[00:00:00] Speaker 03:
All right.

[00:00:00] Speaker 03:
Our final case this morning is United States versus Stacey 25-6029.

[00:00:06] Speaker 05:
Good afternoon, Your Honors.

[00:00:07] Speaker 05:
My name is Michael Pabian, and along with Robert Goldstein, who sits at council table, I represent the appellant Matthew Stacey.

[00:00:14] Speaker 05:
Before I begin, I'd like to reserve two minutes of my time for rebuttal.

[00:00:18] Speaker 05:
May it please the court.

[00:00:19] Speaker 05:
Matthew Stacey is an attorney who stands charged as a prolific drug dealer, facing a statutory sentencing range if convicted

[00:00:27] Speaker 05:
of 10 years to life in prison.

[00:00:30] Speaker 05:
Stacy did not grow or traffic marijuana.

[00:00:33] Speaker 05:
He did not even invest or participate in the marijuana industry.

[00:00:37] Speaker 05:
Rather, he was an attorney for entities applying for licensure to participate in Oklahoma's lawful market for medicinal marijuana.

[00:00:47] Speaker 05:
Congress has prohibited federal prosecution in these circumstances.

[00:00:52] Speaker 05:
Dating back to December 2014, it has

[00:00:55] Speaker 05:
in each and every appropriations act prohibited DOJ from using funds to prevent states that have legalized medical marijuana from implementing their own laws that authorize the use, distribution, possession, or cultivation of medical marijuana.

[00:01:12] Speaker 04:
Did Mr. Stacey have to substantially comply with Oklahoma law to take advantage of that?

[00:01:17] Speaker 05:
Your Honor, there is a dispute about the applicable standard when it comes to it.

[00:01:21] Speaker 04:
Understood, but at the very least substantial, if not strict.

[00:01:25] Speaker 05:
Your Honor, our position is that what Mr. Stacey needed to prove below is that a reasonable person in his circumstances would have believed that he was profiling with Oklahoma law.

[00:01:35] Speaker 04:
Excuse me.

[00:01:36] Speaker 04:
Let's, for purposes of argument, assume that that's not the standard, that it's substantial or strict.

[00:01:43] Speaker 04:
Then how do you get past that when you have Oklahoma charging him, what, 34 offenses?

[00:01:49] Speaker 04:
Obviously, Oklahoma doesn't think that he's substantially complied or strictly implied.

[00:01:54] Speaker 05:
Yes, Your Honor.

[00:01:55] Speaker 05:
It's our alternative position that he did substantially or strictly comply with Oklahoma law.

[00:02:02] Speaker 05:
And we understand that the state of Oklahoma has brought charges against Mr. Stacey.

[00:02:06] Speaker 05:
But that state prosecutorial decision is, of course, not binding on this federal court whatsoever regarding his compliance or lack of compliance.

[00:02:15] Speaker 04:
OK.

[00:02:15] Speaker 04:
We're talking preliminary injunction, right?

[00:02:17] Speaker 05:
Yes, Your Honor.

[00:02:18] Speaker 05:
Unlikelihood of success.

[00:02:20] Speaker 05:
Well, Your Honor, it's not technically a preliminary injunction.

[00:02:23] Speaker 05:
It's an injunction to do the appropriations right.

[00:02:26] Speaker 04:
I just said that out of memory.

[00:02:29] Speaker 04:
But it's an injunction, right?

[00:02:31] Speaker 04:
It is an injunction that we're seeking.

[00:02:32] Speaker 04:
And the likelihood of succeeding on the merits matters, right?

[00:02:38] Speaker 05:
Your Honor, in this context, courts have not

[00:02:41] Speaker 05:
have not weighed the likelihood of succeeding on the merits, but have instead just delved directly into the issue of whether the defendant has proven compliance with state law under the applicable standard.

[00:02:53] Speaker 05:
And we contend that Stacey has under any standard.

[00:02:56] Speaker 04:
Well, the Federal District Court could reasonably consider that the Oklahoma authorities filing 34 counts against Mr. Stacey that, at least in their judgment,

[00:03:09] Speaker 04:
he had not substantially complied with Oklahoma law.

[00:03:12] Speaker 05:
In the state prosecutor's judgment, perhaps, but this is an issue of law that is made relevant to the federal charges that issue here by Congress, right?

[00:03:23] Speaker 05:
Congress is the one that chose to incorporate state law on this issue.

[00:03:28] Speaker 03:
If we peek at state law, I mean, you're asking this court to authoritatively interpret Oklahoma law.

[00:03:39] Speaker 03:
And if I understand Judge Phillips' question, Oklahoma prosecutors, at least for now, think that he's committed 44 infractions of state law.

[00:03:50] Speaker 03:
Are we to second-guess that, or do we wait until that case is completed?

[00:03:55] Speaker 03:
Do we ask the Oklahoma Supreme Court for guidance?

[00:03:59] Speaker 03:
I mean, that puts us in a really odd position, doesn't it?

[00:04:02] Speaker 05:
It may be in opposition, and again, I think that's a result of the way Congress has structured this appropriations rider.

[00:04:08] Speaker 05:
But respectfully, second-guessing prosecutors is part of what courts do, right?

[00:04:13] Speaker 05:
In particular, federal courts.

[00:04:15] Speaker 05:
Right now, these are charges.

[00:04:17] Speaker 05:
They're as yet unproven allegations that have been brought by the state prosecutorial authority.

[00:04:23] Speaker 05:
There's certainly no final judgment against Mr. Stacey on any of those charges at all.

[00:04:29] Speaker 04:
But there are a lot of facts that are not disputed, like the two-track on the corporate structure.

[00:04:35] Speaker 04:
You're not contesting that that's not so, are you?

[00:04:38] Speaker 05:
No, Your Honor.

[00:04:39] Speaker 05:
We don't contest that Stacey Legal Group adopted this two-entity structure.

[00:04:44] Speaker 04:
And thereby, it's not Oklahoma citizens 75%.

[00:04:48] Speaker 04:
It's not just a closed door and there's an indictment behind it and we can't see what's really going on.

[00:04:57] Speaker 04:
There are a lot of facts that are undisputed.

[00:04:59] Speaker 05:
Well, there are some undisputed facts, Your Honor, but our contention with respect to Count 1 is that this two-entity structure utilized by Stacey Legal Group did not violate any state law.

[00:05:09] Speaker 05:
In fact, it complied with Oklahoma law.

[00:05:13] Speaker 05:
At the relevant time, applying entities simply had to show all members, managers, and board members were Oklahoma residents, or that the percentage ownership of any non-Oklahoma residents was 25% or less.

[00:05:26] Speaker 05:
Now it's important that the government does not dispute here that the applying entities, which were the licensing companies under this two entity structure, were 75% owned by the local resident.

[00:05:38] Speaker 05:
Neither the government nor the district court has cited any statute or regulation requiring disclosure of other entities quote unquote involved in or quote unquote responsible for the grow.

[00:05:50] Speaker 05:
In fact, after the events at issue, the Oklahoma statute was amended in November 2021 to expressly require disclosure of all ownership interests in the commercial grower operation.

[00:06:03] Speaker 05:
The government argument that this was already required prior to the amendment would render the amendment entirely superfluous

[00:06:11] Speaker 05:
contrary to a long-standing canon of statutory construction.

[00:06:15] Speaker 05:
Now in response, the government relies on Oklahoma case law about amendments where the prior meaning of a statute was subject to, quote, serious doubt.

[00:06:24] Speaker 05:
But the existence of serious doubt precludes the court from adopting the government interpretation in this criminal context.

[00:06:32] Speaker 05:
Alternatively, the government's implied position that the meaning of the Oklahoma statute at issue was subject to serious doubt during the relevant time period supports Stacey's contention that he substantially complied with state law.

[00:06:48] Speaker 05:
At bottom, Stacey submitted truthful applications.

[00:06:52] Speaker 05:
His failure to volunteer information that was not requested or required did not violate any state law.

[00:07:00] Speaker 05:
Now, unless Your Honors have any further questions on that topic, I'd like to address count two, which is a separately charged count that we submit the courthouse to deal with separately here.

[00:07:09] Speaker 05:
In that count, Stacey stands charged with maintaining a premises for purposes of drug trafficking.

[00:07:15] Speaker 05:
Stacey rented land in Blanchard to a group of tenants.

[00:07:19] Speaker 05:
He told them four times unambiguously and in a recorded conversation that they could not grow marijuana prior to obtaining OBN registration.

[00:07:29] Speaker 05:
The government fails to make any argument in this briefing that the recorded call was not between Stacey and his tenants or that it did not occur in the summer of 2021.

[00:07:40] Speaker 05:
That is because the call facially establishes those facts in combination with the lease that was introduced as a hearing exhibit.

[00:07:47] Speaker 05:
Now the district court nonetheless refused to enjoin that count because Stacey rented his property with knowledge that the tenants wanted to grow marijuana.

[00:07:55] Speaker 05:
The tenants subsequently operated a marijuana farm on the property.

[00:07:59] Speaker 05:
and the tenants were selling marijuana without the required licenses.

[00:08:03] Speaker 05:
But respectfully, that was simply not sufficient to establish a violation of law by Stacey, especially in light of the uncontradicted evidence that Stacey told the tenants they were not permitted to grow.

[00:08:16] Speaker 05:
Permitting prosecution to move forward under these circumstances, Your Honors, squarely implicates the congressional concern underlying the Appropriations Act.

[00:08:25] Speaker 05:
It would expose an almost limitless category of otherwise lawful service providers to potential federal prosecution under the Controlled Substances Act for merely servicing marijuana businesses that may fail to comply with Oklahoma statutes.

[00:08:40] Speaker 03:
Is there anything that gives us a better

[00:08:45] Speaker 03:
Understanding of the purpose of the rider you know the language in the rider seems directed at states There were the federal government challenging state operations and not directly you know individuals like like Mr.. Stacey's or anything that will illuminate what the scope of the rider was intended to be and

[00:09:05] Speaker 05:
I think there is, Your Honor.

[00:09:06] Speaker 05:
Every federal court to address the issue, no fewer than ten judges, has found that the Appropriations Act Rider prohibits federal prosecution of individuals who comply with state law.

[00:09:17] Speaker 03:
And in fact... I know that, but what did they base that determination on?

[00:09:20] Speaker 03:
Well, I think they based that, Your Honor, on the... Is it a textual analysis or is there something from the legislative context that...

[00:09:28] Speaker 03:
would give us some additional clues.

[00:09:30] Speaker 05:
Your Honor, I think it's a straightforward reading of the text.

[00:09:33] Speaker 05:
You know, it's a straightforward proposition in our view that it would prevent states from implementing their own laws if a participant in a state's lawful market for medical marijuana was subject to federal prosecution at the sole discretion of the federal prosecutor.

[00:09:48] Speaker 05:
And I think that's why you have this unanimous consensus of federal courts on the issue.

[00:09:53] Speaker 05:
And frankly, this court, albeit in dicta, has characterized the rider in exactly those same terms.

[00:10:01] Speaker 05:
And if there were any doubt regarding that construction, Congress has clarified that by repeatedly reenacting materially identical language for more than eight years since Macintosh.

[00:10:12] Speaker 05:
The government acknowledges in its briefing that this court must defer to the unanimous construction of the rider unless it is, quote, plainly wrong.

[00:10:22] Speaker 05:
The government has not even come close to such a show, and respectfully, Your Honors, unless you have any further questions on that issue, I'd now like to briefly address the issue of growth prior to registration.

[00:10:33] Speaker 05:
The government does not meaningfully engage with the defense argument that OBN's utter failure to enforce the purported prohibition on growth prior to registration renders Stacey's conduct de facto compliant with state law or alternatively a mere technical violation that cannot defeat his request for an injunction.

[00:10:53] Speaker 05:
OBN consistently declined to take any adverse action against grows that were openly operating prior to OBM registration.

[00:11:02] Speaker 05:
It even told one grower in Stacey's presence that growth prior to registration was quote unquote fine.

[00:11:09] Speaker 05:
Independently, the district court never found that Stacey advised clients growth prior to registration was legal.

[00:11:15] Speaker 05:
To the contrary, Stacey expressly told clients there was an administrative penalty for such conduct, necessarily implying that it was not lawful.

[00:11:24] Speaker 05:
This was fully consistent with OBN's treatment of the issue.

[00:11:28] Speaker 05:
To the extent the court believes a ruling on the fact-bound issue of whether Stacey advised clients it was lawful to grow prior to registration is necessary, it should remand for the district court to consider that issue in the first instance.

[00:11:41] Speaker 05:
Independently, the government in its briefing says nothing at all about the OMMPPA's provision that an applicant need only submit, not obtain, OBN registration to be entitled to grow an unlimited amount of marijuana.

[00:11:56] Speaker 05:
The older statute generally prohibiting manufacture and distribution of drugs cannot override the more recent and specific OMMPPA on this point under the authorities we've cited in our briefing.

[00:12:09] Speaker 05:
Additionally, the operating company was an agent of the licensing company, such that registration was not required.

[00:12:16] Speaker 05:
The government argument to the contrary is based solely on contractual language, contrary to Oklahoma case law.

[00:12:23] Speaker 05:
And Your Honors, just before I close, turning back to the issue of the state prosecutorial decision, that is, again, not in any way binding on this court.

[00:12:33] Speaker 05:
The case law establishes that states may be prevented from implementing their own medical marijuana laws, where the risk of federal prosecution creates fewer market entrants.

[00:12:43] Speaker 05:
and that's the First Circuit's decision in Bilodeau, that the mere fact that the state prosecutorial authority has brought a charge is right now proof of nothing.

[00:12:52] Speaker 05:
It's only a charge.

[00:12:54] Speaker 05:
And on that point, I'd cite, Your Honors, to the McIntosh decision, where the court specifically acknowledged that the federal case arose out of the execution of a Washington state search warrant related to an investigation into violations of Washington's Controlled Substances Act.

[00:13:11] Speaker 05:
That did not prevent the Ninth Circuit from going on to hold that a hearing was required under the appropriations rider.

[00:13:18] Speaker 05:
Lastly, I'd just note that the findings of the state courts on this issue were expressly preliminary and subject to a presumption that the state will strengthen its evidence at trial.

[00:13:28] Speaker 05:
No such presumption is applicable here, unless Your Honors have further questions.

[00:13:33] Speaker 03:
Yeah, for this appeal, are you relying primarily on 1292, the appeal from

[00:13:39] Speaker 03:
Do you want us to make a finding under the collateral order doctrine that you meet those elements?

[00:13:47] Speaker 03:
What's your primary focus here?

[00:13:50] Speaker 05:
Your Honor, we believe that jurisdiction exists under both provisions.

[00:13:54] Speaker 05:
If Your Honor is asking what I believe the simpler approach is, I would say it's under 1292A1.

[00:14:01] Speaker 05:
The government expressly argued to the district court below, and I quote, this is the very situation for which Congress enacted Section 1292A1.

[00:14:11] Speaker 05:
And the statutory language clearly applies here.

[00:14:14] Speaker 03:
They have changed their mind on appeal.

[00:14:16] Speaker 05:
They have changed their mind on appeal, Your Honor, and this Court, of course... We do have to make a jurisdictional determination on our own.

[00:14:22] Speaker 05:
Of course, Your Honor, but I don't think that the government concession below is, as it advocates, irrelevant.

[00:14:28] Speaker 05:
I think it's a strong indication that this prosecutorial team, when looking at the issue in district court, determined that 1292A, one, did apply.

[00:14:37] Speaker 05:
And in fact, the statute on its face applies to, quote, interlocutory orders of the district courts refusing injunctions.

[00:14:44] Speaker 05:
That's precisely what this is.

[00:14:46] Speaker 03:
Does that apply to a criminal case or is that?

[00:14:50] Speaker 03:
They argue it's primarily for civil actions.

[00:14:52] Speaker 03:
Does it apply in a criminal case?

[00:14:54] Speaker 05:
Your Honor, we contend that it does.

[00:14:56] Speaker 05:
The statute on its face, it reflects no limitation to civil cases.

[00:15:00] Speaker 05:
There's binding 10th Circuit precedent in the United States v. McVeigh, applying 1292A1 to criminal cases.

[00:15:07] Speaker 05:
Your Honor, I see that I'm out of time.

[00:15:08] Speaker 05:
May I just finish the thought on this issue?

[00:15:11] Speaker 05:
You may.

[00:15:11] Speaker 05:
The government case law, there's also a unanimous consensus of persuasive authority supporting jurisdiction under 1292A1.

[00:15:19] Speaker 05:
That's McIntosh and Bilodeau, and the government's asking this court to create a circuit split.

[00:15:23] Speaker 05:
And finally, the government argument on this point is based on case law that was abrogated decades ago in the Supreme Court's Gulf Stream decision.

[00:15:31] Speaker 05:
Unless Your Honors have any further questions, I'll rest.

[00:15:34] Speaker 03:
Thank you, Counsel.

[00:15:58] Speaker 02:
Afternoon.

[00:15:59] Speaker 02:
May it please the court.

[00:16:01] Speaker 02:
My name is Nick Coffey.

[00:16:02] Speaker 02:
I'm with me as Stephen Krieger at the council table.

[00:16:05] Speaker 02:
We represent the United States.

[00:16:08] Speaker 02:
Despite the state of Oklahoma having declared Mr. Stacey's ownership scheme, business scheme, illegal and having elected to prosecute him,

[00:16:21] Speaker 02:
Mr. Stacey somehow argues that the federal charges that he faces here based on the same conduct prevent that very state from implementing its medical marijuana regime.

[00:16:37] Speaker 02:
The district court's finding below that Mr. Stacey violated several state statutes was absolutely correct.

[00:16:44] Speaker 02:
It was not an abuse of discretion.

[00:16:49] Speaker 02:
That said, and to go to Your Honor Judge Temkovich's question at the end, neither 1292 nor 1291 confer jurisdiction on this case.

[00:17:00] Speaker 02:
1292 does not apply to criminal cases.

[00:17:05] Speaker 03:
Is there a case that says that?

[00:17:07] Speaker 02:
There is.

[00:17:08] Speaker 02:
The Second Circuit in Miller has noted, citing the DiBella decision, that 1292 does not apply.

[00:17:18] Speaker 02:
in the criminal context.

[00:17:19] Speaker 02:
We cite the Fourth Circuit decision in research warrant in our brief as well for that position.

[00:17:27] Speaker 02:
The Fourth Circuit also relied on DiBella.

[00:17:29] Speaker 02:
And that goes to the characterization from Mr. Stacey that this would somehow be creating a circuit, but I don't think is accurate given what the Second Circuit and the Fourth Circuit have said about 1292.

[00:17:44] Speaker 00:
He cites McVeigh.

[00:17:46] Speaker 00:
What about that?

[00:17:48] Speaker 02:
So to use this court's terminology, how it characterized McVeigh, this court characterized it as a curious procedural posture.

[00:17:56] Speaker 02:
Yes, of course, it was in the criminal context.

[00:18:00] Speaker 02:
I guess my report to that would be, since McVeigh, when this court has heard modifications for judgments in the criminal context, it's treated them under

[00:18:16] Speaker 02:
1291, just the collateral order doctrine, I guess the final judgment rule, reasoning that the orders have sufficient finality to meet 1291's prerequisites.

[00:18:27] Speaker 01:
So I think the fact that... This issue wasn't raised in those cases.

[00:18:30] Speaker 01:
I mean, you've not disavowed McVeigh or... I agree, Your Honor.

[00:18:38] Speaker 01:
This Court has not disavowed... So it does provide some authority, doesn't it?

[00:18:41] Speaker 02:
It does.

[00:18:42] Speaker 02:
It does.

[00:18:42] Speaker 02:
But I do think the fact the way the court has treated this similar scenario since McVeigh at least suggests that perhaps McVeigh doesn't have a ton of precedential value.

[00:18:52] Speaker 02:
I'd also point out, though, that the situation in McVeigh was an injunction dealing with the dissemination of information between the federal prosecutors and the state prosecutors.

[00:19:03] Speaker 02:
It certainly does not, I guess, give precedent for the idea that a criminal defendant can

[00:19:10] Speaker 02:
wholesale and join a criminal prosecution.

[00:19:14] Speaker 02:
And really the problem with 1292, and this is, you know, Mr. Stacey does not want to focus on this, but Gulf Stream is very clear that an order from a district court that pertains only to the progress or conduct of litigation before the court is not an injunction for purposes of 1292.

[00:19:36] Speaker 02:
And this is exactly what

[00:19:39] Speaker 02:
this was below from the district court.

[00:19:43] Speaker 02:
It was entirely in order pertaining to whether the case could go forward.

[00:19:47] Speaker 02:
It had nothing to do with the sale of assets.

[00:19:49] Speaker 02:
It had nothing to do with disseminating information.

[00:19:52] Speaker 02:
So at least under Gulfstream, I don't think Mr. Stacey can get around that jurisdictional problem.

[00:20:00] Speaker 04:
Just centering on McVeigh for a moment, because that's an important case.

[00:20:04] Speaker 04:
The two cases that you refer to are both supervised release cases, aren't they?

[00:20:09] Speaker 02:
The two cases, excuse me, which one?

[00:20:11] Speaker 04:
Well, you mentioned two.

[00:20:12] Speaker 04:
You said there were a couple of cases after McVeigh and suggesting that McVeigh may not be as solid as we thought.

[00:20:18] Speaker 04:
Yes, dealing with modifications to the judgment.

[00:20:21] Speaker 04:
Yes, Your Honor.

[00:20:21] Speaker 04:
And in a different situation, how helpful are those when we're talking about an entirely different matter with an injunction?

[00:20:28] Speaker 02:
I think that was my point to Judge Moritz's question is that I don't think it's helpful at all.

[00:20:33] Speaker 02:
It is

[00:20:34] Speaker 02:
McVeigh does not stand for the proposition that a defendant can use a spending provision to wholesale enjoin a criminal prosecution.

[00:20:44] Speaker 04:
I'm asking about the two cases, and I guess one's Washington and one is Begay, and I thought, and I probably misunderstood, but I thought you were saying that those somehow deluded McVeigh for our purposes, but their supervised release case instead of injunctions, and I'm

[00:21:01] Speaker 04:
if they really mattered much.

[00:21:03] Speaker 02:
I don't think they're very, to your point, Your Honor, I don't think that they are very helpful.

[00:21:06] Speaker 02:
I don't think they were helpful in this context at all.

[00:21:08] Speaker 02:
OK, thanks.

[00:21:10] Speaker 02:
It sounds like the court's not really going to focus much on the clutter order exception.

[00:21:15] Speaker 02:
I would think that Mr. Stacey does have a serious problem in establishing the third prong of the clutter order exception, where he has to establish that this is effectively unreviewable on appeal.

[00:21:26] Speaker 02:
He's got a problem doing that because

[00:21:29] Speaker 02:
This court in Griffith heard on direct appeal a challenge citing the writer.

[00:21:35] Speaker 02:
The Ninth Circuit's heard challenges citing the writer on direct appeal several times.

[00:21:41] Speaker 02:
The Sixth Circuit in

[00:21:43] Speaker 02:
And so, and even what this court said in the Sandusky decision, dealing with collateral relief and the issue of the BOP spending funds in order, whether that would violate the writer, particularly with regards to executing a sentence.

[00:22:01] Speaker 02:
I think this court has acknowledged that there is some review available on appeal, which again, then goes back to what now Justice Gorsuch has pointed in Wampler.

[00:22:11] Speaker 02:
that the question is not whether the remedy is perfect.

[00:22:15] Speaker 02:
It's just whether there is some meaningful review available on appeal, and I definitely think that that's met here.

[00:22:22] Speaker 03:
I gather from your supplemental briefs that you don't think there's a mootness issue with the new reconciliation bill?

[00:22:30] Speaker 02:
Your Honor, I don't.

[00:22:32] Speaker 02:
I think it's clear that no language in the act would prohibit the money in the

[00:22:39] Speaker 02:
excuse me, no language in the writer would prohibit the money from the reconciliation bill being used for the prosecution.

[00:22:45] Speaker 02:
But that said, it doesn't appear, I mean, the money has not been allotted yet from the reconciliation bill.

[00:22:53] Speaker 02:
We learned this morning at least that it was unlikely that it would be authorized, but there haven't been a final decision either way.

[00:23:00] Speaker 02:
So I don't think the question of the effect of the reconciliation bill can moot this appeal, if you will.

[00:23:10] Speaker 02:
Going to the standard, though, I think that I agree with your honor, Judge Phillips, that there is no authority cited for this idea that a reasonable understanding of the law, no circuit has applied that.

[00:23:26] Speaker 02:
And I think really when you look at what Mr. Stacey's arguing, he's essentially arguing he can just ignore even administrative violations of the law.

[00:23:35] Speaker 02:
But even under Bilodeau and even under McIntosh, both of the Ninth Circuit and the Fourth Circuit discuss

[00:23:45] Speaker 02:
you know, regulations and statutes interchangeably.

[00:23:48] Speaker 02:
It's clear that both of those circuits agree with the notion that regulations themselves form a part of a state's comprehensive medical marijuana regime.

[00:24:00] Speaker 02:
So the notion that somehow administrative law shouldn't simply be discarded, I don't think there's any authority in the statute.

[00:24:08] Speaker 02:
Now, even before you get to the issue of compliance, I think that Mr. Stacey had a real problem in showing

[00:24:15] Speaker 02:
how a spending provision that prevents the DOJ from spending funds that would stop, say, from implementing its medical marijuana regime.

[00:24:29] Speaker 02:
I mean, the question then, I guess, in any prosecution dealing with the rider is going to be,

[00:24:36] Speaker 02:
Who in that state is the party that implements a state's medical marijuana regime, assuming that you get past the jurisdictional questions?

[00:24:46] Speaker 02:
And here, it's very clear under Oklahoma law that Article 6 of the Oklahoma Constitution says that the executive branch is tasked with implementing, it uses that word, all mandates passed by the legislature.

[00:25:01] Speaker 02:
But crucially for our purposes,

[00:25:05] Speaker 02:
The Oklahoma Medical Marijuana Patient Protection Act, we'll just call it the Act.

[00:25:10] Speaker 02:
The Act says that it is the Oklahoma Medical Marijuana Authority that implements.

[00:25:15] Speaker 02:
Again, it uses that word, implements, the Act.

[00:25:21] Speaker 02:
And so I think it's clear, just based on the Oklahoma Constitution, the way that the Oklahoma PPA is written, that it is the state authority, the Oklahoma Medical Marijuana Authority, that implements state law.

[00:25:35] Speaker 02:
It is not Mr. Stacey, a private citizen.

[00:25:41] Speaker 03:
Now, Judge Tinkerich.

[00:25:43] Speaker 03:
The other case suggests, well, if the feds can go after individual

[00:25:48] Speaker 03:
participants in the market that that's going to have the same effect as preventing the state from implementing lawful conduct.

[00:25:57] Speaker 02:
The cases do say that.

[00:25:59] Speaker 02:
I don't think that's a fair characterization.

[00:26:02] Speaker 02:
Even in the Ninth Circuit, it's not as if no one is entering the medical marijuana industry despite the fact that the strip compliance standards have been around for a while.

[00:26:11] Speaker 02:
I mean, even under the lesser substantial compliance standard from the first sick.

[00:26:16] Speaker 02:
I point out that Bilido is quite clear.

[00:26:20] Speaker 02:
It said that surely the rider was not meant to give safe harbor.

[00:26:25] Speaker 02:
to individuals that were blatantly violating the law or that the state itself had identified as being illegal.

[00:26:35] Speaker 02:
And here, I mean, I think the characterization just moments before was that somehow this is just a Garvin County Assistant District Attorney that decided to bring this case against Mr. Stacey, identified 34 felony counts.

[00:26:46] Speaker 02:
But no, I mean, it is the Obian General Counsel and Obian Chief Agent, both of whom told Mr. Stacey that he was in violation of state law

[00:26:56] Speaker 02:
long before many of the later violations that OBN found.

[00:27:01] Speaker 02:
It is the attorney general's office itself.

[00:27:05] Speaker 02:
It is two state court judges.

[00:27:08] Speaker 02:
And one of those state court judges made this determination after hearing seven days of preliminary hearing and issuing an 86-page order.

[00:27:17] Speaker 02:
And so while I certainly don't think that, Judge Timkovich, the earlier question about whether it's binding on this court,

[00:27:25] Speaker 02:
I'm not sure I'd use the term binding, but I think it's pretty darn persuasive given... Well, there's a presumption of innocence still, and the proceedings are ongoing.

[00:27:34] Speaker 03:
It seems odd that there'd be a parallel state and federal prosecution, and certainly it seems difficult for this panel, this

[00:27:43] Speaker 03:
decide substantial compliance when the state of Oklahoma certainly has a lot of allegations, but there's been no conclusive determination that Stacy was not in compliance with state law.

[00:27:56] Speaker 02:
Well, but I think to an earlier question about, I mean, there are a lot of things that Mr. Stacy's not contesting that isn't in dispute.

[00:28:06] Speaker 02:
I mean, it's not as if it is a he said, she said, for lack of a better way to put it, they're unfounded allegations.

[00:28:12] Speaker 02:
I mean, there's no question, right, about what the business structure was.

[00:28:17] Speaker 02:
And so if he's going to admit to what his business structure was, in the attorney general's office, OBN, state court judges are all going to look at this and say, yes, it's actually illegal because you're not applying with the OBN registration requirements.

[00:28:33] Speaker 02:
You're not disclosing all ownership

[00:28:36] Speaker 02:
interests.

[00:28:37] Speaker 02:
You're not submitting information in a truthful way.

[00:28:40] Speaker 02:
I think that is fairly persuasive.

[00:28:42] Speaker 02:
I think under Mr. Stacey's argument, I mean, what's the idea that there's not a determination on the legality of his conduct with state law until the Oklahoma Supreme Court weighs in on every single provision?

[00:28:56] Speaker 02:
I mean, I don't think that is reasonable in practice.

[00:29:00] Speaker 02:
And one thing I would point out on the statutes that the district court and the state court judge

[00:29:06] Speaker 02:
found that he violated.

[00:29:09] Speaker 02:
There were several of them.

[00:29:11] Speaker 02:
But moments before, I think Mr. Stacey's counsel represented that nowhere did the state court ever identify how he wasn't submitting ownership interests truthfully.

[00:29:24] Speaker 02:
No, the district court did.

[00:29:27] Speaker 02:
It is in the opinion.

[00:29:29] Speaker 02:
And it cites the state provision that says that an owner

[00:29:35] Speaker 02:
for purposes of the Oklahoma's Medical Marijuana Act is any interest that owns a convertible interest or equity in any operation or any entity that operates

[00:29:52] Speaker 02:
manages or controls a licensed farm.

[00:29:56] Speaker 02:
And that is precisely what Mr. Stacey was not submitting to both the OBN and the OMA.

[00:30:04] Speaker 02:
And so there was that problem.

[00:30:06] Speaker 02:
He obviously is not complying with the OBN registration problem.

[00:30:12] Speaker 02:
I don't hear any argument that he actually thinks he was complying with it.

[00:30:16] Speaker 02:
I think his argument is that, well, I didn't comply with it, but they weren't really enforcing it at

[00:30:22] Speaker 02:
at the time.

[00:30:23] Speaker 02:
Again, I take this to be an entrapment by a stopple defense.

[00:30:26] Speaker 02:
I'm not aware of any court that has held that that is relevant in the context of the writer.

[00:30:35] Speaker 02:
I think Trevino in the Sixth Circuit said it best when dealing with some of the similar arguments, when it noted that the Controlled Substances Act is plain to, quote, lawyer and layman

[00:30:47] Speaker 02:
And the provisions here were clear.

[00:30:53] Speaker 02:
The provisions, I would argue, in Oklahoma statute were clear.

[00:30:56] Speaker 02:
And these provisions he directly disregarded.

[00:31:00] Speaker 03:
Thank you, Council.

[00:31:01] Speaker 03:
Councilor Hughes, I think we ran out of time for the appellant.

[00:31:05] Speaker 03:
I could give you 60 seconds if you'd like it.

[00:31:07] Speaker 05:
Yes, Your Honor, that would be accurate.

[00:31:13] Speaker 05:
May it please the Court.

[00:31:14] Speaker 05:
The government repeatedly asked this court to disregard authority, both on the jurisdictional issue, where it does indeed advocate a circuit split with the only two courts of appeals to have squarely addressed this question under 1292A1, and also with respect to McVeigh, which exclusively relied on that provision and has never been questioned by this court or any other.

[00:31:34] Speaker 05:
The government also asked this court to disregard the consensus of 10 federal judges in their construction of the rider.

[00:31:41] Speaker 05:
With regard to the point about an alleged failure to disclose the owners of a company operating the marijuana grower, the owners of the operating entity were disclosed as set out in our briefs because they were 25% owners of the licensing company.

[00:31:59] Speaker 05:
OBN had their contact information and was able to contact them if necessary.

[00:32:03] Speaker 05:
With respect to the requirement, the alleged prohibition on growth prior to registration,

[00:32:09] Speaker 05:
We've cited three independent bases in our briefs for why Stacey did not violate any statute with respect to that, unless there are any questions.

[00:32:18] Speaker 03:
What is the status of the state prosecution?

[00:32:23] Speaker 05:
My understanding, and I'm not involved in the state prosecution, but my understanding is that that prosecution has been stayed pending the federal case.

[00:32:30] Speaker 03:
OK.

[00:32:31] Speaker 03:
Thank you, counsel.

[00:32:32] Speaker 03:
Your excuse, and the case is submitted.