Vape shop companies can't stop Georgia and an Atlanta-area district attorney from cracking down on the sale of cannabinoid products because their attempt to do so runs afoul of the state's constitution, the Georgia Supreme Court held Wednesday.
In a unanimous opinion, the court reversed a trial judge's denial of a motion by Georgia and Gwinnett County District Attorney Patsy Austin-Gatson to dismiss the case brought against them by SASS Group LLC and Great Vape LLC. The trial judge's injunction barring the district attorney from prosecuting sellers of hemp-derived products was simultaneously wiped out.
Writing for the Georgia Supreme Court, Justice Charles J. Bethel said the companies' fatal error was suing both the state and Austin-Gatson under a new constitutional provision that exclusively waives sovereign immunity for the state, local governments and certain officials in declaratory actions. The statute requires cases involving individual defendants like Austin-Gatson, who aren't covered by the waiver, to be dismissed.
"If a plaintiff wants to avail himself of the limited waiver provided by Paragraph V [of the Georgia Constitution's Article I, Section II], then he must bring the action 'exclusively against the state and in the name of the state of Georgia,' which forecloses the option of also suing a state actor in his or her individual capacity in that same suit," Justice Bethel said.
Representing SASS Group and Great Vape, Thomas D. Church of The Church Law Firm LLC told Law360 the ruling means separate complaints will have to be filed against the state and Austin-Gatson "even though both lawsuits would involve identical questions of fact and law."
"This obviously burdens small business owners with limited resources," Church said Wednesday. "They have to pay lawyers to fight for them while worrying whether a local government official will raid their store based on a misinterpretation of the law."
Justice Bethel addressed Church's point in his opinion, agreeing that "our rules of civil practice and related doctrines generally demonstrate a preference that litigants bring all relevant claims related to their case in one action."
But he said the pursuit of a separate complaint against a state official in their individual capacity makes sense under the court's 2017 Lathrop v. Deal ruling "that suits against state officers and employees in their official capacities were indeed barred by sovereign immunity."
"If a lawsuit is filed against the state pursuant to Paragraph V and that suit includes an independent claim against another party not specified in that paragraph's waiver provision, then the entire lawsuit must be dismissed," Justice Bethel said.
The case was prompted by Austin-Gatson's January 2022 promise to prosecute businesses and individuals involved in the sale of controlled substances including 'Delta-8-THC' and 'Delta-10-THC.' Subsequent raids of smoke shops in Gwinnett County, where SASS Group and Great Vape do business, allegedly resulted in the seizure of millions of dollars worth of currency, inventory and other property.
SASS Group and Great Vape sought a declaration that their sale of hemp-derived products is legal. They claim Delta-8-THC, Delta-10-THC and other cannabinoid products are authorized under the 2019 Georgia Hemp Farming Act.
Church said while he strongly disagrees with the court's reasoning and conclusion, the ruling is not a surprise.
"It's consistent with this court's history of vigorously applying the doctrine of sovereign immunity to prevent aggrieved citizens from bringing lawsuits against the government and its officials," he said. "We are weighing our options. As long as government officials are misinterpreting Georgia's hemp laws, we will continue seeking remedies through the courts."
Church, who has other cases related to hemp products pending, noted that the ruling was silent as to the legality of such products. He said he's "confident that the law is on our side."
Marijuana, which contains more of the psychoactive component tetrahydrocannabinol – or THC – than hemp, remains illegal in Georgia. Justice Bethel described as "treacherous" the existing landscape for companies like SASS Group and Great Vape operating amid battles over cannabis-related federal and state laws and public policies.
Justice Bethel's key finding was that an "action" under the sovereign immunity waiver of January 2021 means an entire case or lawsuit, as opposed to individual claims. The vape shop companies tried to protect their case against Georgia by arguing that only claims against Austin-Gatson had to be dismissed.
"Action is ordinarily and more commonly used to mean a case or lawsuit, and other contextual clues within the [Georgia] Constitution confirm that to be the case with respect to the specific provision at issue here," Justice Bethel said.
The Georgia Attorney General's Office, representing the state and Austin-Gatson, did not immediately respond to questions about the ruling Wednesday.
Georgia Supreme Court Justice Charles J. Bethel wrote the opinion, with concurrence from all eight other justices.
Georgia and Austin-Gatson are represented by Christopher M. Carr, Beth Burton, Tina M. Piper, Cristina M. Correia, Stephen J. Petrany and Ross W. Bergethon of the Georgia Attorney General's Office.
SASS Group and Great Vape are represented by Thomas D. Church of The Church Law Firm LLC.
The cases are The State et al. v. SASS Group LLC et al., case number S22A1243, and The State et al. v. SASS Group et al., case number S22A1244, in the Supreme Court of Georgia.