## Facts

- Colorado legalized recreational marijuana in 2012, creating a largely cash-based cannabis industry due to conflict with federal drug law.
- Fourth Corner Credit Union, a Colorado state-chartered credit union, was formed to provide financial services connected to the cannabis and hemp industry.
- To function as a depository institution and access the national payments system, Fourth Corner sought a Federal Reserve “master account” from the Federal Reserve Bank of Kansas City.
- The Reserve Bank did not grant and ultimately denied the master-account application, preventing Fourth Corner from meaningfully providing electronic payment services.
- Fourth Corner sued for declaratory and injunctive relief compelling issuance of a master account.
- In its amended complaint, Fourth Corner alleged it would serve marijuana-related businesses only “if doing so is legal” and would comply with federal law, guidance, and regulations.

## Issues

1. Whether a federal court may order a Federal Reserve Bank to issue a master account to a state-chartered credit union formed to serve marijuana-related businesses given marijuana’s illegality under the federal Controlled Substances Act.
2. Whether the amended complaint presented a prudentially ripe controversy for adjudication when the plaintiff alleged it would operate only as permitted by federal law and guidance.
3. What the proper disposition was of a district court’s dismissal with prejudice at the pleading stage.

## Decision

- The Tenth Circuit vacated the district court’s dismissal with prejudice and remanded with instructions to dismiss the amended complaint without prejudice.
- The panel issued a per curiam judgment accompanied by separate opinions from each judge, with no single merits rationale commanding a majority.
- The controlling disposition treated the case as prudentially unripe based on the amended complaint’s conditional allegations and uncertainty about how legality and enforcement policy would apply to Fourth Corner’s intended operations.
- The remand-directed dismissal without prejudice left Fourth Corner free to refile if circumstances became sufficiently concrete.

## Legal Principles

- Courts may dismiss a case on prudential ripeness grounds when resolving it would require deciding contingent or speculative questions and the dispute is not fit for judicial resolution.
- At the pleading stage, allegations in the complaint are taken as true for purposes of a motion to dismiss; whether relief is available can depend on what the plaintiff plausibly alleges it will do.
- Equitable relief may be denied where it would require a court to order conduct that violates federal law, but a divided panel did not reach a definitive holding on that merits question in this case.
- A dismissal without prejudice preserves the plaintiff’s ability to bring a later action when facts and legal constraints become sufficiently developed.

## Conclusion

The Tenth Circuit set aside the district court’s with-prejudice dismissal and required dismissal without prejudice, with the controlling rationale declining to decide the merits because the controversy was prudentially unripe in light of the amended complaint’s promise of lawful operations and uncertainty surrounding the applicable federal legal and enforcement framework.


Fourth Corner Credit Union v. Federal Reserve Bank of Kansas City, 861 F.3d 1052 (10th Cir. 2017)