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Ruggles v. Ige

United States District Court, D. Hawaii

January 31, 2017

MICHAEL DOYLE RUGGLES, Plaintiff,
v.
GOVERNOR DAVID IGE, etc., et al., Defendants.

          ORDER GRANTING STATE DEFENDANTS' MOTION TO DISMISS COMPLAINT AND REQUEST FOR INJUNCTION; AND GRANTING LAU OLA DEFENDANTS' MOTION TO DISMISS PLAINTIFF MICHAEL DOYLE RUGGLES' COMPLAINT AND REQUEST FOR INJUNCTION, FILED ON JUNE 9, 2016

          LESLIE E. KOBAYASHI, UNITED STATES DISTRICT JUDGE

         On August 12, 2016, Defendants Governor David Ige, Virginia Pressler, M.D., and Douglas Chin, in their official and individual capacities (collectively “State Defendants”) filed their Motion to Dismiss Complaint and Request for Injunction (“State Motion”). [Dkt. no. 11.] Also on August 12, 2016, Defendants Richard Ha, Dylan Shropshire (“D. Shropshire”), and Lau Ola LLC (collectively “Lau Ola Defendants”) filed their Motion to Dismiss Plaintiff Michael Doyle Ruggles' Complaint and Request for Injunction, Filed on June 9, 2016 (“Lau Ola Motion”). [Dkt. no. 15.] On October 24, 2016, the Lau Ola Defendants filed a statement of no position as to the State Motion, and the State Defendants filed a statement of no position as to the Lau Ola Motion. [Dkt. nos. 23, 24.] On November 1, 2016, pro se Plaintiff Michael Doyle Ruggles (“Plaintiff”) filed a joint memorandum in opposition to the State Motion and the Lau Ola Motion (collectively “Motions to Dismiss”). [Dkt. no. 28.] The Lau Ola Defendants filed their optional reply (“Lau Ola Reply”) on November 14, 2016. [Dkt. no. 34.]

         On November 3, 2016, this Court issued an entering order (“EO”) finding the Motions to Dismiss suitable for disposition without a hearing. [Dkt. no. 32.] After careful consideration of the Motion to Dismiss, supporting and opposing memoranda, and the relevant legal authority, the State Motion is HEREBY GRANTED, and the Lau Ola Motion is HEREBY GRANTED, for the reasons set forth below.

         BACKGROUND

         Plaintiff filed his Complaint and Request for Injunction (“Complaint”) on June 9, 2016. Although Plaintiff has made multiple attempts to file an amended complaint, the original Complaint remains the operative pleading in this case.[1]

         In the instant case, Plaintiff alleges that the State of Hawai`i (“State”) medical marijuana dispensary scheme, created pursuant to Haw. Rev. Stat. Chapter 329D (“Marijuana Dispensary System”), violates federal law. Plaintiff states that he is a Hawai`i resident who owns property on the Island of Hawai`i, and he has a valid recommendation from a licensed physician in Hawai`i to use medical marijuana. [Complaint at pg. 5.] According to the Complaint, in April 2016, the State's Department of Health (“DOH”) selected Lau Ola and Defendant Hawaiian Ethos LLC (“Hawaiian Ethos”) to receive commercial licenses to grow and sell marijuana in medical marijuana dispensaries on the Island of Hawai`i. Ha and D. Shropshire are La Ola's owners, and Defendant Shelby Floyd is Hawaiian Ethos's owner. Plaintiff alleged that La Ola's and Hawaiian Ethos's dispensaries were expected to open within three to nine months. [Id. at pgs. 4-5.]

         According to the Complaint, Defendant Aloha Green LLC (“Aloha Green”) “is a farming business that imports/exports plant products to/from Hawaii, ” and it conspired with Lau Ola to produce and sell marijuana on the Island of Hawai`i. [Id. at pg. 4.] Defendant Steve Shropshire (“S. Shropshire”) is Aloha Green's registered agent, and D. Shropshire is “an owner, manager, and employee of Aloha Green” who conspired with S. Shropshire “to violate federal drug laws.” [Id.] Plaintiff alleges that Defendant Effective Change LLC (“Effective Change”) provides marijuana growing licenses for a fee, and those licenses are necessary for businesses to operate under the Marijuana Dispensary System. [Id. at pg. 5.] Plaintiff apparently has not completed service on the other defendants besides the State Defendants and the Lau Ola Defendants (collectively “the Unserved Defendants”).[2]

         Plaintiff alleges that: Governor Ige “is responsible for the policies, procedures, and acts of the State of Hawaii”; as the DOH Director, Dr. Pressler “is responsible for the policies, procedures[, ] and acts of the Hawaii Department of Health, including licensing medical marijuana dispensaries”; and Attorney General Chin “is responsible for overseeing the legal compliance of the State of Hawaii and authorizing all enforcement and implementation of Hawaii's federally illegal marijuana distribution scheme as it's [sic] top legal organizer.” [Id. at pg. 4.]

         Plaintiff alleges that Chapter 329D “purport[s] to permit the production, trafficking, and sale of marijuana, in violation of the federal Controlled Substances Act of 1970 (CSA), ” 21 U.S.C. § 801, et seq. [Id. at pg. 5.] He alleges that the growth and sale of marijuana, even pursuant to Chapter 329D, constitutes a felony under the CSA because the CSA preempts Chapter 329D. [Id. at pg. 6.] According to Plaintiff, once a medical marijuana dispensary opens on the Island of Hawai`i, he “and the value of his property will be irreparably harmed in value and public perception, due to the presence of massive federally illegal drug businesses in the community.” [Id.] He also alleges that, because he is a medical marijuana patient, he has an interest in the “prevention of the medical marijuana supply from being taken over by federally illegal large scale businesses.” [Id. at pg. 7.] Plaintiff alleges that these are irreparable harms. [Id.]

         The Complaint alleges the following claims: a claim under the CSA seeking an injunction against the implementation or enforcement of Chapter 329D and prohibiting “operating, advertising, promoting, licensing, funding, or authorizing any form of marijuana production or distribution” (“Count I”); [id.] and a claim pursuant to the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. § 1961, et seq., asserting that Plaintiff's business or property has been injured by the Marijuana Dispensary System, which he alleges constitutes an illegal enterprise for purposes of RICO (“Count II”) [id. at 7-8]. Further, although there is no numbered count associated with the argument, Plaintiff asserts that Chapter 329D and the Marijuana Dispensary System violate his rights under the Supremacy Clause of the United States Constitution. [Id. at 1, 7.]

         Plaintiff therefore seeks the following relief: a declaratory judgment that Chapter 329D and the Marijuana Dispensary System violate the CSA and RICO and are preempted by federal law; a declaratory judgment that the State regulations regarding the Marijuana Dispensary System violate the CSA; preliminary and permanent injunctions against the implementation of the Marijuana Dispensary System and the enforcement of Chapter 329D; and any other appropriate relief.

         The State Motion urges this Court to dismiss Plaintiff's claims against the State Defendants because: 1) there is no private right of action under either the Supremacy Clause or the CSA; 2) government entities are not subject to RICO; 3) Plaintiff lacks standing because he has not suffered an injury; 4) Plaintiff's claims are not ripe because he only alleges expected injuries that he believes will occur when the marijuana dispensaries open; 5) Plaintiff's claims for injunctive relief are barred because he has not alleged a sufficient nexus between the State Defendants' actions and the alleged violation of his rights; and 6) the State Defendants have qualified immunity in their individual capacities.

         The La Ola Motion argues that Plaintiff lacks standing to bring the claims he asserts against them because: 1) there is no implied right of action under the Supremacy Clause for Plaintiff to enforce the CSA; and 2) the Complaint does not allege that Plaintiff has suffered the type of damages necessary to support a RICO claim. The Lau Ola Defendants urge this Court to dismiss Plaintiff's claims against them with prejudice because amendment of Plaintiff's claims would be futile.

         STANDARDS

         As relevant to the Motions to Dismiss, Fed.R.Civ.P. 12(b) states that “a party may assert the following defenses by motion: (1) lack of subject-matter jurisdiction; . . . (6) failure to state a claim upon which relief can be granted.” “To survive a [Rule 12(b)(6)] motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.'” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)).

A challenge to the Court's subject-matter jurisdiction may be “facial or factual.” Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). In a facial attack, the party challenging jurisdiction argues that the allegations contained in a complaint are insufficient “on their face” to invoke federal jurisdiction. Id. A facial challenge, therefore, mirrors a traditional motion to dismiss analysis. The Court must take all allegations contained in the pleading “to be ...

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