United States Of America v. Real Property and Improvements Located at 2106 Ringwood Avenue, San Jose, California

Filing 56

PRELIMINARY QUESTIONS FOR DECEMBER 20, 2012 HEARING. Signed by Judge Maria-Elena James on 12/19/2012. (cdnS, COURT STAFF) (Filed on 12/19/2012)

Download PDF
1 2 3 4 UNITED STATES DISTRICT COURT 5 Northern District of California 6 7 UNITED STATES OF AMERICA, Plaintiff, 8 No. C 12-03567 MEJ Related cases: 12-3566 MEJ 12-5245 MEJ v. 9 10 REAL PROPERTY AND IMPROVEMENTS LOCATED AT 1840 EMBARCADERO, OAKLAND, CA, PRELIMINARY QUESTIONS FOR DECEMBER 20, 2012 HEARING 12 For the Northern District of California UNITED STATES DISTRICT COURT 11 Defendant. _____________________________________/ 13 14 Pending before the Court are: (1) the City of Oakland’s Motion to Stay (Dkt. No. 16, Case 15 No. C 12-5245); (2) Claimant Concourse Business Center, LLC’s Motion for Order Prohibiting 16 Unlawful Use of Defendant Property (Dkt. No. 13, Case No. C 12-3566); and (3) Claimant Ana 17 Chretien’s Motion for Order Prohibiting Unlawful Use of Defendant Property (Dkt. No. 64, Case No. 18 C 12-3567). The motions are set for hearing before the Court on December 20, 2012. The Court has 19 thoroughly reviewed the parties’ briefs and cited authorities. To assist counsel in their preparation 20 for the hearing, the Court presents the following questions to counsel to guide them in their argument. 21 At the hearing, the Court will first ask counsel to address the questions and present any additional 22 argument relating to Oakland’s Motion to Stay. After the Court has heard argument on Oakland’s 23 Motion, counsel may then address the questions and present argument relating to the 24 Claimants/Property Owners’ Supplemental Rule G(7)(a) Motions. The following questions represent 25 key points raised in the parties’ briefs that require clarification, but are not exclusive. 26 / / / 27 / / / 28 / / / 1 A. Questions re: Oakland’s Motion to Stay Ruling on Claimants’ Rule G(7)(a) Motions 2 1. Oakland requests that the Court stay resolution of Concourse’s and Ms. Chretien’s 3 Supplemental Rule G(7)(a) Motions until it has had an opportunity to present its challenges to 4 the Oakland forfeiture action. If the Court denies the Claimants’ Supplemental Rule G(7)(a) 5 Motions, does this moot Oakland’s Motion to Stay? 6 7 2. The Government and Concourse have challenged Oakland’s standing to bring its Motion to 8 Stay. Concurrently, the Government has filed a Motion to Dismiss Oakland’s lawsuit 9 arguing, in part, that Oakland lacks standing to bring any lawsuit attacking the forfeiture to address Oakland’s Motion to Stay before issues regarding its standing to bring its lawsuit in 12 For the Northern District of California proceedings. Briefing on the Government’s Motion to Dismiss has not closed. Is it premature 11 UNITED STATES DISTRICT COURT 10 the first instance have been resolved? 13 14 3. The Government contends that it will be harmed if the stay is granted because the stay would 15 impinge its interest in enforcing federal laws. Notably, the Government did not take any 16 action as to either of the defendant properties for several years after they began operating, did 17 not request injunctive relief in its Complaints, did not seek a preliminary injunction at the 18 time it filed the forfeiture actions, and did not independently seek an order pursuant to Rule 19 G(7)(a) (but merely joined in the Claimants’ Motions). In light of these facts, can the 20 Government now credibly argue that there is some immediacy to halting Harborside’s 21 operations? 22 / / / 23 / / / 24 / / / 25 / / / 26 / / / 27 / / / 28 2 1 B. Questions re: Claimants’ Motions for Orders Prohibiting Unlawful Use of Properties 2 1. Is there any dispute that the plain language of Supplemental Rule G(7)(a) makes issuance of 3 any order discretionary? 4 5 2. Section 882 of the Controlled Substances Act vests the district court with “jurisdiction in 6 proceedings in accordance with the Federal Rules of Civil Procedure to enjoin violations of 7 the [Act].” Supplemental Rule G(7)(a) then authorizes the court “on motion or on its own” to 8 enter any order necessary to prevent use of defendant property in a criminal offense. There 9 does not appear to be any disagreement amongst the parties that § 882 of the CSA and right of action exists under the CSA relevant to the construction of Rule G(7)(a)’s language – 12 For the Northern District of California Supplemental Rule G(7)(a) must be read together. Are the decisions holding that no private 11 UNITED STATES DISTRICT COURT 10 or more precisely, silence – as to who is authorized to bring a motion pursuant to the Rule? If 13 only the Government may bring an action under the Controlled Substances Act, and in 14 particular a civil forfeiture action pursuant to § 881(a)(7), does that limit the potential 15 movants for purposes of Supplemental Rule G(7)(a) to the Government? 16 17 3. Although there does not appear to be any reported decisions either granting or denying 18 injunctive relief under Supplemental Rule G(7)(a) in forfeiture cases, can Claimants or the 19 Government provide any other plausible examples of when a claimant – particularly a 20 property owner – would invoke Supplemental Rule G(7)(a) to suspend use of property in 21 alleged criminal activity? 22 23 4. Is the harm that Supplemental Rule G(7)(a) seeks to avoid prospective in nature? The Rule 24 deals with property that the Government does not have possession of and seeks, at least in 25 part, to “preserve the property” and “to prevent its removal or encumbrance.” These 26 components of the Rule seem to be targeted at ensuring the property is not destroyed or lost 27 during the pendency of a forfeiture proceeding. Can the same be said of the clause regarding 28 3 1 preventing the defendant property to be use in a criminal offense? Specifically, is the Rule 2 concerned with the property’s use in a new criminal offense, as opposed to its prior use that 3 triggered the forfeiture action? 4 5 5. Although Concourse moves for an order enjoining Harborside’s use of the property in a 6 criminal offense pursuant to Supplemental Rule G(7)(a), Concourse does not articulate what 7 standard the Court is to apply in considering its request. If a traditional preliminary injunction 8 analysis does not apply, what is the proper standard? 9 use of property, the express language of the Rule seems to require that the Court make some 12 For the Northern District of California As a predicate to issuing an order pursuant to Supplemental Rule G(7)(a) to prevent criminal 11 UNITED STATES DISTRICT COURT 10 6. finding that the use of the property is, in fact, illegal. As applied in this case, that finding 13 would be that Harborside is using the leased premises in a manner that violates the Controlled 14 Substances Act, 21 U.S.C. § 881(a)(7). Can the Court make such a finding on the current 15 record? Can the Court make this finding without some kind of evidentiary hearing? Is there 16 any precedential effect to such a finding as it relates to the Government’s ultimate burden of 17 establishing a violation in the forfeiture actions? Can third parties, such as Concourse and 18 Ms. Chretien, effectively enforce the Controlled Substances Act in this manner? 19 20 7. How does Harborside respond to Concourse’s assertion that it “does not seek to enjoin all 21 activities of Harborside that may violate the [Controlled Substances Act],” but only “seeks 22 limited injunctive relief prohibiting the use of defendant property to violate the CSA”? In 23 other words, Concourse is not seeking to enjoin Harborside from operating as a medicinal 24 marijuana dispensary business, but merely seeks to enjoin Harborside from operating its 25 business on Concourse’s property. Does this allow Concourse to get around the challenge 26 that it is bringing a private enforcement action under the CSA because it is merely seeking to 27 compel Harborside to take its purported illegal activity elsewhere? 28 4 1 8. With respect to both Concourse and Ms. Chretien, it is uncontested that the lease agreements 2 relating to their respective properties expressly stated that Harborside would be operating a 3 medicinal marijuana dispensary. Although both Concourse and Ms. Chretien now aver that 4 they mistakenly believed the medical marijuana dispensaries were lawful, what new facts or 5 law have come to light that were not available to Concourse and Ms. Chretien at the time they 6 executed the lease agreements? 7 8 9. Both Concourse and Ms. Chretien have benefitted from Harborside’s businesses by collecting 9 rent over several years. In fact, in 2011, Ms. Chretien extended Harborside’s lease through 2016. Is it disingenuous for Claimants to now attempt to enjoin Harborside’s operations when 11 they not only acquiesced in, but financially benefitted from Harborside’s business for years? 12 For the Northern District of California UNITED STATES DISTRICT COURT 10 13 10. Concourse asserts that injunctive relief prohibiting Harborside’s continued use of its property 14 as a medical marijuana dispensary is “less burdensome on the courts and law enforcement 15 agencies and should, therefore, be preferable to the institution of a separate criminal 16 proceeding.” Is it less burdensome because it dispenses with the evidentiary burden and 17 procedural safeguards attendant to a criminal proceeding? 18 19 11. Concourse argues that because it cannot institute criminal proceedings against Harborside, its 20 Rule G(7)(a) motion is its only means of halting violations of the CSA at its property pending 21 the outcome of the unlawful detainer action it filed in state court. Why didn’t Concourse 22 request a stay of the forfeiture action pending the state appellate court’s ruling in its unlawful 23 detainer action? 24 25 12. If the Court applies the analysis articulated in Winter v. Natural Resources Defense Council, 26 Inc., 55 U.S. 7 (2008), what is the irreparable harm that Concourse and Ms. Chretien will 27 suffer if their Rule G(7)(a) Motions are denied? Won’t Concourse and Ms. Chretien have an 28 5 1 opportunity to contest the forfeiture through motions for summary judgment or trial? 2 3 13. If the Court grants Concourse’s and Ms. Chretien’s Rule G(7)(a) Motions, what is the impact 4 of such a ruling on the forfeiture proceedings? Does the ruling simply allow the property 5 owners to argue that the alleged illegal activity has stopped so forfeiture is inappropriate? 6 IT IS SO ORDERED. 7 8 Dated: December 19, 2012 _______________________________ Maria-Elena James Chief United States Magistrate Judge 9 10 12 For the Northern District of California UNITED STATES DISTRICT COURT 11 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6

Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.


Why Is My Information Online?