Last month, we reported about a medical marijuana court case with blockbuster potential -- a ruling by an Arapahoe County District Court judge that state-legal MMJ is still illicit at the federal level, so all contracts pertaining to it are null and void.
This conclusion has inspired a letter to state and federal officials, including the President of the United States, from a fearful plaintiff (read it below) decrying the possible precedent it sets.
As we've reported, the original case involved a medical marijuana grower who asked not to be named and Blue Sky Care Connection, a dispensary in Littleton. The plaintiff in that matter said he delivered approximately $40,000 worth of MMJ between June and October of 2010 without receiving compensation in the form of either cash or what's referred to in the document as "a potential business partnership."
As such, the grower took Blue Sky to court, with a trial taking place this past April. But in May, rather than weighing in on the basic dispute, Judge Charles M. Pratt ordered the combatants to "file briefs explaining why this Court should not declare the purported contract void as against public policy."
As Pratt acknowledged, neither the plaintiff nor Blue Sky "raised the issue of legality." Rather, "the issue was...raised by the Court" to determine if the contract violated public policy.
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This last phrase is as loaded as it is important to the judgment. Going way back to Russell v. Courier Printing & Publ'g Co., a Colorado Supreme Court ruling from 1908, to support his view, Pratt argued that "if the disputed contract violates federal law, it would be against public policy and would be void and unenforceable."
With this matter as a backdrop, Pratt determined that the plaintiff and Blue Sky did indeed enter into a contract, and the dispensary breached it. But to cut through the legalese: If the contract involved something illegal, that didn't matter.
Among his assertions:
• Colorado State Law Does Not Create a Constitutional Right for Citizens to Use and Possess Medical Marijuana.
• Possession and use of marijuana remains illegal under federal law.
• Federal law regarding marijuana preempts state law because Colorado state law creates an obstacle to the full enforcement of federal law.
As such, Pratt determined that "contracts for the sale of marijuana are void as they are against public policy. Accordingly, the contract here is void and unenforceable."
The sweeping nature of Pratt's ruling raised an important question: Would attorneys representing defendants in medical-marijuana lawsuits begin arguing that contracts are unenforceable because the federal government considers all pot illegal?
In a related development, Westword was recently contacted by a plaintiff in a current case. The lawyer for this individual, who requested anonymity, is not allowing the client to speak about the specifics of the case, approving only the following statement: "Employees from an MMJ facility are suing the owners for breach of contract. The employees became concerned for their own case when they saw the ruling for the Blue Sky case in Arapahoe County, where Judge Pratt ruled that MMJ was illegal."
These remarks don't offer any specifics about the dispute, and neither do they confirm or deny that attorneys for the defendants are seeking to void a contract using the Pratt-approved argument. But the implication is strong in the following letter, which, according to the plaintiff, was sent to a number of elected officials at the state and federal level, including Governor John Hickenlooper and President Barack Obama.
Continue to read the letter, see comments from the plaintiff and view the Blue Sky ruling. Here's the letter. Note that the first sentence has been tweaked from the original to disguise the identity of the plaintiff.
We are suing our ex-business partners in civil court for breach of contract at an MMJ facility.
The court may rule we cannot sue because medical marijuana is illegal. One other case has just had that ruling in Colorado and 1 in Arizona.
If we cannot sue a business for bad business practices because it is illegal then, the MMED is illegal and is participating in racketeering as it gives money to the Department of Revenue and the CDPHE gives money to the MMED.
The state and various cities in Colorado must be sued for luring people into an illegal business, taking their money, and then the system isn't really valid. Are the State and Cities participating in racketeering with the MMED?
If there can be no fair dealings in business in the MMJ Industry and we cannot count on someone's word and the statutes are not real and cannot be applied, then the system will go into chaos.
If the courts persist at this, it "would force individuals to rely on informal and potentially illegal dispute resolutions:" Attorney Eric Moutz, The Colorado Lawyer, Vol. 41, No 8, Pg 103.
If MMJ is illegal and there is no recourse in the courts, all businesses must shut down now or know that they can do whatever they want until they are caught. They do not have to follow any laws as the whole system is illegal and there is no way to take any issue to court.
The plaintiff adds the following via e-mail:
I am a highly detailed person who thinks of all aspects of the MMJ industry and all business procedures, and I have come to the conclusion that the system is very flawed in every area and only the little guy gets hurt. MMJ needs to be legalized nationally so people can conduct business in the proper manner. Right now, employers and employees have no rights from the agencies they pay into and are losing their rights to sue others for bad business practices.
I wonder...if the IRS, the Department of Labor or Labor and Industries were called, and a person could asked them what they would do if someone who worked in the MMJ industry came in, to either: get help with their taxes, claim unemployment, report an injury, report sexual harassment or tax fraud, what is the proper action they are suppose to take for Colorado citizens in the MMJ industry? They would probably notify the Feds that the person works in an illegal business. Everyone is too afraid to call the IRS for tax questions.
The dispensaries pay their taxes. They should receive the all the benefits afforded to other Americans in business or is this taxation without representation?" And we should have the right to sue as Article XVIII of the Colorado constitution gives citizens the right use MMJ.
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Here's Judge Pratt's ruling in the Blue Sky case.
More from our Marijuana archive: "Medical marijuana: Ten dispensaries targeted in third wave of U.S. Attorney closure letters."