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“A” Be Darned, SD Bar Says Lawyering for Pot Shops Still Unethical

Last July, the State Bar of South Dakota warned its members that, as long as federal law continues to deem marijuana illegal, doing legal work for businesses producing, processing, and/or selling marijuana under South Dakota’s pot-legalizing Amendment A would remain unethical. In an ethics opinion issued this week, the bar’s ethics panel maintains that, even though Section 9 of Amendment A prohibits the bar and every other professional organization in the state from punishing members who counsel pot peddlers, such work will remain unethical when Amendment A takes effect:

The ethics panel can hide behind its limited purview, but the plain language of Amendment A makes clear no lawyer can be punished for providing services to licensed Amendment A businesses:

§9. Actions and conduct by a licensee, a licensee’s employee, and a licensee’s agent, as permitted pursuant to a license issued by the department, or by those who allow property to be used by a licensee, a licensee’s employee, or a licensee’s agent, as permitted pursuant to a license issued by the department, are not unlawful and shall not be an offense under state law, or the laws of any local government within the state, or be subject to a civil fine, penalty, or sanction, or be a basis for detention, search, or arrest, or to deny any right or privilege, or to seize or forfeit assets under state law, or the laws of any local government within the state. No contract is unenforceable on the basis that marijuana is prohibited by federal law. A holder of a professional or occupational license is not subject to professional discipline for providing advice or services related to marijuana licensees or applications on the basis that marijuana is prohibited by federal law [Amendment A, Section 9, as drafted 2019].

Lawyers in other states that have legalized pot still have their licenses:

Colorado was one of the first states to legalize recreational marijuana. A similar issue arose there in 2012, following the vote to legalize marijuana there.

Brian Vicente is a lawyer with Vicente Sederberg LLP, a cannabis law firm based in Denver, Colorado, that provides legal and policy services to marijuana and hemp companies. Vicente says everyone is entitled to a lawyer.

“There was some early statements by the Colorado Bar Association that said we’re not sure if lawyers should be able to advise on this state law and things of that nature. Those have been sorted out for a good ten years,” Vicente says. “Now, we’re at a place with 40 states with medical marijuana and fifteen with recreational marijuana and every single one of those states allows attorneys to advise in the space of cannabis and medical cannabis” [Lee Strubinger, “SD Bar Clarifies Ethics Position on Counseling Marijuana Businesses,” SDPB, 2021.01.07].

Ethics counsel to the American Bar Association Dennis Rendleman boils the complicated questions of lawyering in situations where state and federal laws conflict down to this argument:

In this world of rapidly changing and conflicting laws, a lawyer who wants to ensure a client operates within a state’s law but is confronted with conflicting federal law, must address the ethical precept that prohibits a lawyer from assisting a client in committing a crime or fraud. This paper argues that because the ABA Model Rules of Professional Conduct are rules of reason, it is unreasonable to prohibit a lawyer from providing advice and counsel to clients and to assist clients regarding activities permitted by relevant state or local law, including laws that allow the production, distribution, sale, and use of marijuana for medical or recreational purposes so long as the lawyer also advises the client that some such activities may violate existing federal law [Dennis Rendleman, “Ethical Issues in Representing Clients in the Cannabis Business: ‘One Toke over the Line’?” American Bar Association: The Professional Lawyer, vol. 26, no. 1, 2019.07.02].

Rendleman emphasizes that lawyers shouldn’t counsel clients to break the law. But as Vicente says, every American deserves legal representation, and until Congress gets done impeaching and convicting Donald Trump and turns its attention to cannabis reform, understanding how to do business amidst conflicting state and federal laws will require lots of legal advice. South Dakota’s bar seems to be ignoring the example of many other states and creating an unnecessary and unjustified sense of peril for its members who wish to provide the advice to which South Dakota’s entrepreneurs have a right.

6 Comments

  1. John 2021-01-08

    Thank you for your even-handed analysis and citations.

  2. Jake 2021-01-08

    Quite typical of “the Good Ol’ Boy Club’ in South Dakota! A resistant governor gathers behind her the legal beagles whining that “Until the Feds legalize it” we cam’t authorize you to do your legal duties to your clients! Her legal challenge (Thom/Miller) will fail on its merits so the Bar Association had to step in and put in its two cents worth.

  3. bearcreekbat 2021-01-08

    In my view Cory’s post misunderstands the State Bar’s ethical opinion. As I read the opinion the Ethics Committee is stating that Amendment A has not explicitly repealed the revelant section of the Rules of Professional Conduct prohibiting a lawyer from advising a client how to engage in conduct that is declared illegal under any law, including here federal law. The opinion, however, clearly declares that it cannot say whether or not Amendment A nows provide a defense, i.e. “constitutional immunity” to any disciplinary action, which as best I can tell is pretty good news for any attorney who chooses to advise an individual or business about actions that Sourth Dakota law permits under Amendment A. At worst, the opinion merely declares that attorneys providing such advice are proceeding at their “own risk” until there is a formal change in the language of the disciplinary rules or federal law. This sounds like pretty good advice.

    The situation seems similar to the prohibition against lawyer advertising that existed for years in the Rules of Professional Conduct until the SCOTUS held that such a prohibition was prohibited by the U.S. Constitution.

    https://en.wikipedia.org/wiki/Bates_v._State_Bar_of_Arizona

    Although the SCOTUS held such language to be unconstitional, the prohibition remained in the Rules until the language in the Rules was changed to comport with this change in the Court’s interpretation of the First Amendment. While any lawyer who chose to advertise before the rule was actually changed had to do so at the lawyer’s “own risk,” the change in law could now be raised as a pretty strong defense against sanctions.

    Here, according to this South Dakota State Bar ethical opinion, the change in the State’s Constitutional language also may now be raised as a defense against any attempted professional sanction by the Bar for advising a client what State law permits. And since the State Bar only has the statutory authority to impose discipline on a lawyer granted to it by the State, it would seem that a State Constitutional such as Amendment A removes the authority to sanction for this particular conduct and thereby provides a solid defense against sanctions, regardless of the existing anachronistic federal statutes, which, by the way, now seem to be teetering on the brink of repeal by a newly elected federal Congress and Executive.

  4. Dicta 2021-01-08

    I mean, banks cannot fund these businesses due to federal laws either. There are workarounds. I am with bcb: this seems to be a “proceed with caution” and not an outright ban. I’m not too worked up about it.

  5. Whitless 2021-01-08

    Completely agree with BCB and Dicta.

  6. Mark Anderson 2021-01-09

    its simple, weed will become legal in America as long as the people voting are for it. Communists like kristi don’t understand that.

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