Governor's Cannabis Trailer Bill Proposes to Limit Traditional Judicial Oversight of State Regulators

The Brown administration introduced major cannabis legislation earlier this month in the form of a “trailer bill”. Trailer bills are typically reserved for “cleanup” legislation as part of the annual state budget process. This trailer bill instead proposes substantive changes to California cannabis law intended, supposedly, to align and clarify the separate cannabis regulatory structures created by the Medical Cannabis Regulation and Safety Act (MCRSA), which the state Legislature enacted in 2015, and the Adult Use of Marijuana Act (AUMA), which voters enacted in 2016 (Proposition 64).

Among the more prominent changes proposed (elimination of vertical integration restrictions, elimination of state medicinal identification cards, application of Type 3 license limits to AUMA), the trailer bill also proposes to restrict cannabis licensees’ access to California courts to challenge decisions, regulations, and other actions by state cannabis regulators. This is an important change in the law that prospective cannabis licensees should question.

For background, two provisions of California law form the foundation of public access to the courts to challenge government actions. The first of these is Code of Civil Procedure (CCP) Section 1085, which allows a person to ask a court to order the government (state or local) to do something that is required by law, or to stop doing something that is prohibited by law. CCP 1094.5 allows a person to ask a court to review decisions made by the government after an administrative proceeding. CCP 1085 and CCP 1094.5 both provide a critical check on state and local regulators’ power, and both provisions have been used countless times to protect the public’s rights to due process and fair application of the law.

Currently, actions by the state cannabis regulators (Bureau of Medical Cannabis Regulation, Department of Food and Agriculture, and the Department of Public Health) can be reviewed by any court under CCP 1085 or 1094.5. In other words, current law would allow a cannabis licensee (or other interested person) to file a lawsuit in a local superior court challenging, for example, a decision to deny an application for a state license or to not renew a license, a new rule or regulation, or enforcement action by these agencies. Current law guarantees licensees and others the right to a hearing on such a lawsuit.

The trailer bill proposes to severely restrict these rights, in two ways. First, and most importantly, the trailer bill would eliminate the public’s right to challenge any of the state cannabis regulators’ decisions, regulations, or actions in superior court. (Trailer Bill, Business and Professions Code, § 26054(a).) Instead, the trailer bill would require cannabis licensees and others to file something known as a “writ of review” with an appellate court or the state Supreme Court. The appellate courts and the Supreme Court are not required to hear such writs of review. Given these courts’ current caseloads, lawsuits challenging the cannabis regulators almost certainly would not be heard.

Second, even if an appellate court or the Supreme Court accepted such a lawsuit, the trailer bill severely restricts the courts’ ability to review and question the cannabis regulators’ actions or decisions. For example, the trailer bill prohibits the courts from exercising their own judgment on evidence submitted in the case, and instead requires the courts to accept the cannabis regulators’ judgments. (Trailer Bill, Business and Professions Code, § 26046(b).) Further, the trailer bill would make the cannabis regulators’ decisions on factual issues absolute and beyond question by the courts. (Trailer Bill, Business and Professions Code, § 26047.)

In short, the trailer bill sets up the state cannabis regulators to be, in effect, the final, absolute arbiters of cannabis law in California. This arrangement eliminates the normal refinement process that occurs in any significant regulatory scheme that results from a pattern of regulation and judicial interpretation; it also paves the way for governmental abuses. History shows that the public does not benefit by less access to the courts, and the same is certain to be true here.

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