A trial court enjoined enforcement of a City of Los Angeles ordinance that regulates the number and geographic distribution of medical marijuana collectives.  The court of appeal reversed the trial court’s order finding that the collectives and their members who challenged the ordinance failed to demonstrate a likelihood of prevailing on the merits of their challenge to the ordinance.  (420 Caregivers, LLC v. City of Los Angeles (--- P.3d ----, Cal., September 25, 2013.)

Facts

The City of Los Angeles (“City”) passed Interim Control Ordnance No. 179027 (“ICO”) and it went into effect on September 14, 2007.  The ICO prohibited the establishment or operation within the City limits of any medical marijuana dispensary, which the ICO defined “as any facility or location that ‘distributes, transmits, gives, dispenses, facilitates, or otherwise provides marijuana in any manner in accordance with [s]tate law,’” and in particular, the Compassion Use Act (“CUA”) and the Medical Marijuana Program Act (“MMPA”).  The ICO excluded from its general prohibition “any dispensary established before September 14, 2007 (the effective date of the ICO) and operated in accordance with state law.”  Under the ICO, such a dispensary “would be allowed to continue so long as it filed various specified documents with the City Clerk within 60 days of ‘the adoption’ of the ICO.”

Approximately 187 dispensaries registered pursuant to the ICO, over 30 of which expressly identified in their name that they were a medical marijuana “cooperative” or “collective.”  Over 30 more registrants used the plural term “caregivers” as part of their names, which suggested a collective association of primary caregivers.

The City Council passed City Ordinance No. 181069 (“Ordinance”) and it went into effect on June 7, 2010.  The Ordinance requires compliance with its terms by all medical marijuana “collectives,” which it describes “as incorporated or unincorporated associations of four or more qualified patients, persons with identification cards, or primary caregivers, who collectively or cooperatively associate at a given location to cultivate medical marijuana in accordance with the CUA and MMPA.”

The Ordinance requires all collectives to submit to a new registration and approval process, caps the total number of allowable collectives, and requires the collectives to be distributed proportionally throughout the City.  The only collectives qualified to register are those that (1) have previously registered in compliance with the ICO; (2) “have operated continuously at their registered location since on or before September 14, 2007 (the effective date of the ICO), or both moved once in response to a federal enforcement letter and sought a hardship exemption under the ICO;” (3) have the same ownership and management; and (4) have not been issued nuisance citations or committed safety violations.  A collective must also meet the Ordinance’s new requirements regulating “distances from other collectives, schools, parks, libraries, and other specified sensitive uses.”

If the number of eligible collectives exceeds 70, “they nevertheless remain eligible and are to be allocated proportionally throughout the City based upon the population densities in the various neighborhoods as determined by the Planning Committee.”  All other collectives are required to cease operation immediately.  If a collective is not currently eligible, it may register to participate in a future lottery.  The Ordinance sunsets after two years unless the City Council extends the Ordinance.  If no extension is made, all collectives must cease operation.  A violation of the Ordinance is punishable as a misdemeanor.  However, nuisance abatement proceedings may also be used to enforce the provisions of the Ordinance.

A collective that obtains permission to operate must maintain certain records, including the names, addresses and phone numbers of its members and copies of the members’ MMPA identification cards or recommendations.  A collective must maintain the records for five years and make them available upon demand by the Los Angeles Police Department.  However, the police cannot without a warrant obtain “private medical records,” which are defined “as documentation of the qualified patient’s or identification card holder’s medical history other than a physician’s recommendation, the actual MMPA identification card, or the written designation of a primary caregiver by a qualified patient or identification card holder.”

Various collectives and individual members of the collectives (“Collectives”) filed lawsuits against the City.  The trial court consolidated the lawsuits and enjoined enforcement of portions of the Ordinance.

Decision

The court of appeal reversed the decision of the trial court finding that the Collectives failed to show that they would likely prevail on their merits of their claims at trial.  The trial court found that the Ordinance was unconstitutional on its face because it violates equal protection.  “Equal protection under the law means that parties similarly situated with respect to a law must be treated alike under the law.”  However, the appellate court found that differential treatment is not always unconstitutional.

If a statute makes distinctions involving fundamental rights or inherently suspect classifications, the statute “is subject to ‘strict scrutiny’ and may be upheld only if the government establishes the distinction is necessary to achieve a compelling state interest.”  If a law does not involve suspect classifications or fundamental rights, the law “must be upheld so long as there is any reasonably conceivable set of facts that provides a ‘rational basis’ for the classification.”  The Ordinance does not involve a fundamental right or suspect classification and, therefore, it must be analyzed under the rational basis test.  The Collectives have the burden to show “that the difference in treatment is unrelated to the achievement of any legitimate government purpose.”  The court of appeal held that the Collectives failed to meet this burden.  Therefore, the appellate court held that the trial court erred in finding a violation of equal protection.

The court of appeal further found that the trial court erred in finding a violation of due process. The City sent letters to collectives that failed to register under the Ordinance and advised them that they must cease operation immediately.  The trial court found that the MMPA creates a statutory right to cultivate marijuana collectively for medical purposes and that the City’s letter abrogates that right without a hearing or other procedural protections.

The court of appeal concluded that the MMPA does not create a right to collectively cultivate marijuana.  The court found that “[t]he MMPA creates no right or benefit, other than the right of certain specified persons to be free from prosecution for certain specified state offenses based upon certain specified conduct.”  Even if the MMPA could be construed to create some right or benefit that is affected by the Ordinance, there was no deprivation without due process.  The letter was nothing more than an advisory letter and it did not, by itself, enforce the Ordinance.  The letter was merely a notification to collectives that the City Attorney believed they were, or soon would be, in violation of the Ordinance.

The court of appeal also rejected the trial court’s decision regarding violations of the right to privacy.  The trial court found unconstitutional the provision of the Ordinance that allows police officers to obtain the contact information of collective members.  The appellate court concluded that the Ordinance does not violate any right to privacy.  To the extent the Collectives were asserting their own privacy rights, the court found “no issue with either the record-keeping or disclosure requirements of the Ordinance given the heavily regulated area in which the collectives operate.”  Ordinary pharmacies are closely regulated businesses that are required to maintain the same type of records as those required by the Ordinance and they are also required to present the records on demand from authorized officers of the law.  The court opined that “it would be entirely irrational to accord marijuana collectives, as entities, greater privacy rights than pharmacies involved in the distribution and use of traditional prescription drugs.”

Insofar as the Collectives are asserting the privacy rights of their individual members, or the individual members are asserting their own privacy rights, the court also found no invasion of privacy.  The information subject to disclosure “is extremely limited and nonintimate in nature” and other statutes already allow disclosure upon demand of patient contact information from traditional health care providers.