City of >Auburn> v. Sierra Patient & Caregiver Exchange























Filed 2/7/13
City of Auburn v. Sierra
Patient & Caregiver Exchange CA3









NOT TO
BE PUBLISHED







California
Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying
on opinions not certified for publication or ordered published, except as
specified by rule 8.1115(b). This
opinion has not been certified for publication or ordered published for
purposes of rule 8.1115.









IN THE COURT OF APPEAL
OF THE STATE OF CALIFORNIA

THIRD APPELLATE DISTRICT

(Placer)

----






>

CITY OF AUBURN, Plaintiff and Respondent, v. SIERRA PATIENT & CAREGIVER EXCHANGE, INC. et al., Defendants and Appellants.

C069622 (Super. Ct. No. SCV29599)

In recent years, there has been considerable
litigation over the regulation, and in some cases the outright ban, of medical
marijuana dispensaries. This case
concerns an outright ban. However, as we
explain post, to resolve this case,
we need not reach the issue of whether a local government may ban marijuana
dispensaries, an issue currently pending before our Supreme Court.href="#_ftn1" name="_ftnref1" title="">[1]

The trial court granted the City of Auburn a preliminary> injunction against Sierra Patient and
Caregiver Exchange, Inc. and Richard Miller (collectively Miller), after Miller
obtained a license for a flower shop, but opened a marijuana dispensary,
forbidden by an Auburn ordinance.
On appeal, Miller contends that Auburn’s dispensary ban is
preempted by the Compassionate Use Act of 1996 (CUA) and the Medical Marijuana
Program (MMP). (Health & Saf. Code,
§§ 11362.5, 11362.7 et seq.)href="#_ftn2"
name="_ftnref2" title="">[2]

As we will explain, the record in
this case, viewed in the light favorable to the trial court’s order, shows
Miller committed a nuisance per se by surreptitiously
opening a dispensary. Further, Miller
did not establish irreparable harm.
Because Miller’s business license violation independently shows a
nuisance per se, we shall affirm the order granting Auburn a href="http://www.fearnotlaw.com/">preliminary injunction to preserve the
status quo pending trial.

FACTUAL
AND PROCEDURAL BACKGROUND

Code
Provisions at Issue

Auburn requires all
businesses, “whether or not carried on for profit” to procure a license. (Auburn Mun. Code, §§ 33.001,
33.002(A)(1).) An applicant must furnish
“a sworn statement” including, “The exact nature or kind of business for which
a license is requested.” (>Id., § 33.002(D)(1)(a).)

Auburn also bans
dispensaries. Section 159.019 of the
Auburn Municipal Code, part of its zoning regulations, provides:



“The following uses are prohibited in all zones
established by this chapter and may not be conducted anywhere in the city:



“(A) Medical
marijuana dispensaries or any other facility or use that involves the
distribution of drugs or other substances which it is illegal to distribute or
possess under state or federal law.



“(1) No conduct
protected from criminal liability pursuant to the Compassionate Use Act
[citation] and the Medical Marijuana Program Act [citation] shall be made
criminal by this code. Such conduct that
violates the requirements of this code shall be subject to non-criminal
remedies only.”

Although a person may apply for a
“hardship” variance from zoning regulations, “no variance may be granted to
permit a land use in any district where the land use is prohibited by the
provisions of this chapter.” (Auburn
Mun. Code, § 159.420.)

Auburn’s enforcement
provisions state, “It shall be unlawful for any person to violate any
provisions or to fail to comply with any of the requirements of this
code[.]” (Auburn Mun. Code, §
10.99(A)(1).) “In addition to the
penalties provided by this section, any condition caused or permitted to exist
in violation of any of the provisions of this code . . . shall be deemed a
public nuisance and may be summarily abated by the city in a civil
action[.]” (>Id., § 10.99(A)(4).)

Miller’s
License Application and Ensuing Litigation

On April
8, 2011,
Miller filed a business license application to open “S&R Blooms &
Blossoms,” engaged in the business of “variety store; florist shop.” Based on Miller’s signed declaration, Auburn issued him a license
that week.

On July
19, 2011,
Auburn sued Miller, alleging
he violated its license and
dispensary ordinances. Auburn sought abatement, and
declaratory and injunctive relief.

Attached to the complaint was a
letter from Miller’s counsel dated July 14,
2011,
rejecting a July 12, 2011 cease-and-desist
letter. Miller argued the dispensary ban
was unlawful, he sold floral arrangements, and his failure to mention the dispensary
in his application was irrelevant because the ban was invalid. Miller’s letter attached unauthenticated
information about his “collective.”href="#_ftn3" name="_ftnref3" title="">[3]

On July
22, 2011,
Auburn obtained a href="http://www.mcmillanlaw.com/">temporary restraining order (TRO) and an
order to show cause for a preliminary injunction, based on Miller’s misleading
license application and his operation of a dispensary.

Detective Rick Hardesty supplied Auburn’s key evidence; he had
conducted an undercover operation on June 29,
2011. The store’s windows were blacked out. After Miller’s employee asked for an
undercover agent’s “medical marijuana card and identification[,]” she offered
the agent a free “marijuana-laced chocolate-chip cookie” normally sold for $8,
and said, “‘Richard’ makes all of their edible products.” The agent bought one-eighth of an ounce of
marijuana for $43.30 (with tax), packaged in a “prescription” bag, and was
given a copy of the collective’s rules.
Prices for marijuana products were posted on jars and on a board behind
the sales counter, and hashish was also available.

Miller’s opposition argued he was
likely to succeed on his preemption claim, and that his license application was
accurate because he sold floral arrangements and was negotiating to convert an
adjacent lot into a community flower garden.href="#_ftn4" name="_ftnref4" title="">[4] Further, had he stated he had planned to open
a dispensary, Auburn would have denied his
license.

Miller claimed an injunction would
cause financial harm, because his costs to improve the “non-profit” store would
be lost, he would incur damages due to breach of his lease, and his employees
would lose their jobs. He also claimed
“500+” members would be forced “to travel great distances” to get marijuana and
would suffer. However, as we explain, Miller’s
evidence did not back up his claims.

Miller provided no evidence of
financial harm, nor any evidence showing his dispensary was a non-profit
operation.

Miller did try to show harm to his
customers. He provided 15 declarations,
each from a person claiming to “suffer from a serious medical condition for
which my physician has recommended the use of medicinal cannabis,” and claiming
that closing the dispensary would cause “great difficulty obtaining safe and
lawful access” to marijuana. But there
was no evidence presented as to whether these customers lived in Auburn, how
far the nearest other dispensary was, whether they could grow their own
marijuana, whether they could arrange for a caregiver to get marijuana for
them, or verification of their recommendations.
Miller attached an exhibit purporting to be the application and
recommendation of another customer, but he provided no declarations to
authenticate the documents.

Trial
Court’s Order

The trial court issued a written
order after hearing, finding that Miller “arrived in [Auburn] and opened up
shop without getting a use permit or seeking declaratory relief from the
court. While [Miller] did obtain a
business license, the license application stated that the type of business to
be operated as a florist shop. . . . It is difficult for the court to find that
a false status quo needs to be preserved.
If that was the case then anyone could start an illegal business and if
they [went] unnoticed for even a brief period of time argue that the court
needs to preserve the status quo and allow them to operate. [Miller knew] in advance of the [dispensary
ban] and could have sought declaratory relief rather than resort to the camel’s
nose approach.” The trial court also
found the dispensary ban was not preempted by state law, and Miller failed to
show irreparable harm.href="#_ftn5"
name="_ftnref5" title="">[5]

The trial court issued a preliminary
injunction precluding all defendants from operating a dispensary pending
trial. The preliminary injunction did
not prevent Miller from operating the flower business for which he had a
license.

Miller timely filed this
appeal. The appeal lies. (Code Civ. Proc., § 904.1, subd. (a)(6).)

DISCUSSION

I

Standard
of Review

A preliminary injunction merely
preserves the status quo pending trial.
A trial court considers whether the plaintiff will likely succeed on the
merits, and whether either party will suffer irreparable harm pending
trial. The trial court’s ruling on these
issues is reviewed for an abuse of discretion.
(See Tahoe Keys Property Owners’
Assn. v. State Water Resources Control Bd. (1994) 23 Cal.App.4th 1459,
1470-1471 (Tahoe Keys).)



“‘The law is well settled that the
decision to grant a preliminary injunction rests in the sound discretion of the
trial court.’ . . . An abuse of discretion will be found only where the trial
court’s decision exceeds the bounds of reason or contravenes the uncontradicted
evidence. . . .



“In determining whether or not to
issue a preliminary injunction, a trial court must evaluate two interrelated
factors. The first is the likelihood
that the plaintiff will prevail on the merits at trial. The second is the interim harm the plaintiff
may suffer if the injunction is denied as compared to the harm that the
defendant may suffer if the injunction is granted.” (Tahoe
Keys, supra, 23 Cal.App.4th at
pp. 1470-1471; see People ex rel. Gallo
v. Acuna (1997) 14 Cal.4th 1090, 1136-1137 [facts “subject to review under
the substantial evidence standard”].)

As stated by our Supreme Court, “‘>The ultimate goal . . . >is to minimize the harm which an erroneous
interim decision may cause.’” (>White v. Davis (2003) 30 Cal.4th 528,
554.)

Throughout his briefs, Miller refers
to facts not presented to the trial court, and we disregard all facts stated
without record citations. (See >Duarte v. Chino Community Hospital
(1999) 72 Cal.App.4th 849, 856.) His
flagrant disregard of appellate norms--characterized by viewing all of the
facts in his favor--prompts us to paraphrase one of our prior cases:



“[L]egal issues arise out of facts, and a party cannot
ignore the facts in order to raise an academic legal argument. ‘Appellate counsel should be vigilant in
providing us with effective assistance in ferreting out all of the operative
facts that affect the resolution of issues tendered on appeal.’ [Citation.]



“[Miller] has not waived the legal issues [he]
raises. But in addressing [Miller’s]
issues we will not be drawn onto inaccurate factual ground.” (Western
Aggregates, Inc. v. County of Yuba (2002) 101 Cal.App.4th 278, 291.)

II

Validity
of the Injunction

Miller principally contends the
medical marijuana laws (the CUA and MMP) forbid a local entity from banning
dispensaries. However, as we shall
explain, we can and do uphold the preliminary injunction on an alternate ground.

A. Alternative
Bases for the Preliminary Injunction

Auburn’s complaint pleaded two
causes of action, although it confused separate remedies with separate causes
of action. A cause of action exists
for interference with a primary right.
(See Miranda v. Shell Oil Co.
(1993) 17 Cal.App.4th 1651, 1658;

4
Witkin, Cal. Procedure (5th ed. 2008) Pleading, §§ 34-41, pp. 98-107.) Different legal theories may be pursued in aid of a single, primary right, but
that does not create different causes of action. (See Slater
v. Blackwood (1975) 15 Cal.3d 791, 795-796; Uhrich v. State Farm Fire Casualty Co. (2003) 109 Cal.App.4th 598,
605.) Nor does the pursuit of different
remedies create different causes of action.
(See Walton v. Walton (1995)
31 Cal.App.4th 277, 291; Verdier v.
Verdier (1962) 203 Cal.App.2d 724, 738.)

The complaint pleaded that Miller
violated two ordinances, the business license ordinance and the dispensary ban,
and therefore pleaded two separate causes of action.

Contrary to Miller’s repeated
claims, the trial court found Miller violated both the dispensary ban and exceeded the scope of its business
license.

B. Probability
of Success

Unlike in ordinary nuisance cases,
where a balancing of interests may be required, “where the law expressly
declares something to be a nuisance, then no inquiry beyond its existence need
be made and in this sense its mere existence is said to be a nuisance per
se.” (Beck Development Co. v. Southern Pacific Transportation Co. (1996)
44 Cal.App.4th 1160, 1207 (Beck); >City of Costa Mesa v. Soffer (1992) 11
Cal.App.4th 378, 382-383 (Costa Mesa).) “Cities are constitutionally authorized to
make and enforce within their limits all local, police and sanitary ordinances
and other such regulations not in conflict with the general laws. (Cal. Const., art. XI, § 7.) Government Code section 38771 provides, ‘By
ordinance the city legislative body may declare what constitutes a nuisance.’” (Costa
Mesa, supra, 11 Cal.App.4th at
pp. 382-383.)

Miller does not claim Auburn’s
business license ordinance is itself invalid, and fails to head and argue an
attack on the trial court’s finding as to his violation of the business license
ordinance, thereby forfeiting any such claim.
(See Loranger v. Jones (2010)
184 Cal.App.4th 847, 858, fn. 9.)

Therefore, the finding that Auburn
had a probability of success as to this claim stands unrebutted.

Moreover, even in his reply brief,
Miller fails to make any persuasive attack on the trial court’s conclusion as
to Auburn’s ability to prevail on its claim of a business license
violation.

Miller faults Auburn for choosing to
ban, rather than regulate, dispensaries.
Miller uses Auburn’s failure to regulate dispensaries as an invitation
to open a dispensary by subterfuge,
reasoning it would have been futile for Miller to have been honest in his sworn
statement.

We disagree that the dispensary ban
forgives dishonesty in the license application.
Like the trial court, we do not endorse subterfuge.

Bad faith by a party is a relevant factor
for the trial court to consider in deciding whether to issue a preliminary
injunction, as in other equitable cases.
(See 6 Witkin, supra,
Provisional Remedies, § 348, p. 291.)
Moreover, “No one can take advantage of his own wrong.” (Civ. Code, § 3517; see Estates of Collins and Flowers (2012) 205 Cal.App.4th 1238,
1253-1255 [assuming unclean hands doctrine could bar defendants from relief in
equitable action].)

As the trial court found, Miller
could have challenged Auburn’s dispensary ban through lawful means. (See, e.g., County of Sonoma v. Superior Court (2010) 190 Cal.App.4th 1312,
1317 [dispensary brought mandamus and declaratory relief action challenging
ordinance]; Qualified Patients Assn. v.
City of Anaheim (2010) 187 Cal.App.4th 734, 742 [declaratory relief action
to challenge dispensary ban].)

Instead, Miller violated a facially
valid ordinance requiring accurate business license applications. His apparent belief that the dispensary ban
is unlawful did not give him leave to violate other ordinances. The fact
that Miller questions the legality of Auburn’s dispensary ban has no effect on
Auburn’s business license ordinance and does not excuse Miller’s act of signing
a misleading license application. (See >City of Corona v. Naulls (2008) 166
Cal.App.4th 418, 427 [Naulls “failed to indicate that he intended to operate a
medical marijuana dispensary, instead describing the business as ‘miscellaneous
retail’”; held, nuisance per se, even though the application would have been
denied had Naulls been truthful]; see City
of Claremont v. Kruse (2009) 177 Cal.App.4th 1153, 1165-1166 [“Kruse’s
operation of a medical marijuana dispensary without the City’s approval
constituted a nuisance per se”].)

Auburn established a clear
probability that it would prevail on its cause of action for exceeding the
scope of the business license.

C. Irreparable
Harm

Auburn was not required to show
irreparable harm after establishing a nuisance per se. (See Beck,
supra, 44 Cal.App.4th at pp.
1206-1207; Costa Mesa, >supra, 11 Cal.App.4th at pp. 382-383.)

Although Miller’s pleadings claimed
he would suffer financial harm, and claimed his dispensary complied with state
law, he did not provide evidence establishing
these facts.

As we have said before, “except for
stipulations or admissions contained therein, the unsworn pleadings of counsel
do not constitute evidence.” (>Estate of Nicholas (1986) 177 Cal.App.3d
1071, 1090-1091.) Further, the trial
court was free to reject the evidence Miller did produce, specifically the
customer declarations.

First, the trial court was free to
disregard all of the customer declarations.
“A factual contest based on written evidence is treated like other
factual contests.” (California Correctional Supervisors Organization, Inc. v. Department of
Corrections (2002) 96 Cal.App.4th 824, 832.) “Provided the trier of the facts does not act
arbitrarily, [it] may reject in toto the
testimony of a witness, even though the witness is uncontradicted.” (Hicks
v. Reis (1943) 21 Cal.2d 654, 659-660.) The vague information in those declarations
made them suspect and it would not have been irrational for the trial court to
disbelieve them, both individually and collectively.

Second, even if the trial court
credited the declarations, they did not compel a finding of irreparable
harm. As we explained, none of the
declarations stated how far the next dispensary was, or showed that any
customer was unable to designate a caregiver or grow marijuana at home.

The trial court could properly find Miller
failed to show irreparable harm from the preliminary injunction requiring him
to operate within the scope of his license pending trial.

D. Conclusion

The record supports a preliminary
injunction pending trial based on Miller’s business license violation. We agree with the trial court that Miller
cannot manufacture a status quo by obtaining a business license application for
a different kind of business and then surreptitiously opening a dispensary.

The trial court’s order may be upheld on any correct
theory. (See Davey v. Southern Pacific Co. (1897) 116 Cal. 325, 329.) As we have repeatedly held, “Ordinarily, when
an appellate court concludes that affirmance of the judgment is proper on
certain grounds it will rest its decision on those grounds and not consider
alternative grounds which may be available.”
(Filipino Accountants’ Assn. v.
State Bd. of Accountancy (1984) 155 Cal.App.3d 1023, 1029; see >Sutter Health Uninsured Pricing Cases
(2009) 171 Cal.App.4th 495, 513.)
Because Auburn is entitled to a preliminary injunction whether or not
the dispensary ban is lawful, we need not and do not address the validity of
that ban at this time.href="#_ftn6"
name="_ftnref6" title="">[6]

II

Due
Process

Miller separately contends that
Auburn violated his due process rights.
We disagree.

“[T]he strictures of due process
apply only to the threatened deprivation of liberty and property interests
deserving the protection of the federal [or] state Constitutions.” (Ryan
v. California Interscholastic Federation-San Diego Section (2001) 94
Cal.App.4th 1048, 1059 (Ryan).)

Miller had no federal due process right to operate a dispensary, because
marijuana is contraband per se under
federal law. (See County of Butte, >supra, 175 Cal.App.4th at pp. 739-740
(maj. opn.), 741-745 (dis. opn.).)

As for the broader “dignity”
interest in fair procedure protected by state
due process principles, Miller was given notice, filed an opposition through
counsel, and participated with counsel at a hearing before a neutral
judge. That fully satisfied state due
process. (See Saleeby v. State Bar (1985) 39 Cal.3d 547, 563-565; >People v. Ramirez (1979) 25 Cal.3d 260,
265-269; Ryan, supra, 94 Cal.App.4th at pp. 1069-1072.)

Miller points to Health and Safety
Code section 11362.775, which partly states that persons “who associate within
the State of California in order collectively or cooperatively to cultivate
marijuana for medical purposes, shall not solely on the basis of that fact be
subject to state criminal sanctions under Section . . . 11570.” The referenced section partly states a place
“used for the purpose of unlawfully selling, serving . . . or giving away any
controlled substance . . . is a nuisance which shall be enjoined, abated, and
prevented, and for which damages may be recovered, whether it is a public or
private nuisance.” (Health & Saf.
Code, § 11570.)

Reading these statutes together,
Miller claims he was immune from a civil
nuisance suit. Assuming for the sake of
argument that Miller’s statutory interpretation is correct--a point Auburn
contests--Miller provides no authority for the proposition that filing a
nonmeritorious suit violates due process,
or for his claim that Auburn had a duty to conduct an href="http://www.fearnotlaw.com/">administrative hearing to address his
claims. (See In re Marriage of Nichols (1994) 27 Cal.App.4th 661, 672-673, fn. 3
[failure to provide authority forfeits claim].)

Miller also claims Auburn
manipulated events to obtain the TRO while his counsel was on vacation. Even assuming Auburn knew counsel’s vacation
plans--a disputed point we need not resolve--Auburn’s knowledge did not require
it to delay seeking relief. (See >In re Marriage of Falcone >& Fyke (2008) 164 Cal.App.4th 814,
824-825.) More importantly, Miller’s
counsel opposed the preliminary injunction,
which is the subject of this appeal:
Miller did not appeal from the TRO (see McLellan v. McLellan (1972) 23 Cal.App.3d 343, 357), which in any
event evaporated when the trial court issued the preliminary injunction (see >Landmark Holding Group, Inc. v. Superior
Court (1987) 193 Cal.App.3d 525, 529).

In short, Miller has not
demonstrated how Auburn violated his due process rights in this proceeding.

DISPOSITION

The judgment is affirmed. Miller shall pay Auburn’s costs of this
appeal. (Cal. Rules of Court, rule
8.278.)href="#_ftn7" name="_ftnref7"
title="">[7]







DUARTE , J.







We concur:







BUTZ , Acting P. J.







MAURO , J.