Friday, January 24, 2014

Marijuana Still Illegal Throughout the USA (Yes, Even in Colorado)

A (Much) Better Lawyer than the New York Times
A headline in today's The New York Times declares Attorney General Holder's purported belief that "Legal Marijuana Business Should have Access to Banks."   According to the article, which appears here, Holder expressed this opinion in remarks delivered at the University of Virginia's Miller Center.  In particular, the article reports that the Department of Justice will soon issue guidance to banks assuring such institutions that they accept deposits from enterprises that sell marijuana in states such as Colorado where many such sales do not violate state law.   The article follows a January 11 article, also in the Times, entitled "Banks Say No to Marijuana Money, Legal or Not."  
The Times is apparently confused about the meaning of "legal" and the relationship between state and federal law.   It's hard to imagine that the Attorney General, a very good lawyer, referred to the sale of marijuana in states such as Colorado as "legal" or referred to enterprises selling such marijuana as "legal businesses."  Indeed, despite the headline, the article does not quote the Attorney General as referring to such conduct as "legal" or any synonym thereof.

 To be sure, the production, possession and sale of marijuana does not violate the law of Colorado or certain other states in certain circumstances.  Moreover, the Department of Justice has declared that, with some exceptions, it will not bring criminal prosecutions against individuals or businesses that possess, purchase or sell marijuana in compliance with state law, so long as the states in question "establish strict regulatory schemes that protect eight federal interests."  However, Congress has not repealed the federal ban on the possession and sale of marijuana.  In addition, the Supreme Court upheld this ban as within Congress's commerce power less than a decade ago, even though such possession was lawful in the state where the possessors resided.  See Gonzales v. Raich, 545 U.S. 1 (2005).    Thus, the Administration's refusal to devote scarce resources to the prosecution of relatively minor crimes does not thereby repeal federal law or otherwise render activity inconsistent with federal criminal statutes "legal."  Instead, as the memorandum announcing selective non-enforcement explained, the new policy "does not in any way alter the Department's authority to enforce federal law, including laws relating to marijuana, regardless of state law."  The memorandum also accurately notes that neither it "nor any state or local law provides a legal defense to any violation of federal law, including [laws banning the possession and sale of marijuana]." 

In short, regardless of recent legal developments in states like Colorado, there is no such thing as a "legal marijuana business" in the United States of America.  Instead, given the Constitution's Supremacy Clause, both the possession and sale of marijuana remain unlawful in every state and locality of the Union, without regard to state laws that purport to authorize the practice.  States cannot preempt otherwise valid federal statutes.  As the Supreme Court explained well over a century ago:

"The laws of the United States are laws in the several States, and just as much binding on the citizens and courts thereof as the State laws are. The United States is not a foreign sovereignty as regards the several States, but is a concurrent, and, within its jurisdiction, paramount sovereignty. Every citizen of a State is a subject of two distinct sovereignties, having concurrent jurisdiction in the State — concurrent as to place and persons, though distinct as to subject-matter."

See Claflin v. Houseman, 93 U.S. 130, 136-37 (1876) (emphasis added).

Short of repeal of federal statutory law banning the possession and sale of marijuana, one can imagine only one hypothetical scenario in which the Times' description would be partially accurate.  As previously explained on this blog, the President is not bound by the Supreme Court's interpretation of the Constitution but must instead exercise his or her independent judgment when discerning the meaning of the document.  Thus, a President who disagreed with Raich and believed that the National Government lacks the authority to regulate the purely intrastate possession and sale of marijuana could decline to enforce legislation purporting to ban such activity for that reason alone, and without regard to the content of state or local laws. 

If a President took and announced such a position, one could accurately state that such possession and sale was legal in those states (and only those states) that chose not to regulate such conduct.  Even here, however, such conduct would only be legal outside the courts, as judges would still be bound by the Supreme Court's determination in Raich.  Thus, a Presidential declaration that such regulation exceeded the power of Congress would not prevent judges from treating such conduct as unlawful when adjudicating cases properly before them.   So, for instance, a court could decline to enforce a contract for the purchase and sale of marijuana, in the same way that it would decline to enforce a contract in restraint of trade.  See Dr. Miles v. John D. Park & Sons, 220 U.S.  373 (1910) (holding that contract violating the Sherman Act was not enforceable and thus could not support a diversity action for tortious interference with contract).  Moreover, if an insurance contract limited coverage to accidents resulting from "lawful activities," a court could hold that the company need not pay compensation to an insured injured in the course of conducting the business of selling marijuana. 

It must be emphasized that the scenario just described is purely hypothetical.  After all, the Obama Administration has articulated and defended an extremely broad conception of Congressional power.  Indeed, the Administration has even claimed that Congress possesses the authority to compel  individuals to purchase health insurance against their will, a vision that the Supreme Court thankfully and properly rejected.  Unless and until this Administration or a future Administration adopts a less expansive (and more accurate) conception of the Commerce Power, the possession and sale of marijuana will remain entirely illegal, yes, even in Colorado.