CHICAGO (CN) — Calling a trial court’s injunction too broad, the Seventh Circuit on Wednesday vacated an order prohibiting Indiana from enforcing a law banning the sale of smokable hemp products.
“The Farm Law authorizes the states to continue to regulate the production of hemp, and its express preemption clause places no limitations on a state’s right to prohibit the cultivation or production of industrial hemp,” wrote Chief U.S. Circuit Judge Diane Wood, a Bill Clinton appointee, in a unanimous opinion of the three-judge panel.
“Thus, the part of Act 516 prohibiting the manufacture of smokable hemp does not fall within the ambit of the Farm Law’s express preemption clause.”
But in remanding the case back to federal court, Wood wrote that the appeals court’s decision should not be construed as it finding that a properly tailored injunction was not warranted.
“It may well be that Indiana, in proscribing the possession of industrial hemp, has illegally prohibited the transportation of interstate shipments of industrial hemp,” Wood wrote. “Should that be the case, the district court may appropriately issue an injunction preventing Indiana from enforcing its law against those transporting smokable hemp through Indiana in interstate commerce.”
She added: “A state cannot evade the Farm Law’s express preemption of laws prohibiting the interstate transportation of industrial hemp by criminalizing its possession and delivery. On remand, the district court should evaluate whether Indiana’s law violates the express preemption clause of the Farm Bill while keeping in mind the extent to which the Law reserves to the states the authority to regulate the production of industrial hemp.”
Attorneys for either side did not immediately respond to requests for comment late Wednesday night.
U.S. Circuit Judges Frank Easterbrook and Michael Kanne, both Ronald Reagan appointees, joined Wood on the panel.
A lawsuit filed last year by the Midwest Hemp Council and several stores selling hemp products challenges the state’s May 2019 law banning the sale and transport of industrial hemp flowers and buds.
Senior U.S. District Judge Sarah Evans Barker in Indianapolis, a Reagan appointee, granted a preliminary injunction last September prohibiting Indiana from enforcing the portions of its law dealing with smokable hemp, which the state appealed.
During a telephone hearing before the Seventh Circuit in April, Deputy Solicitor General Kian Hudson argued that states have the right to pass laws that are more strict than federal laws.
“The Indiana General Assembly chose to prohibit the production, possession, and delivery of smokable hemp in Indiana in order to protect the efforts of law enforcement in enforcing state drug laws and to avoid setbacks like those experienced in other states. This prohibition is a valid exercise of Indiana’s traditional police powers, furthers significant public interests, and outweighs any remote chance C.Y. Wholesale has of prevailing on the merits,” the state’s brief says, referring to the lead plaintiff.
Attorney Paul Vink of the Indianapolis firm Bose McKinney & Evans, arguing for the companies challenging the law, told the court, “The new legislation is at best incomplete and at worst extremely vague as to what it purports to allow.”
He added that the law is unclear as to who needs a license, what is a licensed producer and what is a licensed handler.
The plaintiff companies also argued that the very requirement of a license hinders the transportation of hemp within the state.
Vink argued that the law also bans the sale of smokable hemp and by singling out one part of the plant, Indiana has changed the federal definition of hemp, which he said is something it is not authorized to do.
Further adding to the confusion of Barker’s order is her failure to enter a standalone document containing the injunction, as required by the Federal Rules of Civil Procedure.
The appeals panel asked both attorneys about the significance of the omission and both took the position that it was not a jurisdictional flaw. Though the Seventh Circuit agreed with that assessment, it did state in its opinion that it affected the clarity of the injunction.
Wood wrote that Barker’s order, “broadly enjoined the portions of Act 516 that criminalize much more than transportation, including the manufacture, financing, delivery, or possession of smokable hemp. It did so without any explanation of why that breadth was necessary.
“It seems to us that there is a missing step in the district court’s reasoning. The failure to enter an independent injunction requires one to infer the scope of the injunction from the opinion, and regrettably, the opinion’s conclusion is not fully supported by its analysis. The discipline of the separate-order rule would likely have averted this problem, and so we once again remind district judges not to overlook it.”