Pharmacann Penn, LLC v. BV Dev. Superstition RR, LLC

318 F. Supp. 3d 708
District Court, E.D. Pennsylvania·Decided March 16, 2018·No. CIVIL ACTION NO. 17–4625·Published·Cited by 1 cases

Opinion

Pratter, United States District Judge

INTRODUCTION

The deed to a property at a shopping center prohibits using the property as a *711drug store or for any "unlawful" purpose. PharmaCann Penn, the new owner of the property, sued in state court, seeking a declaratory judgment that it may open a medical marijuana dispensary on the property despite these deed restrictions.

The defendants (PharmaCann's predecessors in interest and the partnership entities that operate the shopping center) removed the case to federal court. PharmaCann then moved to remand, challenging the defendants' assertion of federal question jurisdiction, questioning the removal procedure, and invoking doctrines of abstention. For the reasons that follow, the Court concludes that (1) it has federal question jurisdiction, (2) the removal process was proper, and (3) abstention doctrines do not control the case. The motion to remand to state court is therefore denied.

BACKGROUND

The property in question is part of the Franklin Mills shopping center (now called the Philadelphia Mills). The shopping center is managed by defendants Simon Property Group, Franklin Mills Associates, and Franklin Mills Residual. Defendants Western Franklin Mills and BV Development Superstition are previous owners of the property.

In 2017, BV Development conveyed the property to PharmaCann. PharmaCann then obtained a permit from the Commonwealth of Pennsylvania to operate a medical marijuana dispensary pursuant to the Pennsylvania Medical Marijuana Act, 35 P.S. § 10231.101. In addition, the City of Philadelphia granted PharmaCann a zoning permit for the dispensary.

The deed to PharmaCann's property contains several restrictions. Two restrictions potentially block PharmaCann from opening a "medical marijuana dispensary"; hence, this case. First, the deed prohibits "[a]ny activity or use which is unlawful." This prohibition is the basis of the parties' dispute over federal question jurisdiction, discussed below. Second, the deed prohibits PharmaCann from operating a drug store, defined in part as "a store used for the sale and display of drugs." This prohibition bears on the merits of the case and, thus, is not addressed in this Memorandum.

PharmaCann sued in state court for a declaratory judgment interpreting the deed's prohibitions on "unlawful" uses and on "drug stores" as inapplicable. Franklin Mills removed to this Court. After a motion to remand and an amended notice of removal, PharmaCann filed the amended motion to remand at issue now.

ANALYSIS

PharmaCann's motion to remand presents three questions:

1) Whether the Court has federal question jurisdiction because existing federal drug laws render PharmaCann's marijuana dispensary "unlawful" under the deed.
2) Whether two defendants who did not consent to the removal were fraudulently joined.
3) Whether the abstention doctrines emanating from the Younger or Burford cases counsel against hearing this case in federal court.

The Court addresses each question in turn and concludes that (1) the Court has federal question jurisdiction over this case; (2) the removal process was proper because the only defendants who did not consent to removal were fraudulently joined; and (3) abstention doctrines do not control this case.1

*712I. Federal Question Jurisdiction

The deed to PharmaCann's property prohibits "unlawful" uses. That single term opens the door for federal question jurisdiction by teeing up a fundamental clash between state and federal law in this case.

Pennsylvania recently established a system for certain medical marijuana use, joining a substantial number of states in the Union to do so. See 35 P.S. § 10231.101 et seq. The federal Controlled Substances Act, on the other hand, flatly prohibits the distribution of marijuana, 21 U.S.C. § 841(a)(1), and recognizes no "accepted medical use" for the drug, id. § 812(b)(1). In other words, "[d]espite the Commonwealth of Pennsylvania's enactment of its medical marijuana law, the distribution of marijuana remains illegal under federal law." United States v. Dinh , 194 F.Supp.3d 353, 356-57 (W.D. Pa. 2016).

Federal question jurisdiction exists over "all civil actions arising under the Constitution, laws, or treaties of the United States." 28 U.S.C. § 1331. For the "vast bulk" of cases, this means that "federal law creates the cause of action asserted." Gunn v. Minton , 568 U.S. 251, 257, 133 S.Ct. 1059, 185 L.Ed.2d 72 (2013).

In some cases, however, a court has federal question jurisdiction even when the cause of action comes from state law. As the Supreme Court has recognized, a federal court should hear state-law claims "that nonetheless turn on substantial questions of federal law, and thus justify resort to the experience, solicitude, and hope of uniformity that a federal forum offers on federal issues." Grable & Sons Metal Products v. Darue Engineering & Manufacturing , 545 U.S. 308, 312, 125 S.Ct. 2363, 162 L.Ed.2d 257 (2005). In those instances, "federal jurisdiction over a state law claim will lie if a federal issue is: (1) necessarily raised, (2) actually disputed, (3) substantial, and (4) capable of resolution in federal court without disrupting the federal-state balance approved by Congress." Gunn , 568 U.S. at 258, 133 S.Ct. 1059. This case meets all four requirements.

A. Necessarily Raised

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Pharmacann Penn, LLC v. BV Dev. Superstition RR, LLC, 318 F. Supp. 3d 708 (E.D. Pa. 2018).

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