LINCOLN, Neb. (Nebraska Examiner) – The new commissioners set to regulate medical cannabis in Nebraska, as well as the ballot sponsors of the successful effort to legalize it in 2024, blasted an ongoing lawsuit against them as “meritless” and seeking to create a “false conflict.”
In briefs filed Friday, attorneys for the 11 defendants named in the John Kuehn v. Gov. Jim Pillen case explained why they are seeking to dismiss the case.
Kuehn, a former state senator, former State Board of Health member and longtime marijuana opponent, filed the case in December. It sought to declare the voter-approved legalization and regulation of medical cannabis unconstitutional. He expanded the case in January to encompass more state officials.
The lawsuit’s main argument is that the Nebraska laws are unlawful, or preempted, because of the federal Controlled Substances Act.
Typically, cases can only move forward if the party suing can prove direct harm because of the laws, known as “standing.”
Kuehn has conceded he can’t prove standing directly, so to get his foot in the door, he is arguing that his case has standing on behalf of the “taxpayer” or “great public interest,” narrow paths for certain cases to proceed. The first standard regards the spending of public dollars, while the second argues the matter should be taken up because it is of a “great public interest” to Nebraskans.
The lawyers for five state officials, the three commissioners on the Nebraska Medical Cannabis Commission and the three ballot sponsors said neither type of standing applies to Kuehn.
“There is no ‘great public interest’ in invalidating a law approved by a massive supermajority of Nebraska voters which will be susceptible to challenge by many,” the attorney wrote for Bruce Bailey of Lincoln, Harry Hoch, Jr. of Omaha and Kim Lowe of Kearney of the Nebraska Medical Cannabis Commission.
Kuehn’s legal team had no immediate comment on the new filings. His team has until late April to file a response under a briefing order by Lancaster County District Judge Susan Strong. Strong, who ruled against Kuehn in an earlier marijuana-related case, has scheduled an in-person hearing on the motions to dismiss the preemption case for May 20.
The role of Congress
The sponsors of the medical cannabis ballot measure criticized Kuehn’s lawsuit as an attempt “to flip federalism on its head.” They said Kuehn “supports an expansive federal government and a weakened state government at the expense of Nebraska voters who just passed two laws by huge margins.”
Voters overwhelmingly approved the measure to legalize up to 5 ounces of medical cannabis with a physician’s recommendation with 71% support. It secured majority support in all of Nebraska’s 49 legislative districts. A second measure to regulate medical cannabis through the newly created commission passed with 67% support, including majority support in 46 legislative districts.
Campaign attorneys said the federal government — under presidents from former President Bill Clinton to President Donald Trump earlier this year — has never taken the preemption position.
The federal government still lists marijuana as a Schedule I drug, which is defined as having no currently accepted medical use and a high potential for abuse, though the Trump and Biden administrations have taken steps toward reclassifying the drug.
The U.S. Department of Justice has also not prosecuted violations of federal cannabis law in states that have legalized marijuana, the ballot sponsors’ attorneys wrote. Congress has also annually prohibited the Justice Department from spending funds to prevent states from implementing medical cannabis laws.
“Congress’s purpose is the ultimate touchstone in every preemption case, and here, Congress has decided to allow states to enact their own medical cannabis laws,” the ballot sponsors said.
Protecting ‘state sovereignty’
Attorney Jason Grams of Omaha, for the commissioners, said that while it is true that marijuana possession, manufacture and distribution are federally illegal, “that is far from the end of the analysis.”
Grams said preemption in this case, as Congress has designed it in the Controlled Substances Act, is implicated when it is “physically impossible” for a state law to coexist with federal law.
In the 39 states that have legalized medical cannabis, including Nebraska last fall, none has been thrown out on federal preemption standards, the commissioners said.
“We simply hold state sovereignty in greater regard than that,” Grams wrote.
Grams represented the Nebraskans for Medical Marijuana campaign in 2020 against a lawsuit brought by Lancaster County Sheriff Terry Wagner. The Nebraska Supreme Court ruled against the campaign and removed the measure off the ballot.
The campaign tried again in 2022 and 2024 before succeeding at the ballot box.
Ballot sponsors have similarly pointed to the 10th Amendment to the U.S. Constitution, which states: “The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”
The AG’s Office did not address federal preemption in its motion to dismiss other than to say that “Kuehn may be correct on the merits of his substantive challenges.”
Pillen and Hilgers have both hinted at questions regarding marijuana under federal law.
The ballot sponsors said Kuehn is in an “odd position” of being a Nebraska taxpayer suing “not to vindicate the rights of his fellow taxpayers but to secure the rights of the federal government.”
“Unlike most taxpayer lawsuits, success for Kuehn would not save taxpayers money — to the contrary, Kuehn’s success would decrease tax revenue, thereby increasing the per capita tax burden and harming taxpayers,” the brief states. “The federal government, not a resident taxpayer, is the interested party.”
No taxpayer dollars, yet
Another challenge in taking up Kuehn’s case now, Grams added, is pending legislation being considered by the Nebraska Legislature, which could render “moot” the statutes that Kuehn is challenging. He said Kuehn’s arguments against the commissioners “are aiming at a moving target.”
The main proposal, Legislative Bill 677 from State Sen. Ben Hansen of Blair, has not yet advanced from the General Affairs Committee. A vote on whether to advance the bill could come this week.
The commission also has no public dollars set aside to carry out its duties — no state funds, no donations, no fee revenue, no office, no address, no contact information, no equipment, no staff.
“No ability to carry out any duties set forth in the NMRCA [Nebraska Medical Cannabis Regulation Act],” the brief continues.
Up until Friday, with a “complete lack of resources,” the commissioners have:
Executed no contracts.Held no meetings.Advertised for no meetings.Carried on no deliberations.Held no votes.Issued no regulations.Commenced no work on regulations.Sought no office or meeting space.Sought to hire no employees.Began no work on the criteria for licensure.Retained no law enforcement resources.
As approved by voters, commissioners must craft regulations for licensure by July 1, which is three months away. Licensing is supposed to begin by Oct. 1. Under a pending bill, those deadlines could be extended and the commission could receive appropriations.
Members of the new Medical Cannabis Commission said the argument that the potential use of future taxpayer dollars is enough to move the case forward is “bunkum,” or nonsense.
The ballot sponsors’ attorneys said allowing the case to proceed could implicate the “incidental expenditures” of any state law and could allow any challenge to any law. They said allowing Kuehn to move forward on “taxpayer standing” grounds “would effectively swallow the rule — contrary to the Supreme Court’s instruction to apply the exception narrowly.”
If Kuehn is seeking to prevent someone from appropriating funds, the commissioners said, then Kuehn “has sued the wrong parties” and instead “must address his claim to the Legislature.”
Regulations in limbo
There’s also a technical fight for the commissioners, with Grams arguing that none of the commissioners was properly served as part of the case.
Kuehn’s mostly out-of-state attorneys sent “legal threat” letters on Jan. 9, one day before the commissioners were added to the lawsuit, telling them not to enforce the laws.
However, the letter was sent to email addresses that Kuehn “guessed at” but that the commissioners don’t have access to, was mailed to the Nebraska Liquor Control Commission where the commissioners have dual roles at (but is separate) and was left with a woman in the AG’s Office, but not with the commissioners.
None of the commissioners had seen the legal threat telling the commissioners not to act until “long after” Jan. 10, the brief states, and Kuehn didn’t give “even a day to consider his demand, if he gave them a chance to review it at all.”
A pledged future challenge
In addition to Pillen, the AG’s Office is also defending Secretary of State Bob Evnen, CEO Steve Corsi of the Nebraska Department of Health and Human Services, State Treasurer Tom Briese and Tax Commissioner Jim Kamm.
The AG’s Office said Evnen can’t be sued in a duplicative case on the topic. Kuehn continues to appeal his defeated lawsuit against Evnen and the campaign from last September.
Kuehn included Corsi arguing that DHHS would need to discipline doctors who recommend cannabis to patients. While DHHS has not issued guidance to physicians as part of the laws, the AG’s Office said recommending cannabis would open up Nebraska doctors to discipline.
The lawsuit argues that Briese and Kamm could violate money laundering laws if they collect tax revenue from medical marijuana sales, but all three attorney groups said courts have long upheld the collection of such taxes, including on illegal activity.
Rather than Kuehn, the AG’s Office argued, there is another person who would be better suited to challenge the laws: Nebraska Attorney General Mike Hilgers.
Acting Deputy Solicitor General Zachary Pohlman, joining Hilgers in defending the state officials, appeared before the Legislature earlier this month.
Pohlman then and again in the latest brief pledged — or in the view of some lawmakers, threatened — to challenge the constitutionality of the laws if the commission licensed medical cannabis establishments. The brief said that a lawsuit was but “one example” of future action.
“Expanding taxpayer standing to allow a private plaintiff to sue public officials to invalidate statutes that do not harm the plaintiff when the attorney general has pledged to do so himself not only stretches the judiciary’s jurisdiction beyond its proper scope,” the brief states. “It also tramples upon the authority of Nebraska’s chief law enforcement officer.”
Nebraska Examiner is part of States Newsroom, a nonprofit news network supported by grants and a coalition of donors as a 501c(3) public charity. Nebraska Examiner maintains editorial independence. Contact Editor Aaron Sanderford for questions: info@nebraskaexaminer.com.
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The new commissioners set to regulate medical cannabis in Nebraska, as well as the ballot sponsors of the successful effort to legalize it in 2024, blasted an ongoing lawsuit against them as “meritless” and seeking to create a “false conflict.” Read More
