Lawyers, medical cannabis advocates, patients, city officials and reporters packed into a San Francisco courtroom Thursday for the first hearing in the federal government’s effort to shutter the state’s largest marijuana dispensary.
Landlords for Harborside Health Center in Oakland and San Jose, who face forfeiture of their properties, asked U.S. Magistrate Judge Maria-Elena James to stop the sale of marijuana at their properties, while Oakland’s attorneys implored James to first hear the city’s suit challenging the legality of the federal forfeiture actions.
The hearing played out in the wake of recent measures decriminalizing marijuana in two states and last week’s remark from President Obama that his administration would have “bigger fish to fry” than chasing pot smokers in states with legalized use.
That political momentum was the subject of spectator chatter in the courtroom, where Harborside executive director Steve DeAngelo took a front row seat beside his publicist.
U.S. Attorney Melinda Haag, whose office was part of a statewide crackdown on pot dispensaries, was not to be seen, while Oakland city attorney Barbara Parker sat at counsel’s table beside the city’s pro bono legal team from Morrison & Foerster. Dozens of Harborside customers attended the hearing adorned with pot leaf patches and pins.
The actual arguments were technical and succinct. James, who did not rule from the bench, kept the battery of lawyers on a tight leash, repeatedly reminding counsel she had read their briefs and understood the issues.
“I have read this case backwards and forwards,” said James, who gave no indication of how she’d rule.
That didn’t stop Oakland’s lead lawyer, MoFo partner Cedric Chao, from sneaking in a small rhetorical flourish, accusing Justice Department lawyers of operating in a “twilight zone” where legal rights and science don’t exist.
Kathryn Wyer, a Justice Department lawyer who has argued similar cases on behalf of the federal government, told the judge that allowing Oakland to interfere in a forfeiture case where it lacks standing “would overturn the entire forfeiture scheme.”
The feds initiated the two forfeiture actions in July. In October, Oakland filed suit under the Administrative Procedure Act, accusing the federal government of a bait-and-switch.
In essence, the complaint alleges that federal officials promised there would be no enforcement against entities acting in accord with state law and have now pulled a 180-degree reversal at the city’s expense — literally. Closing regulated dispensaries would deprive the city of $1.4 million in projected annual business tax revenues.
Chao told James there was a behind-the-scenes policy shift in Washington, D.C., or San Francisco.
“Something has happened,” Chao said. “We don’t know what it is.”
Lawyers for Harborside’s landlords made it crystal clear where their clients are coming from. As Paul Avilla, lawyer for Concourse Business Center in San Jose, put it, “the very ownership of their property is being threatened.”
Assistant U.S. Attorney Arvon Perteet, who is handling the forfeiture cases for Haag’s office, tried to put a softer spin on the issue. The government isn’t seeking to put Harborside out of business, he said, just out of the marijuana business.
“They can sell popcorn there. They can sell candy there,” he said.
Harborside’s lawyer, Henry Wykowski, told James that ordering his client to stop selling marijuana from its current locations would be a death knell because “no other landlord is going to take them.”
Despite the current feud, landlord and tenant agree on one thing: The federal action is blocked by a five-year statute of limitations since Harborside has been operating in the open since 2006.
Government lawyers argue the statute of limitations restarted with every sale of marijuana.
By the time that issue came up, James was out of patience.
“That’s an issue for another day,” she said.