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New Mexico Top Organics-Ultra Health, Inc. v. Kennedy

United States District Court, D. New Mexico

April 10, 2018

NEW MEXICO TOP ORGANICS-ULTRA HEALTH, Inc., Plaintiff,
v.
LARRY KENNEDY, DAN MOURNING, and RAINA BINGHAM, in their official capacities, Defendants.

          MEMORANDUM OPINION AND ORDER

         New Mexico Top Organics - Ultra Health, Inc. (Plaintiff or Ultra Health) filed suit against three New Mexico State Fair officials in their official capacities, Defendants Larry Kennedy, Dan Mourning, and Raina Bingham (collectively, Defendants), seeking damages, injunctive relief, and a declaratory judgment for alleged violation of its First Amendment right to free speech.[1] Ultra Health alleges that Defendants impermissibly sought to restrict its constitutionally protected speech and engaged in viewpoint discrimination against Ultra Health by placing unreasonable restrictions on Ultra Health's exhibitor application for the State Fair in violation of the First and Fourteenth Amendments to the United States Constitution. Both parties have moved for summary judgment, and those motions have been fully briefed.[2] Because factual disputes remain the Court denies Plaintiff's Motion for Summary Judgment (Doc. 30) in full and Defendant's Motion for Summary Judgment (Doc. 34) in part. The Court will grant Defendants' Motion as to Plaintiff's claim for monetary damages only, dismissing that claim. The Court will reserve ruling on Plaintiff's remaining claims until the non-jury trial.

         I. BACKGROUND[3]

         The State of New Mexico holds an annual fair the purpose of which is to “advanc[e] the agricultural, horticultural and stock raising, mining, mechanical and industrial pursuits of the state[.]” NMSA 1978, § 16-6-4 (A). The New Mexico State Fair is a separate government instrumentality managed by the State Fair Commission (Commission). See NMSA 1978, §§ 16-6-1, 16-6-16. The State Fair Commission is responsible for adopting and enforcing rules necessary to manage the State Fair. NMSA 1978, § 16-6-4(B). Defendant Larry Kennedy is the Chairman of the New Mexico State Fair Commission. Defendant Dan Mourning is the General Manager of Expo New Mexico, a state agency and annual site of the State Fair. Defendant Raina Bingham is the concessions and commercial exhibits manager for the New Mexico State Fair. Each year the State Fair accepts applications from companies and organizations for concession and exhibit space. All accepted vendors must comply with policies and procedures outlined in an annual publication distributed by the New Mexico State Fair. See NMAC 4.3.10.7 (C), 4.3.10.8 (B). The New Mexico State Fair Vendor Manual, which applies to both vendors and exhibitors, has a provision on prohibited items to include:

The display, sale, or distribution of weapons (firearms, knives, mace, martial art items, chains, etc.), toy weapons, fireworks, drug related merchandise or paraphernalia, pornographic materials, offensive wording or graphics of any type, and counterfeit or “knock-off items” are prohibited unless authorized under the terms of the Space Agreement executed by the fair.

See DMSJ Ex. 4 & PMSJ Ex. 4, 2017 New Mexico State Fair Vendor Manual (emphasis added). The vendor application similarly provides a non-exclusive list of prohibited items to include “firearms, knives, swords, mace, martial art items, fireworks, drug related merchandise or paraphernalia, pornographic materials, offensive wording or graphics, counterfeit or ‘knock-off' items.” PMSJ Ex. 1, 2017 New Mexico State Fair Application; see also DMSJ Ex. 5 to Def. MSJ. (emphasis added).

         New Mexico Top Organics - Ultra Health, Inc. is a New Mexico non-profit corporation licensed by the State of New Mexico Department of Health (NMDOH) to produce, distribute and dispense medical cannabis and cannabis-derived products to patients enrolled in the NMDOH Medical Cannabis Program under the Lynn and Erin Compassionate Use Act, NMSA 1978, § 26-2B-1 to -7.[4] PMSJ UMF ¶¶ 10-13; PMSJ Ex. 5A, DOH Renewal Letter. In August of 2016 Ultra Health submitted an application for exhibit space at the New Mexico State Fair to Defendant Raina Bingham with the Fair's Concessions & Commercial Exhibits Department. PMSJ 30 UMF ¶ 16. The second page of the application listed that Ultra Health intended to bring “printed materials, ” “posters, ” “plants, ” “microscope, ” “post cards, ” “pens, ” “post-it notes, ” and “stress balls.” DMSJ Ex. 7, Ultra Health 2016 NM State Fair Application. A proposed set-up design was submitted in a separate email after the application, indicating that Ultra Health would exhibit a “cannabis clone, ” “microscope, ” “educational materials on the medicinal and economic benefits of cannabis, ” a “rosin press lavender demonstration area, ” and a “secure area where people can view cannabis plants.” PMSJ Ex. 5B, Ultra Health 2016 Booth Schematic. When space became available Ms. Bingham contacted Ultra Health and provided it with a space agreement contract that was signed by Ultra Health Board of Directors Chair Leigh Jenke and Defendant Dan Mourning, New Mexico State Fair General Manager. PMSJ Ex. 5C, Email Correspondence; PMSJ Ex. 5, 2016 NM State Fair Contract. Ms. Bingham states that she received Ultra Health's two-page application and the schematic of the space set-up separately, but that because she received the schematic so close to the opening of the State Fair she overlooked that it included a “cannabis clone” as part of the exhibit set-up.[5] DMSJ Ex. 6, Bingham Affidavit at ¶¶ 10-12.

         On September 8, 2016, the first day of the State Fair, Ultra Health displayed a live cannabis plant in its exhibition space. PMSJ Ex. 5, Jenke Affidavit; DMSJ Ex. 6, Bingham Affidavit at ¶ 14. State Fair officials became aware of the plant and asked Ultra Health to leave, stating that Ultra Health had violated the terms of its contract which prohibited drug related merchandise and paraphernalia. The incident attracted media attention. PMSJ Ex. 5F, KOAT Article; PMSJ UMF ¶ 25; DMSJ UMF ¶ 21.

         On January 23, 2017, Ms. Bingham sent an email to prior vendors providing them with the application to participate in the 2017 New Mexico State Fair. PMSJ UMF ¶ 26; PMSJ Ex. 7, Email Correspondence. Ultra Health received Ms. Bingham's email, and on April 11, 2017, Leigh Jenke submitted Ultra Health's application for exhibit space along with a depiction of the proposed booth design to Ms. Bingham. PMSJ UMF ¶ 27; PMSJ UMF ¶ 22. The set-up design was the same as the design Ultra Health provided the State Fair in 2016 which included a “cannabis clone” and a “secure area where people can view cannabis plants.” PMSJ UMF ¶ 28;[6]PMSJ Ex. 5B, Ultra Health 2016 Booth Schematic; PMSJ Ex. 8, Ultra Health 2017 Booth Schematic. On the second page of the 2017 application under “Item” Ultra Health also listed “cannabis clone, ” “microscope, ” “educational materials, ” and “rosin press lavender demonstration area.” DMSJ Ex. 9, Ultra Health 2017 NM State Fair Application.

         In reviewing Ultra Health's application, Ms. Bingham noted that the first item listed on page two was a cannabis clone. She took the application to discuss it with management, including Defendant Mourning, Expo New Mexico's in-house counsel Joseph Holloway, and Deputy Manager Erin Thompson. PMSJ UMF ¶ 30; DMSJ ¶¶ 25-26. After the meeting, Ms. Bingham contacted Ms. Jenke of Ultra Health and indicated that because Ultra Health listed that it would be bringing a prohibited item - a cannabis clone - Ultra Health would need to submit a new State Fair application with a list of items that did not conflict with the State Fair's prohibited items list. PMSJ UMF ¶ 34; DMSJ UMF ¶ 26; PMSJ Ex. 2, Bingham Depo at 28:6-15, 32:11-22, 33:12-17; DMSJ, Ex. 6 Bingham Affidavit at ¶ 18. On April 27, 2017, Ms. Jenke wrote an email to Ms. Bingham requesting from her “a list of what will not be allowed this year from Ultra Health at the State Fair.” DMSJ Ex. 10, Email Correspondence Between Jenke & Bingham. On May 2, 2017, using language she received from in-house counsel, Ms. Bingham responded as follows:

You may not bring onto the EXPO New Mexico campus any and all cannabis and cannabis derived products including CBD products. You may also not bring any product that would be outside your New Mexico Department of Health approved distribution plan. Moreover, you may not bring any type of drug paraphernalia that could be used to plant, propagate, cultivate, grow, harvest, manufacture, compound, convert, produce, process, prepare, test, analyze, pack, repack, store, contain, conceal, inject, ingest, inhale or otherwise introduce into the human body any type of cannabis or other controlled substance. You are also precluded from displaying any image of the above restricted items in any way to include banners, flyers, clothing or any other medium.

DMSJ Ex. 10, Email Correspondence Btwn Jenke & Bingham; PMSJ Ex. 2, Bingham Depo. at 29:2- 30:3; 34:16-35:9. The sentence referencing drug paraphernalia was taken directly from the state statute defining the term. DMSJ UMF ¶ 29; see also NMSA 1978, § 30-31-25.1. On May 8, 2017, Ms. Jenke, having determined the list of restrictions was too broad to allow Ultra Health to meaningfully inform people about “Ultra Health and the benefits of the alternative form of cannabis medicine, ” wrote to Ms. Bingham stating that Ultra Health had decided not to participate in the 2017 State Fair. PMSJ Ex. 11, May 8, 2017 Email Correspondence; DMSJ Ex. 6, Bingham Affidavit ¶ 21.

         On May 31, 2017, Ultra Health filed its Complaint (Doc. 1) against Defendants Larry Kennedy, Dan Mourning, and Raina Bingham in their official capacities for First and Fourteenth Amendment violations. Ultra Health requested the Court to enter a declaratory judgment stating that the restrictions outlined in Ms. Bingham's May 2, 2017 email are unconstitutional, to enter a declaratory judgment stating that Defendants have violated Plaintiff's First Amendment rights, to enter a permanent injunction barring enforcement of the restrictions outlined in Ms. Bingham's May 2, 2017 email, and to award monetary damages plus attorneys' fees, costs, and expenses. Plaintiff's claim is brought under Sections 1983 and 1988 of the Civil Rights Act for alleged violations of its First Amendment rights under the United States Constitution, and accordingly the Court has jurisdiction under 28 U.S.C. § 1331.

         II. LEGAL STANDARD

         Summary judgment is appropriate “if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law.” Fed.R.Civ.P. 56(a). On cross-motions for summary judgment the Court is entitled “to assume that no evidence needs to be considered other than that filed by the parties, but summary judgment is nevertheless inappropriate if disputes remain as to material facts.” Atlantic Richfield Co. v. Farm Credit Bank of Wichita, 226 F.3d 1138, 1148 (10th Cir. 2000). The Court will analyze each motion individually and on its own merits. See Buell Cabinet Co. v. Sudduth, 608 F.2d 431, 433 (10th Cir. 1979) (explaining that “[c]ross-motions for summary judgment are to be treated separately; the denial of one does not require the grant of another.”).

         III. DISCUSSION

         A. Plaintiff's Section 1983 Claim for ...


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