In re Panaggio

174 N.H. 89

260 A.3d 825

APPEAL OF Andrew PANAGGIO (New Hampshire Compensation Appeals Board)

No. 2019-0685

Supreme Court of New Hampshire.

Argued: November 10, 2020

Opinion Issued: March 2, 2021

Shaheen & Gordon, P.A., of Manchester (Jared P. O'Connor on the brief and orally), for the petitioner.

Tentindo, Kendall, Canniff & Keefe LLP, of Boston, Massachusetts (Robert S. Martin on the brief and orally), for the respondent.

Robinson & Cole LLP, of Providence, Rhode Island (Dana M. Horton on the brief), for American Property Casualty Insurance Association, as amicus curiae.

HICKS, J.

The petitioner, Andrew Panaggio, appeals the determination of the New Hampshire Compensation Appeals Board (Board) that the respondent, CNA Insurance Company (the insurer), cannot be ordered to reimburse him for his purchase of medical marijuana because such reimbursement would constitute aiding and abetting his commission of a federal crime under the Controlled Substances Act (CSA), 21 U.S.C. § 801 et seq. (2018). We reverse and remand.

I. Background

This case returns to us following our decision in Appeal of Panaggio, 172 N.H. 13, 205 A.3d 1099 (2019). We repeat the facts set forth in Panaggio as necessary to decide the instant appeal.

Panaggio suffers from ongoing pain as a result of a 1991 work-related injury to his lower back. Panaggio, 172 N.H. at 14, 205 A.3d 1099. He is a qualified patient in the State's therapeutic cannabis program and has a New Hampshire cannabis registry identification card. Id. ; see RSA 126-X:4 (Supp. 2020). The insurer declined to reimburse him for the purchase of medical marijuana on the ground that it was not reasonable or medically necessary. See Panaggio, 172 N.H. at 14, 205 A.3d 1099. When Panaggio appealed the insurer's denial to the New Hampshire Department of Labor, a hearing officer agreed with the insurer. Id. Panaggio appealed the hearing officer's decision to the Board, which unanimously found that his use of medical marijuana is reasonable and medically necessary. Id. Nonetheless, the Board upheld the insurer's refusal to reimburse Panaggio, concluding that "the carrier is not able to provide medical marijuana because such reimbursement is not legal under state or federal law." Id. (quotations omitted).

Panaggio appealed the Board's decision to this court. We concluded that the insurer's reimbursement for the purchase of medical marijuana would not violate state law. See id. at 16-17, 205 A.3d 1099. However, because the Board "did not cite any legal authority for its conclusion, much less identify a federal statute that, under the circumstances of this case, would expose the insurance carrier to criminal prosecution," we vacated its determination that the reimbursement would violate federal law. Id. at 19, 205 A.3d 1099 (emphasis omitted). We remanded so that the Board could "articulate the law that supports [its] legal conclusion" and "provide an adequate explanation of its reasoning regarding federal law." Id.

On remand, the Board unanimously found that were the insurer "to pay for Mr. Panaggio's prescription medical marijuana it would commit a federal crime ... by aiding and abetting Mr. Panaggio's illicit purchase and possession." Accordingly, the Board ruled that, under federal preemption principles as articulated by the Maine Supreme Judicial Court in Bourgoin v. Twin Rivers Paper Co., 187 A.3d 10, 13-22 (Me. 2018), the insurer could not be ordered to reimburse Panaggio for his purchase of medical marijuana. This appeal followed.

II. Analysis

A. Standards of Review

We will not disturb the Board's decision absent an error of law, or unless, by a clear preponderance of the evidence, we find it to be unjust or unreasonable. Panaggio, 172 N.H. at 15, 205 A.3d 1099 ; see RSA 541:13 (2007). The appealing party, here Panaggio, has the burden of demonstrating that the Board's decision was erroneous. Panaggio, 172 N.H. at 15, 205 A.3d 1099. All findings of the Board upon questions of fact properly before it are deemed to be prima facie lawful and reasonable. Id. ; see RSA 541:13. Thus, we review the Board's factual findings deferentially and its statutory interpretation de novo. Panaggio, 172 N.H. at 15, 205 A.3d 1099.

The issue before us raises a question of federal preemption, which is essentially a matter of statutory interpretation and construction. Hendrick v. N.H. Dep't of Health & Human Servs., 169 N.H. 252, 259, 145 A.3d 1055 (2016). When interpreting a statute, we begin with the language of the statute itself, and, if possible, construe that language according to its plain and ordinary meaning. Id. We interpret federal law in accordance with federal policy and precedent. Id.

B. Federal Preemption Principles

The federal preemption doctrine is based upon the Supremacy Clause of the United States Constitution, U.S. CONST. art. VI, cl. 2. In the Matter of Braunstein & Braunstein 173 N.H. 38, 41, 236 A.3d 870 (2020), cert. denied, ––– U.S. ––––, 141 S.Ct. 815, 208 L.Ed.2d 399 (2020). Article VI provides that federal law "shall be the supreme Law of the Land; and the Judges in every State shall be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding." U.S. CONST. art. VI, cl. 2.

"Two basic principles guide all preemption analyses." Erwin Chemerinsky, Jolene Forman, Allen Hopper, & Sam Kamin, Cooperative Federalism and Marijuana Regulation, 62 UCLA L. Rev. 74, 104 (2015). "First, the purpose of Congress is the ultimate touchstone in every pre-emption case." Wyeth v. Levine, 555 U.S. 555, 565, 129 S.Ct. 1187, 173 L.Ed.2d 51 (2009) (quotation omitted). Second, "[i]n all pre-emption cases, and particularly in those in which Congress has legislated in a field which the States have traditionally occupied, we start with the assumption that the historic police powers of the States were not to be superseded by the Federal Act unless that was the clear and manifest purpose of Congress." Medtronic, Inc. v. Lohr, 518 U.S. 470, 485, 116 S.Ct. 2240, 135 L.Ed.2d 700 (1996) (quotations, ellipsis, and citation omitted).

Broadly speaking, there are three different types of federal preemption: "express," "field," and "conflict." See Murphy v. National Collegiate Athletic, ––– U.S. ––––, 138 S. Ct. 1461, 1480, 200 L.Ed.2d 854 (2018). Express preemption occurs when Congress "preempt[s] state authority by so stating in express terms." Pacific Gas & Elec. Co. v. Energy Resources Comm'n, 461 U.S. 190, 203, 103 S.Ct. 1713, 75 L.Ed.2d 752 (1983). "Field preemption occurs when federal law occupies a ‘field’ of regulation so comprehensively that it has left no room for supplementary state legislation." Murphy, 138 S. Ct. at 1480 (quotation omitted). "Conflict preemption" may occur either when "it is impossible for a private party to comply with both state and federal requirements," English v. General Electric Co., 496 U.S. 72, 79, 110 S.Ct. 2270, 110 L.Ed.2d 65 (1990), or when compliance with both state and federal laws is possible, Sikkelee v. Precision Airmotive Corp., 907 F.3d 701, 709 (3d Cir. 2018), but state law "stands as an impermissible obstacle to the accomplishment and execution of the full purposes and objectives of Congress," Virginia Uranium, Inc. v. Warren, ––– U.S. ––––, 139 S. Ct. 1894, 1907, 204 L.Ed.2d 377 (2019) (plurality opinion) (quotation omitted).

"[T]hese categories are not rigidly distinct." Id. at 1901 (plurality opinion) (quotation omitted). However, "at least one feature unites them: Invoking some brooding federal interest or appealing to a judicial policy preference should never be enough to win preemption of a state law; a litigant must point specifically to a constitutional text or a federal statute that does the displacing or conflicts with state law." Id. (plurality opinion) (quotation omitted).

C. Preemptive Reach of the CSA

Although it is an issue of first impression for this court, other courts have considered whether the CSA preempts a state order requiring reimbursement of an employee's purchase of medical marijuana. The results are mixed. Compare Bourgoin, 187 A.3d at 12 (concluding that "where an employer is subject to an order that would require it to subsidize an employee's acquisition of medical marijuana[,] there is a positive conflict between federal and state law, and as a result, the CSA preempts the [Maine Medical Use of Marijuana Act] as applied"), with Hager v. M & K Const., 462 N.J.Super. 146, 225 A.3d 137, 140 (finding no conflict between the CSA and the state medical marijuana law where employer is ordered to reimburse employee for his purchase of medical marijuana), cert. granted, 229 A.3d 208 (N.J. 2020).

Because the CSA contains a saving clause, "our task of statutory construction must in the first instance focus on the plain wording of the clause, which necessarily contains the best evidence of Congress’ pre-emptive intent." Sprietsma v. Mercury Marine, 537 U.S. 51, 62-63, 123 S.Ct. 518, 154 L.Ed.2d 466 (2002) (quotation omitted). Section 903 of the CSA 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 U.S.C. § 903.

Section 903 "is an express invocation of conflict preemption." Oregon Prescription Drug Monitoring v. U.S. Drug, 860 F.3d 1228, 1236 (9th Cir. 2017). Some courts have ruled that, given the language in Section 903, the CSA preempts a state law only under impossibility preemption, and not under obstacle preemption. See Hager, 225 A.3d at 147 ("Congress has expressed its intent in the plain language of the CSA that it only preempts a state law that requires the performance of an action specifically...