Fear and Loathing in Colorado: Invoking the Supreme Court's State-Controversy Jurisdiction to Challenge the Marijuana-Legalization Experiment

Abstract

In this Article, we assert that States may invoke the Supreme Court’s original jurisdiction to challenge marijuana legalization in Colorado and other jurisdictions. The Constitution endows the Court with jurisdiction to adjudicate transboundary nuisance disputes between States. Such suits once comprised a relatively common part of the Court’s docket. The number of these actions fell dramatically following passage of the Clean Air and Water Acts, which relieved the Court of its historic role of establishing and enforcing interstate environmental standards. Colorado’s introduction of marijuana into interstate commerce has reawakened this long-dormant body of constitutional law. Like downstream industrial pollution, the transboundary externalities resulting from Colorado’s introduction of marijuana into interstate commerce fall within the ambit of the Court’s original jurisdiction.

In making this argument, we distinguish our theory from the Complaint lodged by Nebraska and Oklahoma with the Supreme Court. Rather than premising their claim on the Court’s transboundary nuisance jurisprudence, Nebraska and Oklahoma seek to “enforce...the Supremacy Clause, Article VI of the U.S. Constitution.” They contend that Colorado’s venture violates the federal Controlled Substances Act and should be enjoined. Their federal-supremacy claim suffers from a myriad of fatal deficiencies: they lack standing to represent the federal government’s interests, they have not plead injury with the particularity required to invoke the Court’s original jurisdiction, and their prayer for injunctive relief runs afoul of the anti-commandeering doctrine.

In contrast, we assert that 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 theorem is attained by imposing legal rules that best approximate the way disputes would be resolved in a transaction-cost-free environment. Such an outcome is best effectuated by a rule charging the nuisance with the damages it causes. 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. If this remedy is applied, the market will determine the success or failure of Colorado’s venture and will serve as a guide to other states in deciding whether it is worth emulating.

Keywords: marijuana, marihuana, original jurisdiction, original actions, state controversy jurisdiction, federal common law of nuisance, federal common law, Colorado, Coase Theorem

JEL Classification: K00, K10