Petition for Declaratory Judgment, Preliminary Injunction and Permanent Injunctive Relief August 30, 2024 (2024)

 
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 Electronically Filed - COLE CIRCUIT - August 30, 2024 - 11:49 AM 24AC-CC07631 IN THE CIRCUIT COURT OF COLE COUNTY, MISSOURI 19TH JUDICIAL CIRCUITMO HEMP TRADE ASSOCIATION, )50 Hi Line Drive )Union, MO 63084-3104 ) ) Plaintiff, ) ) Case No. v. ) )MISSOURI DEPARTMENT OF )HEALTH AND SENIOR SERVICES, ) )Serve: Paula F. Nickelson, Director ) Missouri Department of Health ) and Senior Services ) 912 Wildwood, P.O. Box 570 ) Jefferson City, MO 65102 ) (573) 751-6400 ) ) Defendant. )PETITION FOR DECLARATORY JUDGMENT, PRELIMINARY INJUNCTION AND PERMANENT INJUNCTIVE RELIEF Plaintiff MO Hemp Trade Association ("Plaintiff" or "MO Hemp") seeksdeclaratory and injunctive relief to stop the Missouri Department of Health and SeniorServices ("DHSS") from designating foods "adulterated" because they contain hempproducts and from embargoing such foods. Missouri law specifically prohibits theintended action announced by DHSS. In addition, Plaintiff asks this Court to declare thatDHSS has improperly enacted a rule prohibiting the manufacture, sale, or distribution offoods containing hemp products unless done so by facilities licensed by DHSS withoutundertaking the rulemaking process required by the Missouri Administrative Procedure 1 Electronically Filed - COLE CIRCUIT - August 30, 2024 - 11:49 AMAct. As a result, DHSS' announced policy is void and of no effect. The Parties 1. Plaintiff is a private, non-profit organization residing in Franklin County,Missouri. 2. Defendant Missouri Department of Health and Senior Services (“DHSS”) isa state agency. § 192.005.1, RSMo. 3. DHSS is responsible for administering Missouri's laws pertaining to foodand drugs. § 192.080, RSMo. Jurisdiction and Venue 4. Venue is proper in this Court because DHSS is located in Cole County. 5. Plaintiff seeks a declaration of rights, status, and other legal relations. §527.010, RSMo. 6. Plaintiff seeks a declaration that DHSS has unlawfully promulgated a rulewithout undertaking the rulemaking process. § 536.050, RSMo. 7. Plaintiff also seeks temporary and permanent injunctive relief. Factual Allegations The citizens of Missouri and the General Assembly have chosen to not regulate hemp products. 8. Marijuana and hemp are varieties of the same species, Cannabis sativa L. 9. Marijuana plants are generally bred as female plants that produce more than0.3% of delta-9 tetrahydrocannabinol ("delta-9-THC"). 10. Hemp is a mixture of male and female cannabis plants, and its flowers 2 Electronically Filed - COLE CIRCUIT - August 30, 2024 - 11:49 AMproduce less than 0.3% of delta-9-THC. 11. Cannabidiol, or CBD, is usually derived from the hemp plant and is notpsychoactive. 12. Clause 4 of Section 2 of Article XIV of the Missouri Constitution givesDHSS the authority to regulate "marijuana." 13. Clause 2(13) of Section 2 of Article XIV of the Missouri Constitutionspecifically states that "marijuana does not include industrial hemp, as defined byMissouri statute, or commodities or products manufactured from industrial hemp." 14. Missouri's Controlled Substances Law defines "industrial hemp" as: (a) All nonseed parts and varieties of the Cannabis sativa L. plant, growing or not, that contain an average delta-9 tetrahydrocannabinol (THC) concentration that does not exceed three-tenths of one percent on a dry weight basis or the maximum concentration allowed under federal law, whichever is greater; (b) Any Cannabis sativa L. seed that is part of a growing crop, retained by a grower for future planting, or used for processing into or use as agricultural hemp seed; (c) Industrial hemp includes industrial hemp commodities and products and topical or ingestible animal and consumer products derived from industrial hemp with a delta-9 tetrahydrocannabinol concentration of not more than 3 Electronically Filed - COLE CIRCUIT - August 30, 2024 - 11:49 AM three-tenths of one percent on a dry weight basis.§ 195.010(24). 15. The Missouri General Assembly has given DHSS the authority to embargofoods when the agency finds or has probable cause to believe that a food is adulterated orso misbranded as to be dangerous or fraudulent. § 196.030.1, RSMo. 16. The Missouri General Assembly has set forth twelve scenarios where "[a]food shall be deemed to be adulterated." § 196.070.1, RSMo. 17. Under § 196.070.1(1), RSMo., a food shall be deemed to be adulterated if itbears or contains any poisonous or deleterious substance which may render it injurious tohealth." 18. Under § 196.070.1(2), RSMo., a food shall be deemed to be adulterated if itbears or contains any added poisonous or added deleterious substance which is unsafewithin the meaning of section 196.085. 19. But the Missouri General Assembly has specifically said that "[a] food shallnot be considered adulterated solely for containing industrial hemp, or an industrial hempcommodity or product." § 196.070.2, RSMo. Governor Parson's Executive Order 24-10 attempts to improperly regulate food products containing industrial hemp. 20. On August 1, 2024, Governor Parson issued Executive Order 24-10 ("EO24-10"). Exhibit 1. 21. EO 24-10 states: "[T]here are currently no safety standards, packagingrequirements, or other regulations related to the safety of consuming unregulated 4 Electronically Filed - COLE CIRCUIT - August 30, 2024 - 11:49 AMpsychoactive cannabis products in Missouri." 22. EO 24-10 states: "Unregulated psychoactive cannabis products includedelta-8 tetrahydrocannabinol (THC), delta-10 (THC), hexahydrocannabinol (HHC),tetrahydrocannabinol (THC-O), tetrahydrocannabiphoral (THCP), tetrahydrocannabivarin(THCV), and other similar products" (hereinafter referred to as the "UnregulatedPsychoactive Cannabis Products"). 23. The Unregulated Psychoactive Cannabis Products listed in Executive Order24-10 are typically made from CBD derived from the hemp plant. 24. The Unregulated Psychoactive Cannabis Products are "industrial hemp"because they do not contain greater than 0.3% delta-9-THC on a dry weight basis. 25. Contrary to Missouri law, EO 24-10 directs DHSS to "find foods thatcontain unregulated psychoactive cannabis products are deleterious, poisonous, andadulterated under Sections 196.070, RSMo., and 196.085, RSMo., and to take thenecessary steps in accordance with statute and regulation to embargo and condemn anyfood containing unregulated psychoactive cannabis products." 26. EO 24-10 directs DHSS to produce and distribute information regardinghow DHSS will regulate products consistent with the executive order. 27. In response to EO 24-10, DHSS has setup an online form for the public toreport establishments selling a product that may be considered an UnregulatedPsychoactive Cannabis Product: https://health.mo.gov/safety/foodsafety/enviro-health-services/unreg-psychoactive-cannabis-products.php. 28. Upon information and belief, DHSS has received reports identifying 5 Electronically Filed - COLE CIRCUIT - August 30, 2024 - 11:49 AMestablishments selling a product that may be considered an Unregulated PsychoactiveCannabis Product. DHSS will violate Missouri law and harm Plaintiff's members by deeming all foods containing industrial hemp "adulterated" and embargoing them. 29. On August 29, 2024, DHSS issued a memorandum entitled "Memo forMissouri Food Retailers and Wholesalers, Executive Order 24-10 Implementation" (the"August 2024 Memo"). Exhibit 2. 30. The August 2024 Memo states that "[a]ny facility under the regulatoryauthority of [DHSS] that sells, manufactures, or distributes products containingunregulated psychoactive cannabis are subject to Executive Order 24-10." 31. The August 2024 Memo states that, starting September 1, 2024, DHSS willinspect facilities for compliance with EO 24-10. 32. The August 2024 Memo states: "If unregulated psychoactive cannabisproducts are found during an investigation, DHSS will: (1) Document the findings. (2)Educate and request voluntary compliance, including destruction of the products. Ifvoluntary compliance is not achieved, products will be embargoed and held on thepremises until a court order for destruction is obtained." 33. On August 29, 2024, DHSS representative Lisa Cox sent an email attachingthe August 2024 Memo that stated: "Governor Parson's Executive Order 24-10 goes intoeffect this weekend, which prohibits foods containing psychoactive cannabis productsfrom being manufactured, sold or delivered in the State of Missouri, unless originatingfrom an 'approved source.' The Department of Health and Senior Services will take steps 6 Electronically Filed - COLE CIRCUIT - August 30, 2024 - 11:49 AMto embargo and condemn these products beginning Sept. 1, 2024." Exhibit 3. The MO Hemp Trade Association meets the three prong test of associational standing. 34. The members of MO Hemp include those who distribute and sell hempproducts. 35. Members of MO Hemp are suffering an immediate and threatened injury asa result of DHSS plan to embargo and condemn foods containing hemp products startingSeptember 1, 2024. They are being threatened with the prospect of an embargo, andrelated litigation, for selling products that contain industrial hemp. 36. Plaintiff seeks a declaration interpreting the statutes regarding adulteratedfood, specifically as they relate to the treatment of foods containing hemp products as"adulterated." Therefore, this lawsuit does not require the participation of any individualmember of the MO Hemp Trade Association. 37. The interests the MO Hemp Trade Association seeks to protect here aregermane to the organization’s purpose, namely to promote the research, development,and commercialization of hemp products, and to offer legal, regulatory, and businesssupport services to members. 38. The relief MO Hemp Trade Association requests—a declaration that foodscontaining industrial hemp products are not adulterated, a declaration that DHSS cannotembargo foods containing industrial hemp products, and a declaration that DHSS cannotunilaterally stop the manufacture, sale, or delivery of foods containing industrial hempproducts without promulgating a rule—is not relief that requires information from any 7 Electronically Filed - COLE CIRCUIT - August 30, 2024 - 11:49 AMparticular member. COUNT I: DHSS UNLAWFULLY CONCLUDES THAT FOODS CONTAINING INDUSTRIAL HEMP ARE ADULTERATED 39. Plaintiff incorporates by reference all preceding paragraphs. 40. The Missouri General Assembly has declared that a food cannot beconsidered adulterated solely for containing industrial hemp, or an industrial hempcommodity or product. § 196.070.2, RSMo. 41. DHSS maintains that foods containing the Unregulated PsychoactiveCannabis Products listed in EO 24-10 are "adulterated." 42. The Unregulated Psychoactive Cannabis Products listed in EO 24-10 areindustrial hemp commodities or products. 43. Thus, Plaintiff maintains that foods containing the UnregulatedPsychoactive Cannabis Products listed in EO-24 are, by statutory definition, notadulterated. 44. Further, Plaintiff maintains that, even if § 196.070.2 did not exist, foodscontaining hemp products are unadulterated because they are not poisonous ordeleterious. 45. Plaintiff and Defendant have a real, substantial, and presently existingcontroversy as to whether DHSS can designate foods containing industrial hemp productsor commodities as "adulterated." 46. Plaintiff seeks to protect the rights of its members. 47. Plaintiff's claim is ripe for judicial determination. 8 Electronically Filed - COLE CIRCUIT - August 30, 2024 - 11:49 AM 48. Plaintiff's members will suffer imminent, irreparable harm if foodscontaining industrial hemp products or commodities are deemed adulterated becauseadulterated foods cannot be sold under Missouri law. 49. Defendant faces no harm if its interpretation is invalidated and Plaintiff'smembers are allowed to continue selling and distributing foods containing industrialhemp products or commodities. 50. The public interest favors an injunction prohibiting Defendant from movingforward with its improper interpretation of Missouri law. 51. An injunction ensures the law is properly enforced. 52. Plaintiff has no adequate remedy at law. COUNT II:ANY EMBARGO ON THE SALE OF FOODS CONTAINING HEMP PRODUCTS VIOLATES MISSOURI LAW 53. Plaintiff incorporates by reference all preceding paragraphs. 54. DHSS is only authorized to embargo a food when it finds or has probablecause to believe a food is adulterated or so misbranded as to be dangerous or fraudulent.§ 196.030.1, RSMo. 55. DHSS cannot embargo unadulterated foods. 56. DHSS has publicly announced that, starting September 1, it will embargofoods containing hemp products because those foods are adulterated. 57. Plaintiff's position is that foods containing hemp products are, by statutorydefinition, unadulterated, and any embargo preventing the sale of those products isunlawful and a taking of its members' property. 9 Electronically Filed - COLE CIRCUIT - August 30, 2024 - 11:49 AM 58. Plaintiff and Defendant have a real, substantial, and presently existingcontroversy regarding DHSS' interpretation of Missouri's Constitution and Food, Drug,and Cosmetics Act. 59. Plaintiff seeks to protect the rights of its members. 60. Plaintiff's claim is ripe for judicial determination. 61. Plaintiff's members will suffer imminent, irreparable harm if foodscontaining hemp products are embargoed and condemned, meaning destroyed, if DHSSprevails. 62. Defendant faces no harm if its interpretation of Missouri law is invalidatedand Plaintiff's members are allowed to continue selling and distributing foods containinghemp products. 63. The public interest favors an injunction prohibiting Defendant from movingforward with an embargo of foods containing hemp products, which not only preventssuch products from being sold but could result in their condemnation and destruction ifDefendant prevails. 64. An injunction ensures the Missouri Constitution and statutes are properlyenforced. 65. Plaintiff has no adequate remedy at law. COUNT III: DHSS CANNOT UNILATERALLY STOP THE MANUFACTURE, SALE, OR DELIVERY OF FOODS CONTAINING HEMP PRODUCTS IN MISSOURI WITHOUT PROMULGATING A RULE 66. Plaintiff incorporates by reference all preceding paragraphs. 10 Electronically Filed - COLE CIRCUIT - August 30, 2024 - 11:49 AM 67. In an email attaching the August 2024 Memo, DHSS has publiclyannounced Executive Order 24-10 prohibits the manufacture, sale, or delivery of foodscontaining hemp products, unless originating from a facility licensed by DHSS. 68. DHSS' announcement is an agency statement of general applicabilitythat implements, interprets, or prescribes law or policy. 69. DHSS has made a statement of general applicability that all foods containinghemp products are per se illegal unless manufactured, sold, or delivered by a facilitylicensed by DHSS. 70. Not only is such a statement contrary to § 196.070.2, but it is made withoutfollowing the rulemaking procedures set forth in § 536.016, RSMo., that must be followedto properly promulgate a rule. 71. DHSS violated the Missouri Administrative Procedure Act by promulgatinga rule without following the procedures set forth in § 536.016, RSMo. 72. DHSS statements that the manufacture, sale, or delivery of foods containinghemp products in Missouri are prohibited have no legal effect. 73. Plaintiff and Defendant have a real, substantial, and presently existingcontroversy regarding whether DHSS has unlawfully promulgated a rule designating allfoods containing hemp products per se illegal unless manufactured, sold, or delivered bya facility licensed by DHSS. 74. Plaintiff seeks to protect the rights of its members. 75. Plaintiff's claim is ripe for judicial determination. 76. Plaintiff's members will suffer imminent, irreparable harm if DHSS is 11 Electronically Filed - COLE CIRCUIT - August 30, 2024 - 11:49 AMallowed to unilaterally declare that foods containing hemp are per se illegal unlessmanufactured, sold, or delivered by a facility licensed by DHSS. 77. Defendant faces no harm if it required to follow the rulemaking proceduresstatutorily applicable to it. 78. Plaintiff has no adequate remedy at law. Prayer for Relief WHEREFORE, for the foregoing reasons, Plaintiff prays for a judgment: a. Declaring DHSS cannot deem a food to be adulterated because it contains industrial hemp products; b. Declaring DHSS cannot embargo a food because it contains industrial hemp products; c. Declaring DHSS cannot unilaterally stop the manufacture, sale, or delivery of foods containing industrial hemp products in Missouri by persons other than those licensed by DHSS; d. Issuing a preliminary injunction and then permanently enjoining DHSS from deeming a food to be adulterated because it contains industrial hemp products; e. Issuing a preliminary injunction and then permanently enjoining DHSS from embargoing foods containing industrial hemp products; f. Award Plaintiff its costs and attorney's fees for this action; and g. Granting such other and further relief as the Court deems just and appropriate under the circ*mstances. 12 Electronically Filed - COLE CIRCUIT - August 30, 2024 - 11:49 AMRespectfully submitted,STINSON LLPBy: /s/ Charles W. HatfieldCharles W. Hatfield, MO No. 40363Alixandra S. Cossette, MO No. 68114Sarah L. Struby, MO No. 66044230 W. McCarty StreetJefferson City, Missouri 65101Phone: (573) 636-6263Facsimile: (573) 636-6231chuck.hatfield@stinson.comalix.cossette@stinson.comsarah.struby@stinson.comATTORNEYS FOR PLAINTIFFS 13 

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