PEOPLE v. REDDEN

es, attributable mainly to DPM's leasing, using, and maintaining at least one of the airplanes.

As previously described, in the notice of deficiency respondent disallowed all the Schedule C deductions for DEL business expenses and DPM pass-through losses on various alternative grounds. In this proceeding, respondent has modified his positions. Respondent now concedes that DEL and DPM paid the disputed expenses. Respondent continues to maintain, however, as he did in the notice of deficiency, that the aviation-related expenses giving rise to the DPM nonrental losses were not ordinary and necessary expenses incurred in a trade or business. He no longer presses this contention, however, with regard to the DPM rental activity or with regard to DEL's activity. Respondent continues to assert that DEL was not engaged in an activity for profit, but he no longer presses this argument with regard to DPM. As in the notice of deficiency, respondent maintains that any allowable losses from either petitioner's DEL activity or his DPM activities are subject to the passive activity loss restrictions of section 469. But respondent now concedes the adjustments of $34,560 and $33,264 for 2003 and 2004, respectively, with respect to the DPM pass-through losses attributable to its rental activities, noting that petitioner correctly reported these pass-through losses as passive for 2003 and 2004.

The notice of deficiency similarly determined that petitioner had correctly reported the 2003 and 2004 DPM rental losses as passive but nevertheless determined an increase in petitioner's tax liabilities resulting from the disallowance of the DPM rental losses for failure to establish that they represented ordinary and necessary business or investment expenses. In conceding this issue, respondent has waived any issue as to whether the DPM rental expenses should be disallowed entirely.

II. Burden of Proof

The taxpayer generally bears the burden of proving the Commissioner's determinations erroneous. Rule 142(a). In particular, the taxpayer bears the burden of substantiating the amount and purpose of each item claimed as a deduction. See Higbee v. Commissioner, 116 T.C. 438, 440 (2001); Hradesky v. Commissioner, 65 T.C. 87, 90 (1975), affd. per curiam 540 F.2d 821 (5th Cir. 1976).

Section 7491(a)(1) provides that if, in any court proceeding, a taxpayer introduces credible evidence with respect to any factual issue relevant to ascertaining the taxpayer's proper tax liability, the Commissioner shall have the burden of proof with respect to that issue. Credible evidence is evidence the Court would find sufficient upon which to base a decision on the issue in the taxpayer's favor, absent any contrary evidence. See Higbee v. Commissioner, supra at 442. Section 7491(a)(1) applies, however, only if the taxpayer complies with all substantiation and recordkeeping requirements under the Code and cooperates with the Commissioner's reasonable requests for witnesses, information, documents, meetings, and interviews. Sec. 7491(a)(2)(A) and (B).

As discussed infra, our decision turns primarily on two issues: (1) Whether DPM's airplane expenses were ordinary and necessary; and (2) whether petitioner's DPM and DEL pass-through losses are subject to the passive activity loss restrictions of section 469. As to the first issue, respondent concedes that petitioner has substantiated the amounts of the disputed expenses but contends, and we agree, that petitioner has failed to substantiate business purposes independent of substantial personal purposes for the flights. Whether petitioner's failure in this regard be viewed as failure to satisfy the substantiation prerequisite of section 7491(a)(2)(A) or as failure to present credible evidence sufficient for the Court to render a decision in his favor, the result is the same — the burden of proof remains with petitioner.

The passive loss issue involves mixed questions of law and fact. With respect to critical factual issues, particularly as to the number of hours petitioner might have engaged in his DPM and DEL activities, petitioner has, again, failed to substantiate these matters or to present credible evidence sufficient for the Court to render a decision in his favor. The burden of proof as to this issue also remains with petitioner.

Respondent bears the burden of production with respect to penalties. See sec. 7491(c). We discuss this matter infra.

III. Deductibility of DPM's Airplane Expenses

A. The Parties' Contentions

Respondent contends that the DPM nonrental losses (i.e., the losses attributable to DPM's activities other than renting its real estate properties) are nondeductible under section 162(a) because they are not attributable to the conduct of any trade or business. Alternatively, respondent contends that the DPM nonrental losses are nondeductible under either section 162(a) or section 212 because they do not represent ordinary and necessary business expenses but rather primarily personal expenses.

Respondent argues alternatively that even if DPM's aircraft-related expenses were ordinary and necessary business expenses, petitioner's deduction of these expenses would be limited by the sec. 469 passive activity loss limitations. We address these arguments in pt. IV, infra.

Characterizing respondent's discussion of the trade or business requirement of section 162(a) as "inapposite" and thereby implicitly conceding that the DPM nonrental activity was not a trade or business, petitioner contends on brief that DPM's deduction of the disputed expenses was based not upon section 162(a) but upon section 212(2). Petitioner contends that DPM's main activity was holding real estate for appreciation. He contends that the disputed expenses represent ordinary and necessary travel expenses that were integral to DPM's managing, conserving, and maintaining properties that it owned during the years at issue and were also necessary for DPM's investigating prospective investment properties. He contends that his need to travel on DPM's behalf by private plane was "obvious" because otherwise it would have been inefficient or infeasible for him to pursue his far-flung real estate investment activities while at the same time conducting his full-time medical practice. Thus, he contends, the disputed expenses are deductible under section 212(2) as DPM's ordinary and necessary expenses.

Petitioner's contentions are inconsistent with the manner in which he treated the disputed expenses on his tax returns for the years at issue. On his returns petitioner treated these items not as miscellaneous itemized deductions under sec. 212 but as reductions in arriving at adjusted gross income, presumably pursuant to sec. 162(a). If we were to agree with petitioner's argument that the disputed expenses are deductible as miscellaneous itemized deductions under sec. 212 (which we do not), collateral computational effects (i.e., subjecting them under sec. 67(a) to the 2-percent floor of adjusted gross income and under sec. 68 to reduction for high-income individuals) would likely reduce the value of these miscellaneous itemized deductions to petitioner. Seeinfra text accompanying note 11. Because we conclude, for reasons discussed infra, that the disputed expenses are not ordinary and necessary, we need not consider these issues further.

B. General Legal Principles

An eligible small business corporation that elects S corporation status is generally exempt from corporate income tax. See sec. 1363(a). Instead, the S corporation's shareholders must report pro rata shares of the S corporation's taxable income, losses, deductions, and credits. Sec. 1366(a)(1)(A); sec. 1.1366-1(a), Income Tax Regs. An S corporation item generally retains its character for the shareholder. Sec. 1366(b). With certain exceptions, an S corporation's taxable income is computed in the same manner as an individual's. Sec. 1363(b).

The shareholder may not take into account S corporation losses and deductions for any taxable year in excess of the shareholder's adjusted basis in the S corporation's stock and debt. Sec. 1366(d)(1). Respondent does not contend that petitioner's basis in DPM was insufficient to support the pass-through losses in question.

Unless expressly provided in the Code, no deduction is allowed for personal expenses. Sec. 262(a). Section 162(a) allows a deduction for "all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business". Section 212(1) and (2) provides that an individual may deduct ordinary and necessary expenses paid or incurred for the production or collection of income or for the management, conservation, or maintenance of property held for the production of income.

Generally, sections 162(a) and 212 provide, with respect to the respective classes of activities to which they pertain, "coextensive" deductions. Trust of Bingham v. Commissioner, 325 U.S. 365, 374 (1945) (discussing statutory predecessors of sections 162(a) and 212(1) and (2)). In some circumstances, however, a section 212 deduction might be less beneficial than a section 162(a) deduction. For instance, as miscellaneous itemized deductions, section 212 deductions, unlike section 162(a) deductions, are deductible only to the extent they exceed 2 percent of the taxpayer's adjusted gross income and for high-income individuals are subject to reduction. Secs. 67(a), 68; see 1 Bittker Lokken, Federal Taxation of Income, Estates and Gifts, par. 20.5.1, at 20-115 through 20-117 (3d ed. 1999) (discussing various other circumstances in which deductibility under section 212 may be less beneficial than under section 162(a)).

For reasons such as these, to effect flowthrough of deductions from an S corporation to a shareholder, itemized deductions under sec. 212, unlike deductions under sec. 162(a), must be separately stated rather than aggregated with the S corporation's other items of income, deductions, losses, and credits. See secs. 1363(b)(2) (disallowing in the computation of an S corporation's taxable income deductions referred to in sec. 703(a)(2), which includes, in subpar. (E) thereof, itemized deductions under sec. 212), 1366(a)(1); sec. 1.1366-1(a)(2)(vi), Income Tax Regs. The character of such separately stated items is determined in the hands of the shareholder as if they were "incurred in the same manner as incurred by the corporation." Sec. 1366(b).

To be deductible under either section 162(a) or 212, expenses must be ordinary and necessary. Under the section 212 regulations, this means that the expenses must be "reasonable in amount and must bear a reasonable and proximate relation to the production or collection of taxable income or to the management, conservation, or maintenance of property held for the production of income." Sec. 1.212-1(d), Income Tax Regs.; see Trust of Bingham v. Commissioner, supra at 373 (articulating a substantially identical standard with respect to the statutory predecessor of section 212). If substantial business and personal motives exist for owning and maintaining property, it is necessary to allocate the expenditures. Internatl. Artists, Ltd. v. Commissioner, 55 T.C. 94, 105 (1970); Richardson v. Commissioner, T.C. Memo. 1996-368.

Pursuant to sec. 274(d)(4), stringent substantiation is required for deductions with respect to "listed property", which includes passenger automobiles and "any other property used as a means of transportation"; e.g., airplanes. Sec. 280F(d)(4)(A)(i) and (ii). These rules require the taxpayer to maintain adequate records or sufficient corroborating evidence to establish each element of an expenditure, including business purpose. See sec. 274(d); sec. 1.274-5T(b)(6), (c)(2)(i), Temporary Income Tax Regs., 50 Fed. Reg. 46016, 46017 (Nov. 6, 1985). If the listed property is used for both personal and business purposes, no deduction is allowed unless the taxpayer establishes the business purpose.Kinney v. Commissioner, T.C. Memo. 2008-287; sec. 1.274-5T(b)(6)(i)(B), Temporary Income Tax Regs., 50 Fed. Reg. 46016 (Nov. 6, 1985). Although these rules would seem germane to the deductibility of DPM's airplane expenses, respondent has not cited or relied upon the sec. 274(d) substantiation rules. Accordingly, we likewise do not rely upon them in our analysis.

C. Analysis

During 2002 and 2003, of the three real properties in which DPM held ownership interests, only one — the Key Largo condominium — was a destination to which petitioner flew himself in one of the airplanes in question. He made these trips, he testified, four to six times a year on DPM's behalf, staying weekends. In 2004 DPM also acquired a resort property in Telluride, Colorado; in 2004 petitioner flew there twice and stayed for periods undisclosed in the record. For the years at issue DPM claimed airplane expenditures ranging from $150,478 to $175,502.

Respondent characterizes these expenses as being "predominately related to petitioner's aircraft". Appearing to agree with this characterization, petitioner states that "the bulk" of these expenses are expenses related to airplane travel. The disputed expenses appear to include some relatively small nonaviation items; e.g., "Auto and truck expense". See app. A. On the basis of petitioner's testimony and in the absence of other evidence, we infer that "Auto and truck expense" includes the expense of DPM's purportedly leasing petitioner's Lexus from him, so that he could drive it, allegedly on DPM's behalf, to the Ormond Beach and Lake Mary, Fla., properties. Petitioner has not advanced independent arguments with respect to such nonaviation items but, like respondent, has contented himself with treating all the disputed expenses as being aviation related.

Clearly, these large airplane expenditures were not wholly attributable to the approximately 20 flights that petitioner made during the years at issue to DPM's Key Largo and Telluride properties. In fact, according to petitioner's flight logs, which are in evidence, during the years at issue petitioner made over 350 flights in the airplanes. He has offered into evidence a redacted version of his flight logs that, according to his testimony, omits "personal trips" and includes only "business trips". These redacted flight logs show about 250 flights that he took in the airplanes. According to petitioner's own reckoning, then, at least 100 of his flights were for personal purposes. Insofar as we can tell from the record, however (and petitioner does not contend otherwise), all the flights, including those that petitioner concedes to have been personal, are included in the aviation expense deductions that DPM claimed for the years at issue. The record does not reflect that petitioner reimbursed DPM for any of these flights.

DPM reported as "Rent expense" $54,400, $27,607, and $32,058, for 2002, 2003, and 2004, respectively. See app. A. Although the record is not explicit on this point, it would appear that these are the amounts that DPM paid DEL as rent for the airplanes. The record does not establish the reasonableness of such rents between these related entities. As discussed infra, it appears that a substantial portion of the rents represents petitioner's personal use of the airplanes.

Another problem brought to light by these flight logs is that petitioner is claiming as part of DPM's airplane expenditures the cost of 22 flights that he made between January 1 and June 16, 2002, in the Mitsubishi, before DEL acquired the Citation in July 2002. DEL and DPM entered into the lease agreement for the Citation on July 3, 2002. Insofar as the record shows, DEL never leased the Mitsubishi to DPM. Petitioner has not explained why any of the Mitsubishi expenses represent expenses of DPM rather than of petitioner.

Furthermore, it appears that petitioner has counted as "business flights" numerous flights, both in the Mitsubishi and in the Citation, that he made to the North Carolina country club in which he owned a vacation home and a building lot. In the flight logs the purpose of these flights is generally described, without elaboration, as "Inspect Property" or as "Training/Inspect Property". Apparently, petitioner characterizes these as business flights partly because of the asset management agreement whereby DPM purportedly agreed to manage these properties on petitioner's behalf. The asset management agreement, however, was executed on January 1, 2003, and so has no bearing on flights petitioner made before then. More fundamentally, we do not perceive any significant purpose, apart from hoped-for tax benefits, in petitioner's purportedly arranging for DPM to manage his properties. Because petitioner was the sole officer, director, and shareholder of DPM, which had no employees, this agreement was tantamount to petitioner's agreeing, for a fee, to "manage" his properties for himself. Nor are we impressed with petitioner's suggestion that he should be allowed to deduct the expenses of flying to his vacation home because he hoped someday to sell it at a profit.

Similarly, we see no DPM-related purpose to a July 30, 2004, flight, included in petitioner's redacted flight logs, in which petitioner flew with his girlfriend and his daughter to make an offer on the Miami Beach condominium that he and his girlfriend would eventually coown in their own names.

In the redacted flight logs the purpose of many of the so-called business trips is listed simply as "Training". For many years before forming DPM and DEL, petitioner had regularly taken training flights to acquire flying licenses and to satisfy insurance standards. We are unconvinced that the "Training" flights were not primarily for personal purposes. See Noyce v. Commissioner, 97 T.C. 670, 693 (1991) (treating training flights as personal).

In some instances, the flight logs manifest personal purposes for the "Training" flights. For instance, a "Training" trip to Miami, Fla., on Aug. 14, 2002, is described in the unredacted version of the flight logs as having the purpose of "pick up daughter". A "Training" trip to Chapel Hill, N.C., on Sept. 27, 2002, is described in the unredacted version of the flight logs as having the purpose of "visit Lisa". Even in instances where a personal purpose is not made manifest, however, we are not convinced that personal motives were absent.

Indeed, we do not believe that even the 20 or so flights that petitioner made to two of the properties that DPM owned were devoid of substantial personal motivations. After all, these were resort properties managed by professional management companies. Although petitioner testified that he performed "global oversight" at these properties, his description of this activity ("looking at the big picture, taking care of maintenance items, et cetera, that type of thing") does not persuade us that any such activity would have much interfered with his personal motives for his frequent weekends at the Key Largo condominium or for his two trips to the Telluride, Colorado, condominium during 2004.

Petitioner suggests that in evaluating whether the disputed expenses were ordinary and necessary, we should take into account not only the airplane trips he made to the two properties that DPM owned but also the more numerous airplane trips he claims to have made to investigate other prospective real estate investments, allegedly on DPM's behalf. He has failed to substantiate, however, that any such investigatory expenses relating to new investment opportunities rather than to the maintenance of existing investments qualify for deduction under section 212. SeeBick v. Commissioner, T.C. Memo. 1978-390 (and cases cited therein).

In Noyce v. Commissioner, supra, this Court held that Intel Corp.'s vice chairman, a licensed pilot, was entitled to deduct unreimbursed expenses of using his private airplane in the course of his employment with Intel. The Court held that these were ordinary and necessary expenses incurred in the taxpayer's trade or business as a corporate official, finding that he had not voluntarily assumed the travel expenses, that his official duties required extensive and frequent travel, that his access to the airplane enabled him to significantly reduce his travel time, that he traveled by aircraft only when there was business advantage in doing so, and that the cost of replicating his travel schedule and time savings via commercial charter carrier would have exceed the costs of operating his airplane. Id. at 685-688; see alsoRichardson v. Commissioner, T.C. Memo. 1996-368 (holding that the taxpayer was entitled to deduct airplane expenses incurred by his S corporation as ordinary and necessary expenses that contributed to the efficiency and productivity of the corporation's trade or business).

Unlike the taxpayers in Noyce and Richardson, petitioner does not contend that the disputed expenses were incurred in the conduct of any trade or business. More fundamentally, unlike the taxpayers in Noyce and Richardson, petitioner has failed to identify business purposes independent of substantial personal purposes for any of the flights in question. Rather, the evidence convinces us that for all the flights in question petitioner had substantial personal motives emanating from his lifelong interest in flying airplanes. From this perspective, this case bears some similarity to Henry v. Commissioner, 36 T.C. 879 (1961). In that case, a lawyer sought to deduct, as ordinary and necessary business expenses, the costs of acquiring and maintaining his yacht. He claimed that he used the yacht to promote his business. In disallowing the expenses the Court noted the taxpayer's strong personal interest in yachting and stated:

Moreover, petitioner has not claimed, and the evidence does not suggest, that he incurred the disputed expenses in the conduct of his trade or business of being an employee of FRI. The evidence does not show that petitioner used the airplane as part of his FRI employment or that any such use would not have represented his voluntary assumption of FRI's expenses, rendering them nondeductible to him. Cf. Noyce v. Commissioner, 97 T.C. 670, 683-685 (1991) (concluding that the taxpayer personally incurred airplane expenses pursuant to Intel's written travel reimbursement policy requiring its officers to incur certain expenses for Intel's benefit without reimbursement).

In Noyce v. Commissioner,supra at 681-682, the taxpayer's personal use of the airplane was 45.6 hours out of a total 147.4 hours, and the taxpayer claimed no deduction for this personal use. The Court inNoyce also disallowed expenses for flight hours attributable to maintenance, training, and delivery on the grounds that these flight hours did not represent business use. Id. at 693. Similarly, in Richardson v. Commissioner, T.C. Memo. 1996-368, the taxpayer's use of the airplane is described as "minor", and the taxpayer paid the actual cost associated with this personal use.

In determining that which is "necessary" to a taxpayer's trade or business, the taxpayer is ordinarily the best judge on the matter, and we would hesitate to substitute our own discretion for his with regard to whether an expenditure is "appropriate and helpful," in those cases in which he has decided to make the expenditure solely to serve the purposes of his business. * * * But where, as in this case, the expenditures may well have been made to further ends which are primarily personal, this ordinary constraint does not prevail; petitioner must show affirmatively that his expenses were "necessary" to the conduct of his professions. * * * We do not think petitioner has shown that the expenses of acquiring and maintaining a yacht were "necessary" to the conduct of his professions. [ Id. at 884.]

Petitioner has failed to show that the disputed expenses were ordinary and necessary expenses of DPM rather than his personal expenses. Accordingly, petitioner is not entitled to deduct the claimed DPM nonrental pass-through losses pursuant to section 212 or otherwise.

On reply brief, petitioner appears to concede that some of the flights for which he claimed deductions were personal and states that "these expenses, at a minimum, would have to be allocated based on the use". He also acknowledges that "if it were true" (and we find that it is true) that DPM deducted the total airplane expenses without allocating any portions to petitioner's personal use, this "oversight or error should be corrected." Petitioner suggests that this "oversight or error" should be corrected "as part of the computations that will be made under Rule 155(b) * * * in accordance with the findings and conclusions of this Court." We disagree. In accordance with our findings and conclusionssupra, no allocation of the disputed expenses is warranted.

IV. Passive Activity Limitations

A. The Parties' Contentions

Respondent contends that during the years at issue DPM's only activity was renting real estate and that DEL's only activity was leasing airplanes. Accordingly, respondent contends that under section 469(c)(2) petitioner's activities with respect to DEL and the DPM rental activity were per se passive activities and his claimed losses therefrom are subject to the section 469(a) passive activity loss restrictions. Respondent further argues that whether or not these rental activities are deemed per se passive, all petitioner's DPM and DEL activities were in fact passive because petitioner failed to materially participate in them.

As previously noted, respondent concedes the adjustments with respect to the 2003 and 2004 DPM rental losses, on the ground that petitioner correctly treated these losses as passive on his 2003 and 2004 returns. See supra note 7.

Petitioner contends that all his activities — including his medical professional activities, his medical research activities, his real estate investment activities, and the ownership and use of airplanes — should be regarded as a "single activity" for purposes of section 469. From this perspective, he suggests, DPM's rental activities were merely "incidental" to its investment activities, and DEL's airplane rental activities should be disregarded altogether, since "no one other than Petitioner ever used the aircraft in connection with any activity." Accordingly, he contends, neither DEL's nor DPM's activities should be treated as per se passive rental activities. He further contends that he meets the material participation test for these various activities, whether viewed separately or as a group, and that accordingly the disputed losses are not subject to the section 469 restrictions.

B. General Legal Principles

Section 469(a)(1) disallows any deduction for a "passive activity loss", defined generally as the amount each year by which the aggregate losses from all passive activities exceed aggregate income from all passive activities. Sec. 469(d)(1). Generally, a passive activity is one involving the conduct of a trade or business in which the taxpayer does not materially participate. Sec. 469(c)(1). Subject to certain exceptions, a "rental activity" is treated as a per se passive activity without regard to whether the taxpayer materially participates. Sec. 469(c)(2), (4). A "rental activity" is one in which payments are principally for the use of tangible property. Sec. 469(j)(8).

By its terms, sec. 469 applies to individuals and various specified entities but not to conduits such as partnerships and S corporations. See sec. 469(a)(2). For purposes of sec. 469, the character of each item of gross income and deduction allocated to a taxpayer from a partnership or S corporation is determined by reference to the taxpayer's participation in the activity. Sec. 1.469-2T(e)(1), Income Tax Regs., 53 Fed. Reg. 5718 (Feb. 25, 1988).

Generally, one or more trade or business activities or rental activities may be treated as a single activity if the activities constitute an appropriate economic unit for the measurement of gain or loss for purposes of section 469. Sec. 1.469-4(c)(1), Income Tax Regs. As an exception to this general rule, however, an activity involving the rental of real property and an activity involving the rental of personal property generally may not be treated as a single activity. Sec. 1.469-4(d)(2), Income Tax Regs.

C. Analysis

1. Petitioner's Grouping Arguments

On their 2003 returns petitioner and DPM elected to group DPM's and DEL's activities for purposes of section 469. Insofar as the record shows, no grouping election was made before 2003. And contrary to petitioner's assertions on brief, no election was ever made, for any year, to group these activities with his medical practice employment or his medical research activities. Indeed, such an election would have been inappropriate for a variety of reasons.

In the first instance, petitioner does not contend and the record does not show that during the years at issue his medical research activities constituted a "trade or business" so as to be eligible for grouping with his other activities under the regulations. See sec. 1.469-4(c)(1), Income Tax Regs. As previously discussed, we have also concluded that petitioner, by insisting that DPM has claimed its nonrental expenses under section 212 and by characterizing as "inapposite" respondent's complaint that DPM did not meet the trade or business requirement of section 162(a), has effectively conceded that DPM's nonrental activities did not constitute a trade or business during the years at issue. Accordingly, petitioner's medical research activities and DPM's nonrental activities are ineligible for grouping with petitioner's other activities.

Although petitioner testified that he reported consultant's fees from his medical research activities as additional income on his tax returns, we find no such additional income reported on his returns for the years at issue. Petitioner's generalized testimony about his medical research activities leaves us in doubt as to the exact periods during which he might have been involved in these activities. But even if we were to assume, for the sake of argument, that he was involved in these activities during the years at issue, the record does not establish that they would have constituted a trade or business.

But even if we were to assume, for the sake of argument, that all the activities which petitioner seeks to group constituted either trades or businesses or rental activities, we would nevertheless conclude that these activities do not constitute an "appropriate economic unit" within the meaning of the regulations. Id. The regulations provide that whether activities constitute an appropriate economic unit for grouping depends upon all the relevant facts and circumstances, with these five factors receiving the greatest weight:

(i) Similarities and differences in types of trades or businesses;

(ii) The extent of common control;

(iii) The extent of common ownership;

(iv) Geographical location; and

(v) Interdependencies between or among the activities (for example, the extent to which the activities purchase or sell goods between or among themselves, involve products or services that are normally provided together, have the same customers, have the same employees, or are accounted for with a single set of books and records). [Sec. 1.469-4(c)(2), Income Tax Regs.]

Petitioner conducted his medical practice as an employee of FRI. Being an employee may be a trade or business. Putoma Corp. v. Commissioner, 66 T.C. 652, 673 (1976), affd. 601 F.2d 734 (5th Cir. 1979). Petitioner has made no showing, however, that his trade or business of being an employee of FRI or any putative trade or business involving his medical research satisfies any of these grouping factors, with the possible exception of the geographical factor. It is not apparent to us that petitioner used the airplanes to any significant degree in his medical practice, based a short distance from his residence, or to what extent he might have used the airplanes in any medical research activities during the years at issue. His central argument, as we understand it, is that using the airplanes was helpful to his medical employment and his medical research because it minimized the time he would lose from these activities while pursuing other activities, such as real estate activities (and, we infer, vacations). But any such connection does not suffice to make his various activities an "appropriate economic unit". We reject petitioner's suggestion that all his activities should be grouped for purposes of section 469.

Consequently, we also reject as without legal or factual basis petitioner's argument that "as a result of the grouping pursuant to the elections, it is appropriate to merge together, and to ignore the separateness of, the aircraft rental income received and the aircraft rental expense paid." Taken to its logical conclusion, petitioner's argument might suggest that the transactions or entities in question should be collapsed or disregarded and viewed, in substance, as signifying nothing more than petitioner's attempt to garner tax deductions by renting his airplanes to himself. But because respondent has not pursued this precise argument, neither do we.

2. DEL's Rental Activity

Apart from his grouping argument, which we have rejected, petitioner has advanced no reason for us to conclude that DEL's activity was not in fact, as petitioner and DPM expressly characterized it in their grouping elections, an "equipment rental activity". Petitioner has not shown that respondent erred in treating DEL's rental activity as per se passive under section 469(c)(2) and (4). Consequently, we hold that the Schedule C losses petitioner claimed with respect to DEL's activities are subject to the passive activity loss limitations.

We note that this holding will result in a smaller increase to petitioner's taxable income with respect to this item than respondent determined in the notice of deficiency, which disallowed petitioner's Schedule C DEL deductions entirely for failure to establish that any amounts had been paid or incurred for ordinary and necessary expenses. In this proceeding, respondent concedes that the DEL expenses were paid or incurred and has not argued that the DEL expenses were not ordinary and necessary. Rather, respondent has sought only to limit the DEL deductions on the grounds that they represent passive activity losses under sec. 469 and, alternatively, that the DEL activity was an "activity not engaged in for profit" within the meaning of sec. 183(c). If respondent's alternative sec. 183 contention were sustained, the result would be to limit petitioner's DEL deductions to DEL's gross income for each year at issue. See sec. 183(a) and (b). As discussed in more detail infra, in petitioner's circumstances this result is functionally equivalent to applying the sec. 469 restrictions to petitioner's DEL losses. Consequently, we need not and do not address respondent's alternative sec. 183 contentions.

3. DPM's Rental Activity

For 2003 and 2004 petitioner reported the DPM rental losses as passive, and respondent has conceded any adjustment with respect to these items for these years. Respondent continues to challenge, however, petitioner's treating the 2002 DPM rental losses as nonpassive. Respondent contends that the 2002 DPM rental activity was per se passive under section 469(c)(2) and (4). Petitioner disagrees, contending that, at least for 2002 (the only year for which petitioner reported the DPM rental activity as nonpassive), DPM's rental activity was incidental to its primary activity of holding investment properties for future appreciation. We need not decide whether DPM's rental activity was "incidental", because even if it were, to avoid the section 469 restrictions petitioner would still need to show that he materially participated in this activity. As discussed below, petitioner has not shown that he materially participated in any of the DPM activities (or for that matter, the DEL activities) for any year, whether they be considered singly or together.

Under temporary regulations, an activity involving the use of tangible property is not treated as a rental activity for a taxable year if rental of the property is treated as incidental to a nonrental activity. Sec. 1.469-1T(e)(3)(ii)(D), Temporary Income Tax Regs., 53 Fed. Reg. 5702 (Feb. 25, 1988). Rental of property is treated as incidental to an activity of holding the property for investment only if the principal purpose of holding the property is to realize gain from the appreciation of the property and the gross rental income from the property is less than 2 percent of the lesser of (i) the unadjusted basis of the property, or (ii) the fair market value of the property. Sec. 1.469-1T(e)(3)(vi)(B)(2), Temporary Income Tax Regs., 53 Fed. Reg. 5703 (Feb. 25, 1988).

4. Lack of Material Participation

Material participation is defined generally as regular, continuous, and substantial involvement in the business operations. Sec. 469(h)(1). The regulations identify these seven situations in which an individual will be treated as materially participating in an activity:

(1) The individual participates in the activity for more than 500 hours during such year;

(2) The individual's participation in the activity for the taxable year constitutes substantially all of the participation in such activity of all individuals (including individuals who are not owners of interests in the activity) for such year;

(3) The individual participates in the activity for more than 100 hours during the taxable year, and such individual's participation in the activity for the taxable year is not less than the participation in the activity of any other individual (including individuals who are not owners of interests in the activity) for such year;

(4) The activity is a significant participation activity (within the meaning of paragraph (c) of this section) for the taxable year, and the individual's aggregate participation in all significant participation activities during such year exceeds 500 hours;

(5) The individual materially participated in the activity (determined without regard to this paragraph (a)(5)) for any five taxable years (whether or not consecutive) during the ten taxable years that immediately precede the taxable year;

(6) The activity is a personal service activity (within the meaning of paragraph (d) of this section), and the individual materially participated in the activity for any three taxable years (whether or not consecutive) preceding the taxable year; or

(7) Based on all of the facts and circumstances (taking into account the rules in paragraph (b) of this section), the individual participates in the activity on a regular, continuous, and substantial basis during such year.

[Sec. 1.469-5T(a), Temporary Income Tax Regs., 53 Fed. Reg. 5725-5726 (Feb. 25, 1988).]

The regulations also provide that the last-described "facts and circumstances" test requires that the individual's participation in the activity exceed 100 hours during the taxable year. Sec. 1.469-5T(b)(2)(iii), Temporary Income Tax Regs., 53 Fed. Reg. 5726 (Feb. 25, 1988).

Although the regulations permit a taxpayer to establish the extent of his participation by "any reasonable means", sec. 1.469-5T(f)(4), Temporary Income Tax Regs., 53 Fed. Reg. 5727 (Feb. 25, 1988), a postevent "ballpark guesstimate" does not suffice, see Lee v. Commissioner, T.C. Memo. 2006-193; Bailey v. Commissioner, T.C. Memo. 2001-296; Carlstedt v. Commissioner, T.C. Memo. 1997-331; Speer v. Commissioner, T.C. Memo. 1996-323; Goshorn v. Commissioner, T.C. Memo. 1993-578.

On brief petitioner claims that he meets the third, fourth, sixth, and seventh of these tests. He has directed us, however, to no evidence or proposed findings to show that he meets the quantitative requirements for the third, fourth, or seventh test, as applied to his activities separately. Petitioner's reliance on all four tests appears to be partly or (in the case of the sixth test) wholly premised on the notion that all his activities should be grouped together so as to constitute, in the aggregate, a personal service activity. For the reasons discussed above, we reject this premise.

D. Summary of Conclusions

We conclude and hold that petitioner's DEL and DPM activities were passive. Consequently, pursuant to section 469(d), for each year at issue he may not deduct losses from these passive activities to the extent that his aggregate losses from all his passive activities exceed his aggregate income from these activities. Application of this rule in calculating petitioner's tax liability requires some consideration of the interplay among petitioner's various activities in the light of our holdings.

For each year at issue, petitioner engaged in three passive activities: (1) The DPM nonrental activity; (2) the DPM rental activity; and (3) the DEL activity. We have disallowed the DPM nonrental losses for failure to show that the disputed expenses were ordinary and necessary. Consequently, petitioner is allowed no loss, passive or otherwise, with respect to the DPM nonrental activity. For 2002 and 2003 petitioner reported no income from the DPM nonrental activity. For 2004, however, petitioner reported $15,000 of income from the DPM nonrental activity; pursuant to our earlier holding, petitioner is allowed no deductions against this income. For 2004, then, the result of our holding DPM's nonrental activity to be passive is partly to "free up" $15,000 of passive income to be added to petitioner's aggregate income from all passive activities and thereby to increase by $15,000 the aggregate losses petitioner is allowed to claim with respect to all his passive activities for 2004.

As previously noted, we have declined to address respondent's alternative argument under sec. 183 that petitioner's DEL activity was not engaged in for profit. Our reason for declining to address this alternative argument was that, even if it were sustained, it would not affect petitioner's tax liabilities in any way different from our holding that the DEL losses were subject to the sec. 469 restrictions. In the light of the discussionsupra, that conclusion requires some further elaboration. If we had held that the DEL losses were subject to the sec. 183 limitation, those losses would have been allowable only to the extent of DEL's gross income for each year and consequently would not have been available to absorb the $15,000 of "freed up" passive income from the DPM nonrental activity in 2004. But because the DPM rental activity generated more than $15,000 of losses in excess of income from that activity, those losses are available to offset the $15,000 of "freed up" passive income from the DPM nonrental activity, independent of any effect that our treatment of the DEL losses, as being limited by either sec. 183 or 469, might have upon the calculation.

V. Accuracy-Related Penalties

Respondent determined that for each year at issue petitioner is liable for an accuracy-related penalty pursuant to section 6662(a) and (b)(2) for substantial understatement of income tax. Respondent bears the burden of production with respect this penalty. Sec. 7491(c). To meet this burden, respondent must produce evidence establishing that it is appropriate to impose this penalty. Once respondent has done so, the burden of proof is upon petitioner. See Higbee v. Commissioner, 116 T.C. at 449.

Section 6662(a) and (b)(2) imposes a 20-percent accuracy-related penalty on any portion of a tax underpayment that is attributable to any substantial understatement of income tax, defined in section 6662(d)(1)(A) as an understatement that exceeds the greater of 10 percent of the tax required to be shown on the return or $5,000. The exact amount of petitioner's understatement will depend upon the Rule 155 computation, taking into account respondent's concessions and in accordance with our findings and conclusions. To the extent that those computations establish, as seems almost certain, that petitioner has a substantial understatement of income tax, respondent has met his burden of production. See Prince v. Commissioner, T.C. Memo. 2003-247.

The accuracy-related penalty does not apply with respect to any portion of the underpayment if it is shown that the taxpayer had reasonable cause and acted in good faith. Sec. 6664(c)(1). Petitioner contends that he had reasonable cause and acted in good faith because in reporting his taxes for the years at issue he relied in good faith on advice from the Meiners firm, which prepared DPM's Forms 1120S and numerous schedules and tables that were incorporated into petitioner's Forms 1040. He also contends that he relied upon Advocate, which advised him in forming DEL and DPM and in preparing necessary documents.

Reliance on a professional tax adviser's advice may demonstrate reasonable cause and good faith if, taking into account all the facts and circumstances, the reliance was reasonable and the taxpayer acted in good faith. Sec. 1.6664-4(b)(1), (c)(1), Income Tax Regs. Reliance on a tax adviser may be reasonable and in good faith if the taxpayer establishes: (1) The adviser was a competent professional with sufficient expertise to justify reliance; (2) the taxpayer provided necessary and accurate information; and (3) the taxpayer actually relied in good faith on the adviser's judgment.Neonatology Associates, P.A. v. Commissioner, 115 T.C. 43, 99 (2000), affd. 299 F.3d 221 (3d Cir. 2002). The advice must not be based on unreasonable factual or legal assumptions and must not unreasonably rely on representations, statements, findings, or agreements of the taxpayer or any other person. Sec. 1.6664-4(c)(1)(ii), Income Tax Regs.

Our determinations regarding petitioner's tax deficiencies turn on two key issues: (1) Whether DPM's nonrental expenses were ordinary and necessary expenses; and (2) whether his DPM and DEL activities were passive activities. Petitioner has not shown that he provided his tax advisers necessary and accurate information as to certain critical matters regarding these issues. Moreover, it appears that his advisers unreasonably relied on certain of his representations.

More particularly, the disputed airplane expenses, reported as ordinary and necessary expenses of DPM, emanate from the flight logs that petitioner maintained. Meiners testified that these flight logs were a "logbook format that we provide to our clients as an example of what they can use to meet the documentation requirements." It appears, however, that the Meiners firm accepted at face value petitioner's characterization of all his flights as business related.

Similarly, the evidence indicates that it was petitioner, not his tax advisers, who decided whether to characterize his activities as passive or nonpassive. Meiners testified: "The client would tell us whether or not it was passive or nonpassive. * * * We would have to ask the client. We would have no way of knowing without. * * * If the client told us it was passive, fine. It was passive. If the client tells us — you know, we don't know unless the client tells us." Judging from this testimony, it appears that on this critical issue the tax advisers relied upon petitioner, rather than the other way around.

As petitioner acknowledges on brief, he is "highly educated and sophisticated and possesses extensive business experience." Accordingly, as petitioner concedes, "the standard of care that must have been exercised by the Petitioner is a high one." We are not convinced that petitioner met that high standard of care. We hold that for each year at issue petitioner is liable for a section 6662(a) penalty insofar as the Rule 155 calculations show a substantial understatement of income tax.

To reflect the foregoing and respondent's concessions,

Decision will be entered under Rule 155.

APPENDIX A DPM Nonrental Loss Deductions

2002 2003 2004 Repairs maintenance — $22,506 $54,591 Rent expense $54,400 27,607 32,058 Taxes licenses 600 25 125 Depreciation — 1,056 1,353 Other deductions: Auto truck expense 2,038 3,075 3,075 Avionics 2,630 — — Fuel 57,567 55,210 53,143 Landing fees permits 3,092 — — Maintenance Aircraft 30,575 — — Real estate fees 160 — — Training 22,850 1,724 1,794 Charts maps — 279 81 Dues subscriptions — 1,045 — Flight planning fees — 162 — Hanger rent — 6,000 — Insurance — 24,310 20,910 Legal professional — 375 1,300 Management fees — 1,800 1,800 Meals entertainment — 526 261 Miscellaneous — 488 430 Oil — 58 — Other rent — 213 — Ramp landing fees — 179 106 Postage — — 339 Supplies — 46 1,307 Telephone — 788 725 Tie down parking — 543 770 Transportation — 200 200 Travel — 2,263 1,134 Total 175,502 150,478 173,912

APPENDIX B DPM Rental Loss Deductions

2002 2003 2004 Advertising $196 — — Auto travel 1,414 $319 — Cleaning maintenance 692 — — Commissions 261 4,858 — Insurance 4,027 1,773 $1,965 Interest 4,578 21,837 66,883 Repairs — 1,118 6,082 Taxes 1,382 14,863 13,529 Utilities 503 1,183 2,087 Depreciation 20,829 33,685 67,228 Other deductions 6,602 14,509 13,367 Total 40,484 94,145 171,141

ed. Id. at 89-91. Based on the foregoing, the court finds no genuine issue of material fact as to Muwwakkil's First Amendment claim and will grant defendants' motion for summary judgment as to this portion of Claim 11.

To prove that an official action which substantially burdens an inmate's religious practice is lawful under RLUIPA, prison officials must demonstrate that the official action furthers "a compelling governmental interest" by "the least restrictive means." § 2000cc-1(a)(1)-(2). On this justification element of a RLUIPA claim, the government bears the burden of proof. Lovelace, 472 F.3d at 186. Prison security needs are well established as compelling interests for purposes of a RLUIPA analysis. See,e.g., Cutter v. Wilkinson, 544 U.S. 709, 723 (2005) ("Lawmakers supporting RLUIPA were mindful of the urgency of discipline, order, safety, and security in penal institutions.") (citation omitted).

Applying these principles here, the court concludes that defendants have established that the security interests furthered by barring Muwwakkil from further attendance of the group prayer services were compelling. Under the guise of religious leadership and despite staff oversight during services, Muwwakkil urged fellow believer inmates to violate prison policies regarding inmate finances and group demonstrations. Furthermore, given the powerful, adverse influences of gangs among the prison population, officials' interest in preventing any gang-type ranking of group members is also a compelling security goal. See Five Percenters, 174 F.3d at 466-70 (regarding dangers of purportedly religious gang influence). Removing only Muwwakkil from the prayer service list limited his ability to exercise his purported religious authority or to structure other inmates' positions among the general population to the same extent in the future, while at the same time allowing him to exercise his personal religious beliefs in his housing unit and his cell. Indeed, Muwwakkil offers no less restrictive means by which prison officials could have accomplished their security goals in this situation. Finding no genuine issue of material fact in dispute, the court will grant defendants' motion for summary judgment as to the RLUIPA portion of Claim 11.

Claim 12: Inadequate Food Portions

In this claim, Muwwakkil alleges that the food portions he received, while on the vegetarian alternative menu in the segregation unit at Wallens Ridge, were smaller than the portions prescribed by the VDOC master menu, which caused him to loose weight. He alleges the following facts in support. On April 27, 2009, when he was transferred into the segregation unit, officers weighed him at 210 pounds. On May 6 and 10, 2009, Muwwakkil wrote complaints to the kitchen staff, stating that the portions he was receiving on the vegetarian/meat alternative diet were inadequate and that he was losing weight. He received no response. On May 16, 2009, as he was exiting the shower, officers weighed him at 186 pounds. Muwwakkil wrote another complaint about the food on May 25, 2009. He received this response from the food service director on May 27, 2009:

All beans are measured with a 12 oz. spoodle [sic]. I frequently monitor the bean portions and have not found any discrepancies. I have checked recipes against pull sheets and the proper amounts of beans are being prepared. I check with the cooks and all beans are being cooked. Unless you['re] eating everything on your tray, you will not receive all the allotted calories.

In response to the defendants' motion for summary judgment, Muwwakkil provides additional facts in support of the claim. On October 20, 2009, Dr. Thompson examined Muwwakkil for a complaint about a fungal infection. The doctor weighed Muwwakkil that day at 183 pounds. He noted that the inmate expressed concerned about weight loss and that he was housed in the segregation unit. When Muwwakkil was released from segregation on December 15, 2009, officers weighed him at 178 pounds.

Muwwakkil also submits declarations, written in his handwriting and signed by 19 other inmates under penalty of perjury, indicating that they believe the food portions served in segregation are nutritionally inadequate and that each of them has suffered "extreme weight loss, fatigue, and hunger headaches." He presents seven declarations, written in his handwriting and signed by other inmates under penalty of perjury, indicating that as former or current kitchen employees, these inmates believe the food portions served are inadequate and have seen food service supervisors "routinely monitor and instruct prison kitchen employees to serve inadequate portions" to save money. Muwwakkil asserts that although the master menu provides for 2800 calories per day per inmate, the portions he received in segregation totaled only 1500 to 1800 calories daily. As a result of the inadequate portions, Muwwakkil claims that he not only lost weight, but also suffered "muscle atrophy, hunger headaches, and sleep deprivation."

Defendants offer the following evidence. A master menu sets out the various meal plans provided to VDOC inmates of different dietary needs and sets out the portion sizes that each inmate is to receive for each meal. A registered dietician ensures that the VDOC's master menu meets the nationally recommended allowances for basic nutrition and reviews the menus semi-annually. All VDOC facilities are to follow the master menu and adhere to the portions as indicated in each individual menu. Food service managers at the prison facilities must conduct meal evaluations at least quarterly to verify that the meals they are serving adhere to the basic daily servings as outlined in the master menu.

The average daily calorie count for three meals from the master menu averages 2700 to 2800 calories. Inmates in the general population may also purchase food items from the commissary, but inmates confined in the segregation unit do not have commissary privileges. Accordingly, while Muwwakkil was in segregation and could not purchase commissary food items, he would have had to eat all the items on his meal trays in order to obtain the full 2700 to 2800 calories per day.

While in segregation, staff members weigh inmates once per month and direct any concerns to the medical department for evaluation. Muwwakkil could also file a sick call request if he had any health concerns while in the segregation unit. During the October 20, 2009 visit with Dr. Thompson, the doctor noted that the inmate was concerned about weight loss, but did not note any complaint the inmate had about his meals or diet. The medical records do not indicate that Muwwakkil made any other complaints to medical staff about his weight loss or related health concerns during his stay in segregation. According to the body mass index charge issued through the National Institute of Health, 182 pounds is a healthy weight for a man of Muwwakkil's height.

Defendants indicate that the most recent weight in Muwwakkil's records at the time they filed their motion for summary judgment was 182 pounds, as recorded on November 4, 2009.

It is well established that

extreme deprivations are required to make out a conditions-of-confinement claim. Because routine discomfort is part of the penalty that criminal offenders pay for their offenses against society, only those deprivations denying the minimal civilized measure of life's necessities are sufficiently grave to form the basis of an Eighth Amendment violation.

Hudson v. McMillian, 503 U.S. 1, 9 (1992) (internal quotations omitted). Thus, "for prison conditions to rise to the level of unconstitutional punishment, there must be [objective] evidence of a serious medical and emotional deterioration attributable to the challenged condition." Strickler, 989 F.2d at 1380. In addition, to satisfy the subjective element of a conditions claim, there must be evidence that prison officials knew a substantial risk of harm existed and failed to respond reasonably to that risk. Farmer, 511 U.S. at 835-37.

The court finds no genuine issue of material fact in dispute as to either aspect of Muwwakkil's claim. Taking the facts in the light most favorable to him, he demonstrates that after his transfer to segregation, he lost 24 pounds in the first three weeks and a total of 32 pounds over seven and a half months. He also presents evidence that, in his opinion as corroborated by the opinion of some other inmates in segregation, food portions served are sometimes smaller than the portion sizes set forth on the master menu. In the face of defendants' evidence, however, Muwwakkil's allegations and documentation are not sufficient to present any genuine issue of material fact in dispute.

First, nothing in the record indicates that the diet served to Muwwakkil in segregation caused him to suffer any "serious medical and emotional deterioration." The discomforts he allegedly suffered while in segregation were not severe enough to motivate him to seek medical treatment, as defendants' evidence indicates that he never filed a sick call request concerning his weight loss or the other symptoms of which he now complains. Defendants' evidence also indicates that even after losing nearly 30 pounds over several months' time in 2009, Muwwakkil maintained a healthy weight for a man of his height.

Second, Muwwakkil's evidence is insufficient to prove by a preponderance of the evidence that his weight loss is attributable to smaller portions on the meal trays in segregation. Other than his own opinion and the purported opinions of his affiants, he fails to explain any method by which he and these other inmates were able to measure the food portions being served or to calculate with any precision the number of calories included in the three daily meals. Moreover, other factors existed that likely contributed to the weight loss Muwwakkil experienced in segregation, such as the lack of access to commissary food items to supplement the menu meals and his admitted disinclination to exercise in the recreation cages supplied for segregation inmates.

Although each of the affiant inmates claims to have experienced "extreme weight loss" while in segregation, none of them provides specific information charting the amount of weight lost or over what period of time.

Third, the record as a whole does not support a claim that the defendants named in Claim 12 have acted with deliberate indifference to inmates' dietary needs. As stated, Muwwakkil does not complain that the VDOC master menu, for which Chief Dietician Linda Shear is responsible, is nutritionally insufficient, nor does he allege that she was personally involved with the meal trays served to him at Wallens Ridge. Accordingly, she is entitled to summary judgment as to Claim 12.

Regional Director Garman, Warden Watson, and Assistant Warden Harvey, although they may have received notice through the grievance procedure of Muwwakkil's complaint about smaller food portions and weight loss, also have no personal involvement in meal service. Through the food service director's response to Muwwakkil's complaint, however, these supervisory officials learned that the food service manager, Defendant Scarberry, was taking reasonable measures to verify that segregation inmates obtained appropriate nutrition, such as inmate kitchen workers using specialized tools, like the spoodle, to measure food portions and Scarberry's own checks on procedures to ensure that the portion sizes being served match the portions dictated by the master menu. Garman, Watson, and Harvey reasonably relied on Scarberry's expertise as a food service manager to resolve the issues raised in Muwwakkil's grievances. See, e.g., Miltier v. Beorn, 896 F.2d 848, 855 (4th Cir. 1990) (finding that prison personnel may rely on the opinion of the medical staff as to the proper course of treatment). Moreover, Muwwakkil offers no evidence whatsoever that Scarberry herself orders kitchen workers to skimp on portions to save money or that she knew of such behavior by other supervisors and allowed it to continue without taking any action to alleviate the problem. For the stated reasons, the court concludes that Muwwakkil's evidence does not establish a § 1983 claim against Garman, Watson, Harvey, and Scarberry, and will grant their motion for summary judgment as to Claim 12.

Muwwakkil asserts that Scarberry's response to his request was "misleading and inaccurate," but offers no evidence that she failed to take the precautions she mentioned in her response.

The mere fact that the defendants did not respond to Muwwakkil's grievance in the manner that he would have preferred does not state any constitutionally significant claim, because inmates have no right to a grievance procedure in the first place. Adams, 40 F.3d at 75.

III. Conclusion

For the stated reasons, the court concludes that Muwwakkil fails to establish any genuine issue of material fact in dispute as to any of his § 1983 claims, and therefore, defendants' motions must be granted. Any state law claims will be dismissed without prejudice, pursuant to § 1367(c). An appropriate order will issue this day.

The plaintiff is advised that he may appeal this decision pursuant to Rules 3 and 4 of the Federal Rules of Appellate Procedure by filing a notice of appeal with this court within 30 days of the date of entry of this memorandum opinion and the accompanying order, or within such extended period as the court may grant pursuant to Rule 4(a)(5).

The Clerk is directed to send copies of this memorandum opinion and accompanying order to plaintiff and counsel of record for the defendants.

ENTER: This 13^th day of September, 2010.

ician has stated that, in the physician's professional opinion, after having completed a full assessment of the patient's medical history and current medical condition made in the course of a bona fide physician-patient relationship, the patient is likely to receive therapeutic or palliative benefit from the medical use of marihuana to treat or alleviate the patient's serious or debilitating medical condition or symptoms of the patient's serious or debilitating medical condition;

(2) The patient and the patient's primary caregiver, if any, were collectively in possession of a quantity of marihuana that was not more than was reasonably necessary to ensure the uninterrupted availability of marihuana for the purpose of treating or alleviating the patient's serious or debilitating medical condition or symptoms of the patient's serious or debilitating medical condition; and

(3) The patient and the patient's primary caregiver, if any, were engaged in the acquisition, possession, cultivation, manufacture, use, delivery, transfer, or transportation of marihuana or paraphernalia relating to the use of marihuana to treat or alleviate the patient's serious or debilitating medical condition or symptoms of the patient's serious or debilitating medical condition.

(b) A person may assert the medical purpose for using marihuana in a motion to dismiss, and the charges shall be dismissed following an evidentiary hearing where the person shows the elements listed in subsection (a).

(c) If a patient or a patient's primary caregiver demonstrates the patient's medical purpose for using marihuana pursuant to this section, the patient and the patient's primary caregiver shall not be subject to the following for the patient's medical use of marihuana:

(1) disciplinary action by a business or occupational or professional licensing board or bureau; or

(2) forfeiture of any interest in or right to property. [MCL 333.26428.]

In this section, the act speaks for the first time in terms of a patient instead of a qualifying patient. The purpose of § 8 is to establish an affirmative defense for those marijuana users and growers who are not registered with the state. Read out of context and with a limitless imagination, one could conclude that qualifying patients, patient caregivers, physicians, or persons in general may not be arrested or prosecuted for any actions involving marijuana, i.e., the act in essence legalizes marijuana in Michigan. But, as I have previously stated, the language of the ballot proposal and a contextual reading of the act belie this premise.

In order for defendants to assert an affirmative defense under § 8(a)(1), they must first establish that Dr. Eric Eisenbud, the physician who signed their medical-marijuana authorizations, treated them in the course of a bona fide physician-patient relationship, and they must further establish under § 7(b)(5) that they have a serious or debilitating condition., Both defendants have failed to establish either prerequisite to asserting a § 8 affirmative defense.

At issue is the phrase, "in the course of a bona fide physician-patient relationship." This phrase has three components: physician-patient relationship, bona fide, and in the course of. When construing a statute, a court should presume that every word has some meaning; a construction rendering some part nugatory or surplusage should be avoided. People v Seiders, 262Mich App 702, 705; 686 NW2d 821 (2004). "Physician-patient relationship" clearly means that a patient must have the traditional doctor-patient relationship. Use of the qualifier "bona fide" indicates that the drafters of this act were concerned about such doctors as the one in Livingston County described in part IV of this opinion who routinely sell written certifications for profit, rather than provide them for any genuine medical reason. Any such doctor is not engaging in the good-faith practice of medicine, and any such certifications must be disallowed under this act. "In the course of" clearly means that the bona fide relationship has been in existence beyond just one occasion. An individual who visits a doctor for the first time for the sole purpose of obtaining certification for the medical use of marijuana, especially after an arrest on drug charges, does not satisfy the requirement that the certification come about in the course of a bona fide physician-patient relationship. Conversely, a primary-care physician who has long been treating a patient suffering from a terminal illness or a serious or debilitating condition is certainly acting in the course of a bona fide physician-patient relationship.

Some seek marijuana for treatment of depression and anxiety disorders. At the very least, the progress of such treatments should be carefully monitored by a doctor. But the MMMA appears to discard the concept of any monitoring within the "bona fide" physician-patient relationship. If monitoring of patients is not taking place, how can the physician-patient relationship be a bona fide one? Should the medical profession step forward on this issue? I note that the medical profession generally opposed the MMMA because, as one official put it, "`it's not in the public health interest to see people smoke.'" Satyanarayana, n 17 supra, quoting Donald Allen, director of the Office of Drug Control and Policy.

Certain protocols must be adhered to, or elements met, before a bona fide physician-patient relationship can be established. Among these are the following: the physician must create and maintain medical records; the physician must have a complete understanding of the patient's medical history; specific medical issues must be identified and plans developed to address each; treatment must be conducted in a professional setting; the physician must, when appropriate, set boundaries for the patient; and the physician must monitor the patient's progress. Important for the treatment of most medical conditions, especially those involving chronic pain, is continuity of treatment. Some chronicpain patients with serious or debilitating conditions need constant monitoring for their own safety. I note that, in the present case, while some of these protocols or elements were present in Dr. Eisenbud's treatment of defendants, others were lacking in both substance and process.

In order to have a bona fide physician-patient relationship, a legal duty must be established between the physician and his or her patient. If no duty arises from the relationship, then no legally recognizable physician-patient relationship exists. Only once a physician-patient relationship is established and a treatment plan is instituted may a physician be held liable for malpractice under Michigan law. However, by insulating a physician from "prosecution, or penalty in any manner," including "civil penalty" in connection with that physician's certification of a patient for the medical use of marijuana, § 4(f) leaves a physician so acting unaccountable in the matter to society and to his or her patient. MCL 333.26424(f). It is problematic to classify as bona fide a physician-patient relationship when the physician has no enforceable duties to the patient. In my opinion, because physicians such as Dr. Eisenbud, in the course of approving written certifications for the medical use of marijuana, do not establish a legally binding physician-patient relationship in the matter, such relationships, in the eyes of the law, are not bona fide.

In this regard, the Catch-22 for patients is found in §§ 4(f) and 8(a). Section 4(f) provides that "a physician shall not be subject to arrest, prosecution, or penalty in any manner, or denied any right or privilege, including but not limited to civil penalty" MCL 333.26424(f). But § 8(a) of the act states that a patient can assert a medical-marijuana defense if in the course of a bona fide physician-patient relationship the physician makes certain statements and authorizes the patient to use marijuana. MCL 333.264248(a). It would be unusual, if not outright peculiar, for the law to recognize a physician-patient relationship if no potential liability attached to the actions of the treating physician. Because one part of the MMMA provides that no civil liability, and thus no potential malpractice liability, attaches to physicians who authorize the medical use of marijuana, while another part of the act states that a physician must have a bona fide physician-patient relationship to assert the affirmative medical-marijuana defense, the act presents a seemingly irreconcilable internal conflict.

Adding to the confusion in this case is that, according to the record, all of Dr. Eisenbud's patients visited him for a single treatment plan and for no other purpose. In each instance then, the patient is not only directing the treatment plan, but setting his or her own boundaries and monitoring his or her own progress. It strains credibility to suggest that a treatment plan has already been established before the doctor has examined the patient. The confusion is resolved by simply cqncluding that a one-stop shopping event to obtain a permission slip to use marijuana under § 8 does not meet the requirement of § 8(a)(1) that the authorization occur in the course of a bona fide physician-patient relationship. Stated another way, a § 8 affirmative defense is not available unless the testifying physician is the patient's treating physician for the underlying serious or debilitating condition. Dr. Eisenbud was not either defendant's treating physician, and therefore the § 8 affirmative defense was not available to them.

In an attempt to explain and help this Court interpret the protections contained in the MMMA, Karen O'Keefe, who was identified in part II of this opinion as director of state policies at the MPP in Washington, D.C., filed an affidavit in this case. In the affidavit, Ms. O'Keefe stated, in paragraph 4, that she was the "principal drafter of Michigan's medical marijuana ballot initiative." In paragraph 7 she stated, "We intended for both Michigan law and MPP's model legislation to include two levels of protection," i.e., defenses, with § 4 providing the greater level of protection and § 8 a lesser level of protection. While that affidavit might assist this Court in separating those two types of protection, it does not address any protections under either § 4 or § 8 concerning the sale of marijuana in Michigan. What it does accomplish is to confirm that the MMMA was intended to provide defenses from arrest and prosecution for the use of small amounts of marijuana for medical purposes. But neither the affidavit nor the act itself asserts that the MMMA provides any protections for the sale of marijuana in Michigan. To have authorized the sale of marijuana in Michigan, the MMMA would have had to specifically make such provision. It did not. I further note that the language of the ballot proposal did not mention that the sale of marijuana was included in the act. It is therefore clear that neither § 4 nor § 8 of the MMMA affords any protections for the sale of marijuana in Michigan.

The MMMA contains a number of Catch-22 situations for the unsuspecting. The act allows someone who is properly registered to possess marijuana, but anyone receiving compensation for the marijuana from someone other than the registrant's primary caregiver may be prosecuted. The act also allows caregivers and patients to grow marijuana, but then provides that this must be done in an enclosed, locked facility. Anyone growing marijuana in his or her backyard can thus be prosecuted under the Public Health Code. Another peculiarity is that patients or their caregivers may grow marijuana, but there is no provision for the legal purchase of marijuana seeds or plants in the first instance. The act also includes no caregiver-reporting requirement, which raises the questions, How much may a caregiver charge his or her qualifying patient and how does a caregiver report the income on tax returns? Another oddity is that the act allows a patient or primary caregiver to possess 2.5 ounces of marijuana and 12 plants. MCL 333.26424(a) and (b). What is the legal consequence if the plants are all harvested at the same time and they happen to produce more than 2.5 ounces?

IV WHAT MUST BE INCLUDED IN THE WRITTEN CERTIFICATION AND HOW DOES ONE OBTAIN A WRITTEN CERTIFICATION FROM A QUALIFIED PHYSICIAN?

Through no fault on the part of legitimate patients and caregivers who are taking pains in good faith to comply with the law and conduct themselves accordingly, the current written certification process reflects badly on them. The process also reflects badly on legitimate physicians who honestly believe that marijuana would assist their patients.

Section 3(1) of the MMMA defines "written certification" as

a document signed by a physician, stating the patient's debilitating medical condition and stating that, in the physician's professional opinion, the patient is likely to receive therapeutic or palliative benefit from the medical use of marihuana to treat or alleviate the patient's debilitating medical condition or symptoms associated with the debilitating medical condition. [MCL 333.26424(1).]

In the present case, defendants' written certification forms fail to set forth their respective debilitating medical conditions and therefore are invalid on their faces. I further regard the process used to obtain the written certification under the current administrative rules as suspect and opine that § 3(1) is clearly the most abused section in the MMMA.

I reiterate that, even with a registry identification card, a qualifying patient can be prosecuted for uses of marijuana exceeding the scope of the statutory defenses. See MCL 333.26424(d)(2).

I do not direct my critical comments toward those qualifying patients who do in fact have a serious debilitating condition and seek some therapeutic or palliative solace in marijuana. This act was intended to help those individuals. My comments are directed at those who are currently abusing the written certification process, i.e., the majority of the persons who are becoming certified at this time. My comments are also directed at those who are charged with the oversight of the administrative process.

At oral argument, it was revealed that a certain Livingston County doctor was selling written certifications for $50. Apparently all one had to do to obtain a written certification to use marijuana was to show up at this doctor's house and slip $50 under the door. This history of the written certification process may in fact jeopardize the entire medical-marijuana process for those who are legitimately entitled to use it. New checks and balances on this process are certainly necessary to resolve this problem.

There currently exist no checks and balances on physicians signing the written certification forms. A simple revision of the form that requires a doctor under penalty of perjury to attest that each patient has a serious or debilitating condition and name that condition might clean up the process. Doctors who are indiscriminately selling written certifications could then be penalized by the courts for issuing false certificates. This would work an important reform, given that § 4(f) appears to immunize even physicians who intentionally sign false certifications. Limiting the number of certifications one doctor may sign might further deter fraudulent certifications.

I will set forth the histories of the MMMA and its written certification process in parts V and VI of this opinion and leave readers to form their own opinions whether the written certification process is serving its legitimate purpose or is being abused. It is within the province of our legislative and executive officials to retain or change that process. But I reiterate that in the present case both defendants' written certifications did not comply with the statute and were therefore invalid ab initio. The balance of this opinion will address issues concerning the written certification process, which the Legislature or the DCH are free to change if persuaded that a problem exists.

In the present case, Dr. Eisenbud testified that he met with each defendant for about a half-hour, spending 5 minutes reviewing the medical records and about 10 minutes on the physical examination, while also interviewing them. On those bases, Dr. Eisenbud then certified that he was treating both defendants "for a terminal illness or a debilitating condition." Such foolishness is so obvious on its face as to deserve no more than a footnote in this opinion to expose it, although I note that even Dr. Eisenbud's certifications appear to be more credible than the Livingston County doctor described in the previous paragraph.

The certification forms at issue here stated:

I, Eric Eisenbud, MD, am a physician, duly licensed in the State of Michigan. I have completed a full assessment of this patient's medical history, and I am treating this patient for a terminal illness or a debilitating condition as defined in Michigan's medical marijuana law. I completed a full assessment of this patient's current medical condition. This assessment was made in the course of a bona fide physician-patient relationship. I have advised the patient about the potential risks and benefits of the medical use of marijuana. I have formed my professional opinion that the potential benefits of the medical use of marijuana would likely outweigh any health risks for the patient. This patient is LIKELY to receive therapeutic or palliative benefit from the medical use of marijuana to treat or alleviate a serious or debilitating medical condition or symptoms of the serious or debilitating medical condition.

I note that Dr. Eisenbud attempted to specify neither what the ailment was, nor whether it constituted a terminal illness or a debilitating condition.

V THE HISTORY OF THE MMMA

The MMMA has a noble purpose, i.e., providing an avenue for improving the health or comfort of those afflicted with a serious or debilitating medical condition. One supposes that most citizens voting for the MMMA envisioned that those individuals suffering from such conditions would visit their regular doctors, obtain prescriptions for marijuana, and then have the prescription filled at a licensed pharmacy. Citizens would rightly expect such a process because the drug-delivery system in Michigan has always dispensed drugs in this manner.

Some assert that marijuana is not a bad thing, especially in light of current research, and that those thinking otherwise are illogical prudes. Then there is the view of the National Institute on Drug Abuse, which maintains that marijuana smoke contains 50 to 70 percent more carcinogenic hydrocarbons than tobacco smoke. NIDA InfoFacts: Marijuana http://www.nida.nih.gov/infofacts/mariiuana. html (accessed September 10, 2010). The Partnership for a Drug Free America similarly reports that "[s]tudies show that someone who smokes five joints per week may be taking in as many cancer-causing chemicals as someone who smokes a full pack of cigarettes every day." Drug Guide http:// www.drugfree.org/portal/drug_guide/marijuana (accessed September 10, 2010). While each of these views is legitimate, for the purposes of this opinion I am not concerned with which view the law should reflect. This Court's job is to interpret statutes as they are written. Public policy is determined by the other branches of government.

A question that arises is, Why is there the need for a specialized medical-marijuana business, instead of dispensing through pharmacies as is the case of other legal prescription drugs, if the marijuana is for medical purposes? The answer, in many cases, is that the medical purpose is mere pretext.

The DCH is the agency charged with regulating this new industry. Under the act, the DCH was required to draft within 120 days administrative rules to implement the act. MCL 333.26425(a). The Governor oversees administrative agencies such as the DCH, and the Legislature also plays a role, maintaining checks and balances to ensure that administrative agencies function properly. Under the normal process, those elected or appointed officials would maintain sufficient control of the process to assure that a schedule 1 drug would not be sold, distributed, or otherwise transferred to the public without a legitimate process in place to regulate the use, sale, and delivery of that drug.

Further, in legitimate medical practice, doctors would observe their ethical duties to sign their names to written certification forms only if their patients were actually suffering from terminal illnesses or serious or debilitating medical conditions, as the act specifies. No ethical doctor would advertise for sale to unqualified patients his or her signature on those forms. Doctors with the personal integrity demanded of that profession would not examine a patient for just several minutes, opine from that short examination that the patient has a terminal illness or a serious or debilitating condition, and then certify that the patient would benefit from the use of a schedule 1 drug. Or would they? Given that these practices have become widespread in Michigan, either I, or the doctors engaging in that practice, should review the question of what integrity and ethics in the medical profession entail.

In proper medical practice, when a doctor prescribes a drug, that doctor carefully monitors the patient to see if the drug is working, if there are side effects, etc. Shouldn't doctors similarly monitor their patients' use of marijuana, including determining and prescribing proper dosages, monitoring side effects, etc.? Does giving the okay for a marijuana card create an ongoing physician-patient relationship and obligate the physician to keep abreast of the situation? Under the MMMA and the current rules, however, doctors are not required to set boundaries for their patients or to inquire into the effectiveness or adverse side effects of the marijuana use. In reality, what have resulted are faux physician-patient relationships.

The ballot proposal was not intended to legalize marijuana in the state of Michigan. It was intended to protect "from arrest the vast majority of seriously ill people who have a medical need to use marihuana." MCL 333.26422(b). It was not intended to protect those individuals who are fraudulently obtaining written certifications.

VI. THE HISTORY OF THE WRITTEN CERTIFICATION PROCESS

Shortly after the MMMA was passed, advertisements began appearing in the print media. These notices advertised that, for a price, one could visit the marijuana doctor and get certified for the use of marijuana. One such ad in the Petoskey News Review, June 22, 2010, p A2, reads as follows:

Exhibit

Soon thereafter, a billboard appeared on 1-75 advertising that, with a phone call, one could be certified for the medical use of marijuana in Michigan. Radio spots then began to advertise that the marijuana doctor would be in Saginaw on Monday, in Bay City on Tuesday, and Midland on Wednesday. With a quick visit to the doctor one could become certified to use, grow, and possibly sell marijuana.

In California, where a similar law has been on the books for a few years, these doctors have taken the process one step further. They have actually set up tents on the beaches and posted signs in front of them advertising easy access to medical-marijuana certification:

Exhibit College students typically patrol in front of the tents and on the beach, encouraging all passersby to enter the tent and get certified for using marijuana. Doctors in California are now advertising that they will refund the certification fee to anyone for whom they cannot find a marijuana-worthy medical ailment.

The sale of written certifications has become a very profitable industry in California, as I fear it will soon become here in Michigan. See Mortensen, California and Uncle Sam's tug-of-war over Mary Jane is really harshing the mellow, 30 J Nat'l Ass'n Admin L Judiciary 126, 151 (2010) (identifying an "enormous administrative and regulatory void" in connection with medical use of marijuana in California, reporting that it is being filled primarily by "free market principles and by the discretion of marijuana-friendly California doctors who have made a healthy profit off of medical `recommendations,'" and opining that such "void-fillers do not have the health, safety, and welfare of Californians in mind").

The Hemp and Cannabis Foundation advertises on its website that the organization has offices in Detroit/Southfield, Grand Rapids, Kalamazoo, Flint, Saginaw, Marquette, Traverse City, and Lansing and lists six doctors, none of whom resides in Michigan and only one of whom, the aforementioned Dr. Eisenbud, is licensed to practice in this state. http://www.the-foundation.org/(accessed September 10, 2010).

The Michigan Medical Marijuana Certification Center advertises electronic filing on its website, providing a form that can be filled out online to start the certification process,http://www.mmmcc.net/locations/ (accessed September 10, 2010). One can even electronically file one's signature on the form.

According to the DCH, it had issued 27, 755 patient registrations as of September 3, 2010, and has been struggling to manage the rate of applications coming in. Michigan Medical Marihuana Program http://www.michigan.gov/mdeh/ 0T1607r7-132-27417_51869-202669-00.html (accessed September 10, 2010).

Because of the backlog of applications, House Bill 5902, introduced by Representative George Cushingberry and reported out of the House Committee on Appropriations, proposes to privatize the issuance of registry identification cards to the public. That legislation would require the DCH to contract with a third party to take over the issuance of medical-marijuana registry cards. In essence, this bill proposes to turn over regulation to the persons regulated — an arrangement that, under normal circumstances, would be deemed highly suspect.

Even advertisements for new careers are beginning to appear in the newspapers. One such advertisement appeared in the July 19, 2010, Northern Express Weekly:

Exhibit That someone is spending money to run such an ad well proves that confusion runs rampant concerning what is, and is not, subject to prosecution under the MMMA.

Unfortunately, the administrative rules associated with the MMMA do not provide for any checks and balances on the accuracy of the medical certifications signed by these doctors. At 1,000 new registry applicants a week, Michigan will soon have more registered marijuana, users than unemployed individuals — an incredible legacy for the Great Lakes State. And soon we will even have graduates from the Medical Marijuana Academy.

See Yung, Even in a poor economy, the pot industry grows, Detroit Free Press, June 21, 2010, p 4A.

What has been lost in the rush to implement the MMMA is a comprehensive set of administrative rules. Under MCL 333.26425(a), the DCH only had 120 days to draft the administrative rules that are currently in effect. As demonstrated by the rules that did come into being, this was a totally unreasonable time limit for such a task.

Mich Admin Code, R 333.101 et seq.

The current administrative rules include no reporting requirements, no log-keeping requirements, and no directions for school officials or law enforcement officers on how to regulate the new medical-marijuana industry. The DCH should continue the rule-making process, taking pains to hear from all interested parties. At oral argument, the attorneys for both sides expressed their approval of a negotiated rule-making process. The goal would be to set boundarie's for all activities and persons associated with the MMMA.

No system of regulation can succeed without a clear set of rules. Those wishing to use marijuana need to know when, how, and under what conditions they can legally do so. Providers need to know under what conditions they can legally grow, harvest, and distribute their product, and the operators of the new medical-marijuana clinics that appear to be springing up on every corner need to know if they are in fact set up to dispense marijuana to the public legally. Until today, the DCH, the Legislature, and the appellate courts have answered very few of these questions. Pressure and confusion results from trying to operate under a system in which no one has stepped forward and stated specifically what actions are legal and what actions are not. It appears that most elected officials, including my colleagues, understand the political nature of this controversy and simply choose to address the MMMA only to the extent that a particular occasion requires. I, on the other hand, right or wrong, prefer giving some notice to those concerned before they are deprived of their liberty and property.

I am reminded of Shakespeare's sentiments, "Yet the first bringer of unwelcome news/Hath but a losing office," ( The Second Part of King Henry the Fourth, act 1, sc 1), and "Come hither, sir./Though it be honest, it is never good / To bring bad news," ( Antony and Cleopatra, act 2, sc 5), and a more modern equivalent: Please don't shoot the messenger.

What is clear from reading the lower court record in this case is that no one has set out a comprehensive plan to implement the new MMMA. The job of setting public policy should not be handed to the courts as a consequence of the inaction of legislative or administrative officials. Those elected and appointed officials can choose to remain silent and allow the courts to interpret this act piecemeal or on a case-by-case basis. Or the statute can be revised, or the pertinent administrative rules revised, to provide a clear direction to all citizens, including the judges of the courts, who are affected by this act.

VII. CONCLUSION

To quote from Sir Walter Scott's 1808 poem, Marmion, canto 6, st. 17, "O, what a tangled web we weave,/When first we practise to deceive!" Of central importance to this appeal is the question, Is the MMMA a subterfuge for legalizing marijuana in this state, or is it a legitimate medical reform intended to help only those individuals who have a terminal illness or a serious or debilitating medical condition?

The answer is simple. For those who instituted the process of placing the proposal on the ballot, the MMMA was both an avenue for allowing society to explore the medical uses of marijuana and a first step in legalizing marijuana in Michigan. For some citizens who voted for the initiative petition out of empathy for the terminally ill or those suffering from debilitating conditions, it was a vote for a medical process that would help those in need. Unfortunately for all concerned with the implementation of the medical mission, including compassionate-care groups, marijuana growers, marijuana users, marijuana dispensers, the police, prosecutors, municipalities, townships, etc., the act has resulted in much confusion. And it has suggested itself to many purely recreational marijuana consumers as a vehicle to aid in their continuing illicit indulgence in that vice.

In any event, the MMMA is currently the law in Michigan. To the extent possible, it must be administered in a manner that protects the rights of all our citizens. When prosecutors and defense attorneys agree that the law is hazy and unclear and poses hazards to all concerned because it does not with sufficient clarity identify what conduct is subject to prosecution, it is time for action from our legislative and executive officials. While the MMMA may be controversial and polarizing, politics should be set aside in the interest of the rule of law in our state.

I note that Senators Roger Kahn, Wayne Kuipers, and Gerald Van Woerkom have introduced bills that might resolve some of the issues raised in this opinion. See SB 616, SB 617, and SB 618.

With the MMMA, two roads have diverged in the forest: one leads to refining and distilling the administrative rules and other law associated with the act, and the other leads to the regulators and regulated alike being totally confused concerning how to give effect to the act. The former leads to the orderly implementation of the MMMA, while the latter leads to disrespect for the law and possibly contempt for the rule of the law itself. Our legislative and administrative officials must make a choice: they can either clarify the law with legislative refinements and a comprehensive set of administrative rules, or they can do nothing. In this situation, not deciding is, in fact, a decision to do nothing.

This line is adapted from the beginning of Robert Frost's poem, The Road Not Taken ("Two roads diverged in a yellow wood. . . .").

An example of confusion at best, or disrespect for the law at worst, is that there is a marijuana shop in Lansing that is less than 100 feet from a school. Clearly, this shop is in violation of the federal Safe and Drug-Free Schools and Communities Act, 20 USC 7101 et seq.

I recall an old cartoon that depicted a king in his palace, with his subjects outside rioting, pillaging, and otherwise destroying the kingdom. The king asks, "Why are they rioting, I didn't do anything?" His wisest advisor responds, "Maybe that is the problem."