alabama. Shortly thereafter, on January 12, 2023, ADPH issued two separate food-condemnation orders notifying TSTL that it could not sell any and all food products that it had manufactured because its facility had not been properly permitted and because "[f]ood or food products containing cannabidiol or cannabidiol derivatives shall not be manufactured or sold within the state of Alabama." ADPH amended the food-condemnation order on March 13, 2023, to include as a basis for the order that "[f]ood or food products containing cannabidiol or cannabinoid

1Based on exhibits in the record on appeal, the foods containing

cannabinoids manufactured by TSTL include lollipops, gummies, brownies, rice-cereal treats, chocolate bars, and honey.

derivatives shall not be manufactured or sold within the State of Alabama."

On May 15, 2024, TSTL commenced in the Montgomery Circuit Court ("the trial court") an action against ADPH and Scott Harris, M.D., in his official capacity as State Health Officer ("the SHO"), seeking a judgment declaring that ADPH did not possess the authority to regulate hemp products, including food, and requesting both a preliminary and a permanent injunction prohibiting ADPH and the SHO from condemning TSTL's food products based on the position of ADPH and the SHO that Alabama does not permit the addition of cannabidiol or cannabinoid derivatives to food. 2 The trial court entered a temporary restraining order requiring ADPH and the SHO to permit TSTL to continue to conduct its business pending resolution of the declaratory-judgment

2TSTL initially pursued its administrative remedies by filing an

appeal to the State Board of Health from the January 2023 and the March 2023 food-condemnation orders. The food-condemnation orders were apparently upheld, but the trial court indicates in its judgment that "the administrative case was stayed." In any event, our supreme court has recognized an exception to the doctrine of the exhaustion of administrative remedies " ' "[w]hen (a) the question raised is one of interpretation of a statute." ' " LEAD Educ. Found. v. Alabama Educ. Ass'n, 290 So. 3d 778, 784 n.8 (Ala. 2019) (quoting City of Graysville v. Glenn, 46 So. 3d 925, 929 (Ala. 2010), quoting in turn Ex parte Lake Forest Prop. Owners' Ass'n, 603 So. 2d 1045, 1046-47 (Ala. 1992)).

action. On June 6, 2023, and February 24, 2024, the trial court held a trial regarding TSTL's claims.

After receiving posttrial briefs from the parties, the trial court entered a judgment on July 10, 2024, declaring that "the manufacture and sale of edible hemp products in Alabama is legal under the plain language of [the Alabama Industrial Hemp Research Program Act ('the Hemp Act'), Ala. Code 1975, § 2-8-380, et seq.,] and consistent with the intent of the Alabama legislature." Although the trial court recognized that ADPH "has regulatory authority over food manufactured and sold in Alabama pursuant to Ala. Code 1975, §§ 22-2-2, 22-10-1, et seq., 22-20-5 and implementing regulations," it concluded that ADPH lacked "the authority to adopt or implement regulations to prohibit the manufacture or sale of edible hemp products by Alabama companies or otherwise undermine the intent of the Legislature."3 Moreover, the trial court opined that ADPH and the SHO "do[] not have the authority to deny [TSTL], or any other Alabama company, a permit based on the fact that [it is] manufacturing or selling food containing hemp as defined in the

3Notably, the regulations relied upon by the SHO were not recently

adopted or implemented and had been in existence, in their most current form, since December 2014.

[Hemp] Act." Based on those conclusions, the trial court declared the January 2023 and March 2023 food-condemnation orders to be void and further ordered ADPH and the SHO to issue to TSTL "the permit or permits required to conduct its business." In addition, the trial court entered a permanent injunction enjoining ADPH and the SHO "from taking any action to prohibit Alabama companies from manufacturing or selling edible hemp products provided that they comply with the statutory definitions" and "from denying permits to any company solely based on the fact that [it is] seeking to manufacture or sell edible hemp products that comply with the statutory definitions."

ADPH and the SHO appealed the July 2024 judgment to the Alabama Supreme Court. Our supreme court transferred the appeal to this court, after that court concluded that, pursuant to Coprich v. Jones, [Ms. SC-2023-0675, June 21, 2024] ___ So. 3d ___ (Ala. 2024), this court was the appropriate appellate forum; the supreme court's transfer order also stated that, if this court were to determine that the amount in controversy exceeded the $50,000 monetary limit of this court's general civil appellate jurisdiction, this court must nonetheless hear the appeal pursuant to our supreme court's discretionary-transfer authority under

subsection (6) of Ala. Code 1975, § 12-2-7. In compliance with our supreme court's directives, see Ala. Code 1975, § 12-3-16, we proceed to consider the appeal.

We must first address a jurisdictional issue. Insofar as TSTL named ADPH as a defendant in its declaratory-judgment action, that action is barred by sovereign immunity. See Alabama Dep't of Transp. v. Harbert Int'l, Inc., 990 So. 2d 831, 841 (Ala. 2008) (explaining that state agencies are immune from suit and that "only State officers named in their official capacity -- and not State agencies -- may be defendants in [declaratory-judgment] proceedings"); Alabama Dep't of Public Health v. Noland Health Servs. Inc., 267 So. 3d 873, 875 (Ala. Civ. App. 2018) (declaring a judgment entered against the Alabama Department of Public Health was void and dismissing the appeal therefrom). Accordingly, insofar as the trial court's judgment purports to adjudicate TSTL's claims against ADPH or to issue an injunction against ADPH, that judgment is void; because a void judgment will not support an appeal, we dismiss ADPH's appeal. See Alabama Dep't of Public Health, 267 So. 3d at 875. We will consider the merits of the appeal brought by the SHO.

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Alabama Department of Public Health and Scott Harris, M.D., in his official capacity as State Health Officer v. TSTL Holdings, LLC (Appeal from Montgomery Circuit Court: CV-23-900643)., (Ala. Ct. App. 2025).

Alabama Department of Public Health and Scott Harris, M.D., in his official capacity as State Health Officer v. TSTL Holdings, LLC (Appeal from Montgomery Circuit Court: CV-23-900643). (Alabama Department of Public Health and Scott Harris, M.D., in his official capacity as State Health Officer v. TSTL Holdings, LLC (Appeal from Montgomery Circuit Court: CV-23-900643).) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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