“Often the best remedy is not in this court. It’s to go down the hall and persuade your state legislator to…amend the statutes that you have an issue with.”
By Zach Wendling, Nebraska Examiner
The Nebraska Supreme Court heard a technical appeal Monday in a second case in six months asking the high court to void Nebraska’s medical cannabis laws.
Both cases have been brought by former State Sen. John Kuehn of Heartwell, a longtime opponent to marijuana, who alleges Nebraska can’t move forward with medical cannabis because of federal laws classifying marijuana as a dangerous drug. Kuehn argues state laws like Nebraska’s voter-enacted legalization of medical cannabis are “preempted” by federal law under the U.S. Constitution’s Supremacy Clause.
Monday’s oral arguments did not address shifting federal guidelines on marijuana. Acting U.S. Attorney General Todd Blanche downgraded state-licensed medical cannabis to a Schedule III drug last Thursday, down from a Schedule I drug. Nebraska’s Medical Cannabis Commission is working toward implementing such a program.
‘Courts should be open’
Lancaster County District Judge Susan Strong had dismissed Kuehn’s preemption lawsuit in June. She ruled Kuehn had not proven he had the legal “standing” to sue, a legal term of art requiring someone to show injury. Strong ruled against letting Kuehn use two “narrow” exceptions to the standing rule.
Kuehn’s attorneys, led by Eddie Greim of Missouri, argue Kuehn should be able to sue to try to prevent an “illegal expenditure” of public funds (taxpayer standing) or because the laws constitute a “matter of great public concern (great public concern standing).”
“It is not enough to wait for the United States government to one day come to Nebraska and challenge these acts,” Greim told the justices. “Instead, Nebraska’s courts should be open to Nebraskans who want to hold their Nebraska state government to its constitutional limitations.”
Unlike in other taxpayer standing cases that try to block public spending, Kuehn seeks to go further and declare the Nebraska medical cannabis laws unconstitutional. At least four justices would need to side with Kuehn for the case to return to the district court and allow him to argue his case.
If the case proceeds and later returns to the Supreme Court, it would take five justices to rule a law unconstitutional.
‘Incidental’ vs. ‘direct’ spending
Zachary Pohlman, the state deputy solicitor general representing five state officials; Jason Grams, an attorney representing members of the Nebraska Medical Cannabis Commission; and Daniel Gutman, representing the three ballot sponsors for the 2024 petition campaign, have all argued Kuehn’s arguments risk “swallowing” taxpayer standing and making it the norm.
Pohlman argued that taxpayer standing requires a “direct” and “explicit” expenditure of public funds. And despite “verbal gymnastics” from Greim, Pohlman said, Kuehn offered no limitations.
“In their theory, any time you have a state agency doing anything in the real world, as long as the officers who are carrying that out are paid a salary from the state budget, a taxpayer can challenge that action,” Pohlman said.
Pohlman and the Nebraska AG’s Office are defending Gov. Jim Pillen, Secretary of State Bob Evnen, Nebraska Department of Health and Human Services CEO Steve Corsi, former State Treasurer Tom Briese and Tax Commissioner Jim Kamm.
Staffers for the Nebraska Liquor Control Commission have administratively and budgetarily assisted the Medical Cannabis Commission since its creation in December 2024. The Legislature has given the Liquor Control Commission more funding as a result, and lawmakers this spring approved paying medical cannabis commissioners an annual salary of $12,500.
State regulations are in progress and are now sitting in the Nebraska Attorney General’s Office for legal review, an office held by Attorney General Mike Hilgers, who has criticized the constitutionality of the medical cannabis laws.
Pohlman said taxpayers do have an “equitable interest” in how government funds are spent, but the focus must be on spending, not regulation. He said that if a taxpayer could merely request spending be withheld and then sue when it’s not, “it’s really not clear what state action would be off limits or challenged by a taxpayer.”
“The groveling here is not taking issue with how the government is spending money,” Pohlman said. “It’s taking issue with how the government is regulated.”
Grams also referenced Strong’s June decision, in which she mentioned the “incidental burdens” of implementing a law, such as staff.
Wrote Strong last June: “Nebraska, like other states, has no shortage of citizen-taxpayers with strong political opinions. That is not necessarily a bad thing. But it would be bad if all those citizens could sue whenever a law requires a government employee to do something.”
Gutman and the ballot sponsors waived oral arguments. They’ve previously pointed to states’ rights to legalize medical cannabis under the 10th Amendment to the U.S. Constitution.
Reschduling impacts?
It’s unclear how rescheduling, including the Trump administration move to downgrade all marijuana from a Schedule I to a Schedule III drug under the federal Controlled Substances Act, might affect Kuehn’s case.
Schedule I drugs, such as heroin, LSD, ecstasy and peyote, are drugs the federal government has classified with a high likelihood of abuse and no currently accepted medical value.
Schedule III drugs are defined as those with moderate to low potential for physical and psychological dependence, such as Tylenol with codeine, ketamine and testosterone.
Pillen said last week that federal rescheduling wouldn’t alter the state regulatory process.
“My goal is to honor Nebraska’s vote, while putting safeguards into place to prevent unregulated or unintended marijuana production,” Pillen said in a Thursday statement. “We will continue to engage with our federal partners as the process evolves.”
Nebraska is the only state with a medical marijuana program not to be congressionally protected from federal interference. Kansas and Idaho are the two other states not protected. Neither has a state medical marijuana law on the books.
Another legal challenge?
Strong in November 2024 separately ruled against Kuehn and the Nebraska AG’s Office as she upheld the legal validity of the overwhelmingly successful 2024 petition campaign that asked voters to legalize and regulate medical cannabis.
Kuehn and the AG’s Office appealed. Justices considered that appeal in December but have yet to decide the case.
On Monday, Pohlman argued at least five parties are better suited to sue than Kuehn:
- The federal government, to enforce the Controlled Substances Act.
- The state attorney general, “if he concludes that the statutes are unconstitutional” and could thereby test the legal validity.
- A property owner whose property values are affected by state regulations.
- A prospective medical cannabis user who wants to test and ensure possession is legal.
- A criminal defendant charged by state prosecutors with marijuana possession and who asserts the voter-approved legalization as a defense. Pohlman said at that point, the Nebraska AG’s Office could advance a similar preemption argument as Kuehn.
“Those are just five. I assume there are many more, as there are with many statutes that regulate,” Pohlman said.
The AG’s Office had threatened to sue the commission, including if it issued its first licenses shortly after October 1, which commissioners did. No such challenges have materialized.
Pohlman continued: “Even more fundamental than that, this court has said in its taxpayer standing cases that often the best remedy is not in this court. It’s to go down the hall and persuade your state legislator to…amend the statutes that you have an issue with.”
‘Cat-and-mouse game’
Greim disagreed and told justices there must be an increase in spending to qualify and that taxpayers shouldn’t need to wait until “rumor leaks” about government spending. He said if justices deviate, it’s hard to see how taxpayer standing would exist in a “vast majority of cases.”
“It’s not enough that someone breathes a breath while in a state office building and utters a word or signs a paper,” Greim said.
Chief Justice Jeffrey Funke countered that there would still be a cost for employees or paper and questioned the difference between a “direct” and “indirect” expenditure.
In response, Greim said the existence of taxpayer standing can’t depend on the particular way that money is being spent on an allegedly unlawful act.
“Then this becomes a cat-and-mouse game,” Greim said. “Then it encourages appropriations just to go to general matters.”
The Nebraska Supreme Court typically releases opinions every Friday and lists “anticipated” opinions by noon the day before release.
This story was first published by Nebraska Examiner.
Photo elements courtesy of rawpixel and Philip Steffan.
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