On August 16, in the case of United States v. McIntosh[1], the U.S. Court of Appeals for the 9th Circuit, reversed decisions from the District Court for the Northern District of California denying the appellants’ request for  relief against the Department of Justice (the “DOJ”) in connection with indictments brought against them for violation of the Controlled Substances Act.  The Court held that the appellants had standing to seek relief under a rider to the Consolidated Appropriations Act[2] prohibiting the DOJ from spending funds to prevent states’ implementation of their medical marijuana laws (“§ 542”).

§ 542, which covers funds appropriated for use during the federal fiscal year ending September 30, 2016, provides that “None of the funds made available in this Act to the Department of Justice may be used, with respect to [list of jurisdictions[3]] to prevent any of them from implementing their own laws that authorize the use, distribution, possession, or cultivation of medical marijuana.”

The appellants included the operators of marijuana stores and indoor grow sites in California and other growers of marijuana in California and Washington State.   In the District Courts, the Appellants sought either dismissal of their cases or to enjoin the DOJ from continuing to prosecute the cases unless Congress authorized funds for it to do so on the basis of  § 542.  The District Courts denied the motions on various grounds, in some cases citing the failure of the appellants to prove that they had complied with the applicable marijuana laws of the state and in one case concluding that the determination of whether there had been compliance with applicable state law would depend on the findings of a jury after a trial.

The Appeals Court first addressed the question of whether it had jurisdiction to hear the appeals. It concluded that jurisdiction existed because the matter in dispute involved the direct rejection of a request for injunctive relief. The Court acknowledged that injunctions against criminal prosecutions were rare but as the appellants sought an injunction against spending federal funds in pursuit of a prosecution in light of a clear prohibition by Congress against the use of funds for such purpose, jurisdiction was appropriate.

The Court then found that the appellants had standing to sue. The Court explained that the appellants’ claims constituted a genuine case or controversy as they stood to suffer significant damages if they were convicted.  The Court further noted that there was ample precedent to support private citizens having the right to bring claims that implicated the separation of powers, which was implicated in these cases where the DOJ sought to spend funds in the face of an express prohibition by Congress.

The Court then rejected the DOJ’s argument that prosecuting private citizens did not violate the provisions of § 542.  The Court concluded that since the state marijuana laws effectively provided for non-prosecution of persons who complied with the terms of the laws, prosecution of such persons by the DOJ prevented the full implementation of the state laws. The Court also in turn rejected a claim by the appellants that § 542 prohibited the DOJ from prosecuting persons licensed by a state even if they were not fully compliant with all terms of the applicable state marijuana laws.  The Court held that failure to “strictly comply” with all of the terms of the applicable statutes would result in a person engaging in conduct not authorized by the statute and thus the DOJ was free to prosecute such persons without preventing a state from implementing its marijuana laws.

The Court remanded the respective cases to the District Courts for evidentiary hearings to determine whether the appellants were acting in full compliance with the applicable state marijuana laws. The Court also left the nature of the remedy to be granted to the appellants if they were found in compliance to the District Courts to fashion.  The Court noted that § 542 did not provide immunity from prosecution under the federal Controlled Substances Act even if a person were to fully comply with applicable state law relating to marijuana and that the Controlled Substances Act superseded the state statutes under the Supremacy Clause of the US Constitution.  Accordingly, the Court explained, the manufacture, distribution, or possession of marijuana remains prohibited and illegal under federal law and, to the extent that Congress subsequently permits the DOJ to use federal funds to prosecute persons who comply with state law but violate the Controlled Substance Act, the DOJ could resume prosecutions even if temporarily enjoined from pursuing them under § 542.  It is also worth noting that should any state not specifically listed in § 542 subsequently legalize marijuana in whole or in part, the DOJ could still prosecute persons complying with the laws of such state unless Congress expanded the scope of § 542 to include such state.

[1] The text of the decision may be found at the following link: http://cdn.ca9.uscourts.gov/datastore/opinions/2016/08/16/15-10117.pdf.

[2] 2016, Pub. L. No. 114-113, § 542, 129, Stat. 2242, 2332-33 (2015).

[3] Alabama, Alaska, Arizona, California, Colorado, Connecticut, Delaware, District of Columbia, Florida, Hawaii, Illinois, Iowa, Kentucky, Maine, Maryland, Massachusetts, Michigan, Minnesota, Mississippi, Missouri, Montana, Nevada, New Hampshire, New Jersey, New Mexico, Oregon, Rhode Island, South Carolina, Tennessee, Utah, Vermont, Washington, Wisconsin, Guam and Puerto Rico.