A federal appeals court panel expressed intense skepticism Tuesday to the city of Oakland’s challenge to a federal effort to seize and shut Harborside medical pot club. But the judges also questioned the wisdom of the feds picking this fight with Oakland.
U.S. Attorney Melinda Haag brought a forfeiture action against the club last year to shut down the sprawling medical marijuana business in East Oakland, which has revenues of $22 million a year.
Oakland challenged the federal move in an appeal to the 9th U.S. Circuit Court of Appeals, in arguments Tuesday. The city brought the challenge even though it has no legal interest in the property. California voters legalized the use of medical marijuana in 1996 but it remains illegal to use, sell or grow under federal law.
At the time of the forfeiture action, City Attorney Barbara Parker, a former assistant U.S. attorney, called Haag’s action “a tragic waste” of resources better used to crack down on violent crime.
The city regulates medical marijuana sales and collects significant taxes from the club, which has 108,000 clients with medical prescriptions for pot.
“If this was a crack house the city would not oppose forfeiture,” said visiting Judge Stephen Murphy a federal trial judge from Detroit. “This is against federal law,” he said.
Judge Richard Tallman said, “We are bound by federal law.”
Cedric Chao, attorney for the city, acknowledged sale of marijuana is against the law but tried to argue Congress has not appropriated funds for federal use to criminally prosecute clubs where it is legal in 32 states.
This only brought scoffs by Murphy and Tallman.
Chao pressed on that there is a conflict between state and federal law and when the city is harmed it should be able to bring a claim under the Administrative Procedures Act to seek redress.
Murphy pointed out Haag could have criminally indicted the employees of the club but “to their credit” chose not to.
“I don’t understand why the court would have any authority to review the forfeiture decision,” Murphy said.
Things were not much easier for the government.
Assistant U.S. Attorney Jed Adam argued that Oakland was seeking limitless authority over federal forfeiture.
“Why have you picked this fight?” asked Murphy. “The U.S. Congress, the President and the Attorney General are largely looking the other way. The people of California have spoken on this, but you want to pick a fight on an issue that now involves the district court and the 9th Circuit that you could have addressed in a number of other ways.”
Murphy suggested that Haag must have consulted with senior authorities in the Justice Department.
Adam said he did not know.
Judge Johnnie Rawlinson said, “We’re trying to get at what the underlying basis for this case is.”
Adam responded he did not know and in any case could not talk about a prosecutorial decision.
Tallman said, “To make this simple, we’re talking about prosecutorial discretion” to seize and close the Harborside club. “I share my colleagues concern that the President takes an oath to enforce the law and then makes comments that they will reallocate resources and not enforce this law. Then the U.S. brings a forfeiture action.”
Adam responded, “I know my friend (referring to Chao) wants to bring into this court a debate about the way the law is enforced.”
Murphy said, “If the Justice Department is not doing anything criminally and is respecting the rights of the voters, it seems to me, they would want to have officials in Oakland overseeing and regulating the dispensing of marijuana, not drug dealers. So why do you want to antagonize the city by bringing a forfeiture action?”
The court took the case under submission and will rule the coming weeks.
Case: Oakland v. Holder, No. 13-15391