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UNITED STATES v. CANNABIS CULTIVATORS CLUB

May 13, 1998

UNITED STATES OF AMERICA, Plaintiff,
v.
CANNABIS CULTIVATORS CLUB; and DENNIS PERON, Defendants. AND RELATED ACTIONS



The opinion of the court was delivered by: BREYER

MEMORANDUM AND ORDER

 INTRODUCTION

 The issue presented by these related lawsuits is whether defendants' admitted distribution of marijuana for use by seriously ill persons upon a physician's recommendation violates federal law, 21 U.S.C. § 841(a), and if so, whether defendants' conduct in this regard should be enjoined pursuant to the injunctive relief provisions of the federal Controlled Substances Act. See 21 U.S.C. § 882(a). This is the only issue before the Court. These lawsuits, for example, do not challenge the constitutionality of Proposition 215, the medical marijuana initiative, as a whole. Nor do they reflect a decision on the part of the federal government to seek to enjoin a local governmental agency from carrying out the humanitarian mandate envisioned by the citizens of this State when they voted to approve this law.

 These cases also do not present the question of whether all conduct exempt from prosecution under the state drug laws by Proposition 215 violates federal law. For example, the Court is not deciding whether a seriously ill person who possesses marijuana for personal use upon a physician's recommendation is in violation of federal law. Rather, the sole issue here is whether defendants' conduct, which may be lawful under state law, may nevertheless violate federal law and can thus be enjoined.

 Finding that there is a strong likelihood that defendants' conduct violates the Controlled Substances Act, the Court concludes that the Supremacy Clause of the United States Constitution requires that the Court enjoin further violations of the Act.

 BACKGROUND

 A. Proposition 215 and the Federal Drug Laws.

 In November 1996, 56% of those participating in the state-wide election voted in favor of Proposition 215, the "Medical Use of Marijuana" initiative, known also as the "Compassionate Use Act" (the "Act"). The Act makes it legal under California law for seriously ill patients and their primary caregivers to possess and cultivate marijuana for use by the seriously ill patient if the patient's physician recommends such treatment. In particular, it exempts a seriously ill patient, or the patient's primary caregiver, from prosecution under California Health and Safety Code § 11357, relating to the possession of marijuana, and § 11358, relating to the cultivation of marijuana. See California Health & Safety Code § 11362.5(d).

 As a result of the passage of Proposition 215, several individuals, including defendants, organized "medical cannabis dispensaries" to meet the needs of seriously ill patients. These nonprofit dispensaries provide marijuana to seriously ill patients upon a physician's recommendation. According to defendants, these patients previously had to purchase marijuana, if they were able to purchase it at all, on the black market at exorbitant prices and of questionable quality.

 At the time that California's voters approved the initiative, federal law -- the Comprehensive Drug Abuse Prevention and Control Act of 1970 (the "Controlled Substances Act") -- did, and still does, strictly prohibit the manufacture and distribution of marijuana, and the possession of marijuana with the intent to manufacture or distribute. See 21 U.S.C. § 841(a)(1). In particular, the Controlled Substances Act established a comprehensive regulatory scheme which placed controlled substances in one of five "Schedules" depending on each substance's potential for abuse, the extent to which each may lead to psychological or physical dependence, and whether each has a currently accepted medical use in the United States. See 21 U.S.C. § 812(b). Congress determined that "Schedule I" substances have a "high potential for abuse," "no currently accepted medical use in treatment in the United States," and a lack of accepted "safety for use of the drug or substance under medical supervision." 21 U.S.C. § 812(b)(1). Schedule I substances are strictly regulated; no physician may dispense any Schedule I controlled substance to any patient outside of a strictly controlled research project registered with the DEA, and approved by the Secretary of Health and Human Services, acting through the Food and Drug Administration ("FDA"). See 21 U.S.C. § 823(f). Congress placed marijuana in Schedule I at the time it passed the Controlled Substances Act and its designation has not changed since then. See 21 U.S.C. § 812(c)(c)(10).

 B. The California Courts and Proposition 215.

 In People v. Trippet, 56 Cal. App. 4th 1532 (1997), the California Court of Appeal, First District, interpreted Proposition 215 for the first time in a published decision. It held that although Proposition 215 does not exempt a seriously ill patient and her primary caregiver from Health and Safety Code § 11360, which prohibits the transportation of marijuana, a defendant in a criminal case might have a Proposition 215 defense to a charge of illegally transporting marijuana if "the quantity transported and the method, timing and distance of the transportation are reasonably related to the patient's current medical needs." Trippet, 56 Cal. App. 4th at 1550-51. The court reasoned that Proposition 215 would make no sense if a patient's primary caregiver would be guilty of a crime for "carrying otherwise legally cultivated and possessed marijuana down a hallway to the patient's room." Id. at 1550.

 Three months later, a different division of the same court decided People ex rel. Lungren v. Peron, 59 Cal. App. 4th 1383 (1997). A unanimous court held that the defendants in that action, Dennis Peron and the San Francisco Cannabis Cultivators Club, both defendants here, are not primary caregivers within the meaning of the statute. A majority of that court disagreed with Trippet by also holding that while Proposition 215 exempts seriously ill patients and their caregivers from California law prohibiting the possession and cultivation of marijuana (Health & Safety Code § 11357, § 11358), it does not, under any circumstances, exempt them from health and Safety Code § 11359 and § 11360, which prohibit the sale or giving away of marijuana. Id. at 1392. The California Supreme Court denied review of that decision on February 25, 1998.

 C. The Federal Lawsuits.

 Less than a month after the Peron decision, and more than a year after California's voters approved Proposition 215, the United States filed six separate lawsuits against six independent cannabis dispensaries and individuals associated with the management of the dispensaries. *fn1" The federal government alleges that defendants' manufacture and distribution of marijuana, and possession with the intent to manufacture and distribute marijuana, violates 21 U.S.C. § 841(a)(1); defendants' use of a facility (i.e., the locations of the dispensaries) for the purpose of manufacturing and distributing marijuana violates 21 U.S.C. § 856(a)(1); and that the individual defendants' conspiracy to violate the Controlled Substances Act violates 21 U.S.C. § 846. The lawsuits seek to preliminarily and permanently enjoin defendants' conduct pursuant to the statute which provides the federal district courts with jurisdiction to enjoin violations of the Controlled Substances Act. See 21 U.S.C. § 882(a).

 On the same day the federal government filed its lawsuits, it filed motions for a preliminary injunction, permanent injunction and summary judgment in each action. In support of its motions, the government submitted the affidavits of several government agents who attest to their undercover purchases of marijuana from defendants at the various defendant dispensaries.

 The six lawsuits were randomly assigned to various judges of this District. Pursuant to Local Rule 3-12, all six were reassigned to this Court as related cases. The Court held a status conference on January 30, 1998, to address defendants' request for additional time to respond to the federal government's motions. At the status conference, and in their papers in support of their request for a continuance, defendants advised the Court that they strenuously dispute the factual assertions in the affidavits with respect to the sale of marijuana to non-seriously ill persons and persons without a physician's recommendation, and contend that much of the federal government's evidence was obtained in violation of the fourth amendment. Over the federal government's objection, the Court granted defendants an extension of time to respond. The Court further ordered that

 
for purposes of plaintiff's motions, the parties shall assume that defendants' alleged conduct falls squarely within that permitted by California Proposition 215, California Health & Safety Code § 11362.5. For example, the parties shall assume that all defendants are "primary caregivers" within the meaning of the statute, that all persons to whom defendants distribute or dispense marijuana are seriously ill, and that a physician has determined that the person's health would benefit from the use of marijuana and has made an oral or written recommendation to that effect. Whether the government illegally obtained the evidence upon which it bases its motions shall not be addressed at this time.

 February 9, 1998 Order. By its Order, the Court sought to avoid a factual dispute as to whether Proposition 215 applies to defendants' conduct.

 Prior to the hearing on the federal government's motions, defendants filed a motion to dismiss for lack of jurisdiction on the ground that Congress does not have authority under the Commerce Clause to regulate defendants' conduct. Defendants also moved to dismiss on the ground that the Court should abstain pursuant to various abstention doctrines.

 The Court also received memoranda in opposition to the federal government's motion from amici curiae City and County of San Francisco, as represented by the San Francisco District Attorney, and other cities in which defendant dispensaries are located. The City and County of San Francisco and the other cities urge the Court not to adopt the injunctive relief sought by the federal government because of the adverse consequences an injunction would have on the public health of their citizens. In particular, the San Francisco District Attorney asks the Court to limit any injunction so as not to exclude distribution to those patients for whom marijuana is a medical necessity, possibly by the City and County of San Francisco itself. See Memorandum of Amicus Curiae District Attorney of San Francisco at 11.

 The Court held a hearing on all pending motions on March 24, 1998. All parties, and amici curiae San Francisco District Attorney, argued at the hearing. The Court requested that the parties submit additional briefing on issues raised at the hearing and took the matter under submission on April 16, 1998.

 DISCUSSION

 The Supremacy Clause of Article VI of the United States Constitution mandates that federal law supersede state law where there is an outright conflict between such laws. See Gibbons v. Ogden, 22 U.S. 1, 210, 6 L. Ed. 23 (1824); Free v. Bland, 369 U.S. 663, 666, 8 L. Ed. 2d 180, 82 S. Ct. 1089 (1962); Industrial Truck Ass'n, Inc. v. Henry, 125 F.3d 1305, 1309 (9th Cir. 1997) (state law is preempted "where it is impossible to comply with both state and federal requirements, or where state law stands as an obstacle to the accomplishment and execution of the full purpose and objectives of Congress"). Recognizing this basic principle of constitutional law, defendants do not contend that Proposition 215 supersedes federal law, 21 U.S.C. § 841(a). Indeed, Proposition 215 on its face purports only to exempt certain patients and their primary caregivers from prosecution under certain California drug laws -- it does not purport to exempt those patients and caregivers from the federal laws. One of the ballot arguments in favor of the initiative in fact states: "Proposition 215 allows patients to cultivate their own marijuana simply because federal law prevents the sale of marijuana and a state initiative cannot overrule those laws." Peron, 59 Cal. App. 4th at 1393 (quoting Ballot Pamphlet, Proposed Amends. to Cal. Const. with arguments to voters, Gen. Elec. (Nov. 5, 1996) p. 60).

 Defendants argue instead that the Court should dismiss the federal government's actions on abstention grounds and on the ground that 21 USC § 841(a) exceeds Congress's authority under the Commerce Clause. Assuming that the Court has jurisdiction, defendants' arguments fall into three categories: (1) defendants have not violated the federal law; (2) defendants have valid defenses to their violation of the law; and (3) equitable principles preclude injunctive relief. We now turn to each of these arguments.

 I. Jurisdiction.

 A. Abstention.

 We start with the proposition that the federal courts have an "unflagging obligation" to exercise their jurisdiction. See Colorado River Water Conservation Dist. v. United States, 424 U.S. 800, 817, 47 L. Ed. 2d 483, 96 S. Ct. 1236 (1976); Miofsky v. Superior Court, 703 F.2d 332, 338 (9th Cir. 1983). While the defendants have asked the Court to abstain, abstention is an "extraordinary and narrow exception to the duty of a district court to adjudicate a controversy properly before it." Colorado River Water Conservation Dist, 424 U.S. at 813 (quoting County of Allegheny v. Frank Mashuda Co., 360 U.S. 185, 189, 3 L. Ed. 2d 1163, 79 S. Ct. 1060 (1959)). Defendants contend that the "extraordinary and narrow" exception to this duty exists here under Burford, Pullman or Colorado River, abstention doctrines.

 1. Burford Abstention.

 Burford abstention is based on comity. It may be appropriate if the lawsuit involves difficult questions of state law, resolution of which is a matter of substantial local concern transcending the result in the case at bar. Federal courts may abstain in such cases if federal adjudication would be disruptive of state efforts to establish a coherent policy with respect to the matter at issue. See New Orleans Public Service, Inc. v. City Council of New Orleans, 491 U.S. 350, 362, 105 L. Ed. 2d 298, 109 S. Ct. 2506 (1989); Burford v. Sun Oil Co., 319 U.S. 315, 334, 87 L. Ed. 1424, 63 S. Ct. 1098 (1943). Burford abstention is appropriate only if the following factors are met:

 
(1) that the state has concentrated suits involving the local issue in a particular court; (2) the federal issues are not easily separable from complicated state law issues with which the state courts have special competence; and (3) that federal review might disrupt state efforts to establish a coherent policy.

 Tucker v. First Maryland Savings & Loan, Inc., 942 F.2d 1401, 1404-05 (9th Cir. 1991).

 Defendants contend that questions of who is a "primary caregiver" within the meaning of Health and Safety Code § 11362.5, and precisely what conduct is permitted by Proposition 215, are difficult and uncertain issues of state law. For example, defendants contend that there is a question whether Proposition 215 exempts the transportation as well as cultivation and use of medical marijuana from California's drug laws. Compare Peron, 59 Cal. App. 4th at 1393-95 with Trippet, 56 Cal. App. 4th at 1550-51. They also assert that "medical marijuana" is "a policy problem of substantial import," the importance of which transcends the result in this case. They assert that "by potentially invalidating Proposition 215 on preemption grounds, this court would effectively halt California's attempt to make section 11362.5 compatible with federal law." Defendants' Memorandum in Support of Motion to Dismiss at 7.

 These lawsuits, however, are not appropriate candidates for Burford abstention. At a minimum, the second requirement for such abstention is not present. The federal issue -- whether defendants' conduct violates federal law -- is unrelated to the state questions identified by defendants, whether defendants' conduct is legal under state law. Proposition 215 may exempt defendants' conduct from prosecution under California's criminal laws and, for purposes of the federal government's motion, the Court has assumed that it does. But the only issue in these lawsuits is whether defendants' conduct violates federal law. See New Orleans Public Service, Inc., 491 U.S. at 362 (Burford abstention is inappropriate where federal issues control).

 None of the cases cited by defendants in support of Burford abstention involved a lawsuit, such as these, where the resolution of the state law issues was immaterial. In Fireman's Fund Ins. Co. v. Quackenbush, 87 F.3d 290 (9th Cir. 1996), for example, the Ninth Circuit affirmed the district court's application of Burford abstention to an action challenging the constitutionality of Proposition 103 (insurance rate rollback initiative) because the federal issues were "intimately conjoined" with difficult and unresolved issues of state law. Id. at 297. Here, in contrast, the scope of Proposition 215 is not at issue since the constitutionality of the initiative is not being challenged. All that is at issue in these actions is whether defendants' conduct violates federal law. The Court need not examine state law to answer that question.

 2. Pullman Abstention.

 Defendants' opposition memorandum argued that abstention is appropriate under an additional doctrine, Railroad Comm'n of Texas v. Pullman Co, 312 U.S. 496, 85 L. Ed. 971, 61 S. Ct. 643 (1941). Under Pullman abstention a federal court may defer hearing a case when "'a federal constitutional issue . . . might be mooted or presented in a different posture by a state court determination of pertinent state law.'" C-Y Development Co. v. City of Redlands, 703 F.2d 375, 377 (9th Cir. 1983) (quoting County of Allegheny v. Frank Mashuda Co., 360 U.S. 185, 189, 3 L. Ed. 2d 1163, 79 S. Ct. 1060 (1959)). A lawsuit must meet three criteria for Pullman abstention to be appropriate:

 
(1) the complaint must touch a sensitive area of social policy into which the federal courts should not enter unless there is no alternative to adjudication; (2) a definitive ruling on the state issues by a state court could obviate the need for constitutional adjudication by the federal court; and (3) the proper resolution of the potentially determinative state law issue is uncertain.

 Kollsman v. City of Los Angeles, 737 F.2d 830, 833 (9th Cir. 1984). Defendants submit that the Court should abstain until the California courts have had an opportunity to define more clearly what state law permits in order ...


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