Judge sides with Gilroy in pot club ruling

http://www.freelancenews.com/news/267361-judge-sides-with-gilroy-in-pot-club-ruling


A Superior Court judge on Tuesday upheld the City of Gilroy's decision to prohibit medical marijuana dispensaries within the city and determined the city's sole nonmobile dispensary is operating illegally.

In an eight-page court order, Judge Kevin McKenney granted the city a "summary judgment," paving the way for the city to issue an injunction to shut down MediLeaf, which has been open in west Gilroy for about eight months.

"Since it is undisputed that MediLeaf did not secure a license or permit before commencing the operation of the medical marijuana dispensary at the subject property, it necessarily violated the Municipal Code," McKenney wrote. "As such the unlawful medical marijuana dispensary may be enjoined."

Jim Roberts, the dispensary's attorney, said MediLeaf plans to appeal the case.

"Obviously, we're clearly disappointed in the result," Roberts said.

Normally, an injunction could be granted within two to three days of a summary judgment, said Andy Faber, who is representing the city of Gilroy in its lawsuit against MediLeaf. However, he did not want to speculate what would happen in this case.

Councilman Perry Woodward, who is an attorney, anticipated a flurry of legal activity within the next 30 to 40 days as the courts aim to determine whether MediLeaf can remain open during the interim period.

"Now's where the fun begins," Woodward said.

MediLeaf opened Nov. 9 without a business license at 1321 First St. in the same shopping center as Togo's and First Street Coffee Exchange after the City Council rejected an ordinance to regulate such operations.

Dispensary directors Neil Forrest and Batzi and Patricia Kuburovich have maintained the dispensary uses a not-for-profit model and therefore does not require a business license. However, McKenney stated in his order that city code requires nonprofits to obtain the city's permission to operate.

"A contrary interpretation that a nonprofit organization can commence the operation of any business or activity without the city's permission would be unworkable and unreasonable," he wrote.

MediLeaf directors could not be reached for comment Wednesday, and it was unclear whether they planned to close the dispensary if an injunction were granted.

Depending upon the type of injunction the judge approves, the dispensary may be able to legally remain open pending an appeals process, Woodward said. It is unclear according to the court order on whether the judge would allow the dispensary to continue to run if that were to happen.

Woodward anticipated that MediLeaf would seek to keep its doors open.

McKenney listened to Faber and Roberts make their case for their respective clients July 1. Previously, Superior Court Judge Kevin Murphy had allowed MediLeaf to remain open while litigation was pending, rejecting the city's request for a preliminary junction on Dec. 15.

At the time, Murphy said the dispensary would not cause "irreparable harm" by staying open. He also said it was not clear whether the city would prevail when the matter goes to trial. Finally, he said Gilroy's City Council committed a Brown Act violation when it approved a resolution in a Nov. 16 closed session that allowed city attorneys to take legal action against the dispensary. The council corrected that violation in December by approving the resolution in open session.

McKenney did not bring up any of Murphy's objections when he deliberated on the case July 1.

City Administrator Tom Haglund has said the city spent $102,861 through May on the litigation against MediLeaf. However, that was before the July 1 hearing.

Mayor Al Pinheiro, who wants to continue the litigation as a matter of principle to make sure the city's laws are upheld, said the council will soon get debriefed on next steps the city can take regarding litigation. He said he was glad the courts finally agreed with the council's position.

"Obviously, as one of people that voted to go ahead and fight this thing, I'm happy about it, but we'll see what the next steps are," Pinheiro said. "We'll see if there's light at the end of the tunnel."


Jonathan Partridge is a staff writer for the Gilroy Dispatch.