C.A.: Marijuana Dispensary Can Reclaim Money Seized by Police

Metropolitan News-Enterprise

Wednesday, October 21, 2009

C.A.: Marijuana Dispensary Can Reclaim Money Seized by Police

By SHERRI M. OKAMOTO, Staff Writer

The federal government cannot retain monies seized from a local medical marijuana dispensary during an illegal 2005 search by the Los Angeles Police Department as proceeds traceable to federal narcotics violations, the Ninth U.S. Circuit Court of Appeals said yesterday.

Reversing the decision of U.S. District Judge Stephen V. Wilson of the Central District of California, the panel explained that the $186,000 could not be forfeited under federal law since the search which yielded the money was authorized by a state warrant lacking in probable cause and was not predicated on an asserted violation of federal law.

In March 2005, the LAPD obtained a search warrant from a Los Angeles Superior Court judge to search a non-profit medical marijuana dispensary owned by United Medical Caregivers Clinic Inc. on Fairfax Avenue.

During the search, officers seized $186,416 in U.S. currency from the clinic’s safe and from a cash register, along with about 209 pounds of marijuana, 21 pounds of hashish, and 12 pounds of marijuana oil.

No criminal charges were filed against the clinic or any of its employees, and the clinic eventually filed a motion in the Los Angeles Superior Court for the return of the money and other items taken during the search.

Attached to this motion was a declaration of the clinic’s chief executive officer, admitting that the facility “distributed” marijuana to “patient members.” He asserted that the cannabis products, currency and other items seized were all used in the course of the clinic’s operation as a lawful medical marijuana provider.

LAPD Request

The Superior Court subsequently ordered the release of the seized currency from the state’s jurisdiction to allow initiation of federal forfeiture proceedings, pursuant to a request from the LAPD.

After the government filed a complaint for forfeiture in the district court, the clinic filed a motion claiming ownership of the money and seeking to suppress all the evidence seized during the LAPD search.

Based on “misleading” statements and “reckless” omissions of relevant facts pertaining to the clinic’s status as a legally-operated medical marijuana dispensary in the LAPD’s warrant affidavit, Wilson found that there had not been probable cause to issue a search warrant for a violation of state law and granted the clinic’s suppression request.

The clinic then filed a motion for summary judgment, arguing that the government lacked sufficient evidence to initiate the federal civil forfeiture action. However, Wilson denied that motion, opining that the declaration of the clinic’s CEO was untainted by the illegality of the search and by itself gave the government sufficient probable cause for bringing the forfeiture action.

Fourth Amendment

Writing for the appellate court, Judge Richard R. Clifton disagreed, explaining that the search—which the government conceded had been illegal—violated the clinic’s Fourth Amendment rights and that the government lacked probable cause to seek forfeiture of the assets seized.

The jurist acknowledged that there may have been probable cause to search the clinic for a violation of federal law but reasoned “that was not what the LAPD was doing” since the agency had never initiated the process of seeking a federal search warrant from a federal magistrate or in any way indicated that it was pursuing a violation of federal law.

He also emphasized that the search was not illegal because it failed to comply with federal procedural requirements for search warrants as the district court had ruled since the Federal Rules of Criminal Procedure are inapplicable to searches conducted by state officers with state warrants issued by state judges, even if a federal prosecution results.

Admissibility Issue

Clifton then turned to the issue of admissibility of the declaration, noting that the document would suffice to establish probable cause to believe that the money in question was linked to sales of marijuana, if the government were permitted to rely on it.

But Clifton said the government could not do so since the declaration had been submitted for the express purpose of securing the return of the money, and had to be offered or else the clinic “would have been left without legal recourse to regain the currency that was illegally taken from its possession.”

The jurist also expressed concern with the “distinct and disturbing possibility that the LAPD could profit from its own illegal activity, were the government to prevail,” based on a suggestion in the clinic’s opening brief—which the government did not deny—that the agency could collect up to 80 percent of any forfeiture obtained.

Because the LAPD’s omission of relevant information from the warrant affidavit enabled its illegal search and its seizure of the currency, which in turn led directly to the submission of the declaration of ownership, Clifton concluded that this direct “causal chain” linking the initial illegality to the declaration foreclosed the government’s ability to rely on it to establish probable cause for the forfeiture action.

Absent any other evidence linking the currency with the clinic’s marijuana sales, Clifton, joined by Judges Michael Daly Hawkins and Marsha S. Berzon, directed the district court to enter summary judgment in favor of the clinic.

Santa Monica attorney Paul L. Gabbert represented the United Medical Caregivers Clinic while Special Assistant U.S. Attorney P. Greg Parham appeared on behalf of the government.

The case is United States v. $186,416.00 in U.S. Currency, 07-56549.

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