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Hoover v. Michigan Department of Licensing and Regulatory Affairs

United States District Court, E.D. Michigan, Southern Division

July 18, 2019

SHERRY HOOVER, Plaintiff,
v.
MICHIGAN DEPARTMENT OF LICENSING AND REGULATORY AFFAIRS, Defendant.

          OPINION AND ORDER DENYING PLAINTIFF'S EMERGENCY MOTION FOR EX PARTE TEMPORARY RESTRAINING ORDER, PRELIMINARY INJUNCTION, AND DECLARATORY RELIEF (ECF NO. 2)

          PAUL D. BORMAN, UNITED STATES DISTRICT JUDGE

         On June 5, 2019, Plaintiff filed her Verified Complaint for Declaratory Judgment and Injunctive Relief. (ECF No. 1.) On that same date, Plaintiff filed an Emergency Motion for Ex Parte Temporary Restraining Order, Preliminary Injunction, and Declaratory Relief. (ECF No. 2.) The Court held a telephonic status conference with all parties on June 11, 2019, and established a briefing schedule on Plaintiff's Emergency Motion. Defendant filed a Response on June 21, 2019. (ECF No. 8.) Plaintiff filed a Reply on July 12, 2019. (ECF No. 14.) The Court held a hearing today, July 17, 2018. For the reasons that follow, the Plaintiff's Emergency Motion is DENIED.

         INTRODUCTION

         In this action, Plaintiff asks this Court to require the Defendant Michigan Department of Licensing and Regulatory Affairs (“LARA”) to “modify and extend” certain temporary and now-expired Emergency Rules that were previously put in place under the Medical Marihuana Facilities Licensing Act (“MMFLA”).[1] Plaintiff seeks an extension of these expired Emergency Rules so that she can continue to purchase untested marihuana from a licensed dispensary. In short, under Michigan law, licensed provisioning centers were permitted to sell only safety-tested marihuana and to purchase product only from licensed growers and processors. Under the expired Emergency Rules, which expired on March 31, 2019, licensed provisioning centers were able to purchase untested product outside the regulated system (as pertinent here from “caregivers” who purchase and supply untested product) without facing disciplinary action. With the expiration of the Emergency Rules, licensed provisioning centers are no longer able to purchase and sell untested marihuana outside the regulatory system. As a result, according to the Plaintiff's Complaint, the caregivers have no market for the product they obtain and the provisioning centers are unable to keep up with demand if required to sell only tested product from licensed processors and growers. As a consequence, Plaintiff alleges, she has been without access to her medical marihuana medication since May 15, 2019. (ECF No. 16, July 17, 2019 Affidavit of Sherry Hoover ¶ 8.)

         Plaintiff claims that as a consequence of the expiration of the Emergency Rules, she is unable to obtain the marihuana products she needs to treat the symptoms of her cancer. Plaintiff argues that “allowing the Emergency Rules to expire is a clear violation of Plaintiff's due process rights.” (Pl.'s Aff. ¶¶ 5-9; Pl.'s Mot. 14, PgID 44.) Plaintiff argues that she has a license to obtain medical marihuana and her right to obtain medical marihuana is now being impeded by LARA. Plaintiff also suggests that her due process rights have been violated because her inability to obtain medical marihuana “constitutes a deprivation of life, quite literally.” (Pl.'s Mot. 14, PgID 44.)

         The State responds that Plaintiff has no likelihood of success on the merits of her claims because: (1) LARA is absolutely immune to suit under the Eleventh Amendment, (2) the Court lacks subject matter jurisdiction because the Complaint fails to allege a colorable federal question, (3) the Plaintiff lacks standing, (4) Plaintiff's claims lack substantive merit, and (5) the Court should abstain from reviewing her claims. The State also asserts that Plaintiff has not established a threat of irreparable injury and the public interest weighs against granting an injunction.

         I. FACTUAL BACKGROUND[2]

         Marihuana is an illegal Schedule 1 controlled substance under federal law. 21 U.S.C. § 812(c). Marihuana is also listed as a schedule 1 controlled substance under Michigan law, Mich. Comp. Laws § 333.7212, with the exception that the drug is categorized in schedule 2 “only for the purposes of treating a debilitating medical condition.” Mich. Comp. Laws § 333.7214(e).

         In 2008, voters passed the Michigan Medical Marihuana Act (“MMMA”), Mich. Comp. Laws § 333.26421 et seq., by ballot initiative. The MMMA did not create an affirmative right to use or possess marihuana but created protections under state law for medical use to qualifying patients and their caregivers who comply with the MMMA's requirements. Mich. Comp. Laws §§ 333.26422(b); 333.26424. LARA was charged with administering the MMMA and maintaining a cardholder registry. Mich. Comp. Laws § 333.26426.

         In 2016, the Michigan Legislature enacted the Medical Marihuana Facilities Licensing Act (“MMFLA”) “to license and regulate medical marihuana [facilities].” Mich. Comp. Laws § 333.27101 et seq. The Medical Marihuana Licensing Board (“the Board”) was created within LARA and charged with implementing and enforcing the MMFLA. Mich. Comp. Laws § 333.27301(1). The MMFLA provides protections for those granted a license and engaging with activities within the scope of the MMFLA. Mich. Comp. Laws § 333.27201. Under the MMFLA, licensed provisioning centers are authorized to purchase safety-tested marihuana only from licensed growers and processors and are authorized to sell it in limited quantities to patients and caregivers who are registered under the MMMA.

         In March 2019, Governor Gretchen Whitmer issued an executive order abolishing the Board and LARA's Bureau of Marihuana Regulation (“BMR”) effective April 30, 2019. Mich. Comp. Laws 333.27001(1)(b), (e). The Governor's Executive Order transferred all powers, duties, functions and responsibilities of LARA, BMR, and the Board to a newly created Marijuana Regulatory Agency (“MRA”). Mich. Comp. Laws § 333.27001(1). The MRA was “created as a Type I agency within the Department of Licensing and Regulatory Affairs.” Mich. Comp. Laws § 333.27001(1)(a), and all of LARA's “authorities, powers, duties, functions, and responsibilities . . . under the [MMA, MMFLA]” among other statutes were transferred to the new MRA. Mich. Comp. Laws § 333.27001(1)(d). The MRA exercises its powers and duties independent of LARA's direction. “When any board, commission, or other agency is transferred to a principal department under a type I transfer, that board, commission or agency shall be administered under the supervision of that principal department. Any board, commission or other agency granted a type I transfer shall exercise its prescribed statutory powers, duties and functions of rule-making, licensing and registration including the prescription of rules, rates, regulations and standards, and adjudication independently of the head of the department. Under a type I transfer all budgeting, procurement and related management functions of any transferred board, agency or commission shall be performed under the direction and supervision of the head of the principal department.” Mich. Comp. Laws § 16.103.

         LARA issued a series of Emergency Rules beginning in late 2017 and continuing through a final set of Emergency Rules which expired in March, 2019. The Emergency Rules provided that licensed provisioning centers were able to purchase and sell untested product outside the regulated system without facing disciplinary action. With the expiration of the Emergency Rules, licensed provisioning centers are no longer able to purchase and sell untested marihuana outside the regulatory system. This, Plaintiff claims, has resulted in her inability to access her medical marihuana medications.

         A different plaintiff seeking the same relief that Plaintiff seeks here previously filed suit in the Michigan courts, but was denied relief. In The Curing Corner, LLC v. Mich. Dept. Of Licensing and Reg. Affairs, No. 19-000052-MZ (Mich. Ct. Of Claims, Apr. 30, 2019), Judge Stephen L. Borello explains in his opinion that the Curing Corner was asking that court to “essentially require LARA to extend previous iterations of now-expired emergency rules.” (ECF No. 9-1, Def.'s Resp. Appendix Ex. 1, April 30, 2019 Opinion and Order at 10, PgID 240.) In his opinion Judge Borello states: “[T]he Court is without authority to grant the relief plaintiff Curing Corner requests and it will not dictate to LARA procedures for the sale of marijuana.” (Id. at 10-11, PgID 240-41.) Plaintiff the Curing Corner was represented by the same counsel representing Plaintiff here, Ms. Donovan. No. appeal was ever taken from Judge Borello's opinion denying the very relief sought here. Instead, Plaintiff brought her claims to this Court and sued LARA - a state agency.

         II. ...


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