Big Sky Scientific - Hemp Seizure Case in Idaho
Thank you to the AGA Cannabis Project for the invitation to guest blog on this site. In my first post below, I will discuss the litigation and legal issues surrounding Idaho’s seizure of a truckload of “hemp” passing through the state.
In late January 2019, Idaho State Police (ISP) seized a shipment of nearly 7,000 pounds of cannabis plant material on its way from Oregon to Colorado. State officials also charged the driver of the truck with felony marijuana trafficking.
The plant material in the truck belonged to Big Sky Scientific (BSS), a Colorado-based CBD wholesaler. BSS claimed that it bought the material from an Oregon-licensed hemp producer, and that tests performed by two different laboratories indicated that the THC content of the crop was well below the cap set by the 2018 Farm Bill for “hemp”. (The Farm Bill defines “hemp” as the cannabis plant or any part thereof containing less than .3% THC by dry weight. See Section 10113.)
The problem for BSS was that Idaho does not distinguish between “hemp” and “marijuana.” The state continues to define “marijuana” expansively – as the federal government until very recently did – to include “all parts of the plant of the genus Cannabis . . . [except] the mature stalks”, regardless of THC content. Idaho St. § 37-2701(t). Hence, even if the cannabis plant material found in the truck really was “hemp” under the terms of the 2018 Farm Bill, it still constituted “marijuana” for purposes of Idaho law. And Idaho has not yet legalized marijuana (in any form), even for medical purposes. See Robert A. Mikos, Only One State Has Not Yet Legalized Marijuana in Some Form . . . ., Marijuana Law, Policy, and Authority Blog, July 16, 2018.
Below, I discuss the seizure case in three steps, corresponding to three different decisions that have been issued in the matter. I will then make a few observations about those decisions and their implications for the 2018 Farm Bill more generally. (For more background on the Farm Bill, you can read another of my posts, New Congressional Farm Bill Legalizes Some Marijuana, Marijuana Law, Policy, and Authority Blog, Dec. 13, 2018.)
Round I, Federal District Court
After the Idaho State Police (ISP) initiated state forfeiture proceedings against the plant material, BSS filed a federal lawsuit against the state, demanding the return of its “hemp”, which it claimed was worth $1.3 million. Indeed, the company sought an emergency temporary restraining order (TRO) because the value of the seized “hemp” was likely to drop precipitously – it is, after all, perishable plant material. (BSS Memorandum in Support of TRO [hereinafter “Memorandum”], p. 8-9).
In the suit, BSS claimed that Idaho’s marijuana prohibition is preempted insofar as it is applied to the interstate shipment of cannabis that meets the Farm Bill’s definition of “hemp.” BSS’s memorandum in support of its motion for a TRO argued that:
“Congress has clearly spoken on the issue of industrial hemp. Big Sky’s shipment is industrial hemp. Without question, industrial hemp is legal at the federal level and considered to be an agricultural crop. While it remains the prerogative of each state to enact its own drug laws, those state laws cannot be enforced in a manner that conflicts with federal statutes. Congress has entirely preempted the area of interstate transportation of industrial hemp, so any state law that conflicts with that complete preemption must give way under the Supremacy Clause.”
(Id. at p. 10). In other words, BSS claimed that while “Idaho can prohibit the sale and marketing of industrial hemp within its borders, . . . it cannot enforce its local laws so stringently as to cut off interstate commerce of what is considered lawful at the federal level.” (Id. at p. 16).
The company based this preemption claim on Section 10114(b) of the Farm Bill. That provision states that:
“No State or Indian Tribe shall prohibit the transportation or shipment of hemp or hemp products produced in accordance with subtitle G of the Agricultural Marketing Act of 1946 (as added by section 10113) through the State or the territory of the Indian Tribe, as applicable.”
Thus, so the argument goes, Idaho must return BSS’s “hemp”, even if the state criminalizes the possession thereof, because BSS was only shipping it through the state.
However, the state successfully rebutted this claim. In its February 2, 2019 decision denying the emergency TRO, the federal district court noted that BSS “does not contend, and it is not clear on the present record whether it could contend, that the product seized was actually produced in compliance with subtitle G” as required by the Farm Bill. (Big Sky Scientific v. Idaho State Policy, D. Idaho, Feb. 2, 2019 [hereinafter “Feb. 2, 2019 decision”], p. 9). As explained in my post on the Farm Bill, and as the court surmises:
“Subtitle G contains not just the definition of hemp (which is the fulcrum of Plaintiff’s argument), but also the provisions detailing how states can create their own regulatory plan for hemp production and the means (the obligation actually) by which the Secretary of the United States Department of Agriculture is to create a federal regulatory plan for hemp production. Subtitle G requires a myriad of procedures, record-keeping requirements, inspection requirements, enforcement requirements, and other details which create a statutory frame around the production of hemp in the United States.”
(Id. at p. 11).
The problem is that,
“even though Big Sky may, at some point in time, be able to purchase industrial hemp that has been ‘produced in accordance with Subtitle G,’ the hemp that was seized in Idaho could not possible meet that standard because no ‘plans’ to regulate the production of industrial hemp under the 2018 Farm Bill have either been approved (by the federal government as to Oregon . . .) or created and promulgated by the United States Department of Agriculture for the federal government (to apply in the absence of an approved state or tribal plan).”
(Id.). Thus, “Big Sky has not persuaded the Court that it is likely to succeed on the merits” (Id. at p. 13), part of its burden in obtaining a TRO. Using virtually identical reasoning, in a second opinion, issued on February 19, 2019, the federal court also denied Big Sky’s separate motion for a preliminary injunction seeking return of the same plant material.
Round II, The United States Court of Appeals for the Ninth Circuit
Not surprisingly, BSS appealed the federal district court’s ruling to the United States Court of Appeals for the Ninth Circuit. At the same time, however, ISP also renewed a claim that it had made before the district court – namely, that the federal court should have abstained from issuing any decision in the case because Big Sky could have raised its federal claims in the ongoing state forfeiture proceeding. This federal courts doctrine is called Younger abstention.
In its February 19 ruling, the district court had rejected ISP’s abstention argument. But the Ninth Circuit disagreed. In a brief, unpublished decision issued in September 2019, the appeals court found that the district court should have dismissed Big Sky’s federal challenge to the state seizure and not issued any substantive ruling in the case. Big Sky Scientific v. Bennetts, 776 Fed. Appx. (9th Cir.) (Sept. 4, 2019). The Ninth Circuit based its decision (in part) on “the assumption that . . . the Idaho District Court will proceed expeditiously with the in rem [forfeiture] action, including Big Sky’s challenge to Idaho’s interpretation of the . . . 2018 Farm Bill . . . .”
The Ninth Circuit’s ruling effectively ended the federal litigation over the seizure. This meant that Big Sky’s only hope in the case would be to convince the state judge presiding over the ongoing state forfeiture proceeding that the seizure of its cannabis plant material was preempted by the 2018 Farm Bill.
Round III, Idaho State Court
. . . . Which brings me back to where this all started -- the state court forfeiture proceeding. In the state forfeiture proceedings initiated by the ISP back in early 2019, Big Sky appears to have recycled the same basic arguments it made (unsuccessfully) to the federal district court – namely, that the 2018 Farm Bill protected its shipment of hemp through Idaho and thus preempted the state forfeiture proceeding. But BSS’s preemption claim did not fare any better before the state court.
Like the federal district court before it, the state court found that Big Sky’s shipment of cannabis plant material through Idaho was not protected by the 2018 Farm Bill (or the 2014 version). Indeed, the state court noted that it “finds persuasive and adopts the reasoning of” the federal court in its February 19, 2019 decision. Idaho State Police v. One White 2013 Freightliner, p. 25. (The fact the Ninth Circuit vacated that opinion did not bar the Idaho court from adopting its reasoning.) It held that while the 2018 Farm Bill expressly preempts state laws barring the interstate transportation of hemp through a state, it does so only when said hemp is produced in accordance with a State Plan approved by the United States Secretary of Agriculture. The big problem for Big Sky (again) was that the plant material it was transporting – even if it was hemp (which no one really disputed at the time) – could not have been hemp produced in accordance with a State Plan. Why? As the federal district court had earlier explained (and as noted above), all of the hemp in the truck was apparently grown in Oregon before any such State Plan had been approved – indeed, it had been grown even before the 2018 Farm Bill had been passed in December 2018.
I think the courts’ (both federal and state) reasoning on the application of the 2018 Farm Bill point is sound. The judgment may seem harsh, but it appears that Big Sky may have jumped the gun on trying to take advantage of 2018 Farm, and now it is paying the price for its haste.
Now, let me offer a few observations about the case.
1. Even though the Idaho state court reached the correct result in the case, its opinion erroneously (and needlessly) narrowed the scope of the 2018 Farm Bill.
The Idaho state court could have issued a short decision adopting the reasoning of the federal district court – but it didn’t. The state court proceeded to write a 34 page opinion which, while reaching the correct result in this case, offers a fundamentally flawed interpretation of the 2018 Farm Bill. In particular, the court mistakenly declared that the 2018 Farm Bill applies only to cannabis sativa, and not to other (supposed) “species” of the cannabis plant, namely, cannabis indica and cannabis ruderalis.
I am not trying to pick on the state court here (it did reach the correct result after all), but since this flawed reading of the law could generate confusion about the 2018 Farm Bill (and perhaps federal marijuana law more generally), I feel the need to highlight and correct its errors here.
At the outset, the court noted that “botanists have disagreed for nearly 300 years about how many species of plant are in the genus Cannabis.” One White 2013 Freightliner, p. 11. Fair enough – there does seem to be some disagreement among botanists as to how to classify cannabis for scientific purposes. But the court proceeded to suggest that “[t]he taxonomical debate is an important one because various legislative bodies, like Congress in the 2014 Farm Bill . . . continue to draw a legal distinction between all plants in the genus Cannabis and plants of the species Cannabis sativa L.” One White 2013 Freightliner, p. 14. And this latter assertion is just plainly false.
For the latter proposition about legal distinctions, the court rested entirely on the statutory definition of “industrial hemp” found in the 2014 and 2018 Farm Bills – a definition the court insists is “species specific.” Id. Here is the definition the court references:
“The term ‘industrial hemp’ means the plant Cannabis sativa L. and any part of such plant, whether growing or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.”
7 USC § 5940 (emphasis added). The court reasoned that Congress must have “recognized the existence of at least one other species of plant in the genus Cannabis”, because “otherwise Congress would not have had to specify hemp as meaning C. sativa L plants. Congress could have simply said ‘plants within the genus Cannabis.’ Congress clearly intended only to include plants of the specific species C. sativa L.” One White 2013 Freightliner, p. 15.
Why does this all matter? Well, according to the court, “Under current federal law, C. indica and C. ruderalis plants are controlled substances . . . , even if the . . . THC concentrations are below 0.3 percent. The definition of “industrial hemp” is species specific.” Id. at p. 14. Thus, to prevail on its preemption claim, the court suggested that Big Sky would have to prove not just that the cannabis plant material it was transporting had a THC concentration below .3% -- and that it was produced pursuant to a State Plan, but also that the material was comprised entirely of the species cannabis sativa – in other words, that it contained no cannabis indica or cannabis ruderalis:
“Because the 2018 Farm Bill and the 2014 Farm Bill are specific to plants of the species C. sativa L, Big Sky’s argument about federal preemption fails as to plants, or parts thereof, from the species C. indica or C. ruderalis.”
Id. at p. 16.
I think the state court erred in interpreting the Farm Bills to apply only to one species of cannabis (i.e., cannabis sativa), for two primary reasons.
First, federal law doesn’t actually make distinctions among cannabis species (even if botanists might). To be sure, the language of the 2014 and 2018 Farm Bills references “cannabis sativa.” But so does the Controlled Substances Act of 1970 (i.e., the statute the Farm Bills modify). 21 U.S.C Section 802(16) defines “marihuana” as “the plant Cannabis sativa L. . . .” Yet, as I discuss in my book (Marijuana Law, Policy, and Authority, pp. 27-29), every court that has interpreted the statute has squarely held that it applies to all cannabis plants, and not just cannabis sativa plants. In other words, every court that has previously addressed the very same issue has held that Congress did not mean to distinguish among different cannabis species when it employed the term “Cannabis sativa L.” – rather, it just employed that term as a catch all term for all cannabis plants.
Many of these cases were decided back in the 1970s, when the ink was still drying on the CSA. Soon after that statute was passed, defendants charged with distributing marijuana would claim that federal prosecutors had to prove that the cannabis they distributed was cannabis sativa, and not cannabis ruderalis or indica (both of which, they claimed, were beyond the definition of “marihuana” under the literal language of the federal law). The federal courts uniformly rejected this argument, reasoning (inter alia) that “Congress adopted ‘cannabis sativa L.’ believing it to be the term scientists used to embrace all marihuana-producing cannabis” and that there was there no practical reason for Congress to distinguish among (purported) species of cannabis because all have “the same properties” (namely, the ability to generate large amounts of THC). (Marijuana Law, Policy, and Authority, p. 29 (discussing cases)).
No doubt Congress was aware of the precedent interpreting its definition as covering all cannabis plants, regardless of (possible) species differentiation. It thus appears that it sought to carry forward that (expansive) definition when it used identical language in the Farm Bills.
The Idaho court, unfortunately, doesn’t notice that the 2014 and 2018 Farm Bills start with the same definition of “marihuana” used in the CSA. Had the Idaho court recognized the textual symmetry, it probably would not have made its interpretative mistake; after all, the court repeatedly acknowledges that cannabis ruderalis and cannabis indica are both considered “marijuana” under the CSA, despite the fact that the CSA uses the same terminology as the Farm Bills. Neither does the court bother to consult any of the (many) federal cases that squarely reject its interpretation of the shared statutory language. Instead, the court consults with sources like Herodontus and the Oxford English Dictionary – sources that don’t (or shouldn’t) trump precedents directly on point.
It doesn’t help that the court’s misguided discussion of the Farm Bills’ definition of industrial hemp was entirely unnecessary (my second problem with its holding). The court could have denied Big Sky’s challenge just by finding that the material it was transporting through Idaho was not produced in accordance with a State Plan, as required by the 2018 Farm Bill. It did not need to decide whether (or not) the material actually met the definition of “industrial hemp,” or whether (or not) that term includes cannabis ruderalis and indica as well as sativa. Indeed, in the state forfeiture proceeding, it appears that no one was actually questioning whether Big Sky’s plant material met the definition of “industrial hemp.” The Idaho court itself acknowledged that “ISP has implicitly conceded that the plant and plant parts it seized were entirely low-THC C. sativa.” One White 2013 Freightliner, p. 21.
The harm caused by the Idaho court’s mistaken interpretation of the Farm Bills may prove small, but I worry that it will cause some farmers / shippers / processors to believe they need to ascertain the species of the cannabis plants they are cultivating / handling (and not just the THC content of those plants). I’m not even sure how that could be done – after all, botanists disagree over whether there really even are different species of cannabis plants in the first instance. And the Idaho court complained that for all the testimony it received in the case,
“[it still] could not determine the species of each and every plant and plant part seized. . . . This court has little or no evidence as to what species of plants were even grown or tested. The testimony of the various chemists and [the farmer] who grew the plants, uses very generic or conclusory language. The reports from the various chemists who examined the material seized by the ISP all refer to it as “plant material” or “hemp biomass.” [The farmer] calls his crop “industrial hemp.” But neither the chemists nor [the farmer] explain what they mean by the word “hemp” or the phrase “industrial hemp” and, if by saying “hemp” they mean “plants of the species C. sativa, ” they fail to explain how they reached the opinion that the plant material seized by ISP (or the crops [the farmer] grew) were of that species and not another.”
Id. at 19.
Ultimately, asking farmers / shippers / processors to prove that the plant material they’re cultivating / handling is cannabis sativa is likely to add to the cost of complying with the Farm Bills – and it’s an entirely unnecessary expense.
2. Distinguishing between “hemp” and “marijuana” under the 2018 Farm Bill may prove difficult (for farmers, processors, police, courts, etc.).
Although it needlessly added to the complexity of the 2018 Farm Bill, the Idaho court did raise some valid concerns about the difficulty courts face when trying to determine whether any given plant material satisfies the federal laws low-THC definition of “hemp.” In particular, the court asked:
“[I]s it the dry weight of the entire plant that is to be used to determine THC concentration? Or just the weight of the part at issue? What if you have the part and not the rest of the plant? Under a reasonable reading of [the 2018 Farm Bill], one could take a C. sativa plant that has a . . . THC concentration of less than 0.3 percent by dry weight, cut it in half mid-stalk, and wind up with 2 plant parts—the top with the leaves and flowers and the bottom with the stalk and the roots. Theoretically once you cut it in half, if the . . . THC is largely concentrated in the leaves and flower buds, you could end up with one part that is now marijuana (the top half) and one part that is still hemp (the bottom) under the federal definitions. . . .”
One White 2013 Freightliner, p. 18. As explained above, the court did not need to answer those questions in the case – but they could arise in future cases considering the legality of hemp.
3. The federal government would have a difficult time prosecuting BSS (or the truck driver) for possession of marijuana, even if the plant material had exceeded .3% THC (however measured).
Even though BSS insisted throughout the proceedings that the plant material seized from the truck met the 2018 Farm Bill’s definition of “hemp”, the federal district court had expressed some skepticism in its February 2, 2019 decision denying the emergency TRO. For example, it noted there were blanks in one of the test reports proffered by BSS and a long gap (nearly 3 months) between the date when the lab sampled the crop and the date when the crop was actually transported into Idaho and seized by the ISP. (Feb. 2, 2019 decision, p. 10, n.5). That time lag may be particularly relevant because the THC concentration found in cannabis plants changes across time.
To be sure, if the federal government were to prosecute BSS’s employees (or the truck driver) for possession of “marijuana” in violation of the CSA, federal prosecutors would need to prove beyond a reasonable doubt not only that the material was, in fact, “marijuana” (rather than “hemp”), but also that the defendants knew the material in the truck was “marijuana” (and not “hemp”). Meeting that burden could prove difficult, given the steps BSS appears to have taken to verify that the crop met the Farm Bill’s legal definition of “hemp.” In other words, even if BSS may have been mistaken about what it possessed, the criminal law usually does not punish such mistakes.
4. The ISP may have had good reasons for seeking abstention, even after it had won before the federal district court.
At first glance, it might seem strange that the ISP would have renewed its abstention claim in the Ninth Circuit after it had won on the merits before the federal district court. After all, abstention effectively nullified its federal district court victories from February 2019. But I can imagine at least two reasons for renewing the abstention claim.
First, abstention simplifies the litigation. Abstention would consolidate all of the litigation over the seizure into one state court forfeiture proceeding. This would spare the ISP the extra time and effort needed to (re)litigate identical claims in two separate courts (Idaho state court and federal court).
Second, the state court is probably a more favorable forum (for ISP) than is the Ninth Circuit. While it’s true that the ISP won before the federal district court, there is no guarantee the Ninth Circuit would have upheld the federal district court’s ruling on the merits, if it had to decide the issue. To be sure, I doubt the Ninth Circuit would have invalidated the seizure – the 2018 Farm Bill is pretty clear. But the Ninth Circuit has issued several pro-marijuana rulings in the past. For example, in Gonzales v. Raich, it found that the application of the federal marijuana ban to the intrastate cultivation of marijuana exceeded the scope of Congress’s Commerce Clause authority (as discussed in Marijuana Law, Policy, and Authority, pp. 253-265, the Supreme Court overturned that decision). Likewise, in Conant v. Walters, the Ninth Circuit held that the federal Drug Enforcement Administration could not punish physicians merely for “recommending” marijuana to their patients – the court held that such a recommendation constitutes First Amendment protected speech (Id. at pp. 602-610). To play it safe, then, ISP may have wanted to keep this case in state court, and not risk the possibility that the Ninth Circuit would interpret the 2018 Farm Bill in a way that would invalidate its seizure of the plant material.
5. A few last notes . . .
Originally the forfeiture case was brought against both the truck that was used to transport the hemp and the hemp itself. As I discuss in my book, many states provide for civil forfeiture of items used in connection with the commission of a drug trafficking offense—and forfeiture cases take their names from the property at issue (see Marijuana Law, Policy, and Authority, pp. 379-396). But at the end of its decision, the Idaho court notes that the ISP had dismissed its claims against the other property in the forfeiture proceedings, including, apparently, the truck for which the case was named (One White 2013 Freightliner Commercial Vehicle, VIN # 1FUJGKDR4DSBU5154, with all appurtenances, (Oregon Registration: YAIT108) . . . .
It appears that the driver of the truck – who was originally charged with a marijuana trafficking offense – pled guilty to a lesser offense: failure to provide supporting documents in a driver’s possession. According to news reports, he was sentenced to 180 days in jail (although he was released for time served – five days) and was fined $2,360. See Katy Moeller, Truck was returned, driver took plea deal. Now Idaho courts will decide hemp case, Idaho Statesman, Oct 1, 2019.