Americans for Forfeiture Reform

A three-judge panel with the 9th U.S. Circuit Court of Appeals will hear oral arguments today on whether the City of Oakland, CA enjoys sufficient standing to challenge, via the Administrative Procedure Act (APA), the federal government's long-running attempt to forfeit Harborside Health Center, a licensed medical marijuana dispensary. 

The City of Oakland argues that the APA provides a viable alternative to challenge the attempted forfeiture because it is ineligible to challenge the forfeiture as a forfeiture claimant and because the APA provides a statutory right to challenge agency action where not otherwise provided by law.

The federal government, in turn, argues that because the forfeiture claim process provides a means to challenge a forfeiture as a claimant, the APA does not create an alternative route for challenging a forfeiture -- that is, the sole means for the City of Oakland (or any municipality) to directly challenge a forfeiture, according to the federal government, would be as a forfeiture claimant, regardless of whether the municipality could sustain claimant status (seemingly excluding Oakland).

In February of 2013, U.S. Magistrate Judge Maria-Elena James ruled that the City of Oakland failed to establish the jurisdictional requirements for federal judicial review, under the APA, but then agreed to stay the order, pending appeal.

An added wrinkle, the recently signed into law "Consolidated and Further Continuing Appropriations Act, 2015” says that it prohibits the U.S. Department of Justice from expending funds to prevent certain states, including California, “from implementing their own State laws that authorize the use, distribution, possession, or cultivation of medical marijuana.” Whether and how such language circumscribes the DOJ's ability to pursue forfeitures against state-compliant businesses, like Harborside, or even to defend against collateral attacks on forfeitures, like the City of Oakland's argument, remains murky.

Today's oral arguments are scheduled to be broadcast live here.

Nota bene: I initially published this in 2012 when US Rep. Dana Rohrabacher offered virtually the same amendment to the current appropriations bill. I am reproducing this post as the analysis is essentially the same. I also do not mean to detract from the notion that the passage of this amendment represents a substantial political victory for marijuana reformers, which may offer opportunities for substantial further reform.

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In an op-ed yesterday in the Huffington Post, Steph Sherer touts the Rohrabacher-Hinchey-Farr Amendment to the appropriations bill H.R. 5326 as a tool “to deny funding to DEA raids against dispensaries operating in accordance with state law”. While I agree that limiting appropriations is a great tool to control federal agency behavior with, I do not believe that the Rohrabacher-Hinchey-Farr Amendment will effectively end DEA prosecution of marijuana dispensaries operating legally under state law.  There are two core reasons for this: I do not believe the text of the amendment will close off federal prosecution of marijuana dispensaries, and the amendment does not touch non-appropriated funds, particularly funds contained in the Department of Justice Asset Forfeiture Fund.

Will the Rohrabacher-Hinchey-Farr Amendment End DEA Raids of State-Legal Dispensaries?

The Amendment reads:

None of the funds made available in this Act to the Department of Justice may be used, with respect to the States of Alaska, Arizona, California, Colorado, Delaware, District of Columbia, Hawaii, Maine, Maryland, Michigan, Montana, Nevada, New Jersey, New Mexico, Oregon, Rhode Island, Vermont, and Washington, to prevent such States from implementing their own State laws that authorize the use, distribution, possession, or cultivation of medical marijuana.

If this amendment passes, I predict that the DEA will continue raiding state-legal marijuana dispensaries. The justification will be that while any state can “implement their own State laws” regarding medical marijuana the amendment does not (explicitly) prohibit the enforcement of federal law criminalizing all aspects of marijuana, and a court is likely to sanction the interpretation that a federal agency can enforce federal law without “preventing” states from “implementing” their own laws. Nor does the Rohrabacher-Hinchey-Farr Amendment provide an affirmative defense for defendants caught in the federal medical marijuana crackdown. In other words, the Rohrabacher-Hinchey-Farr Amendment provides only the barest of restrictions on the actual conduct of the Department of Justice and its subsidiary agencies towards medical marijuana. And before we finish beating this horse, I should note the Amendment does not reach non-DOJ agencies like the IRS, who are also currently part of the federal crackdown on medical marijuana.

And…this Amendment would also not prevent state or local agencies from enforcing the federal law at the behest of the Drug Enforcement Administration. How is this the case? Keep reading…

Beyond Appropriations: Asset Forfeiture Allows for Agency Independence

A basic, structural feature of Drug War funding are the federal asset forfeiture laws that drive hundreds of millions of dollars of seizure revenue into funds not appropriated by Congress but by the Department of Justice itself. I’ll excerpt this overview from the FY 2013 Performance Budget of the Asset Forfeiture Fund of the Department of Justice:

The Assets Forfeiture Fund was created by the Comprehensive Crime Control Act of 1984 (P.L. 98-473, dated October 12, 1984) to be a repository of the proceeds of forfeitures under any law enforced and administered by the Department of Justice (see 28 U.S.C. 524(c)).

The primary purpose of the Fund is to provide a stable source of resources to cover the costs of an effective Asset Forfeiture Program (AFP), including the costs of seizing, evaluating, inventorying, maintaining, protecting, advertising, forfeiting, and disposing of property seized for forfeiture. Prior to the creation of the Fund in 1985, the costs of these activities had to be diverted from agency operational funds. The more effective an agency was in seizing property, the greater the drain on its appropriated funds. The creation of the Fund is responsible, in large measure, for the growth in the Department’s forfeiture program over the past decade. A secondary benefit of an aggressive and well-managed forfeiture program is the production of surplus revenues to assist in financing important law enforcement programs. If the forfeiture program ceases to function effectively in its primary role, these surplus revenues will not be generated. The AFF’s mission has as its primary strategic goal to enforce Federal laws and prevent and reduce crime by disrupting, damaging and dismantling criminal organizations through the use of civil and criminal forfeiture. The program attempts to remove those assets that are essential to the operation of those criminal organizations and punish the criminals involved by denying them the use of the proceeds of their crimes.

Table 1 on page 2 displays the functional activities of the participating agencies. For the full names of the participating agencies, see footnote 1. These agencies investigate or prosecute criminal activity under statutes, such as the Comprehensive Drug Abuse Prevention and Control Act of 1970, the Racketeer Influenced and Corrupt Organizations statute, the Controlled Substances Act, and the Money Laundering Control Act, or provide administrative support services to the program.

Note again that line from the Rohrabacher-Hinchey-Farr Amendment…”None of the funds made available in this Act”…that is, funds appropriated by Congress. But this ignores the river of non-appropriated forfeiture revenue controlled by the DOJ, implying that in the case that this law is read to substantially affect appropriations for federal marijuana law enforcement, DOJ agencies will just find their revenue from non-appropriated sources. Moreover, the federal Equitable Sharing program is slated to distribute close to half a billion dollars in forfeiture revenue to state and local law enforcement agencies participating in a federal seizure in 2013. Another $147 million in forfeiture revenue is budgeted for joint operations between state and federal law enforcement operations. In other words, the DEA and any other federal agency that still deems it worthwhile to enforce federal law against state-legal medical marijuana operations still has plenty of funding…and motive…to do so.