In Se. Cannabis Co., LLC & Yellowhammer Med. Dispensaries, LLC v. Alabama Med. Cannabis Comm’n et al., No. CL-2024-0300, 2024 WL 5178114, at *2 (Ala. Civ. App. Dec. 20, 2024), the court holds the Alabama Medical Cannabis Commission (AMCC) had inherent authority to rescind licenses it had previously issued.
The court first rejects AMCC’s sovereign immunity challenge to the circuit court’s subject matter jurisdiction over the licensees’ petitions for judicial review. The court explains “[a]lthough our supreme court has consistently held that a circuit court lacks jurisdiction over a civil action in which a state agency has been named as the lone defendant, see, e.g., Ex parte Alabama Dep’t of Transp., 978 So. 2d 17 (Ala. 2007), our supreme court has never held that a circuit court lacks jurisdiction over a petition for judicial review naming only a state agency as the respondent. To the contrary, our supreme court has held that a petition for judicial review invokes the jurisdiction of the circuit court only if the state agency is named as the respondent as required by § 41-22-20(h).” Ms. **14-15.
The court also rejects AMCC’s argument that the licensees failed to exhaust administrative remedies because exhaustion “is not a prerequisite to obtaining declaratory relief regarding the validity of an administrative rule, Alabama Cellular Serv., Inc. v. Sizemore, 565 So. 2d 199, 200 (Ala. 1990), or the authority of an administrative agency to take an action. See Jefferson Cnty. v. Johnson, 333 So. 2d 143, 149 (Ala. 1976). Thus, SCC, TheraTrue, and Yellowhammer were not barred by the doctrine of exhaustion of administrative remedies from asserting their claims for declaratory relief against the commissioners, which sought determinations as to the validity of the stay rules adopted by the AMCC and the authority of the AMCC to rescind the license awards.” Ms. **24-25.
On the merits, the court notes that “undisputed evidence establishes that the August 10, 2023, license awards were rescinded out of concern that, when approving those awards, the AMCC and the commissioners had used unlawful procedures that had violated the AAPA and the OMA [Open Meetings Act].” Ms. *32. The court holds “Alabama law recognizes that an administrative agency has a limited inherent power to rescind a nonfinal administrative order to avoid a procedural legal error.” Ms. *39. The court clarifies that “[a]n administrative agency can rescind an administrative action or decision to correct ministerial errors, but the administrative agency cannot rescind an administrative action based on a change in policy, when an unreasonable amount of time has lapsed, or if a party has relied on the original adjudication.” Ms. *36.