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Montana Punished Marijuana Dealers Unconstitutionally With Drug Tax, Court Says


April 1993

Richard Kurth and members of his family were unconstitutionally subjected to a Montana drug tax (In re Kurth Ranch; Kurth, Halley Cattle Company; Richard M. and Judith Kurth; and Robert G. Drummond v. Department of Revenue, State of Montana, 986 F 2nd 1308), the Ninth Circuit Court of Appeals ruled recently (Scott Schmedel, "Montana Punished Convicted Dealers Unconstitutionally With Its Drug Tax," Wall Street Journal, 3/10/93, no page).

Montana billed Kurth and family members $865,000 based on the state's $100 per ounce illegal drug tax after the Kurths pled guilty to marijuana distribution charges. The Kurths filed bankruptcy, and a bankruptcy judged reduced the amount to $208,000 but held that even the reduced sum violated the Kurths' right to protection from double jeopardy. A federal district judge agreed, and the state appealed to the Ninth Circuit Court of Appeals.

That court ruled that the tax was applied unconstitutionally to the Kurths, without holding the tax itself unconstitutional. The issue, according to the court, was whether the state taxed the Kurths as a second criminal punishment for an offense for which they already had been punished in the criminal case. A heavy civil penalty in addition to a criminal penalty may be construed as double jeopardy. The state failed to offer evidence tying the tax to costs and damages caused by the Kurths' activity, and without such justification, the court said, the tax became double jeopardy.