A very interesting (but legally unsurprising) decision from a federal district court in United States v. Stacy (S.D. Cal. Mar. 2, 2010):
From June 2009 until September 2009, Defendant operated what he claims was a “medical marijuana collective” called “Movement in Action,” located at 1050 South Santa Fe Avenue, Vista, California. According to Defendant, he took great care to make sure that his cooperative was formed and operated in compliance with California law, specifically the Compassionate Use Act (“CUA”) and the Medical Marijuana Program Act (“MMPA”), Cal. Health & Safety Code §§ 11362.5, et seq. , 11362.7.
In July and August of 2009, Defendant sold marijuana on three separate occasions to an undercover detective from the San Diego Sheriff’s Office. Each time, Defendant charged $60 for an eighth of an ounce of marijuana.
On September 9, 2009, there was a county-wide raid, which resulted in the arrests of Defendant and thirteen other individuals who operated collectives in San Diego. DEA agents executed search warrants at Defendant’s home and business, seizing 96 marijuana plants, marijuana-laced food products, marijuana-related equipment and paraphernalia, business records, and a fully-loaded FEG semi-automatic pistol….
Defendant contends that this prosecution violates his due process rights because Defendant reasonably believed that his collective was lawful based on his research of California law, his consultation with an attorney, statements made by Barack Obama when he was a presidential candidate in addition to statements made by other federal officials, and the Supreme Court’s refusal to hear cases involving medical marijuana. Defendant argues that the Court should dismiss this case as a violation of his due process rights or, in the alternative, permit him to present an entrapment-by-estoppel defense at trial.
A criminal prosecution violates due process if it is the result of “entrapment by estoppel.” United States v. Tallmadge, 829 F.2d 767, 773-75 (9th Cir.1987). “Entrapment by estoppel” is the unintentional entrapment by an official who mistakenly misleads a person into a violation of the law. Id. at 773 (9th Cir.1987). To succeed under this theory, the defendant must show “that the government affirmatively told him the proscribed conduct was permissible, and that he reasonably relied on the government’s statement.” United States v. Ramirez-Valencia, 202 F.3d 1106, 1109 (9th Cir.2000). A defendant’s reliance is reasonable if “a person sincerely desirous of obeying the law would have accepted the information as true, and would not have been put on notice to make further inquiries.” United States v. Lansing, 424 F.2d 225, 227 (9th Cir.1970).
Defendant has not established that he is the victim of entrapment by estoppel. Defendant has not pointed to any affirmatively misleading statement by a federal official sanctioning his conduct under federal law. Defendant points to the following statement made by Barack Obama when he was a presidential candidate: “[M]y attitude is that if it’s an issue of doctors prescribing medical marijuana as a treatment for glaucoma or as a cancer treatment, I think that should be appropriate because there really is no difference between that and a doctor prescribing morphine or anything else …. I think the basic concept that using medical marijuana in the same way with the same controls as other drugs prescribed by doctors, I think that’s entirely appropriate. What I am not going to be doing is using Justice Department resources to try to circumvent state laws on this issue.”
Defendant also points to a statement by Ben LaBolt, Obama campaign spokesman, that: “Voters and legislators in the states … have decided to provide their residents suffering from chronic diseases and serious illnesses like AIDS and cancer with medical marijuana to relieve their pain and suffering. Obama supports the rights of states and local governments to make this choice-through he believes medical marijuana should be subject to (U.S. Food and Drug Administration) regulations like other drugs.” LaBolt also indicated that Obama would end U.S. Drug Enforcement Administration raids on medical marijuana suppliers in states with their own laws.
In addition, Defendant relies on certain statements by U.S. Attorney General, Eric Holder. During a press conference on February 24, 2009, in response to a question whether raids of medical marijuana clubs established under state law represented American policy going forward, Holder stated, “No, what the president said during the campaign, you’ll be surprised to know, will be consistent with what we’ll be doing in law enforcement. He was my boss during the campaign. He is formally and technically and by law my boss now. What he said during the campaign is now American Policy.” On March 19, 2009, Holder explained that the Justice Department had no plans to prosecute pot dispensaries that were operating legally under state laws.
Defendant’s reliance on the above-quoted statements is problematic for several reasons. First of all, as pointed out by the Government, Defendant does not state that he personally read or heard these statements prior to engaging in the conduct that forms the basis of this criminal case. Furthermore, the comments by then-candidate Obama and his campaign spokesman cannot be deemed representations of the federal government regarding drug-prosecution policy.
Although Holder was Attorney General when he made the statements at issue, his statements do not constitute affirmative representations that Defendant would not be prosecuted under federal law. Holder’s comment that “what [Obama] said during the campaign is now American Policy” is vague and provides no real guidance as to what the so-called “American Policy” is. Similarly, Holder’s statement that the Justice Department “had no plans” to prosecute pot dispensaries that were operating legally under state laws was a loose statement that left open the possibility the Justice Department could change its “plans” or could choose to prosecute medical marijuana dispensaries on a case-by-case basis.
Defendant has not identified any affirmative representations by the federal government that marijuana collectives formed and operated in compliance with California law would not be investigated or prosecuted under federal law under any circumstances. Moreover, unlike the cases in which convictions were reversed on the ground of entrapment by estoppel, nobody with authority at any time personally told Defendant that his actions were permissible under federal law. See, e.g., Cox v. Louisiana, 379 U.S. 559, 85 S.Ct. 476, 13 L.Ed.2d 487 (1965) (reversing conviction of persons who were arrested for picketing across the street from a courthouse because the defendants were given permission to hold their demonstration at that location by the Chief of Police); United States v. Tallmadge, 829 F.2d 767 (9th Cir.1987) (defendant’s conviction for being a felon in possession of a firearm was reversed because a federally licensed firearms dealer told him that he could purchase firearms after his prior felony conviction was reduced to a misdemeanor).
Even if Obama’s and Holder’s statements can be viewed as establishing a general policy against prosecuting marijuana dispensaries operating legally under state law, a reasonable person would not rely on these statements as an assurance that he or she would not be prosecuted under federal law. Defendant could have sought specific guidance regarding the applicability of federal law to his situation. However, Defendant admittedly did not contact anyone within the Department of Justice or any other federal agency.
In concluding that his actions did not violate federal law, Defendant also allegedly relied on California law, including the California Attorney General’s “Guidelines for the Security and non-Diversion of Marijuana Grown for Medical Use,” his attorney’s advice, and articles about the Supreme Court refusing to hear cases involving medical marijuana. The Court need not analyze these other sources of information because they are only relevant for purposes of determining the reasonableness of Defendant’s reliance on affirmative misrepresentations by the federal government. Since there were no affirmative misrepresentations by the federal government, the Court’s due process inquiry is at an end….
Defendant contends that his prosecution is in direct conflict with U.S. Department of Justice Policy, specifically, a Department of Justice Memorandum dated October 19, 2009 (“Memorandum”). Defendant argues that the Memorandum reaffirmed the federal policy of not prosecuting individuals who are in compliance with state law.
The Court does not find Defendant’s prosecution to be inconsistent with the Memorandum. The Memorandum provides “guidance regarding resource allocation” and “does not ‘legalize’ marijuana or provide a legal defense to a violation of federal law.” The Memorandum explains:
As a general matter, pursuit of these priorities [the prosecution of significant traffickers of illegal drugs and the disruption of illegal drug manufacturing and trafficking networks] should not focus federal resources in your States on individuals whose actions are in clear and unambiguous compliance with existing state laws providing for the medical use of marijuana. For example, prosecution of individuals with cancer or other serious illnesses who use marijuana as part of a recommended treatment regimen consistent with applicable state law, or those caregivers in clear and unambiguous compliance with existing state law who provide such individuals with marijuana, is unlikely to be an efficient use of limited federal resources. On the other hand, prosecution of commercial enterprises that unlawfully market and sell marijuana for profit continues to be an enforcement priority of the Department. To be sure, claims of compliance with state or local law may mask operations inconsistent with the terms, conditions, or purposes of those laws, and federal law enforcement should not be deterred by such assertions when otherwise pursuing the Department’s core enforcement priorities.
The Memorandum lists factors that may indicate illegal drug trafficking activity, including “amounts of marijuana inconsistent with purported compliance with state or local law” and “financial and marketing activities inconsistent with the terms, conditions, or purposes of state law, including evidence of money laundering activity and/or financial gains or excessive amounts of cash inconsistent with purported compliance with state or local law.” The Memorandum stresses, “[N]othing herein precludes investigation or prosecution where there is a reasonable basis to believe that compliance with state law is being invoked as a pretext for the production or distribution of marijuana for purposes not authorized by state law.” The determination of whether to prosecute marijuana cases is to be made on a “caseby-case basis.”
According to the Memorandum, an individual is not insulated from prosecution under the CSA just because he ostensibly complies with California law. Federal prosecuting authorities are free to investigate or prosecute individuals if, in their judgment, there is reason to believe that state law is being invoked to mask the illegal production or distribution of marijuana. Based on the evidence in this case, federal authorities apparently concluded that Defendant is operating a commercial enterprise that unlawfully sells marijuana for profit and determined that prosecution would be appropriate. The fact that Defendant disputes that his collective was a business run for profit does not preclude federal authorities from drawing their own conclusions and choosing to prosecute this case.
Even if Defendant’s prosecution were contrary to the guidance set forth in the Memorandum, dismissal of the Indictment would not be warranted. Defendant has not pointed to any authority for dismissing an indictment because it is contrary to internal Department of Justice guidelines. See United States v. McInnis, 601 F.2d 1319, 1323 (5th Cir.1979) (refusing to dismiss an indictment based on a policy set forth in an internal guideline of the Department of Justice). Indeed, the Memorandum specifies that it is not intended “to create any privileges, benefits, or rights, substantive or procedural, enforceable by any individual, party or witness in any administrative, civil, or criminal matter …. Rather, this memorandum is intended solely as a guide to the exercise of investigative and prosecutorial discretion.” …