Pubdate: Sat, 14 Jul 2012
Source: San Francisco Chronicle (CA)
Copyright: 2012 Hearst Communications Inc.
Contact: http://www.sfgate.com/chronicle/submissions/#1
Website: http://www.sfgate.com/chronicle/
Details: http://www.mapinc.org/media/388
Author: Bob Egelko

OAKLAND POT SUPPLIER MIGHT BE TEST CASE FOR SEIZURE OF ASSETS

Like Oakland's Harborside Health Center, the Los Angeles Cannabis 
Resource Center had the approval of local law enforcement and 
political leaders for its medical marijuana dispensary. Host city 
West Hollywood was so supportive that it lent the center $300,000 to 
help buy its building, and the mayor gave a nationally televised 
interview in the grow room.

None of that helped the center, or the city, when the federal 
government moved to shut down the operation and seize the building. 
The government is now trying to do the same thing to Harborside, the 
state's largest medical pot supplier.

The West Hollywood dispensary, which had opened shortly before 
California voters legalized medical marijuana in 1996, was raided in 
October 2001 by federal agents - who deliberately kept the county 
sheriff's office in the dark to avoid tipping off the pot suppliers. 
The shutdown affected nearly 1,000 customers.

West Hollywood lost the $300,000 it had lent the center when the 
government sold the building in January 2003. The city's legal 
challenge to the forfeiture got short shrift from federal courts, 
which said city officials knew federal law was being violated but 
made no effort to evict the dispensary or contact federal authorities.

Current law may be more favorable for owners of such properties, 
however, thanks to rulings by two of the nation's most conservative 
judges. Harborside, with 108,000 patients, could be the test case.

One of many cases

The forfeiture claim filed this week by U.S. Attorney Melinda Haag is 
one of numerous suits filed or threatened by California's four chief 
federal prosecutors since they announced a campaign in October 
against medical marijuana suppliers, who they said were using state 
law as a cover for drug profiteering. Only a handful of cases have 
gone to court, but some 400 outlets have closed, either voluntarily 
or under threat of eviction by their landlords.

Before she targeted Harborside, Haag had gone after dispensaries 
within 1,000 feet of a school, park or playground. Harborside doesn't 
fit that description, but Haag said its sheer size made it likely 
that California law was being violated. That assessment arguably 
satisfies the Justice Department's policy of respecting state 
marijuana laws while seeking to shut down certain dispensaries.

Attorneys for Harborside and the building's owner said forfeiture 
shouldn't be used against a dispensary that follows all state and 
local regulations.

The dispensary was "in compliance with all state and local 
regulations to operate that kind of business," said Geoff Spellberg, 
whose client, Ana Chretien, owns the building. "We would have no 
reason to believe there was anything improper."

Looking to the courts

The U.S. Supreme Court has rejected attempts to shield medical 
marijuana in California from federal drug laws, allowing prosecution 
of patients as well as suppliers. But another set of rulings may 
provide a lifeline to owners like Chretien, who claim they've done 
nothing to justify a government takeover of their property.

The first decision was in 1998, when the Supreme Court said property 
forfeitures were covered by the Eighth Amendment's ban on excessive 
fines - previously limited to criminal cases - and must be 
proportionate to the seriousness of the underlying offense. The 5-4 
ruling was written by conservative Justice Clarence Thomas, joined by 
the court's moderate-to-liberal bloc.

Last month, another conservative jurist, Judge Carlos Bea, applied 
the high court's standard to third-party property owners in a ruling 
by the Ninth U.S. Circuit Court of Appeals in San Francisco.

The case involved a Southern California woman, Maria Ferro, who 
challenged the loss of her half-interest in her husband's $2.5 
million gun collection at their home, seized by federal agents 
because his felony record barred gun possession.

Forfeiture limits

Bea, writing for a three judge panel, said forfeiture against a 
noncriminal property owner must be limited to the extent of that 
person's responsibility for the illegal conduct. He told a lower 
court judge to grant Ferro a partial refund after assessing such 
factors as her own innocence, her knowledge of her husband's 
activities and her apparent unawareness of some of the guns.

Based on that standard, "if your only culpability is renting property 
to someone who pays X thousand a year ... you can't lose the whole 
property," said Brenda Grantland, a Mill Valley attorney and 
president of an organization called Forfeiture Endangers American 
Rights. She said forfeiture would be limited to some multiple of the 
owner's revenues.

New territory

Assistant U.S. Attorney Steve Welk of Los Angeles, a government 
lawyer in both the West Hollywood and Ferro cases, disagreed. He said 
an owner who knowingly leases a building to a marijuana dispensary 
isn't entitled to the same consideration as someone like Ferro.

Unless Harborside itself can successfully challenge the forfeiture, 
it will have to move out even if the building owner wins her case. 
It's not clear whether Chretien could keep the building or instead 
would receive part of the proceeds from a government sale.

But all sides agreed that the courts haven't yet addressed a case 
like Harborside.

As Henry Wykowski, lawyer for Harborside's operators, put it, "We're 
in virgin territory."
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