DOJ Asks Appeals Court to Uphold Marijuana Prohibition, CA Judge Won't Lift Intoxicating Hemp Beverage Ban, More... (10/15/24)

The Supreme Court today heard oral arguments in the case of a trucker fired for testing positive for marijuana who is suing the company that sold him a supposed CBD product, and more.

The Supreme Court is hearing a case about whether a trucker fired for testing positive for THC can sue a medical marijuana company under the RICO Act. (Creative Commons)

Marijuana Policy

Justice Department Tells Appeals Court It Should Uphold Federal Marijuana Prohibition. The Justice Department last Thursday filed a brief with the 1st Circuit Court of Appeals arguing that Congress maintains broad authority to regulate marijuana and urging the court to uphold the federal ban on marijuana. The move comes in a case where several marijuana companies are seeking to overturn the Controlled Substances Act.

"Congress was acting well within its authority to 'make all laws which shall be necessary and proper' to 'regulate Commerce… among the several States,'" the Justice Department argued, citing Supreme Court precedent.

The marijuana companies, led by Canna Provisions, are trying to revive a lawsuit that was dismissed earlier this year in federal district court. That lawsuit was thrown out after the judge ruled that only the Supreme Court could overturn the 2005 Gonzalez v. Raich decision upholding federal marijuana prohibition.

The companies argued that because so many states have already legalized marijuana, federal prohibition is no longer justified.

"The ground-shaking shifts in marijuana regulation… together with the nation's long history of marijuana cultivation and use prior to the CSA, demonstrate the widely held understanding that Plaintiffs' marijuana activities implicate a liberty interest that requires protection," the companies argued in a court filing.

However the Justice Department argues that changing state laws do not weaken federal powers.

"Plaintiffs repeatedly note that many states have legalized medical and recreational marijuana, but Raich squarely held that state legalization of a controlled substance 'cannot retroactively divest Congress of its authority under the Commerce Clause,'" the department argued.

The 1st Circuit could hear oral arguments in the case later this year.

California Judge Denies TRO Request That Attempted to Halt State's Ban on Hemp-Derived THC Products. A state Superior Court judge has ruled that the state's ban on the sale of intoxicating hemp products can stand because hemp companies that challenged it did not show they suffered "irreparable harm" in requesting a temporary restraining order to block the ban.

The US Hemp Roundtable and several state hemp farmers and businesses had sought earlier this month to block emergency regulations banning hemp-derived THC and other intoxicating cannabinoids from store shelves. But Superior Court Judge Stephen Goorvitch demurred.

"Petitioners do not demonstrate that these regulations will cause widespread and catastrophic destruction of the hemp industry," Goorvitch wrote in a 12-page order denying the TRO. "As an initial matter, the court notes that at least half of [the USHR's] members operate outside California."

Goorvich did not mention it, but that's because the 2018 Farm Bill legalizing hemp allowed for interstate sales.

Under the emergency regulations, which went into effect September 23, industrial hemp food, beverages, and dietary supplements intended for human consumption can no longer contain detectable amounts of THC or any "comparable cannabinoid" per serving.

The hemp companies argued that the emergency regulations are "horrendous to industry participants such as farmers, manufacturers, distributors and retailers, who will suffer significant financial injury."

"Manufacturers can sell THC through the legal cannabis system in California, i.e., with a license,""Goorvitch retorted. "Putting aside that petitioners' declarations are speculative, at heart, they complain of lost revenue, which is not persuasive in establishing irreparable harm. The mere fact that these losses may be unrecoverable is not a basis to issue a temporary restraining order."

Drug Testing

Supreme Court Hears Case of Truck Driver Fired for Failed Marijuana Test Who Seeks to Sue CBD Product Supplier. The Supreme Court on Tuesday heard oral arguments in the case of a truck driver who sued a marijuana company after he was fired in the wake of a failed drug test after using its product, which he claims was falsely sold as not containing any THC.

The high court heard an appeal from Medical Marijuana, Inc. of a district court's decision to allow trucker Douglas Horn to sue it under the Racketeer Influenced and Corrupt Organizations (RICO) Act. This 1970 federal law was designed to crack down on organized crime and its economic impact. RICO's civil provisions allow "any person injured in his business or property" to seek triple damages from the defendant.

In 2012, Horn purchased a CBD tincture called Dixie X that was advertised as containing no THC. After a random drug test by his employer detected THC, he was fired from his trucking job.

In oral arguments, some justices were skeptical of Horn's claim. Justice Brett Kavanaugh worried about making it too easy for plaintiffs to bring civil RICO suits by characterizing personal injuries as injuries to business or property.

"That would be a dramatic, really radical shift in how tort suits are brought throughout the United States," Kavanaugh said. "And we would expect a clearer indication from Congress," Kavanaugh added.

But other justices appeared more sympathetic.

"If you're harmed when you lose a job, then you've been injured in your business, haven't you?," asked Justice Elena Kagan. "I guess what I'm saying is the simplest, clearest reading of this statutory language is it doesn't distinguish by what causes the harm," Kagan added. "It just says, if you're harmed in a way that's in your business or property, which has been understood to include being harmed by the loss of a job, and that's by reason of a (racketeering activity), then you're entitled to threefold the damages you would otherwise be."

Horn brought the lawsuit in 2015, arguing that the company was engaged in a "pattern of racketeering activity" that included violations of the Controlled Substances Act, mail fraud, and wire fraud by selling products that contained THC.

He lost at trial, but the 2nd US Court of Appeals revived his lawsuit, leading Medical Marijuana, Inc. to appeal to the Supreme Court. A decision is not expected for months.