Date: 04-15-2010

Case Style: Emerald Steel Fabricators, Inc. v. Bureau of Labor and Industries

Case Number: SC S056265

Judge: Kistler

Court: Supreme Court of Oregon (Polk county)

Plaintiff's Attorney: Terry Hammons, Hammons & Mills, Eugene, Oregonargued the cause and filed the brief for petitioner on review.

Paula Barran, Barran Liebman LLP, Portland, Oregon filed the brief for amicus curiae Associated Oregon Industries.

Jim Westwood, Stoel Rives, L.L.P., Portland, Oregon, filed the brief for amici curiae Pacific Legal Foundation and National Federation of Independent Business. With him on the brief was Deborah J. La Fetra.

Defendant's Attorney: Janet A. Metcalf, Assistant Attorney General, Salem, argued the cause and filed the brief for respondent on review. With her on the brief were John R. Kroger, Attorney General, and Erika L. Hadlock, Acting Solicitor General.

Description: The Oregon Medical Marijuana Act authorizes persons holding a registry identification card to use marijuana for medical purposes. ORS 475.306(1). It also exempts those persons from state criminal liability for manufacturing, delivering, and possessing marijuana, provided that certain conditions are met. ORS 475.309(1). The Federal Controlled Substances Act, 21 USC § 801 et seq., prohibits the manufacture, distribution, dispensation, and possession of marijuana even when state law authorizes its use to treat medical conditions. Gonzales v. Raich, 545 US 1, 29, 125 S Ct 2195, 162 L Ed 2d 1 (2005); see United States v. Oakland Cannabis Buyers' Cooperative, 532 US 483, 486, 121 S Ct 1711, 149 L Ed 2d 722 (2001) (holding that there is no medical necessity exception to the federal prohibition against manufacturing and distributing marijuana).

The question that this case poses is how those state and federal laws intersect in the context of an employment discrimination claim; specifically, employer argues that, because marijuana possession is unlawful under federal law, even when used for medical purposes, state law does not require an employer to accommodate an employee's use of marijuana to treat a disabling medical condition. The Court of Appeals declined to reach that question, reasoning that employer had not preserved it. Emerald Steel Fabricators, Inc. v. BOLI, 220 Or App 423, 186 P3d 300 (2008). We allowed employer's petition for review and hold initially that employer preserved the question that it sought to raise in the Court of Appeals. We also hold that, under Oregon's employment discrimination laws, employer was not required to accommodate employee's use of medical marijuana. Accordingly, we reverse the Court of Appeals decision.

Since 1992, employee has experienced anxiety, panic attacks, nausea, vomiting, and severe stomach cramps, all of which have substantially limited his ability to eat. Between January 1996 and November 2001, employee used a variety of prescription drugs in an attempt to alleviate that condition. None of those drugs proved effective for an extended period of time, and some had negative effects. In 1996, employee began using marijuana to self-medicate his condition.

In April 2002, employee consulted with a physician for the purpose of obtaining a registry identification card under the Oregon Medical Marijuana Act. The physician signed a statement that employee has a "debilitating medical condition" and that "[m]arijuana may mitigate the symptoms or effects of this patient's condition." The statement added, however, "This is not a prescription for the use of medical marijuana." The statement that employee's physician signed tracks the terms of the Oregon Medical Marijuana Act. That act directs the state to issue registry identification cards to persons when a physician states that "the person has been diagnosed with a debilitating medical condition and that the medical use of marijuana may mitigate the symptoms or effects" of that condition. ORS 475.309(2).(1) No prescription is required as a prerequisite for obtaining a registry identification card. See id.

Based on the physician's statement, employee obtained a registry identification card in June 2002, which he renewed in 2003.(2) That card authorized employee to "engage in * * * the medical use of marijuana" subject to certain restrictions. ORS 475.306(1). Possession of the card also exempted him from state criminal prosecution for the possession, distribution, and manufacture of marijuana, provided that he met certain conditions. ORS 475.309(1).

Employer manufactures steel products. In January 2003, employer hired employee on a temporary basis as a drill press operator. While working for employer, employee used medical marijuana one to three times per day, although not at work. Employee's work was satisfactory, and employer was considering hiring him on a permanent basis. Knowing that he would have to pass a drug test as a condition of permanent employment, employee told his supervisor that he had a registry identification card and that he used marijuana for a medical problem; he also showed his supervisor documentation from his physician. In response to a question from his supervisor, employee said that he had tried other medications but that marijuana was the most effective way to treat his condition. Neither employee's supervisor nor anyone else in management engaged in any other discussion with employee regarding alternative treatments for his condition. One week later, the supervisor discharged employee.

Two months later, employee filed a complaint with the Bureau of Labor and Industries (BOLI), alleging that employer had discriminated against him in violation of ORS 659A.112. That statute prohibits discrimination against an otherwise qualified person because of a disability and requires, among other things, that employers "make reasonable accommodation" for a person's disability unless doing so would impose an undue hardship on the employer. ORS 659A.112(2)(e). Having investigated employee's complaint, BOLI filed formal charges against employer, alleging that employer had discharged employee because of his disability in violation of ORS 659A.112(2)(c) and (g) and that employer had failed to reasonably accommodate employee's disability in violation of ORS 659A.112(2)(e) and (f). Employer filed an answer and raised seven affirmative defenses.

After hearing the parties' evidence, an administrative law judge (ALJ) issued a proposed order in which he found that employee was a disabled person within the meaning of ORS chapter 659A but that employer had not discharged employee because of his disability. The ALJ found instead that employer had discharged employee because he used marijuana and ruled that discharging employee for that reason did not violate ORS 659A.112(2)(c) or (g). The ALJ went on to rule, however, that employer had violated ORS 659A.112(2)(e) and (f), which prohibit an employer from failing to reasonably accommodate the "known physical or mental limitations of an otherwise qualified disabled person," and from denying employment opportunities to an otherwise qualified disabled person when the denial is based on the failure "to make reasonable accommodation to the physical or mental impairments of the employee."

Among other things, the ALJ ruled that employer's failure to engage in a "meaningful interactive process" with employee, standing alone, violated the obligation set out in ORS 659A.112(2)(e) and (f) to reasonably accommodate employee's disability. The ALJ also found that employee had suffered damages as a result of those violations, and the commissioner of BOLI issued a final order that adopted the ALJ's findings in that regard.

Employer sought review of the commissioner's order in the Court of Appeals. As we understand employer's argument in the Court of Appeals, it ran as follows: Oregon law requires that ORS 659A.112 be interpreted consistently with the federal Americans with Disabilities Act (ADA), 42 USC § 12111 et seq. Section 12114(a) of the ADA provides that the protections of the ADA do not apply to persons who are currently engaged in the illegal use of drugs, and the federal Controlled Substances Act prohibits the possession of marijuana without regard to whether it is used for medicinal purposes. It follows, employer reasoned, that the ADA does not apply to persons who are currently engaged in the use of medical marijuana. Like the ADA, ORS 659A.124 provides that the protections of ORS 659A.112 do not apply to persons who are currently engaged in the illegal use of drugs. Employer reasoned that, if ORS 659A.112 is interpreted consistently with the ADA, then ORS 659A.112 also does not apply to persons who are currently engaged in medical marijuana use. Employer added that, in any event, the United States Supreme Court's opinion in Raich and the Supremacy Clause required that interpretation.

The Court of Appeals did not reach the merits of employer's argument. It concluded that employer had not presented that argument to the agency and thus had not preserved it. Accordingly, we begin with the question whether employer preserved the issues before BOLI that it sought to raise in the Court of Appeals.

Employer raised seven affirmative defenses in response to BOLI's complaint. The fifth affirmative defense alleged:

"Oregon law prescribes that ORS 659A.112 be construed to the extent possible in a manner that is consistent with any similar provisions of the Federal Americans with Disabilities Act of 1990, as amended. That Act does not permit the use of marijuana because marijuana is an illegal drug under Federal Law."

That affirmative defense is broad enough to encompass the argument that employer made in the Court of Appeals. To be sure, employer's fifth affirmative defense does not refer specifically to ORS 659A.124. However, it alleges that the ADA does not apply to persons who use marijuana, a proposition that necessarily depends on both 42 USC § 12114(a), the federal counterpart to ORS 659A.124, and the Controlled Substances Act. And the fifth affirmative defense also states that ORS 659A.112 should be construed in the same manner as the ADA. Although employer could have been more specific, its fifth affirmative defense is sufficient to raise the statutory issue that it sought to argue in the Court of Appeals.(3)

Ordinarily, we would expect that employer would have developed the legal arguments in support of its fifth affirmative defense more fully at the agency hearing. However, the Court of Appeals issued its decision in Washburn v. Columbia Forest Products, Inc., 197 Or App 104, 104 P3d 609 (2005), two weeks before the hearing in this case, and employer concluded that the reasoning in Washburn foreclosed its fifth affirmative defense. The Court of Appeals held in Washburn that an employer's failure to accommodate an employee's use of medical marijuana violated ORS 659A.112. In reaching that holding, the Court of Appeals decided two propositions that bore on the validity of employer's fifth affirmative defense. First, it reasoned that the requirement in ORS 659A.139 to interpret ORS 659A.112 consistently with the ADA does not require absolute symmetry between state and federal law. Id. at 109-10. Second, it held that, as a matter of state law, the employee's medical use of marijuana was "not unlawful" for the purposes of a federal statute that prohibits the use of illegal drugs in the workplace. Id. at 114-15. The court noted that the question "[w]hether medical use of marijuana is unlawful under federal law is an open question" and that the United States Supreme Court had granted the government's petition for certiorari in Raich to decide that question. Id. at 115 n 8.

At the hearing in this case, employer told the ALJ that five of its affirmative defenses (including the fifth affirmative defense) were "foreclosed by the Washburn decision" but that it was "not withdrawing them." Employer did not explain the basis for that position. We note, however, that the Court of Appeals' conclusion in Washburn that ORS 659A.139 does not require absolute symmetry between the state and federal antidiscrimination statutes and its conclusion that medical marijuana use is "not unlawful" under state law effectively foreclosed reliance on ORS 659A.139 and ORS 659A.124 as a basis for employer's fifth affirmative defense. There would be little point in arguing before the ALJ that employee was currently engaged in the illegal use of drugs if, as the Court of Appeals had just stated in Washburn, the use of medical marijuana is not illegal.(4) The ALJ issued a proposed order in which it ruled that the Court of Appeals decision in Washburn controlled, among other things, employer's fifth affirmative defense.

After the ALJ filed his proposed order, the United States Supreme Court issued its decision in Raich and held that Congress had acted within its authority under the Commerce Clause in prohibiting the possession, manufacture, and distribution of marijuana even when state law authorizes its use for medical purposes. 545 US at 33. Raich addressed the question that the Court of Appeals had described in Washburn as open -- whether using marijuana, even for medical purposes, is unlawful under federal law. Employer filed a supplemental exception based on Raich and alternatively a request to reopen the record to consider Raich. Employer argued that, as a result of Raich, "states may not authorize the use of marijuana for medicinal purposes" and that "[t]he impact of this decision is that [employer] should prevail on its Fourth and Fifth Affirmative Defenses."

BOLI responded that the ALJ should not reopen the record. It reasoned that Raich did not invalidate Oregon's medical marijuana law and that, in any event, employer could have raised a preemption argument before the Court issued its decision in Raich. Employer replied that, as it read Raich, the "Supreme Court has ruled that legalization of marijuana is preempted by federal law. This obviously invalidates the Oregon Medical Marijuana Act." Employer also explained that it had raised this issue in its fourth and fifth affirmative defenses, which "recite[d] that marijuana is an illegal drug under federal law, and that state law deferred to federal law." After considering the parties' arguments, the ALJ allowed employer's motion to reopen the record, stating that "[t]he forum will consider the Supreme Court's ruling in Raich to the extent that it is relevant to [employer's] case." Later, the Commissioner ruled that the Controlled Substances Act, which was at issue in Raich, did not preempt the Oregon Medical Marijuana Act.

As we read the record, employer took the position before the agency that, like the protections of the federal ADA, the protections of ORS 659A.112 do not apply to a person engaged in the use of illegal drugs, a phrase that, as a result of controlling federal law, includes the use of medical marijuana. We conclude that employer's arguments were sufficient to preserve the issue that it sought to raise on judicial review in the Court of Appeals. To be sure, employer's fifth affirmative defense, as pleaded, turned solely on a question of statutory interpretation. Employer did not raise the preemption issue or argue that federal law required a particular reading of Oregon's statutes until employer asked the ALJ to reopen the record to consider Raich. Perhaps the ALJ could have declined to reopen the record. However, once the ALJ chose to reopen the record and the Commissioner chose to address employer's preemption arguments based on Raich, then employer's federal preemption arguments were also properly before the agency.(5)

As noted, the Court of Appeals reached a different conclusion regarding preservation, and we address its reasoning briefly. The Court of Appeals reasoned that, in telling the ALJ that Washburn foreclosed its affirmative defenses, employer adopted the specific defenses that the employer in Washburn had asserted and that employer was now limited to those defenses. 220 Or App at 437. The difficulty, the Court of Appeals explained, was that the statutory issues that employer had raised in its affirmative defenses and sought to raise on judicial review differed from the issues that the employer had raised in Washburn. Id.

In our view, the Court of Appeals misperceived the import of what employer told the ALJ. Employer reasonably acknowledged that the reasoning in Washburn controlled the related but separate defenses that it was raising in this case. Employer did not say that it was advancing the same issues that the employer had asserted in Washburn, and the Court of Appeals erred in holding otherwise.

The Court of Appeals also concluded that employer had not preserved its argument regarding the preemptive effect of the Controlled Substances Act, as interpreted in Raich. Washburn, 220 Or App at 437-38. It noted that, on judicial review, employer argued that federal law required its interpretation of Oregon's antidiscrimination statutes while it had argued before the agency that federal law preempted the Oregon Medical Marijuana Act. Id. We read the record differently. As explained above, employer made both arguments before the agency.(6)

Having concluded that employer preserved the issues it sought to raise on judicial review, we turn to the merits of those issues.(7) Employer's statutory argument begins with ORS 659A.124(1), which provides that "the protections of ORS 659A.112 do not apply to any * * * employee who is currently engaging in the illegal use of drugs if the employer takes action based on that conduct."(8) It follows, employer reasons, that it had no obligation under ORS 659A.112(2)(e) and (f) to reasonably accommodate employee's medical marijuana use. In responding to that argument on the merits, BOLI does not dispute that employee was currently engaged in the use of medical marijuana, nor does it dispute that employer discharged employee for that reason. Rather, BOLI advances two arguments why ORS 659A.124 does not support employer's position.

As we understand BOLI's first argument, it contends that, because the commissioner found that employer had violated ORS 659A.112(2)(e) and (f) by failing to engage in a "meaningful interactive process," ORS 659A.124 is inapposite. We reach precisely the opposite conclusion. The commissioner explained that engaging in a "meaningful interactive process" is the "mandatory first step in the process of reasonable accommodation" that ORS 659A.112(2)(e) and (f) require. However, ORS 659A.124 provides that "the protections of ORS 659A.112 do not apply" to an employee who is currently engaged in the illegal use of drugs, if the employer takes an adverse action based on that use. Under the plain terms of ORS 659A.124, if medical marijuana use is an illegal use of drugs within the meaning of ORS 659A.124, then ORS 659A.124 excused employer from whatever obligation it would have had under ORS 659A.112 to engage in a "meaningful interactive process" or otherwise accommodate employee's use of medical marijuana.

BOLI advances a second, alternative argument. It argues that "employee's use of medical marijuana was entirely legal under state law" and thus not an "illegal use of drugs" within the meaning of ORS 659A.124. BOLI recognizes, as it must, that the federal Controlled Substances Act prohibits possession of marijuana even when used for medical purposes. BOLI's argument rests on the assumption that the phrase "illegal use of drugs" in ORS 659A.124 does not include uses that are legal under state law even though those same uses are illegal as a matter of federal law. BOLI never identifies the basis for that assumption; however, a state statute defines the phrase "illegal use of drugs," as used in ORS 659A.124, and we turn to that statute for guidance in resolving BOLI's second argument.

ORS 659A.122 provides, in part:

"As used in this section and ORS 659A.124, 659A.127 and 659A.130:

"* * * * *

"(2) 'Illegal use of drugs' means any use of drugs, the possession or distribution of which is unlawful under state law or under the federal Controlled Substances Act, 21 U.S.C.A. 812, as amended, but does not include the use of a drug taken under supervision of a licensed health care professional, or other uses authorized under the Controlled Substances Act or under other provisions of state or federal law."(9)

The definition of "illegal use of drugs" divides into two parts. The first part defines the drugs that are included within the definition -- all drugs whose use or possession is unlawful under state or federal law. Marijuana clearly falls within the first part of the definition. The second part of the definition excludes certain uses of what would otherwise be an illegal use of a drug. Two exclusions are potentially applicable here: (1) the exclusion for "uses authorized under * * * other provisions of state * * * law" and (2) the exclusion for "the use of a drug taken under supervision of a licensed health care professional." We consider each exclusion in turn.

We begin with the question whether employee's use of medical marijuana is a "us[e] authorized under * * * other provisions of state * * * law." We conclude that, as a matter of statutory interpretation, it is an authorized use. The Oregon Medical Marijuana Act affirmatively authorizes the use of medical marijuana, in addition to exempting its use from state criminal liability. Specifically, ORS 475.306(1) provides that "[a] person who possesses a registry identification card * * * may engage in * * * the medical use of marijuana" subject to certain restrictions. ORS 475.302(10), in turn, defines a registry identification card as "a document * * * that identifies a person authorized to engage in the medical use of marijuana." Reading those two subsections together, we conclude that ORS 475.306(1) affirmatively authorizes the use of marijuana for medical purposes(10) and, as a statutory matter, brings the use of medical marijuana within one of the exclusions from the "illegal use of drugs" in ORS 659A.122(2).(11)

Employer argues, however, that the Supremacy Clause of the United States Constitution requires that we interpret Oregon's statutes consistently with the federal Controlled Substances Act. We understand employer's point to be that, to the extent that ORS 475.306(1) affirmatively authorizes the use of medical marijuana, federal law preempts that subsection and that, without any effective state law authorizing the use of medical marijuana, employee's use of that drug was an "illegal use of drugs" within the meaning of ORS 659A.124.(12) We turn to that question and begin by setting out the general principles that govern preemption. We then discuss the federal Controlled Substances Act and finally turn to whether the Controlled Substances Act preempts the Oregon Medical Marijuana Act to the extent that state law affirmatively authorizes the use of medical marijuana.

The United States Supreme Court recently summarized the general principles governing preemption:

"Our inquiry into the scope of a statute's pre-emptive effect is guided by the rule that '"[t]he purpose of Congress is the ultimate touchstone" in every pre-emption case.' Medtronic, Inc. v. Lohr, 518 US 470, 485, 116 S Ct 2240, 135 L Ed 2d 700 (1996) (quoting Retail Clerks v. Schermerhorn, 375 US 96, 103, 84 S Ct 219, 11 L Ed 2d 179 (1963)). Congress may indicate a pre-emptive intent through a statute's express language or through its structure and purpose. See Jones v. Rath Packing Co., 430 US 519, 525, 97 S Ct 1305, 51 L Ed 2d 604 (1977). * * * Pre-emptive intent may also be inferred if the scope of the statute indicates that Congress intended federal law to occupy the legislative field, or if there is an actual conflict between state and federal law. Freightliner Corp. v. Myrick, 514 US 280, 287, 115 S Ct 1483, 131 L Ed 2d 385 (1995).

"When addressing questions of express or implied pre-emption, we begin our analysis 'with the assumption that the historic police powers of the States [are] not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress.' Rice v. Santa Fe Elevator Corp., 331 US 218, 230, 67 S Ct 1146, 91 L Ed 1447 (1947)."

Altria Group, Inc. v. Good, ___ US ___, ___, 129 S Ct 538, 543, 172 L Ed 2d 398 (2008).

With those principles in mind, we turn to the Controlled Substances Act. The central objectives of that act "were to conquer drug abuse and to control the legitimate and illegitimate traffic in controlled substances. Congress was particularly concerned with the need to prevent the diversion of drugs from legitimate to illicit channels." Raich, 545 US at 12-13 (footnotes omitted). To accomplish those objectives, Congress created a comprehensive, closed regulatory regime that criminalizes the unauthorized manufacture, distribution, dispensation, and possession of controlled substances classified in five schedules. Id. at 13.

The Court has explained that:

"Schedule I drugs are categorized as such because of their high potential for abuse, lack of any accepted medical use, and absence of any accepted safety for use in medically supervised treatment. [21 USC] § 812(b)(1). These three factors, in varying gradations, are also used to categorize drugs in the other four schedules. For example, Schedule II substances also have a high potential for abuse which may lead to severe psychological or physical dependence, but unlike Schedule I drugs, they have a currently accepted medical use. [21 USC] § 812(b)."

Id. at 14. Consistent with Congress's determination that the controlled substances listed in Schedule II through V have currently accepted medical uses, the Controlled Substances Act authorizes physicians to prescribe those substances for medical use, provided that they do so within the bounds of professional practice. See United States v. Moore, 423 US 122, 142-43, 96 S Ct 335, 46 L Ed 2d 333 (1975).(13) By contrast, because Schedule I controlled substances lack any accepted medical use, federal law prohibits all use of those drugs "with the sole exception being use of [Schedule I] drug[s] as part of a Food and Drug Administration preapproved research project." Raich, 545 US at 14; see 21 USC § 823(f) (recognizing that exception for the use of Schedule I drugs).

Congress has classified marijuana as a Schedule I drug, 21 USC § 812(c), and federal law prohibits its manufacture, distribution, and possession, 21 USC § 841(a)(1). Categorizing marijuana as a Schedule I drug reflects Congress's conclusion that marijuana "lack[s] any accepted medical use, and [that there is an] absence of any accepted safety for use in medically supervised treatment." Raich, 545 US at 14 (citing 21 USC § 812(b)(1)). Consistently with that classification, the Court has concluded that the Controlled Substances Act does not contain a "medical necessity" exception that permits the manufacture, distribution, or possession of marijuana for medical treatment. Oakland Cannabis Buyers' Cooperative, 532 US at 494 and n 7.(14) Despite efforts to reclassify marijuana, it has remained a Schedule I drug since the enactment of the Controlled Substances Act. See Raich, 545 US at 14-15 and n 23 (summarizing "considerable efforts," ultimately unsuccessful, to reschedule marijuana).

Section 903 of the Controlled Substances Act addresses the relationship between that act and state law. It provides:

"No provision of this subchapter shall be construed as indicating an intent on the part of the Congress to occupy the field in which that provision operates, including criminal penalties, to the exclusion of any State law on the same subject matter which would otherwise be within the authority of the State, unless there is a positive conflict between that provision of this subchapter and that State law so that the two cannot consistently stand together."

21 USC § 903. Under the terms of section 903, states are free to pass laws "on the same subject matter" as the Controlled Substances Act unless there is a "positive conflict" between state and federal law "so that the two cannot consistently stand together."

When faced with a comparable preemption provision, the Court recently engaged in an implied preemption analysis to determine whether a federal statute preempted state law. Wyeth v. Levine, ___ US ___, ___, 129 S Ct 1187, 1196-1200, 173 L Ed 2d 51 (2009).(15) That is, the Court asked whether there is an "actual conflict" between state and federal law. An actual conflict will exist either when it is physically impossible to comply with both state and federal law or when state law "'stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.'" Freightliner Corp., 514 US at 287 (quoting Hines v. Davidowitz, 312 US 52, 67, 61 S Ct 399, 85 L Ed 2d 581 (1941)).

The Court has applied the physical impossibility prong narrowly. Wyeth, 129 S Ct at 1199 (so stating); id. at 1209 (Thomas, J., concurring in the judgment).(16) For example, in Barnett Bank v. Nelson, 517 US 25, 116 S Ct 1103, 134 L Ed 2d 237 (1996), the question was whether "a federal statute that permits national banks to sell insurance in small towns pre-empts a state statute that forbids them to do so." Id. at 27. Although the two statutes were logically inconsistent, the Court held that it was not physically impossible to comply with both. Id. at 31. A national bank could simply refrain from selling insurance. See Wyeth, 129 S Ct at 1209 (Thomas, J., concurring in the judgment) (explaining physical impossibility test).

Under that reasoning, it is not physically impossible to comply with both the Oregon Medical Marijuana Act and the federal Controlled Substances Act. To be sure, the two laws are logically inconsistent; state law authorizes what federal law prohibits. However, a person can comply with both laws by refraining from any use of marijuana, in much the same way that a national bank could comply with state and federal law in Barnett Bank by simply refraining from selling insurance.

Because the "physical impossibility" prong of implied preemption is "vanishingly narrow," Caleb Nelson, Preemption, 86 Va L Rev 225, 228 (2000), the Court's decisions typically have turned on the second prong of implied preemption analysis -- whether state law "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." See Hines, 312 US at 67 (stating test). In Barnett Bank, for example, the Court stated, as a self-evident proposition, that a state law that prohibited national banks from selling insurance when federal law permitted them to do so would stand as an obstacle to the full accomplishment of Congress's purpose, but it then added "unless, of course, that federal purpose is to grant [national] bank[s] only a very limited permission, that is, permission to sell insurance to the extent that state law also grants permission to do so." Barnett Bank, 517 US at 31 (emphasis in original). Having considered the text and history of the federal statute and finding no basis for implying such a limited permission, the Court held that the state statute was preempted. Id. at 35-37.

The Court has reached the same conclusion when, as in this case, state law permits what federal law prohibits. Michigan Canners & Freezers v. Agricultural Bd., 467 US 461, 104 S Ct 2518, 81 L Ed 2d 399 (1984). In Michigan Canners, federal law prohibited food producers' associations from interfering with an individual food producer's decision whether to bring that individual's products to the market on his or her own or to sell them through the association. Id. at 464-65. Michigan law on this issue generally tracked federal law; however, Michigan law permitted food producers' associations to apply to a state board for authority to act as the exclusive bargaining agent for all producers of a particular commodity. Id. at 466. When the state board gave a producer's association that authority, all producers of a commodity had to adhere to the terms of the contracts that the association negotiated with food processors, even when the producer had declined to join the association. Id. at 467-68.

In considering whether federal law preempted the Michigan law, the Court held initially that it was physically possible to comply with both state and federal law. The Court reasoned that, because the "Michigan Act is cast in permissive rather than mandatory terms -- an association may, but need not, act as exclusive bargaining representative -- this is not a case in which it is [physically] impossible for an individual to comply with both state and federal law." Id. at 478 n 21 (emphasis in original). The Court went on to conclude, however, that "because the Michigan Act authorizes producers' associations to engage in conduct that the federal Act forbids, it 'stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress.'" Id. at 478 (quoting Hines, 312 US at 67).

The preemption issue in this case is similar to the issue in Michigan Canners and Barnett Bank. In this case, ORS 475.306(1) affirmatively authorizes the use of medical marijuana. The Controlled Substances Act, however, prohibits the use of marijuana without regard to whether it is used for medicinal purposes. As the Supreme Court has recognized, by classifying marijuana as a Schedule I drug, Congress has expressed its judgment that marijuana has no recognized medical use. See Raich, 545 US at 14. Congress did not intend to enact a limited prohibition on the use of marijuana -- i.e., to prohibit the use of marijuana unless states chose to authorize its use for medical purposes. Cf. Barnett Bank, 517 US at 31-35 (reaching a similar conclusion regarding the scope of the national bank act). Rather, Congress imposed a blanket federal prohibition on the use of marijuana without regard to state permission to use marijuana for medical purposes. Oakland Cannabis Buyers' Cooperative, 532 US at 494 & n 7.

Affirmatively authorizing a use that federal law prohibits stands as an obstacle to the implementation and execution of the full purposes and objectives of the Controlled Substances Act. Michigan Canners, 467 US at 478. To be sure, state law does not prevent the federal government from enforcing its marijuana laws against medical marijuana users in Oregon if the federal government chooses to do so. But the state law at issue in Michigan Canners did not prevent the federal government from seeking injunctive and other relief to enforce the federal prohibition in that case. Rather, state law stood as an obstacle to the enforcement of federal law in Michigan Canners because state law affirmatively authorized the very conduct that federal law prohibited, as it does in this case.

To the extent that ORS 475.306(1) affirmatively authorizes the use of medical marijuana, federal law preempts that subsection, leaving it "without effect." See Cipollone v. Liggett Group, Inc., 505 US 504, 516, 112 S Ct 2608, 120 L Ed 2d 407 (1992) ("[S]ince our decision in McCulloch v. Maryland, 4 Wheat. 316, 427 (1819), it has been settled that state law that conflicts with federal law is 'without effect.'") Because ORS 475.306(1) was not enforceable when employer discharged employee, no enforceable state law either authorized employee's use of marijuana or excluded its use from the "illegal use of drugs," as that phrase is defined in ORS 659A.122(2) and used in ORS 659A.124. It follows that BOLI could not rely on the exclusion in ORS 659A.122(2) for "uses authorized * * * under other provisions of state * * * law" to conclude that medical marijuana use was not an illegal use of drugs within the meaning of ORS 659A.124.

The commissioner reached a different conclusion regarding preemption, as would the dissenting opinion. We address the commissioner's reasoning before turning to the dissent. The commissioner, for his part, adopted the reasoning from an informal Attorney General opinion, dated June 17, 2005, which concluded that the Controlled Substances Act does not invalidate the Oregon Medical Marijuana Act. Letter of Advice dated June 17, 2005, to Susan M. Allan, Public Health Direction, Department of Human Services. In reaching that conclusion, the Attorney General focused on those parts of the Oregon Medical Marijuana Act that either exempt medical marijuana users from state criminal liability or provide an affirmative defense to criminal charges. Id. at 2.(17) In concluding that those exemptions from state criminal liability were valid, the Attorney General relied on a line of federal cases holding that "Congress cannot compel the States to enact or enforce a federal regulatory program." See Printz v. United States, 521 US 898, 935, 117 S Ct 2365, 138 L Ed 2d 914 (1997) (so stating); New York v. United States, 505 US 144, 162, 112 S Ct 2408, 120 L Ed 2d 120 (1992) (stating that "the Constitution has never been understood to confer upon Congress the ability to require the States to govern according to Congress's instructions"). The Attorney General concluded that Oregon was free, as a matter of state law, to exempt medical marijuana use from criminal liability because Congress lacks the authority to require Oregon to prohibit that use.

The Attorney General's opinion has no bearing on the issue presented in this case for two reasons. First, as noted, one subsection of the Oregon Medical Marijuana Act affirmatively authorizes the use of medical marijuana. ORS 475.306(1). Other provisions exempt its use from state criminal liability. See, e.g., ORS 475.309(1); ORS 475.319. In this case, only the validity of the authorization matters. ORS 659A.122(2) excludes medical marijuana use from the definition of "illegal use of drugs" for the purposes of the state employment discrimination laws if state law authorizes that use. The Attorney General's opinion, however, addresses only the validity of the exemptions; it does not address the validity of the authorization found in ORS 475.306(1). It thus does not address the issue that is central to the resolution of this case.

Second, and more importantly, the validity of the exemptions and the validity of the authorization turn on different constitutional principles. The Attorney General reasoned that the exemptions from criminal liability are valid because "Congress cannot compel the States to enact or enforce a federal regulatory program" -- a restriction that derives from Congress's limited authority under the federal constitution. See Printz, 521 US at 935 (stating limited authority); New York, 505 US at 161-66 (describing the sources of that limitation). Under the Attorney General's reasoning and the United States Supreme Court decisions on which his opinion relies, Congress lacks authority to require states to criminalize conduct that the states choose to leave unregulated, no matter how explicitly Congress directs the states to do so.

By contrast, there is no dispute that Congress has the authority under the Supremacy Clause to preempt state laws that affirmatively authorize the use of medical marijuana. Whether Congress has exercised that authority turns on congressional intent: that is, did Congress intend to preempt the state law? See Cipollone, 505 US at 516 (describing preemption doctrine). More specifically, the constitutional question in this case is whether, under the doctrine of implied preemption, a state law authorizing the use of medical marijuana "stands as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress." See Hines, 312 US at 67 (stating that test). Nothing in the Attorney General's opinion addresses that question, and the commissioner erred in finding an answer in the Attorney General's opinion to a question that the Attorney General never addressed.

The dissent addresses the issue that the Attorney General's opinion did not and would hold for alternative reasons that ORS 475.306(1) does not stand as an obstacle to the full accomplishment of Congress's purposes in enacting the Controlled Substances Act. The dissent reasons that, because ORS 475.306(1) does not "giv[e] permission to violate the Controlled Substances Act or affec[t] its enforcement, [that subsection] does not pose an obstacle to the federal act necessitating a finding of implied preemption." ___ Or at ___ (Walters, J., dissenting) (slip op at 9).(18) In the dissent's view, the fact that a state law affirmatively authorizes conduct that federal law explicitly forbids is not sufficient to find that the state law poses an obstacle to the full accomplishment of the purposes of the federal law and is thus preempted. The dissent also advances what appears to be an alternative basis for its position. It reasons that the Oregon Medical Marijuana Act, as a whole, exempts medical marijuana use from state criminal liability and that ORS 475.306(1) is merely one part of that larger exemption. It appears to draw two different legal conclusions from that alternative proposition. It suggests that, to the extent ORS 475.306(1) merely exempts medical marijuana use from criminal liability, then Congress lacks power to require states to criminalize that conduct under the line of cases that the Attorney General cited. Alternatively, it suggests that, because authorization is merely the other side of the coin from exemption, authorizing medical marijuana use poses no more of an obstacle to the accomplishment of the purposes of the Controlled Substances Act than exempting that use from state criminal liability and thus that use is not preempted. We begin with the test that the dissent would employ in obstacle preemption cases.

As noted, the dissent would hold that a state law stands as an obstacle to the execution and accomplishment of the full purposes of a federal law (and is thus preempted) if the state law purports to override federal law either by giving permission to violate the federal law or by preventing the federal government from enforcing its laws. We do not disagree that such a law would be an obstacle. But it does not follow that anything less is not an obstacle. Specifically, we disagree with the dissent's view that a state law that specifically authorizes conduct that a federal law expressly forbids does not pose an obstacle to the full accomplishment of the purposes of the federal law and is not preempted.

If Congress chose to prohibit anyone under the age of 21 from driving, states could not authorize anyone over the age of 16 to drive and give them a license to do so. The state law would stand as an obstacle to the accomplishment of the full purposes and objectives of Congress (keeping everyone under the age of 21 off the road) and would be preempted. Or, to use a different example, if federal law prohibited all sale and possession of alcohol, a state law licensing the sale of alcohol and authorizing its use would stand as an obstacle to the full accomplishment of Congress's purposes. ORS 475.306(1) is no different. To the extent that ORS 475.306(1) authorizes persons holding medical marijuana licenses to engage in conduct that the Controlled Substances Act explicitly prohibits, it poses the same obstacle to the full accomplishment of Congress's purposes (preventing all use of marijuana, including medical uses).

The dissent, however, reasons that one state case and four federal cases support its view of obstacle preemption. It reads State v. Rodriguez, 317 Or 27, 854 P2d 399 (1993), as providing direct support for its view. See ___ Or at ____ (Walters, J., dissenting) (slip op at 9). In Rodriguez, federal Immigration and Naturalization Service (INS) agents obtained evidence pursuant to a federal administrative warrant that was valid under federal law but not under the Oregon Constitution, and the question was whether suppressing evidence obtained pursuant to that warrant in a state criminal proceeding was an obstacle to the accomplishment of the full purposes and objectives of the federal immigration laws. This court held that it was not. Suppressing evidence in the state criminal proceeding was completely unrelated to the INS's ability to carry out its separate mission of enforcing the federal immigration laws in a federal administrative proceeding. This court did not hold in Rodriguez, as the dissent appears to conclude, that state law will be an obstacle to the full accomplishment of the purposes of the federal law only if state law interferes with the federal government's ability to enforce its laws.

The dissent also relies on four United States Supreme Court cases "for the proposition that states may impose standards of conduct different from those imposed by federal law without creating an obstacle to the federal law." ___ Or at ___ (Walters, J., dissenting) (slip op at 12). It follows, the dissent reasons, that the mere fact that state law authorizes conduct that federal law forbids does not mean that state law is an obstacle to the accomplishment of the purposes of the federal law. The four cases on which the dissent relies stand for a narrower proposition than the dissent draws from them. In interpreting the applicable federal statute in each of those cases, the Court concluded that Congress intended to leave states free to impose complementary or supplemental regulations on a person's conduct. None of those cases holds that states can authorize their citizens to engage in conduct that Congress explicitly has forbidden, as ORS 475.306(1) does.

In Wyeth, one of the cases on which the dissent relies, the defendant argued that permitting state tort remedies based on a drug manufacturer's failure to warn would "interfere with 'Congress's purpose to entrust an expert agency to make drug labeling decisions that strike a balance between competing objectives.'" 129 S Ct at 1199 (quoting the defendant's argument). After considering the history of the federal statute, the Court concluded that "Congress did not intend FDA oversight to be the exclusive means of ensuring drug safety and effectiveness." Id. at 1200. The Court concluded instead that Congress intended to allow complementary state tort remedies. Id. Given that interpretation of the federal law, the Court determined that the state tort remedy was consistent with, and not an obstacle to, Congress's purpose in requiring warnings in the first place. Put differently, the state law was not an obstacle to Congress's purpose because Congress intended to permit states to continue enforcing complementary tort remedies.

The Court's opinion in Florida Lime & Avocado Growers, Inc. v. Paul, 373 US 132, 83 S Ct 1210, 10 L Ed 2d 248 (1963), on which the dissent also relies, is to the same effect. In that case, the Court determined that a federal marketing order setting minimum standards for picking, processing, and transporting avocados did not reflect a congressional intent to prevent states from enacting laws governing "the distribution and retail sale of those commodities." 373 US at 145. As the Court explained, "[c]ongressional regulation at one end of the stream of commerce does not, ipso facto, oust all state regulation at the other end." Id. The Court accordingly concluded that there was "no irreconcilable conflict with the federal regulation [that] require[d] a conclusion that [the state law] was displaced." Id. at 146.(19) The Court's reasoning implies that, when, as in this case, there is an irreconcilable conflict between state and federal law, that conflict "requires a conclusion that [the state law] [i]s displaced." See id.

In both Florida Lime & Avocado and Wyeth and the other two cases the dissent cites, the Court interpreted the applicable federal statute to permit complementary or supplementary state law.(20) None of those cases considered state laws that authorized conduct that the federal law specifically prohibited, as is present in this case, and none of those cases stands for the proposition that such a law would not be an obstacle to the accomplishment of the full purposes of Congress. Rather, the Court's opinion in Florida Lime & Avocado points in precisely the opposite direction; it teaches that when, as in this case, the state and federal laws are in "irreconcilable conflict," federal law will displace state law. See 373 US at 146.

As noted, the dissent also advances what appears to be an alternative ground for its position. The dissent reasons that ORS 475.306(1) does not affirmatively authorize the use of medical marijuana; it views that subsection instead as part of a larger exemption of medical marijuana use from state criminal laws. The dissent's reasoning is difficult to square with the text of ORS 475.306(1). That subsection provides that a person holding a registry identification card "may engage" in the limited use of medical marijuana. Those are words of authorization, not exemption. Beyond that, if ORS 475.306(1) were merely part of a larger exemption, then no provision of state law would authorize the use of medical marijuana. If that were true, medical marijuana use would not come within one of the exclusions from the "illegal use of drugs," as that phrase is defined in ORS 659A.122, and the protections of ORS 659A.112 would not apply to employee. See ORS 659A.124 (so providing).(21)

Another thread runs through the dissent. It reasons that, as a practical matter, authorizing medical marijuana use is no different from exempting that use from criminal liability. It concludes that, if exempting medical marijuana use from criminal liability is not an obstacle to the accomplishment of the purposes of the Controlled Substances Act and is thus not preempted, then neither is a state law authorizing medical marijuana use. The difficulty with the dissent's reasoning is its premise. It presumes that a law exempting medical marijuana use from liability is valid because it is not preempted. As the Attorney General's opinion explained, however, Congress lacks the authority to compel a state to criminalize conduct, no matter how explicitly it directs a state to do so. When, however, a state affirmatively authorizes conduct, Congress has the authority to preempt that law and did so here. The dissent's reasoning fails to distinguish those two analytically separate constitutional principles.

In sum, whatever the wisdom of Congress's policy choice to categorize marijuana as a Schedule I drug, the Supremacy Clause requires that we respect that choice when, as in this case, state law stands as an obstacle to the accomplishment of the full purposes of the federal law. Doing so means that ORS 475.306(1) is not enforceable. Without an enforceable state law authorizing employee's use of medical marijuana, that basis for excluding medical marijuana use from the phrase "illegal use of drugs" in ORS 659A.122(2) is not available.

As noted, a second possible exclusion from the definition of "illegal use of drugs" exists, which we also address. The definition of "illegal use of drugs" also excludes from that phrase "the use of a drug taken under supervision of a licensed health care professional."(22) ORS 659A.122(2). On that issue, as noted above, employee's physician signed a statement that employee had been diagnosed with a debilitating condition, that marijuana may mitigate the symptoms or effects of that condition, but that the physician's statement was not a prescription to use marijuana. That statement was sufficient under the Oregon Medical Marijuana Act to permit employee to obtain a registry identification card, which then permitted him to use marijuana to treat his condition. Employee's physician recommended that employee use marijuana five to seven times daily by inhalation. However, without a prescription, employee's physician had no ability to control either the amount of marijuana that employee used or the frequency with which he used it, if employee chose to disregard his physician's recommendation.

The question thus posed is whether employee used marijuana "under supervision of a licensed health care professional." The answer to that question turns initially on what a person must show to come within that exclusion. As explained below, we conclude that two criteria must be met to come within the exclusion. As an initial matter, the phrase "taken under supervision" of a licensed health care professional implies that the health care professional is monitoring or overseeing the patient's use of what would otherwise be an illegal drug. See Webster's Third New Int'l Dictionary 2296 (unabridged ed 2002) (defining supervise as "coordinate, direct, and inspect continuously and at first hand the accomplishment of" a task); cf. Moore, 423 US at 143 (holding that a physician who prescribed methadone, a Schedule II controlled substance, without regulating his patients' dosage and with no precautions against his patients' misuse of methadone violated section 841 of the Controlled Substances Act).

Beyond supervision, when a health care professional administers a controlled substance, the exclusion requires that the Controlled Substances Act authorize him or her to do so. That follows from the text and context of the definition of illegal use of drugs set out in ORS 659A.122(2). After providing that the illegal use of drugs does not include "the use of a drug taken under supervision of a licensed health care professional," the legislature added "or other uses authorized under the Controlled Substances Act." The phrase "or other uses authorized by the Controlled Substances Act" is telling. The words "other uses" imply that the preceding use (the use of drugs taken under supervision of a licensed health care professional) also refers to a use authorized by the Controlled Substances Act. See Webster's at 1598 (defining "other" as "being the one (as of two or more) left").

Not only does the text of ORS 659A.122(2) imply that the use of controlled substances taken under supervision of a licensed health care professional refers to uses that the Controlled Substances Act authorizes, but the context leads to the same conclusion. See Stevens v. Czerniak, 336 Or 392, 401, 84 P3d 140 (2004) (explaining that context includes "'the preexisting common law and the statutory framework within which the law was enacted'") (quoting Denton and Denton, 326 Or 236, 241, 951 P2d 693 (1998)). As noted, the Controlled Substances Act both authorizes physicians and other health care professionals to administer controlled substances for medical and research purposes and defines the scope of their authority to do so. See Moore, 423 US at 138-40 (so holding). We infer that, in excluding "the use of a drug taken under supervision of licensed health care professionals" from the phrase "illegal use of drugs," the legislature intended to refer to those medical and research uses that, under the Controlled Substances Act, physicians and other health care professionals lawfully can put controlled substances.

Another contextual clue points in the same direction. The exclusion in ORS 659A.122(2) for the use of a drug taken under supervision of a licensed health care professional is virtually identical to an exclusion in the definition of illegal use of drugs found in the ADA. See 42 USC § 12111(6)(A) (excluding "the use of a drug taken under supervision by a licensed health care professional, or other uses authorized by the Controlled Substances Act"). The federal exclusion contemplates medical and research uses that the Controlled Substances Act authorizes, and there is no reason to think that, in adopting the same exclusion, the Oregon legislature had any different intent in mind. Cf. Stevens, 336 Or at 402-03 (looking to the federal counterpart to ORCP 36 to determine Oregon legislature's intent). Given the text and context of ORS 659A.122(2), we conclude that, when a health care professional administers a controlled substance, the exclusion for the "use of a drug taken under supervision of a licensed health care professional" refers to those medical and research uses that the Controlled Substances Act authorizes.

In sum, two criteria are necessary to come within the exclusion for the use of a controlled substance taken under supervision of a licensed health care professional: (1) the Controlled Substances Act must authorize a licensed health care professional to prescribe or administer the controlled substance and (2) the health care professional must monitor or supervise the patient's use of the controlled substance. In this case, we need not decide whether the evidence was sufficient to prove the second criterion -- i.e., whether employee's physician monitored or oversaw employee's use of marijuana. Even if it were, the Controlled Substances Act did not authorize employee's physician to administer (or authorize employee to use) marijuana for medical purposes. As noted, under the Controlled Substances Act, physicians may not prescribe Schedule I controlled substances for medical purposes. At most, a physician may administer those substances only as part of a Food and Drug Administration preapproved research project.(23) Because there is no claim in this case that employee and his physician were participating in such a project, employee's use of marijuana was not taken under supervision of a licensed health care professional, as that phrase is used in ORS 659A.122(2).

Because employee did not take marijuana under supervision of a licensed health care professional and because the authorization to use marijuana found in ORS 475.306(1) is unenforceable, it follows that employee was currently engaged in the illegal use of drugs and, as the commissioner found, employer discharged employee for that reason. Under the terms of ORS 659A.124, "the protections of ORS 659A.112 do not apply" to employee. The commissioner's final order on reconsideration rests, however, on the premise that the protections of ORS 659A.112 -- specifically, the requirement for employer to engage in a "meaningful interactive process" as an aspect of reasonable accommodation -- do apply to employee. Under ORS 659A.124, that premise is mistaken, and the commissioner's revised order on reconsideration cannot stand. Both the commissioner's order and the Court of Appeals decision affirming that order on procedural grounds must be reversed.

Given the number of the issues discussed in this opinion, we summarize the grounds for our decision briefly. First, employer preserved its challenge that, as a result of the Controlled Substances Act, the use of medical marijuana is an illegal use of drugs within the meaning of ORS 659A.124. Second, two potentially applicable exclusions from the phrase "illegal use of drugs" -- the use of drugs authorized by state law and the use of drugs taken under the supervision of a licensed health care professional -- do not apply here. Third, regarding the first potentially applicable exclusion, to the extent that ORS 475.306(1) authorizes the use of medical marijuana, the Controlled Substances Act preempts that subsection. We note that our holding in this regard is limited to ORS 475.306(1); we do not hold that the Controlled Substances Act preempts provisions of the Oregon Medical Marijuana Act that exempt the possession, manufacture, or distribution of medical marijuana from state criminal liability. Fourth, because employee was currently engaged in the illegal use of drugs and employer discharged him for that reason, the protections of ORS 659A.112, including the obligation to engage in a meaningful interactive discussion, do not apply. ORS 659A.124. It follows that BOLI erred in ruling that employer violated ORS 659A.112.

* * *

See: http://www.publications.ojd.state.or.us/S056265.htm

Outcome: The decision of the Court of Appeals and the revised order on reconsideration of the Commissioner of the Bureau of Labor and Industries are reversed.

Plaintiff's Experts:

Defendant's Experts:

Comments: