State Law Preemption of Local Land Use Regulations and the Supreme Court's Recent Decision Upholding Citywide Ban on Medical Marijuana Dispensaries

June 19, 2013

by Matthew Hinks

The recent spate of court cases dealing with local regulation of medical marijuana dispensaries ("MMDs") offers an interesting illustration of the interplay between federal, state and local laws that regulate the same subject matter, and the impact that dynamic has upon local land use regulation. Each of the three levels of government regulate the use and sale of marijuana, albeit for different purposes and in vastly different ways. Federal law continues to classify marijuana as a Schedule I controlled substance under the Controlled Substance Act. With the passage by voter initiative of the Compassionate Use Act of 1996 ("CUA") and the legislatively-adopted Medical Marijuana Program of 2003 ("MMP"), the State of California chose to remove certain state law obstacles from the ability of qualified patients to obtain and use marijuana for legitimate medical purposes. On the local level, many municipalities have taken steps to either outright ban MMDs or otherwise heavily regulate them through their zoning laws.

What happens when these three sources of law collide? Some answers to that question were provided by the California Supreme Court in City of Riverside v. Inland Empire Patients Health and Wellness Center, Inc., 56 Cal. 4th 729 (2013), which tackled these preemption issues in the context of an ordinance by the City of Riverside banning MMDs as a prohibited use of land within the City and a nuisance subject to abatement. The Court's interesting discussion of the preemption principles applicable to the City's ordinance will serve as a guidepost for future courts' handling of such issues throughout the land use context.

The City of Riverside case resolved a number of medical marijuana cases dealing with preemption principles that made their way to California's highest court. Most of the cases, including the Court of Appeal's opinion in City of Riverside, had held that a city may enforce zoning laws against MMDs despite the passage of the CUA and MMP. At least one case, which I wrote about earlier here [http://landuselaw.jmbm.com/2012/04/state-law-permitting-establishment-of-medical-marijuana-dispensaries-trumps-local-zoning-ordinances.html] held that an outright ban on MMDs in a city's zoning laws conflicted with the CUA and MMP and was therefore invalid. In yet another case, Pack v. Superior Court, the Court of Appeal held that an ordinance of the City of Long Beach, which permitted and regulated MMDs, conflicted with and was therefore preempted by federal law.

Federal Preemption
The Court grappled with the latter issue first. The plaintiff, relying on earlier precedent, argued that local municipalities cannot enact a total ban of MMDs based solely on federal law preemption. The Court agreed. "[T]he city cannot rely on the proposition that federal law, which criminalizes possession of marijuana, preempts state law allowing limited use of medical marijuana and MMD's." While the Court's holding leaves open the possibility that its pronouncement is limited to the medical marijuana context, the clear import of the Court's holding is that an argument regarding federal preemption will not save a municipality's land use regulation where it conflicts with state law.

State Law Preemption of Local Land Use Regulations
The general principles governing state statutory preemption of local land use regulation are well settled. Where otherwise valid land use regulations "conflict" with state law, they are preempted and therefore void. Three types of conflicts give rise to state law preemption: (1) laws that duplicate state law, (2) laws that contradict state law, and (3) laws that enter an area fully occupied by state law, either expressly or by legislative implication. Courts apply a presumption that local land use laws are not preempted by state law.

Duplicative and Contradictory Land Use Regulations
A "duplicative" rule is one that mimics a state law or is "coextensive' with state law." A local law "contradicts" state law if it is inimical to or cannot be reconciled with a state law. Plaintiff in the City of Riverside case argued that the City's ordinance is invalid because it is inconsistent with the MMP, which provides limited immunity for operating and using MMDs. The Court rejected the argument noting that Plaintiff may be prosecuted for a zoning violation, which is not the same thing as being prosecuted "solely on the basis" of operating an MMD. The Plaintiff used its premises for operating a dispensary. Although the MMP allows lawful dispensaries, a municipality can limit or prohibit dispensaries through zoning regulations and prosecute violations by bringing a nuisance action and seeking injunctive relief.

Land Use Regulations in a Field Occupied by State Law
Local legislation enters an area that is fully occupied by general law when the Legislature has expressly manifested its intent to fully occupy the area. Alternatively, implied preemption will be found where:

(1) the subject matter has been so fully and completely covered by general law as to clearly indicate that it has become exclusively a matter of state concern; (2) the subject matter has been partially covered by general law couched in such terms as to indicate clearly that a paramount state concern will not tolerate further or additional local action; or (3) the subject matter has been partially covered by general law, and the subject is of such a nature that the adverse effect of a local ordinance on the transient citizens of the state outweighs the possible benefit to the locality.

The Supreme Court determined that the Riverside ordinance was not preempted under these standards First, the CUA did not expressly preempt the city's zoning ordinance. "The plain language of the statute does not prohibit the City from enforcing zoning and business licensing requirements applicable to defendants' proposed use." Nor did the Court find implied preemption under the 3-part test described above. The reach of the CUA and MMP, the Court held, were limited. The statutes provide immunity only as to "lawful" dispensaries. By contrast, a dispensary operating in violation of a zoning ordinance is not lawful. Moreover, rather than prohibiting the enactment of zoning ordinances regulating or banning MMDs, the CUA and MMP, in fact, contemplated local regulation. Thus, the Court held, nothing in the CUA or MMP suggests that cities are required to accommodate the establishment of MMDs within every city.

Concluding Thoughts
The City of Riverside opinion may not be the last word on local regulation of MMDs. Advocates will continue to press the legislature for an express finding of preemption and may also seek to put the issue back to the voters through another initiative. Moreover, many cities such as Los Angeles and San Francisco are unlikely to ban MMDs altogether, but may seek to find ways to curb their proliferation. Nevertheless, regardless of the fate of the Court's specific holding in City of Riverside, its preemption analysis will likely continue to guide lower courts' review of preemption principles surrounding local land use regulation for some time to come.