September 17, 2014

Conflicting state and federal marijuana laws create ethical complications for lawyers

The country’s changing views and laws on marijuana are forcing lawyers to confront various ethical problems regarding both their personal use of the drug and their professional role in advising clients on marijuana-related legal issues.

Colorado and Washington have legalized the recreational use of marijuana, and 20 states and the District of Columbia have legalized medical marijuana. More than half the states are contemplating decriminalization of marijuana or legalization of the drug for medical or recreational use. And almost all recent polls indicate that a majority of Americans now favor some form of marijuana legalization.

“This trend of legalizing some form of marijuana possession and use is going to increase,” said Tom Fitzpatrick, a partner at Talmadge/Fitzpatrick PLLC in Tukwila, Wash. “If you do not have some form of legal marijuana now, it’s quite likely that you will be dealing with that in the near future.”

In last week’s American Bar Association webinar “Lawyer Ethics and the Business of Marijuana,” Fitzpatrick and other legal experts discussed the ethical issues that arise when lawyers advise clients about marijuana-related business and the relevant  ABA and state bar ethics opinions and rules.

Because marijuana remains illegal under federal law, the main problem for lawyers is rooted in the conflicting state and federal laws, which lawyers have sworn to uphold. ABA Model Rule of Professional Conduct 1.2(d) states that a lawyer “shall not counsel a client to engage, or assist a client, in conduct that the lawyer knows is criminal or fraudulent.”

So are lawyers ethically permitted to advise clients about marijuana-related business if it is legal in their state but illegal under federal law?

Earlier this month, the Colorado Supreme Court held a hearing on a proposed rule changes that would explicitly allow lawyers to both personally use marijuana and counsel clients on marijuana issues without fear of disciplinary action. A similar proposal from the King County Bar Association is under review by the Washington Supreme Court.

While awaiting the official rulings, the lawyer disciplinary offices in both states are not pursuing marijuana-related cases where lawyers are in compliance with state laws.

Jamie Sudler, chief deputy regulation counsel in Colorado’s Office of Attorney Regulation Counsel, said his office has taken the position that lawyers should be allowed to counsel clients on marijuana-related legal issues.

“All of this is said by me as a representative of this office with a major asterisk here: We are assuming the lawyer and the client are in compliance with Colorado law,” he stressed.

These new state marijuana laws are sparking the creation of an entirely new industry, and Sudler said lawyers need to play a role in that process.

Fitzpatrick noted that this is a potentially billion-dollar industry, with the latest estimates showing Washington state taking in $51 million this budget cycle and $139 million in the next budget cycle. Last month, Colorado’s governor predicted about a billion dollars in pot sales in the next fiscal year, and in January alone, Colorado gained $2 million in revenue from taxes on marijuana sales.

Development on such a large scale can pull in a variety of legal areas, from government lawyers working on developing regulations to business lawyers dealing with the formation of new businesses to financial lawyers advising banks on their involvement.

“This is exactly the kind of situation where traditionally in American law we want lawyers to be present and to be advising their clients, as opposed to sitting on the sidelines with their hands tied,” said J. Scott Rhodes, managing attorney at Jennings Strouss and chair of the State Bar of Arizona’s Rules of Professional Conduct Committee.

After Arizona legalized medical marijuana in 2010, the committee issued an ethics opinion stating that lawyers may assist clients on marijuana-related issues, but with caveats. Lawyers must conclude that their clients’ activities do in fact comply with state law, and they must advise clients regarding the federal law implications of their activities. Also, if the law is overturned, either fully or in part, then the rule becomes invalid.

As far as lawyers’ personal use of marijuana, Sudler said the Colorado office’s stance is that it does not violate ABA Model Rule 8.4(b), which states that it is professional misconduct for a lawyer to “commit a criminal act that reflects adversely on the lawyer’s honesty, trustworthiness or fitness as a lawyer in other respects.”

Although that view acknowledges that marijuana use in itself does not reflect on a lawyer’s fitness, Sudler warned that use of the drug could lead to other rules violations.

“You can’t go to court stoned and represent somebody because that reflects on your competence,” Sudler explained. “Also, if your use of marijuana impedes your ability to represent somebody diligently, then we are concerned about that.”

He also warned against driving under the influence of pot, noting that it is much more difficult to predict how marijuana will affect a specific individual as opposed to alcohol. For more information on “drugged driving” and the legal issues involved in such cases, check out this story on the ABA webinar “Marijuana and Driving: Debunking the Myths."