DOJ Gives Up the Marin Alliance and Lynnette Shaw Appeal. What Does It Mean? - With Update

On April 13, the U.S. Court of Appeals for the Ninth Circuit issued an order dismissing the U.S. DOJ's appeal in the case against Lynnette Shaw and the Marin Alliance for Medical Marijuana. That order followed the DOJ's decision to abandon the appeal. Here's the background you need to understand it, and what it means for the future.

Update: on April 21, the Senate Appropriations Committee approved extending the Hinchey-Rohrabacher Amendment into the 2017 appropriations bill. Details below.

The 1998 Civil Cases

In 1998, the DOJ filed a civil case against Ms. Shaw and the Marin Alliance. The case was assigned to Judge Charles Breyer, who is a highly-regarded judge and also happes to be the brother of Supreme Court Justice Stephen Breyer. Ultimately, in June of 2002, the DOJ persuaded Judge Breyer to grant a civil injunction which shut down the dispensary and included a lifetime ban on Ms. Shaw ever operating another dispensary. Ms. Shaw and the Marin Alliance appealed, but the Ninth Circuit upheld the injunction in the same opinion that also upheld an injunction against Oakland Cannabis Buyers' Cooperative. The Oakland Cannabis Buyers' Cooperative case was ultimately appealed to the United States Supreme Court, which also affirmed.

The Hinchey-Rohrabacher Amendment

In late 2014, Congress passed and President Obama signed into law the Hinchey-Rohrabacher Amendment as Section 538 of the Consolidated Appropriations Act, 2015. The Hinchey-Rohrabacher Amendment prohibits DOJ from using its allocated funds to prevent listed states, including California, "from implementing their own State laws that authorize the use, distribution, possession or cultivation of medical marijuana."

In 2015, Congress passed, and President Obama signed, the similar text as Section 542 of the Consolidated Appropriations Act, 2016. The current law lists 41 states (Alabama, Alaska, Arizona, California, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Iowa, Kentucky, Louisiana, Maine,
Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, New York, North Carolina, Oklahoma, Oregon, Rhode Island, South Carolina, Tennesee, Texas, Utah, Vermont, Virginia, Washington, Wisconsin, and Wyoming) along with the District of Columbia, Guam, and Puerto Rico. It provides that the DOJ may not use the funds allocated by the 2016 Act "to prevent any of them from implementing their own laws that authorize the use, distribution, possession, or cultivation of medical marijuana."

The 2015 Decision by Judge Breyer in United States v. Marin Alliance

On June 9, 2015, Ms. Shaw and and the Marin Alliance filed a motion asking Judge Breyer to dissolve the injunction on several grounds, including that the Hinchey-Rohrabacher Amendment barred the DOJ from enforcing it.

The DOJ opposed this motion. According to DOJ, the Hinchey-Rohrabacher Amendment did not reduce DOJ's ability to enforce the Controlled Substances Act, including criminal charges against individuals or businesses involved in the cultivation or sale of marijuana for medical purposes pursuant to state law. DOJ argued -- among other things -- that the Hinchey-Rohrabacher Amendment did not "only prohibits the Department of Justice from expending funds appropriated during the fiscal year in actions directed against States that would prevent them from implementing their own laws," and that "Nothing in the terms of this provision suggests that the Department is prohibited from enforcing the" Controlled Substances Act.

On October 19, 2015, Judge Breyer ruled. While the Court declined to dissolve the injunction entirely, it held that DOJ cannot enfoce the injunction against Ms. Shaw and the Marin Alliance so long as they comply with state law. Judge Breyer held that the "plain reading of the text of Section 538 [the Hinchey-Rohrabacher Amendment] forbids the Department of Justice from enforcing this injunction against [the Marin Alliance] to the extent that [the Marin Alliance] operates in compliance with California law." The Court ruled that "Congress dictated in Section 538 that it inteded to prohibit the Department of Justice from expending any funds in connection with the enforcement of any law that interfereces with California's ability to 'implement [its] own State law[] that authorize[s] the use, distribution, possession, or cultivation of medical marijuana." The Court wrote that the Controlled Substances Act "remains in place, and this Court intends to enforce it to the full extent that Congress has allwed in Section 538, that is, with regard to any medical marijuana not in full compliace with 'State law[] that authorize[s] the use, distribution, possessionm, or cultivation of medical marijuana." Judge Breyer excoriated the DOJ's contrary argument, writing that it "tortures the plain meaning of the statute."

The DOJ's Abandoned Appeal

The DOJ appealed that decision. However, before any brief was filed, on April 1, 2016, the DOJ filed a motion to voluntarily dismiss its appeal. On April 12, the Court of Appeals grant that request.

What It Means for the Future

We don't give legal advice on CaliforniaLegalized.com. If you are making decisions about a business in this industry based on what you read on this (or any other website), you need to wake up and get a lawyer.

But here is what we think this decision means.

1. DOJ Knew It Risked a Loss and Did Not Want Bad Precedent

It has been argued by others that the likely reason for the DOJ's decision to abandon its appeal was fear of setting precedent against it. If the Court of Appeals decided the appeal in a manner favorable to Ms. Shaw and the Marin Alliance, that decision would be binding on all the federal trial courts in California and the other states within the Ninth Circuit (including Washington, Oregon, and Nevada). This particular case, with a strong opinion by Judge Breyer and some unique facts about the history of the Marin Alliance, was not the best one for DOJ to seek a decision at the appellate level. DOJ may have its eyes on another case where it feels it has a better chance at the appellate level.

By avoiding a loss before the Ninth Circuit, DOJ retains its ability to argue in any given case that it is free to prosecute individuals and organizations under the Controlled Substances Act, even if those individuals are involved in medical marijuana in full compliace with state law.

2. Compliance With State Law Remains Essential

Judge Breyer's order, as favorable as it is to the industry, is crystal clear that The Hinchey-Rohrabacher Amendment protects only those that comply with state law. Those operators that do not comply with state law risk not only licensing problems with the state and local regulators, but civil forgeiture and criminal prosecution under state and federal law.

3. The Hinchey-Rohrabacher Amendment Is Specific to Medical Cannabis

Whatever protections the The Hinchey-Rohrabacher Amendment provides to medical marijuana dispensaries and others involved with them, the situation is much different for "adult use" operators. While non-medical cannabis in California is expected to be legalized by AUMA, that is an entirely different kettle of fish.

4. Hinchey-Rohrabacher Amendment Protection Ends If Congress Stops Enacting It

The Hinchey-Rohrabacher Amendment has been enacted twice, for spending bills for 2015 and 2016. The clock resets with the 2017 appropriations bill. If Congress does not enact the Amendment again, then whatever protections are available under Hinchey-Rohrabacher will end.

Update: on April 21, the Senate Appropriations Committee approved an amendment offered by Senator Mikulski that extends the Hinchey-Rohrabacher Amendment into the 2017 appropriations bill. The vote was 21-8. It still needs to make it through the rest of Congress, of course.