Last year, we discussed the pitfalls of trying to cash in on the marijuana bandwagon.
We discussed both the seemingly inevitable grassroots movement toward legalization, but also the fact that the bars of several states had come to contradictory conclusions on attorneys’ ability to assist clients in grass-related business ventures, given that growing, possessing and selling it was still a violation of federal drug laws. We also later told you about another state bar coming to a similar conclusion.
Now another new opinion seems to be taking a slightly different and more liberal (if not enlightened) approach. Last week, in keeping with its city’s counterculture image, the Bar of San Francisco issued an opinion supporting an attorney’s ability to counsel clients in this burgeoning area.
Though it may have very limited precedential value (the opinion cautioned that the State Bar’s Office of Chief Trial Counsel and U.S. Attorneys may disagree with the interpretation), the opinion is notable for taking a slightly more client-centric (and well-reasoned) approach to the issue.
In its Opinion 2015-1, the S.F. Bar noted that the request was “terra incognita.” “We know of no other area in which a lawyer may be asked to represent a client in a matter that is legal under [state] law, but illegal under federal law.” Nonetheless, the Bar concluded that:
A California attorney may ethically represent a California client in respect to lawfully forming and operating a medical marijuana dispensary and related matters permissible under state law, even though the attorney may thereby aid and abet violations of federal law. However, the attorney should advise the client of potential liability under federal law and relevant adverse consequences and should be aware of the attorney’s own risks.
To reach its conclusion, the Bar first concluded that federal drug laws were not intended to preempt state laws because (in its view) there is not “a positive conflict” between California laws permitting medical marijuana and federal laws prohibiting it.
Once it cleared that little hurdle, the Bar focused on the fact that like any other business venture permissible under state law, a client that embarks on a medical marijuana venture may need a lawyer’s advice and assistance on numerous issues. That need is even greater when addressing matters that potentially violate federal law.
Among many other things, a client may need to know who can and can’t grow or possess marijuana and in what quantities; what is permissible compensation; what issues will arise with financing marijuana related business through federally chartered institutions; the client may need assistance negotiating a lease, drafting contracts or dealing with zoning.
The Bar found that, in view of these legitimate needs for legal advice, the Rules of Professional Conduct should not be used to discipline lawyers who satisfy that need. The Bar noted that one of a lawyer’s duties is to support both the laws of the United States and of California. The opinion noted that the duty of a lawyer “is to further the interests of his clients by all lawful means, even when those interests are in conflict with the interests of the United States or of a State.”
“What is a lawyer to do when those laws conflict? We believe that the lawyer may advise, assist, and represent the client in complying with state and local laws and ordinances while, at the same time, counseling against conduct that may invite prosecution for violation of federal laws.”
The opinion concludes that, by telling the client about the risks, but concurrently assisting the client to carry on a business that is expressly permitted by California law, the lawyer would be fulfilling his or her ethical duties to the client. “[T]here is a responsibility on the bar to make legal services available to those who need them.”
The opinion also notes that its analysis is under California’s ethics rules, which differ from lawyers’ duties in a state that has adopted American Bar Association Model Rule 1.2(d), which does not just prohibit a lawyer from advising a client to violate the law. (“A lawyer shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent…..”).
The analogous California rule does not expressly proscribe assisting a client in conduct that the lawyer knows is permissible under state law, but criminal under federal law.
Of course, the Bar noted that a lawyer could not “advise the violation of any law . . . unless the member believes in good faith that such law . . . is invalid,” but noted that assisting a client who wants to comply with state and local laws is not the same as advising a client to violate federal laws.
Importantly, lawyers were advised to tell the client if a proposed activity would violate federal laws and of the associated risks. It also counsels lawyers that engage in these services to provide a number of other cautions, including regarding issues surrounding the confidentiality of communications over illegal activities.
Is this another sign of things to come, or just some California dreaming from the Golden Gate? Only time will tell….
*Edited on July 3 to correct the headline.