By Joe Palazzolo
- iStock
Oakland, Calif., is trying to keep the federal government from seizing its biggest medical-marijuana dispensary.
On Wednesday, the city took a bold step: It sued the feds, arguing that the U.S. attorney for Northern California is barred from seizing the property by the five-year statute of limitations on civil forfeiture.
Sure, it’s illegal to sell medical marijuana under federal law, but President Barack Obama and Attorney General Eric Holder have said publicly they wouldn’t pursue people who are in compliance with state law. A 2009 Justice Department memo gave the same guidance to U.S. attorneys.
California, of course, permits the sale of medical marijuana, and Oakland strictly regulates and taxes its dispensaries. Harborside Health Center, the property at issue here, has been open since 2006 and sells more than $20 million of pot annually, according to its owner.
The lawsuit argues that the Justice Department can’t snatch up Harborside Health Center, because of the doctrine of estoppel, which says, in essence, you can’t say one thing and do another. U.S. Attorney Melinda Haag has said Harborside has grown into a large-scale operation that isn’t legal even under California law.
Law Blog caught up with Cedric Chao, who is representing Oakland. When he’s not suing the federal government, Mr. Chao is co-chairman of Morrison & Foerster LLP’s international litigation and arbitration practice.
Law Blog: So this is the first case of its type?
Cedric Chao: We’re not aware of a city pushing back on a forfeiture action against a medical cannabis dispensary.
LB: We noticed you refer to medical marijuana as “cannabis” throughout the lawsuit. Any reason?
CC: No, but people refer to it both ways.
LB: You argue that DOJ can’t go after Harborside because it opened six years ago — exceeding the five-year statute of limitations. Isn’t there a good argument that, since Harborside continued to break federal law until this year, the clock shouldn’t start ticking until after the dispensary stopped selling medical cannabis?
CC: Well there’s actually a case out there in the Sixth Circuit that addresses this issue. In the context of a gambling operation, it held that the statute of limitations began on the first discovery of illegal conduct by the government and that the government was not allowed to claim that the statute of limitations was reset every single day.
LB: I guess the government can’t credibly argue it wasn’t aware of the Oakland dispensaries until now.
CC: They had websites, they had advertisements, they wanted the patient population to know they had safe access to medical cannabis.
LB: But the fact remains. Medical marijuana is illegal under federal law. How do you convince a federal judge that just because the attorney general tells his troops not to go after certain individuals that means it’s OK to break federal law?
CC: Seventeen states plus the District of Columbia have agreed that it is lawful to sell cannabis for medical purposes, so, clearly, there’s a division of thought. And clearly the top officials of our government also believed there were medical benefits to cannabis, otherwise they would not have said publicity that DOJ’s resources will not be used to prosecute where patients, caregivers and dispensaries are acting in conformity with state law. They well knew that people were hanging on their every word. So how is it, after their words and actions and people acting in reliance on those, can they reverse course and say, “Never mind?”
LB: So you’re doing this case pro bono?
CC: Yes.
LB: It’s a controversial issue. Do you worry about getting pegged as the cannabis lawyer?
CC: As a lawyer, you take an oath and you have a client and you do the best for your client. This issue has important public ramifications, and if I didn’t think it was important, I wouldn’t take it.
LB: Thanks, Cedric.
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