Marijuana Law, Policy & Reform

Editor: Douglas A. Berman
Moritz College of Law

Monday, January 26, 2015

Is Colorado's Recreational Marijuana Law Creating A Nuisance?

   Yes, according to the authors of "Fear and Loathing in Colorado: Invoking the Supreme Court's Jurisdiction to Challenge The Marijuana-Legalization Experiment." Their proposed remedy? Similar to any other polluter, Colorado should pay damages to neighboring states to compensate them for "negative externalities."  

 Here's the abstract:

In this Article, we assert that States may invoke the Supreme Court’s original jurisdiction to challenge Colorado’s marijuana-legalization experiment; the most appropriate remedy is damages. The Constitution endows the Court with jurisdiction to adjudicate suits between States. Historically, such cases generally fall into three categories: conflicts over boundary lines, water-rights disputes, and cross-border nuisances. Suits challenging the marijuana-legalization experiment would implicate the last category. Such suits once comprised a relatively common part of the Court’s docket. The number of these actions fell dramatically in the late-1970s following Congress’s passage of the Clean Air and Water Acts, rendering the Court’s historic role of establishing and enforcing interstate environmental standards obsolete. Colorado’s introduction of recreational marijuana into the stream of interstate commerce has reawakened this long-dormant body of constitutional law. Like downstream pollution produced by industrial operations, the cross-border externalities resulting from Colorado’s introduction of marijuana into the stream of interstate commerce fall squarely within the ambit of the Court’s original jurisdiction. The exercise of this jurisdiction is most appropriately applied “to questions in which the sovereign and political powers of the respective states [are] in controversy” — and in particular, those involving a quarrel for which a “sovereign State could seek a remedy by negotiation, and, that failing, by force.” The current controversy presents just such a case. 

In such a controversy the Court should award damages to a prevailing state, using the Coase Theorem as its guide. The theorem states that if transaction costs are eliminated, “parties will negotiate the efficient solution to private nuisance problems.” Real-world application of the Coase Theorem is attained through the application of legal rules that best approximate the way disputes would be resolved in the absence of transaction costs. Such an outcome is best effectuated by a rule charging the nuisance with the damages it causes. As Coase observed, “when a damaging business has to pay for all damage caused” market forces will determine which of the competing enterprises should prevail, coercing the partisans to allocate their resources in the most economically efficient manner. If compelling a polluter to internalize the cost of his pollution drives him out of business, then his enterprise was not the most economically efficient use of the property and his interests should yield to that of his neighbors. In contrast, if the polluter assumes responsibility for all the costs of his venture and still realizes a sufficient profit to stay in business, then his use of the land is most efficient, and his neighbors should yield to his interest. If this remedy is applied, the market will determine the success or failure of Colorado’s marijuana legalization experiment and will serve as a guide to other states in deciding whether Colorado’s venture is worth emulating. This remedy respects the sovereignty of all States, leaving it to the market, not the Court, to decide which of the competing policies should prevail.

You may not agree with the authors' perspective [I didn't]; but the article provides some good background information on "original jurisdiction."

Federal court rulings, Recreational Marijuana State Laws and Reforms | Permalink


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