Montana Cannabis Indus. Ass'n v. State, DA 11-0460

Docket NºDA 11-0460
Citation2012 MT 201
Case DateSeptember 11, 2012
CourtUnited States State Supreme Court of Montana

2012 MT 201

and CHARLIE HAMP, Plaintiffs, Appellees, and Cross-Appellants,
STATE OF MONTANA, Defendant, Appellant, and Cross-Appellee.

DA 11-0460


Argued and Submitted: May 30, 2012
Decided: September 11, 2012

APPEAL FROM: District Court of the First Judicial District,
In and For the County of Lewis and Clark, Cause No.
DDV 11-518
Honorable James P. Reynolds, Presiding Judge


For Appellant:

Steve Bullock, Montana Attorney General; James P. Molloy (argued), J. Stuart Segrest, Assistant Attorneys General, Helena, Montana

For Appellees:

James H. Goetz (argued); J. Devlan Geddes; Goetz, Gallik & Baldwin, P.C., Bozeman, Montana



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Justice Michael E Wheat delivered the Opinion of the Court.

¶1 The State of Montana ("State") appeals from an order preliminarily enjoining parts of the Montana Marijuana Act, § 50-46-301 et seq., MCA. Montana Cannabis Industry Association, Mark Matthews, Shirley Hamp, Shelly Yeager, Jane Doe, John Doe #1, John Doe #2, Michael Geci-Black, John Stowers, Point Hatfield, and Charlie Hamp (collectively "the Plaintiffs") cross-appeal from the same order. We reverse and remand.


¶2 In 2004, Montana voters approved the use of medical marijuana through the passage of I-148, the Medical Marijuana Act. The 2004 Medical Marijuana Act left in place those provisions in the Montana criminal code that make it illegal to cultivate, possess, distribute or use marijuana, while simultaneously protecting authorized users of medical marijuana from being prosecuted. Section 50-46-201(1), MCA (2009) (repealed 2011). In 2011, the Montana Legislature, in response to a drastic increase of caregivers and medical marijuana users, passed House Bill 161, which repealed I-148. The Governor vetoed House Bill 161, and in response, the Legislature enacted Senate Bill 423, which repealed the 2004 Medical Marijuana Act and replaced it with the Montana Marijuana Act ("MMA"), § 50-46-301 et seq., MCA, which dramatically changed the landscape for the cultivation, distribution, and use of marijuana for medical purposes.

¶3 On May 13, 2011, the Plaintiffs filed a lawsuit seeking to both temporarily and permanently enjoin the implementation of the MMA in its entirety. Based on a motion filed with the complaint, the District Court immediately entered a temporary restraining order

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blocking implementation of § 50-46-341, MCA, which prohibited the advertising of "marijuana or marijuana-related products" and which was scheduled to take effect that day. By stipulation, the temporary restraining order remained in effect pending the preliminary injunction hearing. A hearing on the preliminary injunction was held June 20 through 22, 2011.

¶4 On June 30, 2011, the District Court issued its Order on Motion for Preliminary Injunction. In its Order, the District Court enjoined the following relevant subsections of § 50-46-308, MCA:

(3) (a) (i) A provider or marijuana-infused products provider may assist a maximum of three registered cardholders.
(ii) A person who is registered as both a provider and a marijuana-infused products provider may assist no more than three registered cardholders.
(b) If the provider or marijuana-infused products provider is a registered cardholder, the provider or marijuana-infused products provider may assist a maximum of two registered cardholders other than the provider or marijuana-infused products provider.
(4) A provider or marijuana-infused products provider may accept reimbursement from a cardholder only for the provider's application or renewal fee for a registry identification card issued under this section.
(6) A provider or marijuana-infused products provider may not:
(a) accept anything of value, including monetary remuneration, for any services or products provided to a registered cardholder;
(b) buy or sell mature marijuana plants, seedlings, cuttings, clones, usable marijuana, or marijuana-infused products[.]

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¶5 The District Court preliminarily enjoined a number of sections of the MMA; however, only §§ 50-46-308(3), (4), (6)(a) and (6)(b), MCA, are pertinent to this opinion. The District Court found that these sections substantially implicated the Plaintiffs' fundamental rights to pursue employment, to seek one's own health in all lawful ways, and to privacy. Because the sections substantially implicated the Plaintiffs' fundamental rights, the District Court applied a strict scrutiny analysis, and determined that the Plaintiffs would suffer irreparable harm if the court did not enjoin these provisions.

¶6 The District Court also enjoined §§ 50-46-341, -329(1)-(3), and –303(10), MCA, which are not at issue in this appeal. The remaining provisions of the MMA were not enjoined and, in accordance with the severability clause of the MMA, were allowed to take effect.

¶7 After the District Court issued its Order on the Motion for Preliminary Injunction, the State appealed and the Plaintiffs cross-appealed. We restate the issues on appeal as follows:

¶8 Issue One: Did the District Court err when it applied a strict scrutiny, fundamental rights analysis to preliminarily enjoin §§ 50-46-308(3), (4), (6)(a) and (6)(b), MCA?

¶9 Issue Two: Did the District Court err in not enjoining § 50-46-308(2), MCA?

¶10 Issue Three: Did the District Court err in not enjoining § 50-46-308(7), MCA?

¶11 Issue Four: Did the District Court err in declining to enjoin the MMA in its entirety?


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¶12 We typically review a district court's granting or denying a preliminary injunction for a manifest abuse of discretion. City of Great Falls v. Forbes, 2011 MT 12, ¶ 9, 359 Mont. 140, 247 P.3d 1086. However, where the district court grants or denies injunctive relief based on conclusions of law, no discretion is involved, and we review the conclusions of law to determine whether they are correct. Valley Christian Sch. v. Mont. High Sch. Assn., 2004 MT 41, ¶ 5, 320 Mont. 81, 86 P.3d 554 (citing Hagener v. Wallace, 2002 MT 109, ¶ 12, 309 Mont. 473, 47 P.3d 847).


¶13 As a threshold issue, Plaintiffs argue that the State's appeal of only one of four paragraphs, ¶ 1(d),1 of the District Court's preliminary injunction order, while reserving other defenses, is an improper request for an interlocutory advisory opinion. We may, however, review "an order granting or dissolving, or refusing to grant or dissolve, an injunction or attachment." M. R. App. P. 6(3)(e). This rule allows an immediate appeal from a preliminary injunction. State v. BNSF Ry. Co., 2011 MT 108, ¶ 15, 360 Mont. 361, 254 P.3d 561. A party is not obligated to appeal the entire preliminary injunction, but instead, may ask this Court to separately review specific provisions within an order granting an injunction. See e.g. St. James Healthcare v. Cole, 2008 MT 44, ¶ 54, 341 Mont. 368, 178 P.3d 696. Moreover, in our review of a preliminary injunction, we may review whether the district court applied the proper level of judicial scrutiny to enjoin an allegedly

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unconstitutional statute. See Butte Community Union v. Lewis, 219 Mont. 426, 430-31, 712 P.2d 1309, 1311-12 (1986). Accordingly, we will review the State's appeal of ¶ 1(d) of the preliminary injunction order.

¶14 Section 27-19-201, MCA, authorizes the issuance of a preliminary injunction when it appears that the applicant is entitled to the relief sought; the commission of an act by a party would cause irreparable harm to the applicant; or the adverse party is doing something that threatens to violate the applicant's rights, respecting the subjects of the action. These requirements are in the disjunctive, meaning that findings that satisfy one subsection are sufficient. Sweet Grass Farms, Ltd. v. Bd. of County Commrs. of Sweet Grass County, 2000 MT 147, ¶ 27, 300 Mont. 66, 2 P.3d 825.

¶15 In granting the preliminary injunction in this case, the District Court limited its analysis to the question of irreparable injury. The court properly concluded that the loss of a constitutional right constitutes irreparable harm for the purpose of determining whether a preliminary injunction should be issued. Elrod v. Burns, 427 U.S. 347, 373, 96 S. Ct. 2673, 2689-690 (1976).

¶16 In order to determine if a constitutional right has been lost, a court must first determine which of the established levels of scrutiny is appropriately applied: strict scrutiny, middle-tier scrutiny or the rational basis test. See Snetsinger v. Mont. Univ. Sys., 2004 MT 390, ¶ 17, 325 Mont. 148, 104 P.3d 445. Legislation that implicates a fundamental constitutional right is evaluated under a strict scrutiny standard, whereby the government

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must show that the law is narrowly tailored to serve a compelling government interest. Snetsinger, ¶ 17. If a law or policy affects a right conferred by the Montana Constitution, but is not found in the Constitution's declaration of...

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