There are over 76,000 people enrolled statewide in New Mexico’s medical cannabis program which became law in 2007. On August 29, 2019, Santa Fe District Judge Bryan Biedscheid ruled that New Mexico must allow non-residents to participate in its medical cannabis program. According to the court’s ruling the language of the amended medical cannabis statute is clear: “it does not allow the Department of Health to withhold identification cards to qualifying patients who live outside of New Mexico.”
After the court hearing, Judge Biedscheid ruled:
“This statute, plainly and unambiguously, does away with the requirement of residence of the state of New Mexico … Continuing to insist on a showing of residence for eligibility in the program, when that has been taken out by the Legislature, is not appropriate.”
In announcing that the State will appeal the court ruling, Governor Michelle Lujan Grisham strongly criticized the ruling by issuing the following statement:
“We remain of the opinion that New Mexico’s medical cannabis program should not be bulldozed by an out-of-state litigant operating with his own financial interests at heart rather than those of the state’s medical program or of the many New Mexicans who depend upon it … [The ruling] contradicts both the intent of the legislative sponsor and the interpretation of the New Mexico Department of Health, and the state plans to appeal the decision.”
The court ruling centers on amendments made to the medical cannabis law by the 2019 New Mexico Legislature and which Governor Lujan Grisham signed into law. The changes took effect on July 1, 2019. The legislature changed the definition of “qualified patient” by removing a requirement that an enrolled member of the medical cannabis program must be a New Mexico resident.
The Health Department argued that the legislative intent of the change was aimed at providing reciprocity to residents of other states who have valid medical marijuana cards. An example would be a resident of another state who has a medical marijuana card from that state and who travels through or comes to New Mexico for an extended period of time and needs to refill their prescription, they can do so in New Mexico.
You can review other legislative changes to the medical cannabis statute in the postscript below to this article.
Matthew Garcia, general counsel for the Governor’s Office and Thomas Bird, the Health Department’s attorney, argued that the change was not intended to allow non-New Mexico residents to obtain medical marijuana cards, and that such a shift would encourage the transport of marijuana across state lines, which is illegal under both federal and state laws. They further argued that the change on residency was aimed at providing reciprocity to residents of other states with valid medical marijuana cards.
Thomas Bird, the Health Department’s attorney, argued to the court:
“The department is justifiably concerned about that problem because it could threaten the whole program. … This isn’t ‘chicken little,’ this isn’t ‘the sky is falling,’ these are the legal realities of the anomalous relationship between the program and federal law.”
Plaintiffs’ attorney suing the state, who is also the Speaker of the House Brian Egolf, argued that there was “no clear evidence” that the Legislature intended to require New Mexico residency. Egolf argued there is nothing to back up the concern that the change would impede the state’s ability to maintain regulatory control and he told the court:
“There is no evidence offered to support this theory [that] … anyone who’s driving through the state of New Mexico will be able to pull over to the side of the road to get a registry identification card like it’s a Snickers bar … That’s completely wrong.”
Egolf noted that the federal law prohibits U.S. government resources being used for the prosecution or dismantling of any medical cannabis program and New Mexico’s program will not be in jeopardy.
COMMENTARY AND ANALYSIS
The State Court ruling came as no surprise to anyone in the legal community given the language, or lack of clarifying language, in the medical cannabis statute. What did come as a surprise and raised more than a few eyebrows in the legal community is that the Plaintiffs’ attorney suing the state is the New Mexico Speaker of the House Brian Egolf, a prominent Santa Fe trial attorney, who also voted for the amendments to the law. Egolf representing the Plaintiff in the case against the State on a law he voted for does indeed raise more than a few questions of “conflict of interest” and the “appearance of impropriety” at least in the court of public perception.
One of the plaintiffs in the case Egolf represents is Duke Rodriguez, the president and CEO of Ultra Health LLC, a prominent licensed medical marijuana producer. Rodriguez is also a former New Mexico Human Services Secretary who now is an Arizona resident. It is likely Mr. Rodriquez knew that hiring the Speaker of the House as his attorney to represent his firm in litigation was an advantage on more than one level when it comes to New Mexico politics.
Ostensibly, the state had no problem with Egolf representing the plaintiff in that Matthew Garcia, general counsel for the Governor and Thomas Bird, the Health Department’s attorney, were not reported by the media objecting to Egolf representing the Plaintiffs and did not ask the Court to remove Egolf from the case for any sort of perceived conflict. Notwithstanding, Egolf should have declined the case or at the very minimum had an associate argue the case for his firm before the court to avoid the public perception that the Speaker Egolf had a conflict.
Egolf has now created a problem for himself in the event the Governor and the legislature seek to amend the law once again to include a residency requirement. Egolf will be forced to decide does he vote to amend that statute to include residency or does he take the position of his client and oppose it? With the new ethics commission in the process of booting up, Egolf should have been a little more cautious in taking the case. Egolf should not be surprised if someone within the Republican party or any potential opponent attempts to make an issue of his actions in the court case.
What cannot be dismissed lightly is that Egolf, as an attorney, was representing a plaintiff adverse to the state in a courtroom and argued there was no legislative intent. Egolf argued that there was “no clear evidence” that the Legislature intended to require New Mexico residency for those trying to access the state’s medical cannabis program. Egolf cannot switch off his authority as Speaker of the House by merely walking into a courtroom to argue a case for a client.
When Egolf argued from the court podium on legislation he voted for and that there was no legislative intent, he was essentially testifying as a witness legislator rather than an attorney. The Court should have admonished or cautioned him. The reality is what good is it to piss off the Speaker of the House who has control of the courts budget when you can just ignore what he has to say and make the ruling you want to make, which is what happened.
It is more likely than not that the Court discarded much of what Egolf had to say given that the ruling was based on the clear language, or absent of language taken out, in the statute. It is well settled New Mexico case law that legislative intent is a matter of law and not of fact that must be proven in a court of law. Legislative intent is based strictly on the final language of the statute. It’s the final language of the statute enacted and signed by the governor that embodies the legislatures intent, not arguments made by legislators debating the statute before its enacted. Appellate court decisions have specifically rejected post-hoc affidavits by legislators as not being competent evidence of intent.
GOVERNOR’S CONDEMNATION OF RULING
The Governor’s condemnation of the ruling and the announcement that the State intends to appeal the court’s ruling was an overreaction. An appeal will only benefit the lawyers and would be a waste of time. It is more likely than not that the Court of Appeals and the Supreme Court will uphold the ruling.
The ruling should not be appealed, but should be taken as a recommendation that the New Mexico Legislature should once again amend the statute during the upcoming 2020 session which is within 4 months.
The Governor’s Cannabis Legalization Working Group should submit proposed legislation to include in the definition of “qualified patient” the requirement that an enrolled member of the medical cannabis program must be a New Mexico resident. What the legislature took out can always be put back in along with the 4 options being looked at by the Governor’s Cannabis Legalization Working Group to protect the medical marijuana industry. Those other changes can be viewed in the postscript below.
Expediting legalization of recreational marijuana is one likely result of the Santa Fe District Court ruling.
ALBUQUERQUE JOURNAL EDITORIAL
On October 1, 2019, the Albuquerque Journal published the below editorial:
HEADLINE: “Did Brian Egolf miss the day in law school where they cover conflicts of interest?
The Santa Fe Democrat currently serves as New Mexico’s Speaker of the House. Egolf, like many of his fellow unpaid New Mexico lawmakers, also has a day job as an attorney. That’s normal for our citizen Legislature and not a problem in and of itself.
Well, not unless a situation arises wherein Egolf’s role as a high-ranking legislator allows him to grease the skids for legislation that ultimately enriches him in his private law practice.
And if Egolf isn’t quite fully immersed in that sticky terrain, he’s at least ankle deep in it.
Consider: Egolf is currently representing medical marijuana magnate Duke Rodriguez in an ongoing lawsuit against the state of New Mexico.
While Rodriguez’s Ultra Health LLC has all but cornered New Mexico’s medical marijuana market, Rodriguez – himself a medical marijuana user – lives in Arizona. He is one of three people who live out of state who sued the state to be allowed to participate in New Mexico’s medical cannabis program.
As Journal reporter Dan Boyd reported Sept. 24, the case took its most recent turn on Sept. 23, when a judge ordered the New Mexico Department of Health to start issuing medical marijuana cards to out-of-state residents. The matter remains in limbo as the state Department of Health plans to ask the judge to reconsider, but it was still a clear, albeit not yet final, victory for Rodriguez’s bottom line – and, presumably, for his high-powered lawyer Egolf.
And therein lies the rub.
Egolf is clearly working his hardest to obtain a certain outcome for his client in the politically fraught world of medical marijuana. He also clearly wields tremendous influence over legislative matters, including laws around medical marijuana. Despite this apparent clash of interests, Egolf hasn’t included Rodriguez’s company on a list of potential conflicts of interest, nor has he recused himself in medical marijuana-related legislative matters.
When Republicans raised the issue back in 2017, Egolf said his work with the medical marijuana industry would not influence his work as a lawmaker. He also pointed out it would be tough to find clients who don’t interact with legislation in some way – a fair point – and, according to a 2017 Journal story, noted that, like other state legislators who are lawyers, he disclosed the law firm he works for and the state agencies he’s represented.
On Egolf’s side of the ledger, New Mexico Ethics Watch backed up his stance that he didn’t need to disclose medical marijuana clients as potential conflicts of interest. And perhaps that’s in line with the letter of the law.
But is that really what’s best for New Mexico? Why should only state agencies be included in lawyers’ disclosures and not private industry?
Perhaps it’s a good topic for New Mexico’s newly minted Ethics Commission to cut its teeth on. Because disclosure norms notwithstanding, having the guy who helps make the rules for an industry also represent that industry in court should raise some eyebrows.
SPEAKER OF NEW MEXICO HOUSE BRIAN EGOLF RESPONDS TO JOURNAL
On Sunday, October 6, the Albquerquerq Journal Published Speaker of the House Brian Egolf’s response to its editorial as follows:
Headline: Editorial all (medical pot) smoke, no fire
BY REP. BRIAN EGOLF / SPEAKER OF THE HOUSE, SANTA FE DEMOCRAT
Sunday, October 6th, 2019
Did the Albuquerque Journal Editorial Board miss the day in journalism school where they cover accuracy in reporting, especially in editorials?
The Journal’s Editorial Board should not allow these pages to be weaponized for politically-motivated and unfounded attacks. Yet a recent editorial (Oct. 1) regarding my work as a private lawyer representing a medical cannabis producer did just that. The outrageous nature of the attack against me and my character demands a response.
Political opponents have long muddied the waters in an attempt to discredit me and the entire medical cannabis compassionate-use program. Their arguments are false and have been repeatedly debunked.
At issue is how legislators maintain high ethical standards, prevent conflicts of interest, and ensure that our service does not give us a leg up in our everyday lives. I have studied and scrupulously followed the standards of ethical behavior for legislators during my 11 years of service in the Legislature and have championed the creation of the Ethics Commission to bring true transparency and clear ethical guidance to all public offices. I am confident that my legal work and my legislative service do not present a conflict of interest.
This paper’s Editorial Board takes the position that lawyers cannot serve in the Legislature without creating conflict with every vote, floor speech or bill introduction. This newspaper ignores, however, the law and the rules of ethical conduct for lawyers. It is absurd to think that a lawyer should recuse from a vote every time a client may be affected. For example, if that were the standard, no lawyer-legislator could vote on funding for roads because every client who uses our roadways would be affected.
As legislators, we must hold ourselves to the highest standard of ethics. For attorneys who are also legislators, the Rules of Professional Conduct for attorneys provide additional rules and requirements to ensure that our actions in the courtroom are kept strictly separate from our legislative service. Legislator-lawyers may not refer to our legislative service in the courtroom or take any action that gives the impression that we are using our legislative offices to gain an advantage for a client. I go to great lengths to abide by the spirit and the letter of the law in my courtroom conduct, as witnessed by judges, colleagues and clients.
The legislative process benefits from having people with diverse personal and professional backgrounds as lawmakers. As noted in a recent legal case, attorneys have unique experience to bring to public service. In a 2015 court order, a district court judge explicitly ruled that preventing a legislator from representing their clients in adversarial proceedings would “contravene clear statutory language and create serious disincentives for those most schooled in the law from taking up public service as state representatives.”
As citizen legislators, we must ensure that our behavior is not influenced by the promise of a specific benefit for ourselves or our families. We also must separate our professional lives from our legislative service. It is clear from the record that the medical cannabis legislation in question went through the regular legislative process and was not expedited in any manner. The bill was introduced and modified several times in the Senate and made its way through the process in the House with no particular speed. This record is available plainly on the legislative website, and I invite the public to examine the record for themselves. Unfortunately, the Albuquerque Journal “greased the skids” in its editorial process and thereby ignored facts, the clear record and the law to produce a political hit-job.
During the 2019 New Mexico Legislative session, the legislature enacted changes to the medical cannabis laws. In April, 2019, Governor Lujan Grisham signed into law the changes made by the legislature to the program and the changes took effect on July 1, 2019.
The other major changes made to the medical cannabis laws are:
1. The law now provides that it is unlawful in most circumstances for an employer to fire or otherwise discipline a worker based on allowable conduct under the state’s medical marijuana program. It is not clear whether this change in the law will affect employers with policies that require drug testing of applicants before they are hired, with a positive test precluding their hiring regardless of whether they have a medical marijuana card.
2. The second major change to the law specifies that employers can still establish policies barring use of medical marijuana on the job or showing up under the influence of the drug and take action against employees who violate the policy. Concern has been raised in the business community that anything that would limit an employer’s ability to enforce their drug-free workplace programs would be problematic.
3. Allowing medical marijuana in schools, under certain circumstances.
4. Extending the length of an approved patient identification card from one year to three years.
5. Mandating that a licensed medical marijuana user cannot be denied an organ transplant on the basis of their participation in the program.
CANNABIS LEGALIZATION WORKING GROUP
On June 28, 2019, Governor Michelle Lujan Grisham announced the creation of a Cannabis Legalization Working Group. The group has held public hearing throughout the state. The Working Group or Task Force is finalizing its recommendations to the governor that will be incorporated into proposed legislation to be introduced in the 2020 legislative session.
There are at least 4 options being looked at by the task for to protect the medical marijuana industry and they are:
1. Establishing a licensing and fee system to provide an incentive for companies that produce marijuana for medical consumers.
2. State regulators could require that a certain amount of a company’s sales be dedicated to patients.
3. New Mexico could also encourage medical consumers to stay in the program by exempting their purchases from the taxes levied on recreational consumers.
4. The State could require providers to reserve certain products with high potency for medical patients only.