Filed 12/3/18 City of Riverside v. Golden Valley Collective CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION TWO

APPEAL from the Superior Court of Riverside County. John W. Vineyard, Judge. Affirmed.

Law Office of Daniel S. Miller and Daniel S. Miller for Defendants and Appellants.

Gary G. Geuss, City Attorney and Neil Okazaki and Aaron L. Chandler, Deputy City Attorneys for Plaintiff and Respondent.

This case involves a nuisance abatement action brought by the City of Riverside (City) against Golden Valley Collective (the Collective). The Collective opposed the issuance of the preliminary injunction by relying on the recently enacted Proposition 64, the Adult Use of Marijuana Act. The trial court issued the preliminary injunction based on the Collective’s violation of the City’s zoning law prohibiting any property use that violates state or federal law, and the Collective’s lack of proper license required to operate a marijuana business under state law. The Collective appealed.

On appeal, the Collective argues that the City’s medical marijuana restrictions were preempted by and violate Proposition 64. We affirm.[1]

Background

The record is incomplete, lacking any of the declarations or other factual matters underlying this action that were purportedly attached to the pleadings filed in the trial court. From the City’s complaint we discern that the Collective has operated a marijuana distribution facility on property owned by Eddie Fischer on Tyler Street in the City. Undercover operations revealed that the property was operating as a medical marijuana dispensary.

Riverside Municipal Code (RMC) sections 19.100.030 and 19.150.020 prohibit any use of property that is prohibited by state and/or federal law, while RMC section 19.150.020(A) expressly prohibits the use of property a medical marijuana dispensary. The City sent a cease and desist letter December 5, 2016. On February 16, 2017, the City filed an action for abatement of nuisance against the Collective, seeking injunctive relief. On March 30, 2017, the City made an ex parte application for a temporary restraining order and preliminary injunction.

The Collective opposed the issuance of a restraining order or preliminary injunction on the ground it does not operate a medical marijuana dispensary, but instead is now operating a legally created and organized marijuana distribution facility and functions legally under the California Constitution, in light of passage of Proposition 64.

The hearing was conducted on April 24, 2017, at which time the court granted the City’s application for a preliminary injunction. During the hearing the court concluded the Collective was estopped to claim Proposition 64 as a defense because the business was not in compliance with the licensing provisions of the act. Additionally, the court noted that the zoning restrictions of RMC section 19.150.020 prohibit unauthorized use of property, and because sale and distribution of marijuana still constitutes a violation of federal law, the zoning law prohibits the use of the property as a marijuana distribution facility. The court granted the preliminary injunction.

The Collective appealed.

Discussion

Defendant argues that the order granting the preliminary injunction must be reversed because the City’s municipal marijuana restrictions conflict with Proposition 64. We disagree.

1. General Principles and Standard of Review

Trial courts evaluate two interrelated factors when deciding whether or not to issue a preliminary injunction: (a) the likelihood that the plaintiff will prevail on the merits at trial, and (b) the interim harm that the defendant is likely to suffer if a preliminary injunction were issued. (IT Corp. v. County of Imperial (1983) 35 Cal.3d 63, 69-70; People ex rel. Feuer v. FXS Management, Inc. (2016) 2 Cal.App.5th 1154, 1158.) Where the plaintiff is a governmental entity seeking to enjoin illegal activity, a more deferential standard applies, and after the governmental entity establishes a reasonable probability of prevailing on the merits, a rebuttable presumption arises that the potential harm to the public outweighs the potential harm to the defendant. (IT Corp. v. County of Imperial, supra, at p. 72; People ex rel. Feuer, supra, at pp. 1158-1159.)

On appeal, factual findings made by the trial court are binding on us if supported by substantial evidence. (People ex rel. Feuer, supra, 2 Cal.App.5th at p.1159; County of Los Angeles v. Hill (2011) 192 Cal.App.4th 861, 867.) We review the decision to issue a preliminary injunction for an abuse of discretion. (420 Caregivers, LLC v. City of Los Angeles (2012) 219 Cal.App.4th 1316, 1331; City of Corona v. Naulls (2008) 166 Cal.App.4th 418, 427.) And any question regarding the interpretation of an ordinance or its lawfulness is a question of law subject to de novo review. (420 Caregivers, supra, 219 Cal.App.4th at p. 1331; City of Claremont v. Kruse (2009) 177 Cal.App.4th 1153, 1168.)

Finally, a party challenging a judgment has the burden of showing reversible error by an adequate record. (Ballard v. Uribe (1986) 41 Cal.3d 564, 574; Huang v. Hanks (2018) 23 Cal.App.5th 179, 183.) With these principles in mind, we turn to the Collective’s assertions.

2. Propriety of Injunctive Relief

In reviewing the propriety of the preliminary injunction, we must determine whether the Collective’s commercial marijuana activity constitutes a public nuisance as defined by the RMC and whether the local government’s police power was preempted by state law legalizing certain marijuana activities.

It is well-settled that a city or county’s power to control its own land use decisions derives from its inherent police power, not from the delegation of authority by the state. (City of Riverside v. Inland Empire Patients Health & Wellness Center, Inc. (2013) 56 Cal.4th 729,742.) When local government regulates in an area over which it traditionally has exercised control, courts presume that the regulation is not preempted by state statute, absent a clear indication of preemptive intent by the Legislature. (Id., at p. 743.) “[L]ocal legislation that conflicts with state law is void.” (Id., at p. 743.) A conflict will be found to exist if the local legislation duplicates, contradicts, or enters an area fully occupied by general law, either expressly or by legislative implication. (Ibid, at p. 743, citing Sherwin-Williams Co. v. City of Los Angeles (1993) 4 Cal.4th 893, 897.)

The RMC includes zoning regulations which prohibit “any use [of property] which is prohibited by state and/or federal law. . . .” (RMC, § 19.150.20.) Under federal law, commercial marijuana business violates the Controlled Substances Act. (21 U.S.C. § 801, et seq.; City of Riverside v. Inland Empire Patients Health & Wellness Center, Inc. (2013) 56 Cal.4th 729, 738-739.) Any prohibited use of property is considered a public nuisance and subject to abatement. (RMC, §1.01.110(E).)

The Collective argues that the City’s failure to enact ordinances specifically addressing commercial marijuana business activity places the city in conflict with Proposition 64. In this respect, the Collective asserts that Proposition 64 preempts local ordinances or regulations restricting commercial marijuana activity. This is not so.

Pursuant to Proposition 64, the Legislature enacted a series of statutory provisions “to control and regulate the cultivation, distribution, transport, storage, manufacturing, processing, and sale of nonmedical marijuana and marijuana products for adults 21 years of age and over.” (Bus. & Prof. Code, § 26000, subd. (a).) Most importantly, nothing in the Act supersedes or limits the authority of a local jurisdiction to enforce local ordinances to regulate licensed marijuana businesses, or to completely prohibit the establishment or operation of one or more types of businesses licensed under the Act within the local jurisdiction. (Bus. & Prof. Code, § 26200, subd. (a).) Proposition 64 did not preempt RMC section 19.150.020(A).

Marijuana is still defined as a controlled substance under federal law. (21 U.S.C. § 801, et seq.) California law can only exempt commercial marijuana activities from prohibitions applicable under state law, and cannot mandate that local governments authorize, allow, or accommodate them. (City of Riverside v. Inland Empire Patients Health & Wellness Center, Inc., supra, 56 Cal.4th at p. 759.) Proposition 64 did not legalize marijuana for recreational use; it simply eliminated certain penalties for certain marijuana activities under state law. Commercial marijuana businesses will operate in violation of federal law because marijuana is classified as a controlled substance. (21 U.S.C. § 812, subd. (c)(c)(10).)

However, even if considered “legal” at the state level, the City had the power to define the use of property for the purpose of purveying marijuana as a nuisance. Nuisance law is not exclusively defined by what the state makes subject to, or exempt from, its own nuisance statutes; unless there is a clear conflict with general law, a city’s or county’s inherent, constitutionally recognized power to determine the appropriate uses of land within its borders allows it to define nuisances for local purposes and to seek abatement of them. (City of Riverside v. Inland Empire Patients Health & Wellness Center, Inc., supra, 56 Cal.4th at p. 761, citing Golden Gate Water Ski Club v. County of Contra Costa (2008) 165 Cal.App.4th 249, 255-256.)

Therefore, even in the absence of a specific ordinance prohibiting commercial marijuana businesses or transactions, the use of property within the City’s jurisdiction for a purpose prohibited by federal law constitutes a public nuisance, and is subject to abatement. This resolves the Collective’s related claim that the City was precluded from instituting an action to abate it as a nuisance because there was no specific ordinance outlawing a commercial marijuana business. So long as marijuana continues to be a controlled substance under federal law, the Riverside ordinance defining as a nuisance any use of property that is prohibited by federal law will authorize abatement.

Throughout its briefs, the Collective argues is it not a medical marijuana dispensary or collective; instead, it refers to itself as “a commercial non-medical marijuana” business, and asserts it is conducting business as permitted by Proposition 64. It is irrelevant that its activities would be immune from criminal prosecution under Proposition 64 because the City has the authority to prohibit the activity as a violation of federal law. Moreover, it is a non-issue because the preliminary injunction was not issued to enjoin a prohibited medical marijuana dispensary or collective. It was issued because the use of the premises to operate a business in violation of federal law was a prohibited use and constituted a nuisance.

Further, even if the Collective had established that it is a commercial marijuana activity, it did not establish it was authorized to conduct its operation within the boundaries of the City because it conceded it lacked a license. (Bus. & Prof. Code, § 26038, subds. (a), (c) [engaging in commercial marijuana activity without a license is publishable by civil and criminal penalties].) Absent a license, the Collective was not authorized to conduct commercial marijuana activity even at the state level, after adoption of Proposition 64. (Bus. & Prof. Code, § 26038, subd. (a) [Civil penalties for engaging in commercial marijuana activity without a license].) For unlicensed commercial activities, criminal penalties continue to apply. (Bus. & Prof. Code, § 26038, subd. (c); see also Health & Saf. Code, § 11360.)

It is also unlawful to cultivate marijuana without first obtaining a state license issued by the Department of Food and Agriculture. (Bus. & Prof. Code, § 26067, subd. (b).) State licenses are required to be issued by the Department of Consumer Affairs for retailers, distributors and microbusinesses. (Bus. & Prof. Code, § 26070, subd. (a).) Deliveries may only be made by a licensed retailer or microbusiness. (Bus. & Prof. Code, § 26090, subd. (a).)

In sum, the Collective was not authorized to conduct commercial marijuana activity under federal, state, and local law. The unpermitted use of the property for operations that violated federal law, defined by the City as a nuisance, authorized an action to abate the nuisance. There was no abuse of discretion.

Disposition

The judgment is affirmed. The City of Riverside is awarded costs on appeal.

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

RAMIREZ

P. J.

We concur:

McKINSTER

J.

MILLER

J.