United States v. Anthony Pisarski ( 2020 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA, No. 17-10428
Plaintiff-Appellant,
D.C. Nos.
v. 3:14-cr-00278-RS-1
3:14-cr-00278-RS-2
ANTHONY PISARSKI; SONNY 3:14-cr-00278-RS
MOORE,
Defendants-Appellees. OPINION
Appeal from the United States District Court
for the Northern District of California
Richard Seeborg, District Judge, Presiding
Argued and Submitted December 3, 2019
San Diego, California
Filed July 10, 2020
Before: J. Clifford Wallace, Eugene E. Siler, * and
M. Margaret McKeown, Circuit Judges.
Opinion by Judge McKeown;
Dissent by Judge Wallace
*
The Honorable Eugene E. Siler, United States Circuit Judge for the
U.S. Court of Appeals for the Sixth Circuit, sitting by designation.
2 UNITED STATES V. PISARSKI
SUMMARY **
Criminal Law
The panel affirmed the district court’s pre-sentencing
order enjoining the government from spending additional
funds on the prosecution of Andrew Pisarski and Sonny
Moore, who pled guilty to federal conspiracy to manufacture
and possess with intent to distribute marijuana.
Before sentencing, Congress enacted an appropriations
rider that prohibited the Department of Justice from using
congressionally-allocated funding to prevent states from
implementing their medical marijuana laws. The district
court stayed sentencing. Applying United States v.
McIntosh, 833 F.3d 1163 (9th Cir. 2016), the district court
found that Pisarski and Moore strictly complied with
California’s medical marijuana laws, and enjoined
government expenditures on the case until and unless a
future appropriations bill permits the government to proceed.
As a threshold mater, the panel held that the
appropriations rider does not bar the government from
spending funds on this appeal. The panel then held that the
district court did not err in its legal analysis, properly
focused its McIntosh hearing on the conduct underlying the
charge, and did not clearly err in determining that Pisarski
and Moore proved by a preponderance of the evidence that
they were in strict compliance with California’s Medical
Marijuana Program Act at the time of their arrest.
**
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
UNITED STATES V. PISARSKI 3
Judge Wallace dissented because, in his view, the district
court did not properly interpret California law bearing on the
question presented under McIntosh: whether defendants’
conduct was completely authorized by California law such
that it could be said that defendants strictly complied with all
conditions of California law as to the use, distribution,
possession, and cultivation of medical marijuana. Following
Ninth Circuit precedent, Judge Wallace would hold that the
district court’s errors all turned on its faulty legal
conclusions about how California law applies to criminal
defendants charged with cultivating distributable quantities
of marijuana for prospective sales.
Judge Wallace explained that at the time of defendants’
charged conduct, there was a general prohibition against
possession or distribution of marijuana in
California. California established statutory exemptions
from prosecution only in narrow and carefully-delineated
circumstances. In Judge Wallace’s view, defendants failed
to provide evidence bearing on the question whether those
narrow circumstances applied in this case. Judge Wallace
would hold that the defendants therefore necessarily failed
to carry their burden under Ninth Circuit precedent.
First, Judge Wallace explained that at the time of
defendants’ charged conduct, a medical marijuana grower in
California could not lawfully earn a profit. The California
Attorney General’s Guidelines, which California state courts
have said must be given “considerable weight,” require
collectives and cooperatives to document each member’s
contribution of labor, resources, or money to the
enterprise. Although it was unknown at the time of the
marijuana seizure how many of defendants’ 327 marijuana
plants were female and therefore capable of maturity, Judge
Wallace observed that defendants did not provide the district
4 UNITED STATES V. PISARSKI
court with an estimate of their expected revenue or an
accounting of their labor and operational costs from
cultivating the plants. Examining an analogous California
intermediate appellate decision, Judge Wallace would hold
that the district court erred in concluding that California law
“does not speak to the issue of prospective
compliance.” Applying de novo review, Judge Wallace
concluded that the district court failed to assess whether
defendants would have earned an unlawful profit from the
expected sale of their 327 plant-grow.
Second, Judge Wallace explained that at the time of
defendants’ charged conduct, a criminal defendant in
California was required to prove that every member of the
collective for which he was cultivating marijuana was a
qualified patient or a primary caregiver. In other words, the
exemptions in California medical marijuana law did not
apply to criminal defendants who failed to establish that the
members of the collective were either qualified patients or
primary caregivers. Judge Wallace observed that defendants
did not present any evidence showing whether “other
patients” were qualified patients or primary caregivers even
though defendants’ evidence referred to “other” unidentified
patients and collectives. In Judge Wallace’s view,
California case law states that even when sales are expected
to be made at an unknown time in the future, the membership
status of a charged grow should be identified before a
criminal defendant may benefit from the narrow exemption
under California medical marijuana law. Following Ninth
Circuit precedent, Judge Wallace would hold that where a
district court, as here, fails to make necessary findings of fact
bearing on the McIntosh inquiry, the parameters of strict
compliance have not been followed.
UNITED STATES V. PISARSKI 5
Third, Judge Wallace would hold that the district court’s
conclusion that “the presence of cash, precious metals, and
weapons” were “equally consistent with the operation of a
rural, cash-intensive enterprise” necessarily failed to satisfy
Evan’s preponderance of the evidence standard. In Judge
Wallace’s view, if defendants’ evidence made it equally
possible that defendants complied or did not comply with
California law, defendants necessarily failed to meet their
burden under Evans.
In sum, Judge Wallace would hold that the district court
committed reversible legal error. He would reject the
majority opinion’s application of clear error as inconsistent
with Ninth Circuit precedent because the district court’s
errors all turned on an incorrect statement of California state
law. Judge Wallace fears that as a result of the majority
opinion, district courts may now adopt a proportionality
approach in a case in which a resident is charged with
possession of distributable quantities of marijuana, staying a
federal marijuana prosecution so long as there is a theoretical
possibility of compliance with a state’s medical marijuana
law at an unknown time in the future. Judge Wallace would
hold that this outcome is inconsistent with both Ninth Circuit
precedent and with the relevant California medical
marijuana law governing defendants’ charged conduct.
COUNSEL
Vijay Shanker (argued), Attorney; Matthew S. Miner,
Deputy Assistant Attorney General; Brian A. Benczkowski,
Assistant Attorney General; United States Department of
Justice, Criminal Division, Appellate Section, Washington,
D.C.; J. Douglas Wilson, Helen L. Gilbert, and Merry Jean
Chan, Assistant United States Attorneys, United States
6 UNITED STATES V. PISARSKI
Attorney’s Office; San Francisco, California; for Plaintiff-
Appellant.
Ronald N. Richards (argued), Law Offices of Ronald
Richards, Beverly Hills, California; T. Louis Palazzo,
Palazzo Law Firm, Las Vegas, Nevada; for Defendants-
Appellees.
OPINION
McKEOWN, Circuit Judge:
Andrew Pisarski and Sonny Moore were in a pickle. The
two men had spent months growing hundreds of marijuana
plants. Although they had not yet sold, or even harvested,
any plants, Pisarski and Moore had entered into sale
agreements with two marijuana collectives, promising to sell
them any viable plants for no profit, simply a reimbursement
of costs. Before they could benefit from the fruits of their
labor, federal law enforcement officers raided their rural
Humboldt County property. The government charged them
with federal conspiracy to manufacture and possess with
intent to distribute marijuana. With few appealing options,
Pisarski and Moore pled guilty.
Before sentencing, Congress passed the Consolidated
and Further Continuing Appropriations Act of 2015
(“Appropriations Act of 2015”), which put the kibosh on all
expenditures of federal prosecutions for marijuana use,
possession, or cultivation if the defendant complied with the
state’s medical marijuana laws. Consistent with our decision
in United States v. McIntosh, 833 F.3d 1163 (9th Cir. 2016),
the district court enjoined the government from spending
additional funds on the prosecution, finding that Pisarski and
UNITED STATES V. PISARSKI 7
Moore strictly complied with California’s medical
marijuana laws. Resolution of this appeal rests on the
application of state law and our clear error review of the
district court’s factual findings.
BACKGROUND
In 1996, California began its experiment with marijuana
legalization when voters approved the Compassionate Use
Act (“CUA”). The CUA decriminalized possession and
cultivation of marijuana for medical use, Cal. Health &
Safety Code § 11362.5, and provided immunity from
prosecution for marijuana possession and cultivation to a
“patient, or to a patient’s primary caregiver, who possesses
or cultivates marijuana for the personal medical purposes of
the patient upon the written or oral recommendation or
approval of a physician.” Id. at § 11362.5(b)(2)(d).
In 2003, the state expanded legalization in the Medical
Marijuana Program Act (“MMPA”), which permitted the
possession, cultivation, possession for sale, and sale of
marijuana to “qualified patients, persons with valid
identification cards, and the designated primary caregivers
of qualified patients and persons with identification cards,
who associate within the State of California in order
collectively or cooperatively to cultivate cannabis for
medicinal purposes.” Id. at § 11362.775(a). At the time of
Pisarski and Moore’s arrest in July 2012, California
prohibited the sale, possession, and cultivation of marijuana,
aside from the immunities in CUA and MMPA. Id.
at §§ 11357–11360.
During the almost twenty years that California provided
these immunities, the federal government continued to
prosecute marijuana-related crimes. Resolving this tension,
Congress enacted the Appropriations Act of 2015, which
8 UNITED STATES V. PISARSKI
prohibited the Department of Justice from using
congressionally-allocated funding to prevent states from
implementing their medical marijuana laws. Consolidated
and Further Continuing Appropriations Act Of 2015, Pub. L.
No. 113–235, § 538, 128 Stat. 2130, 2217 (2014) (“the
appropriations rider” or “§ 538”). The relevant section of
the appropriations rider reads:
None of the funds made available in this Act
to the Department of Justice may be used,
with respect to [those states that have
legalized medical marijuana] to prevent such
States from implementing their own State
laws that authorize the use, distribution,
possession, or cultivation of medical
marijuana.
Id. 1 A nearly identical rider has been extended in every
subsequent appropriations bill. See United States v.
Kleinman, 880 F.3d 1020, 1027 (9th Cir. 2017) (describing
legislative history).
Which brings us back to Pisarski and Moore. By the time
the appropriations rider was enacted, Pisarski and Moore had
pled guilty to conspiracy to manufacture and possess with
intent to distribute marijuana. 21 U.S.C. §§ 841(a)(1),
(b)(1)(C), and 846. The plea came on the heels of the 2012
search, which uncovered 327 marijuana plants, $416,125 in
cash, and two loaded firearms. Two additional searches in
1
When the court stayed the sentencing in this case, the rider was
contained within § 537 of the 2017 Consolidated Appropriations Act.
Pub. L. No. 115–31, 131 Stat. 135, 228.
UNITED STATES V. PISARSKI 9
2013 revealed an additional firearm, ammunition, and a
treasure trove of gold and silver bars and coins.
Fortuitously for Pisarski and Moore, the passage of the
appropriations rider intervened before their impending
sentencing date. The district court stayed sentencing until
we addressed the effect of the rider in McIntosh. The district
court then, applying McIntosh, held a hearing and found that
“any potential [marijuana] sale was sufficiently far into the
future that, by the time of such sale, [the defendants] would
have had ample time to ensure every aspect of it complied
with the [MMPA].” United States v. Pisarski, 274 F. Supp.
3d 1032, 1039 (N.D. Cal. 2017). As a consequence of this
finding, the court enjoined government expenditures on the
case “until and unless a future appropriations bill permits the
government to proceed.” Id. at 1040.
ANALYSIS
As a threshold matter, and one of first impression, we
have no trouble concluding that the appropriations rider does
not bar the government from spending funds on this appeal
and that the district court’s McIntosh finding does not
provide defendants with an impenetrable bulwark. Pisarski
and Moore argue that allowing the government to proceed in
this appeal would create a judicial remedy in contravention
of congressional intent. That approach puts the cart before
the horse.
In McIntosh, we held that defendants may seek to enjoin
the expenditure of DOJ funds only if they “strictly comply
with all state-law conditions regarding the use, distribution,
possession, and cultivation of medical marijuana.” 833 F.3d
at 1178. We reiterated this principle in United States v.
Evans, explaining that because prosecution of non-
compliant defendants “does not prevent the implementation”
10 UNITED STATES V. PISARSKI
of state marijuana laws, defendants cannot enjoin their
prosecutions unless they “strictly complied with all relevant
conditions.” 929 F.3d 1073, 1076 (9th Cir. 2019) (quoting
McIntosh, 833 F.3d at 1178–79). The appropriations rider
does not, however, bar the government from spending funds
to determine whether the rider applies to the prosecution in
the first place. To hold otherwise would render a district
court’s McIntosh finding unreviewable.
Our decision in Kleinman offers Pisarski and Moore no
refuge. Because Kleinman’s underlying conduct involved
marijuana sales that were “definitively prosecutable,” the
rider did not preclude the government’s defense of the
appeal. 880 F.3d at 1030. Nothing in Kleinman suggests
that the DOJ cannot appeal a McIntosh finding.
We turn to the heart of this dispute: whether the
defendants strictly complied with California’s medical
marijuana laws. This is a question of state law. There is no
dispute that defendants bear the burden of proof. 2 To prevail
in a McIntosh hearing, Pisarski and Moore must prove by a
preponderance of the evidence that they have strictly
complied with state medical marijuana laws. Evans,
929 F.3d at 1076–77. We review de novo the district court’s
interpretation of California law. Asante v. California Dep't
of Health Care Servs., 886 F.3d 795, 799 (9th Cir. 2018)
(citing In re McLinn, 739 F.2d 1395, 1403 (9th Cir. 1984)
(en banc)). Here, the court was in command of state law
2
We acknowledge that on occasion the district court referenced the
government’s failure to present evidence. Although the government
argues that such comments signal that the court impermissibly shifted
the McIntosh burden off of Pisarski and Moore’s shoulders, these
references instead speak to the district court’s assessment of the scope of
the charged conduct and, accordingly, the scope of the McIntosh inquiry
itself. The court did not shift the burden of proof.
UNITED STATES V. PISARSKI 11
principles, laid out the statute and related cases, and well
understood the parameters of strict compliance. The district
court did not err in its legal analysis. The parties’
disagreement instead rests on the district court’s factual
findings, to which we owe considerable deference. Because
the district court’s McIntosh determination hinges on its
factual findings, we review for clear error. 3 Id. at 1078
(“[Defendants] challenge the district court’s factual finding
that they did not ‘strictly comply’ with [the MMPA].
Although we review a district court’s interpretation of state
law de novo, when the district court’s determination turns
upon factual findings, we review for clear error.”) (internal
citations omitted).
The district court characterized this case as “something
of a temporal conundrum,” explaining that on the date of the
charged conduct, it was not apparent that the MMPA would
have imposed any compliance requirements for speculative
future marijuana sales. 4 Pisarski, 274 F. Supp. 3d at 1038.
The court first outlined the statute and state law.
Importantly, it then considered the evidence in light of the
charges and underlying law.
We have no difficulty concluding that the district court
did not clearly err in determining that Pisarski and Moore
proved by a preponderance of evidence that they were in
strict compliance with California medical marijuana law at
the time of their arrest. Evans, 929 F.3d at 1078. A thorough
3
Though the dissent claims that its analysis is predicated on legal
error, its focus on factual issues paints a different picture and accounts
for the dissent’s misguided conclusions.
4
The CUA is inapplicable because it does not offer immunity from
criminal sanction for possession for sale. See CAL. HEALTH & SAFETY
CODE § 11362.5.
12 UNITED STATES V. PISARSKI
review of the record does not leave us with a “definite and
firm conviction that a mistake has been committed,” United
States v. Silverman, 861 F.2d 571, 577 (9th Cir. 1988)
(quoting United States v. United States Gypsum Co.,
333 U.S. 364, 395 (1948)), and, as such, we affirm the
district court.
Our inquiry begins with the charged conduct. McIntosh
does not allocate a Herculean burden to Pisarski and Moore;
rather, the appropriations rider “focuses on the conduct
forming the basis of a particular charge.” Kleinman,
880 F.3d at 1028 (emphasis added). Pisarski and Moore
each pled guilty to one count of conspiracy to manufacture
and possess with intent to distribute marijuana in violation
of 21 U.S.C. §§ 841(a)(1), (b)(1)(C), and 846. These
charges are mirrored in their laconic plea agreements, in
which each made the following factual admissions:
Beginning at an unknown date and
continuing to at least July 10, 2012, there was
an agreement between me and another
individual to manufacture and possess
marijuana on property in Humboldt County.
During this period, I knowingly grew and
possessed marijuana on this property, and I
did so with the intention to sell marijuana to
others. I agree and stipulate that the total
amount of marijuana for purposes of relevant
conduct is 32 kilograms, consisting of
320 marijuana plants.
The government did not charge any past marijuana sales.
Nor did the government detail any specific impending
marijuana sales. The men did admit that the firearms,
ammunition, cash, silver, and gold recovered during the
UNITED STATES V. PISARSKI 13
search warrants were “derived from proceeds obtained,
directly or indirectly, as a result of the violation [pleaded to],
and/or [were] used or intended to be used, in any manner or
in part, to commit or to facilitate the commission of the
violation.” Pisarski, 274 F. Supp. 3d at 1035.
The district court appropriately focused the McIntosh
inquiry on the intended future sales of the plants being grown
on the Humboldt property. With an eye toward this conduct,
the court determined that, as of the date of Pisarski and
Moore’s charged conduct, there was no provision of the
MMPA with which they were out of compliance. It then
made the following findings: that, to the extent any of the
327 5 marijuana plants were viable, Pisarski and Moore
would have sold them to two marijuana collectives for a
reimbursement of costs; that, although the men had not
shown all members of the two collectives were qualified
patients or primary caregivers, California law did not require
them to do so “well before any sale”; that the presence of
cash and precious metals on the Humboldt property was not
evidence that Pisarski and Moore profited or would profit
from unconsummated future sales and was consistent with
reimbursement for past sales; that California law did not
require Pisarski and Moore to have paid taxes at the time of
their arrest given all relevant sales of marijuana were
speculative; and that the presence of weapons and excessive
amounts of cash on the Humboldt property was “equally
consistent with the operation of a rural, cash-intensive
enterprise” as it was with an unlawful marijuana operation,
as the California Attorney General guidelines suggest. Id.
5
Although the plea agreements reference only 320 marijuana plants,
the district court found the men possessed and intended to sell
327 marijuana plants. This finding is supported by the search warrant of
the Humboldt Property.
14 UNITED STATES V. PISARSKI
at 1038–39. The court then concluded that “[i]n this
context—where defendants are charged with intent to sell
marijuana, but the details of such a prospective sale are thin
at best . . .— [Pisarski and Moore’s] suboptimal evidentiary
showing is nonetheless sufficient.” Id. at 1039–40.
The upshot of these findings is that they are thoroughly
supported by the record and the district court did not err in
concluding Pisarski and Moore were in strict compliance
with California’s medical marijuana laws. 6 Even if they
might have made a better evidentiary showing, it does not
detract from the preponderance of evidence illustrating their
strict compliance. And although the government details a
laundry list of deficiencies in the district court’s assessment
of compliance, the government cannot overcome the high
hurdle of our clear error standard.
The MMPA provides a defense to patients who
participate in collectively or cooperatively cultivating
marijuana if they “show that members of the collective or
cooperative: (1) are qualified patients who have been
prescribed marijuana for medicinal purposes,
(2) collectively associate to cultivate marijuana, and (3) are
not engaged in a profit-making enterprise.” People v.
Jackson, 210 Cal. App. 4th 525, 529 (2012); see also Cal.
Health & Safety Code § 11362.775.
6
Evidence at the McIntosh hearing indicated only that Pisarski
would distribute marijuana from the plants on the property; nothing was
said about Moore’s potential sales. Because they operated on the same
property and both pled guilty to conspiracy to manufacture and possess
with intent to distribute marijuana, the district court appropriately
evaluated Moore’s ability to invoke the collective cultivation defense on
the basis of the same evidence.
UNITED STATES V. PISARSKI 15
The MMPA “does not specify what [is] meant by an
association of persons who engage in collective or
cooperative cultivation for medical purposes,” but state
courts have declined to interpret this requirement rigidly,
explaining that the legislature did not mention formality,
permissible number of persons, acceptable financial
agreements, or distribution limitations in the statute. People
v. Orlosky, 233 Cal. App. 4th 257, 267–68 (2015). Indeed,
California state courts have applied the MMPA defense to
two roommates who informally established a collective
between themselves. Id. at 263–64, 271–72.
We note it is difficult to cherry pick a single principle
from state case law to apply in the McIntosh context, because
courts have emphasized that their findings rest on multiple
non-dipositive factors. See Jackson, 210 Cal. App. 4th at 539
(explaining that the jury may consider multiple non-
dispositive factors to determine if the MMPA defense
applies, to include the testimony of the collective operators,
the volume of the collective’s business, the number of
collective members, the non-profit status of the collective,
and the existence or nonexistence of financial records); cf
Orlosky, 233 Cal. App. 4th at 271 (“[a]lthough business
formality has been identified as a relevant evidentiary
criterion that increases in probative value as the size of the
marijuana distribution enterprise increases, it has not been
identified as a mandatory requirement that automatically
excludes all informal collective cultivation arrangements”)
(emphasis in original).
The case of People v. London illustrates the highly
factual nature of MMPA proceedings. 228 Cal. App. 4th 544(2014). In London, a defendant grew marijuana for an
informal collective, which would then distribute it among
“[members] and the original suppliers of the plants.” Id.16 UNITED STATES V. PISARSKI
at 550. Significantly, the defendant presented no evidence
that any of those individuals were qualified patients. Id.
at 566. Faced with testimony from a police officer that the
defendant had actually admitted to making a $20,000 profit
from the plants, the defendant offered no evidence the plants
would be distributed on a non-profit basis. Id. at 550, 566.
Considering the constellation of relevant factors, the court
concluded there was insufficient evidence to support an
MMPA jury instruction. The court in London correctly
looked to state law, case law, and the Attorney General
guidelines to make a fact-bound evidentiary conclusion—
just as the district court did here.
Ample evidence supports Pisarski and Moore’s
adherence to the collective requirements. Pisarski declared
that any future sales from the 327 plants would be to the
Covello Cut Off and Ramrattan collectives—two collectives
to which he belonged. Unlike the defendant in London,
Pisarski and Moore could account for the distribution of their
entire future harvest. See id. at 566. This arrangement was
confirmed by third-party declarations, coupled with
cultivation agreements. Other evidence included multiple
physician recommendations that corroborate the collective
members’ status as qualified patients. Although the
defendants did not make a showing as to the status of all
members within the two collectives, nothing required them
to establish the status of all collective members months
before any sale occurred.
Nor did the district court clearly err when it concluded
that, “to the extent any of the yield of their 327 marijuana
plants would have been sold, it would have been sold to a
collective on a not-for-profit basis.” Pisarski, 274 F. Supp.
3d at 1038. The only evidence before the court confirmed
the disclaimer of any profit.
UNITED STATES V. PISARSKI 17
The government’s reliance on People v. Solis for the
proposition that Pisarski and Moore lacked financial
documentation for unconsummated sales makes no logical
sense. 217 Cal. App. 4th 51 (2013). Importantly, in Solis,
the court determined that Solis was not entitled to an MMPA
defense because, among other things, Solis admitted to
earning a personal salary of $80,000 from the collective’s
excess income. Id. at 58–59. Here, Pisarski and Moore
expressly denied that they intended to earn a profit from
sales of the marijuana, and the record provides a cornucopia
of reasons for the presence of large amounts of cash on the
property: the cash-intensive nature of marijuana operations,
the rural nature of the Humboldt property, cash
reimbursements from past marijuana sales to the two
collectives, and income from Pisarski’s horticultural
business.
Similarly, because California law does not require a
seller to obtain a permit or pay taxes before a sale is
completed, the district court did not clearly err in concluding
Pisarski and Moore strictly complied with the tax provisions
in the MMPA. See Cal. Health & Safety Code
§ 11362.775(b)(4) (a collective or cooperative must be “in
possession of a valid seller’s permit issued by the State
Board of Equalization”).
Finally, although the government argues that the
excessive amounts of cash and precious metals and the
firearms and ammunition found on the property are
suspicious, they are just that—suspicious. In the absence of
other evidence, we credit the district court’s finding that
these items are “equally consistent with the operation of a
rural, cash-intensive enterprise.” While the California
Attorney General counsels that “excessive amounts of cash”
and “weapons” are indicia of illegal marijuana sales, these
18 UNITED STATES V. PISARSKI
guidelines are non-binding and do not trump evidentiary
findings. See California Attorney General, “Guidelines for
the Security and Non-Diversion of Marijuana Grown for
Medical Use” at 11 (August 2008).
Because the district court properly focused the McIntosh
hearing on the conduct underlying the charge, and because
the district court’s analysis of state law was not in error and
its factual findings were not clearly erroneous, the court did
not err in concluding that Pisarski and Moore met their
burden to show that they were strictly compliant with the
MMPA at the time of their arrest.
AFFIRMED.
WALLACE, Senior Circuit Judge, dissenting:
I.
In July 2012, federal government agents searched
Defendants’ property in California, seizing 327 marijuana
plants, $416,125 in cash, multiple firearms, some of which
were loaded, ammunition, gold, silver, an 18-foot tandem
axle trailer, and a marijuana manufacturing machine. The
seized cash was found bundled by rubber bands, then
vacuum sealed in plastic, and then further wrapped in thick
black plastic. Defendants pleaded guilty to a charge of
conspiracy from an unknown date to July 10, 2012, to
manufacture and possess with intent to distribute marijuana.
Before sentencing, Congress enacted an appropriations
rider known as the Rohrabacher-Farr amendment, which
under our decision in McIntosh, required district courts to
enjoin federal marijuana prosecutions when the charged
UNITED STATES V. PISARSKI 19
conduct was “completely authorized” by state medical
marijuana law. United States v. McIntosh, 833 F.3d 1163,
1177 (9th Cir. 2016). After presiding over an evidentiary
hearing, the district court granted Defendants’ motion to stay
the prosecution under McIntosh. The government now
appeals.
II.
A.
I agree with the majority that a district court’s order
staying a federal prosecution under McIntosh is appealable.
“Congress intended to remove all statutory barriers to
Government appeals and to allow appeals whenever the
Constitution would permit.” United States v. Wilson,
420 U.S. 332, 337 (1975). Without a congressional mandate
divesting us of our jurisdiction, we retain the power to
review lower court decisions. See McIntosh, 833 F.3d
at 1172–73.
Our statement that the appropriations rider “can prohibit
continued DOJ expenditures even though a prosecution was
properly initiated prior to [the rider’s] enactment . . . and the
same reasoning applies to continued expenditures on a direct
appeal after conviction,” United States v. Kleinman,
880 F.3d 1020, 1028 (9th Cir. 2017), does not suggest
otherwise. In context, we meant to say that the Department
of Justice could not expend funds in either the trial or our
court if the appropriations rider applied, i.e., if a criminal
defendant strictly complied with state medical marijuana
law. We did not say that the Department of Justice could not
expend funds to challenge a district court’s threshold
determination that the appropriations rider applied so as to
enjoin the prosecution. We therefore have jurisdiction to
20 UNITED STATES V. PISARSKI
resolve the government’s appeal from the district court’s
stay of prosecution.
B.
As a threshold matter, the government argues that the
district court erred by addressing only the 327 marijuana
plants seized on July 10, 2012. In the government’s view,
the charged conduct was not limited to those plants, and the
district court accordingly failed to assess Defendants’
compliance against the full scope of the conspiracy. I agree
with the majority that the district court properly focused its
analysis on the 327 marijuana plants.
In evaluating the application of the appropriations rider,
we “focus[] on the conduct forming the basis of a particular
charge.” Kleinman, 880 F.3d at 1028. Although Defendants
were charged with conspiracy to manufacture and possess
with intent to distribute marijuana from “an unknown date
and continuing until at least until July 10, 2012,” and
although there is evidence of Defendants’ past sales to a
collective as far back as 2010—which hundreds of thousands
of dollars in cash found on Defendants’ property
corroborates—Defendants had fortuitously entered into Plea
Agreements circumscribing the scope of their charged
conduct. 1 In their Plea Agreements, Defendants stipulated
that “the total amount of marijuana attributable [] for
purposes of relevant conduct is 32 kilograms, consisting of
1
If Defendants had not entered into the Plea Agreements, the plain
meaning of the Information would have governed the scope of the
McIntosh analysis. See Kleinman, 880 F.3d at 1028. We engage in a
“count-by-count analysis to determine which charges, if any, are
restricted by” the appropriations rider. Id. I do not interpret the
Information to limit the scope of the charged conduct to the cultivation
of the 327 marijuana plants seized on July 10, 2012.
UNITED STATES V. PISARSKI 21
320 marijuana plants.” The language in Defendants’ Plea
Agreements therefore controls the scope of the McIntosh
inquiry in this case.
In any event, the government cannot now argue that the
district court’s McIntosh analysis should have extended to
Defendants’ conduct beyond the 327 marijuana plants.
Recognizing that the Plea Agreements had limited the
conspiracy to the marijuana plants seized on July 10, 2012,
the government told the district court that “the best reading
of McIntosh is that we look to their conduct that is the basis
of the charge, and the basis of the charge is the 320 plants.”
Relying on the parties’ shared understanding, the district
court evaluated Defendants’ compliance based on their
conduct connected with the 327 marijuana plants. As a
former district court judge, I cannot fault him for doing so.
C.
The majority next suggests that this appeal turns on the
district court’s factual findings, which we must review for
clear error. See United States v. Evans, 929 F.3d 1073, 1078
(9th Cir. 2019) (citation omitted). However, this appeal
turns instead on the district court’s interpretation and
application of state law, which we must review de novo. See
id., quoting Garmon v. Cty. of Los Angeles, 828 F.3d 837,
842 (9th Cir. 2016); see also United States v. Hinkson,
585 F.3d 1247, 1259 (9th Cir. 2009) (reviewing de novo the
district court’s “application of fact to law” when it “requires
reference to the values that animate legal principles”).
Because the district court did not properly interpret or apply
state law “bearing on whether [California] expressly
authorized the use of medical marijuana,” I respectfully
dissent. Evans, 929 F.3d at 1078.
22 UNITED STATES V. PISARSKI
Applying the McIntosh inquiry, we “focus . . . on the
statutory text.” McIntosh, 833 F.3d at 1175. The
appropriations rider prohibits the Department of Justice
“from spending money on actions that prevent the Medical
Marijuana States’ giving practical effect to their state laws
that authorize the use, distribution, possession, or cultivation
of medical marijuana.” Id. at 1176. By contrast, those “who
do not strictly comply with all state-law conditions regarding
the use, distribution, possession, and cultivation of medical
marijuana have engaged in conduct that is unauthorized”
may still be prosecuted. Id. at 1178.
Under Mcintosh, criminal defendants charged with
violating federal marijuana laws must overcome an exacting
burden—their conduct must be “completely” authorized by
state law and must “strictly” comply with all conditions of
state law as to the use, distribution, possession, and
cultivation of medical marijuana. Id. at 1179. Criminal
defendants must show “that it is more likely than not that the
state’s medical-marijuana laws ‘completely authorized’ their
conduct.” Evans, 929 F.3d at 1077.
In July 2012, the sale and possession of marijuana was
generally unlawful in California. See Cal. Health & Safety
Code §§ 11359, 11360. The Medical Marijuana Program
Act (MMPA) exempted from prosecution qualified patients
and their primary caregivers who cultivated marijuana for
medicinal purposes. See id. § 11362.775(a). As mandated
by statute, California’s Attorney General issued guidelines
defining the scope of the MMPA to “ensure the security and
nondiversion of cannabis grown for medicinal use.” Id.
§ 11362.81(d); Guidelines for the Security and Non-
diversion of Marijuana Grown for Medical Use (Aug. 2008)
(Guidelines). Although the Guidelines “are not binding on
the courts,” they “are entitled to considerable weight.”
UNITED STATES V. PISARSKI 23
People v. London, 175 Cal. Rptr. 3d 392, 402 (Ct. App.
2014) (internal quotation marks and citations omitted).
The majority says that the Guidelines “do not trump” the
district court’s “evidentiary findings.” But that
pronouncement puts the cart before the horse. In evaluating
whether Defendants strictly complied with California law,
the district court was required to consider the Guidelines, the
MMPA, and all relevant California judicial decisions. Cf.
Erie R. Co. v. Tompkins, 304 U.S. 64, 78 (1938) (observing
that “whether the law of the state shall be declared by its
Legislature in a statute or by its highest court in a decision is
not a matter of federal concern”). 2
To effectuate the narrow protections in the MMPA,
criminal defendants in California may invoke a cultivation
defense by showing that the members of the collective or
cooperative: (1) are qualified patients who have been
prescribed marijuana for medicinal purposes;
(2) collectively associate to cultivate marijuana, and (3) are
not engaged in a profit-making enterprise. See People v.
Jackson, 148 Cal. Rptr. 3d 375, 377 (Ct. App. 2012).
Criminal defendants carry the “minimal burden” of raising a
“reasonable doubt as to whether the elements of the
defense[] have been proven.” Id. at 380. 3
2
We may also “consider unpublished state decisions even though
such opinions have no precedential value.” Employers Ins. Of Wausau
v. Granite State Ins. Co., 330 F.3d 1214, 1220 (9th Cir. 2003), citing
Nunez v. City of San Diego, 114 F.3d 935, 943 n.4 (9th Cir. 1997).
3
Once a criminal defendant raises a reasonable doubt about the
medical marijuana defense to permit the defense, the burden shifts to the
government to disprove the defense. See People v. Orlosky, 182 Cal.
Rptr. 3d 561, 571 (Ct. App. 2015). I rely on California state court
24 UNITED STATES V. PISARSKI
Thus, at the time of Defendants’ charged conduct, a
medical marijuana grower in California could not lawfully
earn a profit. See Cal. Health & Safety Code § 11362.765(a)
(providing that nothing in the provision exempts from
prosecution “any individual or group to cultivate or
distribute cannabis for profit”). Instead, a qualified patient
or valid identification cardholder could only receive
reasonable compensation for his labor or services rendered
in cultivating medical marijuana for other qualified patient
members of his nonprofit group, plus reimbursement for his
out-of-pocket expenses incurred. See London, 175 Cal. Rptr.
3d at 411–412, citing Guidelines § IV.B.1, B.6.
The California intermediate appellate court decision,
People v. London, highlights the legal principles underlying
California’s rule against profit-making. See 175 Cal. Rptr.
3d 392. In London, the defendant was charged with
cultivating marijuana and possessing marijuana for sale
under California law. Id. at 397. The defendant was given
100 immature marijuana plants from the collective of which
he was a member. Id. at 398. In total, the defendant had
invested $10,000 in his growing operation, and he claimed
to expect to be reimbursed for his costs of growing the
plants, including the time and effort involved in growing the
plants. Id. at 399. At his trial, the defendant invoked the
MMPA cultivation defense, saying that he did not expect an
“unlawful profit for cultivating the 100 marijuana plants for
the collective.” Id. at 406. The defendant tried to introduce
expert testimony to prove that he had not expected to earn an
decisions addressing a criminal defendant’s threshold minimal burden,
and not the more onerous burden imposed on the government “to
disprove the defense beyond a reasonable doubt.” Id.
UNITED STATES V. PISARSKI 25
unlawful profit based on future sales. Id. However, the trial
court limited the scope of the expert testimony. Id.
The court held that the defendant’s expert “lacked a
sufficient evidentiary foundation to opine that defendant was
earning an unlawful profit for cultivating the 100 marijuana
plants for the collective.” Id., citing Cal. Health & Safety
Code § 11362.765(a); Guidelines, § IV. B.6. The court
reasoned that the defendant had not explained “how much he
expected to earn from his 100-plant grow and any additional
‘grows’ for the collective.” Id. The defendant had also
failed to “estimate the amount of time and effort he had
invested and expected to invest in his 100-plant grow and in
his planned additional grows, or tie that amount of time and
effort to the amount of compensation he expected to earn for
cultivating marijuana for his collective.” Id., citing
Guidelines, § IV.B.4 (stating that “collectives and
cooperatives should document each member’s contribution
of labor, resources, or money to the enterprise”). The
defendant was required to supply “evidence tying the
reasonable value of defendant’s cultivation services to the
amount of compensation he expected to be paid for the
marijuana plants he was growing.” Id.
In this portion of London, the court relied extensively on
the Guidelines and the substantive authorizations of the
MMPA. Id. In a separate part of the opinion, the court also
held that there was insufficient evidence to support the
MMPA defense instruction. Id. at 410. Although the
marijuana plants had not yet matured and had not yet been
sold, the court engaged in a rigorous analysis of the
26 UNITED STATES V. PISARSKI
defendant’s compliance with the MMPA and the
Guidelines. 4
In this case, Defendants did not provide the district court
with an estimate of their expected revenue or an accounting
of their labor and operational costs from cultivating the
327 marijuana plants. As in London, it was unknown how
many marijuana plants were female and therefore capable of
maturity.
In addition, like Defendants did here, the defendant in
London claimed that he had not expected to earn an unlawful
profit from the sale of the marijuana plants. See London,
175 Cal. Rptr. 3d at 397 (addressing defendant’s claim that
the “$20,000 sum he expected to be paid for his
100 marijuana plants, when fully grown, did not include an
unlawful profit”). And here, as in London, there is evidence
about expected payments relating to the marijuana plants
underlying the charged conduct. In his declaration filed with
the district court, Jon Rasmussen, an agent working for the
United States Drug Enforcement Administration, said that
Anthony Stewart had told him that Anthony Pisarski would
pay him about $15,000 for the grow season.
4
California courts consider the absence of an accounting of
expenses in evaluating a criminal defendant’s compliance with the
MMPA even where the marijuana plants underlying the criminal charge
have not yet matured. See People v. Matteucci, No. F07491, 2017 WL
1533485, at *14 (Cal. Ct. App. 2017) (“The 482 marijuana plants, if
grown to maturity, would produce vastly more marijuana than [the]
recommendations. Although [the defendant] claimed he was reimbursed
only for his expenses, he did not keep close track of his expenses and
accepted monetary ‘donations’ without regard to whether the amount
covered overhead costs and operating expenses”).
UNITED STATES V. PISARSKI 27
Despite the clear guidance from London, the district
court nonetheless said that the MMPA “offers immunity
from prosecution for possession for sale” and that it “does
not speak to the issue of prospective compliance, but rather
seems concerned with contemporaneous conditions.”
United States v. Pisarski, 274 F. Supp. 3d 1032, 1038 (N.D.
Cal. 2017). Examining the principles animating the MMPA
de novo, 5 this was error. London expressly tells us that the
MMPA does speak to issue of prospective compliance. The
district court accordingly failed to assess whether
Defendants would have earned an unlawful profit from the
expected sale of their 327 plant-grow.
In addition, under the MMPA, a criminal defendant must
show that every member of the collective for which he is
cultivating marijuana is a qualified patient or a primary
caregiver. See Cal. Health & Safety Code § 11362.775(a).
At the time of the charged conduct, Defendants could
lawfully distribute medical marijuana only to “qualified
patients, persons with valid identification cards, and the
designated primary caregivers of qualified patients and
persons with identification cards.” Id. § 11362.765(a). The
MMPA “protections cannot apply” to a criminal defendant
who has not established that the “proffered” members of the
collective are “qualified patients” or “primary caregiver[s].”
5
The possibility of compliance is not a substitute for affirmative
proof of compliance with the MMPA. See People v. Rodriguez,
No. F071705, 2017 WL 2609599, at *5 (Cal. Ct. App. 2017) (“The
question is whether the record raised a reasonable doubt regarding the
existence of each element of the offense. While the evidence showing
$80 of revenue and $7 for some of the costs did not suffice to prove there
was a profit, it naturally did not tend to show the sale was not for profit
either” (emphasis in original)).
28 UNITED STATES V. PISARSKI
People v. Frazier, 27 Cal. Rptr. 3d 336, 350 (Ct. App. 2005)
(emphasis added).
London is again instructive. The defendant there
testified that “half of the marijuana he harvested from his
100-plant grow would be given to his cousin . . . .” 75 Cal.
Rptr. 3d at 411. Nonetheless, the court concluded that
defendant’s lawful cultivation MMPA defense “fell short of
raising a reasonable doubt that the defendant was lawfully
cultivating and lawfully possessing marijuana” because
there was no evidence “that any of the marijuana harvested
from defendant’s grow would be given for free or sold, on a
nonprofit basis, solely to qualified patient members of the
collective.” Id. (emphasis in original).
Here, Defendants presented evidence that the collectives
were “closed-circuit,” i.e., that there were no purchases or
sales to or from non-members of the collectives. However,
the evidence also refers to “other” unidentified patients and
collectives. Defendants did not present any evidence
demonstrating whether the “other patients” were qualified
patients or primary caregivers 6. On this record, there is no
way to ascertain whether the exemption in the MMPA
applies. The district court therefore necessarily failed to
make findings bearing on the question whether Defendants’
6
The majority says that unlike the defendant in London, the
Defendants here “could account for the distribution of their entire future
harvest.” But even if the district court made such a factual finding, that
did not obviate Defendants’ burden to show that the unidentified “other
patients” of the collectives were qualified patients or primary caregivers
under the MMPA. Nor did that obviate Defendants’ burden to show that
their expected distribution would not result in an unlawful profit under
California law.
UNITED STATES V. PISARSKI 29
conduct was “completely authorized” under California law
to justify enjoining this federal marijuana prosecution.
The majority says that the district court “understood the
parameters of strict compliance.” But where, as here, a
district court fails to make necessary findings of fact bearing
on the McIntosh inquiry, the parameters of strict compliance
have not been followed.
The majority later acknowledges that Defendants “did
not make a showing as to the status of all members within
the two collectives” but nonetheless concludes that “nothing
required them to establish the status of all collective
members months before any sale occurred.” But California
law, as interpreted in London, tells us otherwise. See
London, 75 Cal. Rptr. 3d at 411. In London, the sales were
also expected to be made at an unknown time in the future,
and the testimony about the membership status of half of the
charged grow was inadequate. Id.; see also People v.
Garrett, No. C079468, 2017 WL 2609544, at *8 (Cal. Ct.
App. 2017) (observing that a defendant’s failure to gather
information about the alleged collective counsels against a
MMPA cultivation defense because “business and
membership records were likely available had defendant
actually tried in advance to obtain them”). 7
Finally, Defendants have failed to rebut the various
indicia of an unlawful marijuana operation under California
7
In making this determination, the district court also appeared to
shift the burden of proof impermissibly to the government. See Pisarski,
274 F. Supp. 3d at 1039 (stating that “the government has not identified
a single member of either collective who was not a qualified patient or
caregiver” (emphasis in original)).
30 UNITED STATES V. PISARSKI
law. The Guidelines include a list of “Indicia of Unlawful
Operations:”
When investigating collectives or
cooperatives, law enforcement officers
should be alert for signs of mass production
or illegal sales, including (a) excessive
amounts of marijuana, (b) excessive amounts
of cash, (c) failure to follow local and state
laws applicable to similar businesses, such as
maintenance of any required licenses and
payment of any required taxes, including
sales taxes, (d) weapons, (e) illicit drugs,
(f) purchases from, or sales or distribution to,
non-members, or (g) distribution outside of
California.
Guidelines § IV.C.2. The government argues that the cash,
silver, gold, loaded guns, and ammunition found on the
Defendants’ property are indicia of unlawful marijuana use.
The district court rejected this argument, reasoning that “the
presence of cash, precious metals, and weapons is equally
consistent with the operation of a rural, cash-intensive
enterprise.”
But “evidence in equipoise is not enough” to satisfy the
preponderance of the evidence standard. United States v.
Alvarado-Guizar, 361 F.3d 597, 602 (9th Cir. 2004). The
only reasoning in support of the district court’s conclusion is
that the evidence equally supports two competing theories.
If Defendants’ evidence made it “equally” possible that they
complied or did not comply with state law, they have
necessarily failed to meet their burden under Evans.
UNITED STATES V. PISARSKI 31
D.
In the majority’s view, I “focus on factual issues” and
this “accounts for” my “misguided conclusions.” Again, the
majority is mistaken.
Our controlling precedent tells us that the McIntosh
analysis involves two parts. In the first part, district courts
must examine the state statutes and judicial decisions
“bearing on whether [the state] expressly authorized the use
of medical marijuana.” Evans, 929 F.3d at 1078. We have
said that district courts must determine “all relevant
conditions imposed by state law on the use, distribution,
possession, and cultivation of medical marijuana.”
McIntosh, 833 F.3d at 1079. This is a legal inquiry, which
we review de novo. See Matter of McLinn, 739 F.2d 1395,
1398 (9th Cir. 1984) (en banc) (“[A] decision to give less
than full independent de novo review to the state law
determinations of the district courts would be an abdication
of our appellate responsibility”).
In the second part, the district court must determine
whether the criminal defendant’s conduct “was completely
authorized by state law”—that the defendant “strictly
complied” with all of the state law examined in the first part.
McIntosh, 833 F.3d at 1079. We have explained that the
question “whether [a defendant] strictly complied with
California marijuana laws may depend on specific findings
of fact, as well as legal determinations.” United States v.
Lynch, 903 F.3d 1061, 1087 (9th Cir. 2018) (emphasis
added). The second part may therefore depend on specific
findings of fact, which we review for clear error, or on legal
determinations, which we review de novo.
The majority relies on language from our decision in
Evans, in which we said that “when the district court’s
32 UNITED STATES V. PISARSKI
determination turns upon factual findings, we review for
clear error.” Evans, 929 F.3d at 1078 (emphasis added). In
making this statement, we quoted from our decision in
United States v. Kent, 649 F.3d 906, 912 (9th Cir. 2011).
Our decision in Kent is instructive.
In Kent, we explained that a review for clear error is
“appropriate [] when a determination of vindictive
prosecution turned upon factual findings.” Id. (citation
omitted). However, we then said that since the law on
“vindictive prosecution has developed, [] our review is now
more commonly for mistakes of law, for which de novo
review is appropriate.” Id. (citation omitted). The statement
in Evans on which the majority relies therefore only
confirms what we said in Lynch: when the district court’s
McIntosh analysis turns on specific findings of fact, we
review for clear error, but when the analysis turns on a legal
issue, we apply de novo review.
The district court’s McIntosh analysis did not “turn[]
upon factual findings.” Evans, 929 F.3d at 1078.
Significantly, in reaching the straightforward conclusion that
the district court committed reversible legal error, I do not
reject or discount any of the district court’s factual findings.
Instead, the district court’s errors all turned on its incorrect
statement of law that California “does not offer much further
guidance with respect to how compliance can be assessed
prospectively.” Pisarski, 274 F. Supp. 3d at 1038.
The majority says that the district court exuded a
“command of state law principles.” The majority says this
is so, without adopting the district court’s proportionality
approach, and without offering an alternate framework to
assess strict compliance with California law. Instead, the
majority simply concludes that the district court did not
clearly err in its factual findings. But there must be some
UNITED STATES V. PISARSKI 33
legal framework against which compliance for expected
future sales is assessed. In my view, the district court’s
framework was faulty from the start, and the district court
accordingly erred in its application of California law.
I fear that as a result of today’s opinion, district courts
may now adopt a proportionality approach in any case in
which a California resident is charged with possession of
distributable quantities of marijuana, staying a federal
marijuana prosecution so long as there is a theoretical
possibility of compliance at the time of a future sale. Neither
our precedent nor California’s sanctions this outcome.
III.
A criminal defendant in possession of distribution
quantities of marijuana must provide more than “sub-
optimal” evidence to establish compliance with California
law. That there were no past sales charged in this case did
not obviate Defendants’ burden to prove strict compliance
with California medical marijuana law. By failing to
consider or apply the substantive conditions of the MMPA
and the Guidelines, and the principles animating them both,
the district court erred.
I respectfully dissent.