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DEA subpoena of California BCC licensing records is probably unconstitutional

Posted by on Sunday, July 26, 2020 in News, Updates.

Back in January, the federal Drug Enforcement Administration (DEA) issued an administrative subpoena to the California Bureau of Cannabis Control (BCC), demanding the state agency turn over information regarding a handful of state-licensed cannabis companies. The information includes license applications and shipping manifests from the companies. At the time, the BCC refused to comply, claiming that the subpoena failed to explain the relevancy of the information sought and that the information was privileged under state law. Recently, however, the DEA has renewed its demand for the information, asking a federal court (the U.S. District Court in the Southern District of California) to order the BCC to comply with the subpoena and produce the requested documents. The story, with more details and copies of the filings in the case, can be found on Marijuana Moment here.

I think the two arguments the BCC has made to resist the subpoena are fairly weak. While the DEA must explain why it wants the information — administrative subpoenas may only demand information that is relevant to the function of the agency that issues them, it won’t be difficult for the DEA to do that. For example, the DEA might want the information for a criminal investigation it is conducting of the licensees. And while California law would bar a state agency from demanding the information, the federal government is not bound by state privilege rules. In fact, courts have previously upheld federal subpoenas seeking sensitive information from state agencies, including at least one federal subpoena demanding access to a state medical marijuana registry.

Which leads me back to the title of my post. I think the best argument the BCC can make now is that the DEA’s subpoena is unconstitutional. In particular, the subpoena violates the Supreme Court’s anti-commandeering rule because it effectively forces the state to help enforce federal law (e.g., to assist in the criminal investigation the DEA might now be conducting).

I developed this argument at great length in an Article I published a few years ago, Robert A. Mikos, Can the States Keep Secrets from the Federal Government?, 161 U. Penn. L. Rev. 103 (2012).

The Article explains why courts have previously erred in upholding federal subpoenas directed at state agencies. Part of the explanation is that state agencies have failed to articulate the commandeering argument in their briefs, often just reciting broad generalities (e.g., “the federal government’s powers are limited”, or “Tenth Amendment!”). The Article, I think, does a much better job of explaining why federal demands for information (what I call “commandeering states’ secrets) are indistinguishable from impermissible federal demands for other types of enforcement services.

Here are a few quotes from the Article:

“[T]he distinction between demands for information and demands for other types of enforcement services has no obvious basis. As a descriptive matter, this distinction fails to account for the bulk of what law enforcement agents actually do—gather and report information about regulated activity. As a matter of precedent, it contradicts the very holding of the Printz decision, which invalidated provisions of the Brady Act requiring state officials to do no more than search state databases. As a matter of history, it ignores the fact that most methods now employed to commandeer states’ secrets[, including administrative subpoenas,] were unknown to the Framers and emerged only in the last several decades. Most fundamentally, the distinction allows the federal government to transform state law enforcement officials into the unwitting tools of federal law enforcement—the very harm the anti-commandeering rule is designed to prevent.” (pp. 107-108)

The Article also elaborates on two broad types of harm federal demands for information impose on the states. “First, by stoking the incentives of private citizens to conceal their activity from state regulators, commandeering makes it more difficult for the states to gather information in the first instance. Commandeering thus adds to the already hefty financial and privacy costs of enforcing state law. Second, commandeering forces state officials to help advance federal policies they or their constituents deem objectionable. What is more, state officials might be unfairly blamed for providing information to federal officials and advancing controversial federal policies.” (Id. at 177)

If the BCC were to pursue this commandeering argument against the DEA, I think it would greatly improve its odds of successfully quashing the subpoena — but read the article and see if you agree.

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  • Thomas S Stewart

    July 27th, 2020

    Thought provoking, as always! Thanks for sharing.