Top Mass. cannabis regulator sues to lift suspension; treasurer says ‘several serious allegations’ prompted discipline

Shannon O’Brien, a one-time Democratic nominee for governor who returned to government last year to lead the state’s cannabis regulatory commission, sued Treasurer Deborah B. Goldberg on Thursday, arguing that Goldberg “willfully side-stepped” the law when she suspended her as the commission’s chair earlier this month.

The complaint, filed in Suffolk Superior Court, marked a major escalation in the dispute between O’Brien, a former state treasurer herself, and Goldberg, who appointed O’Brien last summer as chair of the Cannabis Control Commission. O’Brien is asking a judge to reinstate her, arguing that the suspension “is in fact and as a matter of law a removal” that came with no due process.

Goldberg earlier Thursday disclosed that she disciplined O’Brien because, she said, commission staff and one of O’Brien’s fellow commissioners made “several serious allegations” about her behavior, prompting officials to hire outside investigators to probe the complaints.

The firm, Goldberg said, “returned with a report” about its findings. “According to the CCC’s employee handbook, suspension with pay is the only allowable remedy at this point, as the findings are being reviewed and action is considered,” Goldberg said in a statement.

What the allegations entailed, or what investigators determined, was not clear. Goldberg’s statement — her first public comments since she disciplined O’Brien — capped nearly two weeks of mounting pressure to explain why she suspended O’Brien, who is serving a five-year term as chair.

Goldberg’s aides had previously refused to provide any public detail, calling the situation a “personnel matter.” While the commission does not fall under Goldberg’s office, the treasurer is responsible for appointing its chair.

Several key questions remain unanswered, however. It was not clear what investigators concluded, and both Goldberg’s office and the commission declined to release the report or details about the allegations made against O’Brien, saying they remain a personnel matter. A spokesperson for Goldberg also declined to name the other commissioner who had made accusations against O’Brien.

In her 17-page complaint, O’Brien charged that the commission is consumed by “entrenched bureaucracy and infighting,” and said that she — like her immediate predecessor, Steven Hoffman — is being targeted with false allegations.

O’Brien said in the suit that one employee told her “she would be ‘Hoffman 2.0,’ ” and that a “playbook” exists at the agency to use “baseless allegations in order to cause lengthy internal investigations that were designed to force resignations.”

Hoffman unexpectedly resigned as the commission’s chair in the spring of 2022, saying then that “the time is right for a transition in leadership.” Hoffman declined to comment Thursday.

“Chair O’Brien, like her predecessor, has been subjected to the making of false and defamatory allegations against her, all made in an effort to force her removal,” O’Brien said in her complaint. She did not detail the allegations.

Asked about the lawsuit, Andrew Napolitano, a Goldberg spokesperson said Thursday that she “is confident that she has taken the appropriate actions to address the matter.”

In a statement, the commission spokesperson said the agency’s outside counsel, Morgan, Brown & Joy, hired an independent investigative firm to conduct the probe into the allegations against O’Brien. But the agency referred any questions about O’Brien’s status to Goldberg, saying that if her office looked to the commission’s own handbook in interpreting her authority to suspend O’Brien, “it is their prerogative.”

“The Commission is committed to maintaining its status as a positive place to work and has policies in place to ensure a workplace free from abusive or harassing behavior,” Tim Caputo, the commission’s spokesperson, said in the statement.

Until Thursday, Goldberg had refused to comment on the situation.

In her statement, she said the situation is challenging, given the six-year-old commission is an independent entity. Goldberg noted that her authority is limited to appointing the commission’s chair and having a hand in appointing two other commissioners. “But beyond that the office of the Treasurer has no other authority, oversight, management, or influence over the Commission,” she said.

Legal questions have also surrounded the situation. While the 2017 law creating the Cannabis Control Commission allows for a commissioner to be removed, it does not explicitly say the treasurer can suspend or put a commissioner on leave without reason.

Attorneys and legal observers said Goldberg’s actions may have tread onto questionable territory and could invite a lawsuit, the Globe has reported. Some also fear it could set a dangerous precedent that individuals named to a state commission or board could be sidelined without knowing why. O’Brien has said Goldberg did not formally tell her why she was suspended.

The handbook Goldberg cited in suspending O’Brien with pay says a commission employee could face discipline, up to “discharge,” if their behavior “interferes with the orderly and efficient operation of a department or the Commission as a whole,” according to a copy of the language provided by the commission.

In her lawsuit, O’Brien contends her suspension is illegal, noting that it is indefinite, bars her from physically entering the commission’s offices, and prohibits her from doing any work on the commission’s behalf.

“Treasurer Goldberg has willfully side-stepped both Massachusetts law and any process at all, let alone due process, by removing Chair O’Brien while deceptively attempting to label her action as merely a ‘suspension,’ ” the complaint reads. “The statute enabling the CCC provides Treasurer Goldberg with no authority to ‘suspend’ a commissioner, much less to do so without any process whatsoever.”

The commission is a five-member panel, to which the treasurer, governor, and attorney general each have their own appointees and then jointly name the other two. The commission voted this month to name Ava Callender Concepcion — an appointee of now-Governor Maura Healey when she served as attorney general — as its acting chair through early November.

Healey said last week that she has “respect [for] the decisions that the treasurer has made,” and that her office would “whatever we can to support the CCC.”

O’Brien’s short tenure has been marred by controversy. Weeks after her appointment, the commission took the unusual step of putting on hold an application from a proposed outdoor marijuana-growing operation that, months earlier, had counted O’Brien as its chief executive and 50 percent co-owner.

The commission eventually approved its license after the agency’s enforcement team filed a report that essentially cleared O’Brien — who has said she dropped out of the project entirely and assigned all her shares back to the company — of violating disclosure regulations in the episode.

Then, months later, O’Brien surprised even her fellow commissioners when she announced that the commission’s executive director, Shawn Collins, was planning to leave the agency by year’s end. O’Brien later apologized for “any confusion I created,” and Collins, a former employee under Goldberg at the state treasury, has said that he remains in his position.

The situation has shaken the agency, with one commissioner saying during a public meeting last week that it put the remaining commission members in a “pickle” as they began finalizing a raft of new regulations governing the state’s $5 billion industry.

A group of lawmakers is pressing for more oversight of an agency that’s been a magnet for drama, with one legislator saying it’s felt “like an endless stream of scandals.”

Lawmakers have criticized its approach to investigations as “overly aggressive.” In its letter, the legislators likewise raised concerns over the agency’s unusual and prolonged use of closed-door mediation among commissioners and staff leaders to establish what the commission has called a “durable and effective governance structure.”

The commission responded with a lengthy letter of its own, saying officials there “reject that notion” that it’s been scarred by scandal, calling the regulatory agency a “model for other states in developing their regulated marijuana markets.”

Samantha J. Gross of the Globe staff contributed to this report.