That Time when N.H. Required Workers’ Compensation Insurers to Pay for Pot

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In an issue of first impression, the New Hampshire Supreme Court held that requiring an insurer to reimburse a worker for his medical marijuana purchase and complying with the federal Controlled Substances Act was possible and that such an order did not stand as an obstacle to the accomplishment and execution of the full purposes and objectives of Congress as reflected in the CSA. Simply Research subscribers have access to the full text of the decision.

Case

Appeal of Andrew Panaggio, No. 2019-0685 (N.H. 03/02/21)

What Happened

A worker suffered from ongoing pain as the result of awork-related injury to his lower back. He was a qualified patient in New Hampshire's therapeutic cannabis program and had a New Hampshire cannabis registry identification card. The insurer declined to reimburse the worker for the purchase of medical marijuana on the ground that it was not reasonable or medically necessary.

Following appeals that took the case up to the New Hampshire Supreme Court, the New Hampshire Compensation Appeals Board eventually determined that the insurer could not be ordered to reimburse the worker for his purchase of medical marijuana because such reimbursement would constitute aiding and abetting his commission of a federal crime under the Controlled Substances Act.

This prompted the worker to appeal, again, to the New Hampshire Supreme Court, which faced the question of federal preemption.

Rule of Law

There are three types of federal preemption:

(1) Express preemption. Express preemption occurs when Congress preempts state authority by stating in express terms. Pacific Gas & Elec. Co. v. Energy Resources Comm'n, 461 U.S. 190 (1983).

(2) Field preemption. Field preemption occurs when federal law occupies a "field" of regulation so comprehensively that it has left no room for supplementary state legislation. Murphy v. National Collegiate Ath. Ass'n, 138 S. Ct. 1461 (U.S. 2018).

(3) Conflict preemption. Conflict preemption may occur when it is impossible for a private part to comply with both state and federal requirements. English v. General Electric Co., 496 U.S. 72 (1990). It also occurs when compliance with both state and federal laws is possible, but state law stands as an impermissible obstacle to the accomplishment and execution of the full purposes and objectives of Congress. Sikkelee v. Precision Airmotive Corp., 907 F.3d 701 (3d Cir. 2018); Virginia Uranium, Inc. v. Warren, 139 S. Ct. 1894 (U.S. 2019).

What the New Hampshire Supreme Court Said

The court ruled that reimbursing a worker for medical marijuana under New Hampshire workers' compensation law and the CSA could coexist under federal preemption principles.

After noting that the CSA specifically detailed that Congress did not intend to occupy the field of controlled substance legislation, in reaching its decision, the court considered the other possible bases of preemption:

Impossibility preemption. The court found no direct conflict between the CSA and a Board order to reimburse the worker for his medical marijuana as the CSA did not criminalize the act of insurance reimbursement for an employee's purchase of medical marijuana. The reimbursement did not constitute aiding and abetting a federal crime, in the court's view, because state law ordered the insurer to reimburse the cost, meaning that the insurer would not be an active participating with the requisite "mens rea," or state of mind vis-a-vis intent, to violate the CSA. "The insurer's compliance with a court or Board order to reimburse [the worker] for his medical marijuana purchase does not constitute voluntary participation," the court wrote.

Obstacle preemption. Would requiring the insurer to reimburse the worker for the purchase of medical marijuana thwart the purposes and objectives of the CSA? The court explained that a Board order to reimburse the worker did not enforce the CSA. "Regardless of whether the insurer is ordered to reimburse [the worker] for his medical marijuana purchase, the federal government is free to prosecute him for simple possession of marijuana under the CSA," the court wrote.

As a result, the court ruled in the worker's favor.

Verdict. The Court reversed the Board's decision in the insurer's favor and remanded the case.

Takeaway

Requiring insurers to reimburse the costs of medical marijuana for injured workers doesn't conflict with the federal Controlled Substances Act.

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