plugubius

plugubius t1_irk7emx wrote

The applicability of state law is straight-forward Erie. The federal court must ask whether the Illinois Supreme Court would hold the lease is invalid. In answering that question, the federal court is allowed to ask whether federal law preempts any state court or legislative pronouncements, but preemption is narrow.

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plugubius t1_irjrzhz wrote

That law does not expressly preempt state contract law, and it would be very hard to argue that conflict preemption applies. It allows the Attorney General to seek a variety of criminal, civil, and administrative penalties. That power does not clearly conflict with a state's ability to decide contractual rights in the absence of the Attorney General's action, and it does not provide for any private enforcement. The scope of federal preemption in the drug context is very narrow.

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plugubius t1_irjm9et wrote

>A commercial lease for the purpose of running a cannabis business is illegal under federal law.

I have asked repeatedly for someone to identify this law. I know of none. A prohibition on cannabis sales alone won't alter state contract law (which is what the federal court must apply here).

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plugubius t1_irjkcx3 wrote

I think you're wrong about the effect of federal drug prohibitions on the validity of leases, but the difference I was referring to is between jurisdiction and a judgment. Jurisdiction allows a court to enter judgment, but it doesn't sat what that judgment should be. If the contract is unenforceable, the court enters judgment for the defendant.

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plugubius t1_irjj453 wrote

He doesn't need to argue he didn't know. This is a suit for rent, not a defense against a criminal charge of aiding and abetting. This is a question of state contract law, and Illinois is clear that the lease is enforceable. Federal law is vlear that state law applies in this situation.

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plugubius t1_irjg0sd wrote

As you note, the issue here isn't whether the tenant's business is lawful. It is whether the agreement to pay rent for the property is lawful. The unlawfulness of a business does not render every contract that business signs unenforceable against the business. Under federal law, state law provides the rules of decision in this case. Unless there is a federal law specific to cannabis that expressly invalidates the lease, federal law says nothing at all the validity of the lease here.

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plugubius t1_irjeguu wrote

Whether a contract is valid is a matter of state law. Here, the relevant state law says the contract is valid.

Federal law can preempt state law, but a thing's being illegal under federal law does not by itself preempt state law on contract validity. We would need to examine the federal law being referred to in order to see if it had any effect on state law about leases. I can tell you that prohibiting the sale of cannabis is not enough to touch state law on leases, which is why I asked what federal law the poster was referring to.

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plugubius t1_irj362m wrote

>If the contract is for something illegal, the feds are not going to enforce it.

What is the unlawful part of the contract? This is not is contract for the sale of cannabis. This is a lease. It is unlawful to engage in insider trading, but that does not make a lease to someone who violates that law unenforceable, even if the lessor knows about the insider trading.

A federal court sitting in diversity applies state law. Here, state law says the contract is enforceable. Federal law can preempt state law, but the bare illegality of cannabis sales is not going to preempt state contract law concerning leases. That is why I asked what federal law the poster was talking about that would make it illegal to enforce this lease.

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plugubius t1_irivlny wrote

>Because this is in federal court, there are federal laws making it illegal to rent to cannabis businesses. So, this is a valid defense.

What federal law are you talking about? State law governs the contract, so the federal law would need to do more than just prohibit an act.

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