Lawsuit Over DEA Hemp Rule Dismissed for Lack of Jurisdiction

An opinion authored by Judge James E. Boasberg has declined a hemp advocacy group and hemp producer’s request for the judicial review of a Drug Enforcement Administration (DEA) rule regulating hemp products exceeding a certain concentration of the plant’s chief psychoactive component, delta-9 tetrahydrocannabinol (THC). Monday’s ruling dismissed the District of Columbia complaint for want of subject matter jurisdiction.

The plaintiffs, Hemp Industries Association and RE Botanicals Inc., took issue with the DEA’s August 2020 rule requiring hemp products with a concentration of greater than 0.3% delta-9 THC to obtain a Controlled Substances Act (CSA) Schedule I registration. They asked the court to declare that two useful byproducts of the hemp manufacturing process, which contain delta-9 THC in concentrations above the regulatory threshold, do not qualify as controlled substances. If granted, the court wrote, such an order would alleviate the plaintiffs’ fear of criminal enforcement and would not subject the products to the CSA’s registration requirements.

The 25-page ruling explained the history of CSA and how the DEA’s August 2020 rule impacts the plaintiffs’ interests in hemp cultivation. The present lawsuit follows others filed by the plaintiffs, one “upstairs in the D.C. Circuit,” and another in the same court against the DEA and its acting administrator.

In the present suit, the DEA moved to dismiss once and then again in response to the plaintiffs’ amended complaint, arguing that the court lacked subject matter jurisdiction over the dispute. Specifically, the defendants contended that 21 U.S.C. § 877, “the CSA’s exclusive-review provision, divests the Court of subject-matter jurisdiction over this action.” The plaintiffs opposed.

The court stated that, “(i)nteresting as this question may be, the Court ultimately concludes that it is powerless to entertain the merits of Plaintiffs’ entreaty.” Instead, the opinion explained that the plaintiffs must file a petition for review with the court of appeals as the dispute “falls squarely within the ambit of that exclusive-review provision.” The court reasoned that permitting the plaintiffs to proceed in the district court would endorse “an impermissible end run around Section 877.”

Both plaintiffs are represented by Yetter Coleman LLP and Vicente Sederberg LLP, and RE Botanicals by additional counsel Knight Law Office PC and Hoban Law Group. The defendants are represented by the U.S. Department of Justice.