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February 2021 Case Law Monitor

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February 2021 Case Law Monitor LEGISLATIVE ANALYSIS AND PUBLIC POLICY ASSOCIATION Case Law Monitor February 2021 Each issue of Case Law Monitor highlights unique cases from around the United States in the areas of public health and safety, substance use disorders, and the criminal justice system. Every other month, LAPPA will update you on cases that you may have missed but are important to the field. We hope you find the Case Law Monitor helpful, and please feel free to provide feedback at [email protected]. IN THIS ISSUE… California Agency Improperly Allowed Cannabis Billboards Along Highways Fifth Circuit Reinstates Worker with Previous Positive Drug Tests Indiana Recovery House Sparks Legal Battle in Federal Court Drug Ring Busted at Three North Carolina Universities Safe Injection Sites Ninth Circuit Finds Jail Nurses Are Not Entitled to Qualified Immunity Michigan’s McLaren Health Care Reaches Drug Diversion Settlement Insys Therapeutics’ Founder Permanently Banned from U.S. Drug Work Insys Therapeutics’ Founder Settles with New Jersey Over Role in the Opioid Crisis Oklahoma Seeks $9.3 Billion in Damages from Johnson & Johnson AmerisourceBergen Must Turn Over Opioid Files to Pension Funds California State Agencies Do Not Have to Turn Over Opioid Data in Marketing Suit U.S. Department of Justice Alleges Walmart Violated the Controlled Substances Act Walmart Sued by Shareholders Over its Role in the Opioid Crisis Purdue Pharma Bankruptcy Proceedings Pharmaceutical Companies Subject to Tennessee’s Drug Dealer Liability Act PAGE | 1 CALIFORNIA AGENCY IMPROPERLY ALLOWED CANNABIS BILLBOARDS ALONG HIGHWAYS Matthew Farmer v. Bureau of Cannabis Control, San Luis Obispo, California Superior Court, Case No. 19-CV-0597 (opinion filed November 20, 2020). On November 20, 2020, a California state trial court judge ruled that California’s Bureau of Cannabis Control (BCC) overstepped its power when it adopted a regulation allowing cannabis advertising billboards along freeways. In 2016, Californians approved Proposition 64, which legalizes cannabis for adult use and directs the BCC to administer and enforce the law. Proposition 64 contains a provision that prohibits licensed cannabis businesses from “advertis[ing] or market[ing] on a billboard or similar advertising device located on an Interstate Highway or on a State Highway which crosses the California border.” (Cal. Bus. & Prof. Code § 26152(d)). The BCC later issued rules interpreting the restriction to prohibit cannabis billboards and other outdoor advertising “located within a 15-mile radius of the California border on an Interstate Highway or on a State Highway that crosses the California border.” (Cal. Code Regs. tit. 16 § 5040(b)(3)). Matthew Farmer, a San Luis Obispo County resident and father of two children, filed the suit due to concerns over his children seeing cannabis ads while traveling along U.S. Highway 101. In the suit, Farmer asserted that the BCC’s regulation conflicts with state law and his status as a taxpayer gives him standing to challenge the rule. The trial judge granted Farmer’s request for declaratory judgment and ordered the BCC to meet and confer with him to propose an order to withdraw the regulation and likely develop stricter guidance on cannabis advertising on interstate and state highways. On January 11, 2021, the court entered a final order requiring BCC to take all action necessary to revoke Cal. Code Regs. tit. 16 § 5040(b)(3) and inform state cannabis licensees of the change to the regulation. BCC provided this notice on January 21, 2021. FIFTH CIRCUIT REINSTATES WORKER WITH PREVIOUS POSITIVE DRUG TESTS Union Pacific Railroad Co. v. American Railway and Airway Supervisors' Assoc., et al., U.S. Court of Appeals for the Fifth Circuit, Case No. 18-50110, --- Fed.Appx. --- (opinion filed December 16, 2020). In a 2-1 decision not selected for publication in the Federal Reporter, the U.S. Court of Appeals for the Fifth Circuit ordered Union Pacific Railroad Company (Union Pacific) to reinstate a former employee who previously tested positive for cocaine and amphetamines. Roland Beltran, a member of the labor union American Railway and Airway Supervisors’ Association (ARASA), worked as a car foreman for Union Pacific. In December 2010, Beltran tested positive for cocaine after a random drug test. Subsequently, Union Pacific reinstated Beltran, but only pursuant to a last-chance agreement, which stated that if Beltran violated Union Pacific’s drug and alcohol policy again within a ten-year period, he would be dismissed permanently. In November 2014, Beltran tested positive for amphetamines and methamphetamine. Union Pacific conducted an investigation and hearing on the matter, during which Beltran testified that he ingested prescription and over-the-counter medications that could have led to a false-positive result. However, Union Pacific’s medical review officer (MRO) testified that none of the medications Beltran reportedly took would cause a false positive for methamphetamine. In January 2015, Union Pacific terminated Beltran’s employment. In accordance with their collective bargaining agreement, ARASA moved the matter to arbitration before a public law board (PLB). The PLB ordered Beltran to return to work without back pay but with his seniority and other benefits intact. In response, Union Pacific filed suit in Texas federal court seeking to set aside the ruling of the PLB. The district court granted Union Pacific’s motion and vacated the arbitration ruling PAGE | 2 concluding that the PLB decision violates public policy. On appeal, the Fifth Circuit reversed the decision, holding that Union Pacific failed to show that the arbitrator’s conclusion that the second drug test resulted in a false positive and that Beltran should be reinstated was at odds with the MRO’s determination. The court ruled that an arbitrator overseeing a case may disagree with an MRO’s determination if the ultimate remedy does not conflict with other regulated procedures. In this case, the federal transportation laws governing random drug test procedures do not require the arbitrator to follow the MRO’s conclusion about the validity of a test for purposes of personnel decisions. Therefore, the court ruled that the PLB’s arbitration award did not violate public policy. While not completely disagreeing with the majority, the dissenting judge stated that there may be situations in which the arbitrator’s ruling would violate public policy, such as if Beltran could only work in a safety-sensitive position. Union Pacific filed a petition for rehearing en banc (in front of all Fifth Circuit judges) on January 13, 2021. A response/opposition to the rehearing en banc by ARASA was due on February 1, 2021. INDIANA RECOVERY HOUSE SPARKS LEGAL BATTLE IN FEDERAL COURT City of Crown Point, Indiana v. Pinnacle Treatment Centers, Inc., et al., U.S. District Court for the Northern District of Indiana, Case No. 2:20-cv-00359-PPS-JPK (suit filed September 1, 2020); Pinnacle Treatment Centers, Inc. v. City of Crown Point, Indiana, U.S. District Court for the Northern District of Indiana, Case No. 2:20-cv-00336-PPS-JPK (suit filed September 18, 2020). On September 1, 2020, the City of Crown Point, Indiana filed a lawsuit against two companies, CapGrow Holdings (CapGrow) and Pinnacle Treatment Centers (Pinnacle), alleging that the recovery home (home) operated by the two companies violates the local zoning code. In this case, CapGrow acquired a residential property in Crown Point, Indiana and leased the home out to Pinnacle, a provider of alcohol and substance use disorder treatment, for use as temporary lodging for some of its patients. The home in question is zoned residential R-1, with only the following uses permitted: (1) single-family dwelling; (2) public and parochial schools; (3) public parks and playgrounds; (4) churches; (5) essential services; and (6) accessory uses. The zoning code’s definition of “family” includes five or fewer persons unless additional residents are related by blood or marriage. Crown Point asserts that eight to ten non-related individuals stay in the home at any given time, and thus, by using the home as temporary lodging for more than five unrelated individuals, CapGrow and Pinnacle violate the zoning code. After the defendants failed to file a petition with Crown Point for a land use variance, the city filed a suit in state court seeking a permanent injunction enjoining, restraining, prohibiting, and preventing the defendants from operating the home in violation of the zoning code. Crown Point also asks the court to enter a declaratory judgment declaring that the defendants must submit a complete and proper use variance petition or a petition to rezone the home. On October 6, 2020, the defendants removed the case to federal court. Meanwhile, Pinnacle filed a separate class lawsuit against Crown Point on September 18, 2020 in federal court on behalf of itself and all past, current, and future patients of the home. Pinnacle asserts that the individuals living at the home are disabled under the federal Fair Housing Amendments Act (FHAA) due to their history of substance use disorder. Because the home houses disabled individuals, Pinnacle argues that Crown Point has violated, and continues to violate, the FHAA by failing to provide the home with a reasonable accommodation. The reasonable accommodations desired by Pinnacle could include: (1) not enforcing any Crown Point ordinance that requires the residents to be members of the same family, so long as individuals meeting the definition of disabled under the FHAA reside at the property; and (2) not enforcing any Crown Point ordinance that prevents residents undergoing treatment for substance use disorder or otherwise disabled under the FHAA from living at the property. Pinnacle asks the court to enjoin Crown Point preliminarily and permanently from violating the FHAA. On January 19, 2021, the court consolidated the cases for the purposes of discovery and all pretrial proceedings but left open the question of how the trials should proceed.
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