Colo. Health Consultants v. City & Cnty. of Denver

429 P.3d 115
CourtColorado Court of Appeals
DecidedSeptember 6, 2018
DocketCourt of Appeals No. 17CA1644
StatusPublished
Cited by1 cases

This text of 429 P.3d 115 (Colo. Health Consultants v. City & Cnty. of Denver) is published on Counsel Stack Legal Research, covering Colorado Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Colo. Health Consultants v. City & Cnty. of Denver, 429 P.3d 115 (Colo. Ct. App. 2018).

Opinion

Opinion by JUDGE FREYRE

¶ 1 Sometimes a retail marijuana business wishes to grow the marijuana it sells. To do so legally in Denver, such a business must be located in a zone that permits both cultivation and retail sales, and it must obtain a zoning permit from Denver's Zoning Authority. Additionally, such a business must obtain a retail marijuana cultivation (RMC) license from the Director of the Denver Department of Excise and Licenses (Department), which is subject to an annual renewal process.

¶ 2 This case involves the interplay between a zoning permit and a RMC license. Plaintiff, Colorado Health Consultants, d/b/a Starbuds (Starbuds), appeals from the district court's judgment affirming the Department's decision to deny Starbuds' 2016 RMC license renewal application. For the reasons described below, we affirm.

I. Background

¶ 3 Starbuds is a retail marijuana business located in an I-MX-3 zone-a special context zone for industrial mixed use. In March 2013, the zoning authority issued Starbuds a zoning permit for retail sales. The application included attached floor plans identifying retail space on the first floor and a "veg" and "bloom" space on the second floor. Starbuds separately applied with the Department for a RMC license. The Department issued the RMC license in March 2014.

¶ 4 The following year, Starbuds sought renewal of the RMC license and, after an uncontested hearing required by Denver Revised Municipal Code (D.R.M.C.) section 6-214(a)(3), *120the Department renewed Starbuds' RMC license.

¶ 5 Starbuds again sought renewal on February 17, 2016. Because changes to the D.R.M.C. no longer mandated a hearing, but allowed one in the Department's discretion, the Department immediately renewed the RMC license. However, several days later, the Department discovered that an interested party had requested a hearing on Starbuds' license renewal. The Department then notified Starbuds that based on this request, it needed to schedule a public hearing. Starbuds agreed to the hearing, which occurred on April 25, 2016. However, during the hearing, Starbuds changed course. It argued that it sought renewal under D.R.M.C. section 6-214(a)(1) and that this provision did not authorize the Department to conduct a hearing.

¶ 6 At the hearing, six witnesses opposed the renewal. Starbuds' managing member and owner testified in support of the renewal. The hearing officer also accepted petitions containing signatures of neighborhood residents, both in opposition to and in support of the renewal.

¶ 7 In a detailed written recommendation, the hearing officer applied D.R.M.C. section 6-214(a)(3) and recommended that the Department deny Starbuds' request to renew the RMC license. She first found that plant husbandry was not a permitted use in an I-MX-3 zone and that the Department had issued the original license in error.1 She then rejected Starbuds' assertion that plant husbandry was a permitted "accessory use" under section 6-214(a)(1) and, instead, found that the RMC license was subject to the requirements of section 6-214(a)(2) and (3). After weighing the evidence, the hearing officer found that the opposition had established, by a preponderance of the evidence, that Starbuds failed to satisfy four of the five requirements for renewal under section 6-214(a)(3). Consequently, she recommended that the Department deny Starbuds' RMC license renewal application. After considering Starbuds' formal objections to the hearing officer's recommendation, the Department adopted the hearing officer's findings and denied Starbuds' renewal application.

¶ 8 Starbuds filed a C.R.C.P. 106(a)(4) complaint in the Denver District Court alleging that the Department did not have the authority to hold a public hearing on its renewal application because plant husbandry was a permitted accessory use in an I-MX-3 zone. Starbuds also alleged that the Department was equitably estopped from denying its renewal application and that the Department's denial was an unconstitutional taking. The district court affirmed the Department's order, found that equitable estoppel did not apply, and concluded that the denial was not an unconstitutional taking.

II. The Department Properly Denied Starbuds' RMC License Renewal Application

¶ 9 Starbuds first contends that the Department abused its discretion and legally erred in concluding that plant husbandry is not a permitted accessory use in an I-MX-3 zone and that its zoning permit did not authorize plant husbandry. Specifically, Starbuds argues that its license is governed by D.R.M.C. section 6-214(a)(1), which does not permit a public hearing, rather than section 6-214(a)(2) and (3), under which the Department denied its application. Because Starbuds concedes that it did not meet the requirements of section 6-214(a)(2) and (3), we need not analyze those provisions further. Instead, we conclude that the Department's findings and conclusions under those provisions also support denial under section 6-214(a)(1). We therefore affirm the Department's order and the district court's judgment, albeit on a slightly different basis.

A. Standard of Review

¶ 10 C.R.C.P. 106(a)(4) provides as follows:

Where any governmental body or officer or any lower judicial body exercising judicial or quasi-judicial functions has exceeded *121its jurisdiction or abused its discretion, and there is no plain, speedy and adequate remedy otherwise provided by law:
(I) Review shall be limited to a determination of whether the body or officer has exceeded its jurisdiction or abused its discretion, based on the evidence in the record before the defendant body or officer.

Thus, in a C.R.C.P. 106(a)(4) action, "judicial review of a governmental agency exercising its quasi-judicial role ... is limited to whether the body has exceeded its jurisdiction or abused its discretion." City of Commerce City v. Enclave W., Inc. , 185 P.3d 174, 178 (Colo. 2008). We sit in the same position as the district court when reviewing an agency decision under C.R.C.P. 106(a)(4). Marshall v. Civil Serv. Comm'n , 2016 COA 156, ¶ 10, 401 P.3d 96 ; Roalstad v. City of Lafayette , 2015 COA 146, ¶ 13, 363 P.3d 790. We review de novo whether the agency abused its discretion. Roalstad , ¶ 13.

¶ 11 An agency abuses its discretion if its decision is not reasonably supported by any competent evidence in the record, or if the agency has misconstrued or misapplied applicable law. Freedom Colo. Info., Inc. v. El Paso Cty. Sheriff's Dep't , 196 P.3d 892, 899-900 (Colo. 2008) ; Roalstad

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Bluebook (online)
429 P.3d 115, Counsel Stack Legal Research, https://law.counselstack.com/opinion/colo-health-consultants-v-city-cnty-of-denver-coloctapp-2018.