Texas Department of State Health Services John Hellerstedt, in His Official Capacity as Commissioner of the Texas Dshs v. Crown Distributing LLC America Juice Co., LLC Custom Botanical Dispensary, LLC 1937 Apothecary, Llc

CourtTexas Supreme Court
DecidedJune 24, 2022
Docket21-1045
StatusPublished

This text of Texas Department of State Health Services John Hellerstedt, in His Official Capacity as Commissioner of the Texas Dshs v. Crown Distributing LLC America Juice Co., LLC Custom Botanical Dispensary, LLC 1937 Apothecary, Llc (Texas Department of State Health Services John Hellerstedt, in His Official Capacity as Commissioner of the Texas Dshs v. Crown Distributing LLC America Juice Co., LLC Custom Botanical Dispensary, LLC 1937 Apothecary, Llc) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Texas Department of State Health Services John Hellerstedt, in His Official Capacity as Commissioner of the Texas Dshs v. Crown Distributing LLC America Juice Co., LLC Custom Botanical Dispensary, LLC 1937 Apothecary, Llc, (Tex. 2022).

Opinion

Supreme Court of Texas ══════════ No. 21-1045 ══════════

Texas Department of State Health Services; John Hellerstedt, in His Official Capacity as Commissioner of the Texas DSHS, Appellants,

v.

Crown Distributing LLC; America Juice Co., LLC; Custom Botanical Dispensary, LLC; 1937 Apothecary, LLC, Appellees

═══════════════════════════════════════ On Direct Appeal from the 345th District Court of Travis County, Texas ═══════════════════════════════════════

Argued March 22, 2022

JUSTICE BOYD delivered the opinion of the Court. JUSTICE YOUNG filed a concurring opinion, in which Chief Justice Hecht, Justice Devine, and Justice Blacklock joined.

The Texas Constitution guarantees that “[n]o citizen of this State shall be deprived of life, liberty, property, privileges or immunities, or in any manner disfranchised, except by the due course of the law of the land.” TEX. CONST. art. I, § 19. The plaintiffs in this case assert that this guarantee invalidates a new Texas law that prohibits the processing and manufacturing of smokable hemp products. The trial court agreed and permanently enjoined the defendants from enforcing the challenged law, and the defendants directly appealed to this Court. 1 Because we conclude that the due-course clause does not protect the interest the plaintiffs assert, we reverse the trial court’s judgment. I. Background The federal Agriculture Improvement Act of 2018 2—commonly referred to as the 2018 Farm Bill—classified “hemp” as an agricultural product and generally authorized each state to decide whether and how to regulate it within the state’s borders. The bill delegated to the U.S. Department of Agriculture the responsibility for approving each state’s hemp-regulation plan and for implementing a federal plan for any state that elects not to adopt its own. Although “marihuana” remains a Schedule 1 substance under the federal Controlled Substances Act, the 2018 Farm Bill excludes “hemp” and hemp products that are cultivated, produced, manufactured, and sold in compliance with federal regulations and the relevant state’s federally approved plan. 3

1 See TEX. GOV’T CODE § 22.001(c) (“An appeal may be taken directly to the supreme court from an order of a trial court granting or denying an interlocutory or permanent injunction on the ground of the constitutionality of a statute of this state.”). 2Agriculture Improvement Act of 2018, Pub. L. No. 115-334, 132 Stat. 4490 (2018). 3 See 21 U.S.C. §§ 802(16)(B)(i) (defining “marihuana” to exclude “hemp”), 812 Schedule 1(c)(10) (listing “[m]arihuana” as Schedule 1 substance); 7 U.S.C. § 1639o(1) (defining “hemp”); 7 C.F.R. §§ 990.2–.20; 84 Fed. Reg. 58, 522–63; see also generally Meina Heydari, The Budding Hemp Industry: The Effect of Texas House Bill 1325 on Employment Drug Policies, 15 HEALTH L. &

2 The Texas Legislature adopted a hemp plan at its next legislative session in 2019. Through House Bill 1325, 4 the legislature enacted chapters 121 and 122 of the Texas Agriculture Code, generally permitting and regulating the cultivation and handling of hemp within the state. TEX. AGRIC. CODE §§ 121.001–122.404. The bill also added chapter 443 to the Texas Health and Safety Code, generally permitting and regulating the manufacture and sale of consumable hemp products within the state. TEX. HEALTH & SAFETY CODE §§ 443.001–.207. Chapter 443 expressly authorizes the executive commissioner of the Texas Health and Human Services Commission to “adopt rules and procedures necessary to administer and enforce this chapter,” consistent with the state plan. Id. § 443.051. 5 The Texas hemp plan generally permits Texans to cultivate, handle, transport, export, process, manufacture, distribute, sell, and purchase hemp and hemp-containing products within the state. 6 But as

POL’Y BRIEF 1, 11 (2020); David V. Patton, A History of United States Cannabis Law, 34 J.L. & HEALTH 1, 20 n.119 (2020); Lynn Garcia & Peter Stout, Hemp or Marijuana? The Importance of Accurate and Reliable Forensic Analysis to the Fair Administration of Justice, JUDGES’ J., Winter 2021, at 22. 4 Act of May 22, 2019, 86th Leg., R.S., ch. 764, 2019 Tex. Gen. Laws 2085. Chapters 121, 122, and 443 are expressly interrelated: chapter 443 5

requires the commissioner’s rules and procedures to be consistent with “an approved state plan submitted” under chapter 121, TEX. HEALTH & SAFETY CODE § 443.051(1), and chapter 121 in turn requires the state plan to comply with chapters 122 and 443, TEX. AGRIC. CODE § 121.003(2), (3). 6The plan imposes various restrictions and limitations and requires a license or registration for some hemp-related activities. See TEX. AGRIC. CODE §§ 122.101(a) (permitting license holders to “cultivate” and “handle” hemp within the state and “transport” hemp outside the state), .301(a) (permitting

3 an exception to this otherwise broad authorization, the plan expressly prohibits the “processing” or “manufacturing” of hemp-containing products “for smoking.” 7 Specifically, chapter 122 prohibits any state agency from authorizing “a person to manufacture a product containing hemp for smoking.” TEX. AGRIC. CODE § 122.301(b). And chapter 443 requires the commissioner’s rules to reflect the “principle” that “the processing or manufacturing of a consumable hemp product for smoking is prohibited.” TEX. HEALTH & SAFETY CODE § 443.204(4). Based on this mandate, the commissioner adopted rule 300.104, which prohibits the “manufacture” and “processing” of “consumable hemp products for smoking.” 25 TEX. ADMIN. CODE § 300.104. 8

manufacture of nonconsumable hemp products), .302(a) (permitting possession, transport, sale, and purchase of legally produced nonconsumable hemp products within the state), .303 (generally permitting retail sale of nonconsumable hemp products legally cultivated and manufactured outside of the state), .304 (generally permitting transport and export of nonconsumable hemp products across state lines); TEX. HEALTH & SAFETY CODE §§ 443.101 (permitting license holders to “process” and “manufacture” consumable hemp and hemp products within the state), .201 (permitting possession, transport, sale, and purchase of legally processed or manufactured consumable hemp products), .2025(b) (permitting sale of consumable hemp products by registered persons), .205(a) (permitting distribution of properly labeled consumable hemp products), .206 (generally permitting retail sale of consumable hemp products legally processed and manufactured outside of the state), .207 (permitting transport and export of consumable hemp products across state lines). 7The bill defines “smoking” to mean “burning or igniting a substance and inhaling the smoke or heating a substance and inhaling the resulting vapor or aerosol.” TEX. HEALTH & SAFETY CODE § 443.001(11). 8The rule also prohibits the “distribution[] or retail sale of consumable hemp products for smoking.” 25 TEX. ADMIN. CODE § 300.104. The plaintiffs challenged these two restrictions not only on constitutional due-course grounds, but also on the ground that these restrictions exceed the commissioner’s statutory authority because the statutes only prohibit (and

4 The plaintiffs in this case (collectively, the Hemp Companies) are Texas-based entities that manufacture, process, distribute, and sell hemp products—including smokable hemp products—in Texas.

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