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Auburn, banned marijuana dispensary in settlement talks

City Council makes offer in hopes of ending costly legal battle
By: Jon Schultz, Journal Staff Writer
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The Auburn City Council authorized a settlement offer to the banned medical marijuana dispensary in hopes of avoiding further legal costs that, for Auburn alone, are estimated around $75,000.

The offer comes after Sierra Patient and Caregiver Exchange, the corporation behind the Blooms & Blossoms dispensary, had its petition for the rehearing of its appeal turned down.

On Feb. 7, the 3rd District Appellate Court ruling upheld the trial court’s decision that granted the city a preliminary injunction to shut down Blooms & Blossoms, saying it violated the city’s business license ordinance.

Owner Richard Miller had described the business at 250 Lincoln Way as a “florist; variety shop” on its permit application in 2011, and when the city found it to be operating as a medical marijuana dispensary, it would take legal action to shut it down.

The city offered to waive its rights to recover court costs and attorneys’ fees that totaled $74,568 through January if the corporation and Miller agree to “a stipulated judgment ending this litigation,” according to the letter from Auburn’s attorneys to dispensary attorney Ken Brock.

 The city would also require them to follow its business license and zoning ordinances “unless and until a change in case law clearly invalidates them,” according to the letter obtained by the Journal.

“The council made that proposal as a way to bring this case to a close and not spend any more money on it,” City Attorney Michael Colantuono said. “And it was informed by the fact that the corporation had no assets and Mr. Miller just came out of bankruptcy.”

Brock said his client was open to the possibility of a settlement, but, as of Tuesday afternoon, that he had yet to see the specific terms of the settlement.

Colantuono said he received a “constructive response” to the settlement proposal Tuesday, and the parties have agreed to continue settlement talks confidentially so no further comment will be provided until they conclude.

The city banned medical marijuana dispensaries more than six years ago. The appeals court didn’t address the issue of whether local governments can ban dispensaries, which is the subject of a current case before the State Supreme Court involving the City of Riverside.

The petition for a rehearing argued the appeals court decision had been in error, one reason being that the appeal had been based on the trial court’s ruling that addressed the city’s zoning code, not a violation of the business license ordinance.

“While we respectfully disagree with the 3rd Appellate District's decision, our appeal was always based upon the trial court’s preliminary injunction ruling,” Brock wrote in an email to the Journal. “The question of whether the City is legally-entitled to enforce its zoning ban will ultimately be determined by the CA Supreme Court sometime within the next couple months. 

“Consequently, if the Supreme Court rules the way we believe it will, we look forward to the trial court’s determination as to whether the City is legally-entitled to a permanent injunction.”

Colantuono said “nobody should be surprised” the petition for a rehearing had been denied, as it is the most common outcome, and that the dispensary has three ways to proceed, “Up, down or out.”

“The next question is whether the plaintiff will ask the Supreme Court to review the case, go back to the trial court to fight some more, or whether they will fold their tent and go away,” he said.

If the City of Riverside case at the Supreme Court is decided in favor of dispensaries, Miller could legally reapply for a permit to open one in Auburn, though Colantuono said he doesn’t expect that outcome.

“For me, this was never really about California’s medical marijuana laws in particular but the Rule of Law in general, which is why I agreed to represent Sierra free-of-charge,” Brock said.

 

Jon Schultz can be reached at jons@goldcountrymedia.com. Follow him on Twitter @Jon_AJNews