The City of Upland’s effort last year to load the legal dice against the California Cannabis Coalition came up snake eyes last week when the Fourth District Court of Appeal ruled that the city’s theory that a voter-endorsed special election on a measure to allow three medical marijuana clinics to operate in the 73,732-population city could be postponed until this year’s general municipal election was a misapplication of the California Constitution.
Between October 2014 and January 2015 a group of Upland residents, nominally headed by Nicole DeLaRosa and James Velez, sponsored by the California Cannabis Coalition, Craig Beresh and Randy Welty, undertook a petition drive to qualify for the ballot in Upland an initiative aimed at overturning the Upland’s ban on marijuana dispensaries. On January 14, 2015 the California Cannabis Coalition and those involved in the signature-gathering effort came to Upland City Hall and handed over to then-Upland administrative services director/city clerk Stephanie Mendenahll the initiative petition endorsed with 6,865 signatures gathered in Upland. Mendenhall’s processing and evaluation of those signatures done in conjunction with the San Bernardino County Registrar of Voters established that more than 15 percent of the city’s voters had endorsed the petition. Under the election code, petitioners’ gathering of the signatures of ten percent of the city’s electorate would qualify the measure for the ballot. By meeting the 15 percent threshold, the petitioners were entitled to the measure being placed upon a special ballot that would come at least 88 days but no more than 103 days after the city council accepted the city clerk’s certification of the ballots. That meant, that at the latest, the special election would need to be held by June 2015. The Upland City Council, however, had three members – mayor Ray Musser and councilmembers Carol Timm and Glenn Bozar, who were philosophically opposed to allowing medical marijuana to be sold within the city. Concerned that holding a special election would afford medical marijuana advocates the opportunity to utilize social media and other means to drive large numbers of voters who look favorably upon marijuana use for both medical and recreational purposes to the polls in support of the measure while those city residents were not so galvanized, the trio signaled to city officials their wish that some means of preventing the special election from occurring be found. In response, city attorney Richard Adams cobbled together a strategy, based upon a somewhat dubious set of legal interpretations, that he told the council would very likely result in the vote on the measure being postponed until the city’s next municipal election, which is scheduled for November 8, 2016.
Adams seized on an element in the Cannabis Coalition’s measure calling for the imposition of a $75,000 licensing fee to be paid to the city by each medical marijuana dispensary granted a permit to operate. The framers of the measure intended the $75,000 to be utilized by the city to pay for a host of costs associated with the facilities, including background checks on the operators, staff time in inspecting and plan checking the premises in which the clinics would be located, police patrolling of the establishments and the like. Adams, however, said he believed the licensing fee could be represented as a tax and that under the California Constitution, votes to approve a municipal tax must be approved by voters at a regularly scheduled municipal election and not during specially-scheduled balloting. Though it was pointed out at the time that the constitutional provision Adams was applying, or misapplying, pertained to taxing measures put on the ballot by the governing body of a public agency and was inapplicable to a measure brought forth through the citizen initiative process, the council majority – Musser, Bozar and Timm – voted to schedule the vote on the medical marijuana dispensary permitting measure in conjunction with the November 2016. The upshot of the council majority’s action was the official contention that the $75,000 specified in the proposed dispensary licensing ordinance contained in the ballot measure would prove greater than the city’s actual costs for carrying out the licensing and permitting process. The council did so, going along with Adams’ legal representations, despite the assertions of councilman Bozar and his one-time appointee to the city council advisory commission, Pat Almazon, who was perhaps the most vociferous opponent of allowing the marketing of medical marijuana in Upland, that the cost to the city of permitting the facilities was far greater than the $75,000 the city stood to bring in from each operation.
Moreover, the council voted to postpone the election, despite clear language in the constitutional provision that it was applicable strictly to taxing initiatives by governmental entities.
Welty, the owner of the Tropical Lei nude dancing venue in Upland, the Hawaii Theatre in the city of Industry, Eye Candy Showgirls Theater in Chula Vista, three Spearmint Rhino bars, several adult bookstores and the owner of the Flesh Club on Hospitality Lane in San Bernardino before it was shut down amid charges of being a venue for prostitution activity, also has an interest in at least 63 medical marijuana dispensaries throughout California. He has on permanent retainer attorney Roger Jon Diamond, the legendary Santa Monica-based First Amendment rights attorney. He detailed Diamond to legally challenge the city’s action.
Diamond, on behalf of the sponsors of the initiative, filed a lawsuit on March 19, 2015 accompanied by a peremptory writ in which it was asserted the city had denied “the signers of the initiative…the full benefit of California law, which requires that the initiative be put on the ballot within 88 to 103 days of the certification of the signatures.”
The city did not have the legal option to postpone the election until 2016, Diamond said, and Adams had misapplied the section of the California Constitution that prohibits governmental entities from imposing taxes on citizens without the benefit of a vote to an initiative brought forth not by the government but citizens. Moreover, Diamond, insisted, the fee involved in the Upland initiative was not a tax, but a reasonable element of the licensing procedure intended to recoup the city’s costs for accommodating medical marijuana dispensaries within its jurisdiction.
The matter came before Judge David Cohn in San Bernardino on Tuesday, May 19, 2015. After Cohn got Adams, assistant city attorney James Touchstone and Diamond to agree to have the matter adjudicated by motion, i.e., on the basis of his ruling rather than through a court trial including a jury, Cohn devoted the lion’s share of his questioning to Diamond. He questioned Diamond as to why the Cannabis Coalition was so intent on getting the initiative on a special ballot rather than having it voted upon during the 2016 election, suggesting as he did so that it would stand a greater chance of passage during a special election. Diamond did not confirm that there was any political motive to his client’s desire for a special election, stating only that the goal was to make medical marijuana available to patients at the earliest date possible. Cohn then pressed Diamond to deconstruct the city’s primary defense for postponing the vote for over a year, which consisted of its representation of the fee as a tax. Cohn asked Diamond to identify in a series of the city’s legal submissions evidence to controvert the city’s assertion that the $75,000 fee is a tax. In his responses, Diamond took aim at the city’s claim that the background checks, licensing processing, follow-up inspections and investigations would at most cost $56,540 and that enforcement and prosecutions of violations would run no more than another $10,000. Diamond asserted that the city had “artificially” minimized the cost and that while the exact costs could not be quantified ahead of time, the $75,000 fee was a reasonable one intended to cover the city’s outlays in accommodating the uses envisioned in the initiative. “You cannot come up with an exact mathematical figure when you are talking about a future event,” he said. “They [the city] can set any cost they want.”
Touchstone retorted that the total itemized costs of $66,540 was under the $75,000 specified in the initiative.
In his ultimate ruling, Cohn shut the door on Diamond and the Cannabis coalition, stating “I wasn’t able to find anything that stated $75,000 was a reasonable cost,” Cohn said. “The city has an affirmative obligation not to place a measure on the ballot it believes is unconstitutional.” He allowed the city to put the election off until November 2016.
Diamond, however, appealed the ruling and the ten months later, California’s Fourth District Court of Appeal in Riverside ruled that Cohn had erred and it was the City of Upland that had acted unconstitutionally when it denied the rights of the 6,865 Upland residents who had signed the petition to seek redress from their government.
The appellate court’s opinion, released on March 18, found that Upland must hold the special election and that the city must bear the cost of doing so, which under the current conditions, with the county Registrar of Voters office tied up with making preparations for both the June primary election and the November general election, will likely cost one-and-a-half times as much as the estimated $88,000 it would have cost to hold the election last year. The city is also on the hook for Diamond’s legal fees, which he pegged at around $100,000. Cohn will be asked to determine the actual amount Diamond should be awarded after examining Diamond’s itemized bills to the Cannabis Coalition.
The appellate court released its tentative decision in favor of the Cannabis Coalition in February and then heard final oral arguments on the issue on March 1. The city was unable to dissuade the appellate court panel from its earlier expressed interpretation of the circumstance and Diamond pressed the appellate court’s three judge panel to comply with the election code and hold a special election at which the only item on the ballot will be the dispensary permitting initiative.
As it stands, however, depending on the dispatch with which events ensue, it is possible the measure might be placed on the June primary ballot.
One indication of what is underway is the speed with which the appellate panel acted, issuing its decision just 18 days after those oral arguments, on March 18, when it had until April 9 to reach its final decision. The rapidity of the ruling and the consideration that it came in the form of a “published decision” indicates the unanimity of the panel on the underlying finding that the city did violate the petitioners’ rights and a willingness to expedite the holding of the election.
City officials are now mulling their next move. While some of the city’s anti-marijuana zealots are pressing for the city to appeal the Fourth District Court of Appeal’s ruling to the California Supreme Court and thus angle toward delaying the vote to the point where by default it will end up on the November ballot where they believe it will stand far less of a chance of passing because of the larger voter turnouts that traditionally occur during presidential general elections. If Upland were to ask the California Supreme Court to take up the matter, those justices might take up to 90 days to determine whether to undertake that review. Depending how far into that ninety day window the court proceeds, the ticking of the calendar might make it impossible for the lower court to hear the matter within 88 days of the November 8 election.
Cooler heads, however, conscious that the Supreme Court consents to hear fewer than ten percent of the petitions for rehearing that come to it, as well as the weakness of the city’s legal position, are willing to capitulate to the virtually inevitable, thus saving the city a likely expenditure of more than another $200,000 in legal fees.
Diamond told the Sentinel “Obviously, we are pleased with the appellate court’s determination that the city acted illegally to delay the election. It shows the superior court judge was wrong in denying us relief last year. The case has been returned to him and we are looking toward scheduling the special election. This was a published decision. I am very excited about that. It goes into the law books, so it is a precedent.”
Diamond said he is not certain what the city will do and what the ultimate timing of the election will be and whether or not it will be of benefit to his clients. “If there is another appeal by the city, that could carry it into the November election,” he said. “Either way, we will definitely get an election by November 8. There may well be other procedural remedies to shorten the process but at this point I cannot say.”
The city council will take up whether or not the city should appeal the Court of Appeal’s decision at its April 11 meeting.