Minnesota head shops' lawsuit over fake pot ban gets tossed

ST. PAUL

A federal judge Friday tossed out a lawsuit by four Minnesota head shops that challenged the government's plan to outlaw fake marijuana, a product from which they say they've made a bunch of money.

U.S. District Judge Patrick Schiltz concluded that he lacked jurisdiction in the case because the proposed ban, announced in November by the U.S. Drug Enforcement Administration, is only a notice of intent to ban the substances, not a final order doing so.

He said it appears federal law has no provision to challenge a notice of intent, and final orders can be challenged only in courts of appeal.

"Whether I'm sympathetic to you or not, whether I agree with you or not, I don't think I have the jurisdiction," Schiltz told attorney Marc Kurzman, who represents the shops.

After the hearing, Kurzman said he disagreed with the judge's analysis of the law and contended it sets up a situation where the DEA is free to make rules with little review.

"The tyranny of the king is replaced by the tyranny of the bureaucrat," he said of the agency. He added that he plans to appeal the judge's decision to the 8th U.S. Circuit Court of Appeals.

The judge's order came at the end of an hourlong hearing in Minneapolis in which Kurzman was prepared to argue that the DEA's proposal to outlaw synthetic cannabinoids was illegal, lacked any basis in science and would financially ruin businesses that sell it. He sought a temporary restraining order barring the government from

implementing the ban.

But in briefs filed before the hearing, attorneys for the government held that a district court lacked jurisdiction, and when Schiltz called Kurzman to the lectern at the start of the hearing, the judge told the attorney he was inclined to agree with the government's position.

"It's an interesting lawsuit with interesting issues, but I wonder if you're in the right court," the judge told the lawyer.

At issue is a notice the DEA published in the Federal Register on Nov. 24, saying it intended to use its emergency powers to temporarily list some forms of synthetic cannabinoids as a drug under the Controlled Substances Act. The change would make the substances a Schedule I drug, putting them in the same illegal league as marijuana and methamphetamine.

Such notice of intent must be published 30 days before a final order can be entered. The notice was published in late November, but the DEA has not yet entered an order outlawing the substances.

Synthetic cannabinoids have been around for several years, but in the past 15 years or so, scientists have fine-tuned their chemistry to a point where some users believe the substances mimic real reefer. Companies market the product as incense, often selling it under names hinting of marijuana such as Yucatan Fire, Skunk, Red X Dawn and Pandora Potpourri.

In its notice of intent to have the fake pot listed as a Schedule I drug, the DEA said it was needed "to avoid an imminent hazard to the public safety." It also said the move "will not have a significant economic impact on a substantial number of small entities."

But four Minnesota head shops sued to stop the move, claiming that it was illegal and that there was no proof the incense had narcotic effects. The shops are Hideaway in Minneapolis, Down in the Valley in Golden Valley, Last Place on Earth in Duluth and Discontent in Moorhead.

Among other claims, they said that the DEA had inflated or manufactured claims that the substances were responsible for health problems and that a ban would severely damage their businesses.

In an affidavit, Tom Tepley president of Discontent, said that last year, fake pot accounted for $1.1 million in sales, or 40 percent of his store's business, and that he would lose more than $6,000 a day in sales if the substances were outlawed.

Some of the products are manufactured by Midwest Botanicals of Winona. Company owner Blake Dennis said in an affidavit that he'd sold more than $384,000 of the substances from July to the end of last year and that if the ban takes effect, "my company, which employed 11 people, would not survive."

Kurzman discussed those issues, but Schiltz said the arguments were best saved for an appeals court because the DEA had not yet issued a final order.

"I understand you can challenge the rule, but I've never heard of challenging the notice," the judge said. When Schiltz explained his analysis of the law -- that there's no provision for a plaintiff to challenge a notice of intent -- Kurzman said he saw nothing prohibiting such a challenge.

"Do you have to wait before your business is destroyed before challenging it?" the attorney said. He said there were competing interests between the DEA's right to protect the public from harmful substances and the rights of individuals, and "the infringement of constitutional rights is real."

But in the end, Schiltz decided that as a district court judge, he had no jurisdiction.

"If I were you," he told Kurzman, "I'd wait for that order to be issued, and on that day I'd be ready to go to the court of appeals."

Distributed by McClatchy-Tribune Information Services.