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Colorado Medical Board v. McLaughlin

Court of Appeals of Colorado, First Division

March 22, 2018

Colorado Medical Board, Petitioner-Appellee,
Scott Storm McLaughlin, M.D., Respondent-Appellant.

          City and County of Denver District Court No. 16CV33460 Honorable Jay S. Grant, Judge

          Cynthia H. Coffman, Attorney General, Russell B. Klein, Assistant Attorney General, Eric Maxfield, Assistant Attorney General, Sierra R. Ward, Assistant Attorney General, Denver, Colorado, for Petitioner-Appellee

          Hershey Decker, PLLC, Carmen N. Decker, Lone Tree, Colorado, for Respondent-Appellant



         ¶ 1 In this subpoena enforcement action, respondent, Dr. Scott Storm McLaughlin, appeals the district court's judgment enforcing a subpoena issued by plaintiff, the Colorado Medical Board (Board). The Board's subpoena sought the medical records of patients for whom Dr. McLaughlin had recommended the use of medical marijuana.[1] On appeal, Dr. McLaughlin contends that the subpoena was not issued for a lawful purpose because the policy prompting the Board's investigation was adopted in violation of Colorado's Open Meetings Law, the State Administrative Procedure Act (APA), and the Colorado and United States Constitutions. We agree with Dr. McLaughlin that the subpoena did not have a lawful purpose, and therefore we reverse the district court's judgment.

         ¶ 2 At the outset, we recognize that another divided division of this court is announcing today Colorado Medical Board v. Boland, 2018 COA 39, ____P.3d____, affirming the judgment of the district court enforcing a subpoena issued on the basis of the same challenged policy. In Boland, the division assumes that the policy is invalid, but nevertheless concludes that the subpoena there had a lawful purpose. For the reasons stated herein, we disagree with that analysis.

         I. Background

         A. The Subpoena

         ¶ 3 Dr. McLaughlin, a physician licensed to practice in Colorado since 1985, received a subpoena duces tecum from the Board in June 2015. The subpoena ordered him to produce medical records for specific patients examined on ten dates ranging from August 2014 through January 2015.[2]

         ¶ 4 Dr. McLaughlin asserts, and the Board does not dispute, that the subpoena was issued by the Board after it had received a complaint from the Colorado Department of Public Health and Environment (CDPHE) related to Dr. McLaughlin's medical marijuana recommendations. In fact, along with the subpoena, Dr. McLaughlin was sent a copy of CDPHE's original complaint. The complaint referenced a policy that dictated that CDPHE would refer physicians on the basis of any of three enumerated criteria: (1) a specified number of medical marijuana recommendations per year; (2) recommendations of an increased plant or ounce count for a specified percentage of patients; or (3) a specified percentage of patients under the age of thirty.[3]

         ¶ 5 Dr. McLaughlin objected to the Board's subpoena, arguing that CDPHE's referral policy was invalidly adopted. On that basis, he refused to produce the subpoenaed records.

         ¶ 6 In September 2016, the Board filed an application for an order enforcing the subpoena, citing section 12-36-104, C.R.S. 2017. In January 2017, the district court granted the Board's application and ordered Dr. McLaughlin to produce the subpoenaed records. The district court concluded that, although the physician referral policy was invalid, "the subsequent investigation and the subpoena [we]re for a lawfully authorized purpose - the duty to investigate licensed physicians who may fail to meet generally accepted standards of medical practice." The district court subsequently stayed enforcement of the order pending this appeal.

         B. The Physician Referral Policy

         ¶ 7 As a result of a Colorado Open Records Act request filed with CDPHE, the Board, and the Department of Regulatory Agencies (DORA)[4] in connection with related litigation, Dr. McLaughlin obtained public records concerning the drafting of the physician referral policy. The record on appeal in this case includes correspondence provided by these agencies in response to the Open Records Act request.

         ¶ 8 Specifically, the Board produced internal communications detailing the policy's evolution and adoption. The correspondence revealed that CDPHE officials and Board members began discussing the referral policy in the fall of 2013. A July 2014 email from the Board's program director stated that she "had a t/c with [the director of the medical marijuana registry] in January 2014 and met in person with him in April 2014 re: parameters for reporting." An August 2014 email also from the Board's program director detailed how, after a 2013 state audit, "CDPHE reached out to [the Board] requesting assistance in developing reporting parameters" for physicians who made medical marijuana recommendations. The email read, "After a period of extended silence from CDPHE, [the Board and Office of Investigators (OI)] took a leadership role and frequently circled back with CDPHE to promote progression of the project. CDPHE subsequently adopted an internal policy based on the criteria identified and/or defined by the CDPHE/[Board]/OI work group."

         ¶ 9 A December 2014 email from the Medical Marijuana Program's manager stated, "[W]e are in the process of updating our referral policy with DORA. I have been meeting with DORA and internal leadership on this topic and we are still working out the details." Another email from that same date from CDPHE's director similarly detailed that the agencies were "in the process" of developing the referral policy and acknowledged, "[I]t's misleading to state that we do not have a policy, as one is under development."

         ¶ 10 CDPHE officially implemented the physician referral policy on May 15, 2014. The policy, titled "Medical Marijuana Policy Number 2014-01" (Policy 2014-01), stated that CDPHE would refer physicians to the Board for investigation on the basis of any of the following: (1) 3521 or more recommendations for medical marijuana per year; (2) recommendations for an increased marijuana plant or ounce count for more than thirty percent of patients, or a particularly high recommendation for any individual patient; or (3) a caseload in which over one-third of patients were under the age of thirty.

         ¶ 11 Dr. McLaughlin alleges, and the Board does not dispute, that the policy was not available to the public until April 2015, nearly a year after its implementation, and that no public meeting was ever held regarding the adoption of Policy 2014-01.

         C. Related Litigation

         ¶ 12 In addition to the instant case, several other pending actions have challenged the validity of Policy 2014-01. Six other subpoena enforcement actions have been filed against individual physicians who were referred to the Board based on Policy 2014-01. Five of these enforcement actions have been stayed pending this appeal. The sixth subpoena enforcement action has been appealed to this court. As noted, another division of this court decides that case today. Boland , 2018 COA 39, __ P.3d___ .

         ¶ 13 Dr. McLaughlin and eight other physicians directly challenged the validity of the policy in yet another action. In that case, the district court dismissed the relevant claims against the Board, stating that Policy 2014-01 had been developed by CDPHE and thus, "[i]f this policy was in fact unlawfully adopted and is ultimately declared void, any injunctive relief would necessarily be aimed at CDPHE to prohibit it from referring cases to [the Board] under the void policy."

         ¶ 14 The district court later ruled that Policy 2014-01 was void. Specifically, the district court found that the "policy was the product of about a dozen meetings and about a dozen phone calls between staff members with [CDPHE] and staff at the Board" and "was adopted and implemented without providing public notice." Order at 7-8, John Does v. Colo. Dep't of Pub. Health & Env't, No. 15CV30902 (City & Cty. of Denver Dist. Ct. Oct. 4, 2016). Because the district court concluded the policy had been adopted in violation of the Open Meetings Law, it enjoined CDPHE from referring physicians to the Board under the policy. That decision is also the subject of an appeal to this court. See John Does v. Colo. Dep't of Pub. Health & Env't, No. 16CA2011 (Colo.App. filed Nov. 22, 2016).

         D. CDPHE and the Board

         ¶ 15 Pursuant to an executive order signed by Colorado's governor, CDPHE is the health agency designated to manage Colorado's medical marijuana program. See § 25-1.5-106(2)(f), C.R.S. 2017. See generally § 25-1.5-106. CDPHE is required to promulgate rules governing certain aspects of the medical marijuana program. See § 25-1.5-106(3)(a) (CDPHE "shall . . . promulgate rules of administration"); see also Colo. Const. ...

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