USA v. Yuan et al

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IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF OKLAHOMA
UNITED STATES OF AMERICA, 	)
)
Plaintiff, 	)
)
v. 	) 	Case No. CR-25-402-D-1
)
KE YUAN, a/k/a Jessica, 	)
)
Defendant. 	)
ORDER
Before the Court is Defendant Ke Yuan’s Motion to Dismiss the Superseding
Indictment Pursuant to the Dormant Commerce Clause [Doc. No. 76]. The government has
filed a response [Doc. No. 80]. The matter is fully briefed and at issue, and neither party
requested a hearing.
Defendant was charged in a five-count Superseding Indictment [Doc. No. 52], along
with five co-defendants. Defendant was charged with drug conspiracy, two counts of
maintaining a drug-involved premises, and money laundering conspiracy. Id. According to
Defendant, the government’s allegations include the claim that Defendant operated
marijuana grows in violation of Oklahoma law due to her not having the appropriate
licensure, for which “she was unable to even apply due to her not meeting Oklahoma’s two
(2) year residency requirement.” [Doc. No. 76, at 1].
In 	Defendant’s 	motion 	to 	dismiss, 	she 	argues 	that 	Oklahoma’s 	residency
requirement is unconstitutional under the Commerce Clause, U.S. Const., art. I, § 8. The
Commerce Clause grants Congress the power to regulate commerce among the states, and
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the Supreme Court has “long held that this Clause also prohibits state laws that unduly
restrict interstate commerce.” Tennessee Wine & Spirits Retailers Ass’n v. Thomas, 588
U.S. 504, 514 (2019). Under this “dormant Commerce Clause,” “state statutes that clearly
discriminate 	against 	interstate 	commerce 	are 	routinely 	struck 	down, 	unless 	the
discrimination 	is 	demonstrably 	justified 	by 	a 	valid 	factor 	unrelated 	to 	economic
protectionism.” New Energy Co. of Ind. v. Limbach, 486 U.S. 269, 274 (1988) (internal
citations omitted).
In Oklahoma, “[i]n order to be considered a resident of this state for purposes of a
medical marijuana business application, all applicants shall provide proof of state residency
for at least two (2) years immediately preceding the date of application[.]” OKLA. S TAT .
tit. 63, § 427.14(E)(12). In the present motion, Defendant contends that “Oklahoma’s
residency requirement for medical marijuana licenses clearly discriminates against non-
residents by delaying their ability to even apply for the proper licensing, much less actually
participate in the marijuana market, for a significant period of time.” Id. at 4. Accordingly,
Defendant seeks dismissal of the Superseding Indictment “due to the underlying allegations
being based on an unconstitutional law that violates the dormant Commerce Clause.” Id.
at 5.
In response, the government contends that Defendant does not have standing to
challenge Oklahoma’s residency requirements in the context of this criminal proceeding
based on violations of federal law, citing Dennis v. United States, 384 U.S. 855 (1966). In
Dennis, several defendants were indicted for a conspiracy to obtain the services of the
National Labor Relations Board on behalf of a union “by filing false affidavits in purported
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satisfaction of the requirements of [§] 9(h) of the National Labor Relations Act.” Dennis,
384 U.S. at 857. The defendants argued on appeal that Section 9(h) was unconstitutional.
Id. However, the Supreme Court rejected the defendants’ attempt to overturn their
convictions on such a basis. Id. at 866. In doing so, the Supreme Court provided that “[i]t
is no defense to a charge based upon this sort of enterprise that the statutory scheme sought
to be evaded is somehow defective.” Id. Concluding that “[a]mple opportunities exist in
this country to seek and obtain judicial protection,” the Dennis Court found “no reason for
this Court to consider the constitutionality of a statute at the behest of petitioners who have
been indicted for conspiracy by means of falsehood and deceit to circumvent the law which
they now seek to challenge.” Id.; see also United States v. Stewart, 590 F.3d 93, 111 (2d
Cir. 2009) (“[the defendant’s] strategy of collaterally attacking the validity of the
[restrictions] [was] futile” because the prosecution was directed at the defendant’s fraud
and was “not an action to enforce the [law] claimed to be unconstitutional.”).
Here, as noted by the government, Defendant is not being prosecuted “for violating
any Oklahoma residency restriction,” nor is the present action one to enforce Oklahoma’s
state medical marijuana laws. Rather, the government is prosecuting Defendant “for her
participation in a large-scale marijuana trafficking conspiracy, maintaining multiple drug-
involved premises (marijuana farms), and engaging in a money laundering conspiracy with
the proceeds from her illegal drug operation[,] all in violation of federal law.” [Doc. No.
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80, at 4]. For this reason, the present criminal proceeding is not a proper forum for
Defendant’s collateral challenge to Oklahoma’s residency requirement.1
For the reasons stated herein, Defendant Ke Yuan’s Motion to Dismiss the
Superseding Indictment Pursuant to the Dormant Commerce Clause [Doc. No. 76] is
DENIED.
IT IS SO ORDERED this 22 nd day of April, 2026.
1 The government further notes that—even if Oklahoma’s residency requirement is deemed
unconstitutional—Defendant “was still violating Oklahoma law by falsely conspiring to list
individuals on licenses who were not the actual owners of the grows to conceal her own and other
people’s involvement in them.” [Doc. No. 80, at 5]. Additionally, the Court agrees with the
government that Defendant does not explain in her motion to dismiss how Oklahoma’s residency
requirement is connected to the remaining allegations of Defendant maintaining a drug-involved
premises and engaging in money laundering.
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