NH High Court Sends Medical Marijuana Case Back to Board for Second Time
In a well-written opinion that should be earmarked by law students (and attorneys) who desire a relatively concise discussion of federal preemption law, the Supreme Court of New Hampshire has, for the second time, reversed a decision of the state’s Compensation Appeals Board, which had ruled—following an earlier remand—that an insurer could not be required to reimburse a workers’ compensation claimant for medical marijuana because such reimbursement would constitute aiding and abetting his commission of a federal crime under the Controlled Substances Act (CSA) [Appeal of Panaggio, No. 2019-0685, 2021 N.H. LEXIS 20 (Mar. 2, 2021)].
Background
Panaggio suffers from ongoing pain as a result of a 1991 work-related injury to his lower back. A qualified patient in New Hampshire’s therapeutic cannabis program, Panagio has a state registry identification card. The insurer declined to reimburse him for the purchase of medical marijuana on the ground that it was not reasonable or medically necessary. A state Department of Labor hearing officer agreed with the insurer. The New Hampshire Board found Panagio’s use of medical marijuana was reasonable and medically necessary. Nonetheless, it upheld the insurer’s refusal to reimburse Panaggio, concluding that “the carrier is not able to provide medical marijuana because such reimbursement is not legal under state or federal law.”
Panaggio appealed to the New Hampshire Supreme Court [see 172 N.H. 13, 205 A.3d 1099 (2019)], which concluded that such reimbursement would not violate state law. The Court indicated, however, that because the Board “did not cite any legal authority for its conclusion, much less identify a federal statute that, under the circumstances of this case, would expose the insurance carrier to criminal prosecution,” it was vacating the Board’s determination that the reimbursement would violate federal law [172 N.H. at 19 (emphasis omitted)](to see my earlier discussion of “Panaggio I”, click here).
First Remand
On remand, the Board unanimously found that were the insurer to pay for Panaggio’s prescription medical marijuana, it would commit a federal crime by aiding and abetting Panaggio’s illicit purchase and possession. The Board ruled that, under federal preemption principles as articulated by the Maine Supreme Judicial Court in Bourgoin v. Twin Rivers Paper Co., LLC, 2018 ME 77, 187 A.3d 10 (2018), the insurer could not be ordered to reimburse Panaggio for his marijuana (to see my earlier discussion of Bourgoin, click here). Following the Board’s ruling, Panaggio again appealed.
Preemptive Reach of the CSA
The New Hampshire high court observed that while it was an issue of first impression for the Court, other courts had considered whether the CSA, 21 U.S.C.S. § 801, et seq. (2018), preempts a state order requiring reimbursement of an employee’s purchase of medical marijuana. The Court added that the results were “mixed.” As noted above, in Bourgoin, the high court in Maine had found that there was a positive conflict between federal and state law and, as a result, the CSA preempted Maine’s Medical Use of
Marijuana Act, as applied. A New Jersey appellate court, in Hager v. M&K Construction, 225 A.3d 137 (N.J. Super. Ct. App. Div. 2020), found no conflict between the CSA and and the state’s medical marijuana law where an employer was ordered to reimburse an employee for his purchase of medical marijuana (to see my earlier discussion of Hager, click here).
Impossibility Preemption: CSA Does Not Criminalize Reimbursement
As to “impossibility preemption,” the Court indicated the core question was whether it was impossible for the insurer to comply with both a Board order to reimburse Panaggio and the CSA. The Court stressed that there was no conflict between the CSA and the Board order, since the CSA did not criminalize the act of insurance reimbursement for an employee’s purchase of medical marijuana.
Aiding and Abetting the Commission of a Crime
Turning to Judge Learned Hand’s oft-cited statement on aiding and abetting—that to aid and abet, the defendant must not “in some sort associate himself with the venture,” he must also “participate in it as something that he wishes to bring about,” and further “seek by his action to make it succeed [quoting Nye & Nissen v. United States, 336 U.S. 613, 619 (1949)].
Here, Panaggio reasoned that because New Hampshire law unambiguously required the insurer to pay for his medical treatment, an insurer that reimbursed a claimant for the purchase of medical marijuana acted without the volition required by the federal aiding and abetting statute.
Noting that Panaggio’s argument found support in the dissent in Bourgoin and in the New Jersey court’s opinion in Hager, the New Hampshire high court found the insurer’s compliance with a court or Board order to reimburse Panaggio did not constitute voluntary participation.
Obstacle Preemption
As to “obstacle preemption,” the Court indicated that it was required to consider whether requiring reimbursement would thwart the purposes and objectives of the CSA. The Court said it was unable to discern how such reimbursement would stand as an impermissible obstacle to the accomplishment and execution of the full purposes and objectives of Congress. As the Court had previously discussed, the CSA does not make it illegal for an insurer to reimburse an employee for his or her purchase of medical marijuana. Moreover, an order to reimburse Panaggio did not interfere with the federal government’s ability to enforce the CSA. The federal government was still free to prosecute him for simple possession under the CSA.
Under all these circumstances, said the Court, the high threshold of obstacle preemption had not been met. Accordingly, the Court reversed the Board’s decision and again remanded for further proceedings consistent with its opinion.