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United States v. Avenue

United States District Court, N.D. California

February 6, 2015

UNITED STATES OF AMERICA, Plaintiff,
v.
REAL PROPERTY AND IMPROVEMENTS LOCATED AT 2366 SAN PABLO AVENUE, BERKELEY, CALIFORNIA, Defendant.

ORDER GRANTING MOTION TO STAY ACTION PENDING APPEAL Re: ECF No. 163

JON S. TIGAR, District Judge.

Before the Court is the City of Berkeley's Motion to Stay this Action Pending Appeal. ECF No. 163. For the reasons set forth below, the Court will grant the Motion.

I. BACKGROUND

The United States instituted this action in May 2013, seeking to forfeit property located at 2366 San Pablo Avenue in Berkeley, California due to the property's use as the site of a medical marijuana dispensary. ECF No. 1. Among others, Claimants Nahla Droubi, the owner of the property, Berkeley Patients Group, the lessee of the property and operator of the dispensary, and the City of Berkeley ("City" or "Berkeley") challenged the forfeiture. See ECF Nos. 1, 12, 16.

On March 21, 2014, the United States filed a motion to strike Berkeley's claim, contending that the City lacked Article III standing to participate in this action because its interest in the property was insufficient for standing purposes. ECF No. at 94. Berkeley asserted that its interests in tax revenues generated by the dispensary and its ability to regulate dispensaries within its jurisdiction are sufficient to confer on the City Article III standing. ECF No. 95 at 12-16. Ultimately, the Court granted the United States' motion, and struck Berkeley from this action. See ECF No. 130.

Berkeley then sought a separate judgment from this Court, which would allow the City to appeal the issue of standing to the Ninth Circuit Court of Appeals. See ECF No. 137. The Court granted Berkeley's motion and entered final judgment against the City. ECF No. 153. The City then filed an appeal at the Ninth Circuit, and simultaneously filed its motion to stay these proceedings pending resolution of its appeal. See ECF Nos. 161, 163.

II. LEGAL STANDARD

A court's "power to stay proceedings is incidental to the power inherent in every court to control the disposition of the causes on its docket with economy of time and effort for itself, for counsel, and for litigants." Landis v. N. Am. Co. , 299 U.S. 248, 254 (1936). A stay is "an exercise of judicial discretion, and the propriety of its issue is dependent upon the circumstances of the particular case. The party requesting a stay bears the burden of showing that the circumstances justify an exercise of that discretion." Nken v. Holder , 556 U.S. 418, 433-34 (2009) (internal alterations, citations, and quotations omitted).

To decide whether a stay pending appeal is warranted, district courts consider four factors: (1) whether the movant has made a strong showing that it is likely to succeed on the merits; (2) whether the movant will be irreparably injured absent a stay; (3) whether a stay will substantially injure other parties to the proceeding; and (4) the public interest implicated by the grant or denial of the stay. Id. at 434; see also Leiva-Perez v. Holder , 640 F.3d 962, 964 (9th Cir. 2011).

III. DISCUSSION

A. Likelihood of Success on the Merits

Berkeley argues that courts have interpreted the standard for evaluating the first factor- the likelihood of success on the merits-to mean that a party seeking a stay "must show a minimum quantum of likely success necessary to justify a stay, '" such as when the moving party has raised "serious legal questions" on appeal. ECF No. 163 at 3 (citing Leiva-Perez , 640 F.3d at 967-68). In particular, says the City, substantial issues of first impression in the Ninth Circuit represent "serious legal questions" for the purposes of deciding whether to stay a case. Id. at 4-5 (citing Gray v. Golden Gate Nat'l Recreational Area, No. C 08-00722 , 2011 WL 6934433, at *2 (N.D. Cal. Dec. 29, 2011); Hunt v. Check Recovery Sys., Inc., Nos. C 05 4993 SBA, C 06 2037 SBA, 2008 WL 2468473, at *3 (N.D. Cal. June 17, 2008); and City of Oakland v. Holder , 961 F.Supp.2d 1005, 1012 (N.D. Cal. 2013)).

The United States argues that Berkeley has presented no serious legal question or question of first impression because "the Ninth Circuit has clearly stated that only those with an ownership interest or a possessory interest' have standing to file a claim in a forfeiture proceeding." ECF No. 168 at 1-2 (citing United States v. $133, 420 in U.S. Currency, 672 F.3d 629, 637-38 (9th Cir. 2012)). Further, the United States believes that this factor weighs against a stay because the City lost before this Court on the merits of the standing issue.

The Court finds that the City has raised a "serious legal question" that satisfies the likelihood-of-success prong of the stay analysis. The issue of Berkeley's standing is a serious legal question of first impression. Gray , 2011 WL 6934433, at *2. Moreover, the issues raised by medical marijuana in local or state jurisdictions that permit its use, and those jurisdictions' standing to assert their interests in medical marijuana regulation, present real, unanswered policy questions that are sufficiently "serious" to warrant consideration by the Ninth Circuit. Cf. City of Oakland , 961 F.Supp.2d at 1012 (explaining that ...


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