United States Court of Appeals For the First Circuit

No. 21-1719

NORTHEAST PATIENTS GROUP, d/b/a Wellness Connection of Maine; HIGH STREET CAPITAL PARTNERS, LLC,

Plaintiffs, Appellees,

v.

UNITED CANNABIS PATIENTS AND CAREGIVERS OF MAINE,

Intervenor-Defendant, Appellant,

MAINE DEPARTMENT OF ADMINISTRATIVE AND FINANCIAL SERVICES; KIRSTEN FIGUEROA, Commissioner of the Maine Department of Administrative and Financial Services,

Defendants.

No. 21-1759

NORTHEAST PATIENTS GROUP, d/b/a Wellness Connection of Maine; HIGH STREET CAPITAL PARTNERS, LLC,

Plaintiffs, Appellees,

v.

KIRSTEN FIGUEROA, Commissioner of the Maine Department of Administrative and Financial Services,

Defendant, Appellant,

MAINE DEPARTMENT OF ADMINISTRATIVE AND FINANCIAL SERVICES; UNITED CANNABIS PATIENTS AND CAREGIVERS OF MAINE,

Defendants. APPEALS FROM THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF MAINE

[Hon. Nancy Torresen, U.S. District Judge]

Before

Barron, Chief Judge, Lynch and Gelpí, Circuit Judges.

Matthew Warner, with whom Jonathan Mermin, Alexandra Harriman, and Preti, Flaherty, Beliveau & Pachios, LLP were on brief, for appellees. James G. Monteleone, with whom Bernstein Shur was on brief, for appellant United Cannabis Patients and Caregivers of Maine. Christopher C. Taub, Chief Deputy Attorney General of Maine, with whom Aaron M. Frey, Attorney General of Maine, Thomas A. Knowlton, Deputy Attorney General of Maine, and Paul E. Suitter, Assistant Attorney General of Maine, were on brief, for appellant Kirsten Figueroa.

August 17, 2022 BARRON, Chief Judge. This appeal concerns whether the

Maine Medical Use of Marijuana Act, 22 M.R.S. §§ 2421-2430 (2009)

("Maine Medical Marijuana Act"), violates what is known as the

dormant Commerce Clause of the United States Constitution by

requiring "officers" and "directors" of medical marijuana

"dispensar[ies]," id. § 2428(6)(H), operating in Maine to be Maine

residents. The United States District Court for the District of

Maine held that Maine Medical Marijuana Act's residency

requirement does violate the dormant Commerce Clause,

notwithstanding that Congress enacted the Controlled Substances

Act ("CSA"),

et seq., to "eradicate the market" in

marijuana, see Gonzalez v. Raich,

, 19 n.29 (2005). The

District Court concluded that is so, because the residency

requirement is a facially protectionist state regulation of an

interstate market in medical marijuana that continues to operate

even in the face of the CSA. We affirm.

I.

Maine enacted the Maine Medical Marijuana Act in 2009 to

authorize participation in the market in medical marijuana in that

state in specified circumstances. See Maine Medical Use of

Marijuana Act, 22 M.R.S. §§ 2421-2430 (2009) (the "Medical

Marijuana Act") (permitting the "acquisition, possession,

cultivation, manufacture, use, delivery, transfer or

transportation of marijuana" relating to prescribed treatments for

- 3 - certain medical conditions). Among other things, the Maine Medical

Marijuana Act provides that a "dispensary" may sell medical

marijuana in the state, so long as certain requirements are

satisfied. Id. It then goes on to define a "dispensary" as "an

entity registered under [22 M.R.S. § 2425-A] that acquires,

possesses, cultivates, manufactures, delivers, transfers,

transports, sells, supplies or dispenses marijuana plants or

harvested marijuana or related supplies and educational materials

to qualifying patients and the caregivers of those patients." Id.

§ 2422(6).

The residency requirement that is at issue in this appeal

appears in § 2428(6)(H) of the Maine Medical Marijuana Act. It

provides that, for a "dispensary" to be authorized under state law

to sell "medical marijuana" in Maine, "all [the] officers or

directors of a dispensary must be residents of [Maine]." Id.

§ 2422(6)(H) (the "residency requirement"). The phrase "[o]fficer

or director" is then defined broadly in a separate provision of

the Maine Medical Marijuana Act to include "a director, manager,

shareholder, board member, partner, or other person holding a

management position or ownership interest in the organization."

Id. § 2422(6-B).

Northeast Patients Group is a corporation that is wholly

owned by three Maine residents and that owns and operates three of

Maine's seven licensed dispensaries as a for-profit corporation.

- 4 - High Street Capital is a Delaware corporation that is owned

exclusively by non-Maine residents and that wants to acquire

Northeast Patients Group. If the deal between the two companies

were to proceed, as both High Street Capital and Northeast Patients

Group desire, then the resulting company would not be able to

function as a dispensary under Maine law in consequence of the

Maine Medical Marijuana Act's residency requirement, because the

"officers or directors" of that new company would not be only Maine

residents.

Northeast Patients Group and High Street Capital

("plaintiffs") filed this suit under 42 U.S.C § 1983 and

against the Maine Department of Administrative and

Financial Services ("the Department") and Kirsten Figueroa, the

Commissioner of the Department, on December 17, 2020, in the

District of Maine to challenge the Maine Medical Marijuana Act's

residency requirement. The complaint alleges that the residency

requirement violates the dormant Commerce Clause by permitting

only in-staters to serve as "officers or directors" of

"dispensaries."

Figueroa and the Department answered the complaint on

January 29, 2021. Shortly thereafter, United Cannabis Patients,

a nonprofit advocacy group that represents medical marijuana

businesses owned by Maine residents, moved to intervene in the

- 5 - action as a defendant under Federal Rule of Civil Procedure

24(a)(2). The District Court granted the motion on March 23, 2021.

The parties filed a stipulated record that same month,

and the plaintiffs moved for summary judgment on that record.

Figueroa and the Department cross-moved for summary judgment on

the record on April 26, 2021. United Cannabis Patients opposed

the plaintiffs' motion that same day.

The District Court ruled on the parties' motions on

August 11, 2021. The District Court granted judgment for the

Department on the ground that the Department was immune from suit

under the Eleventh Amendment to the U.S. Constitution. Ne.

Patients Grp. v. Maine Dep't of Admin. & Fin. Servs.,

, 181-82 (D. Me. 2021). The District Court held with respect

to the plaintiffs' claims against Figueroa that Maine's residency

requirement violated the dormant Commerce Clause. On that basis,

it granted the plaintiffs' motion for a permanent injunction and

enjoined Figueroa from enforcing Maine's residency requirement.

. It also denied the defendants' motion for judgment on

the stipulated record on the same basis.

Figueroa and United Cannabis Patients timely appealed.

They simultaneously moved for the District Court to stay its

injunction while the appeal was pending. On October 27, 2021, the

District Court granted the motion and stayed the injunction. This

appeal followed.

- 6 - II.

The Commerce Clause of the U.S. Constitution provides

that "Congress shall have [the] [p]ower . . . [t]o regulate

Commerce . . . among the several States." U.S. Const. Art. I,

§ 8, cl. 3. The Supreme Court of the United States has long

construed the Commerce Clause to be not only an affirmative grant

of authority to Congress to regulate interstate commerce but also

a negative, "self-executing limitation on the power of the [s]tates

to enact laws [that place] substantial burdens on [interstate]

commerce." S.-Cent. Timber Dev., Inc. v. Wunnicke,

(1984); see also Gen. Motors Corp. v. Tracy,

(1997) ("The negative or dormant implication of the Commerce Clause

prohibits state taxation or regulation that discriminates against

or unduly burdens interstate commerce and thereby 'imped[es] free

private trade in the national marketplace.'" (internal citations

omitted) (alteration in original) (quoting Reeves, Inc. v. Stake,

(1980))). Thus, the negative aspect of the

Commerce Clause in and of itself protects interstate commerce from

"the evils of 'economic isolation' and protectionism" that state

regulation otherwise could bring about. City of Philadelphia v.

New Jersey,

(1978).

The District Court concluded in this case that the

"dormant implication of the Commerce Clause" prohibits Maine's

residency requirement from being given legal effect. The

- 7 - defendants do not dispute that Maine's residency requirement, if

applied to a lawful market, would comport with the dormant Commerce

Clause (as the Clause's negative aspect is often called) only if

that requirement were "narrowly tailored to 'advanc[e] a

legitimate local purpose,'" Tenn. Wine and Spirits Retailers

Assoc. v. Thomas,

(2019) (quoting Dep't of

Revenue of Ky. v. Davis,

(2008)). The defendants

also do not dispute that, at least with respect to a lawful market,

"where simple economic protectionism is effected by state

legislation, a virtually per se rule of invalidity has been

erected." City of Philadelphia,

. Finally, the

defendants do not dispute that they cannot show that Maine's

residency requirement, if it were applied to a lawful market, would

be narrowly tailored to serve a legitimate local purpose, because

they agree that, as applied to such a market, the requirement would

"basically [be] a protectionist measure,"

, that would

both "discriminate[] against" and "unduly burden[] interstate

commerce," Gen. Motors Corp.,

.

The defendants' acceptance of these propositions should

come as no surprise, given the Maine Medical Marijuana Act's

sweeping definition of "officers" and "directors." In Tennessee

Wine and Spirits Retailers Association v. Thomas, the Supreme Court

found the state law at issue there to be "plainly based on

unalloyed protectionism,"

(2019), and so

- 8 - barred by the dormant Commerce Clause, because the measure required

all the stockholders of a corporation holding a license to operate

an in-state liquor store to be state residents,

.

Maine's measure goes ever further in discriminating against out-

of-staters, as a plain reading of the definition of "officers or

directors" in the Medical Marijuana Act would seem to sweep up

anyone with the title of "manager," no matter at what level, as

well as all stockholders and anyone with an ownership interest of

any amount. See 22 M.R.S. § 2422(6-B).

That the defendants do not dispute these points does not

mean, however, that they accept that the dormant Commerce Clause

bars the residency requirement. They argue that, notwithstanding

these points, Maine's residency requirement comports with the

dormant Commerce Clause because federal law makes participation in

the market to which the residency requirement applies illegal. It

is that contention -- and that contention alone -- that we must

address.

It is important to emphasize at the outset, however,

that, to address that contention, we need to examine the distinct

versions of it that the defendants press. As we will see, each

version rests on its own, independent premises. We thus proceed

accordingly, starting with the defendants' most sweeping version.

We then work our way through to the most case-specific -- but, as

we will explain -- still unpersuasive one. Our review, in all

- 9 - events, is de novo, see Walgreen Co. v. Rullan,

, 55

(1st Cir. 2005).

A.

The defendants' first ground for contending that the

District Court erred in ruling that the residency requirement

violates the dormant Commerce Clause rests on the uncontroversial

major premise that the dormant Commerce Clause only "denies the

[s]tates the power unjustifiably to discriminate against or burden

the interstate flow of articles of commerce." Or. Waste Sys.,

Inc. v. Dep't of Env't Quality of Or.,

(1994).

This ground also appears to rest, however, on a minor premise --

namely, that it is impossible for there to be an interstate market

in any good that, under federal law, is contraband throughout the

country.

The defendants appear to be relying on this minor premise

because they contend that the CSA ensures that the residency

requirement does not run afoul of the dormant Commerce Clause

simply because that federal statute, by making marijuana

contraband, ensures that there is no interstate market in commerce

for the residency requirement to burden. But, the minor premise

is mistaken.

That is not just because it is possible for an interstate

commercial market in contraband to exist, as the persistence of

interstate black markets of various kinds all too clearly

- 10 - demonstrates. It is also because the Supreme Court has recognized

as much in connection with its review of Congress's attempt to

exercise the Commerce Clause's affirmative grant of power to stamp

out the interstate market in marijuana.

Specifically, in Gonzalez, the Supreme Court considered

whether Congress had the authority under the Commerce Clause to

"prohibit the local cultivation and use of marijuana" even when

undertaken in compliance with state law,

. The Court

explained that Congress did possess such authority -- and thus

that the CSA constituted a proper exercise of the commerce power

insofar as that federal statute effected such a prohibition -- in

part because marijuana is a "fungible commodity for which there is

an established, albeit illegal, interstate market."

(emphasis added).

We note, too, that nothing in the record in this case

indicates that, due to the CSA, there is no interstate market in

medical marijuana. The prohibition that Maine's Medical Marijuana

Act seeks to impose on out-of-state actors entering that very

market reflects the reality that the market continues to operate.

That prohibition even indicates that the market is so robust that,

absent the Medical Marijuana Act's residency requirement, it would

be likely to attract entrants far and wide. And, while the Medical

Marijuana Act does attempt to restrict out-of-staters from selling

medical marijuana, it affirmatively encourages out-of-staters to

- 11 - participate in the medical marijuana market as customers. See 22

M.R.S. § 2423-D (permitting a "visiting qualifying patient from

another jurisdiction that authorizes the medical use of marijuana"

to possess limited quantities of marijuana in Maine).

Congress's enactment of the Rohrabacher-Farr Amendment

in the wake of the CSA's passage further undermines the notion

that no such interstate market exists. That amendment hardly

reflects a congressional understanding that the CSA succeeded in

eradicating the interstate market in medical marijuana. See

Consolidated Appropriations Act of 2022,

,

(2022) (providing that "[n]one of the funds

made available under this Act to the Department of Justice may be

used, with respect to [Maine and other states], to prevent any of

them from implementing their own laws that authorize the use,

distribution, possession, or cultivation of medical marijuana").

And, we note, the current Rohrabacher-Farr Amendment is no anomaly,

as Congress has included an identical version of it in every annual

congressional appropriation to the U.S. Department of Justice

since fiscal year 2015, see United States v. Bilodeau,

(1st Cir. 2022), reflecting the fact that over time more

than half of all states have legalized the market for medical

marijuana to some extent.

We make one additional observation. The defendants

acknowledged at oral argument that Congress could enact a measure

- 12 - pursuant to the Commerce Clause to preempt the residency

requirement that the Medical Marijuana Act imposes. Thus, the

defendants do not dispute that Congress could exercise the commerce

power to countermand Maine's protectionist choice to afford only

its residents the chance to exploit the market in question by

operating a medical marijuana dispensary in that state. But, in

consequence, the defendants necessarily recognize that an

interstate commercial market in medical marijuana must exist that

the Commerce Clause can reach. Thus, the defendants themselves

appear, in the end, to be less committed to the view that there is

no interstate market in medical marijuana than their lead ground

for challenging the District Court's ruling might suggest.

B.

The defendants next contend, somewhat more modestly,

that the District Court's ruling cannot stand even if there is an

interstate market in medical marijuana that continues to operate

in the face of the CSA. Here, the defendants shift away from the

contention that there is no such market for the dormant Commerce

Clause to protect. They appear to contend instead that the

negative implication of the Commerce Clause is a nullity with

respect to the interstate market in medical marijuana simply

because Congress affirmatively exercised its Commerce Clause power

to regulate that very market. But, insofar as that is what the

defendants mean to argue, we are not persuaded. Or, at least, we

- 13 - are not, given the nature of the specific federal legislative

context in which this case arises.

To see why, it is important to keep in mind that the

question before us is not whether the CSA preempts the residency

requirement in the Medical Marijuana Act. It is whether the

residency requirement cannot stand because it transgresses the

dormant Commerce Clause due to the substantial burden that this

requirement (in light of its patently protectionist nature)

imposes on interstate commerce.

This distinction matters because preemption by a federal

statute and prohibition by the dormant Commerce Clause are distinct

rather than coterminous means by which federal law may limit state

lawmaking that substantially burdens interstate commerce. Thus,

the negative implication of the commerce power may pose an

independent bar to a state regulation of an interstate commercial

market even when Congress chooses to exercise its affirmative

commerce power with respect to that same market without also

preempting that state regulation.

Precedent accords with this same understanding. The

Supreme Court addressed whether the negative implication of the

commerce power bars a state regulation of commercial activity in

the same interstate market in which Congress has exercised its

affirmative commerce power in California v. Zook,

(1949). In doing so, the Court examined whether the federal

- 14 - statute that resulted from Congress's exercise of that power

preempted the state law at issue while also, separately,

determining whether the state law comported with the requirements

of the dormant Commerce Clause.

.

Moreover, our own decision in United Egg Producers v.

Department of Agriculture of Puerto Rico,

(1st Cir.

1996), accords with this understanding of the way that the

affirmative and negative aspects of the Commerce Clause relate to

one another. There, we considered whether a Puerto Rico law that

mandated that eggs sold within the Commonwealth be stamped with

the two-letter code that indicated their state of origin violated

the dormant Commerce Clause.

. We held that it did,

even though Congress had already regulated the labeling of eggs

within the continental United States. Id. at 507. We thus did

not treat Congress's exercise of the Commerce Clause's affirmative

grant of power in the interstate market in eggs as having

inherently displaced the operation of the Commerce Clause's

negative implication on state attempts to regulate that market.

Rather, we concluded that the dormant Commerce Clause operated as

an independent means by which federal law could limit a state law

attempt to regulate the interstate commercial market that the

federal statute did not itself preempt.

To be sure, unlike the federal statute at issue in United

Egg Producers, the CSA applies uniformly throughout the United

- 15 - States. But, as we have noted, the defendants do not suggest that

the CSA preempts the provision of the Medical Marijuana Act that

is at issue. Nor could they press their appeal if they did. That

being so, this case is no different from United Egg Producers when

it comes to the question of whether the fact that Congress has

regulated an interstate market to some extent in and of itself

renders the dormant Commerce Clause inoperative as to any state

regulation of that same market.

Simply put, here, as there, the state is attempting to

regulate an interstate market in a way that no federal statute on

its own purports to prohibit. Cf. Tenn. Wine,

(noting that "[d]ormant Commerce Clause restrictions apply only

when Congress has not exercised its Commerce Clause power to

regulate the matter at issue," and citing to Leisy v. Hardin,

(1890), which discusses federal preemption of

state law (emphasis added)). And so, here, as there, the question

remains whether a separate possible federal law bar to such state

regulation -- namely, the dormant Commerce Clause -- stands in the

way.

Nonetheless, we need not -- and so, do not -- hold that

a congressional exercise of the commerce power can never, merely

by being in place, displace the dormant Commerce Clause. As we

have noted above, the CSA was not Congress's last word on the

market in marijuana. Rather, some years after Congress passed the

- 16 - CSA, Congress enacted the Rohrabacher-Farr Amendment. And, it has

continued to enact that measure annually thereafter.

This congressional action in the wake of the CSA reflects

that Congress contemplates both that an interstate market in

medical marijuana may exist that is free from federal criminal

enforcement and that, if so, this interstate market may be subject

to state regulation. Thus, this is not a case in which, if Congress

is our guide, we have reason to conclude solely based on Congress's

affirmative exercise of its commerce power with respect to an

interstate market either that there is nothing left of that market

for the dormant Commerce Clause to protect from state protectionism

or that there is no prospect of states attempting to substantially

burden that market through protectionist regulation. Accordingly,

this is not a case in which we could conclude from the fact of

congressional regulation of the relevant interstate market

alone -- and thus without further inquiry into congressional

intent in so regulating that market -- that the dormant Commerce

Clause imposes no limits on state regulation of the interstate

market, including even when such state regulation smacks of pure

protectionism.

In arguing otherwise, the defendants do invoke an out-

of-state precedent, Pic-A-State PA, Inc. v. Commonwealth of

Pennsylvania,

(3d Cir. 1994). There, the Third Circuit

considered the validity of a state statute that prohibited the

- 17 - sale of out-of-state lottery tickets in the face of a federal

statute that barred interstate sales of lottery tickets.

. Pic-A-State held that the state regulation was not barred by

federal law.

.

The Third Circuit stated in reaching that conclusion

that where Congress "proscribe[s] certain interstate commerce,

Congress has determine[d] that . . . commerce is not in the

national interest."

. The Third Circuit then went on

to state that, "where such a determination has been made by

Congress, it does not offend the purpose of the Commerce Clause

for states to discriminate or burden that commerce."

But, we do not understand the Third Circuit to have

premised its decision to uphold the state law in that case on the

mere fact that Congress had exercised its affirmative commerce

power to regulate the same interstate market that the state law

burdened. The Third Circuit rested its holding on the more fine-

grained determination that the state statute that was claimed to

violate federal law "[was] consistent with the federal criminal

proscription,"

(emphasis added), such that the state

law, regardless of its possibly protectionist nature, "did not

offend the purpose of the Commerce Clause,"

. And, in

explaining why the state and federal measures at issue were

properly deemed to be "consistent," Pic-A-State emphasized that

the state law, by mirroring the federal one, "aided" Congress's

- 18 - objectives.

. Pic-A-State, therefore, does not hold

that a congressional decision to regulate an interstate market in

and of itself pretermits an inquiry into whether a state law

violates the dormant Commerce Clause by substantially burdening

that very market. Pic-a-State holds only, like Zook, that, in

some circumstances, a federal statute may provide a basis for

concluding that a state law that otherwise might run afoul of the

dormant Commerce Clause does not.

C.

The defendants make one last stand. They contend that

the dormant Commerce Clause does not bar Maine's residency

requirement because Congress "consent[ed] to [this] otherwise

impermissible state regulation," United Egg Producers,

, through the CSA. This version of the defendants' challenge

to the ruling below is unlike the others that we have considered

thus far, because it turns entirely on whether Congress intended

in the CSA to bless state attempts to substantially burden the

interstate market in medical marijuana.

The defendants are, of course, correct that Congress

could manifest an intent to consent to Maine's chosen means of

substantially burdening that market. The defendants also are

correct that if Congress were to manifest such an intent, then the

dormant Commerce Clause would pose no bar to the residency

requirement. It is well established that "Congress may 'redefine

- 19 - the distribution of power over interstate commerce'" by consenting

to state laws that would otherwise violate the dormant Commerce

Clause. S.-Cent. Timber, 467 U.S. at 87–88 (quoting S. Pac. Co. v.

Arizona,

, 769 (1945)). As we will explain, however,

we cannot conclude that Congress did manifest such an intent

through the CSA.

1.

Ordinarily, Congress must "expressly state" an intent to

obviate the dormant Commerce Clause's limitation on protectionist

state regulation. Sporhase v. Nebraska, ex rel. Douglas,

(1982) (quoting New England Power Co. v. New Hampshire,

(1982)); Prudential Ins. Co. v. Benjamin,

(1946) (same). The usual requirement that Congress

must be "unmistakably clear," S.-Cent. Timber,

,

about its "intent and policy to sustain state legislation from

attack under the Commerce Clause," Sporhase,

(quoting New England Power,

(internal quotation

marks omitted)), "is mandated by the policies underlying dormant

Commerce Clause doctrine." S.-Cent. Timber,

.

The dissent points out that none of the cases that apply

this clear statement requirement concern a state measure that had

been imposed on an interstate commercial market that Congress had

sought to snuff out. The dissent goes on to contend that, because

Congress has sought to criminalize the market at issue in this

- 20 - case through the CSA, there is no reason to apply the clear

statement requirement here. See Dissent at 38-39.

To support this conclusion, the dissent stresses that

the policy underlying the dormant Commerce Clause is to preserve

a "national market for competition undisturbed by preferential

advantages conferred by a State upon its residents or resident

competitors." Gen. Motors,

. It asserts as well

that, when such a national market for competition is maintained,

"every consumer may look to the free competition from every

producing area in the Nation to protect him from exploitation by

any."

at 299-300 (quoting H.P. Hood & Sons, Inc. v. Du Mond,

(1949)). See Dissent at 40. The dissent then

contends that there is no reason to require Congress to make a

clear statement blessing state protectionism when Congress does

not want any consumers to be participating in the relevant market.

Indeed, the dissent suggests that it would be anomalous to expect

Congress to articulate such mixed messages clearly. See Dissent

at 41.

But, we are not as confident that the constitutionally

rooted rule of construction that ordinarily applies is

categorically inapplicable when Congress seeks to eradicate a

national market through a federal criminal statute (even assuming

that was Congress's intent in enacting the CSA and that, the

Rohrabacher-Farr Amendment notwithstanding, Congress continues to

- 21 - have that intent). Indeed, in South-Central Timber Development,

Inc. v. Wunnicke,

(1984), the Supreme Court described

at some length the logic that underlies the clear statement

requirement, and it is not evident to us that this logic supports

the view that there is no such requirement whenever Congress has

acted to make a certain kind of interstate commercial activity

unlawful.

The Court explained in South-Central Timber that the

democratic process at the state level does not in and of itself

function as an effective restraint against protectionist state

laws because the burdens that such laws impose will fall on actors

who are unrepresented in state legislatures.

; see also

S.C. State Highway Dep't. v. Barnwell Bros., Inc.,

,

185 n.2 (1938) ("[W]hen the regulation is of such a character that

its burden falls principally upon those without the state,

legislative action is not likely to be subjected to those political

restraints which are normally exerted on legislation where it

affects adversely some interests within the state."). The Court

further observed that, by contrast, "when Congress acts, all

segments of the country are represented, and there is significantly

less danger that one State will be in a position to exploit

others." S.-Cent. Timber,

. And, the Court noted,

when a state is in such an advantageous position relative to other

states and we can be confident that Congress has authorized that

- 22 - state to capitalize on the edge that it holds, we at least know

that "the decision to allow [that state to so capitalize] is a

collective one."

Thus, the Court explained, "[a] rule

requiring a clear expression of approval by Congress ensures that

there is, in fact, such a collective decision and reduces

significantly the risk that unrepresented interests will be

adversely affected."

To be sure, South-Central Timber is itself a case in

which the interstate market at issue was a lawful one to enter.

And, we do not dispute that the potential for protectionist state

regulation to stoke antagonism among the states is likely to be

greatest when the market at issue is a lawful one. The incentives

for states to let their rivalries get the best of them are clear

in that circumstance, given the reasons to think that a lawful

market is inherently ripe to be exploited.

But, we are not as confident as the dissent that

interstate rivalry in the commercial realm poses no risk to our

national system of government whenever the commercial market at

issue is one that federal law makes illegal. Indeed, the issue of

whether Congress has chosen to bless a state's effort to protect

such a market for its own residents will only arise when a state

does have an incentive to exploit it, as that issue presents itself

only when a state seeks to regulate an illegal market through

protectionist means. There thus appear to us to be reasons to be

- 23 - concerned that states sometimes will act on those incentives to

the detriment of the national system of government even in a market

of that illegal kind.

To be sure, we may expect that, with respect to markets

in which Congress makes participation a crime, states will not

take the unusual steps that many states have taken with respect to

medical marijuana in seeking to facilitate participation in it.

And, of course, if states take no such steps, then we will have no

occasion to inquire into whether Congress has blessed state

protectionism, clearly or otherwise. But, when states do take

such steps, and in taking them enact protectionist measures, we

have no choice but to decide whether to so inquire and, if an

inquiry is required, to decide how demanding that inquiry must be.

In answering those questions, we do not see how we may

simply ignore the suggestion from history that we have some

obligation to be attentive to the dangers that state protectionism

poses to the federal system of government that the Constitution

establishes. The destructive consequences of allowing states to

exercise an unfettered power to discriminate against each other's

industry have been of great concern since the Founding. Indeed,

"[r]emoving state trade barriers was a principal reason for the

adoption of the Constitution," Tenn. Wine,

, and

not solely because their removal would benefit consumers. As

Alexander Hamilton cautioned in Federalist Paper No. 7:

- 24 - The competitions of commerce would be another fruitful source of contention. The States less favorably circumstanced would be desirous of escaping from the disadvantages of local situation, and of sharing in the advantages of their more fortunate neighbors. Each State, or separate confederacy, would pursue a system of commercial policy peculiar to itself. This would occasion distinctions, preferences, and exclusions, which would beget discontent. . . . The infractions of these regulations, on one side, the efforts to prevent and repel them, on the other, would naturally lead to outrages, and these to reprisals and wars.

We are thus reluctant, given such Founding-era worries,

to construe the negative aspect of the dormant Commerce Clause in

a way that would essentially require us to ignore the potential

for a trade war to be destructive whenever its genesis could be

traced to a single state's effort to attain predominance in a

market that federal law deems unlawful. The potential for any

trade war -- including one started in that way -- to escalate and

have knock-on effects would seem rather strongly to counsel against

our doing so.

Accordingly, we are skeptical that the precedents in

this area may be read to show that, whenever Congress makes

participation in an interstate market unlawful, Congress need not

be as clear in blessing state protectionism as we usually demand

that it must be. Certainly, no case so holds.

Our skepticism in this regard, however, is especially

great here. As we have emphasized, Congress, through the

- 25 - Rohrabacher-Farr Amendment, has acknowledged the existence of a

market in medical marijuana. It has also acknowledged, through

that same measure, that this market may continue to exist in some

circumstances free from federal criminal enforcement and thus

subject only to state regulation. See Bilodeau,

.

And, of course, it has done so in the wake of the unusual efforts

by many states (Maine included) to construct a legal framework for

lawful participation -- as a matter of state law -- in that very

same market.

Thus, whatever the circumstances may be with respect to

other goods that Congress has deemed contraband, this is not a

case in which Congress may be understood to have criminalized a

national market with no expectation that an interstate market would

continue to operate. Quite the opposite. Congress has taken

affirmative steps to thwart efforts by federal law enforcement to

shut down that very market, through the annual enactment of the

Rohrabacher-Farr Amendment. And it has taken those steps,

presumably, with an awareness of the beneficial consequences that

those steps will have for consumers who seek to obtain medical

marijuana.

For that reason, whatever assumptions may be warranted

in other contexts, we have trouble seeing why we must assume here

that the specter of states competing for dominance in this market

through protectionist means is so remote that we need not demand

- 26 - that Congress make a point of expressly consenting to their doing

so. Congress itself has given us reason to attend to that very

specter by so plainly contemplating state regulation of this

market.

How, then, would the defendants' claim of congressional

consent fare here if the clear statement requirement were to

obtain? Not well, we think.

Nothing on the face of the CSA purports to bless

interstate discrimination in the market for medical marijuana.

The CSA in that respect stands in stark contrast to notable

instances of Congress blessing such interstate discrimination.

See, e.g., Prudential Ins. Co. v. Benjamin,

(1946)

(finding that Congress's purpose in enacting the McCarran Act "was

broadly to give support to the existing and future state systems

for regulating and taxing the business of insurance . . . by

removing obstructions which might be thought to flow from its own

power, whether dormant or exercised, except as otherwise expressly

provided in the Act"). The same may be said of the Rohrabacher-

Farr Amendment.

Perhaps for these reasons, neither the dissent nor the

defendants attempt to argue that Congress's expression of consent

to this kind of rank protectionism is unmistakably clear. They

offer only reasons for us not to require that Congress express its

intent to give such consent with that kind of clarity.

- 27 - All that said, we need not -- and so, do not -- go so

far as to hold that the same clear statement requirement that

obtains when a market is lawful necessarily obtains even when a

market is not. We choose to take what seems to us a more prudent

course, by assuming that the dissent is right that this clear

statement requirement does not apply here. For, as we will next

explain, even if there is reason to excuse Congress for not

attending to the possibility that states might seek to protect

their ability to exploit a market in which participation is a

federal crime, we still cannot conclude that Congress has consented

to the kind of state protectionism in which Maine has engaged.

2.

To conclude that Congress has consented to such

protectionism, we would have to do more than abandon the ordinary

rule that Congress does not mean to consent to such measures unless

it does so in unmistakably clear terms. We would have to adopt

the presumption that Congress does mean to consent to such measures

whenever it makes participation in an interstate market a crime.

And that is because, absent the application of such a pro-

protectionism presumption, we see nothing in this record that could

support the conclusion that Congress did mean to bless such

protectionist measures here.

To that point, it can hardly be said that a state effort

to protect a market in medical marijuana from out-of-state

- 28 - competition necessarily advances Congress's evident goal in the

CSA of preventing entry into that market. Such protectionism does,

of course, stop out-of-staters from entering the market. But, it

does so only by simultaneously insulating in-state actors who do

choose to enter that market from competition. It thus threatens,

in the way that protectionist measures necessarily do, to encourage

precisely what the CSA seeks to stop -- trade by in-staters in the

relevant market. Indeed, if that were not Maine's aim in imposing

the residency requirement, then why would Maine not have simply

prohibited dispensaries altogether, rather than protected those

run by Mainers from outside competition? For these reasons, we

conclude that, while Maine's residency requirement does limit some

actors from trading in medical marijuana, it does so in a way that,

due to its protectionist nature, in no sense "aid[s]" the policy

expressed by Congress in the CSA, Pic-A-State,

.

Moreover, Congress took the time in the Rohrabacher-Farr

Amendment to address the extent to which, the CSA notwithstanding,

the market in medical marijuana may be protected from federal

prosecutorial action. But, the defendants do not suggest that, in

doing so, Congress said anything that would indicate that it

intends to bless the kind of protectionist regulation of that

market by a state that the dormant Commerce Clause would bar in a

lawful market.

- 29 - The defendants' failure to do so is understandable. The

Rohrabacher-Farr Amendment does not in fact repeal the CSA as to

medical marijuana. It is thus hard to discern from the

Rohrabacher-Farr Amendment a congressional intent to bless a state

regulation of the market that might further participation in it,

such as a protectionist state law like the one at issue here might.

Yet, at the same time, the Rohrabacher-Farr Amendment does plainly

reflect an effort by Congress to free the market in medical

marijuana from being subject to the full degree of federal criminal

enforcement to which that market otherwise would be subject. And

yet, the Rohrabacher-Farr Amendment does so without in any way

indicating that Congress wishes for that interstate commercial

market to be the unusual one that states may substantially burden

through protectionist measures.

So, to the extent that the Rohrabacher-Farr Amendment

bears on the inquiry into whether Congress intended to bless such

protectionist state regulation, that federal measure at most adds

to our reasons for concluding that Congress did not. And that is

because that federal measure reflects Congress's awareness of

there being a market in medical marijuana but contains not a word

that would suggest, even by implication, that states may

substantially burden it.1

1In this regard, we note that unlike the prohibition in Ne. Bancorp, Inc. v. Bd. of Governors of Fed. Rsrv. Sys., 472 U.S.

- 30 - To make the case that, even if Congress's affirmative

regulation of the marijuana market does not in and of itself

displace the dormant Commerce Clause, Congress nonetheless has

consented to the protectionism in which Maine has engaged, the

defendants do appear to rely on Pic-A-State once again. But, that

precedent, once again, offers the defendants no support.

The Third Circuit observed in upholding the state law

measure in that case that the Supreme Court has explained that

federal preemption and dormant Commerce Clause doctrines are

"separate particularizations of [the] principle" that Congress --

not the states -- holds the power to "redefine" areas of national

policy. Pic-A-State,

(quoting Zook,

). Moreover, the federal statute in that case made it a crime

to participate in an interstate lottery market and the state law

at issue mirrored that same federal criminal prohibition. Thus,

the Third Circuit had no trouble concluding that the state law did

not run afoul of "national policy," id. at 179, because that state

159, 163 (1985) (describing the Douglas Amendment, which "prohibits the Board from approving an application of a bank holding company or bank located in one State to acquire a bank located in another State, or substantially all of its assets, unless the acquisition 'is specifically authorized by the statute laws of the State in which such bank is located, by language to that effect and not merely by implication'" (quoting

(d) (1985))), which makes explicit reference to interstate protectionism, the CSA makes no much explicit reference.

- 31 - law had the effect of "aiding" the same federal proscription,

.

Here, by contrast, the federal criminal prohibition that

the CSA imposes is, as we have explained, not "aided" in any

evident way by the ban on out-of-state participation in the market

in medical marijuana in Maine. To the contrary, that state law

ban encourages participation in that market (at least by in-

staters) that the CSA gives every indication that Congress seeks

to prevent.

True, as we have noted, the Rohrabacher-Farr Amendment

does limit enforcement of the national ban on participation in

that market that the CSA imposes. But, as we have pointed out,

the defendants understandably do not suggest that Congress blessed

Maine's protectionism through the Rohrabacher-Farr Amendment.

Thus, we see no basis for concluding in this case that

Congress intended to permit state discrimination against out-of-

staters in the interstate market in medical marijuana, unless there

is a presumption that Congress means to consent to state

protectionism whenever it exercises its commerce power to make

participation in an interstate market unlawful. But, we know of

no precedent that would support the application of such a pro-

protectionism presumption.

Nor can we think of any logic, set forth in the available

precedent, that would lead us to apply that presumption. Indeed,

- 32 - applying that presumption would seem only to invite state attempts

to exploit markets that Congress has made illegal, by freeing

states to regulate those markets in ways that would facilitate

only their residents' participation in them. Thus, as neither the

defendants nor the dissent have given us any reason to adopt the

presumption, we reject the defendants' third and final ground for

concluding that the Maine residency requirement does not violate

the dormant Commerce Clause, just as we have rejected each of the

other two that the defendants have put forward.

III.

We close by addressing what appears to us to be the

dissent's two additional grounds for reversing the District Court,

though neither appears to be a ground on which the defendants

themselves rely. We are not persuaded by either one.

The first of these grounds is that a court has no warrant

to "extend" the reach of the Commerce Clause's negative implication

to a market in goods that is "illegal." As the dissent puts it,

"[n]othing in our precedents asserts a 'fundamental'

constitutional interest in 'preserving a national market for

competition in a market which Congress has lawfully proscribed."

(quoting Gen. Motors Corp.,

). See Dissent at 42.

But, of course, what is merely an application of the

dormant Commerce Clause to a new circumstance and what is an

extension of the dormant Commerce Clause beyond its permissible

- 33 - bounds is the issue at hand. Indeed, it would be just as well to

say that we have no warrant to limit the scope of the dormant

Commerce Clause in these unique circumstances just because the CSA

is on the books.

Why, then, would it be improper for us to apply the

dormant Commerce Clause here? There is an interstate market, and

a state is trying to protect its advantageous position with respect

to it. Moreover, Congress anticipated both that there would be

such a market, despite having passed the CSA, and that states would

seek to regulate it. So, given the long-held understanding that

the dormant Commerce Clause has a negative aspect, there would

seem to be no basis for our declining to enforce the dormant

Commerce Clause unless there were a reason for us to think that

Congress had exercised its commerce power in a way that would

suggest that we should not do so. Yet, as we have explained, we

have no reason to think that Congress has.

In so concluding, we again find support in the Supreme

Court's decision in Zook. There, the Court considered a challenge

to a state law that criminalized "sale or arrangement of any

transportation over public highways of [that] State if the

transporting carrier" did not have the proper permit could stand,

notwithstanding a federal law that was "substantially the same."

Id. at 726. The Court ultimately concluded that the state law

aided the enforcement of the federal criminal prohibition that

- 34 - Congress had enacted, and, in doing so, it appeared to conclude

that Congress had blessed the protectionist policy, such that it

was neither preempted nor violative of the dormant Commerce Clause.

Id. at 731. In doing so, the Court in no way suggested that

because a federal statute makes the relevant interstate commercial

activity illegal, states are free to regulate that activity in

ways that the dormant Commerce Clause otherwise would bar without

there being any indication that Congress had consented to states

doing so. The Court held only that, notwithstanding the dormant

Commerce Clause, states could so regulate the interstate

commercial activity that Congress had made illegal when Congress

had not preempted state efforts to do so and those state efforts

mirrored the precise criminal prohibition that Congress had

enacted. Id.; see also Pic-A-State,

(considering

whether a state statute that criminalized the participation in an

interstate market was "consistent with the federal criminal

proscription" as part of its analysis as to whether that state law

violated the dormant Commerce Clause).

For these reasons, we cannot see how we may conclude

that, whenever Congress criminalizes activity in an interstate

commercial market, Congress need not give any indication of its

intent to permit a state to do what it otherwise may not --

substantially burden interstate commerce without adequate

- 35 - justification. Accordingly, we cannot agree with the dissent's

contrary view.

The remaining ground posited by the dissent seems to be

rooted less in a claim about the reach of the dormant Commerce

Clause itself than in a claim about the scope of a court's

equitable power to enforce it. The dissent asserts that the

plaintiffs "should not be able to receive a constitutional remedy

in federal court to protect the sale and distribution of a

controlled substance which remains illegal under federal law."

See Dissent at 42-43; see also Original Investments, LLC v.

Oklahoma,

, 1233 (W.D. Okla. 2021).

But, we do not see how it would be equitable for us to

leave a dormant Commerce Clause violation unremedied if such a

violation has occurred. To the extent that the dissent suggests

that we must not provide a remedy for the sake of ensuring that we

do not inadvertently facilitate participation in an illegal

market, we do not see why. The surest way to prevent courts from

inadvertently preventing state regulation of interstate commercial

markets that Congress meant to permit is to look for indications

that Congress did intend to permit them. And, insofar as the

dissent means to suggest that such an indication can be found in

the mere fact that Congress has made it illegal to participate in

the market that a state has chosen to regulate, then it seems to

us that the dissent is relying on the ground set forth above. But,

- 36 - as we there explained, we are not persuaded that the dormant

Commerce Clause can have no effect in a market in which Congress

has made participation criminal, including even one in which, as

is the case here, Congress has barred enforcement of the federal

criminal prohibition in certain respects.

IV.

The District Court's grant of judgment on the stipulated

record to the plaintiffs and denial of its grant of judgment to

the defendants is affirmed.

-Dissenting Opinion Follows-

- 37 - GELPÍ, Circuit Judge, dissenting. I respectfully

dissent from the affirmation of the district court's opinion. I

agree that Maine's residency requirement, that "[a]ll officers or

directors of a dispensary must be residents of this State" set

forth at 22 M.R.S. § 2428(6)(H), incontestably constitutes

protectionist legislation. Indeed, at oral argument, counsel for

Defendant-Appellant Kristen Figueroa conceded as much. Moreover,

Figueroa does not assert that the measure could meet the strict

scrutiny standard to which protectionist legislation is ordinarily

subject. Indeed, the Supreme Court and this court have routinely

invalidated similar protectionist legislation in markets ranging

from liquor store licensing to egg products. See, e.g., Tenn.

Wine & Spirits Retailers Ass'n v. Thomas,

(2019); United Egg Producers v. Dep't of Agric.,

, 571-

72 (1st Cir. 1996). Following this caselaw, the majority affirms

the district court by concluding that Maine's measure fails under

the dormant Commerce Clause, because defendants have not

satisfactorily demonstrated Congress's "unmistakably clear intent

to allow otherwise discriminatory regulations," United Egg

Producers,

(citing Wyoming v. Oklahoma,

(1992)), or demonstrated that Congress has otherwise

consented to such protectionist legislation. In the ordinary

course, in an ordinary market, I would agree that such a measure

- 38 - is unconstitutional under well-trodden dormant Commerce Clause

principles and caselaw.

But the national market for marijuana is unlike the

markets for liquor licenses or egg products in one crucial regard:

it is illegal. Congress in 1971 enacted the Controlled Substance

Act (CSA) pursuant to its Commerce Clause powers, designating

marijuana a Schedule I controlled substance. See

;

§ 812(c)(Schedule I)(c)(10); Gonzales v. Raich,

(2005). Under the CSA, it is a crime "to manufacture, distribute,

or dispense, or possess with intent to manufacture, distribute, or

dispense, a controlled substance."

(a)(1). It is

here that I part ways with the majority, because I disagree that

the test we have developed for the mine-run of dormant Commerce

Clause cases apply automatically or with equal vigor when the

market in question is illegal as a matter of federal law. As such,

I do not believe that the United Egg Producers test -- which, prior

to today, we have only ever applied in cases involving legal

markets -- extends to national markets that Congress has expressly

made illegal. Instead, I start from the premise that we should

vindicate the principles that animate the dormant Commerce Clause

-- and I conclude that the same constitutional precepts that led

us to articulate the United Egg Producers test counsel against its

application here.

- 39 - As the Supreme Court has stated, "the dormant Commerce

Clause's fundamental objective [is to] preserve[] a national

market for competition undisturbed by preferential advantages

conferred by a State upon its residents or resident competitors."

Gen. Motors Corp. v. Tracy,

(1997). It follows

that, in the market for legal goods and services in the stream of

interstate commerce, the dormant Commerce Clause renders

unconstitutional a state's preferential treatment of its

residents, absent Congress's "unmistakably clear intent to allow

otherwise discriminatory regulations." United Egg Producers,

. This is because the law presumes the public interest

is best served by maintaining an unencumbered "national market for

competition" in legal goods and services. Gen. Motors Corp.,

. However, it makes little sense to retain this

presumption when Congress has explicitly acted to make the market

in question illegal, because the premise that the dormant Commerce

Clause enshrines, and which undergirds United Egg Producers, does

not hold. The Commerce Clause does not recognize an interest in

promoting a competitive market in illegal goods or services or

forestalling hypothetical interstate rivalries in the same.2

2 The majority highlights the Supreme Court's explanation in South-Central Timber Development, Inc. v. Wunnicke,

(1984) that -- in the context of the lawful timber market -- "the risk that unrepresented interests will be adversely affected by restraints on commerce" informs the "policies underlying dormant Commerce Clause doctrine."

. But the Supreme Court has

- 40 - In the instant case, therefore, the "fundamental

objective" of the dormant Commerce Clause to preserve a competitive

national market is inapplicable, because Congress has already

outlawed the national market for marijuana. Gen. Motors Corp.,

. While the majority assumes that the national

marijuana market is sufficiently akin to legal interstate markets

for our ordinary dormant Commerce Clause jurisprudence to apply,

I believe that illegal markets are constitutionally different in

kind, and thus disagree that the Commerce Clause protects the

free-flowing operation of national markets that Congress has

already made illegal through its Commerce Clause power. Nor should

we expect Congress to speak out of both sides of its mouth on this

issue, simultaneously illegalizing marijuana while affirmatively

granting states the power to "burden interstate commerce 'in a

matter which would otherwise not be permissible.'" New England

Power Co. v. New Hampshire,

(1982) (quoting S.

Pac. Co. v. Arizona,

, 769 (1945)). Yet the majority

reads United Egg Producers and other precedent to compel this

posture. My reluctance to join my colleagues in extending

certainly never indicated that it is a constitutionally cognizable harm under the dormant Commerce Clause to "adversely affect[]" out-of-state actors if their "unrepresented interest[]" consists solely in peddling illicit goods. Id. Further, as the majority itself concedes, the fear that protectionist legislation might instigate injurious interstate rivalries is significantly attenuated in the unusual context of illegal markets.

- 41 - constitutional solicitude to protecting an illegal market is

heightened if one were to imagine extending the same logic to

relieve burdens on the illicit trade in other Schedule I controlled

substances, such as heroin, fentanyl, or cocaine, or indeed most

any other black market in goods or services which Congress has

determined is harmful to the public interest. Nothing in our

precedents asserts a "fundamental" constitutional interest in

"preserving a national market for competition" in a market which

Congress has lawfully proscribed. Gen. Motors Corp.,

.

To be sure, if Congress were to legalize marijuana, which

it has not done via the passage of the Rohrabacher-Farr Amendment,

I would join the majority in finding this legislation

unconstitutional under the dormant Commerce Clause. But the

dormant Commerce Clause does not provide the right to engage on

equal footing in a federally illegal market, regardless of the

evolving political and legal landscape of marijuana at the state

level and Congress's implicit recognition that the CSA has not

eradicated the marijuana market. See Original Investments, LLC v.

Oklahoma,

, 1233 (W.D. Okla. 2021); see also

Fourth Corner Credit Union v. Fed. Rsrv. Bank of Kansas City,

(10th Cir. 2017).3 As such, appellees should

The court's analysis in Original Investments, LLC that 3

courts should not use their equitable powers to facilitate conduct

- 42 - not be able to receive a constitutional remedy in federal court to

protect the sale and distribution of a controlled substance which

remains illegal under federal law. I respectfully

DISSENT.

that is illegal under federal law finds support in case law from our sister circuits. See Fourth Corner Credit Union,

; Cartlidge v. Rainey,

(5th Cir. 1948); see also Finch v. Treto, No. 22C1508,

, at *13-15 (N.D. Ill. June 9, 2022) (acknowledging that most courts considering this issue "have not substantively addressed whether federal courts can award equitable relief related to state- sanctioned cannabis businesses").

- 43 -