Skip to comments.Justice Thomas dissents denial of cert regarding a marijuana related case
Posted on 06/28/2021 11:03:24 AM PDT by zeugma
The Supreme Court rejected hearing the case cited below. Justice Thomas dissented in that denial of cert. The case concerned a business that operated a medical-marijuana dispensary in Colorado. Since marijuana is still illegal accordig to federal law, there are legal and tax implications to that. This is something that really needs to be dealt with by the court. It is exactly this sort of thing that the court exists for. For governments and courts at all levels to continue to just wink at this stuff and not actually resolve what is, and is not actually legal is really nothing short of tyranny, because we, as citizens, have no way to actually determine what the law actually is. As usual, Thomas is completely correct. The court should have heard this case.
The following is the text of Thomas' dissent. For footnotes and related stuff, click the link.
Supreme Court Of The United States
Standing Akimbo, LLC, et al., v. United States
On petition for writ of certiorari to the United States Court Of Appeals For The Tenth Circuit
Decided June 28, 2021
The petition for a writ of certiorari is denied.
Statement of JUSTICE THOMAS respecting the denial of certiorari.
Sixteen years ago, this Court held that Congress' power to regulate interstate commerce authorized it "to prohibit the local cultivation and use of marijuana." Gonzales v. Raich, 545 U. S. 1, 5 (2005). The reason, the Court explained, was that Congress had "enacted comprehensive legislation to regulate the interstate market in a fungible commodity" and that "exemption[s]" for local use could undermine this "comprehensive" regime. Id., at 22–29. The Court stressed that Congress had decided "to prohibit entirely the possession or use of [marijuana]" and had "designate[d] marijuana as contraband for any purpose." Id., at 24–27 (first emphasis added). Prohibiting any intrastate use was thus, according to the Court, " ‘necessary and proper' " to avoid a "gaping hole" in Congress' "closed regulatory system." Id., at 13, 22 (citing U. S. Const., Art. I, §8).
Whatever the merits of Raich when it was decided, federal policies of the past 16 years have greatly undermined its reasoning. Once comprehensive, the Federal Government's current approach is a half-in, half-out regime that simultaneously tolerates and forbids local use of marijuana. This contradictory and unstable state of affairs strains basic principles of federalism and conceals traps for the unwary.
This case is a prime example. Petitioners operate a medical-marijuana dispensary in Colorado, as state law permits. And, though federal law still flatly forbids the intrastate possession, cultivation, or distribution of marijuana, Controlled Substances Act, 84 Stat. 1242, 1247, 1260, 1264, 21 U. S. C. §§802(22), 812(c), 841(a), 844(a),1 the Government, post-Raich, has sent mixed signals on its views. In 2009 and 2013, the Department of Justice issued memorandums outlining a policy against intruding on state legalization schemes or prosecuting certain individuals who comply with state law.2 In 2009, Congress enabled Washington D. C.'s government to decriminalize medical marijuana under local ordinance.3 Moreover, in every fiscal year since 2015, Congress has prohibited the Department of Justice from "spending funds to prevent states' implementation of their own medical marijuana laws." United States v. McIntosh, 833 F. 3d 1163, 1168, 1175–1177 (CA9 2016) (interpreting the rider to prevent expenditures on the prosecution of individuals who comply with state law).4 That policy has broad ramifications given that 36 States allow medicinal marijuana use and 18 of those States also allow recreational use.5
Given all these developments, one can certainly understand why an ordinary person might think that the Federal Government has retreated from its once-absolute ban on marijuana. See, e.g., Halper, Congress Quietly Ends Federal Government's Ban on Medical Marijuana, L. A. Times, Dec. 16, 2014. One can also perhaps understand why business owners in Colorado, like petitioners, may think that their intrastate marijuana operations will be treated like any other enterprise that is legal under state law.
Yet, as petitioners recently discovered, legality under state law and the absence of federal criminal enforcement do not ensure equal treatment. At issue here is a provision of the Tax Code that allows most businesses to calculate their taxable income by subtracting from their gross revenue the cost of goods sold and other ordinary and necessary business expenses, such as rent and employee salaries. See 26 U. S. C. §162(a); 26 CFR. 1.61–3(a) (2020). But because of a public-policy provision in the Tax Code, companies that deal in controlled substances prohibited by federal law may subtract only the cost of goods sold, not the other ordinary and necessary business expenses. See 26 U. S. C. §280E. Under this rule, a business that is still in the red after it pays its workers and keeps the lights on might nonetheless owe substantial federal income tax.
As things currently stand, the Internal Revenue Service is investigating whether petitioners deducted business expenses in violation of §280E, and petitioners are trying to prevent disclosure of relevant records held by the State.6 In other words, petitioners have found that the Government's willingness to often look the other way on marijuana is more episodic than coherent.
This disjuncture between the Government's recent laissez-faire policies on marijuana and the actual operation of specific laws is not limited to the tax context. Many marijuana-related businesses operate entirely in cash because federal law prohibits certain financial institutions from knowingly accepting deposits from or providing other bank services to businesses that violate federal law. Black & Galeazzi, Cannabis Banking: Proceed With Caution, American Bar Assn., Feb. 6, 2020. Cash-based operations are understandably enticing to burglars and robbers. But, if marijuana-related businesses, in recognition of this, hire armed guards for protection, the owners and the guards might run afoul of a federal law that imposes harsh penalties for using a firearm in furtherance of a "drug trafficking crime." 18 U. S. C. §924(c)(1)(A). A marijuana user similarly can find himself a federal felon if he just possesses a firearm. §922(g)(3). Or petitioners and similar businesses may find themselves on the wrong side of a civil suit under the Racketeer Influenced and Corrupt Organizations Act. See, e.g., Safe Streets Alliance v. Hickenlooper, 859 F. 3d 865, 876–877 (CA10 2017) (permitting such a suit to proceed).
I could go on. Suffice it to say, the Federal Government's current approach to marijuana bears little resemblance to the watertight nationwide prohibition that a closely divided Court found necessary to justify the Government's blanket prohibition in Raich. If the Government is now content to allow States to act "as laboratories" " ‘and try novel social and economic experiments,' " Raich, 545 U. S., at 42 (O'Connor, J., dissenting), then it might no longer have authority to intrude on "[t]he States' core police powers . . . to define criminal law and to protect the health, safety, and welfare of their citizens." Ibid. A prohibition on intrastate use or cultivation of marijuana may no longer be necessary or proper to support the Federal Government's piecemeal approach.
Am I wrong in reading that as Thomas suggesting he supports the removal of federal marijuana laws?
He has always been pretty anti-drug, but I can’t interpret his objection otherwise.
As fas I am concern Justice Thomas and Justice Altio are the only 2 Supreme Court justices that are following the Constitution.
Yes that's what he is saying
Thomas and Alito carryon in the tradition of Scalia, while the other “Conservatives” defer to the federal executive and lower courts too often. denying to rule on issues that cry out for clarity from the court, while Roberts is a total waste.
He is saying that fedgov’s ignoring the law regarding intrastate possession and sale of marijuana should also apply to the IRS rules and laws, because if a business is legal in the state and the congress prohibits federal interference in that intrastate business, then the business hsould be equal with other businesses under tax law.
Seems to be. I think more than anything else Justice Thomas believes we should have some certainty in law. If the nation has decided this is an issue better handled at the state level, then it shouldn't be dealt with at the federal level. I think that's entirely reasonable. Personally, I am not a fan of marijuana. Would't use it if I could buy it at my local walgreens. Regadless, I believe it is something that is better dealt with at the state rather than federal level.
There are other implications to any decision that might have been made on this case though, which is the real reason I don't think it was granted cert. The main one being the whole 'sanctuary cities' for illegal aliens. Immigration is definitely something that should be dealt with on the federal level, because you need uniform laws across the country concerning citizenship.
Another issue the court would be hesitant to touch with any kind of finality is the issue of '2nd amendment sanctuaries'.
There is a huge can o worms involved here. The court has completely chickened out on all of it. Cowards, all. (but Thomas)
“the business hsould be equal with other businesses under tax law.”
The Constitution does not require uniformity when it comes to income taxation.
“In 2009 and 2013, the Department of Justice issued memorandums outlining a policy against intruding on state legalization schemes or prosecuting certain individuals who comply with state law.”
That should be worth as much as Obama’s DACA - zilch.
The executive branch should faithfully enforce the constitutional laws passed by Congress.
I strongly suspect federal marijuana legalization bills have been typed up and tossed into the House & Senate hoppers.
FWIW Thomas dissented from Gonzales v. Raich—thus arguing against the warping of the interstate commerce clause (admittedly this is a ten second read of the case).
he would like the legal world to be something other than completely arbitrary so that citizens can figure out what the hell is supposedly going on and how they should behave—this is more fundamental than pro/anti drug
You appear to be saying that equality under the law doesn’t mean equal treatment by the IRS - that is, equal application of the rules as written.
Is that what you mean? If so, I disagree.
Any case that shows Congress has exceeded its bounds on interstate commerce by declaring everything under the sun as "interstate commerce" when it really isn't has a chance to reign in Congress' abusive power bigly. For instance, we all know the Roberts' SCOTUS allowed Obamacare with the individual mandate to slide because the mandate was "just a tax". But without the mandate, the other issue is that Congress can't tell us what we have to buy or can't buy without calling health insurance an interstate commerce -- which they describe because the Affordable Care Act mandates that we all be allowed to buy insurance from companies in other states. So when Obamacare was being taken to court one of the arguments the libs were making for it was it's an interstate commerce and therefore within Congress' purview.
And that's just Obamacare. We could go on and on with other slight of hands to label anything Congress wants as "interstate commerce" to let them slide by the 10th Amendment's "not delegated" clause that protects us from Congressional overreach.
That case was one of a line of cases that go back to a New Deal decision that a farmer who grew wheat solely for his own use was nevertheless engaging in "interstate commerce" and subject to New Deal quotas. If that case were reversed the conflict between federal and state marijuana laws would no longer exist.
What I believe Thomas is saying without actually spelling it out is that as long as Federal legislators skirt their obligation to spell out the actual law on this, it’s a mess at all levels of law.
Agreed. And I agree with him.
Absolutely agreed. That's another strong reason for the court to hide from this case. I think we really seriously need to take a very close look at exactly what should, and should not, be considered 'interstate commerce'. Ideally, that would be defined by congress, but they are utterly incapable of being nearly precise enough to be of any use.
The Constitution allows states to have various tax laws but in the case here Thomas is saying businesses can’t deduct normal business expenses when they file federal income taxes making them liable for excess tax payments to the IRS. The federal tax laws follow what is a legal business by federal law. Marijuana is not so you can’t apparently claim normal business deductions. The IRS is “studying “ this.
Thomas is consistent and right.
The DOJ and Congress are sloppy in enforcing and passing laws regarding marijuana, and the Court ducked the issue.
Thomas was one of three judges (all Republican appointees) voted in favor of medical marijuana. Demonrat judges approve of anything that increases government power.
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