With the nomination of Judge Neil Gorsuch of the United States Court of Appeals for the Tenth Circuit to the United States Supreme Court, much of the conversation in coming days and weeks will be about his views on abortion, free speech, and his stated skepticism regarding the Chevron doctrine. But his opinion in a recent tax case allows a glimpse into his views on another issue that may come before the Court – the split between the growing number of states which have legalized marijuana and the its continued illegality under federal law.
In Feinberg v. Commissioner of Internal Revenue, 808 F.3d 813 (10th Cir. 2015), Judge Gorsuch wrote an opinion denying a petition for a writ of mandamus following a discovery dispute before the United States Tax Court. The taxpayers operated a Colorado marijuana dispensary named Total Health Concepts (abbreviated, unsubtly, as Judge Gorsuch noted, as THC). Although the business was legal under Colorado state law, its operations violated federal criminal law in the form of 21 U.S.C. § 841. For federal tax purposes, a business distributing marijuana may not deduct its business expenses. 26 U.S.C. § 280E. The taxpayers petitioned the United States Tax Court and challenged the IRS’s disallowance of their business expense deductions under § 280E. The IRS served discovery, inquiring about the details of the taxpayers’ business. The taxpayers, recognizing that the distribution of marijuana violated federal criminal law, asserted their Fifth Amendment rights and refused to answer the discovery requests. The IRS moved to compel responses, and the Tax Court granted the motion to compel. Judge Gorsuch, writing for a unanimous panel, denied the petition for writ of mandamus because he determined that the taxpayers had not shown any irreparable harm would arise which could not later be addressed in a post-trial appeal.
But in considering whether the taxpayers had a Fifth Amendment claim at all, Judge Gorsuch addressed the Cole Memorandum, stating the Department of Justice’s policy that it would generally not prioritize enforcement of federal marijuana laws against marijuana businesses operating legally under state law. And here, he expressed some skepticism that DOJ policy on this point was legal:
“But in our constitutional order it’s Congress that passes the laws, Congress that saw fit to enact 21 U.S.C. § 841, and Congress that in § 841 made the distribution of marijuana a federal crime. And, frankly, it’s not clear whether informal agency memoranda guiding the exercise of prosecutorial discretion by field prosecutors may lawfully go quite so far in displacing Congress’s policy directives as these memoranda seek to do.”
Feinberg, 808 F.3d, 816.
While the court did not need to reach the legality of DOJ policy to resolve the case before it, this statement should cause interested parties to keep an eye on the confirmation process and on the jurisprudence of a Justice Gorsuch. Even if the incoming Attorney General continues current DOJ policy, it is possible that, should the issue ever reach the Supreme Court, there would be at least one vote reigning in the discretion the Attorney General has in deciding which laws to enforce, and where, in the face of conflicting federal and state laws regarding the legality and regulation of marijuana.