.Harborside Health Center Faces Raids, Epic Legal Battle

An asset forfeiture expert says it's no slam dunk as to whether the feds can put the Oakland dispensary out of business.

Harborside Health Center’s 100,000 patients and their allies are bracing themselves for a possible federal raid on the popular Oakland medical cannabis dispensary, as well as a long, complex, and costly legal battle. A pre-dawn raid on Harborside to seize its marijuana, computers, and other equipment could be imminent, experts say, after US Attorney Melinda Haag filed a federal civil forfeiture complaint last week against Harborside’s landlord, Ana Chretien. Such civil forfeiture actions can be a prelude to club raids and criminal charges against dispensary operators.

Though dispensaries and landlords have often lost such battles, Harborside is not a typical dispensary, said Mill Valley attorney Brenda Grantland, co-founder of the Forfeiture Endangers American Rights foundation, and a 29-year veteran of asset forfeiture cases. Grantland currently represents two landlords in medical marijuana cases. “I don’t think they’re screwed,” she said of Harborside and Chretien. “They’re going to have a big battle ahead of them. The only way they’re screwed is if they don’t mount a good defense.”

On July 10, dispensary staffers found letters from the federal government announcing the planned forfeiture taped to the doors of Harborside’s properties in Oakland and San Jose. Club officials then held a defiant press conference Thursday morning at Oakland City Hall. “Harborside has nothing to hide,” said owner Stephen DeAngelo. “We have no intention of closing. … We will contest the Justice Department openly in public and through all means at our disposal. We look forward to our day in court. We will never abandon our patients.”

But many questions were left unanswered at the press conference, foremost of which is the terms of Harborside’s lease. Landlords have been known to evict dispensaries when their property is threatened with federal seizure, Grantland said. Berkeley Patients Group’s landlord evicted that dispensary earlier this year after being threatened with forfeiture. Scores of other clubs have succumbed to the same fate. “Most of them would [evict],” she said of landlords. “Most leases have some kind of clause that says if you violate the law and cause the property ownership to be jeopardized, that can cancel the lease for that reason. If the lease has that, [DeAngelo] won’t have any say over it.”

At the press conference DeAngelo said that Harborside Oakland has a five-year lease with two optional one-year extensions. Chretien — sole owner of the property — was not at the press conference. Her attorney told the San Francisco Chronicle that Harborside is “in compliance with all state and local regulations to operate that kind of business. … We would have no reason to believe there was anything improper.”

Chretien’s claims could play a pivotal role in a civil forfeiture trial. Haag is seeking the property under federal laws that allow the government to seize land used for drug sales.

Grantland said Chretien, whose company ABC Security operates on the same Oakland parcel with Harborside, has thirty days to file a “claim,” affirming ownership of the property. She then has another twenty days to file an “answer,” where she should ask for a jury trial, and raise any possible defenses. Grantland said landlords can assert a number of defenses. They can claim, for example, that they didn’t know illegal drug activity was taking place at the property. They also can claim a proportional defense, asking the government to not take all of the property.

The case would then be assigned a judge, and if Chretien’s answer survives a potential prosecutorial “motion for summary judgment” — wherein the judge decides whether she has a plausible defense — it could go to a jury trial. Judges in the Northern District of California are a mixed bag, Grantland said. “There are some liberal judges, but there are some very pro-prosecution judges there. You never know who you’re going to get.”

Most forfeiture cases don’t get to a jury trial, but a Northern California jury might be “pretty good” for Chretien and Harborside, she said. Northern California residents, after all, overwhelmingly support the lawful use of medical marijuana.

As such, Chretien may be able to claim that she indeed believed what Harborside was doing was legal. Even though Harborside advertised that it sold medical marijuana — which is illegal under federal law — other factors are at play. The dispensary, for example, had a lawful city permit and a state business license in a state that has decriminalized the drug. Moreover, President Obama said he would not waste scarce federal resources on medical marijuana users in states where it was legal, while US Attorney General Eric Holder has said federal prosecutors are only interested in operators violating both state and federal law. And, finally, Haag has said she was focusing her crackdown efforts on medical pot businesses within 1,000 feet of a school or park. Harborside is not close to a school or park.

As a result, Chretien could contend that she believed Harborside was engaging in legal activity. “That’s a reason to not be culpable,” Grantland said. “You had reasonable belief that what you were doing was legal.”

A civil forfeiture case can last two years or longer and become very expensive. Moreover, federal prosecutors often delay the civil case while pursuing criminal charges. As a result, it’s reasonable to fear a police raid on Harborside, Grantland said. In these raids, usually conducted during pre-dawn hours, federal agents snatch up herb, cash, computers and other equipment, and might arrest Harborside’s staff and owners. Or they may not arrest anyone. “It’s totally arbitrary,” Grantland said.

In the past, many dispensaries have re-opened within days of a raid, only to get raided again and again. However, criminal investigations can also open up new avenues for counter-attack. “From the beginning you would think that it looks desperate, but you got to see what kind of cards [prosecutors] are holding,” she said. The federal government, for example, can slip up and accidentally sabotage its own case by making errors in the search warrant affidavit or by the improper use of confidential informants. The collapse of a criminal case, in turn, can then take a civil forfeiture complaint down with it. “A lot of times the motivation for making an example of someone causes [prosecutors] to lose good judgment,” Grantland said. “They just get cocky and do something that is ridiculous or rash, or they lie and then the lie comes back to haunt them.”

Harborside officials have also made it clear that they’re going to wage a zealous fight in the court of public opinion. It’s unclear what effect that would have, but the popular dispensary appears to have won the preliminary round. Haag and the federal government have already been strongly criticized by state Board of Equalization member Betty Yee, Congresswoman Barbara Lee of Oakland, and Oakland City Attorney Barbara Parker, who is a former federal prosecutor.

Most major news agencies ran such criticism alongside tearful testimonials from medical marijuana patients and their families. By comparison, Haag’s terse statement made her effort look arbitrary and capricious, and indicated that she had no proof Harborside has violated state law. 


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