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August 29, 2019 3:00 PM, EDT

Appeals Court Hears Oral Arguments in Idaho Hemp Case

Hemp plant in Kentucky Hemp plants hang to dry in a barn at Ananda Hemp in Cynthiana, Ky., on Jan 24, 2019. (Associated Press/Bryan Woolston)

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A three-judge appeals court panel heard arguments Aug. 28 in a lawsuit challenging the confiscation of a 6,700-pound load of hemp being transported from Oregon to Colorado.

But with the 9th U.S. Circuit Court of Appeals panel questioning whether it should even be involved with the case, the hearing did not give truckers any hints about how, or when, the court might issue a decision that would offer clear guidance for truckers confused whether a new federal law legalizing hemp permits the interstate transport of the substance.

For hemp to be legal, the new federal law requires that the concentration of THC, or tetrahydrocannabinol, the compound responsible for the psychoactive effects of hemp and marijuana, cannot be more than 0.3%. Although tests on the hemp, confiscated by Idaho State Police, showed it to be legal, Idaho law still defines hemp and marijuana as illegal substances.

The legal fight dates to late January, when Idaho police officers detected a strong smell coming from a box van trailer during a routine roadside inspection near Boise. Believing the load to be marijuana, rather than legal hemp, police arrested the driver, Denis Palamarchuk, 36, of Portland, Ore., on felony marijuana trafficking charges. Authorities also confiscated the hemp, owned by Big Sky Scientific of Aurora, Colo., the load’s destination.

Although Big Sky reportedly helped bail the trucker out of jail, the company has not been involved with the state criminal case. The company filed a federal civil lawsuit in Idaho, but a federal magistrate denied the company’s motion for an injunction requiring the state to return the hemp to Big Sky.

Chief U.S. magistrate Ronald E. Bush

Bush

“Though the 2018 Farm Bill removes industrial hemp as a controlled substance under federal law, states and Indian tribes still may declare it to be a controlled substance under state or tribal law,” said chief U.S. magistrate Ronald E. Bush. “Idaho does not distinguish industrial hemp from marijuana; both are controlled substances under Idaho law.”

Big Sky then appealed the case to the 9th Circuit.

“However, the 9th Circuit threw a curve ball and is now asking whether the case is even appropriately in federal court, or whether the federal courts should tell Big Sky to pursue the matter in state court,” Nathaniel Saylor, an attorney with Scopelitis, Garvin, Light, Hanson & Feary, P.C. told Transport Topics.

Nathaniel Saylor, an attorney with Scopelitis, Garvin, Light, Hanson & Feary

Saylor

The Big Sky appeal is believed to be the first of its kind since the Farm Bill was signed into law Dec. 20, 2018, making industrial hemp legal. The case that has reached the 9th Circuit essentially pits the federal law allowing production and transport of hemp against the Idaho statute that defines legal hemp and marijuana as illegal substances.

The case has left truckers mostly confused, largely because the Idaho arrest came only a month after Congress passed the law making legal the growing and interstate transportation of hemp, and also taking the substance off the federal Schedule I list of illegal drugs.

Despite passage of the law, the legality of the interstate transportation of hemp has remained unclear because the U.S. Department of Agriculture has yet to translate the law into a slate of regulatory requirements. An interim final rule that could clear up the industry’s confusion is expected to be published by the end of this year.

Until that happens, the appellate panel faces a bit of a quandary. At times during oral arguments, the judges seemed frustrated with the case and the litigators, occasionally catching attorneys off guard and unable to answer their questions.

Tops of hemp plants in Oregon

Lloyd Nackley, a plant ecologist with the Oregon State University Extension Service, holds freshly picked tops of hemp plants from one of Oregon State's hemp research stations in Aurora, Ore., on June 13, 2019. (Associated Press/Gillian Flaccus)

“If the 9th Circuit determines that the case is more properly heard in state court, the case could be dismissed, and Big Sky will be back to square one in attempting to obtain release of its hemp through state court proceedings in Idaho.”

Indeed, much of the debate and questioning by the judges centered on the “Younger” abstention, a reference to the 1971 Younger v. Harris case in which the U.S. Supreme Court ruled that generally, a federal court should not intercede in a case involving a state law with similar issues that has yet to be resolved.

“This sounds like a classic Younger abstention case to me,” Judge Michael Hawkins told Big Sky’s Boise attorney Christopher Pooser.

Further muddying the legal waters is Idaho prosecutors and the truck driver’s attorneys engaging in plea bargain discussions that could end the criminal case soon, Merritt Dublin, an attorney representing the Idaho State Police, told the judges.