Nebraska, Indiana, and Louisiana filed a Petition for Review on May 22 in the United States Court of Appeals for the District of Columbia Circuit challenging marijuana’s move to Schedule III.
The petition challenges the Acting Attorney General’s final agency action reclassifying FDA-approved and state-licensed marijuana under the Controlled Substances Act.
The DC Circuit has consolidated this new petition with one previously filed by SAM, Inc. and the National Drug and Alcohol Screening Association, Inc.
Like SAM’s petition, the states allege the Attorney General failed to comply with the Administrative Procedure Act and exceeded authority under the Controlled Substances Act.
The states also argue the Acting Attorney General acted arbitrarily, capriciously, and in abuse of discretion when issuing the rescheduling rule.
Standing is the legal capacity of a party to bring a lawsuit, requiring a plaintiff to demonstrate a direct, tangible stake in the outcome.
SAM previously failed a standing test in federal court, when a separate lawsuit challenging a hemp-derived Medicare benefit program was dismissed entirely.
The same standing analysis from that dismissal would almost certainly apply to SAM’s Schedule III rescheduling petition now before the DC Circuit.
Nebraska and Louisiana both face a fundamental tension because their voters and legislatures have already approved medical marijuana programs benefiting from the rescheduling rule.
Indiana presents the strongest standing argument among the three states, having no medical marijuana program and maintaining strict statewide prohibition laws.
Indiana could argue that federal rescheduling foreseeably increases marijuana flow across its borders, creating a concrete and traceable harm to the state.
The parens patriae doctrine allows states to represent citizens in suits involving threats to public health, but courts require injury to a sufficiently substantial population segment.
Conservative Supreme Court justices have expressed “significant doubt on a State’s standing to assert a quasi-sovereign interest — as opposed to direct injury — against the Federal Government.”
States may also derive standing from procedural rights granted by Congress, with the Supreme Court recognizing in Massachusetts v. EPA that states receive special solicitude in standing analysis.
If any petitioner clears the standing hurdle, the rescheduling rule faces serious legal problems on the merits regarding agency authority.
The Attorney General did not simply reschedule a substance as permitted under 21 U.S.C. § 811(d)(1), but effectively rescheduled entire state-licensed marijuana programs.
The FDA played no meaningful role in the rulemaking process, despite being the agency responsible for making official medical and scientific determinations.
A court reaching the merits would likely find strong grounds to conclude the final rule exceeded both Attorney General and DEA statutory authority.
Standing remains the threshold question that will likely prove dispositive in determining whether this rescheduling challenge proceeds at all.
If this litigation moves forward, the cannabis industry must begin thinking seriously about alternative strategies for advancing sensible federal cannabis policy going forward.