Granny Purps, Inc. v. Cnty. of Santa Cruz

53 Cal.App.5th 1

266 Cal.Rptr.3d 752

GRANNY PURPS, INC., Plaintiff and Appellant,

v.COUNTY OF SANTA CRUZ et al., Defendants and Respondents.

H045387

Court of Appeal, Sixth District, California.

Filed August 5, 2020

Andrew F. Pierce, Pierce & Shearer LLP, Redwood City, for Plaintiff/Appellant GRANNY PURPS, INC.

Jordan Sheinbaum, Office of the Santa Cruz County, for Defendant/Respondent COUNTY OF SANTA CRUZ Counsel

Grover, J. Santa Cruz County law enforcement officers seized more than 2,000 marijuana plants from a medical marijuana dispensary for violating a local ordinance restricting cannabis cultivation. When the dispensary sued to recover the marijuana, the county asserted it had no obligation to return the plants since the dispensary violated the ordinance. The trial court agreed and sustained the county's demurrer without leave to amend. We will reverse the judgment. A government entity does not have to return seized property if the property itself is illegal. But the ordinance here ultimately regulates land use within the county; it does not (nor could it) render illegal a substance that is legal under state law. For that reason, the causes of action seeking return of property survive demurrer.

I. BACKGROUND

We take the facts from the operative first amended complaint. Plaintiff Granny Purps, Inc. operates a medical marijuana dispensary in Santa Cruz County that grows and provides medical marijuana to its 20,000 members. It does so in compliance with state laws governing the production and distribution of marijuana for medical purposes.

The County of Santa Cruz restricts cannabis cultivation. A local ordinance prohibits any medical cannabis operation from cultivating more than 99 plants, while plaintiff's dispensary was growing thousands of marijuana plants. As a result, law enforcement officers from the county sheriff's office went to the dispensary in June 2015 and seized about 1,800 plants. The county also issued plaintiff a notice of ordinance violation. Several months later, law enforcement officers again went to the dispensary and took about 400 more marijuana plants.

Plaintiff sued the county and two sheriff's deputies in July 2016. The complaint asserted claims for monetary damages, alleging causes of action for conversion, trespass, and inverse condemnation. Plaintiff also sought an order requiring the county to return the seized cannabis plants, by way of a writ of mandate, injunctive relief, and a cause of action for specific recovery of property. Plaintiff also requested a judgment declaring that the county cannot lawfully seize cannabis plants from a dispensary operating in compliance with state medical marijuana laws.

The county demurred to the complaint on the grounds that it failed to state a valid cause of action and the claims were time barred. The trial court sustained the demurrer without leave to amend and entered judgment for defendants.

II. DISCUSSION

The county argues the demurrer was properly sustained for two primary reasons: the claims seeking return of property cannot succeed because plaintiff was in violation of the ordinance restricting cannabis cultivation; and the claims for damages are barred by the statute of limitations for suits against a government entity. Our review of a decision sustaining a demurrer is de novo. ( Martin v. Bridgeport Community Assn., Inc. (2009) 173 Cal.App.4th 1024, 1031, 93 Cal.Rptr.3d 405.) We independently review the complaint, assume its factual allegations are true, and determine whether it states a cause of action under any legal theory. ( Ibid. )

A. CLAIMS FOR RETURN OF SEIZED PROPERTY

Plaintiff seeks an order compelling the county to return the seized marijuana plants. As a general proposition, a government agency cannot retain an individual's property without providing due process of law. ( Ensoniq Corp. v. Superior Court (1998) 65 Cal.App.4th 1537, 1548–1549, 77 Cal.Rptr.2d 507.) Someone whose property is wrongfully withheld by the government may bring a cause of action specifically for an order compelling return of the property. ( Minsky v. City of Los Angeles (1974) 11 Cal.3d 113, 121–123, 113 Cal.Rptr. 102, 520 P.2d 726.) But the right to regain property withheld by the government is not absolute. One exception applies to property lawfully seized for use as evidence in a criminal action while the action is pending. ( People v. Lamonte (1997) 53 Cal.App.4th 544, 549, 61 Cal.Rptr.2d 810.) Another exception applies to illegal property. The state can retain property that is illegal to possess, whether it was lawfully seized or not. ( Ensoniq Corp., supra , 65 Cal.App.4th 1537, 1548, 77 Cal.Rptr.2d 507.) It is that second exception the county relies on here. The county asserts that because plaintiff's dispensary violated a local ordinance restricting cannabis cultivation within the county, the marijuana was illegally possessed and plaintiff has no right to its return.

The illegal property exception applies only where the property in question is per se illegal to possess. (See Minsky v. City of Los Angeles, supra , 11 Cal.3d 113, 121, 113 Cal.Rptr. 102, 520 P.2d 726 [government is a bailee of seized property unless it is shown to be contraband]; People v. Lamonte, supra , 53 Cal.App.4th 544, 552, 61 Cal.Rptr.2d 810 ); see also United States v. Harrell (9th Cir. 2008) 530 F.3d 1051, 1057 ( ["An object is contraband per se if its possession, without more, constitutes a crime; or in other words, if there is no legal purpose to which the object could be put."].) We must therefore determine if the seized marijuana is contraband per se.

Marijuana, at least for medical purposes, has been legal to possess in California since 1996. The Compassionate Use Act ( Health & Saf. Code, § 11362.5 ) made " ‘possession and cultivation ... noncriminal for a qualified patient or primary caregiver.’ " ( City of Garden Grove v. Superior Court (2007) 157 Cal.App.4th 355, 373, 68 Cal.Rptr.3d 656.) For qualifying individuals, possession and cultivation of marijuana became "just as lawful as the ‘possession and acquisition of any prescription drug.’ " ( Id. at p. 372, 68 Cal.Rptr.3d 656.) Protections for medical marijuana increased in 2003 with the passage of the California Medical Marijuana Program Act ( Health & Saf. Code, § 11362.71, et seq. ), which decriminalized medical marijuana-related activities beyond mere possession. The Legislature "exempted those qualifying patients and primary caregivers who collectively or cooperatively cultivate marijuana for medical purposes from criminal sanctions for possession for sale, transportation or furnishing marijuana, maintaining a location for unlawfully selling, giving away, or using controlled substances, managing a location for the storage, distribution of any controlled substance for sale, and the laws declaring the use of property for these purposes a nuisance." ( People v. Urziceanu (2005) 132 Cal.App.4th 747, 785, 33 Cal.Rptr.3d 859.)¹

Significantly, California laws allowing access to medical marijuana do not limit the ability of a local government to make land use decisions. A local government's inherent police power gives it broad authority to determine the appropriate uses of land within its jurisdictional boundary. ( City of Riverside v. Inland Empire Patients Health & Wellness Center, Inc. (2013) 56 Cal.4th 729, 738, 156 Cal.Rptr.3d 409, 300 P.3d 494 ( City of Riverside ).) As a result, a local government can by zoning ordinance determine that a medical marijuana dispensary is not an allowed land use anywhere in the jurisdiction. (See Ibid. [upholding Riverside's ban on medical marijuana dispensaries within city limits].) Similarly, a local legislative body can restrict or disallow entirely the cultivation of medical cannabis. (See County of Tulare v. Nunes (2013) 215 Cal.App.4th 1188, 1203, 155 Cal.Rptr.3d 781.) Those local land use restrictions have been held not to conflict with state laws permitting medical marijuana because of the narrow scope of the state laws, which merely created an exception to the criminal laws regulating the possession and use of marijuana. ( City of Riverside, supra , at p. 746, 156 Cal.Rptr.3d 409, 300 P.3d 494.) An exemption from state criminal laws does not preempt local land use regulation. ( Id. at p. 749, 156 Cal.Rptr.3d 409, 300 P.3d 494.)

The stated purpose of the Santa Cruz County ordinance at issue is "to prohibit medical cannabis cultivation while granting limited immunity from the enforcement of its prohibition to those medical cannabis cultivation activities that do not violate [certain restrictions]." (Santa Cruz County Code, § 7.126.010.) It accomplishes that purpose by declaring all cultivation of cannabis within the county by any cannabis cultivation business to be a prohibited activity constituting a public nuisance. (Id. , § 7.126.030.) At the same time, the ordinance grants limited immunity from its provisions for any medical cannabis cultivation business that does not cultivate more than 99 marijuana plants and complies with certain other requirements. (Id. , § 7.126.040.) Taken together, these provisions essentially impose a 99-plant limit on medical cannabis cultivation within the county, which is a permissible exercise of the County's inherent authority to regulate for public health, safety and welfare.

The County insists its cannabis restriction is a health and safety ordinance and not a land use regulation, noting that the ordinance is codified in Title 7 of the County Code which is entitled "Health and Safety." But on its face the ordinance restricts the manner in which land can be used, effectively making it a zoning regulation. (See City of Riverside, supra , 56 Cal.4th 729, 754, 156 Cal.Rptr.3d 409, 300 P.3d 494 [ordinance prohibiting marijuana-related activities on land within the jurisdiction is a zoning regulation].) And the County is not helped by characterizing its regulation as something other than zoning. Local land use regulation is clearly allowed...