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420 Caregivers, LLC et al v. City of Los Angeles

July 3, 2012

420 CAREGIVERS, LLC ET AL., PLAINTIFFS AND RESPONDENTS,
v.
CITY OF LOS ANGELES, DEFENDANT AND APPELLANT.



APPEAL from an order of the Superior Court of Los Angeles County, Anthony J. Mohr, Judge. (Los Angeles County Super. Ct. No. BC433942)

The opinion of the court was delivered by: Sortino, J.*fn15

CERTIFIED FOR PUBLICATION

Reversed.

Appellant in this case is the City of Los Angeles (City). Respondents are various collectives and individual members of collectives (Collectives) currently engaged in the cultivation, distribution, or use of medical marijuana within City limits.*fn1 In the court below, the Collectives filed various separate lawsuits seeking to enjoin enforcement of City Ordinance No. 181069 (Ordinance), passed by the City Council on January 26, 2010, and approved by the Mayor on February 3, 2010. The Ordinance regulates the number and geographic distribution of medical marijuana collectives within City limits. It also imposes a number of other regulations on the operation of medical marijuana collectives within City limits.

The trial court consolidated the various separate lawsuits and, after multiple hearings, preliminarily enjoined enforcement of portions of the Ordinance on the following grounds: (1) violation of the federal right to equal protection; (2) preemption by state law; (3) violation of the state right to due process; and (4) violation of the state right to privacy. The City now appeals from the trial court's preliminary injunction.

For the reasons that follow, and based upon considerable guidance received from cases decided and a statute enacted after the trial court rendered its decision, we reverse the trial court's order granting the request for a preliminary injunction. We remand this case for further proceedings consistent with this opinion.

STATUTORY AND PROCEDURAL BACKGROUND

Both the trial court's order and the issues raised in this appeal involve the interplay of various state and local laws, enacted at different times since 1996. Accordingly, a lengthy statutory and procedural background follows.

1. The Compassionate Use Act

In 1996, California voters approved Proposition 215, known as the Compassionate Use Act (CUA), which is codified in Health and Safety Code section 11362.5. The CUA provides that no physician shall be punished, or denied any right or privilege, for having recommended marijuana to a patient for medical purposes. (§ 11362.5, subd. (c).) The CUA also immunizes specific persons from specific prosecutions under the Health and Safety Code:

"[Health and Safety Code] [s]section 11357, relating to the possession of marijuana, and [s]section 11358, relating to the cultivation of marijuana, shall not apply to a patient, or to a patient's primary caregiver, who possesses or cultivates marijuana for the personal medical purposes of the patient upon the written or oral recommendation or approval of a physician." (§ 11362.5, subd. (d).)

The CUA defines "primary caregiver" as the person designated by the patient "who has consistently assumed responsibility for the [patient's] housing, health, or safety." (Health & Saf. Code, § 11362.5, subd. (e).)

Significantly, for purposes of this case, the CUA also provides that "[n]othing in this section shall be construed to supersede legislation prohibiting persons from engaging in conduct that endangers others, nor to condone the diversion of marijuana for non-medical purposes." (Health & Saf. Code, § 11362.5, subd. (b)(2).) It also expressly "encourage[s] the federal and state governments to implement a plan to provide for the safe and affordable distribution of marijuana to all patients in medical need of marijuana." (§ 11362.5, subd. (b)(1)(C).)

2. The Medical Marijuana Program Act

In 2003, the California Legislature enacted the Medical Marijuana Program Act (MMPA), codified in Health and Safety Code sections 11362.7 through 11362.83. The MMPA was passed, in part, to clarify the scope of the CUA and promote its uniform application "among the counties within the state." (Stats. 2003, ch. 875, § 1.)

To accomplish these goals, the MMPA empowers the Department of Health Services to create a voluntary program for the issuance of identification cards to "qualified patients." (Health & Saf. Code, § 11362.71, subd. (a)(1).) "Qualified patients" are defined as those persons "entitled to the protections" of the CUA. (§ 11362.7, subd. (f).)

The MMPA then grants immunity from prosecution to an expanded list of offenses so long as the underlying conduct involves medical marijuana use:

"Subject to the requirements of this article, the individuals specified in subdivision (b) shall not be subject, on that sole basis, to criminal liability under [Health and Safety Code] [s]section[s] 11357 [possession], 11358 [cultivation], 11359 [possession for sale], 11360 [sales], 11366 [maintaining a place], 11366.5 [providing a place], or 11570 [nuisance]." (§ 11362.765, subd. (a), italics added.)

The individuals to whom this immunity applies are expanded beyond the patients and primary caregivers protected by the predecessor CUA: the MMPA grants immunity to (1) qualified patients, persons with identification cards, and the primary caregivers of such persons; (2) individuals who provide assistance to persons in these three groups in administering medical marijuana; and (3) individuals who provide assistance to persons in these three groups in acquiring the skills necessary to cultivate or administer medical marijuana. (Health & Saf. Code, § 11362.765, subd. (b).)

Significantly, the MMPA also expressly extends immunity to the same enumerated Health and Safety Code sections for additional, "collective," conduct:

"Qualified patients, persons with valid identification cards, and the designated primary caregivers of qualified patients and persons with identification cards, who associate within the State of California in order collectively or cooperatively to cultivate marijuana for medical purposes, shall not solely on the basis of that fact be subject to state criminal sanctions under [s]section[s] 11357, 11358, 11359, 11360, 11366, 11366.5, or 11570 [of the Health and Safety Code]." (§ 11362.775, italics added.)

The MMPA, as originally enacted, also affirmatively provided that "[n]othing in this article shall prevent a city or other local governing body from adopting and enforcing laws consistent with this article." (Stats. 2003, ch. 875, § 2 [Health & Saf. Code, former § 11362.83].) More importantly, during the pendency of this appeal, that section was amended to read, in full:

"Nothing in this article shall prevent a city or other local governing body from adopting and enforcing any of the following: [¶] (a) Adopting local ordinances that regulate the location, operation, or establishment of a medical marijuana cooperative or collective. [¶] (b) The civil and criminal enforcement of local ordinances described in subdivision (a). [¶] (c) Enacting other laws consistent with this article." (Health & Saf. Code, § 11362.83, italics added.)

3. The City's Interim Control Ordinance

In response to citizen complaints and law enforcement concerns about the proliferation of storefront medical marijuana dispensaries within City limits, the City Council passed Interim Control Ordinance No. 179027 (ICO) on August 1, 2007, and the Mayor approved it on August 10, 2007. The ICO went into effect September 14, 2007.*fn2

For a period of one year from its effective date or until adoption of a permanent ordinance, whichever came first, the ICO prohibited the establishment or operation of a medical marijuana dispensary within the City limits. The ICO defined a medical marijuana dispensary as any facility or location that "distributes, transmits, gives, dispenses, facilitates, or otherwise provides marijuana in any manner in accordance with [s]tate law, in particular, California Health and Safety Code [s]sections 11362.5 through 11362.83 [the CUA and the MMPA], inclusive." The ICO, however, also created one large exception to the general prohibition of dispensaries: any dispensary established before September 14, 2007 (the effective date of the ICO) and operated in accordance with state law would be allowed to continue so long as it filed various specified documents with the City Clerk within 60 days of "the adoption" of the ICO.*fn3 The parties, as well as the court below, seem to agree that the 60th day was November 13, 2007.*fn4

The ICO also allowed up to two 180-day extensions of its prohibition so long as the City Council found that the various agencies responsible for investigation relevant to a permanent ordinance were exercising due diligence. Subsequently, the City Council enacted both of the available 180-day extensions. On June 19, 2009, the City Council passed an entirely new ordinance, Interim Control Ordinance No. 180749, which amended the ICO and extended its prohibitions to March 15, 2010, or the enactment of a permanent ordinance, whichever came first.

Approximately 187 "dispensaries" registered on or before November 13, 2007, pursuant to the ICO. Over 30 of these "dispensaries" expressly identified themselves in their names as either a medical marijuana "collective" or "cooperative." Over 30 more expressly utilized the plural term "caregivers" in their names, implicitly suggesting collective associations of primary caregivers.

4. The City's Permanent Ordinance

On January 26, 2010, the City Council passed the Ordinance, which added article 5.1 (§ 45.19.6 et seq.) to chapter IV of the Los Angeles Municipal Code.*fn5 The Mayor approved the Ordinance on February 3, 2010. The Ordinance went into effect June 7, 2010, after approval of a final fee schedule.*fn6

Prior to enactment of the Ordinance, the City Council and City Planning and Land Use Management Committee (Planning Committee) conducted at least 16 public hearings regarding the community impact of entities engaged in the distribution of medical marijuana. The hearings involved testimony from members of the public, including medical marijuana patients, the owners and operators of entities engaged in the cultivation and distribution of medical marijuana, and residents living near these entities. These hearings also included testimony from high-ranking members of the Los Angeles Police Department. Evidence presented to the City Council and the Planning Committee showed both an explosive increase in the number of entities dispensing medical marijuana and a significant increase in crime and citizen complaints involving those entities. It also showed that some of these entities were diverting marijuana to uses not authorized by the CUA or MMPA. Finally, it showed that scarce law enforcement resources were often diverted to criminal investigations involving these entities.

As a result, the City Council enacted the Ordinance for the express purpose of protecting the health, safety, and welfare of the City residents by regulating the collective cultivation of medical marijuana inside City limits. (§ 45.19.6.) To achieve this goal, the Ordinance requires all "medical marijuana collectives" to comply with its provisions. (Ibid., italics added.) It defines "medical marijuana collectives" as incorporated or unincorporated associations of four or more qualified patients, persons with identification cards, or primary caregivers, who collectively or cooperatively associate at a given location to cultivate medical marijuana in accordance with the CUA and MMPA. (§ 45.19.6.1(B).)

The Ordinance requires all medical marijuana collectives to submit to a new registration and approval process to continue operation. (§ 45.19.6.2(A).) Subject to an exception discussed below, the Ordinance caps the total number of allowable collectives at 70, to be distributed proportionally around the City's various neighborhoods according to population densities as mapped by the Planning Committee. (§ 45.19.6.2(B)(1).)

Initially, the only collectives eligible to register under the Ordinance are those that (1) previously registered on or before November 13, 2007, in compliance with the ICO; (2) have operated continuously at their registered location since on or before September 14, 2007 (the effective date of the ICO), or both moved once in response to a federal enforcement letter and sought a hardship exemption under the ICO; (3) continue to have the same ownership and management as that identified in their City registration documents; (4) have not been cited for nuisance or public safety violations of state or local law; and (5) are currently at or designate a new location that meets new Ordinance requirements regarding distances from other collectives, schools, parks, libraries, and other specified sensitive uses. (§§ 45.19.6.2(B)(2), 45.19.6.3(A)(2).) To the extent the total number of initially eligible collectives exceeds 70, they nevertheless remain eligible and are to be allocated proportionally throughout the City based upon the population densities in the various neighborhoods as determined by the Planning Committee. (§ 45.19.6.2(B)(2).) All potentially eligible collectives were to notify the City of their intent to register at a designated location within one week of the Ordinance's effective date. (§ 45.19.6.2(C)(1).) The City decided to give priority to collectives that had registered under the ICO because they had already shown a willingness to be openly compliant with and regulated by the law.

The Ordinance requires all other collectives to cease operation immediately. (§ 45.19.6.7.) It does, however, allow other collectives not currently eligible to register to participate in a future lottery for the opportunity to register should the total number of operating collectives ever fall below 70. (§ 45.19.6.2(C)(2).) The Ordinance sunsets after two years unless extended by the City Council and, if not extended, all collectives must cease operation. (§ 45.19.6.10.) Violations of the Ordinance are punishable as misdemeanors. The Ordinance may also be enforced through nuisance abatement proceedings. (§ 45.19.6.9; L.A. Mun. Code, § 11.00, subd. (m).)

Collectives that register with and ultimately obtain permission to operate from the City pursuant to the Ordinance must maintain certain records: (1) the names, addresses, and phone numbers of all members engaged in management of the collective; (2) the names, addresses and phone numbers of all patient members to whom the collective provides marijuana; (3) copies of the patient members' MMPA identification cards or doctors' recommendations; (4) the names, addresses, and phone numbers of all primary caregiver members to whom the collective provides marijuana; and (5) copies of the primary caregivers' MMPA identification cards or their qualified patients' written designations. (§ 45.19.6.4.) The collective must maintain these records for five years and must make them available to the Los Angeles Police Department upon demand. (Ibid.)

The above notwithstanding, the Ordinance expressly states that "private medical records" may not be obtained by the police absent an otherwise valid warrant, court order, or subpoena. (§ 45.19.6.4.) The Ordinance defines a "private medical record" as documentation of the qualified patient's or identification card holder's medical history other than a physician's recommendation, the actual MMPA identification card, or the written designation of a primary caregiver by a qualified patient or identification card holder. (§ 45.19.6.1(B).)

Collectives not eligible under the Ordinance because they had not previously registered under the ICO were sent letters by the City Attorney advising them that they were or would be in violation of the Ordinance and that continued operation might result in criminal prosecution.

5. The Trial Court's Injunction

Beginning in March 2010, the Collectives began filing lawsuits seeking to enjoin enforcement of the Ordinance. The multiple lawsuits were eventually consolidated before one trial court. On December 10, 2010, after extensive hearings, the trial court preliminarily enjoined enforcement of portions of the Ordinance.

The trial court based its injunction on a number of legal conclusions: (1) the Ordinance violates federal equal protection because it requires eligible collectives to have previously registered under the ICO, which, despite its terms, expired by operation of law nearly 60 days before the end of the registration period; (2) the Ordinance's sunset and penal provisions are preempted by the MMPA; (3) the Ordinance violates state procedural due process because it requires collectives that did not register under the ICO to cease operation immediately without the benefit of a hearing; and (4) the Ordinance's record-keeping and record disclosure requirements violate the state right to privacy.

6. Litigation and Legislation Since the Injunction

On January 10, 2011, the trial court required the Collectives to post a bond in the amount of $348,102 pursuant to Code of Civil Procedure section 529. On January 13, 2011, the court requested additional briefing on the bond issue and stayed the injunction pending resolution of the bond issue. To date, the bond issue has not been resolved and the trial court's stay of the injunction remains in effect.

On January 21, 2011, the City Council passed Temporary Urgency Ordinance No. 181530 (TUO) and the Mayor approved it on January 25, 2011. The TUO amends the Ordinance, purportedly to resolve the defects in it as found by the trial court. By its terms, it remains in effect only until the preliminary injunction is reversed on appeal or permanent amendments to the Ordinance are enacted.*fn7

DISCUSSION

I. Review of Preliminary Injunction: Applicable Legal Standards

When deciding whether to issue a preliminary injunction, a trial court weighs two interrelated factors: (1) the likelihood the moving party will prevail on the merits and (2) the relative interim harm to the parties from issuing or not issuing the injunction. (Hunt v. Superior Court (1999) 21 Cal.4th 984, 999.)

On appeal, factual findings made by the trial court must be accepted if supported by substantial evidence. (County of Los Angeles v. Hill (2011) 192 Cal.App.4th 861, 867 (Hill).) Ordinarily, the decision to issue a preliminary injunction is reviewed for an abuse of discretion. (City of Corona v. Naulls (2008) 166 Cal.App.4th 418, 427.) Whether a local ordinance is unconstitutional or preempted, however, is a question of law subject to de novo review. (Hill, supra, at p. 867; City of Claremont v. Kruse (2009) 177 Cal.App.4th 1153, 1168 (Kruse); see also Arcadia Development Co. v. City of Morgan Hill (2011) 197 Cal.App.4th 1526, 1534 (Arcadia Development) [where pertinent facts are not in dispute, appellate review is de novo].)

II. Equal Protection

A. The Trial Court's Opinion

As stated above, to be eligible to register under the Ordinance, a collective must have previously registered under the ICO on or before November 13, 2007. To be eligible to register under the ICO, a collective must have been in existence prior to September 14, 2007, the effective date of the ICO. In the court below, the City argued that prior registration under the ICO is a reasonable way to determine preference: past compliance with the ICO shows a willingness to follow the law, which in turn is a good predictor of law-abiding behavior going forward.

The trial court disagreed. It found the Ordinance's requirement of previous registration under the ICO to be arbitrary. The trial court concluded, therefore, that the Ordinance violates equal protection.

The trial court reasoned as follows. The City Council passed the ICO on August 1, 2007. The ICO, despite its express initial term of one year, expired by operation of law 45 days later on September 15, 2007. To reach this finding, the trial court relied upon Government Code section 65858, subdivision (a), which provides that local interim zoning ordinances, such as the ICO, automatically expire 45 days after their "adoption," unless extended after a noticed public hearing. Since no such noticed public hearing occurred in this case, the trial court concluded that the ICO necessarily expired on September 15, 2007, one day after its effective date of September 14, 2007, and only one day into the 60-day registration period which it authorized.

The trial court then opined - hypothetically - that an otherwise law-abiding collective able to register under the express terms of the ICO, might have declined to do so because of its belief that the ICO expired as of September 15, 2007. A failure to register under the ICO, then, was not necessarily a refusal to follow the law, but possibly only a recognition that the law was no longer valid. Thus, the trial court reasoned, a collective's failure to register under the ICO did not necessarily mean that it was less likely to follow the law in the future. Accordingly, the trial court concluded, the requirement violated federal principles of equal protection.

Before we evaluate the trial court's ruling, it is important to frame properly the issues before this court. The relevant issue is not the constitutionality or even the non-constitutional legality of the ICO per se. The issue is the constitutionality of the Ordinance insofar as it requires prior compliance with the ICO.

Second, the trial court did not find the Ordinance unconstitutional as applied: it did not find - and apparently no evidence was presented - that any particular collective prohibited from registering under the Ordinance because of noncompliance with the ICO was in fact eligible to register under the ICO but chose not to for any reason, let alone out of a belief that the ICO had already expired. The trial court based its decision entirely on the hypothetical existence of a collective or group of collectives that could have registered under the express terms of the ICO but chose not to because of a belief that the ICO had already expired by operation of law. Thus, although it did not expressly so state, the trial court's ruling that the Ordinance violates equal protection is necessarily a ruling on the face of the Ordinance and not on the Ordinance as applied.

In their briefs to this court, the Collectives likewise do not contend that any of them actually fit within this category theorized by the trial court. Thus, the equal protection challenge to the ...


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