United States District Court, E.D. Michigan, Southern Division
OPINION AND ORDER GRANTING DEFENDANT'S MOTION TO
DISMISS (ECF NO. 10) AND DENYING PLAINTIFF'S REQUEST FOR
LEAVE TO AMEND THE COMPLAINT
PAUL
D. BORMAN UNITED STATES DISTRICT JUDGE.
On June
5, 2019, Plaintiff Sherry Hoover filed her Verified Complaint
for Declaratory Judgment and Injunctive Relief against
Defendant Michigan Department of Licensing and Regulatory
Affairs. (ECF No. 1.) That same day, Plaintiff also filed an
Emergency Motion for Ex Parte Temporary Restraining
Order, Preliminary Injunction, and Declaratory Relief (ECF
No. 2, Pl.'s TRO), which was subsequently denied in an
Opinion and Order issued on July 18, 2019, because the Court
found that Plaintiff had demonstrated no likelihood of
success on the merits of her claims. (ECF No. 23.) Defendant
now moves to dismiss Plaintiff's Complaint pursuant to
Fed.R.Civ.P. 12(b)(1) and 12(b)(6). The matter is fully
briefed and the Court held a hearing on January 14, 2019. For
the reasons that follow, the Court GRANTS Defendant's
motion to dismiss and DENIES Plaintiff's request in her
response brief for leave to amend her Complaint.
INTRODUCTION
In this
action, Plaintiff Sherry Hoover 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.[2] Pursuant to two Board resolutions setting
a March 31, 2019 deadline, 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. After the March 31, 2019 deadline,
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. Plaintiff asks this Court to order LARA to
“modify and extend” long-expired emergency rules
to enable her to purchase marihuana outside the bounds of
state law.
I.
FACTUAL AND PROCEDURAL BACKGROUND
A.
Overview of Marihuana Regulations in
Michigan[3]
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(1)(c), with the exception that the
drug is categorized in schedule 2 “if it is
manufactured, obtained, stored, dispensed, possessed, grown,
or disposed of in compliance with this act and as authorized
by federal authority.” Mich. Comp. Laws §§
333.7212(2), 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. Mich. Comp.
Laws § 333.27504.
In
November 2018, Michigan voters initiated legislation to
legalize non-medical marihuana use, possession, cultivation,
and sale by adults age 21 and over. Mich. Comp. Laws §
333.27951 et seq. The Michigan Regulation and
Taxation of Marihuana Act (“MRTMA”) sets
possession and use limits and creates an additional layer of
state licensing and regulation for commercial marihuana
establishments. Mich. Comp. Laws §§ 333.27955,
333.27959. The State issued the first five recreational
marihuana licenses on November 19, 2019, and, according to
Defendant's supplemental brief, the MRA has recently
issued additional medical marihuana facility licenses as well
as adult-use (recreational) marihuana establishment licenses.
(See ECF Nos. 32-2 and 32-3.)
LARA
issued four sets of emergency rules under the MMFLA, in
December 2017, May 2018, September 2018 and October 2018, the
last set of which expired in March 2019. (ECF Nos. 10-2
through 10-5.) None of these emergency rules allowed
provisioning centers to obtain marihuana products directly
from caregivers or sell it to patients without prior testing.
(See id.) According to Plaintiff, however, the
Emergency Rules allowed LARA and the Board to adopt two
resolutions, one on January 16, 2019 and another on March 21,
2019. (Compl. ¶¶ 15-16; ECF Nos. 10-7 to 10-8.) The
January 16, 2019 Resolution expressed the Board's intent
to not discipline a licensee for purchasing “marihuana
products that have not been tested in full compliance with
the law and administrative rules, ” and selling the
untested products to patients, if the licensee obtains the
patient's consent in writing on a LARA-provided form,
until March 31, 2019. (Compl. ¶ 15; ECF No. 10-7 at 2.)
The March 21, 2019 Resolution reconfirmed the March 31, 2019
deadline. (Compl. ¶ 16; ECF No. 10-8.)
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, MRTMA]”
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 (emphasis added).
B.
Plaintiff's Allegations
Plaintiff
alleges that she suffers from Stage 4 cancer and that her
doctor prescribed medical marihuana for her. (Compl.
¶¶ 7-8.) Plaintiff obtained a medical marihuana
patient identification card from LARA. (Id. ¶
7.) Her medical marijuana medicines include CBD/THC gummy
cubes, THC extreme medicated pain balm, cannabis flower
Sunshine Kush, Purple Punch Rick Simpson Oil, and specialty
ribbon chews 200mg THC chill medicated lozenges.
(Id. ¶ 9.) She alleges, however, that the
supply of medical marihuana is insufficient because
“[a] de minimus amount of grower, processor, transport,
and testing facilities have been approved by LARA to operate
under the MMFLA” and that a “lack of access to
medical marijuana” has adversely affected her health.
(Id. ¶¶ 10-12, 20.) Specifically, she
contends that “LARA has only granted provisioning
center licenses to 94 operations, grow licenses to 68
operations, processing licenses to 12 individuals, secure
transporting licenses to seven operations, and testing
licenses to only four safety compliance centers, ”
which is “clearly insufficient to supply the tens of
thousands of pounds [of] medical marijuana for the 300, 000
Michigan medical marijuana patients per month, leaving
medical marijuana patients without a means to fulfill their
medicinal needs.” (Id. ¶¶ 27-28.)
Plaintiff alleges that the lack of access to her medical
marihuana regimen affects her health and well-being by
failing to alleviate her pain, nausea, insomnia and decreased
appetite from chemotherapy treatments. She claims that her
health and quality of life are deteriorating. (Id.
¶¶ 8-11.)
According
to Plaintiff, LARA established Emergency Rules, with regard
to the MMFLA, to prevent harm to Michigan residents
“due to the delays … experienced in reviewing
applications under the MMFLA” “until the medical
marijuana supply-chain is established in Michigan.”
(Id. ¶¶ 13-14.) She contends that these
Emergency Rules allowed for LARA and the Board to adopt
resolutions that allowed licensed provisioning centers to
purchase and sell untested marihuana outside the regulatory
system, but that, with the expiration of the Board
Resolutions on March 31, 2019, licensed provisioning centers
are no longer able to do so. (Id. ¶ 15-16.)
This, Plaintiff claims, has resulted in her inability to
access her medical marihuana medications. She asserts that
“[w]ithout such supply of product the medical marijuana
industry will end.” (Id. ¶ 23.)
Plaintiff
alleges that medical marihuana continues to be sold to
unlicensed facilities who are unregulated and do not need to
purchase tested marihuana under the MMFLA, but that if she
purchased from, or was even present in, one of these
unlicensed operations she risks losing her medical marihuana
card. (Id. ¶¶ 31-32.) She contends that
LARA can “cure” this issue by “modifying
and extending the Emergency Rules to December 31, 2019 to
allow Plaintiff to purchase untested medical marihuana from
licensed caregivers directly from licensed provisioning
centers.” (Id. ¶ 33.) In her Complaint,
Plaintiff asks the Court to declare that the MMMA represents
an unconstitutional violation of her due process rights under
the United States and Michigan constitutions, and seeks
declaratory and injunctive relief requiring LARA to
“extend[] the Emergency Rules” to allow licensed
provisioning centers to purchase marihuana from unregulated
caregivers and sell it untested to patients until December
31, 2019, or until Plaintiff and others can “obtain
sufficient … supply” via the newly regulated
supply chain. (Id. ¶¶ 46-72.)
C.
Plaintiff's Emergency Motion for Ex Parte
Temporary Restraining Order, Preliminary Injunction and
Declaratory Relief is Denied
On June
5, 2019, the same day Plaintiff filed her Verified Complaint
for Declaratory Judgment and Injunctive Relief, she also
filed an Emergency Motion for Ex Parte Temporary
Restraining Order, Preliminary Injunction, and Declaratory
Relief. (ECF No. 2, Pl.'s TRO.) The Court allowed
briefing on Plaintiff's motion and held a hearing on July
17, 2019. On July 18, 2019, the Court issued an Opinion and
Order denying Plaintiff's motion, finding that Plaintiff
had no likelihood of success on the merits of her claims
because Defendant LARA is a state agency entitled to absolute
Eleventh Amendment immunity. (ECF No. 23.)
D.
Defendant's Motion to Dismiss
Defendant
filed its Motion to Dismiss on June 26, 2019, arguing that
Plaintiff's Complaint should be dismissed for the
following reasons: (1) Plaintiff's claims are barred
because LARA is immune from suit; (2) the Court lacks subject
matter jurisdiction over Plaintiff's claims because they
fail to allege a colorable federal question; (3) Plaintiff
lacks standing to bring this action because her injuries are
not traceable to or redressable by LARA; (4) Plaintiff's
claims lack substantive merit; (5) the Court should abstain
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