Tag: Whiskey

George Washington’s Whisky Distillery, 21st Century Edition

You might think the laws of King Edward I of England (1239-1307), George Washington’s whisky distillery, and an 1807 “Treatise on the Law of Idiocy and Lunacy” have little to do with the federal criminal code of 2024. And you might think they have even less to do with contemporary federal regulation of cannabis. But the Supreme Court’s test for the Second Amendment right to keep and bear arms requires litigants and courts to become historians scouring the archives. So, the U.S. Court of Appeals for the Fifth Circuit recently held a federal criminal statute barring unlawful users of controlled substances from possessing firearms and ammunition, 18 U.S.C. § 922(g)(3), was unconstitutional as applied. The government’s prosecution of a “non-violent, marijuana smoking gunowner” was dismissed (United States v. Connelly, — F.4th — (5th Cir. 2024).

Those intrigued by the ins and outs of historical firearms regulations, and the back and forth between the Supreme Court and Fifth Circuit on that issue, can study the court’s opinion. The facts, however, were straightforward and seemingly commonplace. The defendant “would at times smoke marijuana as a sleep aid and for anxiety.” So do countless Americans, in full compliance with applicable state laws allowing just such uses. The defendant owned a firearm. Again, nothing remarkable there. Yet federal officials charged the defendant with violating criminal law. The Fifth Circuit put an end to the prosecution, as it did in a similar case last year, United States v. Daniels, 77 F.4th 337 (5th Cir. 2023), vacated, 144 S. Ct. 2707 (2024) (for reconsideration in the light of United States v. Rahimi, 144 S. Ct. 1889 (2024)), which we discussed last year here.

Three takeaways stand out for the industry:

1. The federal classification of cannabis does not trump constitutional rights.

Noticeably absent from the Fifth Circuit’s reasoning was any deference to the federal scheduling of cannabis as a controlled substance. That may be due to the unique historical test applicable to the Second Amendment. Still, the opinion shows the Constitution has no cannabis exception. Judicial statements like “[m]arijuana user or not,” the defendant “is a member of our political community and thus” has constitutional rights are a welcome change in emphasis. When facing an enforcement challenge, industry participants should evaluate constitutional challenges they may have. The Constitution may just win the day.

2. Analogies to regulation of alcohol carried more weight than analogies to other regulatory schemes.

The government tried to analogize cannabis users to several regulatory schemes, including a tenuous (at best) analogy to mental health. Nothing doing there. The Fifth Circuit instead analogized to alcohol regulation, concluding that both alcohol and cannabis can cause a temporary, potentially “impairing influence.” So, just as the federal government does not charge firearms owners with violating 18 U.S.C. § 922(g)(3) because they occasionally consume alcohol, the government could not prosecute the defendant because she occasionally consumed cannabis.

This decision suggests that future enforcement targets might find success in analogizing cannabis to alcohol. Subject to appropriate regulatory control and responsible personal use, alcohol consumption is an accepted part of American society. Indeed, as the Fifth Circuit took pains to note, American acceptance of alcohol consumption dates to the colonial period. Just ask George Washington. And it’s still going strong today. Manufacturers and distributors of alcoholic beverages can advertise their products widely — watch the Super Bowl — and they benefit from access to the banking system, stock market, and other financial opportunities closed to the cannabis industry. Situating the cannabis industry in that established history may help show that cannabis should follow a similar pattern. And it may call into question differential regulatory treatment of the two industries.

3. Supposed “dangerousness” cannot justify treating cannabis differently.

The Fifth Circuit declined the government’s invitations to analogize cannabis users to “dangerous” persons, like political traitors, whom the Constitution might permit disarming. That is, of course, a marked shift from the historical justification for the federal ban on cannabis — a supposed propensity to “incite[] violent crimes,” that modern medicine shows is false.

Rejecting the supposed “dangerousness” of occasional cannabis users furthers questions about whether prohibitions on cannabis serve a legitimate purpose. Recall Justice Clarence Thomas’s 2021 statement questioning the federal approach as a contradictory and unstable “half-in, half-out regime” that “strains basic principles of federalism and conceals traps for the unwary” (Standing Akimbo, LLC v. United States, 594 U.S. 2236 (2021) (Thomas, J., statement respecting denial of certiorari)). As more courts reject federal attempts to treat cannabis users differently from other citizens, future litigants may consider asserting constitutional due process or equal protection challenges to regulations. After all, as Connelly shows, courts stand ready to vindicate constitutional rights, “[m]arijunana user or not.”

© 2024 Bradley Arant Boult Cummings LLP
For more on Cannabis Regulations, visit the NLR Biotech Food Drug section

On National Bourbon Day, Maker’s Mark Toasts to Consumer Protection Reform

June 14th is National Bourbon Day, so it’s a nice time to highlight the resolve of the recent class action lawsuit filed against Maker’s Mark, one of America’s favorite whiskeys, by two consumers who said the company falsely advertised its product as “handmade.”

The suit seized on the word “handmade” used in Maker’s Mark advertising, claiming consumers had been misled. U.S. District Judge Robert Hinkle ruled on behalf of Maker’s Mark, stating that “no reasonable person would understand ‘handmade’ in this context to mean literally made by hand.”

This case is representative of an increasingly common national trend. Similar suits have recently been filed against Tito’s Handmade Vodka and Jim Beam Bourbon.

Consumer advocates say that these class action lawsuits are the most effective way to hold companies accountable for what they allege to be misleading marketing. But real-life consumers, those the litigation is supposed to protect, are often harmed as defendants’ legal costs and sometimes multimillion-dollar verdicts or settlements are passed on in the form of higher prices and fewer choices.

So all across the country, state policymakers are rethinking and reforming their respective consumer protection acts (CPAs) to their original mission of preventing and punishing truly deceptive business practices.

Most state CPAs were modeled on the Federal Trade Commission Act when they were first enacted in the 1960s and 1970s. But since then, many of these laws have come to include expansive amendments and judicial interpretations that now allow lawsuits like the one aimed at Maker’s Mark.

Emory University law professor Joanna Shepherd’s white paper, Consumer Protection Acts or Consumer Litigation Acts?, was published last year and demonstrates this devolution. It begins with the origins of the federal law a century ago when “Congress first sought to define and deter” a “new class of consumer harms” that arose as “the merchant-consumer relationship” evolved rapidly, along with new products and services, retail models, and credit-based payment systems. “Unfair and deceptive acts or practices in or affecting commerce” were prohibited by the broadly worded new law.

But to prevent litigious mischief, Congress purposely limited enforcement of the law to its newly created FTC, prohibiting private lawsuits out of fear that “a certain class of lawyers” would otherwise “arise to ply the vocation of hunting up and working of such suits,” the number of which “no man can estimate,” warned Sen. William J. Stone (D-MO) prior to the act’s 1914 passage.

Fifty years later, the states were no longer willing to leave consumer protection entirely to the federal government. Eventually all 50 states and the District of Columbia adopted their own consumer protection statutes and authorized state attorneys general to enforce them.

By the 1980s, however, many state CPAs were being expanded well beyond their original scope. No longer were these laws enforced primarily by state attorneys general seeking injunctive relief in the public interest. Now they permitted and even promoted private lawsuits seeking significant awards for sometimes theoretical damages and inflated attorney’s fees. Incredibly, some plaintiffs no longer have to prove injuries, demonstrate that they relied on allegedly deceptive representations, or even behaved reasonably in order to prevail in lawsuits.

But here’s to judges like Judge Hinkle who require plaintiffs to explain precisely how they were misled by innocuous advertising terms like “handmade.”  And here’s to those state lawmakers working to refocus their consumer protection laws in the interest of consumers who were truly misled into making a purchase and suffered an actual injury as a result.

Happy National Bourbon Day, everyone.

ARTICLE BY Sherman Joyce of American Tort Reform Association
Copyright © 2015 American Tort Reform Association