THE PEOPLE ex rel. MICHAEL N. FEUER, as City Attorney, etc., Plaintiff and Respondent, v. PROGRESSIVE HORIZON, INC., et al., Defendants and Appellants.
No. B263622
Second Dist., Div. Eight
May 31, 2016
Rehearing Denied June 14, 2016
248 Cal.App.4th 533
Review Denied September 14, 2016, S235786. Corrigan, J., did not participate therein.
Richard H. Gordon, Kiana Sloan-Hillier and Joel R. Isaacson for Defendants and Appellants.
Michael N. Feuer, City Attorney, Asha Greenberg, Assistant City Attorney, Anh Truong, Assistant Deputy City Attorney, and Ryan Borho, Deputy City Attorney, for Plaintiff and Respondent.
GRIMES, J.-Because of the proliferation of medical marijuana businesses in the City of Los Angeles (City), in 2013, City voters approved the Medical Marijuana Regulation and Taxation Ordinance (Proposition D). (
Defendant Progressive Horizon, Inc. (Progressive), is a medical marijuana business, claiming the privilege of Proposition D‘s limited immunity. Michael N. Feuer, as attorney for the City, and on behalf of the People, filed a complaint against Progressive and defendant James Chingming Chen, Progressive‘s director and CEO, to abate a public nuisance, for injunctive relief, and for civil penalties, based on defendants’ violation of Proposition D, and sought a preliminary injunction barring defendants from operating their medical marijuana business. The trial court granted the preliminary injunction, finding that defendants had not complied with Proposition D‘s LiveScan requirement. (
On appeal, defendants ask us to overturn the injunction, and contend the trial court erroneously denied their motion to dissolve the injunction. Because defendants did not timely appeal the order granting the injunction, the only issue before us is whether the trial court erred in denying the motion to dissolve the injunction. Defendants’ argument for reversal turns on whether Proposition D allows a medical marijuana business, which fails to comply with the ordinance, to have limited immunity under the ordinance. We find that it does not, and affirm the orders below.
FACTS
On July 15, 2014, the People filed this lawsuit alleging that defendants’ medical marijuana business was a nuisance and violated Los Angeles Municipal Code sections
Defendants Progressive and Mr. Chen opposed the request for a preliminary injunction, arguing that Progressive timely submitted the names of its then-managers to the City by October 31, 2013, but that Progressive‘s management changed after its submission. Nevertheless, before January 31, 2014, Progressive‘s new managers requested LiveScans. (The opposition did not contend that all of Progressive‘s managers had actually submitted their fingerprints for a LiveScan check or that the results of the LiveScans were publicly displayed by Jan. 31, 2014.) Defendants argued that any failure to comply with subdivision M should not permanently bar them from eligibility for immunity under Proposition D. They also argued that the injunction would result in irreparable harm to defendants and their members.
On August 27, 2014, the trial court held a hearing on the OSC. The court granted the injunction in part, enjoining Progressive from conducting its medical marijuana business, finding that defendants “failed to abide by the requirements for limited immunity under LAMC § 45.19.6.3 (M) and that their operation of a medical marijuana business in any form is an unpermitted land use, and therefore a public nuisance subject to abatement by injunction.
On February 27, 2015, defendants filed a motion to “Modify, Rescind, or Overturn [the] Preliminary Injunction.” The motion argued that “[a]t the time the Court issued the Preliminary Injunction, apart from the LiveScan issue, Progressive qualified for limited immunity under Prop D. As set forth in the Declarations attached to these moving papers, Progressive has resolved the LiveScan issue and now fully qualifies for limited immunity. Consequently, Progressive seeks by this Motion an Order modifying, rescinding, or overturning the Preliminary Injunction.”
The motion also argued that the ends of justice would be served by the modification because Progressive employed eight people, served 6,000 qualified patients, and was at risk of losing its commercial lease.
Defendant Adam Agathakis, Progressive‘s manager and CFO (who is not a party to this appeal), and defendant Mr. Chen, as Progressive‘s manager and
In opposition, the People argued that defendants did not comply with the requirements of Proposition D in 2013 and 2014, and therefore they did not qualify for limited immunity under the law, and that allowing belated compliance to restore their immunity would circumvent the purposes of Proposition D.
The motion was heard on March 27, 2015. The trial court concluded that because defendants violated Proposition D in 2013 and 2014, they were ineligible for limited immunity. The court reasoned that “a violation of any of the business restrictions [in Proposition D] acts as a continual bar to immunity under Proposition D.”
On April 23, 2015, defendants filed a notice of appeal from the court‘s March 27, 2015 order.
DISCUSSION
1. Scope of Appeal
Defendants make numerous arguments of error on appeal, many of which focus on the order granting the preliminary injunction. However, defendants did not timely appeal that order. (
2. Regulation of Medical Marijuana and Proposition D
Generally, the State of California prohibits the cultivation, possession, use, and distribution of marijuana. (See
In 2003, the Legislature enacted the Medical Marijuana Program. (
In 2013, City voters approved such a regulatory measure, Proposition D. (
Although Proposition D bans all medical marijuana businesses, it does grant limited immunity from prosecution under Los Angeles Municipal Code sections
Among the relevant business restrictions of Proposition D is subdivision M, which provides that “[e]very medical marijuana business is prohibited that fails to identify by name and residence address each of its Managers to the City Clerk by October 31 of each year and whose Managers fail to successfully pass and publicly display at the location of the medical marijuana business the results of an annual LAPD LiveScan background check to be completed by January 31 of each year. A failed LAPD LiveScan is a LiveScan that includes any felony conviction within the past ten years and/or current parole or probation for the sale or distribution of a controlled substance.” (
3. Analysis
“[T]he court may ... modify or dissolve an injunction ... upon a showing that there has been a material change in the facts upon which the injunction ... was granted, that the law upon which the injunction ... was granted has changed, or that the ends of justice would be served by the modification or dissolution of the injunction ....” (
Defendants do not dispute that they were in violation of Proposition D‘s LiveScan requirements at the time the preliminary injunction was granted. Clearly, Progressive‘s failure to timely submit its managers for LiveScans, and to publicly display results by January 31, 2014, violated subdivision M of Los Angeles Municipal Code section
Proposition D is quite clear. The ordinance provides that “[e]very medical marijuana business is prohibited that fails to” comply with subdivision M. (
The ordinance does not provide that immunity, once lost, may be restored. It provides that a business not complying with the ordinance is prohibited, and that the immunity is only available to businesses that do not violate the ordinance. (
The orders are affirmed. Respondent is to recover its costs on appeal.
Bigelow, P. J., and Flier, J., concurred.
A petition for a rehearing was denied June 14, 2016, and appellants’ petition for review by the Supreme Court was denied September 14, 2016, S235786. Corrigan, J., did not participate therein.