On May 22, the states of Nebraska, Indiana, and Louisiana filed a Petition for Review in the United States Court of Appeals for the District of Columbia Circuit (“DC Circuit”) challenging the Acting Attorney General’s (“AG”) final agency action moving FDA-approved and state-licensed marijuana into Schedule III of the Controlled Substances Act (“CSA”). The DC Circuit has since consolidated this petition with the one previously filed by SAM, Inc. (“SAM”) and the National Drug and Alcohol Screening Association, Inc. (“NDASA”).
Similar to SAM’s petition, the States’ petition alleges that the AG: (1) failed to comply with the Administrative Procedure Act; (2) exceeded or acted inconsistently with authority under the CSA and the Single Convention on Narcotic Drugs; and (3) acted arbitrarily, capriciously, and in abuse of discretion. Prior to consolidation, SAM had been ordered to submit procedural motions, which would include a potential motion to stay the rescheduling order, by June 4, 2026. No such deadline was set in the States’ case, but it is expected that the court will coordinate those deadlines going forward.
What is Standing?
In law, “standing” is the legal capacity of a party to bring a lawsuit or participate in a case. To have standing, a plaintiff must demonstrate a direct, tangible stake in the outcome and show that they have suffered, or will suffer, a specific, concrete injury due to the action being challenged. The doctrine of standing ensures that someone cannot challenge a law simply because they don’t like it, or the policy behind it. The law has to affect them.
This doctrine was recently in the news again in federal cannabis litigation, when another lawsuit brought by SAM was dismissed for lack of standing. In SAM v. Kennedy, SAM had sought to block a new Trump administration initiative to cover up to $500 worth of hemp-derived products each year for eligible Medicare patients. That program is still on track.
Why SAM and NDASA Likely Cannot Survive Standing
As the SAM v. Kennedy litigation made clear, standing is a threshold that is difficult to establish. On May 22, the U.S. District Court for the District of Columbia held that SAM and its co-plaintiffs lacked standing in that case. The same analysis would almost certainly apply to SAM’s Schedule III petition.
An association can establish “associational standing” when: “(a) its members would otherwise have standing to sue in their own right; (b) the interests it seeks to protect are germane to the organization’s purpose; and (c) neither the claim asserted nor the relief requested requires the participation of individual members in the lawsuit.”
To establish “organizational standing,” plaintiffs must “plausibly allege they suffered an ‘actual or threatened injury in fact’ to their own interests that is ‘fairly traceable to the alleged illegal action and likely to be redressed by a favorable court decision.’“
Under either theory, SAM and NDASA must show “an injury that is actual, imminent, or certainly impending” — a showing they could not make in SAM v. Kennedy and are unlikely to make in the Schedule III litigation.
Why the States May be Different
The addition of Nebraska, Indiana, and Louisiana opens new avenues for standing that SAM alone could not access or satisfy.
Particularized Injury
To establish particularized injury standing, a state must demonstrate an injury that is: (1) concrete, particularized, and actual or imminent; (2) fairly traceable to the challenged action; and (3) redressable by a favorable ruling. This form of standing will likely be the most difficult avenue for the State Petitioners to pursue. Louisiana has an established medical marijuana program, meaning the AG’s final rule — which benefits state-licensed programs — cuts against rather than in favor of Louisiana’s claimed injury. Nebraska is in the process of rolling out its own medical marijuana program (maybe), placing it in a similar position, especially since voters overwhelmingly approved a medical marijuana measure in 2024.
Indiana presents a different theory: as a state with no medical marijuana program and strict prohibition laws, it could argue that rescheduling state-licensed medical marijuana at the federal level would foreseeably increase the flow of marijuana across its borders, causing a concrete harm to the state. However, demonstrating that this injury is imminent and fairly traceable to the rescheduling rule specifically — rather than to the pre-existing legal markets in surrounding states — will be a challenging causal link to establish.
Parens Patriae
A state may also establish standing as a quasi-sovereign representative of its population. “A quasi-sovereign interest must be sufficiently concrete to create an actual controversy between the State and the defendant.”
Courts have long recognized that states may represent their residents in suits involving threats to public health, holding that “if health and comfort of the inhabitants of a State are threatened, the State is the proper party to represent and defend them.” To withstand such an action, however, the state must have “a quasi-sovereign interest in the health and well-being — both physical and economic — of its residents in general,” and must “allege injury to a sufficiently substantial segment of its population.” A key factor is whether “the State, if it could, would likely attempt to address [the issue at hand] through sovereign lawmaking powers.” Further, many cases have required that at least one of the state’s citizens satisfy Article III standing.
Of the three states, Indiana presents the strongest case for parens patriae standing. Because Indiana has no medical marijuana program and has consistently chosen prohibition, it can credibly argue that its sovereign policy judgment — that marijuana is harmful to its citizens — is being undermined by a federal rule that effectively legitimizes state-licensed marijuana and foreseeably increases its availability.
Louisiana and Nebraska, by contrast, face a fundamental tension: both states, through their legislatures or their voters, have already determined that medical marijuana is in the best interest of their citizens’ health and well-being. It is difficult to simultaneously hold that position and argue that the AG’s rule — which benefits those same state-licensed programs — threatens the health and well-being of their populations.
It bears noting that most parens patriae cases do not arise from challenges to federal agency action, which could complicate this theory. The conservative wing of the Supreme Court believes that there is “significant doubt on a State’s standing to asset a quasi-sovereign interest – as opposed to direct injury – against the Federal Government.” When such a state-federal conflict exists, it is the United States, and not the State, which represents the citizens.
Statutory Standing
Finally, a state may derive standing from a procedural right granted by Congress. In Massachusetts v. EPA, the Supreme Court recognized that states are not ordinary litigants and are entitled to “special solicitude” in standing analysis when asserting a quasi-sovereign interest tied to a congressional grant of procedural rights.
While the CSA and APA provide states with specific authorities and obligations, they are not as express as those provided to states under EPA laws.
The Merits, if Standing is Established
Standing is likely dispositive in this litigation. If any petitioner clears that hurdle, the rescheduling rule was poorly conceived, and faces serious legal problems on the merits.
As we have written previously (here, here, here and here), the AG did not simply reschedule a substance as permitted under 21 U.S.C. § 811(d)(1). The rule effectively rescheduled state-legal programs. Moreover, the FDA is the agency responsible for medical determinations and played no meaningful role in the rulemaking process (outside of providing medical and scientific determinations for the other rescheduling action). A court reaching the merits will likely have strong grounds to find that the final rule exceeded AG and DEA authority.
Conclusion
If this case moves forward, the cannabis industry must begin thinking seriously about alternative strategies for advancing sensible cannabis policy. In the coming weeks and months, I will be outlining one such approach: Project Four 2029. Stay tuned.
The post Standing Is Everything: Three States Join the Medical Marijuana Rescheduling Fight appeared first on Harris Sliwoski LLP.
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