Viewing a single comment thread. View all comments

Aleyla t1_irimc15 wrote

Ok, so here’s what is actually at issue:

The landlord decided to sue in federal court instead of suing in an Illinois court for their back rent. Because this is in federal court, there are federal laws making it illegal to rent to cannabis businesses. So, this is a valid defense.

The right answer would be for the landlord to sue in Illinois court - which is where the property is located. Illinois has laws that superceded the federal law and close this little loophole.

So basically the landlord tried to make it more expensive to fight the lawsuit snd fucked themselves. There are no good guys in this situation.

663

crwlngkngsnk t1_irjw5rb wrote

Ok, so it looks like the deal is that the dispensary wants a final decision from the Feds, under Federal law, dismissed with prejudice or something to the effect to where the issues can't be raised and re-adjudicated. Res judicata.
I think they're right that the contract is unenforceable under Federal law, it's probably more a question of whether that court is the proper venue, or what law applies to the case, Federal, Illinois, New York, or California.

85

OverPot t1_irjujdv wrote

Rich assholes doing rich asshole shit.

19

tryingtodefendhim t1_irl0pni wrote

The weed is the good guy.

16

Leto2AndTheCrew t1_irldlx6 wrote

It’s such bullshit how many loopholes pot stores have to jump through to run a business. Even in Washington state (where I can buy an ounce for under $100) I’ve gotta pay in cash because banks cannot fuck themselves over for engaging in federally illegal business (and I don’t blame them). Better to have $300 ounces where the money goes to criminals… ugh, I hate it all.

Then the cash business gets fucked from every side - it’s all a bunch of bullshit. It’s ludicrous that this is still a problem

Was glad to hearing the recent news about pardons. Fucking schedule 1 drug at the federal level.

11

hellslave t1_irlf8dc wrote

> (where I can buy an ounce for under $100)

Yeah, but, an actual good ounce? And if so, where? For reference, I'm in Pierce County, and I've not often found ounces of quality flower anywhere.

4

tryingtodefendhim t1_irlflua wrote

Right! Like the cheapest ounce I’ve seen is 160 for shake. Plus they have no problem taking debit just no credit cards.

4

Leto2AndTheCrew t1_irliz8x wrote

It’s a medium quality ounce because I enjoy smoking out of a bong. But even better than buying bags of pot, check out the infused pre rolls. 24% THC at $4 a gram - take that, load it up in a bong and you’re set.

https://trovecannabis.com

2

immibis t1_irma340 wrote

Whoever a landlord is mad at is usually the good guy.

5

Intrepid_Ad_1539 t1_irk8jxg wrote

Why didn't the change venue when they had the chance?

2

Aleyla t1_irkbsos wrote

? Not sure what you are asking. The landlord picked the venue. The cannabis business is taking advantage of that choice.

10

Intrepid_Ad_1539 t1_irkcosl wrote

Right but you can have the case removed for improper venue under FRCP Rule 12

2

BillHicksScream t1_irkbiz4 wrote

I think this is a reasonable conclusion. The existence of more appropriate, identical in spirit, morally clear local level laws makes this easy.

Are you paying attention Chief inJustice Roberts? Hello, McStooge...

1

Yung_Corneliois t1_is3a323 wrote

Isn’t there laws about the rent though? Like after 30 days of being over rent the owner can do what he wants with the property (this is a wild guess obviously I have no clue how this works).

Can’t he just destroy the stuff on the property?

1

plugubius t1_irivlny wrote

>Because this is in federal court, there are federal laws making it illegal to rent to cannabis businesses. So, this is a valid defense.

What federal law are you talking about? State law governs the contract, so the federal law would need to do more than just prohibit an act.

−89

Uncle_Father_Oscar t1_irj001b wrote

If the contract is for something illegal, the feds are not going to enforce it. Knowingly renting out a property for purposes of cannabis production or sale violates any number of federal laws. The landlord's actions make him guilty of conspiracy to produce/traffic marijuana. It would be the same as asking a federal court to enforce a contract for murder-for-hire.

The real problem for the tenant is that they are risking a federal crackdown. If they're going to affirmatively claim their business is illegal in federal court there's really no reason the feds shouldn't come in and shut them down.

90

plugubius t1_irj362m wrote

>If the contract is for something illegal, the feds are not going to enforce it.

What is the unlawful part of the contract? This is not is contract for the sale of cannabis. This is a lease. It is unlawful to engage in insider trading, but that does not make a lease to someone who violates that law unenforceable, even if the lessor knows about the insider trading.

A federal court sitting in diversity applies state law. Here, state law says the contract is enforceable. Federal law can preempt state law, but the bare illegality of cannabis sales is not going to preempt state contract law concerning leases. That is why I asked what federal law the poster was talking about that would make it illegal to enforce this lease.

−47

Mental_Cut8290 t1_irjdr8w wrote

I think the issue is the landlord trying to evict solely because of the "insider trading" but they're in a state that allows it.

Also the issue is back rent, so the "illegal" activity is not relevant.

So, I think the whole picture is the Landlord is owed rent, decided to take it to federal so that the renter would be considered the bad guy, but this just made it so the landlord didn't have a valid contact for knowingly renting the space for that purpose.

On state level, everything is above board and the store owes rent. On a federal level, everything is illegal and the contract is void.

Don't know why you're getting down voted. Seems like a reasonable question for a complicated issue.

30

plugubius t1_irjg0sd wrote

As you note, the issue here isn't whether the tenant's business is lawful. It is whether the agreement to pay rent for the property is lawful. The unlawfulness of a business does not render every contract that business signs unenforceable against the business. Under federal law, state law provides the rules of decision in this case. Unless there is a federal law specific to cannabis that expressly invalidates the lease, federal law says nothing at all the validity of the lease here.

−21

Sumthin-Sumthin44692 t1_irjlr6q wrote

A commercial lease for the purpose of running a cannabis business is illegal under federal law. A lot of commercial leases have the business use/purpose expressly stated in them. But even if this one didn’t the court is not going to ignore what the lease was for. The court cannot enforce a contract, including rent, if it is for an illegal purpose.

Similar cases involve personal service contracts for “physical assistance” that are actually for sex. The court looks to how a contract actually functions. Not just how it appears to function.

18

plugubius t1_irjm9et wrote

>A commercial lease for the purpose of running a cannabis business is illegal under federal law.

I have asked repeatedly for someone to identify this law. I know of none. A prohibition on cannabis sales alone won't alter state contract law (which is what the federal court must apply here).

−14

PullDaLevaKronk t1_irjnl5o wrote

Federal law also makes it a felony to lease or rent any place for the purpose of manufacturing, distributing, or using any controlled substance, including cannabis.

14

plugubius t1_irjrzhz wrote

That law does not expressly preempt state contract law, and it would be very hard to argue that conflict preemption applies. It allows the Attorney General to seek a variety of criminal, civil, and administrative penalties. That power does not clearly conflict with a state's ability to decide contractual rights in the absence of the Attorney General's action, and it does not provide for any private enforcement. The scope of federal preemption in the drug context is very narrow.

−8

lorgskyegon t1_irk5wl7 wrote

The landlord can't ask a federal court to enforce a contract that is illegal under federal law.

6

PullDaLevaKronk t1_irk0xll wrote

Never made the argument. Just provided a reliable link to a mention of the law you were looking for.

5

ankelbiter12 t1_irjmdhy wrote

IANAL, but my understanding is that because it’s a business property, the landlord is aware of what the business is. I take it as the court is looking at it as “you’ve filed a contract / lease with the tenants, so that they pay you money, in exchange, they can use the property to sell cannabis”. Federally, last I checked, cannabis isn’t legal. Since the landlord knows the property is being used federally illegally, the federal court won’t discuss the contract because it’s invalid. Plus, they also know the landlord could just take it to the Illinois state court so I imagine they’re using some slight discretion there. Now if the property were a residence type instead of business, the landlord would have no reason to know that they’re using their property for selling cannabis, so then I think the federal court would touch it.

3

plugubius t1_irjmqng wrote

IAAL. There is no prohibition on leasing space to Vito Corleone, even if you know who Vito Corleone is. If you know about a murder he commits, you can be charged in connection with that, but the lease is still valid, and he still owes you rent.

0

Sumthin-Sumthin44692 t1_irjorhy wrote

There is. A landlord can be held liable for conspiracy if they know crimes are taking place on their property. This comes up with so-called “crystal palaces” where motel owner knowingly rent rooms to meth users and prostitutes

4

plugubius t1_irjs909 wrote

>A landlord can be held liable for conspiracy if they know crimes are taking place on their property.

I agree, and I said as much. That potential liability is different from whether the lease contract is enforceable.

1

Sumthin-Sumthin44692 t1_irjwei1 wrote

A landlord renting a unit for an illegal purpose can be criminally liable as a co-conspirator. The lease is also void so they won’t be entitled to contractual rent. A court could order some payment to the landlord based on equitable principles but the doctrine of unclean hands and public policy considerations would most likely bar or limit recovery.

Bottom line: landlords, don’t lease out space for criminal activity.

5

CaptainTripps82 t1_irjnf5l wrote

I was just thinking, the basis for a lot of mob arrests in the past was that even if the underlying business is illegal, you still owe taxes on the income.

3

crwlngkngsnk t1_irjueo4 wrote

But you can't rent out a murder room, with the explicit understanding that this is his murder room, to be used for murdering people.
I think, like another poster said, that it might depend on if the lease spells out the purpose of the business. If the nature of the business is known and illegal then Federal law isn't going to enforce a contract for that. I don't know enough about the law to know if this case is heard under Illinois law, but I do know that Federal courts sometimes evaluate cases under State law, so you might be right about that. I guess it depends on the issues raised in the suit. I haven't actually, you know, read anything about the case.

3

Uncle_Father_Oscar t1_irjionk wrote

How can the landlord plausibly argue that he did not know they are a cannabis business? He either leased to them knowing they are a cannabis business, or continued to lease to them when he found out. The underlying contract most likely acknowledges what the premises are going to be used for.

Your failure to appreciate what laws are being broken is not a defense to the clear illegality of the of what they are doing.

4

plugubius t1_irjj453 wrote

He doesn't need to argue he didn't know. This is a suit for rent, not a defense against a criminal charge of aiding and abetting. This is a question of state contract law, and Illinois is clear that the lease is enforceable. Federal law is vlear that state law applies in this situation.

2

Uncle_Father_Oscar t1_irk69di wrote

Yes he does. So what? Doesn't matter. No it's not.

1

plugubius t1_irk7emx wrote

The applicability of state law is straight-forward Erie. The federal court must ask whether the Illinois Supreme Court would hold the lease is invalid. In answering that question, the federal court is allowed to ask whether federal law preempts any state court or legislative pronouncements, but preemption is narrow.

1

WebbityWebbs t1_irjdq6q wrote

A contract to engage in an illegal act is not valid.

17

plugubius t1_irjeguu wrote

Whether a contract is valid is a matter of state law. Here, the relevant state law says the contract is valid.

Federal law can preempt state law, but a thing's being illegal under federal law does not by itself preempt state law on contract validity. We would need to examine the federal law being referred to in order to see if it had any effect on state law about leases. I can tell you that prohibiting the sale of cannabis is not enough to touch state law on leases, which is why I asked what federal law the poster was referring to.

−6

r33k3r t1_irjja6q wrote

Is someone suggesting that state law on leases would be preempted, rather than that the federal court simply wouldn't be the venue to deal with state contract law matters, and that this contract can't be adjudicated under federal contract law because it's an illegal contract under federal law?

5

plugubius t1_irjjwkq wrote

My assumption is that was the argument, because federal courts are certainly the right place to hear state-law disputes between citizens of different states.

2

r33k3r t1_irjkdme wrote

I dunno. I think leases of real property are almost always governed by the laws of the state where the property is located, not whatever other state the parties happen to reside in.

2

plugubius t1_irjksit wrote

That is a question of choice of law, not federal jurisdiction. Illinois law will usually apply to Illinois properties, but that doesn't mean a New York federal court can't apply Illinois law.

2