Court Opinion

ID: 3186711
Source: CourtListenerOpinion
Date Created: 2016-03-18 00:04:35.447305+00
Date Added: 2024-06-11T14:35:40.556253
License: Public Domain

Filed 3/17/16

                          CERTIFIED FOR PUBLICATION

          IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                         FOURTH APPELLATE DISTRICT

                                    DIVISION TWO

CITY OF PALM SPRINGS,

      Plaintiff, Cross-defendant and                 E062654
Respondent,
                                                     (Super.Ct.No. PSC1404912)
v.
                                                     OPINION
LUNA CREST INC.,

      Defendant, Cross-complainant and
Appellant.

        APPEAL from the Superior Court of Riverside County. John G. Evans, Judge.

Affirmed.

        Law Offices of James DeAguilera and James DeAguilera for Defendant, Cross-

complainant and Appellant.

        Woodruff, Spradlin & Smart, Jason M. McEwen and Vincent K. Wong for

Plaintiff, Cross-defendant and Respondent.

        Defendant, cross-complainant and appellant Luna Crest Inc. (Luna) opened a

medical marijuana dispensary within the city limits of plaintiff, cross-defendant and

respondent City of Palm Springs (City). The Palm Springs Municipal Code requires a

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permit to operate a marijuana dispensary in the City, which Luna did not obtain. Luna

contends that the City ordinance requiring a permit is preempted by federal law and,

therefore, invalid and unenforceable. This appeal arises from the trial court’s order

denying Luna’s motion for a preliminary injunction. We affirm.1

                 I. FACTUAL AND PROCEDURAL BACKGROUND

       The material facts underlying this matter are straightforward and undisputed:

Luna opened a medical marijuana dispensary in the City without obtaining the permit

required under local law. Luna contends the law requiring it to obtain a permit is

preempted by federal law, and therefore invalid and unenforceable, and opened its

dispensary with the express purpose of provoking litigation to test that contention. The

City obliged.

       More specifically, chapter 5.35 of the Palm Springs Municipal Code2 establishes a

“Comprehensive Medical Cannabis Regulatory Program.” Section 5.35.100 provides that

“[n]o person shall engage in the business or activity of cultivating, possessing, selling,

distributing, dispensing, or offering to sell, distribute, or dispense Medical Cannabis or

Medical Cannabis Infused Product unless such person fully complies with the provisions

of this Chapter, [and] has received any and all permits required in this Chapter . . . .”

       1 Also pending is Luna’s request for judicial notice of a particular section of the
Palm Springs Municipal Code. The request is unopposed and will be granted on that
basis. Our disposition of this appeal, however, does not require discussion of the noticed
code section.

       2Except as otherwise indicated, further undesignated section references are to the
Palm Springs Municipal Code.

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Section 5.35.200 requires that “[p]rior to initiating operations and as a continuing

requisite to conducting operations, the legal representative of the persons wishing to

operate a [medical cannabis cooperative or collective] shall obtain and maintain a permit

from the City Manager under the terms and conditions set forth in this Chapter.” Section

5.35.120 previously set the maximum number of permitted “medical cannabis

cooperatives and collectives” operating in the City at any time at four; Palm Springs

Ordinance No. 1879, enacted June 17, 2015, modified section 5.35.120, raising that

number to six. Luna did not obtain a permit before opening its dispensary, or at any other

time.3

         In addition to the permitting requirement, the City’s medical marijuana laws

authorize the city manager to “formulate, adopt, and amend from time to time, rules and

regulations regarding the safety and potency of medical cannabis” that is distributed by

dispensaries in the City. (§ 5.35.710, subd. (A).) The city manager is authorized to

contract with one or more testing centers to assist in formulating those regulations, and to

perform periodic and random testing of the products distributed at each dispensary

operating in the City. (§ 5.35.710, subd. (B).)

         The City brought suit in September 2014, seeking and obtaining a preliminary

injunction against Luna’s continued operation of the unpermitted dispensary.4

Subsequently, in October 2014, Luna filed a cross-complaint, alleging that the provisions

         3
         As best we can determine, Luna never applied for a permit from the City;
nothing in the present record, at any rate, indicates otherwise.

        Luna’s appeal of the trial court’s order granting a preliminary injunction was
         4
dismissed by this court for failure to pay the required filing fee.

                                              3
of the Palm Springs Municipal Code that regulate medical marijuana—and in particular,

the provisions requiring a permit to operate a medical marijuana dispensary—are invalid

and unenforceable, because they are preempted by federal law. Luna filed a motion

seeking a preliminary injunction against continued enforcement of the City’s permitting

requirement. The trial court denied the motion.

                                     II. DISCUSSION

A. Luna Does Not Lack Standing.

       The City argues that Luna lacks standing to challenge the City’s permit

requirement. We disagree.

       “‘As a general principle, standing to invoke the judicial process requires an actual

justiciable controversy as to which the complainant has a real interest in the ultimate

adjudication because he or she has either suffered or is about to suffer an injury of

sufficient magnitude reasonably to assure that all of the relevant facts and issues will be

adequately presented to the adjudicator. [Citations.] To have standing, a party must be

beneficially interested in the controversy; that is, he or she must have “some special

interest to be served or some particular right to be preserved and protected over and

above the interest held in common with the public at large.” [Citation.] The party must

be able to demonstrate that he or she has some such beneficial interest that is concrete

and actual, and not conjectural or hypothetical.’ [Citation.]” (County of San Diego v.

San Diego NORML (2008) 165 Cal. App. 4th 798, 814 (County of San Diego), italics

omitted.)

                                              4
         There is nothing conjectural or hypothetical about the injury that Luna alleges it

has suffered. Luna opened a medical marijuana dispensary and was forced to shut it

down when the City brought suit and obtained an injunction enforcing the City’s permit

requirement. Luna contends the permit requirement is unlawful and unenforceable.

Luna, therefore, “‘“‘personally has suffered [an] actual . . . injury as a result of the

putatively illegal conduct of the [the City]’”’” and has standing to assert its challenge to

the City’s asserted legal basis for that conduct. (County of San Diego, supra, 165

Cal.App.4th at p. 814.) The proposition that Luna has no interest in the matter separate

or different from the public at large, asserted by the City, is belied by the undisputed

facts.

         To be sure, as the City points out, there is a certain irony, if not hypocrisy, in

Luna’s invocation of federal drug laws as a basis for invalidating the City’s permitting

requirements, given Luna’s intention to operate a medical marijuana dispensary in

violation of those very federal drug laws. The City cites no authority, however, for the

proposition that irony or hypocrisy alone may vitiate standing, and we are aware of none.

We turn, therefore, to the merits of Luna’s claims.

B. The City’s Permitting Requirements Are Not Preempted by Federal Law.

         Luna argues that the City’s regulatory program for medical marijuana dispensaries

is preempted by federal law, arguing that by not just decriminalizing, but affirmatively

permitting the operation of medical marijuana dispensaries, the City violates federal drug

laws. Applying the applicable de novo standard of review (Spielholz v. Superior Court

(2001) 86 Cal. App. 4th 1366, 1371), we reject Luna’s arguments.

                                                5
       As an initial matter, we note that the primary authority cited in Luna’s opening

brief directly in support of its contentions regarding federal preemption is a California

appellate opinion that is no longer published, because a petition for review was granted

by the California Supreme Court, and the case was later dismissed without ordering

republication. (Pack v. Superior Court, review granted Jan. 18, 2012, S197169, review

dismissed by Pack v. Superior Court, 2012 Cal. LEXIS 8531 (Cal., Aug. 22, 2012).) The

California Rules of Court, with exceptions not applicable here, provide that unpublished

opinions of this state’s courts of appeal “must not be cited or relied on by a court or a

party in any other action.” (Cal. Rules of Court, rule 8.1115; McMahon v. City of Los

Angeles (2009) 172 Cal. App. 4th 1324, 1336, fn. 10 [citation of appellate court opinion

superseded after the Supreme Court granted review violates rule 8.1115].) “Appellant’s

counsel should know better. It goes without saying we have not considered such

improper authority.” (People v. Wallace (2009) 176 Cal. App. 4th 1088, 1105, fn. 9.)

       Turning now to the substance of Luna’s claim of preemption, we find no merit in

the assertion that City’s permit requirement for medical marijuana dispensaries is

preempted by federal law. Luna suggests that both “conflict preemption” and “obstacle

preemption” principles require the conclusion that the City’s permit requirement is

preempted by federal law. “Conflict preemption exists when ‘simultaneous compliance

with both state and federal directives is impossible,’” creating a “positive conflict with

federal law.” (Qualified Patients Assn. v. City of Anaheim, 187 Cal. App. 4th 734, 758-

759 (Qualified Patients).) The city’s permit requirement would be preempted under

obstacle preemption principles if it “‘“‘stands as an obstacle to the accomplishment and

                                              6
execution of the full purposes and objectives of Congress.’”’” (Id. at p. 760.)

“[O]bstacle preemption only applies if the state enactment undermines or conflicts with

federal law to such an extent that its purposes ‘“cannot otherwise be

accomplished . . . .”’” (Id. at p. 761.)

       With respect to conflict preemption, Luna has pointed to no specific provision of

the City’s regulation of medical marijuana dispensaries that is in “positive conflict” with

federal drug laws, and indeed the City’s permitting requirements do not require anything

that the federal Controlled Substances Act forbids. (See Qualified Patients, supra, 187

Cal.App.4th at p. 759.) Luna asserts that the circumstance that the City affirmatively

permits—rather than merely decriminalizing—medical marijuana dispensaries “violates

the federal law.” It emphasizes specifically the City’s involvement not only in allowing a

certain number of dispensaries to operate, but in overseeing their operation through

regulations, including testing requirements regarding safety and potency of the marijuana

and marijuana products being dispensed.5 But in fact, the Controlled Substances Act

“does not direct local governments to exercise their regulatory, licensing, zoning, or other

power in any particular way,” so exercise of those powers “with respect to the operation

of medical marijuana dispensaries that meet state law requirements would not violate

conflicting federal law .” (Qualified Patients, supra, at p. 759.) Moreover, with limited

exceptions not relevant here, federal law confers immunity on any “duly authorized

       5  We note that at other points in its briefing, Luna apparently concedes the City’s
right to “regulate” medical marijuana dispensaries within city limits, while contesting
only the City’s right to require a permit for a medical marijuana dispensary to operate.
We need not attempt to reconcile this apparent inconsistency.

                                             7
officer of any State, territory, [or] political subdivision thereof, . . . who shall be lawfully

engaged in the enforcement of any law or municipal ordinance relating to controlled

substances.” (21 U.S.C. § 885(d).) Luna’s premise that the City’s implementation of its

permitting and testing requirements for medical marijuana dispensaries is in violation of

federal law is therefore false.

        Similarly, with respect to obstacle preemption, Luna articulates no persuasive

reason why the City’s regulatory program for medical marijuana should be considered to

stand as an obstacle to the purposes and objectives of Congress. “Congress enacted the

[Controlled Substances Act] to combat recreational drug abuse and curb drug

trafficking.” (City of Garden Grove v. Superior Court (2007) 157 Cal. App. 4th 355, 383.)

Nothing about the City’s regulatory program for medical marijuana stands in the way of

those purposes. (See Qualified Patients, supra, 187 Cal.App.4th at pp. 760-761

[rejecting argument that state medical marijuana laws are preempted under obstacle

preemption].) To the contrary, common sense suggests that a strong local regulatory

regime governing medical marijuana related conduct would tend to prevent the

transformation of purported nonprofit medical marijuana dispensaries into “profiteering

enterprises” that contribute to recreational drug abuse and drug trafficking.6 (Id. at p.

760.)

        6 Apparently, at least the executive branch of the federal government agrees. An
August 29, 2013 memorandum issued by the Department of Justice to all United States
attorneys, which was submitted by the City for consideration by the trial court, provides
guidance to the United States attorneys regarding enforcement of federal drug laws, in
light of the decriminalization of marijuana in some states. The guidance offered “rests on
[the Department of Justice’s] expectation that states and local governments that have
                                                                    [footnote continued on next page]
                                               8
        In short, we find that the City’s regulatory program for medical marijuana

dispensaries neither conflicts with federal law, nor stands as an obstacle to its purposes

and objectives. As such, the trial court properly denied Luna’s request for an injunction

against its enforcement.

                                               III. DISPOSITION

        The order appealed from is affirmed. The City is awarded its costs on appeal.

        CERTIFIED FOR PUBLICATION

                                                                  HOLLENHORST
                                                                                         J.
We concur:

        RAMIREZ
                                     P. J.

        MILLER
                                          J.

[footnote continued from previous page]
enacted laws authorizing marijuana-related conduct will implement strong and effective
regulatory and enforcement systems” to ensure that those laws “do not undermine federal
enforcement priorities.”

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