Opinion of The Court By Chief Justice MINTON.
Frank D. Hamilton and Heather Cole entered conditional guilty pleas to second-degree trafficking in a controlled substance, first offense. In particular, Hamilton and Cole were convicted for dealing in Suboxone, the trade name of a specific drug containing buprenorphine. Under Kentucky law, the Cabinet for Health and Family Services designated buprenorphine as a Schedule III controlled substance. The focus of this case is on Hamilton and Cole's efforts to challenge the Cabinet's reclassification of buprenorphine in 2002 from a Schedule V to Schedule III controlled substance, a change that came about as a result of a change in federal law.
Before the trial court, Hamilton and Cole made motions challenging the scientific evidence used in classifying buprenorphine as a Schedule III controlled substance and the findings purportedly required by the Cabinet before rescheduling buprenorphine. The trial court ruled that the General Assembly's delegation of legislative authority to the Cabinet, and in turn, the federal government, was proper; and, further, to the extent Hamilton and Cole wish to challenge the methods used by the federal Drug Enforcement Administration, the trial court found it lacked subject matter jurisdiction. Hamilton and Cole appealed the decision to the Court of Appeals, which found in their favor. In a terse opinion, the Court of Appeals remanded this case to the trial court with directions to name the Attorney General and the Cabinet as parties.
We granted discretionary review. We now reverse the opinion of the Court of Appeals. We hold that a trial court does have subject matter jurisdiction to rule on a challenge to the Cabinet's scheduling of a controlled substance following federal action. A trial court may take judicial notice of the federal regulation used by the Cabinet and make a determination whether the findings comport with the requirements of Kentucky law. And, contrary to the remand directive of the Court of Appeals, the Attorney General and the Cabinet are not necessary parties.
In 2008, a grand jury indicted Hamilton and Cole for trafficking in a synthetic opiate, Suboxone. Suboxone is the trade name for a drug containing two active ingredients, buprenorphine and naloxene. Under both Kentucky and federal law, buprenorphine is regulated as a Schedule III drug, having been changed by regulation from a Schedule V drug in 2002. Hamilton and Cole both mounted a defense centered on challenging the validity of Suboxone's Schedule III classification.
Hamilton and Cole, as well as the Commonwealth, requested information from the Cabinet regarding Suboxone's rescheduling. But the Cabinet consistently responded that it possessed no records pertaining to the reclassification. Following various motions, including a motion to dismiss the indictment, the trial court ordered an evidentiary hearing to determine any issues with the Cabinet's classification of Suboxone. Before the hearing, Hamilton and Cole provided notice to the Attorney General of their intended challenge to Suboxone; but the Attorney General declined the invitation to participate in the
At the evidentiary hearing, the parties stipulated that the Cabinet, in altering the classification of buprenorphine, relied upon the ability granted by the General Assembly to "similarly control" any substance that is "designated, rescheduled, or deleted as a controlled substance under federal law."
Hamilton and Cole called two witnesses at the evidentiary hearing. Harry Plotnick, an Ohio-licensed attorney with a Ph.D. in toxicology, testified regarding the procedures employed by the DEA in designating buprenorphine a Schedule III drug. According to Plotnick, the DEA improperly characterized buprenorphine's potential for abuse, relied solely on European studies, and provided no tests involving Suboxone. At the time of the federal government regulation, Suboxone was not on the market in the United States. Additionally, Hamilton and Cole called Chris Johnson, a licensed pharmacist employed by the Cabinet. Hamilton and Cole repeatedly questioned Johnson about the Cabinet's findings relating to Suboxone. Although Johnson was knowledgeable about Suboxone, he was unable to shed any light on the findings made by the Cabinet or the procedure the Cabinet undertook when rescheduling buprenorphine.
The Commonwealth argued to the trial court that the gravamen of Hamilton and Cole's position was that KRS 218A.020(3) is unconstitutional. And the Commonwealth asserted that Hamilton and Cole were in the wrong forum to challenge the methodology used by the DEA to classify buprenorphine. By the Commonwealth's reasoning, Hamilton and Cole could not challenge the methodology used by the DEA in state court because only a federal court would have subject matter jurisdiction over the actions of a federal agency. But the Cabinet, according to the Commonwealth, acted wholly within its power in adopting the federal schedule of buprenorphine.
The trial court denied Hamilton and Cole's motion to dismiss the indictment. In denying the motion, the trial court ruled that the General Assembly's delegation of authority to the Cabinet was proper and constitutional. According to the trial court, KRS 218A.020(3) expressly allows the Cabinet to adopt the federal scheduling of a controlled substance. But the trial court did rule that it was without subject matter jurisdiction to the extent Hamilton and Cole sought to challenge the procedures used by the DEA. The trial court held that Hamilton and Cole, if they wished to challenge the DEA, must do so in federal court before proceeding in the criminal case. Following the trial court's ruling, Hamilton and Cole entered conditional
The Court of Appeals reversed the trial court and remanded for a hearing on the constitutionality of KRS 218A.020(3). According to the Court of Appeals, the trial court's ruling called the constitutionality of KRS 218A.020(3) into question because it effectively allowed the Cabinet, based on federal law, to change Kentucky law, thereby preventing this state's judiciary from reviewing the regulation's validity. The Court of Appeals found the statute's constitutionality an issue despite not being argued at the trial court. Surprisingly, the Court of Appeals found that the Attorney General and the Cabinet must be added as necessary parties to the action on remand.
The Commonwealth appealed the decision of the Court of Appeals. And we granted discretionary review to clear up the confusion engendered by the General Assembly's delegation to the Cabinet. We now reverse the Court of Appeals and remand to the trial court.
On appeal, the Commonwealth challenges various aspects of the decision by the Court of Appeals. First, the Commonwealth claims the Court of Appeals correctly found Hamilton and Cole failed to notify the Attorney General of a constitutional challenge, as statutorily required, but erred in remanding the case rather than simply not reviewing the issue or exercising palpable error review. Second, the Commonwealth agrees with the Court of Appeals that the Cabinet should have been added as a party but argues the proper remedy was to dismiss the appeal rather than to remand the case. Finally, the Commonwealth argues KRS 218A.080 is constitutional; and the trial court correctly concluded it does not have the authority to strike down a federal regulation. Hamilton and Cole dispute each of these claims with the exception that the parties agree the Attorney General should not be added as a party to this action. We engage in de novo review of the issues presented.
We exercise discretion and decide not to review the issue of proper notification to the Attorney General for a constitutional challenge. In our view, the Court of Appeals erred in relying on this ground in its opinion, especially in light of its failure to cite any legal support for its holding. Hamilton and Cole, from the initiation of proceedings in this case, have sought to challenge the Cabinet's regulation and findings. The genesis of the issue of constitutionality in this litigation is unclear. It may have arisen in response to the Commonwealth's initial argument at the evidentiary hearing that the trial court does not have subject matter jurisdiction over the federal regulation in issue; and, as a result, Hamilton and Cole must go to federal court for the relief they seek. But the trial court also ruled on the constitutionality of KRS 218A.080(3). And Hamilton and Cole have mentioned it repeatedly.
Our decision today does not require us to decide the constitutionality of KRS 218A.080(3) because we find that the trial court had subject matter jurisdiction to rule on Hamilton and Cole's initial argument regarding the validity of the regulation. As a result, Hamilton and Cole may obtain relief in the trial court on the validity of buprenorphine's classification. Of course, if constitutionality is raised at the trial court, KRS 418.075 — as well as CR 24.03, made applicable to criminal proceedings through RCr 13.04 — mandates the Attorney General be notified. The record below indicates the Attorney General was not notified of any constitutional challenge before the trial court's judgment was entered.
We do agree, on different grounds, with the Court of Appeals that the case should be remanded to the trial court for further proceedings. We read KRS 218A.020(3) to be a separate procedure for scheduling controlled substances available to the Cabinet. And we hold that the trial court does have subject matter jurisdiction to hear claims regarding the Cabinet's actions under KRS 218A.020(3).
Hamilton and Cole argue that the Cabinet, in promulgating the regulation placing buprenorphine in Schedule III, did not follow the established adequate standards outlined in KRS 218A.080. Additionally, Hamilton and Cole argue that we should find the trial court has subject matter jurisdiction to rule on the classification of buprenorphine. The trial court ruled that subject matter jurisdiction was lacking because Hamilton and Cole were seeking the invalidation of action taken by a federal agency. We disagree with the notion that the trial court lacks subject matter jurisdiction to hear any challenge to the Cabinet's actions under KRS 218A.020(3). The invalidation of action by a federal agency is not involved in this matter.
As we have consistently noted, "[s]ubject matter jurisdiction of each Court within the Court of Justice is established by the constitutional provisions and statutes assigning to the courts specific types of claims and causes of actions[.]"
The Cabinet for Health and Family Services shall place a substance in Schedule III if it finds that:
This Court previously reviewed sections (1) and (2) of KRS 218A.020 in Commonwealth v. Hollingsworth.
Hamilton and Cole argue that the Cabinet improperly classified buprenorphine as Schedule III because it failed to "lay hands" on the regulation promulgated as a result of federal action. That is, the Cabinet must make findings under KRS 218A.080, one of the statutes setting out "mandatory standards" according to Hollingsworth, in order to "similarly control" buprenorphine as a Schedule III controlled substance under Kentucky law. We do not necessarily disagree with Hamilton and Cole on this point because it is important that the Cabinet comply with the standards established by the General Assembly. But it is our opinion that KRS 218A.020(3) simply adopts the procedures used and findings made by the federal government, which are strikingly similar to our law expressed in Chapter 218A.
Regardless, given the nature of the statute in question and the similarity between the federal requirements and Kentucky's requirements for controlled substances, we believe the federal regulation
By taking judicial notice of the federal regulation, the fact of the Cabinet's findings is no longer in dispute.
But KRS 218A.080 does not require the Cabinet to make independent findings when operating under KRS 218A.020(3) and acting in response to federal action. Instead, the statute allows the Cabinet, after receiving notice of a change in federal classification via a regulation in the Federal Register, to adopt the findings. Essentially, the federal findings are viewed as the Cabinet's findings. And the trial court does not lose subject matter jurisdiction simply because the Cabinet relies on federal laboratory testing in its findings. The Cabinet's adoption of the DEA's scientific findings is not materially different than if the Cabinet contracted with a third-party, independent laboratory to perform drug testing on the Cabinet's behalf or if the Cabinet relied upon published testing by a third-party laboratory. The trial court would not be stripped of jurisdiction in those instances. Instead, the parties would simply call witnesses from the third-party laboratory to testify about the methodology used on behalf of the Cabinet. The same principle applies here.
The Cabinet may look at the federal findings to ensure they meet the standards required by Kentucky law under KRS 218A.080. After finding them sufficient, the Cabinet may promulgate a regulation "similarly control[ling]" the particular substance. KRS.218A.020(3) is an efficiency provision.
Accordingly, the trial court has subject matter jurisdiction and may review the merits of Hamilton and Cole's challenge to the Cabinet's treatment of buprenorphine. We appreciate the trial court's cautious approach, but this is not a case where federal agency action is to be invalidated. Rather, this case involves a determination of whether the findings adopted by an agency of this Commonwealth adopted from a federal agency satisfy the laws of this Commonwealth. This determination is entirely proper for our courts, and we remand this case to the trial court for further proceedings consistent with this opinion.
Our decision to remand the case to the trial court leaves unresolved issues. Because the remaining issues are likely to recur on remand, we will address them in turn.
The Court of Appeals concluded on its own motion that Hamilton and Cole's appeal should be dismissed for failure to join as parties the Attorney General and the Cabinet, effectively rendering them necessary and indispensable parties to this criminal case. Finding several aspects of the disposition of this issue by the Court of Appeals troubling, we must disagree.
We reject as unnecessary the requirement of the Court of Appeals that the Attorney General be added as a party on remand, a requirement effectively mandating the Attorney General participate in the proceedings. Our concern with the requirement of the Court of Appeals here is two-fold. First, we are uneasy with ordering parties to be added to a criminal prosecution. The lack of any directive or legal support in the opinion from the Court of Appeals does not ease our concern. In a criminal prosecution, the necessary parties are seemingly straightforward — the Commonwealth versus the defendant. No other parties are needed in order for the trial court to issue a judgment in the action.
Second, the Attorney General is not required by law to participate in any proceeding of which notice is received regarding a potential constitutional challenge. While it is clear that the Attorney General must be given notice, the law has never been found to say the Attorney General must then participate. All that is required is the Attorney General be given the opportunity to intervene and be heard on the matter.
Finally, we take issue with the Court of Appeals characterizing the Attorney General as a party at the appellate level. In characterizing the Attorney General in this manner, the Court of Appeals relied upon an unpublished decision from this Court, holding that "where the constitutional validity of a statute is raised for the first time on direct appeal, the notice requirement of KRS 418.075(2) is satisfied by the filing of the appellate brief" when the Commonwealth is represented by the Attorney General.
So contrary to the directive of the Court of Appeals, we conclude that this case should not be remanded to make the Attorney General a party. Whether the Attorney General participates in the proceedings on remand or not rests within his official discretion.
Likewise, the Cabinet is not a necessary party to this action and need not be included as a party on remand. The Court of Appeals, in finding it was reversible error for the Cabinet to be absent from these proceedings, heavily relied upon KRS 13A.140. Under KRS 13A.140, "when an administrative regulation is challenged in the courts it shall be the duty of the promulgating administrative body to show and bear the burden of proof to show" that the regulation meets various criteria regarding the statutory authority given to and procedure required of the agency. Unfortunately, the Court of Appeals provided little analysis beyond a citation to KRS 13A.140. We are left with little choice but to craft reasoning for the Court of Appeals and assume the Cabinet's having the burden of proof but not being a party was a fatal flaw in the eyes of the Court of Appeals. This reasoning is alluring but when we read Chapter 13A in its entirety and look at our case law in conjunction with that of our sister states, we cannot support the conclusion reached by the Court of Appeals.
Initially, KRS 13A. 140 does not require the Cabinet be a party in the action in order for its language and purpose to be satisfied. The statute places the burden of proof on the promulgating agency to show various legal aspects of the agency's challenged action. But this policy decision by the General Assembly to place the burden on the agency does not eliminate the presumption of validity, which remains "until declared otherwise by a court."
We draw attention to the operation of this statute because, at first blush, the reading by the Court of Appeals seems acceptable, if not entirely correct. But the totality of the statute's language does not embrace the type of fact-intensive, investigative determination that would possibly require having the Cabinet participate in the action as a party. Notably, the statute omits any indication of what burden the Cabinet is expected to meet. Instead, the statute calls for a presumptive, purely legal determination by the trial court — a determination that could be performed
Section 2 of the statute is further signal that it is not necessary to mandate the Cabinet's participation as a party. "It shall be prima facie evidence of compliance with the provisions of this section as to the holding of hearings, statements of consideration, consideration of tiering, local government impact, and fiscal impact to file with the court appropriate citations to the Administrative Register which indicate such compliance."
At the evidentiary hearing in this case, the Cabinet provided a witness; and Hamilton and Cole asked him several questions about the validity of the regulation. It would be difficult to argue that Johnson was highly knowledgeable of the promulgation of the regulation; but it is not difficult to imagine that the Cabinet could provide — and the Commonwealth or Hamilton and Cole could ask for — a witness more familiar with the promulgation of the regulations in question here.
Furthermore, the concerns mentioned previously about mandating a party be added in a criminal action apply equally to the Cabinet. It is unprecedented and not at all clear what role the Cabinet would play as a party to a criminal prosecution. Because there is no urgent need to take this step, we decline to label the Cabinet as an indispensable or necessary party in this criminal prosecution.
The Court of Appeals cites no authority for mandating the Cabinet be named a party on remand. And we are unable to find a case from this jurisdiction, or any other, where the relevant administrative agency was required to be a party in a criminal action in which a statute or regulation is being challenged.
We reverse the Court of Appeals and remand to the trial court for further proceedings consistent with this opinion. On remand, the trial court may take judicial notice of the federal regulation amending buprenorphine from a Schedule V drug to a Schedule III drug under federal law. A hearing may be held on the matter, but it is not necessary to name the Attorney General and the Cabinet as parties. Hamilton and Cole may present evidence challenging the sufficiency of the findings if they wish, including calling a witness from the Cabinet or DEA to testify about the procedures. And the trial court is to determine if the findings adopted by the Cabinet are sufficient to satisfy KRS 218A.080.
All sitting. All concur.
Ex parte McCurley, 390 So.2d 25, 30 (Ala. 1980).