Opinion
Index No. 905386-23
09-20-2024
Cannabis Impact Prevention Coalition, LLC; CANNABIS INDUSTRY VICTIMS SEEKING JUSTICE, LLC; RENNE BARCHITTA; EDWIN DE LA CRUZ; PHIL ORENSTEIN; PHILIP MCMANUS; ROBERT CAEMMERER; RICHARD P. MCARTHUR; RONNIE HICKEY and JOHN AND JANE DOES 1-15 and XYZ CORPORATIONS 1-15 JOINTLY, Plaintiffs-Petitioners, v. Kathy Hochul, GOVERNOR OF THE STATE OF NEW YORK, IN HER OFFICIAL CAPACITY; NEW YORK STATE CANNABIS CONTROL BOARD; NEW YORK STATE OFFICE OF CANNABIS MANAGEMENT; TREMAINE WRIGHT CHAIRWOMAN OF THE NEW YORK STATE CANNABIS CONTROL BOARD IN HER OFFICIAL CAPACITY; AND CHRISTOPHER ALEXANDER EXECUTIVE DIRECTOR OF THE NEW YORK STATE OFFICE OF CANNABIS MANAGEMENT IN HIS OFFICIAL CAPACITY; JOHN AND JANE DOES 1-15 and XYZ CORPORATIONS 1-15, JOINTLY, Defendants-Respondents.
George F. Hritz, Esq. Bartels & Feuerisen, LLP Attorneys for Petitioners-Plaintiffs William J. Keniry, Esq. Tabner, Ryan & Keniry, LLP Local Counsel for Petitioners-Plaintiffs Letitia James, Attorney General of the State of New York Shannan C. Krasnokutski, Esq., Assistant Attorney General Attorneys for Respondents-Defendants NYS Office of the Attorney General The Capitol
George F. Hritz, Esq. Bartels & Feuerisen, LLP Attorneys for Petitioners-Plaintiffs
William J. Keniry, Esq. Tabner, Ryan & Keniry, LLP Local Counsel for Petitioners-Plaintiffs
Letitia James, Attorney General of the State of New York Shannan C. Krasnokutski, Esq., Assistant Attorney General Attorneys for Respondents-Defendants NYS Office of the Attorney General The Capitol
Hon. James H. Ferreira, Acting Justice
In March 2021, New York State passed the Marihuana Regulation and Taxation Act (MRTA) (see L 2021, ch 92; Matter of Buenos Hill Inc. v Saratoga Springs Planning Bd., 83 Misc.3d 494, 497 [Sup Ct, Saratoga County 2024]). The MRTA, which created the Cannabis Law and established both the Office of Cannabis Management (OCM) and the Cannabis Control Board (CCB), was enacted to
Marijuana is less commonly known as 'marihuana,' and the two words will be used interchangeably (see https://www.merriam-webster.com/dictionary/marijuana, accessed September 13, 2024).
regulate, control, and tax marihuana, heretofore known as cannabis, generate significant new revenue, make substantial investments in communities and people most impacted by cannabis criminalization to address the collateral consequences of such criminalization, prevent access to cannabis by those under the age of twenty-one years, reduce the illegal drug market and reduce violent crime, reduce participation of otherwise law-abiding citizens in the illicit market, end the racially disparate impact of existing cannabis laws, create new industries, protect the environment, improve the state's resiliency to climate change, protect the public health, safety and welfare of the people of the state, increase employment and strengthen New York's agriculture sector(https://legislation.nysenate.gov/pdf/bills/2021/S854A, accessed September 4, 2024; see Cannabis Law § 2).
As a basis for enacting the Cannabis Law, the Legislature found that" '[e]xisting [marihuana] laws have been ineffective in reducing or curbing marihuana use and have instead resulted in devastating collateral consequences, including mass incarceration and other complex generational trauma, that inhibit an otherwise law-abiding citizen's ability to access housing, employment opportunities, and other vital services'" (People v Graubard, 214 A.D.3d 143, 146 [2d Dept 2023], lv dismissed, 40 N.Y.3d 934 [2023], quoting L 2021, ch 92, § 2; see Cannabis Law § 2). According to Cannabis Law § 2, the Legislature found, among other things, "that it is in the best interest of the state to regulate medical cannabis, adult-use cannabis, cannabinoid hemp and hemp extracts under independent entities, known as the cannabis control board and the office of cannabis management."
Accordingly, New York's Cannabis Law currently "allows for adults 21 years of age or older to use and possess marijuana in moderate amounts" (Matter of Buenos Hill Inc. v Saratoga Springs Planning Bd., 83 Misc.3d at 497, citing Cannabis Law §§ 3[6], 13[3][a], and Penal Law § 222.05). "Businesses may also apply for a license to sell recreational marijuana" (Matter of Buenos Hill Inc. v Saratoga Springs Planning Bd., 83 Misc.3d at 497, citing Penal Law § 222.20 and Cannabis Law §§ 72 and 77). However, the Cannabis Law also provides that it is not intended to "require any individual to engage in any conduct that violates federal law or to exempt anyone from any requirement of federal law or pose any obstacle to the federal enforcement of federal law" (Cannabis Law § 2).
After the MRTA was enacted, defendants-respondents Kathy Hochul, the Governor of the State of New York in her official capacity, the CCB, the OCM, Tremaine Wright, in her official capacity as Chairperson of the Board, and Chris Alexander, in his official capacity as Executive Director of the OCM (collectively, respondents) promulgated the following regulations with respect to medical and adult use cannabis:
1) 9 NYCRR 113 [Medical Cannabis];
2) 9 NYCRR 128 [Adult-Use Packaging and Labeling]; and
3) 9 NYCRR 129 [Adult-Use Marketing and Advertising].
Sections 13 and 43 of the MRTA grant respondents the authority to promulgate regulations pertaining to the medical use of cannabis in New York (see Cannabis Law §§ 13 and 43).
9 NYCRR 113 et. seq. regulates, among other things, the manufacturing, pricing, marketing, and advertising of medical marijuana, which is defined as "the final manufactured product of medical cannabis, as defined in section 3 of article 1 of the Cannabis Law, delivered to the patient that represents a specific phytocannabinoid concentration and form and active and inactive ingredients, prepared in a specific dosage and form, to be administered as recommended by the practitioner" (9 NYCRR 113.1 [aa]). As is relevant to this action, section 113.17 provides that
"(1) Medical cannabis marketing, advertising, and advertisements shall only include true and accurate statements relating to effectiveness, side effects, consequences or contraindications. It shall present a fair balance between information relating to effectiveness, side effects, consequences, and contraindications in that the information relating to effectiveness may not be presented in greater scope, depth, or detail than is the information relating to side effects, consequences and contraindications, taking into account all implementing factors such as typography, layout, contrast, headlines, paragraphing, white space, and any other techniques apt to achieve emphasis....
(4) Any advertisement of medical cannabis or medical cannabis products shall, unless otherwise approved by the office, include a required warning statement that depends on that advertisement's form:
(i) If the advertisement contains only visual elements, or a combination of audio and visual elements, then the following statements shall be included in a conspicuous manner on the face of the advertisement or be read aloud clearly at the same volume and pace and in the same language as the rest of the advertisement: 'For use only by certified registered patients. Keep out of reach of children and pets. In case of accidental ingestion or overconsumption, contact your Poison Center at 1-800-222-1222 or call 9-1-1. Please consume responsibly.';
(ii) If the advertisement contains only auditory elements, then the following statements shall be clearly read aloud at the same volume and pace and in the same language as the rest of the advertisement: 'For use only by certified patients. Keep out of reach of children and pets. In case of accidental ingestion or overconsumption, contact your Healthcare Provider or Poison Center.'; and
(iii) any other statements or warnings as directed by the board."(9 NYCRR 113.17 [1][1- 4]).
Likewise, 9 NYCRR 128 et. seq. regulates the adult-use packaging and labeling of cannabis products, and section 128.5 sets forth minimum standards for such labeling, which requires, among other things, that packaging display the milligrams of THC, CBD, and any other marketed phytocannabinoids per single serving and per package, that retail packaging display a list of all ingredients, with any major allergens as set forth in 21 USC 343 listed separately in bold, together with certain mandated warnings, including, among others,
"Phytocannabinoid means any of the chemical compounds, excluding terpenes or any other compounds set forth by the Office, that are the active principles of cannabis sativa, including, but not limited to, tetrahydrocannabinol (THC) and cannabidiol (CBD), and does not include synthetic cannabinoids as that term is defined in subdivision (g) of schedule I of section thirty-three hundred six of the Public Health Law" (9 NYCRR 128.1[r]).
"(1) 'This product contains cannabis and THC';
(2) 'KEEP OUT OF REACH OF CHILDREN AND PETS. For use only bypersons 21 years and older';
(3) 'Warning: Do not use if pregnant or nursing';
(4) 'Poison Center 1-800-222-1222';
(5) For cannabis products intended to be smoked, inhaled, or vaporized: 'Warning: Smoking or vaping is hazardous to health';
(6) For cannabis products intended to be ingested orally: 'Warning: Effects of this product may be delayed by 4 or more hours'; [and]
(7) For topical products: 'Warning: For topical use only. Do not eat or smoke'"(9 NYCRR 128.5 [f][1-7]).
Similarly, 9 NYCRR 129 et. seq. regulates the adult-use marketing and advertising of cannabis products, requiring, among other things, that any advertisement include, among others, the following warnings:
"(1) 'Cannabis can be addictive.';
(2) 'Cannabis can impair concentration and coordination. Do not operate a vehicle or machinery under the influence of cannabis.';
(3) 'There may be health risks associated with consumption of this product.';
(4) 'Cannabis is not recommended for use by persons who are pregnant or nursing.'; or
(5) Other warnings as determined by the Office."(9 NYCRR 129.2 [d][1-5]).
On June 20, 2023, plaintiff-petitioners (petitioners), who are organizations or individuals affiliated with entities that aim to prevent the negative impacts of marijuana and provide advocacy services to victims of the cannabis industry, commenced this combined action for declaratory judgment and pursuant to CPLR Article 78 against respondents, seeking to "put an end to Respondents' unconstitutional ultra vires venture into [rulemaking] in violation of federal law and to compel the CCB and OCM to perform their executive duties in accordance with federal law" (NYSCEF No. 1, ¶¶ 6, 12-23). Petitioners challenge the adoption of 9 NYCRR 113 [Medical Cannabis], 9 NYCRR 128 [Adult-Use Packaging and Labeling], and 9 NYCRR 129 [Adult-Use Marketing and Advertising], claiming that
Petitioners are the Cannabis Impact Prevention Coalition, LLC (CIPC) and the Cannabis Industry Victims Seeking Justice, LLC (CIVSJ), and eight individuals who allege that they are New York taxpayers and residents and are affiliated with either CIPS, CIVSJ, or both entities.
"[r]espondents are attempting to orchestrate a marijuana trafficking operation utilizing taxpayer funds and public employees and resources. Their blatant disregard of every major objective embodied in federal marijuana law directly conflicts with, and otherwise stands as an obstacle to, Congress's mandate that production, possession and distribution of Schedule I drugs, including marijuana, be prohibited unless approved by federal law"(NYSCEF No. 1, ¶5).
Petitioners seek to "put an end to [r]espondents' unconstitutional ultra vires venture into rule making in violation of federal law and to compel CCB and OCM to perform their executive duties in accordance with federal law" (NYSCEF No. 1, ¶ 6). In this regard, petitioners allege that the
"CCB and/or OCM have failed to perform a duty the federal law requires of them and/or is proceeding in excess of jurisdiction, and [ ] [r]espondents' rules adopted in February and March of 2023 governing the medical cannabis program and labeling and advertising are final determinations which are arbitrary and capricious, violations of lawful procedure, and/or affected by errors of law"(NYSCEF No. 1, ¶ 43).
Petitioners specifically argue that the CCB and OCM have improperly assumed the role of the U.S. Congress, the federal Drug Enforcement Administration, and the Food and Drug Administration by imposing their own policies and judgment over those federal agencies that are far better experienced and qualified to do so (see NYSCEF No. 1, ¶9). Petitioners express their concern for the adverse effects of marijuana on the health, safety, and business of New Yorkers and allege, among other things, that
"[u]nder federal law, marijuana is contraband for any purpose, including for medical purposes. Although marijuana may appear to be nominally 'legalized' under some state laws, because marijuana is illegal under federal law, individuals cannot lawfully possess marijuana. Where there is a conflict between federal and state law with respect to the legality of marijuana, the Supremacy Clause of the U.S. Constitution unambiguously provides that federal law shall prevail. U.S. Const. art. 6, cl. 2; Gonzales v. Raich, 545 U.S. 1, 29 (2005). Comprehensive Drug Abuse Prevention and Control Act of 1970 § 202, 21 U.S.C.A. § 812(c); US v. Schostag, 895 F.3d 1025 (CA 8 2018)."(NYSCEF No. 1, ¶51).
Petitioners argue that New York State lacks the authority to regulate commerce in marijuana or to permit the sale, distribution, or consumption of marijuana/cannabis products that are deemed illegal under federal law. Petitioners argue that the regulations promulgated by respondents are preempted by the Controlled Substances Act, 21 USC 801, et seq (CSA), which makes it unlawful to knowingly or intentionally "possess with intent to manufacture, distribute, or dispense, a controlled substance" (21 USC 841 [a][1]). Petitioners note that marijuana is classified as a Schedule I controlled substance under the CSA (see 21 USC 811), and further argue that, since federal law does not recognize marijuana as a medicine as it is not approved by the Food and Drug Administration (FDA) under the Food, Drug, and Cosmetic Act, 21 USC 301, et seq (FDCA), the regulations that permit marketing marijuana as a medicine are in conflict with federal law and constitute deceptive labeling under the Consumer Product Safety Act, 15 USC 2051, et seq (CPCA).
While petitioners' focus is on respondents' purported violations of the CSA, petitioners also challenge the regulations on the basis that respondents intend to have marijuana products used as food and as medicine, which has not been approved by the FDA (see NYSCEF No. 1¶ 116). Petitioners further argue that citations to the following federal labeling laws in the regulations renders the regulations deceptive, in that respondents were "deceptively trying to make what they are doing appear as 'legitimate'" (NYSCEF No. 1, ¶ 125): 1) 16 CFR 1700.15 and 1700.20 (poison prevention packaging standards); 2) 21 CFR Parts 111 and 21 CFR Part 117 (dietary supplements); 3) 16 CFR Part 260 (deceptive marketing); 4) 21 USC 321 (definitions - food and drug laws); 5) 21 USC 343 (misbranded food); 6) 21 USC 343, 21 CFR 101.9 (c), and 21 CFR 101.36 (nutrition labeling); 7) 7 CFR 205.600 -205.619 (criteria for allowed and prohibited substances and ingredients in food); and 8) 21 CFR 101.91 (gluten-free labeling of food) (NYCEF No. 1, at ¶¶ 123-125).
Petitioners assert three causes of action, including that 1) respondents' actions are preempted by federal law; 2) petitioners are entitled declaratory relief that respondents acted in excess of their jurisdiction through enacting the aforementioned regulations and approving marijuana as medicine in violation of federal law; and 3) respondents deceptively cite to federal law in the aforementioned regulations. In an amended petition, filed July 10, 2023, petitioners challenge the same regulations set forth above, making the same arguments, and contending that those regulations are unconstitutional, arbitrary and capricious, and are in conflict with federal law (see NYSCEF No. 15, page 56).
In the amended petition, petitioners' challenges are set forth in three causes of action:
1) alleging that respondents' actions are illegal as they are preempted by Federal Law, the Supremacy and Commerce Clauses of the United States Constitution, the CSA, and the FDCA/FDA;
2) seeking an order in the nature of prohibition, seeking a declaration that respondents acted in excess of their jurisdiction, unlawfully, arbitrarily, and abused their discretion by creating a "marijuana trafficking scheme" that is at odds with federal law, thus violating the doctrine of Separation of Powers; and
3) seeking an order enjoining respondents from deceptively citing to federal law as a basis for enacting 9 NYCRR 113 [Medical Cannabis], 9 NYCRR 128 [Adult-Use Packaging and Labeling], and 9 NYCRR 129 [Adult-Use Marketing and Advertising];(see NYSCEF No. 15).
Petitioners also assert that 1) respondents have misbranded and misrepresented the alleged medical benefits of cannabis products and have cannabis products listed as food and medicine in violation of 21 USCA § 321.
Respondents now move to dismiss the petition pursuant to CPLR 3211 (a)(2) and (7), contending that this Court lacks subject matter jurisdiction over the action, and that petitioners have failed to state a cause of action. Petitioners oppose respondent's motion and cross-move, pursuant to CPLR 3025 (b), seeking leave to amend and supplement the amended petition. Respondents oppose petitioners' cross-motion.
PETITIONERS' CROSS-MOTION SEEKING LEAVE TO AMEND
In the interest of judicial economy, the Court will first address petitioners' cross-motion. Petitioners, in support of their cross-motion, submit an amended notice of petition-complaint (amended notice of petition), together with a second amended petition and complaint (second amended petition). Petitioners' proposed second amended petition reorganizes the petition and amended petition, alleges that each petitioner has "suffered harms, injuries, and damages as a result of the adoption of 9 NYCRR 113 [Medical Cannabis], 9 NYCRR 128 [Adult-Use Packaging and Labeling], and 9 NYCRR 129 [Adult-Use Marketing and Advertising]" (NYSCEF No. 49, ¶ 29), and recasts the relief sought into the following four causes of action:
By their proposed amended notice of petition, petitioners seek 1) a declaration, order, and judgment pursuant to CPLR 7803(1) compelling respondents to perform their duties with respect to the challenged regulations; 2) a declaration, order, and judgment pursuant to CPLR 7803(2) determining that respondents acted in excess of jurisdiction in violation of federal law in adopting the challenged regulations; 3) a declaration, order, and judgment pursuant to CPLR 7803(3) invalidating the challenged regulations as arbitrary and capricious and in violation of federal law; and 4) a declaratory judgment pursuant to the provisions of CPLR 3001 declaring that the challenged regulations are preempted by federal law (see NYSCEF No. 49).
Since petitioners have amended their petition by document filed July 10, 2023, the Court will refer to petitioners' proposed amended petition and complaint as their "second amended petition."
(a) The first cause of action sounds in the nature of mandamus to compel, seeking a declaration, order, and judgment pursuant to CPLR 7803(1) determining, ordering, declaring, and compelling respondents to perform their duties with respect to 9 NYCRR 113 [Medical Cannabis], 9 NYCRR 128 [Adult-Use Packaging and Labeling], and 9 NYCRR 129 [Adult-Use Marketing and Advertising] in accord with federal law and/or refrain performance of such duties in contravention of the Supremacy Clause of the United States Constitution, the CSA, and the FDAC/FDA.
(b) The second cause of action sounds in the nature of prohibition, seeking a declaration, order, and judgment pursuant to CPLR 7803(2) determining, ordering, and declaring that respondents acted outside without and/or in excess of their jurisdiction in adopting 9 NYCRR 113 [Medical Cannabis], 9 NYCRR 128 [Adult-Use Packaging and Labeling], and 9 NYCRR 129 [Adult-Use Marketing and Advertising] in contravention of the Supremacy Clause of the United States Constitution, the CSA, and the FDAC/FDA.
(c) The third cause of action sounds in the nature of mandamus to review, seeking a declaration, order, and judgment pursuant to CPLR 7803(3) invalidating, annulling, and vacating 9 NYCRR 113 [Medical Cannabis], 9 NYCRR 128 [Adult-Use Packaging and Labeling], and 9 NYCRR 129 [Adult-Use Marketing and Advertising], asserting their adoption was made in error of federal law and in violation of the Supremacy Clause of the United States Constitution, the CSA, and the FDAC/FDA, thus rendering their actions arbitrary and capricious.
(d) The fourth cause of action seeks a declaratory judgment pursuant to the provisions of CPLR 3001 declaring 9 NYCRR 113 [Medical Cannabis], 9 NYCRR 128 [Adult-Use Packaging and Labeling], and 9 NYCRR 129 [Adult-Use Marketing and Advertising] as preempted by federal law.(see id.).
"[A] party may amend his or her pleading... at any time by leave of court or by stipulation of all parties" (CPLR 3025 [b]; see Favourite Limited v Cico, ___ N.Y.3d ___, ___, 2024 NY Slip Op 01496, *3 [2024]). "In the absence of prejudice or surprise resulting directly from [any] delay in seeking leave, such applications are to be freely granted unless the proposed amendment is palpably insufficient or patently devoid of merit" (Lucido v Mancuso, 49 A.D.3d 220, 221 [2d Dept 2008]; see CPLR 3025 [b]; Walden v Varricchio, 195 A.D.3d 1111, 1113 [3d Dept 2021])." '[A] claim is palpably insufficient or patently devoid of merit where it would be barred by the applicable statute of limitations'" (Lilley v Greene Cent. Sch. Dist., 187 A.D.3d 1384, 1390-1391 [3d Dept 2020], quoting Belair Care Ctr., Inc. v Cool Insuring Agency, Inc., 161 A.D.3d 1263, 1266 [3d Dept 2018]). A movant need not establish the merits of the proposed amendment on a motion to amend and, "[i]f the opposing party on a motion to amend wishes to test the merits of the proposed added cause of action or defense, that party may later move for summary judgment [or to dismiss] upon a proper showing" (NYAHSA Servs., Inc., Self-Ins. Trust v People Care Inc., 156 A.D.3d 99, 102 [3d Dept 2017][internal citations, quotation marks and brackets omitted]).
Upon review of petitioners' proposed amended notice of petition and proposed second amended petition, the Court grants petitioners' cross-motion. The proposed amended and second amended documents are based on the same facts as presented in the petition and amended petition, and simply clarify and organize the causes of action. Petitioners do not change their legal theories. As such, because the proposed amended notice of petition and proposed second amended petition expound upon the already pleaded cause of action, respondents' motion can be applied to the allegations set forth by the proposed amended documents. For both the parties' and the Court's ease, petitioners' cross-motion is granted and the proposed amended notice of petition and second amended notice of petition attached to the cross-motion, is deemed served.
RESPONDENTS MOTION TO DISMISS
Respondents seek dismissal of the second amended petition pursuant to CPLR 3211 (a) (2), alleging a lack of subject matter jurisdiction, and pursuant to CPLR 3211 (a) (7), claiming that the second amended petition fails to state a cause of action upon which relief can be granted. In support of their motion, respondents argue that (1) the Governor is not a proper party to this action; (2) petitioners, both individually and through the entities CIPC and CIVSJ, lack standing to maintain any of their claims; (3) no private right of action exists under the Controlled Substances Act; (4) respondents' actions were not arbitrary, capricious, or contrary to law; and (5) petitioners' deceptive labeling claim fails to state a cause of action.
Because the amended petition and second amended petition make similar allegations, the Court will deem respondents' motion as one seeking dismissal of the second amended petition.
Petitioners' claims against Governor Kathy Hochul
Initially, petitioners do not object to that part of respondents' motion asserting that the Governor is not a proper party to this action. Accordingly, respondents are entitled to dismissal of petitioners' claims asserted against the Governor, and that part of respondents' motion is granted.
Respondents' Motion to Dismiss based on Standing
In next addressing respondents' motion seeking dismissal of the petition based on petitioners' lack of standing, respondents note that petitioners consist of two organizations, CIPC and CIVSJ, as well as well as eight individuals who are New York taxpayers, members of CIPC and/or CIVSJ, and allege that they have been harmed by the legalization of cannabis in New York State and the adoption of 9 NYCRR 113 [Medical Cannabis], 9 NYCRR 128 [Adult-Use Packaging and Labeling], and 9 NYCRR 129 [Adult-Use Marketing and Advertising] (see NYSCEF No. 49, ¶29).
Petitioners allege that CIVSJ is the New York Division of "Cannabis Industry Victims Educating Litigators" (CIVEL), which was incorporated in New Jersey in 2018 (NYSCEF No. 49, ¶24).
"Standing to sue is critical to the proper functioning of the judicial system. It is a threshold issue....The rules governing standing help courts separate the tangible from the abstract or speculative injury, and the genuinely aggrieved from the judicial dilettante or amorphous claimant" (Saratoga County Chamber of Commerce v Pataki, 100 N.Y.2d 801, 812-13 [2003], cert denied 540 U.S. 1017 [2003]). Generally, "[a] petitioner challenging government agency action pursuant to an article 78 petition has the burden of demonstrating an 'injury in fact' and that the alleged injury falls within the 'zone of interests or concerns sought to be promoted or protected by the statutory provision under which the [government] has acted' in order to have standing to challenge that action" (Matter of Stevens v New York State Div. of Criminal Justice Servs., 40 N.Y.3d 505, 515 [2023], quoting Matter of Mental Hygiene Legal Servs. v Daniels, 33 N.Y.3d 44, 50 [2019]). "The injury-in-fact requirement necessitates a showing that the party has 'an actual legal stake in the matter being adjudicated' and has suffered a cognizable harm ([ Society of Plastics Indus. v County of Suffolk, 77 N.Y.2d 761, 772 [1991]]) that is not 'tenuous,' 'ephemeral,' or 'conjectural' but is sufficiently concrete and particularized to warrant judicial intervention" (Matter of Mental Hygiene Legal Servs. v Daniels, 33 N.Y.3d at 50, quoting New York State Assn. of Nurse Anesthetists v Novello, 2 N.Y.3d 207, 211 [2004]).
"In the area of associational or organizational standing, the applicable principles are embodied in three requirements []. First, if an association or organization is the petitioner, the key determination to be made is whether one or more of its members would have standing to sue; standing cannot be achieved merely by multiplying the persons a group purports to represent. Second, an association must demonstrate that the interests it asserts are germane to its purposes so as to satisfy the court that it is an appropriate representative of those interests. Third, it must be evident that neither the asserted claim nor the appropriate relief requires the participation of the individual members. These requirements ensure that the requisite injury is established and that the organization is the proper party to seek redress for that injury" (Society of Plastics Indus. v County of Suffolk, 77 N.Y.2d at 775 [emphasis in original]; see New York State Assn. of Nurse Anesthetists v Novello, 2 N.Y.3d at 211]["To establish standing, an organizational plaintiff-such as plaintiff here-must show that at least one of its members would have standing to sue, that it is representative of the organizational purposes it asserts and that the case would not require the participation of individual members."]).
In support of their motion, respondents argue that, for purposes of standing, neither the individual petitioners, nor CIPC or CIVSJ can establish the requisite injury in fact. Respondents note that there are eight named individual petitioners, and each assert that they are members of CIPC and/or CIVSJ. Through the allegations set forth in the second amended petition, four individual petitioners allege that, as parents, educators, and individuals, they have experienced devastating effects of marijuana, and two petitioners assert that they have suffered from the adverse effects of marijuana smoke (see NYSCEF No. 49, ¶¶14-22). Respondents argue that petitioners' generalized assertions of their devastating experiences or concerns with consuming marijuana or inhaling its smoke fails to establish standing. The Court disagrees.
Based on the record before the Court and, in particular, the detailed affidavit of petitioner Eric R. De La Cruz, the Court finds that petitioners have sufficiently established their standing to maintain this action. Mr. De La Cruz, who has struggled with addiction prior to the adoption of the regulations, attests that after the adoption of the regulations, he purchased marijuana from retail stores that failed to display the required labeling, and that, as a result, he purchased and used said marijuana, which worsened his addiction issues (see NYSCEF No. 36). The marijuana purchased is alleged to have been packaged in an unlabeled jar, without warnings, thus implicating the regulations challenged by the instant action. Mr. De La Cruz outlines, in detail, the negative effects, both physically and mentally, that he experienced as a result of his increased use of marijuana, which he attributes to the marketing, sale and, labeling of the substance. By his affidavit, Mr. De La Cruz has sufficiently alleged that he has suffered from an injury in fact, and that injury falls within the zone of interests sought to be promoted by the regulations. In so finding, and in noting the organizational purposes of CIPC and CIVSJ, the Court finds that, through the affidavit of Mr. De La Cruz, who a member of both CIPC and CIVSJ, petitioners have established that the organizations also have standing to maintain this action.
Respondents' Motion to Dismiss for Failure to State a Cause of Action
" 'When considering a motion pursuant to CPLR 3211(a)(7) to dismiss a [petition] for failing to state a cause of action, courts must afford the [petition] a liberal construction, accept the facts as alleged in the pleading as true, confer on the [petitioners] the benefit of every possible inference and determine whether the facts as alleged fit within any cognizable legal theory" (Pierce v Archer Daniels Midland, Co., 221 A.D.3d 1382, 1383 [3d Dept 2023], quoting Graves v Stanclift, Ludemann, McMorris & Silvestri, P.C., 174 A.D.3d 1086, 1087 [3d Dept 2019]; see Leon v Martinez, 84 N.Y.2d 83, 87-88 [1994]).
Petitioners' first, second, third, and fourth causes of action seek relief in the nature of mandamus to compel and review, prohibition, and seek declaratory relief alleging that respondents acted in excess of their jurisdiction in adopting 9 NYCRR 113 [Medical Cannabis], 9 NYCRR 128 [Adult-Use Packaging and Labeling], and 9 NYCRR 129 [Adult-Use Marketing and Advertising], which regulations are in contravention of and preempted by federal law - namely the Supremacy Clause of the United States Constitution, the CSA and the FDAC/FDA.
In support of their motion pursuant to CPLR 3211 (a)(7), respondents argue that the CSA contains no private right of action and creates no substantive rights on the part of private citizens and, accordingly, petitioners' preemption claims must be dismissed. Respondents contend that petitioners have failed to plead facts to support a finding that respondents' actions in promulgating the regulations were arbitrary, capricious, in excess of respondents' jurisdiction, or contrary to the law. In opposition to respondents' motion, petitioners argue that they have sufficiently alleged that respondents failed to perform a duty enjoined upon them by law and proceeded in excess of their jurisdiction by adopting the subject regulations which are in conflict with the CSA and the FDA.
LAW
The Federal Controlled Substances Act
The Federal Controlled Substances Act, 21 USC 801 et seq., enacted in 1970, defines marijuana as a Schedule 1 controlled substance, which is characterized as having a) a high potential for abuse; b) no currently accepted medical use in treatment in the United States; and c) a lack of accepted safety for use of the drug under medical supervision (see 21 USC 812 [b] [1]; [c]). The CSA makes it unlawful to manufacture, distribute, dispense, or possess any controlled substance except as authorized by the CSA (see 21 USC 841[a][1]; 844 [a]). However, section 903 the CSA, entitled 'Application of State Law,' provides that
"[n]o provision of this [Act] shall be construed as indicating an intent on the part of the Congress to occupy the field in which that provision operates, including criminal penalties, to the exclusion of any State law on the same subject matter which would otherwise be within the authority of the State, unless there is a positive conflict between that provision of this subchapter and that State law so that the two cannot consistently stand together."
Federal Preemption
"Federal preemption is based on the U.S. Constitution's Supremacy Clause" (Malerba v New York City Transit Auth., ___ A.D.3d ___, ___, 2024 NY Slip Op. 04344, *3 [1st Dept 2024]). "Article VI, cl [] 2, of the Constitution provides that the laws of the United States 'shall be the supreme Law of the Land;... [anything] in the Constitution or Laws of any state to the Contrary notwithstanding['US Const, art VI cl 2.] Consistent with that command, [the Supreme Court of the United States has] long recognized that state laws that conflict with federal law are without effect" (Altria Group, Inc. v Good, 555 U.S. 70, 76 [2008][internal quotation marks and citation omitted]). "Congress may indicate pre-emptive intent through a statute's express language or through its structure and purpose.... If a federal law contains an express pre-emption clause, it does not immediately end the inquiry because the question of the substance and scope of Congress' displacement of state law still remains. Pre-emptive intent may also be inferred if the scope of the statute indicates that Congress intended federal law to occupy the legislative field, or if there is an actual conflict between state and federal law" (id., see Jackson-Mau v Walgreen Co., ___ F4th ___, ___, 2024 WL 3836105, *2 [2d Cir 2024]).
"Three general types of preemption exist: '(1) express preemption, where Congress has expressly preempted local law; (2) field preemption, where Congress has legislated so comprehensively that federal law occupies an entire field of regulation and leaves no room for state law; and (3) conflict preemption, where local law conflicts with federal law such that it is impossible for a party to comply with both or the local law is an obstacle to the achievement of federal objectives'" Bates v Abbott Labs, ___ F Supp3d ___, ___, 2024 WL 1345342, *11 [NDNY 2004], quoting New York SMSA Limited Partnership v Town of Clarkstown, 612 F.3d 97, 104 [2d Cir 2010]). "Traditionally, there has been a presumption against preemption with respect to areas where states have historically exercised their police powers" (New York SMSA Limited Partnership v Town of Clarkstown, 612 F.3d at 104; see Wachovia Bank, N.A. v Burke, 414 F.3d 305, 314 [2d Cir 2005], cert denied 550 U.S. 913 [2007]["There is typically a presumption against preemption in areas of regulation that are traditionally allocated to states and are of particular local concern."]).
In the instant matter, it is clear that the provisions of the CSA only preempts state law to the extent that there is a conflict (see 21 USC 903). Such a conflict exists when "either (1) 'compliance with both federal and state law is a physical impossibility,' or (2) the state law at issue 'stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress'" (Matter of Buenos Hill Inc. v Saratoga Springs Planning Bd., 83 Misc.3d at 508, quoting Matter of Quigley v Village of E. Aurora, 193 A.D.3d 207, 211 [3d Dept. 2021], lv denied 37 N.Y.3d 908 [2021]).
Conflict Preemption and the CSA
"[F]or purposes of the Controlled Substances Act, marijuana has 'no currently accepted medical use at all'" (United States v Oakland Cannabis Buyers' Cooperative, 532 U.S. 483, 491 [2001], citing 21 USC 829; see Gonzales v Raich, 545 U.S. 1, 2 [2005] ["All controlled substances are classified into five schedules, § 812, based on their accepted medical uses, their potential for abuse, and their psychological and physical effects on the body, §§ 811, 812. Marijuana is classified as a Schedule I substance, § 812(c), based on its high potential for abuse, no accepted medical use, and no accepted safety for use in medically supervised treatment, § 812(b)(1)"]). This classification renders the manufacture, distribution, or possession of marijuana a criminal offense under the CSA. However, the CSA also expressly acknowledges the absence of Congress' intent "to occupy the field in which that provision operates, including criminal penalties, to the exclusion of any State law on the same subject matter which would otherwise be within the authority of the State, unless there is a positive conflict between that provision of this subchapter and that State law so that the two cannot consistently stand together" (21 USC 903).
The CSA has been held to "regulate[] medical practice insofar as it bars doctors from using their prescription-writing powers as a means to engage in illicit drug dealing and trafficking as conventionally understood. Beyond this, however, the statute manifests no intent to regulate the practice of medicine generally. The silence is understandable given the structure and limitations of federalism, which allow the States" 'great latitude under their police powers to legislate as to the protection of the lives, limbs, health, comfort, and quiet of all persons.'" (Gonzales v Oregon, 546 U.S. 243, 269-270 [2006], quoting Medtronic, Inc. v Lohr, 518 U.S. 470, 475 [1996]). Because "[t]he structure and operation of the CSA presume and rely upon a functioning medical profession regulated under the States' police powers" (Gonzales v Oregon, 546 U.S. at 270), the Court finds that the State's adoption of regulations related to medical cannabis, 9 NYCRR 113, is not preempted by the CSA.
"[P]olice power" refers to a State's "general power of governing," which includes a State's ability to "[punish] street crime, [run] public schools, [zone] property for development" (National Federation Of Independent Business et al v Sebelius, 567 U.S. 519, 535-536 [2012]), and to, among other things, "prescribe regulations to promote the health, peace, morals, education, and good order of the people" (Barbier v Connolly, 113 U.S. 27, 31 [1884]; see Dawson v Higgins, 197 A.D.2d 127, 132 [1st Dept1994], appeal dismissed 83 N.Y.2d 996 [1994], cert denied 513 U.S. 1077 [1995]).
Likewise, the CSA does not preempt the State's adoption of regulations implemented by respondents relating to 9 NYCRR 113 [Medical Cannabis], 9 NYCRR 128 [Adult-Use Packaging and Labeling]; and 9 NYCRR 129 [Adult-Use Marketing and Advertising] which, in conjunction with the Cannabis Law, were implemented to "to protect the public health and safety by regulating the illicit market" when the CSA is not actively enforced (Matter of Buenos Hill Inc. v Saratoga Springs Planning Bd., 83 Misc.3d at 505). "Nothing in the CSA requires New York to criminalize marijuana. Nor could Congress have used its preemption power to direct the states to enforce the CSA... The Court is also unwilling to assume that Congress elected simply to preempt every state law that does not follow its policy on marijuana. The CSA contains no language to this effect and rather 'explicitly contemplates a role for the States in regulating controlled substances'" (id., at 505, quoting Gonzales v Oregon, 546 U.S. at 251). Accordingly, the Court finds that no conflict exists between the CSA and State marijuana legislation and that the CSA does not preempt the implementation of the regulations challenged by the second amended petition.
Private Right of Action
With respect to the challenged regulations, "[t]he Supremacy Clause does not give affected parties a constitutional [] right to enforce federal law against the States[,]" and the CSA, in particular, does not bestow upon petitioners a substantive private right of action to enforce its provisions (Safe Streets Alliance v Hickenlooper, 859 F.3d 865, 900 [10th Cir 2017]). Likewise, "[t]he Food, Drug, and Cosmetic Act (the 'FDCA'), pursuant to which the United States Food and Drug Administration (the 'FDA') issues regulations, does not create a private right of action" (Yu v Dreyer's Grand Ice Cream, Inc., 592 F.Supp.3d 146, 155 [SDNY 2022]), and "[a petitioner] may not circumvent a lack of a private right of action in one statute by incorporating allegations of its violations into claims pleaded under another statute that does allow for a private right of action" (id., citing Colpitts v Blue Diamond Growers, 527 F.Supp.3d 562, 579 [SDNY 2021] [dismissing petitioner's claims under GBL 349 and 350 where petitioner's allegations of FDCA violations are the sole bases for GBL claims]). Accordingly, this Court holds that petitioners fail to state viable causes of action under the both the CSA and the FDCA/FDA (see NYSCEF No. 49, ¶ 115).
To the extent that petitioners reference the Racketeer Influenced and Corrupt Organizations Act (RICO), they have failed allege the existence of both an enterprise and a pattern of racketeering activity (see 18 USC 1961 [1], [4]; Procter & Gamble Co. v Big Apple Indus. Bldgs., Inc., 879 F.2d 10, 14 [2d Cir 1989], cert denied 439 U.S. 1022 [1990]).
In so holding, the Court notes that each of petitioners' four causes of action are based on arguments that respondents' actions in implementing the challenged regulations are in violation of the CSA and the FDCA/FDA. Accordingly, petitioner's first, second, third, and fourth causes of action, made pursuant to CPLR 7803(1), 7801(2), 7801(3), and CPLR 3001, which are based on allegations of respondents' violation of the CSA and FDA are dismissed pursuant to CPLR 3211 (a)(7).
Accordingly, it is hereby
ORDERED that petitioners' cross-motion, made pursuant to CPLR 3205, seeking leave to serve an amended notice of petition and second amended petition, is granted, and the second amended petition attached to petitioners' cross-motion is deemed served; and it is further
ORDERED that respondents' motion, made pursuant to CPLR 3211, is granted in its entirety and the second amended petition is dismissed.
This constitutes the Decision and Order of the Court, which will be uploaded to the New York State Court's Electronic Filing System (NYSCEF). Counsel is advised of 22 NYCRR 202.5-b (h) (2) relating to notice of entry.
SO ORDERED AND ADJUDGED.