Preemption & the Michigan Regulation & Taxation of Marihuana Act (MRTMA); 25 CFR 1.4; 25 CFR 1.4(b); White Mountain Apache Tribe v Bracker; Cannabis Regulatory Agency (CRA); Little Traverse Bay Band of Odawa Indians (LTBB)

In this appeal involving preemption and the MRTMA, the court affirmed the trial court’s order granting summary disposition under MCR 2.116(C)(8) (failure to state a claim). Plaintiff “adopted an ‘opt out’ ordinance that prohibits all marijuana establishments within Bear Creek Township.” Before the MRTMA’s effective date, the LTBB asked the U.S. “Department of the Interior to accept in trust two parcels of land located within Bear Creek Township. The LTBB subsequently leased the parcels held in trust to defendant, a company that sells adult-use recreational marijuana. Plaintiff expressed its opposition[.]” The CRA “issued two licenses to defendant authorizing it to operate a retail marijuana facility on the parcels. Plaintiff initiated this action seeking a declaratory judgment that the CRA lacked the authority to issue licenses to defendant.” The trial court agreed with defendant, finding “that federal law preempted plaintiff’s attempt to regulate or control the use of the land in question.” On appeal, plaintiff argued “against giving 25 CFR 1.4(a) preemptive effect by characterizing its argument as one not seeking to enforce its ordinance, but instead as one seeking to exercise its statutory rights under the MRTMA.” Plaintiff’s argument lacked merit. The court found that “it is the ordinance that plaintiff passed pursuant to MCL 333.27956 that necessarily underlies plaintiff’s claims.” It explicitly argued “on appeal that its ordinance and the MRTMA, ‘when taken together, foreclose [defendant’s] ability to lawfully obtain licenses to operate a retail establishment on the LTBB’s land[.]’ By its own admission, plaintiff seeks to control or regulate, through its ordinance, the use of leased Indian land held in trust by the United States. This situation falls squarely within those preempted by 25 CFR 1.4(a), and plaintiff has presented no evidence that the Secretary of the Interior has said otherwise, 25 CFR 1.4(b).” Plaintiff also argued “against preemption by citing federal caselaw providing carve outs for state regulation of activities of nontribal individuals on tribal land.” Specifically, plaintiff argued that, under Bracker, “a more ‘particularized inquiry’ is required for addressing the actions of a nontribal entity like defendant on tribal land.” Plaintiff misconstrued Bracker. Its “emphasis on the need for a more ‘particularized inquiry’ is misplaced, because such an inquiry is necessary only when the federal enactment is ‘vague or ambiguous[.]’” The court noted that the “language of 25 CFR 1.4(a) is neither. By its plain terms, 25 CFR 1.4(a) prohibits states and their political subdivisions from regulating or controlling the use of leased Indian property held in trust by the United States.” Plaintiff sought “to control the use of such land through its ordinance; it may not do so.” Moreover, the court noted that “25 CFR 1.4(b) provides the only exception to this rule, and nothing in the record or parties’ arguments indicate it applies.”