Unclear If Eteros Decision Allows Import of Drug Paraphernalia in States Besides Washington, Lawyers Say
A September Court of International Trade decision finding that the U.S. cannot seize or forfeit imports of federally deemed "drug paraphernalia" whose delivery, possession and manufacture were made legal in Washington state may not be as applicable to other states as certain importers would like, trade lawyers told Trade Law Daily. Since the opinion rests heavily on the precise language of the Washington state law legalizing marijuana, the trade court's ruling will only make the most difference in states with a similar law, one attorney said.
Sign up for a free preview to unlock the rest of this article
Export Compliance Daily combines U.S. export control news, foreign border import regulation and policy developments into a single daily information service that reliably informs its trade professional readers about important current issues affecting their operations.
The decision involves motor frame assemblies imported by Eteros Technologies USA in April through the Port of Blaine, Washington, which were to be used to make marijuana harvesting units and deemed "drug paraphernalia" by CBP. CBP excluded the goods from entry, as drug paraphernalia under the Controlled Substances Act. Eteros contested the exclusion, telling the trade court the goods should be permitted to be imported under 21 U.S.C. 863(f)(1).
The exemption says CSA Section 863, which prohibits the sale, distribution or import of drug paraphernalia, doesn't apply to anyone authorized at the local or state level to manufacture, possess or distribute such items. Judge Gary Katzmann looked to the conditions that trigger the exemption's applicability. The judge ruled that the authorization by one relevant legislative body at the local, state or federal level was sufficient to permit a party to engage in one of the activities barred by Section 863 (see 2209210034). Katzmann held that Washington state authorized Eteros to import the drug paraphernalia.
While Katzmann looked to the Washington state law, the opinion does not necessarily apply to imports of drug paraphernalia outside of that state. "The opinion rests significantly on the structure of the Washington law," said John Peterson, partner at Neville Peterson. "Each state's law must be consulted. Many have language similar to Washington's, while others have language that even more clearly spells out the legality of dealing in and possessing marijuana processing and serving equipment."
While this could lead to 21 different cases at CIT for the 21 different states and territories where weed is legal in the U.S., another likely avenue to seek guidance is CBP itself, Peterson said. Importers can get a ruling on whether they're allowed to import weed-related drug paraphernalia in states where it is legal.
Larry Friedman, partner at Barnes Richardson, added that he expects a bunch of rulings in different states that have legalized weed "in one way or another." So far, CBP has only issued rulings on whether a good constitutes drug paraphernalia, but not whether that paraphernalia can be imported where its possession was made legal at the state level.
The Eteros decision, though, is not set in stone, since the prospect of a government appeal looms. "Most consequential decisions from the CIT get appealed because they have a policy behind it, and CBP defended its position in court, so I assume that they’ll appeal," Friedman said. "Obviously, if it’s overturned, then this whole window goes away."
If the case does make it to the U.S. Court of Appeals for the Federal Circuit, Friedman added, it likely will just get a legal interpretation on its legality since there are no facts in dispute. With that in mind, both Friedman and Peterson expressed their satisfaction with the quality of the decision, with both saying that it was well decided.
"The case turns on what it means to be 'authorized' by the state to deal in paraphernalia," Peterson said. "Since the CIT relied on a Supreme Court interpretation of the term, the decision is on strong footing. I know that rank and file Customs officers at the border are looking for clarity in the marijuana equipment area. Most items that can process marijuana can also process hemp, which is legal in all 50 states. The Federal position has also frustrated the delivery of equipment to participants in the wholly legal hemp industry."
One potential pitfall is interstate commerce. If a good enters a state where marijuana is illegal or there is not a court ruling saying that it is legal to import it, and its final destination is in a spot where such clarity exists, how is the good handled on import? "It’s going to be potentially logistically problematic to get stuff into the country and to a place where it is authorized," Friedman said. "If you’re in Kansas and you don’t fly it in, it’s going to have to travel through other states, so a potential issue. I don’t know what the outcome of that is."