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Sacramento Nonprofit Collective, Dba El Camino Wellness Center, A v. Eric Holder

February 28, 2012

SACRAMENTO NONPROFIT COLLECTIVE, DBA EL CAMINO WELLNESS CENTER, A MUTUAL BENEFIT NON-PROFIT COLLECTIVE; RYAN LANDERS, AN INDIVIDUAL, PLAINTIFFS,
v.
ERIC HOLDER, ATTORNEY GENERAL OF THE UNITED STATES; MICHELLE LEONHART, ADMINISTRATOR OF THE DRUG ENFORCEMENT ADMINISTRATION; BENJAMIN B. WAGNER, U.S. ATTORNEY FOR THE EASTERN DISTRICT OF CALIFORNIA, DEFENDANTS.



The opinion of the court was delivered by: Garland E. Burrell, Jr. United States District Judge

ORDER GRANTING DEFENDANTS' DISMISSAL MOTION*fn1

The federal defendants, Attorney General of the United States Eric Holder, Administrator of the Drug Enforcement Administration Michelle Leonhart, and the United States Attorney for the Eastern District of California Benjamin Wagner ("Defendants") move for dismissal of Plaintiffs' Complaint under Federal Rule of Civil Procedure ("Rule") 12(b)(6). Defendants argue their motion should be granted since the majority of Plaintiffs' claims have already been rejected by the United

States Supreme Court and the Ninth Circuit, and the remaining claims are not actionable. Plaintiffs oppose the motion.

I. 12(b(6) Standard

Decision on Defendants' Rule 12(b)(6) motion requires determination of "whether the complaint's factual allegations, together with all reasonable inferences, state a plausible claim for relief." Cafasso, U.S. ex rel. v. Gen. Dynamics C4 Sys., 637 F.3d 1047, 1054 (9th Cir. 2011) (citing Ashcroft v. Iqbal, 556 U.S. 662, 129 S. Ct. 1937, 1949-50 (2009)). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Iqbal, 129 S. Ct. at 1949 (citing Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556 (2007)).

When determining the sufficiency of a claim, "[w]e accept factual allegations in the complaint as true and construe the pleadings in the light most favorable to the non-moving party[; however, this tenet does not apply to] . . . legal conclusions . . . cast in the form of factual allegations." Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011) (internal quotation marks and citations omitted). "Therefore, conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss." Id. (internal quotation marks and citation omitted).

II. Requests for Judicial Notice

Defendants include in their motion a request that judicial notice be taken of the criminal indictments and related court documents filed in United States v. Bartkowicz, No. 1:10-cr-00118-PAB (D. Colo. May 5, 2010), and United States v. Do, No. 1:11-cr-00422-REB (D. Colo. Oct. 13, 2011), which are attached to the motion as Exhibits D and E. Judicial notice may be taken "of court filings and other matters of public record[;]" therefore, this request is granted. Reyn's Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 n.6 (9th Cir. 2006). Defendants also request that judicial notice be taken of three judicial opinions from other district courts in California. (Defs.' Mot. to Dismiss ("Mot.") Exs. A-C.) "The court does not need to judicially notice the[se] opinion[s] to consider [them]." Thompson v. Residential Credit Solutions, Inc., No. CIV. 2:11--2261 WBS DAD, 2012 WL 260357, at *2 (E.D. Cal. Jan. 26, 2012).

Plaintiffs request that judicial notice be taken of a joint stipulation of dismissal and an attachment thereto, which were filed in an unrelated case, County of Santa Cruz v. Ashcroft, No. CV-09-2386-JF (N.D. Cal. Jan. 25, 2010) ("Santa Cruz action"). (Pls.' Request for Judicial Notice ("RJN") Ex. 1; Compl. Ex. 3.) The document attached to the stipulation of dismissal is a memorandum issued by Deputy Attorney General David W. Ogden ("the Ogden Memo") dated October 19, 2009, which states that it "provides clarification and guidance to federal prosecutors in States that have enacted laws authorizing the medical use of marijuana." (Ogden Memo at 1, Pls.' RJN Ex. 1; Pls.' Compl. Ex. 3.) Plaintiffs attached these documents to both their Complaint and their request for judicial notice. Since "[a court] may . . . consider materials that are submitted with and attached to the Complaint" in reviewing a 12(b)(6) motion, these documents are considered. United States v. Corinthian Colleges, 655 F.3d 984, 999 (9th Cir. 2011).

Plaintiffs also request that judicial notice be taken of the transcript of proceedings from the October 30, 2009 hearing in the Santa Cruz action, since Plaintiffs' judicial estoppel claim relies on statements made by the Department of Justice at that hearing. (Pls.'s RJN Ex. 2.) "A court may consider evidence on which the complaint necessarily relies if: (1) the complaint refers to the document; (2) the document is central to [Plaintiffs'] claim; and (3) no party questions the authenticity of the copy attached to the 12(b)(6) motion. The court may treat such a document as part of the complaint, and thus may assume that its contents are true for purposes of a motion to dismiss under Rule 12(b)(6)." Marder v. Lopez, 450 F.3d 445, 448 (9th Cir. 2006) (internal quotation marks and citations omitted). Since the transcript satisfies these criteria, it will be considered.

Plaintiffs also seek judicial notice of the following documents attached to their request for judicial notice: Declaration of Rick Doblin in Support of Plaintiffs' Petition for Temporary Restraining Order/Preliminary Injunction in Conejo Wellness Center Cooperative, Inc. v. Holder, No. CV11-9200 DMG (PJWx) (C.D. Cal. Nov. 8, 2011) (Exhibit 3); three online news articles discussing the use of marijuana for medical purposes (Exhibits 4, 5 & 8); Declaration of Paul Armentano in Support of Plaintiffs' Petition for Temporary Restraining Order/Preliminary Injunction in Marin Alliance for Medical Marijuana v. Holder, No. CV 11-5349 DMR (N.D. Cal. Nov. 8, 2011) (Exhibit 6); Declaration of Lester Grinspoon, M.D. in Support of the Brief of the Nat'l Org. for the Reform of Marijuana Laws, et al. as Amici Curiae Supporting Respondents, at App. B, Gonzales v. Raich, 545 U.S. 1 (2005) (No. 03-1454) (Exhibit 7); Cannabinoids as Antioxidants and Neuroprotectants, U.S. Patent No. 6,630,507 (filed Oct. 7, 2003) (Exhibit 9); and a print-out from the National Institute on Drug Abuse website providing information on marijuana, printed January 5, 2012 (Exhibit 10). Plaintiffs do not refer to these documents in their Complaint and do not explain how the evidence contained in these documents is central to their claims. Marder, 450 F.3d at 448. Therefore, "[these documents] cannot be considered in resolving whether [Plaintiffs] state [claims] upon which relief can be granted without converting the motion to one for summary judgment[.]" Am. Express Travel Related Servs. Co., Inc. v. D & A Corp., No. CV-F-04-6737 OWW/TAG, 2007 WL 2462080, at *12 (E.D. Cal. Aug. 28, 2007). However, "[they] may be considered in determining whether . . . amendment [of the Complaint] should be allowed[.]" Id.

III. Background

Plaintiffs are the "Sacramento Nonprofit Collective, doing business as El Camino Wellness Center" ("El Camino Wellness Center"), which Plaintiffs allege "is a medical cannabis [dispensary] made up of patients which operate pursuant to California Health and Safety Code section 11362.775"; and Ryan Landers, "a medical cannabis patient with a California doctor's recommendation to use medical cannabis." (Compl. ¶¶ 7-8.) Plaintiffs allege that "in late September and early October 2011, the United States Attorneys . . . for each of the four federal districts in California wrote to numerous individuals and entities involved in California's Medical Marijuana program, alleging that the dispensaries, landlords who rent to the dispensaries, patients and other supporting commercial entities, even though they are fully in compliance with state law, are nonetheless in violation of federal law." (Compl. ¶ 17.) Plaintiffs allege that "[s]wift sanctions[, including criminal prosecution, imprisonment, fines, and the forfeiture of assets,] were threatened if those involved did not cease their . . . activities." (Compl. ¶ 17.) Plaintiffs allege that "[i]t is the threatening actions of these . . . [United States Attorneys] in mounting a comprehensive attack-mainly on all the support systems that any legitimate business needs-that will eviscerate and likely eradicate California's Medical Marijuana Program." (Compl. ¶ 19.)

Plaintiffs allege that in early October 2011, United States Attorney Benjamin Wagner sent one of these letters to El Camino Wellness Center's landlord, who is not a party in this case. (Compl. ¶ 7; Compl. Ex. 1.) The letter, which is attached to Plaintiffs' Complaint as Exhibit 1, states in part:

This office has received information that [the property occupied by El Camino Wellness Center] is being used to cultivate and/or distribute marijuana in violation of [the Controlled Substances Act], and that you are an owner, or have management or control, of the property. This letter is formal notice that continued use of the property in violation of federal law may result in forfeiture and criminal or civil penalties. . . . Under federal forfeiture law, the "innocent owner" defense is unavailable to those who know or have reason to know of the illegal use of their property. This letter puts you on notice. It is not a defense to claim the property is providing so-called "medical marijuana." Congress has determined that marijuana is a dangerous drug, and that the manufacture and distribution of marijuana are serious crimes. . . . Those who allow their property to be used for such activities do so at their peril.

(Compl. Ex. 1.)

Plaintiffs seek declaratory relief and a permanent injunction that would preclude the United States from enforcing the Controlled Substances Act ("CSA") against Plaintiffs and third parties in California. (Compl. ¶¶ A-F.) Plaintiffs allege in their Complaint that Defendants' enforcement of the CSA "violate[s] the Ninth Amendment," since "[Defendants'] actions threaten" "[t]he plaintiff patients['] . . . fundamental right[] to bodily integrity" and "their right to consult with their doctors about their bodies." (Compl. ¶¶ 31-33.) Plaintiffs allege that Defendants' actions "violate the Tenth Amendment," since Defendants' enforcement of the CSA against California citizens "overturn[s]" California's "primary plenary power to protect the health of its citizens." (Compl. ¶¶ 37-38.) Plaintiffs also allege Defendants' enforcement of the CSA violates the Fourteenth Amendment equal protection clause, since Defendants "unlawfully discriminate[] against medical cannabis patients in California" and have failed to show "a rational basis for [Defendants'] recent effort to end the supply of medical cannabis to qualified patients in ...


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