The commercial litigation landscape for CBD, hemp and marijuana is constantly evolving as federal and state courts issue decisions that impact investors, commercial contracts, employment issues, intellectual property and insolvency. The CannaBizDisputes™ blog regularly tracks and reports on these developments.
Second Circuit Emphatically Inserts Itself Into the Federal Cannabis Debate
The Second Circuit recently emphatically inserted itself into the debate over cannabis' schedule 1 status by retaining jurisdiction over an otherwise dismissible case, solely for the purpose of ensuring that the DEA does not drag its feet in considering reclassification. Washington v. Barr, No. 18-859-cv (2d Cir. May 30, 2019)was commenced in 2017 in the Southern District of New York by five plaintiffs, including former San Francisco 49ers lineman and Super Bowl Champion Marvin Washington (who also played for the Jets), as well as medical cannabis users that suffered from life-threatening conditions. The plaintiffs alleged various constitutional claims against the DEA and Justice Department, including violations of the Commerce and Due Process Clauses. They argued that "a shift over time in our understanding of the uses and dangers of marijuana warrants a change" in cannabis' schedule 1 classification, and that the failure to change the classification was arbitrary and capricious.
After Judge Hellerstein below found that the plaintiffs failed to exhaust their administrative remedies, the Second Circuit affirmed. The Second Circuit found that while the CSA did not expressly mandate the exhaustion of administrative remedies, its "text and structure" expressed a clear congressional intent to effectuate drug rescheduling decisions through "the administrative rulemaking process." Nevertheless, the court vacated the District Court’s dismissal of the Complaint and ordered that the case be held in abeyance because it was "troubled by the DEA's history of dilatory proceedings" with respect to reconsidering cannabis' schedule 1 status. The Court emphasized the unusual nature of the case, which involved critically ill patients that derived substantial benefits from cannabis:
Plaintiffs claim that marijuana has extended their lives, cured seizures, and made pain manageable. If true, these are no small things. Plaintiffs should not be required to live indefinitely with uncertainty about their access to allegedly life‐saving medication or live in fear that pursuing such medical treatment may subject them or their loved ones to devastating consequences.
Perhaps for this reason, the decision is unapologetically activist. The Court explained that the "sole purpose" for its decision to keep the case open was to "tak[e] whatever action might become appropriate" should the DEA "not act with adequate dispatch." It also acknowledged its decision was based on "strong interests" but scant authority: "[W]here agencies have a history of dilatory proceedings, federal courts have sometimes retained jurisdiction of related cases to facilitate swift review." Regardless of the driving force behind the decision, there is now one very large thumb on the scale of the federal cannabis debate.
The Second Circuit’s decision comes on the heels of another cannabis related constitutional challenge in the case Adam v. Barr, 2019 WL 1426991, at *1 (S.D.N.Y. Mar. 29, 2019) (Nathan, J.). In Adam v. Barr, a pro se plaintiff brought an action for declaratory judgment and sought an order enjoining the Justice Department from enforcing the Controlled Substances Act (the “CSA”), pursuant to the First, Fifth, and Fourteenth Amendments. The plaintiff, who was the founder of a non-profit religious organization believing in “the potential of cannabis to help facilitate prophetic states and religious experiences,” claimed that the CSA prohibited him from “freely practicing” his religious beliefs. As Judge Nathan explained:
Plaintiff believes that when mentally and physically healthy “adherents to the divine law” imbibe the “cannabis plant,” “in an appropriate environment,” the psychoactive properties of the “cannabis plant” can help induce a “pre-prophetic ecstatic state” that “can connect an individual to God and divine realms, leading to perception of God,” as well as “higher forms of prophecy.” He also believes that use of cannabis for such purposes “is a fulfillment of several divine commandments, including ‘to cling to God,’ ‘to know Him,’ and ‘to love Him.’ ” Plaintiff alleges that cannabis is an “invaluable tool” achieving these pre-prophetic states.
The Court granted the government’s motion to dismiss based on lack of standing. Notwithstanding the plaintiff’s claim that being prosecuted would result in “desecration in the name of God,” the Court found that the plaintiff had never before been arrested for cannabis use, and could not show any credible fear of prosecution as required to prevail on its constitutional claims.
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