DISTRICT

COURT, ADAMS COUNTY, COLORADO

1100 Judicial Center Drive
Brighton, CO 80601
Plaintiff:

VISAJ UNITY, LLC D/B/A METRO CANNABIS, a Colorado
Limited Liability Company

v.

Defendants:

CITY OF AURORA, a Municipality; THE AURORA
MARIJUANA ENFORCEMENT DIVISION; and JASON
BATCHELOR, in his official capacity as Aurora Director of
Finance

Attorneys for Plaintiff
Robert T. Hoban, # 33151
C. Adam Foster, #35969
730 17th Street, Suite 900
Denver, CO 80202
(303) 674-7000
Fax: 303-382-4685

COURT USE ONLY

Case Number:

Division

COMPLAINT

Plaintiff, VISAJ Unity, LLC d/b/a Metro Cannabis (VISAJ), by and through its
attorneys, Hoban & Feola, LLC, respectfully submits its Complaint, stating as follows:

I.
PARTIES, JURISDICTION AND VENUE

1. Plaintiff VISAJ is a Colorado Limited Liability Company with a business address of
18881 E. Colfax Ave., Aurora, CO 80111.

2. Defendant City of Aurora (Aurora) is a Colorado municipality with its principal
administrative offices at 15151 E. Alameda Parkway, Aurora, CO 80012.

3. Defendant Aurora Marijuana Enforcement Division (AMED) is a division of the
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Aurora Finance Department charged with enforcing Auroras Retail Marijuana Code
(the Code) and AMEDs own regulations.

4. Defendant Jason Batchelor is the Director of the Aurora Finance Department. Mr.
Batchelor also acted as the hearing officer at the October 13, 2014 hearing that gave
rise, in large part, to this Complaint. Mr. Batchelor is named as a defendant in his
official capacity.
5. Venue is proper in this Court pursuant to C.R.C.P. 98(c) because VISAJs principal
place of business is in Adams County and Aurora is partially located in Adams
County.

II.
GENERAL ALLEGATIONS

6. On May 12, 2014 the Aurora City Council approved Auroras Retail Marijuana
Establishments Ordinance (Ordinance), which went into effect on June 14, 2014.
The Ordinance provided for issuance of up to four retail marijuana store licenses in
each of Auroras six city council wards, for a total of twenty-four retail marijuana
store licenses throughout Aurora.

7. The Ordinance and Code established a points system to grade applications for
licensure, with each applicant awarded between 0 and 41 points, and the top four
applicants in each city council ward awarded a conditional license.

8. AMED created an extensive application packet requesting a broad range of
information from applicants. The application packet included an Application
Checklist detailing the criteria under which AMED would award points, and
apportioning specific point values to specific criteria and topics pursuant to Code
6-309.

9. Applicants could earn up to ten possible points for their Business Plan and up to ten
points for their Operating Plan. AMED represented to applicants that it would
contract with three independent reviewers possessing specialized expertise to
evaluate the Business and Operating plans.

10. Although Aurora and AMED represented to applicants and members of the public
that licenses would be awarded based on an unbiased and comprehensive
evaluation system, the process was in fact conducted according to a set of unwritten
rules that appear to have been made up and changed at the whim of AMED officials.
The result was that AMED failed to implement an objective and transparent process
to award licenses to the most qualified applicants.

11. Upon information and belief, AMED instead manipulated the process to pick
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winners and losers based on secret criteria that included seeking a certain
geographic distribution of marijuana stores and favoring certain applicants that
AMED officials liked more than others.

12. On or about June 9, 2014, VISAJ submitted a letter of intent to apply for a retail
marijuana store license (license)1 to AMED in compliance with AMED Regulation
202.3(b). And VISAJ requested a pre-application meeting with AMED on or about
June 25, 2014.

13. Members of VISAJs ownership group and design team met with AMED officials
during an informal meeting on or about June 23, 2014 to discuss the application
process, and also met with AMED officials and other Aurora officials on July 14,
2014 at the preapplication meeting required by AMED Regulation 202.3(b).

14. Aurora officials mentioned more than once during these meetings that Auroras
ventilation and odor mitigation requirements for marijuana stores were modeled on
requirements that the City of Boulder had implemented in order to prevent the odor
of marijuana from being detectable outside of the licensed premises.

15. Aurora officials also stated that engineering drawings or details of the filtration
plans were not required at the application stage, but instead such details would
need to be submitted to the Building Department once the license was approved.
This was consistent with Auroras written pre-licensing overview package, which
stated that Aurora would require [i]nstallation of an air scrubber or carbon filter
air filtration systems or equivalent but did not require any specific equipment.
(emphasis supplied).

16. VISAJ timely submitted its license application on July 31, 2014. VISAJs entire
application packet was over 400 pages long including attachments and met the
submittal requirements of Regulation 202.4.

17. AMED informed VISAJ that its application packet was complete. AMED
subsequently requested additional tax information from VISAJ, but did not request
any other supplemental information.

18. On August 28, 2014 Aurora announced that it had awarded 21 total licenses for
retail marijuana stores. VISAJ did not receive a license, and members of its
ownership group requested a meeting with AMED to discuss why AMED denied
VISAJs application.
1 Aurora issued different classes of licenses for retail marijuana stores, cultivation facilities,

infused product manufacturers and testing facilities. The case at bar concerns the
procedure for issuance of marijuana store licenses only.
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19. VISAJs counsel, Robert T. Hoban, Esq. and VISAJ owners Stanislav Zislis, Igor
Kaminer and Vice President of Finance Aleksander Murakhovskiy met with AMED
members Kim Kreimeyer and Wade Jensen on September 10, 2014 to discuss
AMEDs process for evaluating license applications.

20. VISAJ applied for a license in City Council Ward 2 because its leased premises at
18881 E. Colfax Ave. were located within that ward. VISAJ was awarded 34 total
points by Auroras evaluators. The next highest scoring applicant in Ward 2 was
Mountain States Group I LLC (MSG), who received a score of 35.

21. At the September 10, 2014 meeting VISAJ also learned that it would have tied for the
highest score of all applicants in Ward 2 had it been awarded three points for its
response to Item # 17, which asked what steps the applicant would take to prevent
the odor of marijuana from being detected outside of the licensed premises.
22. But VISAJ received zero points for its response to Item # 17 despite the fact that it
provided a far more detailed response to the question than most applicants who
were awarded the full three points.

23. At the September 10, 2014 meeting VISAJs attorney asked Mr. Jensen and Ms.
Kreimeyer if VISAJ could appeal denial of its application and Ms. Kreimeyer denied
than an appeal process existed.

24. Following the meeting with Ms. Kreimeyer and Mr. Jensen from AMED, VISAJ
requested copies of winning applicants applications and its own application on
September 10, 2014 pursuant to the Colorado Open Records Act (CORA) in order
to attempt to understand why its application was denied.

25. On September 16, 2014 VISAJ timely appealed denial of its license application
pursuant to AMED regulations 203.3 and 802.

26. On or about October 1, 2014 AMED produced approximately 3,000 pages of
documents in response to VISAJs September 10, 2014 document request.

27. VISAJ went to hearing on October 13, 2014. Mr. Batchelor acted as the hearing
officer.

28. AMED should have appointed a truly neutral hearing officer, as opposed to Mr.
Batchelor. A high level of public interest and media coverage accompanied Auroras
implementation of its marijuana licensure system. As the Finance Director, Mr.
Batchelor had a vested interest in issuing a decision that minimized any mistakes or
irregularities in the licensure process implemented by his subordinate department,
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AMED. Thus, Defendants stacked the deck against VISAJ from the outset of the
appeal process.

29. On October 13, 2014 VISAJ submitted another CORA request to AMED following the
licensure hearing. VISAJ requested copies of documentation pertaining to all
financial transactions between AMED and the independent reviewers.

30. VISAJs presentation of evidence and argument at the October 13, 2014 hearing, and
in its post-hearing Brief, demonstrated that AMED committed serious errors in the
licensure process. VISAJ now brings this lawsuit because AMED has refused to
correct these errors or to reverse its denial of VISAJs application

a.

AMED Unreasonably Refused to Correct its Obvious Math Error

31. AMED committed an obvious math error in calculating competing applicant MSGs
score. MSG obtained an average score of 7.44 points from the three independent
reviewers rating its Operating Plan. But rather than rounding the score down to 7,
AMED rounded the score up to 8 points. Applying the correct rounding rule results
in MSG obtaining a total score of 34, which in turn results in a tie for fourth place
between MSG and VISAJ.

32. In other instances Aurora employed the proper mathematical rule of rounding
scores below .5 points downward. For instance, in Ward 1, applicant Blue Dot
Botanicals received an average score of 7.44 points on its operating plan. In that
instance, Aurora correctly rounded Blue Dots score down to 7 points.

33. Code 6-309(c) directed AMED to select a winner at random in the event that two
or more applicants tied for licensure in a given ward. AMED had previously stated
that the tiebreaker process would involve a public lottery system.

34. In his written denial of VISAJs appeal Mr. Batchelor wrote: I find that the score of
[MSG] was incorrectly rounded up, however, at best this would have entitled VISAJ
to a drawing for the final license. The license has already been awarded to [MSG].
There is no lawful basis to revoke [MSGs] license. (emphasis supplied).

35. AMEDs refusal to implement the tiebreaker process that Code 6-309(c) mandates
in order to correct its own obvious math erroror to simply award an additional
license to VISAJ--rendered the appellate process set forth in AMED Regulation 803
meaningless, and provides additional evidence of AMEDs intent to improperly
award licenses to its preferred applicants.

36. Mathematical analysis of AMEDs scoring of all applications reveals that it is highly
unlikely that there would not have been any tie for licensure in any ward. Upon
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information and belief, AMED officials manipulated scores in order to avoid a

tiebreaker scenario.
b.

AMEDs Mystery Reviewer Improperly Manipulated Scores

37. As noted above, applicants Business and Operating Plans were scored by three
reviewers. AMED repeatedly represented to applicants and the general public that
each of the three reviewers would be independent of AMED and possess specialized
skill, training and experience in evaluating the applicants Business and Operating
plans.

38. AMED has refused to disclose the reviewers identities despite VISAJs repeated
requests that it do so.

39. Analysis of the scores that the three reviewers awarded to all applicants shows that
Reviewer #1 and Reviewer #2 issued very similar scores to each applicant.

40. In contrast, Reviewer #3s scores depart radically from the other two reviewers.

41. If Reviewer #3s scores are excluded, VISAJ would be placed in a three-way tie for
the fourth license in Ward 2, even without VISAJ receiving an additional three points
for Item #17.

42. In response to VISAJs CORA request, AMED provided scoring notes for Reviewers
#1 and #2 commenting on VISAJs Operating Plan and Business Plan.

43. AMED officials first stated that AMED could not provide Reviewer #3s notes along
with the other reviewers notes because Reviewer #3 made notes directly on a hard
copy of VISAJs Business Plan and Operating Plan.

44. But at the October 13, 2014 hearing, AMED Manager Ms. Peterson changed AMEDs
position and testified that AMED could not provide notes for Reviewer #3 because
Reviewer #3 did not make any written notes or comments of any kind. Ms. Peterson
again refused to disclose Reviewer #3s identity.

45. In its October 13, 2014 CORA request VISAJ requested records of all payments to the
three reviewers. Aurora produced documents showing that it paid $16,500.00 to
Reviewer #1 and $16,500.00 to Reviewer #2. Aurora did not produce any
documents showing any payments to Reviewer #3. Aurora also produced contracts
with Reviewer # 1 and Reviewer #2, which specifically required the reviewers to
submit narratives explaining their rationale in grading the Business and Operating
Plans. Aurora produced no contract with Reviewer #3.

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46. The terms of the reviewer contracts that Aurora produced contradicted Ms.
Peterson and Mr. Batchelors later statements that the reviewers were not required
to retain any written notes.

47. Additionally, Mr. Batchelor wrote in his decision denying the appeal that at the
October 13, 2014 hearing, [t]here was no testimony about the instructions given to
reviewers or whether they were required to write explanatory notes.

48. Mr. Batchelors finding contradicted Ms. Petersons hearing testimony that Reviewer
#3 took no notes. And Ms. Petersons testimony in turn contradicted the terms of
Auroras contracts with Reviewers # 1 and 2, as well as Mr. Jensen and Ms.
Kreimeyers September 10, 2014 statements that Reviewer #3 took notes directly
on VISAJs Business Plan and Operating Plan.

49. These statements, combined with Auroras delays in providing requested
documents, evidence a concerted effort by Aurora to deny VISAJ genuine insight into
Auroras decision-making process. If Aurora had implemented an objective and
consistent evaluation process for licenses it would not have needed to go to such
great lengths to attempt to prevent VISAJ from gathering relevant facts and
documents in support if its appeal.

50. Upon information and belief, Aurora did not pay Reviewer #3 because the individual
who entered scores under the guise of Reviewer #3 was not actually an independent
reviewer. Rather, this individual, or group of individuals, improperly manipulated
scores in order to favor certain applicants over others, to ensure a preferred
geographic distribution of licensed marijuana stores and to avoid having to hold a
public lottery.

c.
VISAJ Should Have Received Three Points for its Response to Item #17

51. As noted above, AMED awarded either three points or zero points for an applicants
response to Item #17, which stated:

Does the facility have a proper ventilation system (proposed or

installed) that will filter out the odor of marijuana so that the odor
cannot be detected by a person at the exterior of the building?
[ ] Yes [ ] No

If yes, briefly state what you have or plan to have
installed._____________________________________

52. In response, VISAJ provided a description of stores that it currently operates that
meet the requirements of AMED Regulation 503.2, which requires that no marijuana
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odors be detectable outside of the licensed premises. Because AMED officials had
repeatedly stated that the Aurora regulation was modeled after Boulders
regulation, VISAJ explained that its ownership group operated a store in Boulder
and would use the same design-build team that designed and installed the HVAC
system at its Boulder premises.

53. Moreover, members of VISAJs design-build team--including Roger Blank, P.E.,
general contractor Bryan Williams and architect Glen Palmer--attended the July 14,
2014 pre-application meeting to ensure compliance with Item # 17, among other
things. AMED officials told these professionals that plans or a detailed description
of the proposed air filtration system were unnecessary at the application stage and
that these details should be submitted to the Building Department following
conditional licensure.

54. Auroras Application Checklist noted that up to three points could be awarded if
[p]rior to opening, the building contains air filtration systems that filter out
marijuana odor pursuant to Code 6-309(b)(6).

55. VISAJ made it clear that it would be able to meet this requirement by noting that it
would be using the same design-build team that had installed ventilation systems
that meet Auroras standards at various other marijuana businesses managed by
VISAJs ownership group.

56. In addition to requiring a written Business Plan and a written Operating Plan,
Aurora also permitted applicants to submit a written Security Plan. VISAJ was one
of only eighteen out of 55 applicants that received the full two points for its
narrative Security Plan.

57. In contrast, VISAJ was one of only seven out of 55 total applicants that received zero
points for its response to Item # 17.

58. It made no sense for Aurora to award more points for respondents who used certain
catchphrases in response to Item # 17 than it awarded to applicants who provided a
detailed narrative Security Plan.

59. Steve Clark, building inspection supervisor and AMED member, testified at the
October 13, 2014 hearing that he had sole responsibility for awarding points in
response to Item # 17, and that he awarded the points on an all or nothing basis.

60. Mr. Clark stated he had inspected marijuana facilities in Boulder and that he and
other AMED members were familiar with Boulders requirement and modeled
Regulation 503.2 after Boulders regulation. But he also testified that it was
insufficient for VISAJ to state that it was currently operating facilities that meet
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Boulders regulation and would use the same design-build team that VISAJ used for
its Boulder facility in order to receive three points for Item #17.

61. Mr. Clark testified that he is not an HVAC expert and that he essentially received no
guidance from AMED on how to score Item #17. Rather, Mr. Clark unilaterally
decided to award points only to applicants who used some combination of the
catchphrases carbon filter, air scrubber, or negative pressure.

62. Mr. Clark initially testified that he would not consider portions of the application
outside of Item #17 to award points, but then admitted that he awarded points to
another applicant based on a ventilation plan that the applicant submitted as an
attachment to the application. He also testified that no standards existed to guide his
decision.

63. VISAJs attorney noted that both Reviewer #1 and Reviewer #2 provided very
favorable written comments in response to VISAJs statements regarding odor
mitigation in its Operating Plan. Mr. Clark responded that he did not review the
applicants Operating or Business plans.

64. Aurora abused its discretion by failing to provide Mr. Clark with any criteria for
scoring Item # 17. And Mr. Clark abused his discretion by ignoring the fact that he
should have awarded three points to VISAJ for describing a system that would
employ the equivalent of some combination of carbon filters, air scrubbers and
negative pressure.

65. Significantly, Mr. Clark later expressed his view that theres a lot of people out there
that wereare more qualified than your client. Thatsthat is definitely the case.
If Mr. Clark correctly testified that he did not review other portions of the
applicants applications he would have had no way of knowing which applicants
were the most qualified.

66. If Mr. Clark had awarded VISAJ three points for its response to Item #17 VISAJ
would have tied for the highest score in Ward 2 with 37 points. And VISAJs
Business Plan and Operating Plan received some of the highest scores of any
applicants in any ward.

67. Upon information and belief, Mr. Clark declined to award three points to VISAJ for
its response to Item #17 because he had improperly concluded that other applicants
were better qualified based on his own subjective criteria.

68. Moreover, conflicts between the Code, AMED Regulations and written application
materials made the Citys criteria for evaluating Item #17 unnecessarily vague and
confusing.
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69. Mr. Clarks decision to award three points to Applicants who parroted certain
catchphrases in Response to Item #17and his decision to ignore VISAJs superior
responseconstitute an abuse of discretion. Similarly, AMED abused its discretion
by providing carte blanche to Mr. Clark to award all or nothing points based on his
own personal criteria.

III. CLAIMS

First Claim For Relief
(CRCP 106(a)(4))

70. VISAJ incorporates Paragraphs 1 through 68 above as though fully set forth herein.

71. Defendants abused their discretion and exceeded their jurisdiction by, among other
things, refusing award VISAJ an additional license or implement Auroras tiebreaker
system after VISAJ successfully proved that AMED had committed a mathematical
scoring error, refusing to award VISAJ three points in response to Item # 17,
improperly considering the scores of mystery reviewer #3, refusing to reveal the
identity of Reviewer #3 and awarding licenses according to a pliable set of criteria
based upon the preferences of AMED officials rather than the Code and AMEDs
written regulations.

72. VISAJ respectfully asks this Court to direct AMED to award VISAJ a license.
SECOND CLAIM FOR RELIEF
(Violation of Substantive and Procedural Due Process)
73. VISAJ incorporates Paragraphs 1 through 71 above as though fully set forth herein.

74. Defendants violated VISAJs state and federal rights to due process and equal
protection of the law by failing to implement a fair and transparent process for
evaluating applications, failing to provide a meaningful administrative review
process, failing to provide requested documents prior to hearing, impermissibly
departing from Defendants own written criteria for evaluating applications and
failing to take any action to grant VISAJ a license after VISAJ demonstrated that the
licensure process was fundamentally flawed and riddled with errors.

75. Defendants actions constituted a violation of due process under Article II 25 of the
Colorado Constitution and the Fifth and Fourteenth Amendments of the U.S.
Constitution.

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76. Defendants acted under the color of state law to deprive VISAJ of its federal civil
rights in violation of 42 U.S.C. 1983.2

77. VISAJ requests an award of its reasonable attorney fees pursuant to 42 U.S.C. 1988.

78. Defendants violations of the rights to due process and equal protection under the
laws resulted in damages to be proven at trial.


THIRD CLAIM FOR RELIEF
(CRCP 57Declaratory Judgment)

79. VISAJ incorporates Paragraphs 1 through 77 above as though fully set forth herein.

80. Despite the fact that Mr. Batchelor acknowledged that AMED committed a clear
mathematical error, he held that VISAJ was entitled to no relief. VISAJ asks this
Court to hold that the ability to appeal AMEDs decision necessarily included the
right to compel AMED to reverse its decision if AMED committed an error.

81. VISAJ also asks this Court to hold that Aurora has not shown a compelling need nor
legal basis for refusing to disclose the identity of the independent reviewers or to
provide additional documents and details regarding the independent review
process, and that Auroras refusal to provide such details violates Colorados Open
Records and Open Meetings laws. See, e.g., C.R.S. 24-6-401 (It is declared to be a
matter of statewide concern and the policy of this state that the formation of public
policy is public business and may not be conducted in secret.); C.R.S. 24-72-201
(It is declared to be the public policy of this state that all public records shall be
open for inspection by any person at reasonable times, except as otherwise
specifically provided by law.)

82. VISAJ respectfully asks this Court to interpret the parties rights under the Aurora
Code and to hold that the Aurora Code permits, and in fact requires, that VISAJ be
granted a license under the circumstances present in this case; and to require AMED
to issue a license to VISAJ, or provide other appropriate relief consistent with that
holding.

2 Undersigned counsel directs this Court to the Court of Appeals recent decision in Young v.

Larimer County Sheriffs Office, 2014 COA 119 (Colo. Ct. App. Sept. 11, 2014) (no claim
under 42 U.S.C. 1983 where sheriffs office wrongfully destroyed plaintiffs marijuana
plants). Undersigned counsel respectfully contends that Young is legally and factually
distinguishable from the case at bar and that VISAJ has a viable claim under 42 U.S.C.
1983 under the circumstances present in this case.
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IV. REQUEST FOR RELIEF

WHEREFORE, VISAJ requests the following relief:

A. A finding that Defendants abused their discretion and exceeded their jurisdiction in
denying VISAJs license application.

B. An order directing AMED to issue a license to VISAJ forthwith.

C. A determination of the parties rights related to the license application and appeal
process pursuant to CRCP 57.

D. An award of VISAJs damages as determined at trial, together with pre- and post-
judgment interest, costs and expert witness fees.

E. An award of VISAJs reasonable attorneys fees incurred herein as provided by law.

F. That VISAJ be granted such other relief as the Court deems proper.


VISAJ demands a trial by jury.



Dated: November 25, 2014.
Respectfully submitted by:
Hoban & Feola, LLC
/s/ C. Adam Foster
(original signature on file)


Plaintiffs Address:
18881 E. Colfax Ave.
Aurora, CO 80111

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