Massachusetts Court Denies Temporary Restraining Order in Adult-Use Marijuana COVID-19 Case
- For many weeks now, businesses across the country have been grappling with the notion of their essential versus non-essential status in response to state shutdown orders related to COVID-19.
- One such group of affected businesses deemed non-essential and therefore ordered to close were adult-use marijuana businesses in the Commonwealth of Massachusetts. Rather than accept Gov. Charlie Baker's determination, the adult-use marijuana businesses decided to challenge it in the case of Commcan, Inc. v. Charlie Baker.
- In the end, after considering both the general police power of the government and whether the governor's drawing of a distinction between different types of businesses under the COVID-related executive orders violated the equal protection clauses in the U.S. Constitution and the Massachusetts Declaration of Rights, the court refused to grant a temporary restraining order as to the governor's executive order because the plaintiffs had failed to establish the likelihood of success on the merits.
For many weeks now, businesses across the country have been grappling with the notion of their essential versus non-essential status. What makes it even more complex is that state shutdown orders related to COVID-19 have not been the result of a lengthy regulatory rulemaking process, or public officials holding town halls or listening sessions around their respective states. Rather, the shutdown orders have been the result of gubernatorial fiat in the form of state executive orders.
One such group of affected businesses deemed non-essential and therefore ordered to close were adult-use marijuana businesses in the Commonwealth of Massachusetts. Rather than accept the governor's determination, the adult-use marijuana businesses decided to challenge the determination in the case of Commcan, Inc. v. Charlie Baker.1 Although the Commcan case began as a dispute by several businesses and individuals who objected to the Massachusetts governor's decision as to whether adult-use marijuana businesses are "essential" to society, the case is really about the extent of state emergency powers and therefore has implications that may reach far beyond the land of Patriots, Bruins, Celtics, Red Sox and Ben Affleck movies.
Massachusetts Gov. Charlie Baker issued an executive order on March 23, 2020, mandating that all businesses and other organizations that do not provide "COVID-19 Essential Services" must "close their physical workplaces and facilities ... to workers, customers, and the public" by noon on March 24, 2020, and not reopen before noon on April 7, 2020. The duration of the order was subsequently extended to May 4, 2020. Like many states, the Massachusetts executive orders were broad and made certain distinctions as to which types of businesses around the commonwealth would be deemed essential. For example, among the businesses that were deemed to be essential during COVID-19 were "liquor stores" and "licensed medical marijuana retailers." However, no guidance from the Massachusetts Governor's Office, or his delegates, provided a rationale for the different treatment. It was because of this different classification treatment among liquor stores and medical marijuana retailers, deemed essential, versus adult-use businesses, deemed non-essential, that the latter group challenged the governor's conduct.
In this case, the plaintiffs sought a temporary restraining order against the governor. The plaintiffs did not challenge whether the governor had the authority to order that certain businesses that he does not identify as "essential" must remain closed. Rather, they claimed that the governor acted arbitrarily by allowing liquor stores and medical marijuana treatment centers to remain open but required adult-use marijuana establishments to close. From a procedural perspective, the plaintiffs sought a temporary restraining order against the governor, for which they had to prove that: 1) the plaintiffs are likely to succeed on the merits of their claims; 2) they will suffer irreparable harm if injunctive relief is denied; 3) when the possible harm to each side is considered in light of the plaintiffs' likely chance of success, the risk of irreparable harm to the plaintiffs if the injunction is denied outweighs the potential harm to the commonwealth if the injunction is granted; and 4) "the requested order promotes the public interest, or, alternatively, that the equitable relief will not adversely affect the public."2 Because the issue was disposable on the first prong, likelihood of success on the merits, the court began and ended its analysis there.
The Court's Decision
In addressing the likelihood of success on the merits, the court focused on the powers of the governor. First, the court considered the general police power of the government. Relying on Massachusetts Supreme Judicial Court and U.S. Supreme Court precedent on the ability of the government to order residents to get a smallpox vaccination or face fines and imprisonment,3 the court noted that the power of government to subject individual liberties to some restraint is permissible. Second, the court considered whether the governor's drawing of a distinction between different types of businesses under the COVID-related executive orders violated the equal protection clauses of the 14th Amendment to the U.S. Constitution and Articles 1 and 10 of the Massachusetts Declaration of Rights. The court concluded that the case at bar did not involve any claim of invidious discrimination that significantly interferes with a fundamental right or targets a suspect class. "The right to pursue one's business is not a 'fundamental right' under the equal protection clause; therefore government regulation that bars certain economic activity will survive an equal protection challenge if 'it is rationally related to the furtherance of a legitimate State interest.' "4 Under this "rational basis" standard, governmental action will be upheld if there is some conceivable rational basis for state action, but will be held unconstitutional if the conduct is arbitrary and capricious.
In considering whether governmental action satisfies the rational basis test, Massachusetts case law presents two fundamental points. First, a rational basis test inquiry will not judge or question the "wisdom or desirability" of economic regulations. In this case, Gov. Baker offered two main justifications for not exempting retail adult-use marijuana establishments from his closure orders. One is that because there are so few adult-use businesses in that sector, they have tended to attract large crowds of customers, which in a time of social distancing would pose an added health risk. The other primary reason is that, because non-medical marijuana cannot be purchased in bordering states, Massachusetts adult-use sales outlets also attract many out-of-state customers traveling into Massachusetts.5 The court concluded that these constituted rational reasons for the state action and the different treatment of adult-use marijuana businesses from other types of businesses.
The second key point under a rational basis test analysis in Massachusetts is that classifications made by the state may satisfy the requirements of equal protection "even where the lines of distinction seem imprecise or improvident and where it appears that, had the line been drawn differently, a more just outcome would have resulted."6 In other words, as the U.S. Court of Appeals for the First Circuit has noted, even if the state's goals could have been accomplished in a way that imposed less of a burden on the plaintiffs, that would not make the state's action any less constitutional.7 In Commcan, the court noted that there may have been a variety of other approaches that the governor could have taken to achieve the same social distancing and curve-flattening objectives. However, unlike strict scrutiny analysis, the availability of lesser restrictive alternatives is irrelevant under Massachusetts and federal precedent. In the end, because the plaintiffs had failed to establish the likelihood of success on the merits, the court refused to grant the temporary restraining order as to the governor's executive order.
Takeaways and Considerations
The Commcan case offers several key insights into what is likely to a key source of litigation in the coming months. Across the country, state governors are using their powers to issue broad executive orders in an attempt to help prevent the spread of COVID-19 to the most vulnerable in our society and to prevent the nation's healthcare system from becoming overwhelmed. Notwithstanding these very important and even lifesaving goals, actions of state governors have resulted in inevitable economic loss, both for businesses and the hard-working Americans that they employ.
Although the Massachusetts trial court's conclusion in the Commcan case provides a glimpse into possible future disputes, other issues are bound to arise, such as: Would another state offer greater protections for businesses, or take a different view as to the limits of executive orders or a liberty interest in pursuing one's own livelihood? How would the result have been different if the plaintiff's goal was not the injunction of one aspect of a closure order but rather some sort of regulatory takings argument? These tough issues represent the nexus between possibly competing interests of the protection of individual health and the preservation of economic livelihood. Such issues are not only being debated in courts and among legal practitioners but also on social media and at kitchen tables. As a result, counsel on both sides of the issues must be prepared to navigate choppy waters.
DISCLAIMER: Please note that the situation surrounding COVID-19 is evolving and that the subject matter discussed in these publications may change on a daily basis. Please contact your responsible Holland & Knight lawyer or the author of this alert for timely advice.
Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem. Moreover, the laws of each jurisdiction are different and are constantly changing. If you have specific questions regarding a particular fact situation, we urge you to consult competent legal counsel.
1 2020 WL 1903822 (Super. Ct., Suffolk County, April 16, 2020).
2Garcia v. Dept. of Hous. & Cmty. Dev., 480 Mass. 736, 747 (2018).
3Commonwealth v. Pear, 183 Mass. 242 (1903); Jacobson v. Massachusetts, 197 U.S. 1 (1905).
4Commcan at *6, citing Roche v. Director of Div. of Marine Fisheries, 76 Mass. App. Ct. 733, 740 (2010).
5Id. at *10.
6Murphy v. Massachusetts Turnpike Auth., 462 Mass. 701, 741 (2012).
7Starlight Sugar, Inc. v. Soto, 253 F.3d 137 (1st Cir. 2001).