Judge considering whether to dismiss Nebraska medical cannabis preemption lawsuit
LINCOLN — A Lancaster County district judge is reviewing whether to dismiss a lawsuit alleging that Nebraska's voter-approved medical cannabis laws violate federal law after in-person arguments Tuesday.
This is the second medical cannabis case to reach District Judge Susan Strong, who in late November ruled against a preelection lawsuit challenging that the ballot measures shouldn't have been placed on the ballot because of allegedly fraudulent notarizations. Strong rejected those arguments. In the latest case, Strong must first decide whether to let the federal preemption case proceed based on whether a longtime marijuana opponent, John Kuehn, has the necessary 'standing' to sue.
That's the legal term of art required for cases to proceed, meaning that Kuehn, a former state senator and former member of the State Board of Health, must show injury as a result of the new medical cannabis laws legalizing and regulating the drug.
The ballot measures overwhelmingly passed in November, with 71% approval for legalization and 67% approval for a regulatory law. Tuesday's arguments came on the same day state lawmakers are considering Legislative Bill 677, a separate effort to create a clearer regulatory scheme around medical cannabis to assist in the program's implementation.
Many of the arguments in court Tuesday mirrored legal briefs filed earlier. Largely, they argue that Kuehn is not the right party to challenge the measures under 'taxpayer standing,' or that, as a taxpayer, he should get to challenge 'illegal' taxpayer spending.
All 11 defendants named in the case from Kuehn have filed to dismiss the case. Attorney Jason Grams, for the three members of the new Nebraska Medical Cannabis Commission that voters' regulatory law established, told Strong no taxpayer funds had been spent by Jan. 10, when Kuehn amended his lawsuit to include the commissioners.
'He couldn't wait to take the time to meet the demand requirement for taxpayer standing,' Grams said.
Grams represented the Nebraskans for Medical Marijuana campaign in 2020 against a lawsuit brought by Lancaster County Sheriff Terry Wagner. The Nebraska Supreme Court ruled against the campaign and removed the measure from the 2020 ballot.
Attorney Daniel Gutman, who is now representing the three sponsors of the 2024 cannabis ballot measures, said the 'ship has long sailed' for election-related challenges against his clients. Gutman continues to defend the sponsors as Kuehn and the Attorney General's Office appeal the earlier notarization case, also from Kuehn, to the Nebraska Supreme Court.
Gutman said the sponsors didn't agree to be 'sued in perpetuity' for any challenge from Kuehn.
Of the dozens of states that have legalized medical cannabis, Gutman and Grams said no court has tossed the laws.
Gutman said states are meant to be 'labs of democracy' and that the federal government and Congress do not preempt the Nebraska laws. He also noted a provision in annual federal spending bills prohibiting the U.S. Department of Justice from spending federal money to prosecute people following state medical cannabis laws.
'We would literally be here all day if I cited all the cases rejecting this recycled argument,' said Gutman.
Deputy Solicitor General Zach Pohlman, defending Gov. Jim Pillen, Secretary of State Bob Evnen, Treasurer Tom Briese and two other state defendants in the case, summed up morning arguments that someone should challenge the laws, but Pohlman said it shouldn't be Kuehn.
'Just because that statute is on the books doesn't mean that Kuehn can run around the normal standing requirements,' Pohlman said.
Instead, the AG's staff has said Nebraska Attorney General Mike Hilgers and his staff should be the ones to challenge the law, which they've pledged to do if and when the Medical Cannabis Commission issues any dispensary licenses under the new laws.
Attorney Eddie Greim of Kansas City, representing Kuehn, said the challenge should proceed in part because public records requests indicate that staff for the Liquor Control Commission, which the regulatory law voters passed and tied closely to the Nebraska Medical Cannabis Commission, have discussed how to implement the laws and estimated possible costs.
'If we can snip this off at the bud, and we can enjoin the NMCC from doing anything,' Greim said, 'then the harms will never flow down to the other defendants.'
Some of the records received include fiscal or lobbying requests related to pending legislation just down the street from the courthouse at the Nebraska State Capitol, which Greim said show regulatory steps being taken. Grams said the records are 'utterly irrelevant' to the lawsuit.
Grams also filed affidavits from each of the three commissioners on the Nebraska Medical Cannabis Commission stating that the commissioners had taken no regulatory action as of Jan. 10, when the commissioners were added to the lawsuit.
Greim objected to that evidence, saying he needed to be able to 'look behind the veil' and challenge the commissioners' statements.
Strong said she would take the evidence challenges and the motions to dismiss from all defendants under advisement and rule at a future date.
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