Alerts and Updates

Ninth Circuit Punts on Interstate Transportation of Hemp

September 4, 2019

Big Sky’s appeal presented the Ninth Circuit with an opportunity to decide an issue crucial to the continued development of the hemp industry.

On September 4, 2019, the Ninth Circuit issued its ruling in Big Sky Scientific LLC v. Jan Bennetts et al, the case involving the seizure of an interstate shipment of hemp that occurred after the enactment of the 2018 Farm Bill. In a three-page opinion, the court sidestepped the substantive issues presented on appeal and held that the parties should pursue their claims in state court.

In January 2019, a hemp cultivator in Oregon attempted to ship a truckload of hemp to a processor in Colorado. But as the cargo passed through Idaho, the Idaho State Police seized the shipment and arrested the driver, alleging violations of Idaho state law. The Idaho police charged the driver with a crime and filed a civil complaint in state court against the hemp itself. The Idaho civil case was stayed pending resolution of the criminal proceeding.

Shortly after the state court actions began, the hemp processor, Big Sky Scientific LLC, filed a motion for a preliminary injunction in federal court to force the Idaho State Police to turn over the hemp and to prevent Idaho from seizing future shipments, arguing that the 2018 Farm Bill expressly protected the interstate shipment of hemp. The District Court found in favor of the Idaho State Police and denied Big Sky’s motion. It held that the provisions of the 2018 Farm Bill are not effective unless the hemp is produced pursuant to a USDA-approved program. Because USDA had not yet issued regulations, Idaho could seize the hemp.

Duane Morris filed an amicus brief on behalf of the American Trade Association for Cannabis and Hemp in support of Big Sky, arguing that an adverse ruling would have a serious negative impact on the hemp industry. (Duane Morris is the national law firm partner of the American Trade Association for Cannabis and Hemp.)

Big Sky’s appeal presented the Ninth Circuit with an opportunity to decide an issue crucial to the continued development of the hemp industry and to do so based on basic principles of constitutional law and the landmark 2018 Farm Bill. Unfortunately, rather than address the legality of interstate transportation of hemp, the Ninth Circuit held that the federal courts should abstain from hearing the case until the Idaho state courts have fully resolved both the pending criminal and civil actions. The Ninth Circuit based its decision on two representations the state made during the parties’ oral argument: (i) Idaho will promptly lift the stay on the civil case against the hemp so that it can proceed at the same time as the criminal case, and (ii) an assumption that the Idaho state court “will proceed expeditiously” in that civil case.

The Ninth Circuit’s decision to “punt” on the issues presented in the appeal leaves unanswered crucial questions about the legality of interstate of commercialization of hemp. However, to reach that result, the Ninth Circuit reversed the federal district court’s decision interpreting the law so that the district court’s opinion has no force or effect. It is now up to the Idaho court to decide the fate of the hemp shipment. But, unlike a federal appeals court decision that would have impacted multiple states, the Idaho courts’ decisions are limited to Idaho.

Duane Morris will continue to monitor this case and will provide updates when the Idaho state courts issue their rulings.

For More Information

If you have any questions about this Alert, please contact David E. Landau, Joseph J. Pangaro, any of the attorneys in our Cannabis Industry Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.