In a case presenting “a question about the nature and extent to which a federal court may act to resolve a dispute related to a marijuana business that operates legally under state law,” a divided panel of the U.S. Court of Appeals for the Tenth Circuit vigorously debated public policy concerns—namely, whether a federal court can enforce a judgment arising from a contract that is illegal under federal law. See Bartch v. Barch, 2024 U.S. App. LEXIS 18607, at *2 (10th Cir. July 29, 2024). Ultimately, the court affirmed the $6.4 million breach of contract judgment but—agreeing with the public policy concerns raised by the dissent—reversed and remanded the separate enforcement order for the district court to address in the first instance whether the enforcement order would require violation of federal drug laws and, thus, violate public policy.
The Parties’ Marijuana Business and Contract
David Joshua Bartch (Josh) and Mackie Barch (Mackie) owned and operated a marijuana business in Colorado. Josh and Mackie later sought a license to open a similar business in Maryland but, out of concern that Josh’s deferred judgment in Colorado for misdemeanor drug possession could hurt the license application, they agreed that Josh would temporarily relinquish his ownership of the Maryland business and that Josh would be reinstated after the license was granted. The Maryland business, Culta, LLC, received the license, but Mackie refused to reinstate Josh’s ownership interest. Culta, which cultivates, processes, and dispenses marijuana, opened and operated without Josh.
