Elijah M. Watkins, ISB No. 8977 E-mail: …...PLAINTIFF’S EMERGENCY MOTION FOR TEMPORARY...

PLAINTIFF’S EMERGENCY MOTION FOR TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION - 1 100085343.1 0204757-00001

Elijah M. Watkins, ISB No. 8977 E-mail: [email protected] Wendy J. Olson, ISB No. 7634 E-mail: [email protected] Anna E. Courtney, ISB No. 9279 Email: [email protected] STOEL RIVES LLP 101 S. Capitol Blvd, Suite 1900 Boise, ID 83702 Telephone: (208) 389-9000 Fax: (208) 389-9040 Attorneys for Plaintiff Big Sky Scientific LLC

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF IDAHO BIG SKY SCIENTIFIC LLC, Plaintiff, v. IDAHO STATE POLICE, ADA COUNTY, JAN M. BENNETTS, in her official capacity as Ada County Prosecuting Attorney, Defendants.

Case No.

PLAINTIFF’S EMERGENCY MOTION FOR TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION DEMAND FOR JURY TRIAL REQUESTED

COMES NOW Plaintiff Big Sky Scientific LLC (“Big Sky”), by and through its counsel

of record, Stoel Rives LLP, and requests that this Court enter an Emergency Motion for

Temporary Restraining Order and Preliminary Injunction pursuant to Federal Rule of Procedure

Rule 26 prohibiting Defendants Idaho State Police, Ada County and Jan M. Bennetts, in her

official capacity as Ada County Prosecuting Attorney (“Defendants”), from violating the clear

commands of the Agriculture Improvement Act of 2018, Pub. L. 115-334 (the “2018 Farm

Case 1:19-cv-00040-REB Document 2 Filed 02/01/19 of 3


Bill”). Alternatively, Big Sky requests the Court appoint an emergency receiver to safeguard Big

Sky’s valuable, federally-protected property, pending final resolution of the matter.

This motion is based on the argument and authority set forth in the concurrently filed

Memorandum in Support of Motion for Temporary Restraining Order and Preliminary

Injunction, and the Affidavit of Elijah M. Watkins in Support of Motion for Temporary

Restraining Order and Preliminary Injunction as well and the exhibits attached thereto.

DATED: February 1, 2019.

STOEL RIVES LLP

/s/ Elijah M. Watkins Elijah M. Watkins Wendy J. Olson Anna E. Courtney Attorneys for Defendant FPS Food Process

Solutions Corporation



CERTIFICATE OF SERVICE

I hereby certify that on February 1, 2019, I served a copy of the foregoing

PLAINTIFF’S EMERGENCY MOTION FOR TEMPORARY RESTRAINING ORDER

AND PRELIMINARY INJUNCTION on CM/ECF Registered Participants as reflected on the

Notice of Electronic Filing as follows:

Jan M. Bennetts Heather McCarthy Ada County Prosecutor’s Office 200 W. Front Street, Room 3191 Boise, Idaho 83702 Telephone: 208-287-7700 Email: [email protected] Attorneys for State of Idaho, Idaho State Police and Ada County

Via: CM/ECF Notification and Email

Merritt L. Dublin Deputy Attorney General Criminal Law Division/Idaho State Police 700 S. Stratford Drive Meridian, Idaho 83642 Telephone: 208-884-7050 Email: [email protected] Attorneys for Idaho State Police


/s/ Elijah M. Watkins Elijah M. Watkins


mailto:[email protected]





Case No.

MEMORANDUM IN SUPPORT OF PLAINTIFF’S EMERGENCY MOTION FOR TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION

Case 1:19-cv-00040-REB Document 2-1 Filed 02/01/19 Page 1 of 28

TABLE OF CONTENTS

Page

i

INTRODUCTION ......................................................................................................................... 1

THE LEGAL BACKGROUND OF INDUSTRIAL HEMP ......................................................... 2

A. The 2014 Farm Bill ................................................................................................ 2

B. The 2018 Farm Bill ................................................................................................ 3

FACTUAL BACKGROUND ........................................................................................................ 6

A. Big Sky and the Industrial Hemp Market .............................................................. 6

B. Big Sky Purchases a Large Shipment of Industrial Hemp ..................................... 7

C. Big Sky’s Shipment Is Seized in Violation of the 2018 Farm Bill ........................ 8

D. Big Sky Contacts Defendants in Hopes of Resolving the Issue, but to No Avail ....................................................................................................................... 8

E. Defendants Openly Oppose Federal Law ............................................................ 10

LEGAL STANDARD .................................................................................................................. 11

ARGUMENT ............................................................................................................................... 12

A. THE COURT SHOULD ENTER AN EMERGENCY INJUNCTION ............... 12

1. Big Sky Is Likely to Succeed on the Merits of Its Declaratory Judgment Claims ...................................................................................... 12

a. The Shipment Is Industrial Hemp ................................................ 12

b. Industrial Hemp Is Legal on a Federal Level............................... 14

c. Congress Has Completely Preempted State Control over the Interstate Shipment of Industrial Hemp, so Defendants Must Allow Big Sky’s Shipment of Industrial Hemp to Proceed to Its Final Destination in Colorado ............................... 14

i. 2018 Farm Bill Preemption .............................................. 14

ii. Preemption and Interstate Commerce .............................. 15

2. Big Sky Will Suffer Irreparable Harm if Defendants Are Not Enjoined ................................................................................................... 17

3. The Balance of Equities Weighs in Favor of Big Sky ............................. 19

4. Enforcing the 2018 Farm Bill and Releasing the Shipment Would Not Be Contrary to the Public Interest ..................................................... 20

B. ALTERNATIVELY, THE COURT SHOULD APPOINT A RECEIVER......... 20

CONCLUSION ............................................................................................................................ 21


ii

TABLE OF AUTHORITIES

Cases

Am. Trucking Ass’n v. City of Los Angeles, 559 F.3d 1046 (9th Cir. 2009) .................................................................................................20

Arizona Dream Act Coal. v. Brewer, 757 F.3d 1053 (9th Cir. 2014) .................................................................................................20

Arizona v. United States, 132 S. Ct. 2492 (2012) .......................................................................................................15, 17

Baltimore & O. S. W. R. Co. v. Settle, 260 U.S. 166 (1922) .................................................................................................................16

Battelle Energy All., LLC v. Southfork Sec., Inc., 980 F. Supp. 2d 1211 (D. Idaho 2013) ....................................................................................17

BNSF Ry. Co. v. Cal. Dep’t of Tax & Fee Admin., 904 F.3d 755 (9th Cir. 2018) ...................................................................................................16

Cannon v. Univ. of Chi., 441 U.S. 677 (1979) .................................................................................................................15

Compass Airlines, LLC v. Mont. Human Rights Bureau of the Dep’t of Labor & Indus., No. CV 12-105-H-CCL, 2012 WL 6477267 (D. Mont. Dec. 13, 2012)..................................20

K.W. ex rel. D.W. v. Armstrong, 789 F.3d 962 (9th Cir. 2015) ...................................................................................................11

Disney Enters., Inc. v. VidAngel, Inc., No. 16-56843, 2017 WL 3623286 (9th Cir. Aug. 24, 2017) .............................................11, 19

Freeman v. Hewit, 329 U.S. 249 (1946) ...........................................................................................................15, 19

Garcia v. Google, Inc., 786 F.3d 733 (9th Cir. 2015) ...................................................................................................11

Greater Yellowstone Coal. v. Timchak, 323 F. App’x 512 (9th Cir. 2009) ............................................................................................11

Hawai’i Papaya Indus. Ass’n v. Cty. of Hawaii, 666 F. App’x 631 (9th Cir. 2016) ............................................................................................16


iii

Hemp Indus. Ass’n v. U.S. Drug Enf’t Admin., 720 F. App’x 886 (9th Cir. April 30, 2018) ...............................................................................3

Idaho Sporting Cong., Inc. v. Rittenhouse, 305 F.3d 957 (9th Cir. 2002) ...................................................................................................18

Idaho State Univ. Faculty Ass’n for the Pres. of the First Amendment v. Idaho State Univ., 857 F. Supp. 2d 1055 (D. Idaho 2012) ....................................................................................11

Man Hing Ivory & Imports, Inc. v. Deukmejian, 702 F.2d 760 (9th Cir. 1983) ...................................................................................................16

Morgan v. Virginia, 328 U.S. 373 (1946) .................................................................................................................15

Nat’l Fed’n of the Blind v. United Airlines Inc., 813 F.3d 718 (9th Cir. 2016) ...................................................................................................15

Pimentel v. Dreyfus, 670 F.3d 1096 (9th Cir. 2012) (per curiam).............................................................................11

S. Pac. Co. v. Arizona, 325 U.S. 761 (1945) .................................................................................................................15

Save Our Sonoran, Inc., v. Flowers, 408 F.3d 1113 (9th Cir. 2005) .................................................................................................11

Swift & Co. v. United States, 196 U.S. 375 (1905) .................................................................................................................16

United States v. Mallory, No. CV 3:18-1289, 2019 WL 252530 (S.D.W. Va. Jan. 17, 2019) .........................................17

Valle del Sol Inc. v. Whiting, 732 F.3d 1006 (9th Cir. 2013) .................................................................................................20

Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7 (2008) ...............................................................................................................11, 19

Statutes

7 U.S.C. § 5940(a) ...........................................................................................................................2

7 U.S.C. § 5940(b) ...........................................................................................................................3

21 U.S.C. § 812(c) ...........................................................................................................................4

21 U.S.C. §812(c)(17) ......................................................................................................................4


iv

Agricultural Act of 2014, Pub. L. No. 113-79 .........................................................................2, 3, 4

Agricultural Act of 2014, Pub. L. No. 113-79, § 7606 ....................................................................4

Agricultural Improvement Act of 2018, Pub. L. No. 115-334, § 10112 .........................................6

Agricultural Improvement Act of 2018, Pub. L. No. 115-334, § 10113 ...............................4, 5, 12

Agricultural Improvement Act of 2018, Pub. L. No. 115-334, § 10113 .......................................14

Agricultural Improvement Act of 2018, Pub. L. No. 115-334, § 10114(b) .....................................5

Agricultural Improvement Act of 2018, Pub. L. No. 115-334, § 12619(b) ...............................4, 14

Agricultural Improvement Act o f 2018, Pub. L. No. 115-334, § 10114 .............................. passim

Agricultural Marketing Act of 1946, 7 U.S.C. § 1621, et seq. ........................................................3

Agricultural Marketing Act of 1946, section 297A .....................................................................4, 5

Agricultural Marketing Act of 1946, subtitle G ...............................................................................5

Agriculture Improvement Act of 2018, Pub. L. No. 115-334 ................................................ passim

Controlled Substances Act, 21 U.S.C. § 801 et seq. ............................................................1, 2, 4, 5

Controlled Substances Act, 21 U.S.C. § 802(16) ............................................................................4

Or. Rev. Stat. § 571.333 ...................................................................................................................3

Rules

Fed. R. Civ. P. 65 .......................................................................................................................1, 11

Fed. R. Civ. P. 66 .....................................................................................................................12, 21

Constitutional Provisions

U.S. Const. art. I, § 8, cl. 3 ...................................................................................................1, 15, 19

U.S. Const. art. VI, cl. 2 ......................................................................................................... passim

Other Authorities

Agriculture Improvement Act, Cong. Rec. 164:196 (Dec. 12, 2018) p. H10151-H10152; 164:195, p. S7405 .......................................................................................................5

H. Rep. No. 115-1072 (2018) ....................................................................................................6, 14


v

https://www.cnbc.com/2018/06/13/senate-agriculture-panel-passes-farm-bill-with-hemp-legalization.html ................................................................................................4, 14

https://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm628988.htm (Dec.20, 2018) ......................................................................................................................5

https://www.idahopress.com/news/local/does-the-new-federal-law-protect-people-from-transporting-hemp/article_d5a71a18-e3e8-5e83-ad66-a802e99ecbaf.html .............................................................................................................14, 16

https://www.idahopress.com/news/local/does-the-new-federal-law-protect-people-from-transporting-hemp/article_d5a71a18-e3e8-5e83-ad66-a802e99ecbaf.htmli8 (Jan 30, 2019) ........................................................................................10

https://www.idahostatesman.com/news/northwest/idaho/article225242275.html .........................13

https://www.idahostatesman.com/news/northwest/idaho/article225242275.html (Jan 29, 2019)...........................................................................................................................10

https://www.ktvb.com/article/news/it-is-up-to-them-to-understand-the-law-idaho-prosecutors-charge-hemp-under-drug-statutes/277-0aa8ca83-5404-4557-aa90-4a2a17b8c275 ....................................................................................................................10, 13

Tom Angell, Forbes, Legalizing Hemp Brings Schumer and McConnell Together (May 5, 2018), https://www.forbes.com/sites/tomangell/2018/05/05/legalizing-hemp-brings-schumer-and-mcconnell-together/#188159e9222d....................................................................5


1

Pursuant to Federal Rule of Civil Procedure 65, Plaintiff Big Sky Scientific LLC (“Big

Sky”) moves the Court for a temporary restraining order (“TRO”) and to preliminarily enjoin

Defendants Idaho State Police (“ISP”), Ada County (the “County”), and Jan M. Bennetts in her

official capacity as Ada County Prosecuting Attorney (“Bennetts”) (collectively, “Defendants”)

from violating the clear commands of the Agriculture Improvement Act of 2018, Pub. L. No.

115-334 (the “2018 Farm Bill”) and the Commerce Clause, and to order Defendants to

immediately return Big Sky’s property. Alternatively, Big Sky requests the Court appoint an

emergency receiver to safeguard Big Sky’s valuable, federally-protected property, pending final

resolution of the matter. As explained herein, such relief is necessary to prevent Big Sky from

suffering immediate, irreparable harm as a result of Defendants’ unlawful conduct.

INTRODUCTION

Industrial hemp is not marijuana. It is an agricultural crop. It causes no “high.” Products

containing industrial hemp isolates, such as hand cream, shampoo, lip balm, pet products, sports

drinks, and dietary supplements, can be found in national chains and local grocery stores

throughout the Treasure Valley. Industrial hemp is not illegal.

On December 20, 2018, Congress enacted the 2018 Farm Bill. Among other things, the

2018 Farm Bill distinguished industrialized hemp from marijuana and removed it from the

Controlled Substances Act. Most critically for this case, the 2018 Farm Bill provides that no

state, regardless of that state’s marijuana laws, may prohibit the shipment of industrial hemp or

hemp products through the state or territory. Blocking such shipments puts an impermissible

burden on interstate commerce.

Despite the clear language of the 2018 Farm Bill and the Commerce Clause, on or around

January 24, 2019, ISP prohibited one of Big Sky’s industrial hemp shipments from passing

through the state, headed from Oregon to Colorado. Instead, ISP arrested the driver, seized the


2

shipment, and reported to media outlets that it had just made the “largest marijuana bust” in the

agency’s history. Industrial hemp is not marijuana.

Big Sky was quick to respond. Through counsel, it spoke to the County’s Chief Deputy

Criminal Prosecutor, emailed and sent hand-delivered letters to Bennetts and her Chief Deputy in

charge of civil matters, and left voice messages, sent a letter, and emailed the Deputy Attorney

General assigned to ISP. Big Sky provided Defendants with documentation from multiple state-

accredited laboratories certifying the shipment as industrial hemp, not marijuana. It explained

that the shipment was very expensive and very perishable. If proper climate and airflow are not

maintained, the product will mold. If that happens, the product will be worthless and Big Sky

will have lost not only the estimated $1.3 million value of its industrial hemp shipment’s isolates,

but also the opportunity of being among the first entrants into the new Congressionally-created

industrial hemp market. Defendants think the 2018 Farm Bill does not apply.

Big Sky files this action and emergency motion to safeguard its perishable, federally-

protected property, and to ensure that it can continue its lawful business as Congress intended.

THE LEGAL BACKGROUND OF INDUSTRIAL HEMP

A. The 2014 Farm Bill

On February 7, 2014, President Barack Obama signed the Agricultural Act of 2014, Pub.

L. No. 113-79 (the “2014 Farm Bill”), into law. The 2014 Farm Bill provided that

“[n]otwithstanding the Controlled Substances Act . . . or any other Federal law, an institution of

higher education . . . or a State department of agriculture may grow or cultivate industrial hemp,”

provided it is done “for purposes of research conducted under an agricultural pilot program or

other agricultural or academic research” and those activities are allowed under the relevant

state’s laws. 7 U.S.C. § 5940(a). The 2014 Farm Bill narrowly defined “industrial hemp” as the

plant Cannabis sativa L., or any part of such plant, “with a delta-9 tetrahydrocannabinol


3

concentration of not more than 0.3 percent on a dry weight basis.” Id. § 5940(b).1

Despite opening pathways for state-sponsored research into industrial hemp, the 2014

Farm Bill did not remove industrial hemp from the federal controlled substances list. Hemp

Indus. Ass’n v. U.S. Drug Enf’t Admin., 720 F. App’x 886, 887 (9th Cir. April 30, 2018)

(affirming DEA interpretation of industrial hemp isolates as a Schedule I controlled substance,

but holding that such interpretation did not interfere with state-sponsored research).

Following the passage of the 2014 Farm Bill, the Oregon legislature passed HB 4060 in

order to establish an industrial hemp program in line with the registration and research

requirements of the 2014 Farm Bill. The Oregon law requires industrial hemp growers to be

registered and certified with the state. Consistent with the research aims of the 2014 Farm Bill,

Oregon’s law established a framework “for the purpose of developing standards for investigating

and testing…industrial hemp crop[s].” Or. Rev. Stat. § 571.333.

B. The 2018 Farm Bill

For four years, multiple states and academic institutions across the country, including

Oregon, tested the viability of industrial hemp as an agricultural crop, as part of the pilot

programs contemplated by the 2014 Farm Bill. Following this four-year research period, on

December 20, 2018, President Donald Trump signed the 2018 Farm Bill into law.

The 2018 Farm Bill amends the Agricultural Marketing Act of 1946, 7 U.S.C. § 1621, et

seq., by expanding the definition of “industrial hemp” beyond the 2014 Farm Bill to include not

only “the plant Cannabis sativa L. and any part of that plant,” but also “the seeds thereof and all 1 Delta-9 tetrahydrocannabinol (“∆-9 THC”) is the principal psychoactive constituent of cannabis. Declaration of Ryan Shore in Support of Big Sky Scientific LLC’s Emergency Motion for Temporary Restraining Order and Preliminary Injunction (“Shore Decl.”) at ¶ 3. The greater the amount of ∆-9 THC, the larger the “high” experienced by a recreational marijuana user. Id. Industrial hemp, with a ∆-9 THC level of 0.3 percent or less on a dry weight basis, has virtually no psychotropic effect and is therefore not used for recreational purposes. Id.


4

derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers, whether growing

or not, with a delta-9 tetrahydrocannabinol concentration of not more than 0.3 percent on a dry

weight basis.” Compare 2018 Farm Bill § 10113 with 2014 Farm Bill § 7606.

With its expanded definition, the 2018 Farm Bill distinguishes industrial hemp from

“marihuana” as defined in the Controlled Substances Act (“CSA”), 21 U.S.C. § 802(16), and,

unlike the 2014 Farm Bill, explicitly removes industrial hemp from the CSA. 2018 Farm Bill

§ 12619(b) (“TETRAHYDROCANNABINOL.—Schedule I, as set forth in section 202(c) of the

Controlled Substances Act (21 U.S.C. § 812(c)), is amended in subsection (c)(17) by inserting

after ‘Tetrahydrocannabinols’ the following: ‘, except for tetrahydrocannabinols in hemp (as

defined under section 297A of the Agricultural Marketing Act of 1946)’”).

In removing industrial hemp from the CSA, Senate Majority Leader Mitch McConnell of

Kentucky, a member of the Senate Agriculture Committee, stated: “I think it’s time we took this

step…. I think everybody has figured it out that this isn’t the other plant.” Jeff Daniels, CNBC,

Senate Agriculture Panel Passes Farm Bill with Hemp Legalization (June 13, 2018; updated June

14, 2018), https://www.cnbc.com/2018/06/13/senate-agriculture-panel-passes-farm-bill-with-

hemp-legalization.html. Leader McConnell went on to explain that industrial hemp is an

agricultural crop, not a narcotic: “I know there are farming communities all over the country who

are interested in this,” as a “cash crop…. I think it’s an important new development in American

agriculture. There’s plenty of hemp around; it’s just coming from other countries. Why in the

world would we want a lot of it to not come from here?” Id.

Senate Minority Leader Chuck Schumer of New York holds a similar viewpoint.

Referring to then federal law, he stated: “It’s a crock…. It makes no sense that the DEA is the

primary regulator, and that they stop farmers and investors from growing hemp. Why are we


5

buying hemp from other countries, when we have hundreds of acres that could be grown right

here in our backyard?” Tom Angell, Forbes, Legalizing Hemp Brings Schumer and McConnell

Together (May 5, 2018), https://www.forbes.com/sites/tomangell/2018/05/05/legalizing-hemp-

brings-schumer-and-mcconnell-together/#188159e9222d. Idaho’s entire congressional

delegation that voted, voted in favor of the legalization of industrial hemp. Agriculture

Improvement Act, Cong. Rec. 164:196 (Dec. 12, 2018) p. H10151-H10152; 164:195, p. S7405.2

In addition to making industrial hemp a legal agricultural crop, Congress also prohibited

state interference with the transportation of industrialized hemp through interstate commerce,

regardless of a state’s marijuana laws. The 2018 Farm Bill provides in relevant part:

SEC. 10114. INTERSTATE COMMERCE. (a) RULE OF CONSTRUCTION.—Nothing in this title or an amendment made by this title prohibits the interstate commerce of hemp (as defined in section 297A of the Agricultural Marketing Act of 1946 (as added by section 10113)) or hemp products. (b) TRANSPORTATION OF HEMP AND HEMP PRODUCTS.—No State or Indian Tribe shall prohibit the transportation or shipment of hemp or hemp products produced in accordance with subtitle G of the Agricultural Marketing Act of 1946 (as added by section 10113) through the State or the territory of the Indian Tribe, as applicable.

(Emphasis added.) The Conference Report clarifies that despite section 10114(b)’s reference to

“subtitle G,”3 “nothing in this title authorizes interference with the interstate commerce of

2 On the day of the 2018 Farm Bill’s passage, FDA Commissioner Scott Gottlieb stated that the changes made remove hemp “from the Controlled Substances Act, which means that it will no longer be an illegal substance under federal law.” U.S. FDA, Statement from FDA Commissioner Scott Gottlieb, M.D., on signing of the Agriculture Improvement Act and the agency’s regulation of products containing cannabis and cannabis-derived compounds (Dec. 20, 2018), https://www.fda.gov/NewsEvents/Newsroom/PressAnnouncements/ucm628988.htm. 3 A lapse in congressional appropriations funding the federal government made it difficult if not impossible for states to submit “subtitle G” information to the Secretary of Agriculture from December 22, 2018 (two days after the 2018 Farm Bill was enacted) through January 25, 2019.


6

hemp.” H. Rep. No. 115-1072, at 436 (2018) (emphasis added). “While states and Indian tribes

may limit the production and sale of hemp and hemp products within their borders, the

Managers, in Sec. 10112, agreed to not allow such states and Indian tribes to limit the

transportation or shipment of hemp or hemp products through the state or Indian

territory.” Id. at 438 (emphasis added).

FACTUAL BACKGROUND

A. Big Sky and the Industrial Hemp Market

Big Sky was incorporated on December 17, 2018, three days before the 2018 Farm Bill

was signed into law, specifically so it could be among the first companies to market in the new

industrial hemp industry. Shore Decl. at ¶ 4. Big Sky promptly set up operations in Aurora,

Colorado, where it could receive and process shipments of industrial hemp. Id. at ¶ 5. Big Sky’s

business model is to purchase industrial hemp from licensed growers; process it to remove the

“extracts, cannabinoids, isomers, acids, salts, and salts of isomers,” typically an odorless and

flavorless cannabidiol (“CBD”) powder; and then sell the CBD to consumer products

manufacturers for a profit. Id. at ¶ 6.

The public’s desire for CBD-infused products is vast. Id. at ¶ 7. Products run the gamut

from skin cream to pet products to nutritional supplements. Id. Consumers are willing to pay a

premium for CBD products. Id. While Big Sky does not produce any end-user CBD products or

make any claims as to the efficacy of them, CBD-infused products are used by some consumer

products manufacturers to treat medical problems, including epileptic seizures, inflammation,

and anxiety, particularly in children. Id.

While consumer products manufacturers may sell items that contain CBD, not all of these

manufacturers are equipped to extract and process the CBD isolates from the industrial hemp. Id.

at ¶ 8. By marketing CBD to products manufacturers, Big Sky hopes to position itself as a


7

market leader in meeting the public’s increasing demand for CBD-infused products. Id.

B. Big Sky Purchases a Large Shipment of Industrial Hemp

Boones Ferry Berry Farms (“Boones Ferry”) is a registered industrial hemp grower,

licensed with the Oregon Department of Agriculture (“ODA”), License No. AG-R1050510IHG.

Declaration of Elijah M. Watkins in Support of Big Sky Scientific LLC’s Emergency Motion for

Temporary Restraining Order and Preliminary Injunction (“Watkins Decl.”) at Ex. A. ODA

performed ∆-9 THC testing on Boones Ferry’s industrial hemp crops during its growing cycle, as

required under Oregon’s state-regulated industrial hemp program, to ensure the crops were

cultivated to have a ∆-9 THC concentration level of 0.3 percent or less. Shore Decl. at ¶ 9.

Big Sky implements strict buying controls to ensure that the products it purchases meet

the 2018 Farm Bill definition of industrial hemp. Id. at ¶ 10. Boones Ferry’s crop was tested by

two different state-accredited laboratories prior to Big Sky’s purchase. Watkins Decl. at Exs. B

and C. On October 26, 2018, Chemhistory, an Oregon accredited laboratory, provided a

certificate of analysis for industrial hemp, certifying that the Boones Ferry crop Big Sky was

contemplating purchasing contained a dry weight ∆-9 THC level of 0.03 percent, far less than the

0.3 percent industrial hemp ceiling established by the 2018 Farm Bill. Id. at Ex. B. On January

17, 2019, the Good Lab, a Colorado accredited laboratory, provided ∆-9 THC/CBD potency test

results showing the average ∆-9 THC percentage between 19 different samples from the Boones

Ferry crop was 0.043 percent. Id. at Ex. C.

Based on the multiple independent state-accredited testing results certifying the crop as

industrial hemp, Big Sky purchased approximately 13,000 pounds of industrial hemp from

Boones Ferry. Shore Decl. at ¶ 11. Big Sky intended to have the industrial hemp shipped from

Hubbard, Oregon to Big Sky’s processor in Aurora, Colorado. Id. at ¶ 11. Big Sky had and still


8

has no intention of selling, marketing, or distributing industrial hemp at all in Idaho. Id. at ¶ 12.

C. Big Sky’s Shipment Is Seized in Violation of the 2018 Farm Bill

Big Sky contracted with a third-party logistics company that arranged for Big Sky’s

industrial hemp to be shipped with VIP Transporter LLC (“VIP”) from Oregon to Colorado. Id.

at ¶ 13. Given the quantity of industrial hemp, the shipment had to be split into multiple truck

loads. Id. On January 24, 2019, one of the trucks transporting Big Sky’s industrial hemp stopped

at the East Boise Port of Entry in compliance with commercial trucking laws and standards to

have the shipment weighed and/or inspected. Id. at ¶ 14. The truck was headed eastbound on I-84

as one would be traveling if driving to Colorado. Id.

The VIP driver presented the officer with a copy of the bill of lading, indicating the

shipment was industrial hemp bound for Colorado. Watkins Decl. at Ex. D. The industrial hemp

was not hidden away in tires or wall panels as one would expect an illegal product to be shipped,

but was instead stored in large shipping bags in plain sight, as one might expect any other

agricultural crop to be transported. Shore Decl. at ¶ 14. The driver was arrested and charged with

marijuana trafficking, a felony offense that carries a mandatory minimum five-year term of

imprisonment. Watkins Decl. at ¶ 7. Big Sky’s industrial hemp shipment was seized. Shore Decl.

at ¶ 15. Although Defendant ISP had only “field-tested” the industrial hemp, a process that does

not measure ∆-9 THC percentage, ISP began reporting to media outlets that it had achieved the

“largest marijuana bust” in the agency’s history. Id. The market value of Big Sky’s seized

property is approximately $1.3 million. Id. at ¶ 16.

D. Big Sky Contacts Defendants in Hopes of Resolving the Issue, but to No Avail

Like most agricultural crops, industrial hemp is perishable. Id. at ¶ 17. It must be stored

in a climate-controlled setting, unbundled, with space between the product to allow air flow so

the product can “breathe.” Id. If stored improperly, it can mold. Id. If any portion of a bail of


9

industrial hemp molds, the entire bail becomes useless, loses all commercial value, and must be

discarded. Id. Even without spoiling, the longer industrial hemp sits, the more the CBD trapped

inside dissipates, thus lowering the value of the product. Id.

On January 28, 2019, counsel for Big Sky called Shawna Dunn, Chief Deputy Criminal

Prosecutor for the County. Watkins Decl. at ¶ 8. Counsel explained that the shipment was

industrial hemp, not marijuana; that the 2018 Farm Bill’s provision regarding interstate

transportation supersedes Idaho’s state marijuana laws; the value and perishable nature of the

industrial hemp; and the need for the County and/or ISP to release the hemp or properly store it.

Id. Counsel explained his intention to resolve the issue quickly and amicably, without having to

litigate. Id. Dunn explained that she would not allow the shipment to be released, that it was

outside her purview to direct the manner in which the shipment was stored, that industrial hemp

is illegal under Idaho law regardless of what the 2018 Farm Bill says, and that if she were to

release the shipment to counsel, she herself would be guilty of a felony. Id. at ¶ 9.

On January 29, 2019, counsel emailed and hand-delivered a letter to Defendant Bennetts

and her Deputy Chief Civil Prosecutor, and emailed a variant of the same letter to ISP’s assigned

Deputy Attorney General, Merritt Dublin, setting forth Big Sky’s position. Id. at Exs. E and F.

The letters attached the ∆-9 THC reports from two different state-accredited laboratories and

Boones Ferry’s industrial hemp license issued by ODA. Id. Counsel outlined the changes made

by the 2018 Farm Bill, explained that the seizure violated the 2018 Farm Bill’s Interstate

Commerce section and the Supremacy Clause of the United States Constitution (U.S. Const. art.

VI, cl. 2), and asked that Defendants’ counsel contact him “at your first available moment,” as

“[t]ime is of the essence” given the perishability of Big Sky’s industrial hemp. Id. Big Sky’s

counsel explained that the matter needed to be resolved by Friday in order to avoid litigation. Id.


10

On Thursday, Defendants responded that the 2018 Farm Bill did not apply, claiming that

“section G” in section 10114 gave them a safe harbor to prohibit the interstate shipment of what

has been declared a legal good under federal law. Id. at Exs. G and H.

E. Defendants Openly Oppose Federal Law

While slow to respond to Big Sky, Defendants were quick to speak to the press, declaring

“business as usual” despite the 2018 Farm Bill. According to Scott Bandy, Chief Criminal

Deputy Prosecutor for the County, “As far as we’re concerned, it [industrial hemp] is and always

has been illegal under Idaho law as it’s currently written, and nothing has changed,” the 2018

Farm Bill notwithstanding. Emily Lowe & Xavier Ward, Idaho Press, Does the new federal law

protect people from transporting hemp plants in Idaho? (Jan. 30, 2019),

https://www.idahopress.com/news/local/does-the-new-federal-law-protect-people-from-

transporting-hemp/article_d5a71a18-e3e8-5e83-ad66-a802e99ecbaf.htmli8. “If there is any

quantity of THC, then it meets the definition of marijuana.” Katy Moeller, Idaho Statesman,

Hemp or marijuana? ISP stops truck driver with 6,701 pounds of ‘green, leafy substance,’

(Jan. 29, 2019), https://www.idahostatesman.com/news/northwest/idaho/article225242275.html.

“We don’t believe [the 2018 Farm Bill] affects Idaho law…. It does not preempt state law,” and

anyone transporting industrial hemp in interstate commerce “across the state” will be treated by

Defendants as “a drug smuggler.” Katie Terhnune, KTVB.com, ‘It is up to them to understand

the law:’ Idaho prosecutors charge hemp under drug statutes (Jan. 30, 2019; updated Jan. 31,

2019), https://www.ktvb.com/article/news/it-is-up-to-them-to-understand-the-law-idaho-

prosecutors-charge-hemp-under-drug-statutes/277-0aa8ca83-5404-4557-aa90-4a2a17b8c275.

Big Sky now files this emergency motion to safeguard its federally-protected property, its

position in the marketplace, and its future viability as a legitimate and lawful business.


11

LEGAL STANDARD

Under Federal Rule of Civil Procedure 65, a court may issue preliminary injunctive relief

if the plaintiff shows (1) a likelihood of success on the merits; (2) that irreparable harm will

result in the absence of injunctive relief; (3) that the balance of relative hardships tips in

plaintiff’s favor; and (4) that an injunction is not contrary to the public’s interest. K.W. ex rel.

D.W. v. Armstrong, 789 F.3d 962, 970 (9th Cir. 2015); Pimentel v. Dreyfus, 670 F.3d 1096, 1105

(9th Cir. 2012) (per curiam) (citing Winter v. Nat. Res. Def. Council, Inc., 555 U.S. 7, 20

(2008)). Although all four parts must be satisfied, the first factor—likelihood of success on the

merits—is the “most important.” Disney Enters., Inc. v. VidAngel, Inc., No. 16-56843, 2017 WL

3623286, at *4 (9th Cir. Aug. 24, 2017) (quoting Garcia v. Google, Inc., 786 F.3d 733, 740 (9th

Cir. 2015)). “The standard for issuing a temporary restraining order is identical to the standard

for a preliminary injunction.” Idaho State Univ. Faculty Ass’n for the Pres. of the First

Amendment v. Idaho State Univ., 857 F. Supp. 2d 1055, 1060 (D. Idaho 2012).

In addition to this traditional test, the Ninth Circuit has applied an alternative “sliding-

scale” approach under which a TRO and/or preliminary injunction may be granted where the

plaintiff “demonstrates either a combination of probable success on the merits and the possibility

of irreparable injury or that serious questions are raised and the balance of hardships tips sharply

in his favor.” Greater Yellowstone Coal. v. Timchak, 323 F. App’x 512, 513–14 (9th Cir. 2009)

(emphasis omitted) (quoting Save Our Sonoran, Inc., v. Flowers, 408 F.3d 1113, 1120 (9th Cir.

2005)); see Pimentel, 670 F.3d at 1105 (“Under the ‘sliding scale’ approach to preliminary

injunctions observed in this circuit, the elements of the preliminary injunction test are balanced,

so that a stronger showing of one element may offset a weaker showing of another.” (citation

omitted)). Where Big Sky’s probability of success is so great, resorting to the sliding scale is not

necessary, but under either standard, emergency injunctive relief is warranted.


12

Alternatively, the Court should appoint a receiver pursuant to Fed. R. Civ. P. 66 to store

and keep the industrial hemp during the duration of the dispute.

ARGUMENT

A. THE COURT SHOULD ENTER AN EMERGENCY INJUNCTION

1. Big Sky Is Likely to Succeed on the Merits of Its Declaratory Judgment Claims.

Congress has clearly spoken on the issue of industrial hemp. Big Sky’s shipment is

industrial hemp. Without question, industrial hemp is legal at the federal level and considered to

be an agricultural crop. While it remains the prerogative of each state to enact its own drug laws,

those state laws cannot be enforced in a manner that conflicts with federal statutes. Congress has

entirely preempted the area of interstate transportation of industrial hemp, so any state law that

conflicts with that complete preemption must give way under the Supremacy Clause. Big Sky is

likely to succeed on the merits of its declaratory judgment claims.

a. The Shipment Is Industrial Hemp.

Under the 2018 Farm Bill, industrial hemp is defined as “the plant Cannabis sativa L. and

any part of that plant, including the seeds thereof and all derivatives, extracts, cannabinoids,

isomers, acids, salts, and salts of isomers, whether growing or not, with a delta-9

tetrahydrocannabinol concentration of not more than 0.3 percent on a dry weight basis.”

2018 Farm Bill § 10113 (emphasis added). The shipment transported by VIP was certified by

two different state-accredited laboratories as falling well below the 0.3 percent ∆-9 THC limit.

Watkins Decl. at Exs. B and C. ODA monitored the crop during its growing process to ensure

that it was cultivated in such a way so as to fall below the ∆-9 THC limit. Shore Decl. at ¶ 9.

At the time of the seizure, Defendants possessed no meaningful evidence to suggest that

the shipment was anything but what the VIP driver and the bill of lading said it was: industrial


13

hemp bound for Colorado, not Idaho. The ISP officer’s field test was incapable of measuring the

percentage amount of ∆-9 THC because the test just indicates the presence of “THC” in general,

without regard to amount—the main distinguishing characteristic of industrial hemp compared to

marijuana. Id. at ¶ 15. Nor was it possible for the K-9 officer to smell the percentage amount of

∆-9 THC since K-9’s don’t smell “THC”, but terpenes, which are present in several plants,

including industrial hemp. Id. That is why ISP has sent samples of the seized industrial hemp to

laboratories for further testing. Terhnune, supra, https://www.ktvb.com/article/news/it-is-up-to-

them-to-understand-the-law-idaho-prosecutors-charge-hemp-under-drug-statutes/277-0aa8ca83-

5404-4557-aa90-4a2a17b8c275.4

Nor did the circumstances surrounding the stop alert ISP to the shipment being anything

but industrial hemp. The VIP driver voluntarily stopped at a port of entry, just as any other law-

abiding commercial driver would have done. The industrial hemp was not hidden in secret

compartments, but was out in the open, being shipped like any other legal good. When asked

what he was hauling, the VIP driver told the truth and said “industrial hemp.” While ISP has

claimed to news outlets that the amount seized is greater than the total amount of marijuana

seized by ISP in the past five years combined, by a significant margin, Moeller, supra,

https://www.idahostatesman.com/news/northwest/idaho/article225242275.html, there is good

reason for that. The shipment was not an illegal load of marijuana, but a commercial-sized load

of industrial hemp being legally shipped on federally-funded interstate highways to Colorado.

Every piece of direct and circumstantial evidence points to the shipment being what Big

Sky claims it to be: industrial hemp.

4 Big Sky reserves the right to amend its Complaint to seek damages for lost amounts of its industrial hemp, including lost amounts resulting from destructive testing performed by or at the direction of Defendants.


14

b. Industrial Hemp Is Legal on a Federal Level

The 2018 Farm Bill makes industrial hemp legal at the federal level. It is no longer a

controlled substance under the CSA. 2018 Farm Bill § 12619(b). That includes not only the

plant itself, but all isolates derived from it, like CBD. Id. § 10113. It was the clear intent of

Congress to treat industrial hemp as an agricultural crop (akin to potatoes, onions, cotton, and the

like), and not a narcotic. Daniels, supra, https://www.cnbc.com/2018/06/13/senate-agriculture-

panel-passes-farm-bill-with-hemp-legalization.html.

c. Congress Has Completely Preempted State Control over the Interstate Shipment of Industrial Hemp, so Defendants Must Allow Big Sky’s Shipment of Industrial Hemp to Proceed to Its Final Destination in Colorado.

i. 2018 Farm Bill Preemption

Under the 2018 Farm Bill, states remain free to continue to categorize any plant with

trace amounts of ∆-9 THC as an illegal substance. While at least “41 states have legalized

[industrial hemp],” including “[a]ll of Idaho’s neighboring states,” Idaho remains free to

prohibit the production, marketing, and sale of all ∆-9 THC plants within its borders. Lowe &

Ward, supra, https://www.idahopress.com/news/local/does-the-new-federal-law-protect-people-

from-transporting-hemp/article_d5a71a18-e3e8-5e83-ad66-a802e99ecbaf.html.

However, under the 2018 Farm Bill, Idaho cannot legally prohibit the transportation

across its state of what is a lawful agricultural crop under federal law, as the crop is bound for a

neighboring state where it will be sold. 2018 Farm Bill § 10114. This was the clear intent of

Congress. Conf. Rep. at 436-438 (emphasis added) (“nothing in this title authorizes interference

with the interstate commerce of hemp,” Congress will “not allow such states…to limit the

transportation or shipment of hemp or hemp products through the state….”)

Congress is presumed to be aware of the conflicting laws of the several states, and yet


15

still chose to forbid states, like Idaho, from prohibiting the interstate travel of industrial hemp.

Cannon v. Univ. of Chi., 441 U.S. 677, 696–97 (1979) (“It is always appropriate to assume that

our elected representatives, like other citizens, know the law....”). Congress has completely

preempted the area of interstate commerce of industrial hemp shipments by the 2018 Farm Bill.

ii. Preemption and Interstate Commerce

Even if the 2018 Farm Bill did not apply (and it does), Defendants still cannot interfere

with the shipment of goods between states, because Congress has preempted virtually all of

interstate commerce. “States are precluded from regulating conduct in a field that Congress,

acting within its proper authority, has determined must be regulated by its exclusive

governance.” Nat’l Fed’n of the Blind v. United Airlines Inc., 813 F.3d 718, 724 (9th Cir. 2016)

(quoting Arizona v. United States, 132 S. Ct. 2492, 2495 (2012)). Moreover, state laws are

preempted when they conflict with federal law,” such that “compliance with both federal and

state regulations is a physical impossibility, ... [or] the challenged state law stands as an obstacle

to the accomplishment and execution of the full purposes and objectives of

Congress.” Id. (internal quotation marks and citation omitted). The Supremacy Clause mandates

that conflicting, preempted state laws must give way to federal law. U.S. Const. art. VI, cl. 2.

The Commerce Clause affords Congress near limitless authority to regulate the free

shipment of goods between the several states, local laws notwithstanding.

Our starting point is clear. In two recent cases we applied the principle that the Commerce Clause was not merely an authorization to Congress to enact laws for the protection and encouragement of commerce among the States, but by its own force created an area of trade free from interference by the States. In short, the Commerce Clause even without implementing legislation by Congress is a limitation upon the power of the States.

Freeman v. Hewit, 329 U.S. 249, 252 (1946) (emphasis added); S. Pac. Co. v. Arizona, 325 U.S.

761 (1945); Morgan v. Virginia, 328 U.S. 373 (1946).


16

Long has Congress exercised complete preemption over interstate shipment of goods, and

federal courts have chided states and localities for just as long when they have attempted to

interfere with the free interstate shipment of legal goods. Swift & Co. v. United States, 196 U.S.

375 (1905) (cattle for slaughter); Baltimore & O. S. W. R. Co. v. Settle, 260 U.S. 166, 174 (1922)

(rail cars of lumber); Hawai’i Papaya Indus. Ass’n v. Cty. of Hawaii, 666 F. App’x 631, 634 (9th

Cir. 2016) (county ordinance banning certain fruits and seeds preempted because it burdened the

interstate movement of plant products); BNSF Ry. Co. v. Cal. Dep’t of Tax & Fee Admin., 904

F.3d 755, 771 (9th Cir. 2018) (affirming injunction of state fees on interstate waste shipments).

Importantly, federal preemption over the interstate shipment of goods applies even where

a state totally bans the possession of a given product in that state. In Man Hing Ivory & Imports,

Inc. v. Deukmejian, California banned the possession of African elephant parts within its borders,

while federal law allowed the practice. 702 F.2d 760, 761-62 (9th Cir. 1983). In quoting from

and affirming the district court, the Ninth Circuit found that to allow the state to prohibit

possession of an item that it believed was objectionable, but that was allowed under federal law,

“would open the way for states to impose regulation to supersede federal regulation of trade

in…interstate commerce, a form of state preemption clearly contrary to the intent of

Congress….” Id. at 765. Like California in Man Hing Ivory, Idaho can prohibit the sale and

marketing of industrial hemp within its borders, but it cannot enforce its local laws so stringently

as to cut off interstate commerce of what is considered lawful at the federal level. Id.

In this case, the 2018 Farm Bill is clear that “[n]o State…shall prohibit the transportation

or shipment of hemp or hemp products…through the State….” 2018 Farm Bill § 10114.

Defendants’ belief that “nothing has changed” is just plain wrong. Lowe & Ward, supra,

https://www.idahopress.com/news/local/does-the-new-federal-law-protect-people-from-


17

transporting-hemp/article_d5a71a18-e3e8-5e83-ad66-a802e99ecbaf.html. While Idaho law may

have remained the same, federal law as it concerns the interstate shipment of industrial hemp has

drastically changed. Defendants are prohibited from shutting down the interstate commerce of

industrial hemp under the explicit language of the 2018 Farm Bill as well as under Congress’s

preemption over the interstate travel of lawful goods. Defendants’ seizure of Big Sky’s lawful

property, and the untenable alternative of needing to drive hundreds of miles around Idaho to

avoid such seizures in the future, “stands as an obstacle to the accomplishment and execution of

the full purposes and objectives of Congress.” Arizona, 132 S. Ct. at 2501 (citation omitted).

Preemption and the Supremacy Clause mandate that Defendants must release Big Sky’s

shipment and allow it to be transported through the state.

Because Big Sky’s seized shipment qualifies as legal industrial hemp under the 2018

Farm Bill, and because the interstate shipment of industrial hemp has been completely preempted

by Congress, Big Sky is likely to succeed on the merits. United States v. Mallory, No. CV 3:18-

1289, 2019 WL 252530, at *3 (S.D.W. Va. Jan. 17, 2019) (lifting injunction that prohibited

defendant from transporting industrial hemp across West Virginia, and noting that after

enactment of the 2018 Farm Bill “the Court has become increasingly doubtful of the

Government’s case on the merits”). This factor strongly favors entry of an injunction.

2. Big Sky Will Suffer Irreparable Harm if Defendants Are Not Enjoined.

“Harm is irreparable when, as name suggests, the harm cannot be undone by an award of

compensatory damages.” Battelle Energy All., LLC v. Southfork Sec., Inc., 980 F. Supp. 2d 1211,

1220 (D. Idaho 2013). “The threat of loss of prospective customers, goodwill, or reputation may

support a finding of irreparable harm, so long as it is not too speculative.” Id. “Additionally,

irreparable harm may arise when a company loses prospective goodwill due to the lost ability to

market a unique product.” Id. The irreparable harm prong also is satisfied where a perishable


18

good may be destroyed or harmed prior to the resolution of a case. Idaho Sporting Cong., Inc. v.

Rittenhouse, 305 F.3d 957, 974 (9th Cir. 2002).

In this case, Big Sky’s industrial hemp shipment will spoil if not properly stored. Shore

Decl. ¶ 17. This is not mere speculation, but a fact of nature. Id. If that occurs, Big Sky, a newly

formed company, will lose its approximately $1.3 million shipment at the precise moment when

it needs such capital to grow and stay viable.

More troubling, if the shipment does not arrive soon, Big Sky will lose out on business

opportunities and market share. According to the bill of lading, the industrial hemp shipment was

supposed to arrive in Colorado on January 29, where it would have been immediately processed

to have the isolates removed. Watkins Decl. at Ex. D. Big Sky has reserved time with its

processor’s lab for this very reason. Shore Decl. at ¶ 18. If the shipment does not arrive soon, the

processor will take Big Sky off its schedule and begin to process the industrial hemp of Big

Sky’s competitors. Id. Big Sky will be placed at the back of the queue or will have to find a new

processor, at a time when processors are busy and booked due to the 2018 Farm Bill. Id.

Additionally, Big Sky is already under contract for the isolates from this shipment. One

large customer wants at least $650,000 of the CBD from this shipment, and plans on placing

similarly sized orders each month going forward. Id. at ¶ 19. If Big Sky cannot timely deliver, it

will lose this ongoing customer, and the annual $7.8 million this customer’s business represents.

Id. This loss of capital will occur precisely when Big Sky needs infusions of cash to grow during

its first year of business. Id. at ¶ 20. Two other customers—one with $1.2 million in monthly

CBD needs, and the other with $580,000 in monthly CBD needs—want to purchase from Big

Sky once Big Sky can demonstrate a steady industrial hemp supply stream, rich in CBD. Id. at ¶

21. If Big Sky fails in demonstrating the reliability of its supply, these customers will go to Big


19

Sky’s competitors, who are already courting Big Sky’s customers and potential customers. Id.

Going forward, Defendants’ conduct irreparably harms Big Sky, as it cuts off the most

direct trade route for Big Sky’s operations. Rather than a shipping truck traveling the

approximately 1,200 miles between Hubbard, Oregon and Aurora, Colorado on I-84,

Defendants’ interference with interstate commerce means that Defendants must bypass Idaho by

traveling down the California coast to Sacramento on I-5 and then cut over through Reno via I-

80, a 500-mile detour made treacherous and unreliable because of the Sierra Nevada mountains.

Id. at ¶ 22. This also will greatly increase Big Sky’s costs and impact its profitability. Id. The

irreparable harm element strongly favors emergency relief for Big Sky.

3. The Balance of Equities Weighs in Favor of Big Sky.

In considering an injunction, “courts must balance the competing claims of injury and

must consider the effect on each party of the granting or withholding of the requested

relief.” Disney Enters., 2017 WL 3623286, at *14 (quoting Winter, 555 U.S. at 24). Here, as

discussed, releasing the shipment to continue on to Colorado complies with the 2018 Farm Bill,

which preempts Idaho’s laws as they apply to the interstate transportation of industrial hemp.

Defendants will suffer no real harm by being required to respect Congress’s constitutional

authority to regulate interstate commerce because Defendants never had the ability to regulate

interstate commerce. Freeman, 329 U.S. at 252 (the Commerce Clause “by its own force created

an area of trade free from interference by the States,” and “even without implementing

legislation by Congress is a limitation upon the power of the States”). Defendants cannot be

harmed by being blocked from doing that which they were never allowed to do in the first place.

Nor do Defendants need the industrial hemp to prosecute their case against the VIP driver

because a semi-truck load of industrial hemp will not fit into a County courtroom. Defendants

can take pictures and video of the shipment to present to any future jury. There is no need for the


20

shipment to be kept in Idaho once Defendants have photographic evidence of it (which they do).

By awarding injunctive relief, Defendants remain free to enforce local drug laws among

persons in Idaho. Injunctive relief would impact only Defendants’ ability to prohibit interstate

commerce of industrial hemp traveling across, but not being distributed in, Idaho. The equities

heavily favor emergency injunctive relief.

4. Enforcing the 2018 Farm Bill and Releasing the Shipment Would Not Be Contrary to the Public Interest.

The public has a clear interest in states not acting in conflict with federal law. Arizona

Dream Act Coal. v. Brewer, 757 F.3d 1053, 1069 (9th Cir. 2014) (“[I]t is clear that it would not

be equitable or in the public’s interest to allow the state ... to violate the requirements

of federal law….” (quoting Valle del Sol Inc. v. Whiting, 732 F.3d 1006, 1029 (9th Cir. 2013))).

This is especially true where a state tries to ignore the Supremacy Clause. Am. Trucking Ass’n v.

City of Los Angeles, 559 F.3d 1046, 1059–60 (9th Cir. 2009) (the public’s interest is met by

recognizing “the Constitution’s declaration that federal law is to be supreme”). “Essentially, it is

in the public interest to avoid constitutional violation. It is also in the public interest to uphold

the decisions of Congress.” Compass Airlines, LLC v. Mont. Human Rights Bureau of the Dep’t

of Labor & Indus., No. CV 12-105-H-CCL, 2012 WL 6477267, at *5 (D. Mont. Dec. 13, 2012).

The public interest prong strongly favors emergency injunctive relief in Big Sky’s favor.

Because each of the four TRO/preliminary injunction factors weighs heavily in favor of

Big Sky, the Court should enter an order requiring the release of Big Sky’s shipment so that it

may be allowed to continue on to its final destination in Colorado.

B. ALTERNATIVELY, THE COURT SHOULD APPOINT A RECEIVER

A TRO and preliminary injunction are necessary in this instance to protect Big Sky’s

federally-protected rights. However, if such relief is denied, the Court should at least appoint a


21

receiver who can safeguard the perishable industrial hemp in a commercially reasonable manner

so that spoiling can be reduced (but not eliminated) during the litigation. Fed. R. Civ. P. 66.

CONCLUSION

Big Sky respectfully requests that the Court enter a TRO and preliminary injunction in

the form set forth in Exhibit A to Big Sky’s Motion.

DATED: February __, 2019 STOEL RIVES LLP By: /s/ Elijah M. Watkins


22



PLAINTIFF’S MEMORANDUM IN SUPPORT OF ITS EMERGENCY MOTION FOR

TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION on

CM/ECF Registered Participants as reflected on the Notice of Electronic Filing as follows:









DECLARATION OF ELIJAH M. WATKINS IN SUPPORT OF PLAINTIFF’S EMERGENCY MOTION FOR TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION - 1 100087498.1 0204757-00001




Case No. _____________________________

DECLARATION OF ELIJAH M. WATKINS IN SUPPORT OF PLAINTIFF’S EMERGENCY MOTION FOR TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION

I, Elijah M Watkins, declare and state as follows:

1. I am an attorney at the law firm of Stoel Rives LLP, counsel of record for Big Sky

Scientific LLC (“Big Sky”).

2. I am over the age of eighteen and I have personal knowledge of the matters stated

in this declaration and could competently testify to these facts.



3. Attached hereto as Exhibit A is a true and accurate copy of Boone’s Berry

Oregon Industrial Hemp Growers License, License No. AG-R1050510IHG, issued by the

Oregon Department of Agriculture.

4. Attached hereto as Exhibit B is a true and correct copy of a Certificate of

Analysis, Industrial Hemp, from Chemhistory, a Oregon accredited laboratory.

5. Attached hereto as Exhibit C is a true and correct copy of a ∆9-THC / CBD

Potency Test Results from The Good Lab, a Colorado accredited laboratory.

6. Attached hereto as Exhibit D is a true and correct copy of a Bill of Lading from

DestiNation Transport, BOL # OR to CO 012319.

7. The driver shipping Big Sky’s product was arrested by Idaho State Police and

charged with marijuana trafficking, which carries a mandatory minimum of five years in prison.

8. On January 28, 2019, I called Shawna Dunn, Chief Deputy Criminal Prosecutor

for Ada County and explained that the shipment was industrial hemp, that the 2018 Farm Bill

regulated the interstate shipment of industrial hemp, that the industrial hemp was perishable and

valuable, and asked that Ada Country either release the industrial hemp or properly store it. I

explained that I preferred resolving the issue without litigation.

9. Ms. Dunn countered that industrial hemp is marijuana, the 2018 Farm Bill

notwithstanding, that she would not direct how the shipment is stored, and that if she turned the

shipment over to counsel she herself would be guilty of a felony.

10. Attached hereto as Exhibit E is a true and correct copy of a January 29, 2019

letter from the undersigned to Jan M. Bennetts and Heather McCarthy, attachments excluded.



11. Attached hereto as Exhibit F is a true and correct copy of a January 29, 2019

letter from the undersigned to Merritt Dublin, attachments excluded.1

12. Attached hereto as Exhibit G is a true and correct copy of a January 31, 2019

letter from Merritt Dublin to the undersigned.

13. Attached hereto as Exhibit H is a true and correct copy of a January 31, 2019

letter from David Roscheck, on behalf of Jan M. Bennetts, to the undersigned.

Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury that the foregoing is true

and correct.


STOEL RIVES LP /s/ Elijah M. Watkins Attorneys for Big Sky Scientific LLP

1 Exhibits E and F are erroneously dated 2018.





DECLARATION OF ELIJAH M. WATKINS IN SUPPORT OF PLAINTIFF’S

EMERGENCY MOTION FOR TEMPORARY RESTRAINING ORDER AND

PRELIMINARY INJUNCTION on CM/ECF Registered Participants as reflected on the Notice

of Electronic Filing as follows:









Cust Name

Cust ID

Filename

1900096

1900097

1900098

1900099

1900100

1900101

1900102

1900103

1900104

1900105

1900106

1900107

1900108

1900109

1900110

1900111

1900112

1900113

1900114

15.478

14.502

13.879

15.862

14.532

14.602

15.658

14.065

14.800

15.331

15.678

14.236

15.901

10.051

14.370

14.176

14.210

14.930

NF

NF

NF

0.023

0.039

0.043

0.046

0.037

NF

NF

NF

NF

NF

NF

NF

NF

0.073

0.035

404

Sample Type Δ9-THC Max CBD

Hemp Biomass

Hemp Biomass

0.045

NF

14.644

15.135

Boons Ferry Berry Farm #412

AVERAGE

Hemp Biomass

Boons Ferry Berry Farm #13C

Boons Ferry Berry Farm#14C

Hemp Biomass

Hemp Biomass



Hemp Biomass

Hemp Biomass



Hemp Biomass

Hemp Biomass



Hemp Biomass

Hemp Biomass

Boons Ferry Berry Farm #5L2


Hemp Biomass

Hemp Biomass



Hemp Biomass

Hemp Biomass



Hemp Biomass

Hemp Biomass



Hemp Biomass

Hemp Biomass



Date Completed

Date Received 1/16/2019

1/17/2019

Sample ID

Colorado Springs, Colorado

(720) 245-8323

[email protected]

www.GoodLabColorado.com

The Good Lab

Δ9-THC / CBD Potency Test Results

NutriCo Limited

Thank you for choosing The Good Lab for your analytical needs. This report outlines the results of your sample analysis. If you have any further questions regarding your product, feel free to contact us for a consultation at (720) 245-8323 or [email protected]. This information is provided as a service and makes no claims of efficacy, safety or compliance of this product. Results are applicable only for the sample tested and for the specific test conducted. For informational use only. The above test is reported in percentage by weight. Detectable amounts below .07% are typically shown as TR (trace). Amounts below .02% are considered undetectable and are shown as NF (not found). Due to many factors outside of The Good Lab's control, results may vary. Cannabinoid content variations may be due to natural variations in the plant and/or inaccurate sampling practices. This report and all information herein shall not be reproduced, except in its entirety, without the expressed consent of The Good Lab. This report is for informational purposes only and should not be used to diagnose, treat or prevent any medical symptoms or conditions. The statements and results herein have not been approved or endorsed by the FDA. Results are only for the sample supplied by the customer to The Good Lab.


EXHIBITE


STATE OF IDAHO

OFFTcE OF THE AnoRNEY GENERAL

LAWRENCE G WASDEN

January 3 1, 201 9

Elijah M. WatkinsStoel Rives [-LPl0l S. Clapitol Blvd, Sre 1900Boise, ID 83 702Via email: eliiah.* atkins6lstoel.com

RE: Big Sky ScientiJic LLC Property tnd Controband Seizure

Dear Mr. Watkins.

I represent Idaho State Police. I received your correspondence Wednesday regardingISP's seizure ofyour client's property and contraband, and demand for its retum. OnJanuary 24,2019, Idaho State Police (lSP) seized a truck, trailer and almost 7,000 poundsofcontraband which you contend was being legally transported through Idaho as

industrial hemp pursuant to the Agriculture Improvement Act of2018 (aka "Farm Bill201 8")(hereafter "the Act").

The Act, signed into law on December 20,2018 (two business days before the federalshutdown) creates a comprehensive federal regulatory framework for the federallegalization of hemp production. As you point out, Sec. l0l l4 (b) ofthe Act reads, inrelevant part:

Transportation of Hemp and Hemp Products. - No State . . . shall prohibitthe transportation or shipment of hemp or hemp products produced inaccordance with subtitle G of the Agricultural Marketing Act of 1946 (as

added by section 10113) through the state . . . .

The Act's signage into law and particularly Sec. 101l4 has created a perception in the

growing industry that the transportation ofindustrial hemp through states like Idaho,

u,here the product is illegal under state law, is now legal. To comply with subtitle G,

however, numerous steps must be taken by both states that wish to permit industrial hemp

production and federal regulatory authorities. States that wish to permit hemp production

and to regulate it, must submit a plan to do so to the Secretary of Agriculture. Hemp

producers in states that do not have an approved plan must satisry requirements under a

federal plan yet to be set forth by the USDA. Both state and federal plans must, among

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Watkins. E.Big Slqt SeizurePage 2

other requirements, set fofih a procedure for licensure ofhemp producers and a procedurefor testing THC concentration levels ofthe hemp produced. The Act does not set forthany parlicular time frame within which these regulations must be promulgated.

ISP seized and holds your client's property as part ofan ongoing criminal investigation.The ultimate decision ofwhether the driver will be prosecuted. and under what charges,is a decision for the Ada County Prosecutor. In the meantime, ISP respectfully deniesyour demand to retum the seized property which is evidence in an ongoing criminalmatter.

Sincerely,

Merritt Lynn DublinLead Deputy Attomey General, Idaho State Police

cc: Colonel Kedrick Wills. Director Idaho State PolicePaul Panther. Division Chief. Criminal Division

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DECLARATION OF RYAN SHORE IN SUPPORT OF PLAINTIFF’S EMERGENCY MOTION FOR TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION - 1 100086652.1 0204757-00001




Case No.

DECLARATION OF RYAN SHORE IN SUPPORT OF PLAINTIFF’S EMERGENCY MOTION FOR TEMPORARY RESTRAINING ORDER AND PRELIMINARY INJUNCTION

I, Donald Ryan Shore (“Ryan Shore”) , declare and state as follows:

1. I am the President and CEO of Big Sky Scientific LLC (“Big Sky”).

2. I am over the age of eighteen and have personal knowledge of the matters stated

in this declaration and could competently testify to these facts.

3. Delta-9 tetrahydrocannabinol (“∆-9 THC”) is the principal psychoactive

constituent of cannabis and the “high” experienced by recreational users increases based upon



the level of ∆-9 THC. Because industrial hemp has a ∆-9 THC percentage of 0.3 percent or less

on a dry weight basis, it has virtually no psychotropic effects and is not used recreationally.

4. Big Sky was incorporated on December 17, 2018 in order to be amongst the first

to market under the then soon-to-pass Agriculture Improvement Act of 2018, Pub. L. 115-334

(the “2018 Farm Bill”).

5. Operations were set up in Aurora, Colorado in order to receive industrial hemp

and have it processed by processors with whom we contract.

6. As a business, Big Sky purchases industrial hemp from state-licensed industrial

hemp growers. It then ships that industrial hemp to a processor who removes the isolates,

typically cannabidiol (“CBD”) powder, from the industrial hemp. The CBD powder is odorless

and flavorless. Big Sky then sells the CBD powder to consumer products manufacturers who add

the product to a diverse range of products.

7. CBD infused products are very popular and consumers are willing to pay a

premium for them. Products run the gamut from skin cream, pet care, and nutritional

supplements, to medical aids used to address epileptic seizures and anxiety, particularly in

children. Big Sky does not make any of these products or endorse any of the claims being made

by manufacturers, but, rather, simply harvests the CBD powder and sells it to the product

manufacturers.

8. By purchasing the industrial hemp and managing the processing of the industrial

hemp to extract the isolates, including CBD powder, Big Sky is positioning itself as a leader in

the market for meeting the CBD demands of product manufactures and the public.

9. Boones Ferry Berry Farms is an Oregon licensed industrial hemp grower who,

upon information and belief, had their industrial hemp crops routinely inspected by the Oregon



Department of Agriculture to ensure that the industrial hemp was being cultivated to have a ∆-9

THC concentration level of 0.3 percent or less.

10. Big Sky has strict buying policies to ensure that its purchases comply with the

2018 Farm Bill’s definition of industrial hemp. In addition to only buying from state-licensed

industrial hemp growers and requiring crops to be tested by state accredited laboratories after

harvesting, Big Sky also requires licensed hemp growers to produce signed invoices outlining the

total quantity shipped to the pound with certification that the shipment has a ∆-9 THC

concentration level of 0.3 percent or less

11. Based on the testing results of two state accredited laboratories certifying Boones

Ferry Berry Farm’s industrial hemp as in fact being industrial hemp, Big Sky purchased

approximately 13, 000 pounds from the company. The intention was to ship the industrial hemp

from Hubbard, Oregon to our processor in Aurora, Colorado.

12. Big Sky does not and never has had any intention to sell, market, or distribute any

of its industrial hemp, or any isolate from its industrial hemp, including CBD, directly to any

buyer in Idaho.

13. Big Sky contracted with a third-party logistics company who then hired VIP

Transporter LLC (“VIP”) to ship the industrial hemp load from Oregon to Colorado, but given

the amount the load had to be split into multiple trucks.

14. On January 24, 2019, one of the shipping trucks stopped at a weigh station which

I understand to have been the East Boise Port of Entry. The truck was headed eastbound on I-84,

headed to Colorado with Big Sky’s shipment. Upon information and belief the industrial hemp

was not being shipped in any unusual manner, but instead was in plain sight in the back of the

semi-truck.



15. Regardless, the officer seized the shipment without any evidence that it was

anything but industrial hemp. Field tests used by officers are incapable of measuring the amount

of ∆-9 THC, and K-9 officers do not smell the percentage weight of ∆-9 THC, or any THC, but

instead smell terpenes which are present in many plants, including both hemp and marijuana.

Nonetheless, the police began telling the press that they had made the “largest marijuana bust” in

Idaho history.

16. The value of the removed isolates, including CBD powder, from this shipment

alone is estimated to be approximately $1.3 million.

17. Industrial hemp is perishable and will mold if proper airflow and climate are not

maintained. Once a bail molds, a processor can refuse to process it, making the bail worthless.

Even without mold, as harvested industrial hemp sits, the amount of CBD contained within it

dissipates. In practice, there is typically no more than ten days between harvesting,

transportation, and processing in order to ensure that the maximum amount of isolates are

removed from the industrial hemp. When it is momentarily stored for a period of days, it is

separated and kept in a climate-controlled building with air flow around the product.

18. Big Sky has reserved time with its processor in Aurora, Colorado for this specific

shipment. If it is not received soon, the processor will fill Big Sky’s time slot with one of Big

Sky’s competitors and Big Sky will either be placed at the back of the line or need to find a

different processor, all of whom are busy because of the 2018 Farm Bill.

19. Big Sky is under contract for the isolates, including CBD powder, that are to be

removed from this specific shipment, with one buyer needing at least $650,000 worth of isolates

from this shipment and a similar sized amount each month moving forward. If Big Sky cannot

deliver these orders, the buyers will move to one of our competitors.



20. As a newly formed and growing company, Big Sky requires capital to remain

viable.

21. In addition to the contracted buyer spoken of previously, there are two other

potential customers that are currently considering Big Sky to fill their monthly CBD demands,

one with $2,082,500 million and the other with $580,000 in monthly needs. If Big Sky fails to

demonstrate that it can provide a reliable supply of industrial hemp isolates, including CBD

powder, these companies will go to Big Sky’s competitors, who are already courting these

customers.

22. If Big Sky is not allowed to ship its Oregon industrial hemp through Idaho, it will

necessarily have to avoid the state by driving down through California and across Nevada,

approximately a 500 mile detour that will increase Big Sky’s shipping costs and which is

unreliable and treacherous because of the Sierra Nevada mountains.

Pursuant to 28 U.S.C. § 1746, I declare under penalty of perjury that the foregoing is true

and correct.


BIG SKY SCIENTIFIC LLC

_____________________________________ Ryan Shore President and CEO Big Sky Scientific LLC





DECLARATION OF RYAN SHORE IN SUPPORT OF PLAINTIFF’S EMERGENCY

MOTION FOR TEMPORARY RESTRAINING ORDER AND PRELIMINARY

INJUNCTION on CM/ECF Registered Participants as reflected on the Notice of Electronic

Filing as follows:







Elijah M. Watkins, ISB No. 8977 E-mail: …...PLAINTIFF’S EMERGENCY MOTION FOR TEMPORARY...

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Transcript of Elijah M. Watkins, ISB No. 8977 E-mail: …...PLAINTIFF’S EMERGENCY MOTION FOR TEMPORARY...