In a preceding post from a few days back, I offered that there are several highly unsettling aspects of the State Bar’s Ethics Opinion 11-01 issued in February, 2011. I registered a complaint with the State Bar Ethics Committee, and they kindly responded in due course, for which I am grateful. I hope that they will clear up my confusion in the end of their deliberations. With all my respect for that committee, whose labors are usually underappreciated, here’s my problems with the opinion, starting with the anxiety I have about the following substantial (and unfortunately false) factual premises underpinning the State Bar’s opinion:
a. That the Arizona lawyer typically understands all components of the client’s intended “course of action”;
b. That the lawyer is capable of applying the Act and its enabling regulations to all elements of business conduct that the client seeks to pursue “in clear and unambiguous compliance” with the Act after providing the client a “full disclosure of the risks” of proceeding to operate a medical marijuana business;
c. After reading the Act and consulting with the lawyer, that the client him/her/itself will understand what is required for “clear and unambiguous compliance” with the Act and regulatory requirements;
d. That the Act itself, together with administrative regulations, together provide a comprehensive scheme governing all behavior pertaining to the growing and dispensing of medical marijuana; and
e. That a client who or which does not intend to proceed with a course of action specifically authorized by the Act will be forthright about the “miscreant intentions” in communicating with the attorney hired for advice.
Because of my skepticism, here are a few thoughts directed to the well-being of my brothers and sisters at the bar addressing these assumptions made by the folks who worked and will work some more on the ethics opinion. As to assumption e. (and to some extent as to d.) above, the best way to save your bacon from sizzling down the road (other than simply to refuse to give advice to medical marijuana enterprises) will be to make certain that your “engagement” or “representation” letter contains a statement at the bottom that effectively says that the client represents and warrants this:
• to the best of its ability to understand the Act and its accompanying regulations, the client intends and desires to act in accordance with their requirements and to in all other respects comply with Arizona law as it pertains to medical marijuana growing, transportation and dispensing as that law and those regulations evolve in the future during the course of the attorneys’ representation.
• that the attorneys will be asking numerous and in-depth questions about the business model and operating procedures involved in the medical marijuana business – questions which the client must answer fully and truthfully in order for the lawyers to give their most comprehensive and sagest legal advice.
• that the client consents to the audio recording of their interviews and consultations, which will be kept confidential unless subpoenaed by government authorities, or unless the recording is necessary for the attorneys to defend themselves in the course of a legal or state bar proceeding.
Apropos of assumptions lettered a. and c. above, clients come to your practice from all levels of mental acuity. To pretend otherwise is folly. Now sometimes the education process will be painfully slow, but they all will require hours to learn the client’s business model and their operating policies and procedures. It’s going to require hours of questioning them, looking at their floor plan for their business, asking about the employees’ training, the reporting of the inventory and the revenues of the business, the security procedures, the means and process of transporting the products for sale from their source to the dispensary. You’ll need extensive information about the growing process, if your intention is to represent persons with a cultivation site accompanying a dispensary. Let me remind you here that environmental laws for indoor operations (including indoor air quality concerns) are implicated by the client’s operations in addition to the provisions of the Act and accompanying regulations. That’s a part of your obligation to give a “full disclosure of the risks” of proceeding with a medical marijuana business. If you’re lacking in knowledge about herbicides, pesticides and fertilizers and the their “activity” in respect to indoor air quality, well, you’ve got some learning to do.
You must be clear that the initial interview will be lengthy and that, charging by the hour, it’s going to be pricey to give this advice. Or not – because if they refuse to submit to your examination your sensible course of action is to wish them well and validate their parking as you show the wannabe client the door. Most of the more than 150 clients I have represented in the past 29 years or so would resist the suggestion that I need to know so much about their business. It seems like idle curiosity, from their standpoint, for which they are expected to pay large sums of fees. The lawyer must explain to the client prospect that this isn’t “business as usual”; the lawyer usually isn’t in the posture of answering for alleged criminal liability (under an aiding and abetting or a conspiracy theory) for consulting with a client and assisting in forming its business and negotiating its lease of the business premises. If the client prospect indicates that he/she/it has “just a few isolated questions” about the medical marijuana regulatory scheme, but the inquiries of this client require more than simple explanations of the text of certain of the Act’s provisions (or the regulations) while client simultaneously insists that you really don’t need to ask or learn much about what the businessman is doing – well, decline the representation. Ask yourself this: What am I doing, taking on this sort of client? How are you going to make what the Ethics Opinion refers to as a “full disclosure of the risks” of going forward with a business like a dispensary if you don’t know substantially all aspects of the client’s business model and operating procedures?
As to assumption b., here’s the reality check. It’s illegal to possess, transport and sell marijuana under the federal Controlled Substances Act of 1970. While you may not need to memorize the entire Act and the DHS regulations, if you like practicing law, you’d darned well have dog-eared the documents and be ready to refer to them over and over again during the counseling sessions, and provide the client with copies of all the pertinent text (better yet, complete copies of the Act, with highlighting, and the regulations, with ditto). If you have doubts, you’d best have friends at DHS and DEQ (and the Structural Pest Control Board, too) you can ask questions of, and it wouldn’t hurt to have some contacts at the U.S. Attorney’s Office in Phoenix and Tucson as well. Learn the law in this area thoroughly before you start advising medical marijuana business clients; and know the implications of environmental law also on such activities. Make sure if you’re representing landlords that you’ve scanned my preceding blog posts. State all of your oral advice to the medical marijuana clients in non-technical language, then follow it up in writing. Don’t be in a hurry to deliver the counseling sought; read and reflect on what you’re about to say before you speak. Little about this type representation is “business as usual.” If your disposition just won’t allow you to proceed cautiously and thoughtfully, stay out of this area of practice altogether. (Clients ought to apply the same approach to getting involved in the Cannabis world.) I could make a list of 100 questions to ask a new medical marijuana business client, but I won’t. The risk-reward isn’t well balanced from where I stand, given my skeptical disposition. Also, I believe I cannot represent medical marijuana enterprises, even if my innate disposition were sunnier. Alas, Ethics Opinion 11-01 doesn’t reference Rule 41(b) of the Rules of the Supreme Court of Arizona. That rule commits lawyers to “support the laws of the United States.” The rule doesn’t carve out any of the inconvenient federal laws, much less criminal statutes, from its coverage. Ouch – and my sincere best wishes to the Ethics Committee addressing this; it feels like squaring the circle!
In my next post, I’ll share a little about the May 2, 2011, guidance offered by the Arizona United States Attorney’s Office to the Arizona Department of Health Services as to the intentions of local federal law enforcement in the medical marijuana business realm.