Preview
1 Steven G. Churchwell (SBN 110346) Filing Fee Exempt
Douglas L. White (SBN 206705) (Gov. Code § 6103)
2 Nubia I. Goldstein (SBN 272305)
J. Scott Miller (SBN 256476)
3 CHURCHWELL WHITE LLP
4 1414 K Street, 3rd Floor
Sacramento, CA 95814
5 (916) 468-0950 Phone
(916) 468-0951 Fax
6 steve@churchwellwhite.com
7 Todd Noonan (SBN 172962)
8 NOONAN LAW GROUP E-FILED
980 9th Street, 16th Floor 10/28/2020 4:54 PM
9 Sacramento, California 95814 Superior Court of California
(916) 449-9541 Phone County of Fresno
10 todd@noonanlawgroup.com By: K. Daves, Deputy
11
Attorneys for Petitioner/Plaintiff
12 COUNTY OF SANTA CRUZ, et al.
13
SUPERIOR COURT OF THE STATE OF CALIFORNIA
14
COUNTY OF FRESNO
15
16 COUNTY OF SANTA CRUZ, ET AL., Case No.: 19CECG01224
17
Plaintiffs,
18 PLAINTIFFS’ REPLY BRIEF
v. REGARDING STANDING AND
19 RIPENESS
BUREAU OF CANNABIS CONTROL, ET
20 AL.,
Complaint Filed: April 4, 2019
21 Trial: Nov. 16, 2020
Defendants.
22 Dept.: 502
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25
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{CW098713.3} 1
Plaintiffs’ Reply Brief Regarding Standing and Ripeness
1 TABLE OF CONTENTS
2 TABLE OF CONTENTS .................................................................................................... 2
3
TABLE OF AUTHORITIES .............................................................................................. 3
4
5 I. INTRODUCTION ........................................................................................................ 5
6
II. DISCUSSION ............................................................................................................... 6
7
A. Plaintiffs Have Sufficiently Alleged that Regulation 5416(d) Preempts Local
8 Jurisdictions’ Ordinances. ............................................................................................. 6
9 1. East of Eden Presented an Actual Controversy Between Plaintiff County of
Santa Cruz’s Cannabis Delivery Ordinance and Regulation 5416(d). ................... 7
10
2. The BCC Fails to Refute that Plaintiffs Have Standing Under Both
11 Government Code Section 11350 and Code of Civil Procedure Section 1060. ..... 8
12 a. The Legislature Granted Plaintiffs Standing to Challenge a Regulation
as “Interested Persons” in Government Code Section 11350. ................................ 8
13
b. Plaintiffs Have Additional Standing Under Code of Civil Procedure
14 Section 1060.......................................................................................................... 10
15 B. The BCC’s Argument that Regulation 5416(d) Does Not Preempt Plaintiffs’
Ordinances Misses the Point of This Litigation.......................................................... 11
16
1. Plaintiffs’ Ordinances Do Not Duplicate State Law, But Rather Are
17 Consistent with Business and Professions Code Provisions Preserving Local
Control to Ban Cannabis Delivery. ....................................................................... 12
18
2. Regulation 5416(d) Directly Contradicts Plaintiffs’ Ordinances. .............. 13
19
3. Regulation 5416(d) Shows That the BCC Intends to Fully Occupy the Field
20 of Cannabis Delivery Regulation, Which Directly Deprives Plaintiffs of Their
Right to Regulate Cannabis Delivery. .................................................................. 16
21
C. The BCC Fails to Refute that Each Plaintiff Has a Ripe Controversy. ................ 18
22
1. Plaintiffs’ Evidence is Sufficient to Prove That Regulation 5416(d)
23 Interferes with Their Power to Regulate or Ban Cannabis Delivery Within Their
Boundaries. ........................................................................................................... 18
24
2. For the Cities That Allow Delivery Subject to Local Licensing
25 Requirements, Regulation 5416(d) Takes Away the Authority to Regulate
Commercial Cannabis Delivery Businesses Pursuant to Their Constitutionally-
26 Protected Police Power. ........................................................................................ 19
27
III. CONCLUSION ........................................................................................................... 20
28
{CW098713.3} 2
Plaintiffs’ Reply Brief Regarding Standing and Ripeness
1 TABLE OF AUTHORITIES
2 Cases
3 Alameda County Land Use Assn. v. City of Hayward (1995) 38 Cal.App.4th 1716 ........ 10
4 California Department of Consumer Affairs v. Superior Court (2016) 245 Cal.App.4th
5 256 ................................................................................................................................ 15
6 Californians for Native Salmon and Steelhead Assn. v. Department of Forestry (1990)
7 221 Cal.App.3d 1419 .................................................................................................... 10
8 Carmel Valley Fire Protection District v. State of California (2001) 25 Cal.4th 287 ..... 18
9
Communities for a Better Environment v. State Energy Resources Conservation and
10
Development Com. (2017) 19 Cal.App.5th 725................................................ 10, 11, 20
11
Environmental Defense Project of Sierra County v. County of Sierra (2008) 158
12
Cal.App.4th 877 ...................................................................................................... 15, 16
13
Environmental Protection Information Center v. Department of Forestry and Fire
14
Protection (1996) 43 Cal.App.4th 1011 ............................................................. 8, 11, 19
15
In re Claudia E. (2008) 163 Cal.App.4th 627 .................................................................. 10
16
Kirby v. County of Fresno (2015) 242 Cal.App.4th 940 ................................ 12, 15, 16, 17
17
Pacific Legal Foundation v. California Coastal Com. (1982) 33 Cal.3d 158 ............ 10, 11
18
Qualified Patients Ass’n v. City of Anaheim (2010) 187 Cal.App.4th 734 ...................... 11
19 Save the Plastic Bag Coalition v. City of Manhattan Beach (2011) 52 Cal.4th 155 ........ 19
20 Southcentral Foundation v. Alaska Native Tribal Health Consortium (9th Cir. 2020) 975
21 F.3d 831 ........................................................................................................................ 16
22 Woods v. Superior Court (1981) 28 Cal.3d 668 ................................................................. 8
23 Zeitlin v. Arneburgh (1963) 59 Cal.2d 901 ....................................................................... 10
24
Statutes
25
Business and Professions Code section 26013, subdivision (a) ......................................... 9
26
Business and Professions Code section 26055 ............................................................. 9, 13
27
Business and Professions Code section 26090 ......................................................... 6, 9, 16
28
{CW098713.3} 3
Plaintiffs’ Reply Brief Regarding Standing and Ripeness
1 Business and Professions Code section 26090, subdivision (e)............................. passim
2 Business and Professions Code section 26200 ............................................................... 6, 9
3 Business and Professions Code section 26200, subdivision (a) ............................ passim
4 Business and Professions Code section 26200, subdivision (a)(1) ......................... 9, 12, 13
5 Code of Civil Procedure section 1060 ....................................................................... passim
6 Code of Civl Procedure section 1086 ................................................................................. 6
7 Government Code section 11342.2 ..................................................................................... 5
8 Government Code section 11350 ........................................................................ 6, 8, 18, 19
9 Government Code section 11350, subdivision (a) .............................................................. 5
10 Regulations
11 California Code of Regulations, title 16, section 5416, subdivision (d) .................... passim
12
13
14
15
16
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20
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{CW098713.3} 4
Plaintiffs’ Reply Brief Regarding Standing and Ripeness
1 I. INTRODUCTION
2 The Bureau of Cannabis Control (“BCC”) must have finally realized that they are
3 going to lose this case. What other explanation could there be for their desperate,
4 eleventh-hour argument that Regulation 5416(d) 1 simply does not regulate any of the
5 Plaintiffs, but only BCC-licensed cannabis delivery retailers? Thus, the argument goes,
6 Plaintiffs’ cannabis ordinances are not in conflict with Regulation 5416(d), because those
7 ordinances merely regulate land use, zoning, and business licensing. For this reason, there
8 exists no preemption of local regulation of cannabis deliveries sufficient to create a ripe
9 controversy for judicial relief.
10 Shockingly, the BCC apparently hopes that the Court will not find out about its
11 intervention as a plaintiff in East of Eden v. County of Santa Cruz (“East of Eden”)
12 (Plaintiffs’ Request for Judicial Notice (“RJN”), Exhs. 39 [Motion for Leave to
13 Intervene]; 40 [Complaint in Intervention]), a lawsuit filed in Santa Cruz County against
14 the lead plaintiff in this lawsuit. There, the BCC took the opposite position, asserting that
15 the same Santa Cruz County cannabis delivery ordinance before this Court violates
16 Regulation 5416(d) and, therefore, should be enjoined from enforcement. (RJN, Exh. 40
17 at p. 6.)
18 Perhaps worse, the BCC’s Opposition fails to grapple with the very nature of this
19 lawsuit. The Plaintiffs are seeking a declaration that Regulation 5416(d) is in direct
20 conflict with Sections 26090, subdivision (e), and 26200, subdivision (a). These
21 statutory provisions protect the right of local governments to regulate commercial
22 cannabis deliveries within their boundaries. Government Code section 11342.2 provides
23 that “no regulation adopted is valid or effective unless consistent and not in conflict with
24 the statute and reasonably necessary to effectuate the purpose of the statute.” Further,
25 Government Code section 11350, subdivision (a), states that “[a]ny interested person may
26 obtain a judicial declaration as to the validity of any regulation or order of repeal by
27
1
References herein to “Regulation” are to Title 16, California Code of Regulations.
28 References to “Section” are to the Business and Professions Code.
{CW098713.3} 5
Plaintiffs’ Reply Brief Regarding Standing and Ripeness
1 bringing an action for declaratory relief in the superior court in accordance with the Code
2 of Civil Procedure.” The BCC further ignores the additional standing for all Plaintiffs to
3 this action provided in Code of Civil Procedure section 1060, arguing incorrectly that the
4 “beneficially interested” standard in section 1086 applies.
5 Finally, the BCC’s arguments fail because this case is about the BCC’s overreach
6 in promulgating Regulation 5416(d) and robbing Plaintiffs’ of their statutory power to
7 control the commercial cannabis delivery market within their boundaries, a power
8 granted to them by the voters in Proposition 64. By authorizing licensees to deliver inside
9 the boundaries of jurisdictions that ban or regulate such deliveries, Regulation 5416(d)
10 directly conflicts with Sections 26200 and 26090. Regulation 5416(d) strips Plaintiffs of
11 that power. That is the regulation’s express and intended purpose, as evidenced by every
12 part of the BCC’s rulemaking file that was lodged with the Court.
13 Although one might give the BCC points for creativity, the simple fact remains
14 that the regulation is ultra vires. It and the statute cannot co-exist. In our system of
15 jurisprudence, the ultra vires regulation must yield. Under both Government Code section
16 11350 and Code of Civil Procedure section 1060, there is a ripe controversy between
17 every Plaintiff in this case, and the BCC. Therefore, the Court may declare Regulation
18 5416(d) invalid.
19 II. DISCUSSION
20 A. Plaintiffs Have Sufficiently Alleged that Regulation 5416(d) Preempts Local
Jurisdictions’ Ordinances.
21
The BCC claims that Plaintiffs have not alleged that 5416(d) “has ever actually
22
encroached upon their rights, nor have they explained how any application of 5416(d)
23
could ever touch upon the right of any local jurisdiction.” (Corrected Defendants’
24
Opposition to Plaintiffs’ Supplemental Brief Regarding Ripeness (“Opp.”) at p. 13.) The
25
BCC claims that Plaintiffs did not meet their burden to show how their ordinances are
26
“preempted,” which the BCC contends requires an “actual controversy involving facts,
27
evidence and the application of local ordinances.” (Opp. at p. 26.) This statement is
28
{CW098713.3} 6
Plaintiffs’ Reply Brief Regarding Standing and Ripeness
1 demonstrably false.
2 1. East of Eden Presented an Actual Controversy Between Plaintiff
County of Santa Cruz’s Cannabis Delivery Ordinance and Regulation
3 5416(d).
4 First, as the BCC knows full well, but refuses to acknowledge, the East of Eden
5 action already provided an instance where Regulation 5416(d) was challenged. Plaintiffs
6 have argued this point extensively in their trial brief and this Standing/Ripeness Brief
7 ordered by this Court. In that action, the BCC cited Regulation 5416(d) to the Santa Cruz
8 Superior Court, in an attempt to invalidate Santa Cruz’s delivery ordinances. 2
9 The cannabis delivery company plaintiff in that action, East of Eden, moved for a
10 preliminary injunction arguing that Santa Cruz County Code sections 7.130.050,
11 subdivision (C), and 7.130.110, subdivision (F)(1), were preempted by Regulation
12 5416(d). The Superior Court found that East of Eden failed to show a probability of
13 success on the merits, because Sections 26200 and 26090 “make clear that local control
14 has been preserved by the State statutory scheme and that Santa Cruz County’s
15 ordinances do not conflict with State law, are not preempted, nor are they
16 unconstitutional.” (RJN, Ex. 37 [Santa Cruz Opp., filed September 5, 2019]; Ex. 38
17 [Order, filed September 18, 2019]).
18 The BCC’s Complaint-in-Intervention asserted that Santa Cruz’s ordinances
19 violated Regulation 5416(d) and therefore could not be enforced. (RJN, Ex. 40 at ¶¶ 1, 3,
20 22-23.) The BCC specifically argued that “[a] judicial declaration that [Regulation
21 5416(d)] is valid, that the County Cannabis Codes violate MAUCRSA, and [Regulation
22 5416(d)] is necessary and appropriate to prevent the Respondents from enforcing local
23 laws that contravene MAUCRSA and [Regulation 5416(d)].” (RJN, Exh. 40 at 23.) The
24 BCC further alleged that:
25
2
The original plaintiff in the East of Eden case was a cannabis business. The Superior
26
Court denied its request for a preliminary injunction, stating that Proposition 64’s express
27 protection for local control over deliveries meant that the “likelihood of success on the
merits” standard had not been met. (See RJN, Ex. 38, pp. 2-3.) That litigation clearly
28 demonstrates the uncertainty the BCC’s regulation has created.
{CW098713.3} 7
Plaintiffs’ Reply Brief Regarding Standing and Ripeness
1 A judicial order permanently enjoining the Respondents from enforcing the
2 Santa Cruz County Code sections 7.130.050, subdivisions (A) & (C),
7.130.090, and 7.130.110 (A) & (F) is necessary and appropriate to prevent
3 Respondents from violating the Bureau’s statutory rights to regulate
commercial cannabis activities within the state and the statutory rights
4 of the Bureau’s licensees to deliver commercial cannabis to any
jurisdiction within the state.
5
(RJN, Exh. 40 at ¶ 24 [bold added].)
6
In light of this statement before another Superior Court, the BCC may not now
7
legitimately claim that Regulation 5416(a) does not preempt the Plaintiffs’ ordinances.
8
The existence of the East of Eden action flies in the face of the BCC’s argument that “it is
9
reasonably possible to comply with both” Regulation 5416(d) and the Plaintiffs’
10
ordinances. (See Opp. at p. 17.) Most telling is that the BCC fails to even mention its
11
intervention in the East of Eden lawsuit, much less confront its implications.
12
2. The BCC Fails to Refute that Plaintiffs Have Standing Under Both
13 Government Code Section 11350 and Code of Civil Procedure Section
1060.
14
The BCC argues that since the Court mentioned that it may treat this action as a
15
mandamus proceeding, the “interested person” standard of Government Code section
16
11350 does not apply. The BCC is incorrect.
17
a. The Legislature Granted Plaintiffs Standing to Challenge a
18 Regulation as “Interested Persons” in Government Code
Section 11350.
19
Government Code section 11350 states: “[a]ny interested person may obtain a
20
judicial declaration as to the validity of any regulation or order of repeal by bringing an
21
action for declaratory relief in the superior court in accordance with the Code of Civil
22
Procedure.” This standard is appropriate for actions brought to challenge regulations.
23
(Environmental Protection Information Center v. Department of Forestry and Fire
24
Protection (1996) 43 Cal.App.4th 1011, 1017-1018 (“Environmental Protection
25
Information Center”); see also Woods v. Superior Court (1981) 28 Cal.3d 668, 682.)
26
The BCC fails to show how Plaintiffs do not meet this standard. Indeed, the BCC
27
failed to make even a colorable argument that Regulation 5416(d) plainly conflicts with
28
{CW098713.3} 8
Plaintiffs’ Reply Brief Regarding Standing and Ripeness
1 Sections 26090 and 26200. The BCC’s “rules and regulations shall be consistent with the
2 purposes and intent” of Proposition 64. (§ 26013, subd. (a).)
3 The intent of Proposition 64, among other things, is to preserve the ability of local
4 jurisdictions to regulate or ban cannabis delivery within their boundaries if they see fit. 3
5 Consistent with this intent, Sections 26090, subdivision (e), and 26200 preserve local
6 control over cannabis regulation, painstakingly gained over many years, beginning with
7 medical marijuana businesses.
8 Section 26200, subdivision (a)(1), expressly states that these statutes “shall not be
9 interpreted to supersede or limit the authority of a local jurisdiction to adopt and enforce
10 local ordinances to…completely prohibit the establishment or operation” of cannabis
11 delivery businesses within its boundaries. (§ 26200, subd. (a)(1).)
12 Ignoring these statutory provisions, the BCC argues that Proposition 64’s stated
13 goal to implement a statewide licensing regulation, and enforcement system “to legalize,
14 control, and regulate … the sale of non-medical marijuana” somehow gives the BCC the
15 authority to implement a statewide licensing program for delivery, including into local
16 jurisdictions that ban delivery. (See Opp. at p 39, and fn. 20.) The BCC even concedes
17 that Plaintiff City of Tehachapi’s “total prohibition” ordinance “is likely preempted
18 because it obstructs the implementation of a state wide commercial cannabis program,”
19 yet somehow this ordinance “does not implicate [Regulation 5416(d)] or invoke any right
20
21 3
See, e.g., RJN, Exh. 50 (AB 2020, Legislative Counsel’s Digest, stating that Prop.
64/AUMA “authorizes a person who obtains a state license under AUMA to engage in
22
commercial adult-use cannabis activity pursuant to that license and applicable local
23 ordinances.” (bold added); RJN, Exh. 54 (AB 97, Legislative Counsel’s Digest, noting
that both a state license and compliance with “applicable local ordinances” are required
24 to engage in any commercial adult-use cannabis activity); § 26055, subdivision (d) [as
amended by AB 97], confirming that BCC “shall not approve an application for a state
25 license under this division if approval of the state license will violate the provisions of
any local ordinance or regulation adopted in accordance with Section 26200”; Id. at subd.
26
(f) [local authorities to advise BCC of changes to local requirements]; Id. at subd. (g)
27 [where a local jurisdiction advises BCC that an activity is contrary to local ordinance,
BCC is affirmatively required to deny any license application seeking to conduct such an
28 activity locally].
{CW098713.3} 9
Plaintiffs’ Reply Brief Regarding Standing and Ripeness
1 of the city or duty of the Defendants in this case” and therefore raises no actual
2 controversy. (Opp. at pp. 38-39.)
3 This strained logic not only ignores the text of Sections 26090, subdivision (e),
4 and 26200, subdivision (a), but also runs directly counter to the BCC’s position in the
5 East of Eden action, where it alleged that the County of Santa Cruz’s ban on non-local
6 deliveries did in fact raise an actual controversy. (RJN, Exh. 40, at pp. 5-6.)
7 Further, the BCC does not refute that Regulation 5416(d) creates regulatory
8 uncertainty sufficient to create a ripe controversy for all Plaintiffs. A declaration from
9 this Court is needed, because “the consequences of a deferred decision will be lingering
10 uncertainty in the law, especially when there is widespread public interest in the answer
11 to a particular legal question.” (Communities for a Better Environment v. State Energy
12 Resources Conservation and Development Com. (2017) 19 Cal.App.5th 725, 734
13 (distinguishing Pacific Legal Foundation v. California Coastal Com. (1982) 33 Cal.3d
14 158 (“Pacific Legal Foundation”).) The BCC’s own prior appearance in East of Eden
15 only confirms that litigation over the scope of Regulation 5416(d) is inevitable due to the
16 “lingering uncertainty” in its application.
17 b. Plaintiffs Have Additional Standing Under Code of Civil
Procedure Section 1060.
18
Next, the BCC fails to mention that one of the purposes of Code of Civil
19
Procedure section 1060 declaratory relief is to “liquidate doubts with respect to
20
uncertainties or controversies which might otherwise result in litigation.” (In re Claudia
21
E. (2008) 163 Cal.App.4th 627, 633; Alameda County Land Use Assn. v. City of Hayward
22
(1995) 38 Cal.App.4th 1716, 1723; Zeitlin v. Arneburgh (1963) 59 Cal.2d 901, 905.)
23
Declaratory relief applies broadly to challenges of state agency actions, even where no
24
specific agency decision is attacked. (See Californians for Native Salmon and Steelhead
25
Assn. v. Department of Forestry (1990) 221 Cal.App.3d 1419, 1422.) If the facts “show
26
the existence of an actual controversy, between appellants and respondents, appellants
27
have ‘stated a legally sufficient complaint’ for declaratory relief and it was an abuse of
28
{CW098713.3} 10
Plaintiffs’ Reply Brief Regarding Standing and Ripeness
1 discretion to dismiss the action.” (Id., at p. 1426, citing Zeitlin v. Arneburgh, supra, 59
2 Cal.2d at p. 908.)
3 The BCC also fails to refute that declaratory relief under Code of Civil Procedure
4 section 1060 is necessary to resolve questions that are bound to be the subject of future
5 litigation, as undoubtedly Regulation 5416(d) will be. (See Communities for a Better
6 Environment v. State Energy Resources Conservation and Development Com., supra, 19
7 Cal.App.5th at p. 735. The court distinguished Pacific Legal Foundation, supra, in a
8 challenge to a statute that restricted judicial review of an agency’s decisions, since:
9 [N]o factual context from an individual Energy Commission certification
proceeding is necessary, or even useful, to resolution of the constitutional
10 question raised. Moreover, the constitutional question will necessarily be
implicated in every future judicial proceeding seeking review of an Energy
11 Commission decision.
12 (Id. at pp. 734-39, italics omitted [reviewing cases finding the ripeness element satisfied
13 where direct challenges are raised to the legality of an enactment, including where, as
14 here, delay in decision will result in “lingering uncertainty in the law”]; see also
15 Qualified Patients Ass’n v. City of Anaheim (2010) 187 Cal.App.4th 734, 756 [whether
16 Medical Marijuana Program Act preempted local city ordinance was “an actual
17 controversy between the parties relating to their respective legal rights and duties” and
18 “stated a legally sufficient complaint for declaratory relief,” which had to be addressed by
19 the trial court in the first instance]; Environmental Protection Information Center, supra,
20 43 Cal.App.4th at pp. 1019-20 [association deprived by regulation of right to comment on
21 timber harvest plans was an interested party entitled to challenge regulation].)
22 As East of Eden and this action show, Regulation 5416(d) has already been
23 challenged twice in its short lifespan; this is certainly not unexpected given Regulation
24 5416(d)’s blatant encroachment on protected local authority.
25 B. The BCC’s Argument that Regulation 5416(d) Does Not Preempt Plaintiffs’
Ordinances Misses the Point of This Litigation.
26
Without disputing these points, the BCC instead insists that Plaintiffs fail to show
27
28
{CW098713.3} 11
Plaintiffs’ Reply Brief Regarding Standing and Ripeness
1 how each ordinance is “preempted” by Regulation 5416(d). 4 The BCC claims that
2 Regulation 5416(d) does not preempt the Plaintiffs’ local ordinances because it does not
3 conflict with them. As the BCC asserts, under California preemption doctrine, a
4 “conflict” exists, sufficient to establish preemption, if the local ordinance: (1) duplicates
5 the state statute; (2) contradicts the statute; or (3) enters an area fully occupied by general
6 law. (Opp. at p. 13; Kirby v. County of Fresno (2015) 242 Cal.App.4th 940, 954.) The
7 BCC’s arguments in this regard must fail, since each of the Plaintiffs’ ordinances directly
8 contradicts Regulation 5416(d).
9 1. Plaintiffs’ Ordinances Do Not Duplicate State Law, But Rather Are
Consistent with Business and Professions Code Provisions Preserving
10 Local Control to Ban Cannabis Delivery.
11 First, the BCC claims there is no duplication of state statutes. Contrary to the
12 BCC’s claims, Plaintiffs have not alleged that their respective ordinances are coextensive
13 with state law. Rather, the ordinances are a valid exercise of their police power as
14 expressly permitted by and consistent with Business and Professions Code section 26200,
15 which states:
16 This division shall not be interpreted to supersede or limit the authority of
a local jurisdiction to adopt and enforce local ordinances to regulate
17 businesses licensed under this division, including, but not limited to, local
zoning and land use requirements, business license requirements, and
18 requirements related to reducing exposure to secondhand smoke, or to
completely prohibit the establishment or operation of one or more types
19 of businesses licensed under this division within the local jurisdiction.
20 (§ 26200, subd. (a) (1), bold added.)
21 Section 26200 specifically protects local jurisdictions against state-level
22 regulatory encroachment. Notably, this proscription against preemption is not qualified,
23 4
To be clear, Plaintiffs agree that their respective ordinances do not conflict with, and are
24 not preempted by, Sections 26200, subdivision (a), and 26090, subdivision (e), as
consistent with the East of Eden order denying the preliminary injunction. (RJN, Exh. 38,
25 at p. 3.) Rather, it is Regulation 5416(d) that purports to preempt their respective
ordinances, despite BCC’s new position in its Opposition that there can be no
26
preemption. That is the heart of this dispute: Regulation 5416(d) conflicts with Sections
27 26200 and 26090 (and therefore also with Plaintiffs’ ordinances), and thus must be
declared void. BCC’s arguments in its Opposition against Regulation 5416(d)’s
28 preemption are directly contrary to BCC’s position in East of Eden.
{CW098713.3} 12
Plaintiffs’ Reply Brief Regarding Standing and Ripeness
1 as the first words of the provision demonstrate: “This division shall not be interpreted to
2 supersede or limit the authority of a local jurisdiction to adopt and enforce local
3 ordinances to regulate businesses licensed under this division … .” (§ 26200, subd. (a)
4 (1).) Following those words are examples of local regulatory authority (zoning, land use,
5 and the right to completely prohibit the establishment or operation of cannabis
6 businesses), not constraints on local government authority. These examples establish that
7 complete prohibition at the local level is fully consistent with the statutory scheme and
8 purpose.
9 Defendants next allege that “Plaintiffs believe that it is a violation of state law for
10 state licensees to deliver to local jurisdictions that prohibit local delivery.” (Opp. at p. 14)
11 Defendants allege that these “Plaintiffs mistakenly believe that passing local laws
12 governing cannabis fundamentally alters state law; and therefore, when a local ordinance
13 prohibits a cannabis related activity, state law must also prohibit that activity from within
14 their jurisdictional borders.” (Ibid., citing § 26090, subd. (e).)
15 This is incorrect. Plaintiffs have passed local ordinances regulating or banning
16 cannabis delivery in their jurisdictions pursuant to the express protections of local control
17 that are spelled out in Sections 26090, subdivision (e), and 26200, subdivision (a). Rather
18 than being “coextensive with” these statutes, Plaintiffs’ ordinances are consistent with
19 Plaintiffs’ police power, and the intent and purpose of Proposition 64, as codified in these
20 two sections. 5
21 2. Regulation 5416(d) Directly Contradicts Plaintiffs’ Ordinances.
22 The BCC asserts that the Plaintiffs’ Ordinances do not conflict with state law. It
23 argues that “[w]hile local laws which totally prohibit all retail activity including delivery
24 5
Defendants allege that 26090, subdivision (e), is ambiguous as it is not clear whether
25 the “local law” referenced is the local law of the jurisdiction banning delivery or the local
law of the jurisdiction where the license is established. (Opp. at p. 15.) Besides being a
26 red herring, this is simply untrue. Section 26200 expressly states that these statutes “shall
not be interpreted to supersede or limit the authority of a local jurisdiction to adopt and
27 enforce local ordinances to…completely prohibit the establishment or operation” of
cannabis delivery businesses within its boundaries. (§ 26200, subd. (a)(1).) Section
28
26055’s licensing requirements does not change this plain language.
{CW098713.3} 13
Plaintiffs’ Reply Brief Regarding Standing and Ripeness
1 may be preempted for other reasons, [Regulation 5416(d)] itself does not create an
2 irreconcilable contradiction.” (Opp. at p. 16). That is because, according to the BCC’s
3 view, Regulation 5415(d) “does not command local jurisdictions to do anything, neither
4 does it prohibit them from doing anything.” (Ibid.)
5 This logic is utterly inconsistent with the BCC’s position in the East of Eden
6 action, in which the agency asserted that it had the authority to preempt local regulation
7 concerning deliveries, and that Regulation 5416(d) was intended to do so and did so. 6
8 But beyond Plaintiff County of Santa Cruz’s ordinance, all other Plaintiffs’
9 ordinances in this case directly conflict with Regulation 5416(d). As the BCC concedes,
10 each Plaintiff jurisdiction’s ordinance either bans all cannabis delivery entirely, 7 bans all
11 deliveries by non-local businesses, 8 or restricts delivery through regulations or licensing
12 requirements. 9 Regulation 5416(d) directly contradicts and attempts to override these
13 bans and regulations, both by its express language permitting delivery “to any jurisdiction
14 within the State of California,” and by the BCC’s own interpretation of its objectives and
15 6
RJN, Ex. 39 (BCC Motion to Intervene, filed November 18, 2019) at p. 4:14-15
16 (“[Regulation 5416(d)] ... authorizes a licensed commercial cannabis retail business to
deliver cannabis and cannabis products throughout the state, … .”); see also BCC
17 Complaint-in-Intervention, ¶ 2, RJN, Ex. 40 (“The Bureau seeks a judicial declaration
validating the Cannabis Delivery Regulation. The Court should permanently enjoin
18 Santa Cruz County… from enforcing local laws that violate the Cannabis Delivery
Regulation.”); ¶ 22 (“The Cannabis Delivery Regulation permits delivery by a state
19 licensed commercial cannabis retailer to a physical address to any jurisdiction within the
20 State of California as long as the licensee complies with MAUCRSA and its
implementing regulations. Inconsistent with MAUCRSA and the Cannabis Delivery
21 Regulation, the County Cannabis Codes prohibit commercial cannabis retailers licensed
by the Bureau and other local jurisdictions from delivering in unincorporated Santa Cruz
22 County, but allow delivery by commercial cannabis retailers licensed by the Bureau and
Santa Cruz County.”)
23
7
See, Opp. at pp. 25-39 (cities of Agoura Hills, Arcadia, Clovis, Covina, Downey,
24 McFarland, Newman, Palmdale, Riverside, San Pablo, and Tehachapi); see also, pp. 44-
45 (Patterson, Beverly Hills [prohibiting all non-medical cannabis delivery but allowing
25 medical delivery], and Temecula [same].)
26 8
See, Opp. at pp. 39-43 (cities of Dixon, Oakdale, Sonora, and Turlock, and County of
Santa Cruz).
27
9
See, Opp. at pp. 21-25 (cities of Angels Camp, Atwater, Ceres, Riverbank, Tracy); see
28 also, pp. 45-46 (Vacaville).
{CW098713.3} 14
Plaintiffs’ Reply Brief
Preview
1 Steven G. Churchwell (SBN 110346) Filing Fee Exempt Douglas L. White (SBN 206705) (Gov. Code § 6103) 2 Nubia I. Goldstein (SBN 272305) J. Scott Miller (SBN 256476) 3 CHURCHWELL WHITE LLP 4 1414 K Street, 3rd Floor Sacramento, CA 95814 5 (916) 468-0950 Phone (916) 468-0951 Fax 6 steve@churchwellwhite.com 7 Todd Noonan (SBN 172962) 8 NOONAN LAW GROUP E-FILED 980 9th Street, 16th Floor 10/28/2020 4:54 PM 9 Sacramento, California 95814 Superior Court of California (916) 449-9541 Phone County of Fresno 10 todd@noonanlawgroup.com By: K. Daves, Deputy 11 Attorneys for Petitioner/Plaintiff 12 COUNTY OF SANTA CRUZ, et al. 13 SUPERIOR COURT OF THE STATE OF CALIFORNIA 14 COUNTY OF FRESNO 15 16 COUNTY OF SANTA CRUZ, ET AL., Case No.: 19CECG01224 17 Plaintiffs, 18 PLAINTIFFS’ REPLY BRIEF v. REGARDING STANDING AND 19 RIPENESS BUREAU OF CANNABIS CONTROL, ET 20 AL., Complaint Filed: April 4, 2019 21 Trial: Nov. 16, 2020 Defendants. 22 Dept.: 502 23 24 25 26 27 28 {CW098713.3} 1 Plaintiffs’ Reply Brief Regarding Standing and Ripeness 1 TABLE OF CONTENTS 2 TABLE OF CONTENTS .................................................................................................... 2 3 TABLE OF AUTHORITIES .............................................................................................. 3 4 5 I. INTRODUCTION ........................................................................................................ 5 6 II. DISCUSSION ............................................................................................................... 6 7 A. Plaintiffs Have Sufficiently Alleged that Regulation 5416(d) Preempts Local 8 Jurisdictions’ Ordinances. ............................................................................................. 6 9 1. East of Eden Presented an Actual Controversy Between Plaintiff County of Santa Cruz’s Cannabis Delivery Ordinance and Regulation 5416(d). ................... 7 10 2. The BCC Fails to Refute that Plaintiffs Have Standing Under Both 11 Government Code Section 11350 and Code of Civil Procedure Section 1060. ..... 8 12 a. The Legislature Granted Plaintiffs Standing to Challenge a Regulation as “Interested Persons” in Government Code Section 11350. ................................ 8 13 b. Plaintiffs Have Additional Standing Under Code of Civil Procedure 14 Section 1060.......................................................................................................... 10 15 B. The BCC’s Argument that Regulation 5416(d) Does Not Preempt Plaintiffs’ Ordinances Misses the Point of This Litigation.......................................................... 11 16 1. Plaintiffs’ Ordinances Do Not Duplicate State Law, But Rather Are 17 Consistent with Business and Professions Code Provisions Preserving Local Control to Ban Cannabis Delivery. ....................................................................... 12 18 2. Regulation 5416(d) Directly Contradicts Plaintiffs’ Ordinances. .............. 13 19 3. Regulation 5416(d) Shows That the BCC Intends to Fully Occupy the Field 20 of Cannabis Delivery Regulation, Which Directly Deprives Plaintiffs of Their Right to Regulate Cannabis Delivery. .................................................................. 16 21 C. The BCC Fails to Refute that Each Plaintiff Has a Ripe Controversy. ................ 18 22 1. Plaintiffs’ Evidence is Sufficient to Prove That Regulation 5416(d) 23 Interferes with Their Power to Regulate or Ban Cannabis Delivery Within Their Boundaries. ........................................................................................................... 18 24 2. For the Cities That Allow Delivery Subject to Local Licensing 25 Requirements, Regulation 5416(d) Takes Away the Authority to Regulate Commercial Cannabis Delivery Businesses Pursuant to Their Constitutionally- 26 Protected Police Power. ........................................................................................ 19 27 III. CONCLUSION ........................................................................................................... 20 28 {CW098713.3} 2 Plaintiffs’ Reply Brief Regarding Standing and Ripeness 1 TABLE OF AUTHORITIES 2 Cases 3 Alameda County Land Use Assn. v. City of Hayward (1995) 38 Cal.App.4th 1716 ........ 10 4 California Department of Consumer Affairs v. Superior Court (2016) 245 Cal.App.4th 5 256 ................................................................................................................................ 15 6 Californians for Native Salmon and Steelhead Assn. v. Department of Forestry (1990) 7 221 Cal.App.3d 1419 .................................................................................................... 10 8 Carmel Valley Fire Protection District v. State of California (2001) 25 Cal.4th 287 ..... 18 9 Communities for a Better Environment v. State Energy Resources Conservation and 10 Development Com. (2017) 19 Cal.App.5th 725................................................ 10, 11, 20 11 Environmental Defense Project of Sierra County v. County of Sierra (2008) 158 12 Cal.App.4th 877 ...................................................................................................... 15, 16 13 Environmental Protection Information Center v. Department of Forestry and Fire 14 Protection (1996) 43 Cal.App.4th 1011 ............................................................. 8, 11, 19 15 In re Claudia E. (2008) 163 Cal.App.4th 627 .................................................................. 10 16 Kirby v. County of Fresno (2015) 242 Cal.App.4th 940 ................................ 12, 15, 16, 17 17 Pacific Legal Foundation v. California Coastal Com. (1982) 33 Cal.3d 158 ............ 10, 11 18 Qualified Patients Ass’n v. City of Anaheim (2010) 187 Cal.App.4th 734 ...................... 11 19 Save the Plastic Bag Coalition v. City of Manhattan Beach (2011) 52 Cal.4th 155 ........ 19 20 Southcentral Foundation v. Alaska Native Tribal Health Consortium (9th Cir. 2020) 975 21 F.3d 831 ........................................................................................................................ 16 22 Woods v. Superior Court (1981) 28 Cal.3d 668 ................................................................. 8 23 Zeitlin v. Arneburgh (1963) 59 Cal.2d 901 ....................................................................... 10 24 Statutes 25 Business and Professions Code section 26013, subdivision (a) ......................................... 9 26 Business and Professions Code section 26055 ............................................................. 9, 13 27 Business and Professions Code section 26090 ......................................................... 6, 9, 16 28 {CW098713.3} 3 Plaintiffs’ Reply Brief Regarding Standing and Ripeness 1 Business and Professions Code section 26090, subdivision (e)............................. passim 2 Business and Professions Code section 26200 ............................................................... 6, 9 3 Business and Professions Code section 26200, subdivision (a) ............................ passim 4 Business and Professions Code section 26200, subdivision (a)(1) ......................... 9, 12, 13 5 Code of Civil Procedure section 1060 ....................................................................... passim 6 Code of Civl Procedure section 1086 ................................................................................. 6 7 Government Code section 11342.2 ..................................................................................... 5 8 Government Code section 11350 ........................................................................ 6, 8, 18, 19 9 Government Code section 11350, subdivision (a) .............................................................. 5 10 Regulations 11 California Code of Regulations, title 16, section 5416, subdivision (d) .................... passim 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 {CW098713.3} 4 Plaintiffs’ Reply Brief Regarding Standing and Ripeness 1 I. INTRODUCTION 2 The Bureau of Cannabis Control (“BCC”) must have finally realized that they are 3 going to lose this case. What other explanation could there be for their desperate, 4 eleventh-hour argument that Regulation 5416(d) 1 simply does not regulate any of the 5 Plaintiffs, but only BCC-licensed cannabis delivery retailers? Thus, the argument goes, 6 Plaintiffs’ cannabis ordinances are not in conflict with Regulation 5416(d), because those 7 ordinances merely regulate land use, zoning, and business licensing. For this reason, there 8 exists no preemption of local regulation of cannabis deliveries sufficient to create a ripe 9 controversy for judicial relief. 10 Shockingly, the BCC apparently hopes that the Court will not find out about its 11 intervention as a plaintiff in East of Eden v. County of Santa Cruz (“East of Eden”) 12 (Plaintiffs’ Request for Judicial Notice (“RJN”), Exhs. 39 [Motion for Leave to 13 Intervene]; 40 [Complaint in Intervention]), a lawsuit filed in Santa Cruz County against 14 the lead plaintiff in this lawsuit. There, the BCC took the opposite position, asserting that 15 the same Santa Cruz County cannabis delivery ordinance before this Court violates 16 Regulation 5416(d) and, therefore, should be enjoined from enforcement. (RJN, Exh. 40 17 at p. 6.) 18 Perhaps worse, the BCC’s Opposition fails to grapple with the very nature of this 19 lawsuit. The Plaintiffs are seeking a declaration that Regulation 5416(d) is in direct 20 conflict with Sections 26090, subdivision (e), and 26200, subdivision (a). These 21 statutory provisions protect the right of local governments to regulate commercial 22 cannabis deliveries within their boundaries. Government Code section 11342.2 provides 23 that “no regulation adopted is valid or effective unless consistent and not in conflict with 24 the statute and reasonably necessary to effectuate the purpose of the statute.” Further, 25 Government Code section 11350, subdivision (a), states that “[a]ny interested person may 26 obtain a judicial declaration as to the validity of any regulation or order of repeal by 27 1 References herein to “Regulation” are to Title 16, California Code of Regulations. 28 References to “Section” are to the Business and Professions Code. {CW098713.3} 5 Plaintiffs’ Reply Brief Regarding Standing and Ripeness 1 bringing an action for declaratory relief in the superior court in accordance with the Code 2 of Civil Procedure.” The BCC further ignores the additional standing for all Plaintiffs to 3 this action provided in Code of Civil Procedure section 1060, arguing incorrectly that the 4 “beneficially interested” standard in section 1086 applies. 5 Finally, the BCC’s arguments fail because this case is about the BCC’s overreach 6 in promulgating Regulation 5416(d) and robbing Plaintiffs’ of their statutory power to 7 control the commercial cannabis delivery market within their boundaries, a power 8 granted to them by the voters in Proposition 64. By authorizing licensees to deliver inside 9 the boundaries of jurisdictions that ban or regulate such deliveries, Regulation 5416(d) 10 directly conflicts with Sections 26200 and 26090. Regulation 5416(d) strips Plaintiffs of 11 that power. That is the regulation’s express and intended purpose, as evidenced by every 12 part of the BCC’s rulemaking file that was lodged with the Court. 13 Although one might give the BCC points for creativity, the simple fact remains 14 that the regulation is ultra vires. It and the statute cannot co-exist. In our system of 15 jurisprudence, the ultra vires regulation must yield. Under both Government Code section 16 11350 and Code of Civil Procedure section 1060, there is a ripe controversy between 17 every Plaintiff in this case, and the BCC. Therefore, the Court may declare Regulation 18 5416(d) invalid. 19 II. DISCUSSION 20 A. Plaintiffs Have Sufficiently Alleged that Regulation 5416(d) Preempts Local Jurisdictions’ Ordinances. 21 The BCC claims that Plaintiffs have not alleged that 5416(d) “has ever actually 22 encroached upon their rights, nor have they explained how any application of 5416(d) 23 could ever touch upon the right of any local jurisdiction.” (Corrected Defendants’ 24 Opposition to Plaintiffs’ Supplemental Brief Regarding Ripeness (“Opp.”) at p. 13.) The 25 BCC claims that Plaintiffs did not meet their burden to show how their ordinances are 26 “preempted,” which the BCC contends requires an “actual controversy involving facts, 27 evidence and the application of local ordinances.” (Opp. at p. 26.) This statement is 28 {CW098713.3} 6 Plaintiffs’ Reply Brief Regarding Standing and Ripeness 1 demonstrably false. 2 1. East of Eden Presented an Actual Controversy Between Plaintiff County of Santa Cruz’s Cannabis Delivery Ordinance and Regulation 3 5416(d). 4 First, as the BCC knows full well, but refuses to acknowledge, the East of Eden 5 action already provided an instance where Regulation 5416(d) was challenged. Plaintiffs 6 have argued this point extensively in their trial brief and this Standing/Ripeness Brief 7 ordered by this Court. In that action, the BCC cited Regulation 5416(d) to the Santa Cruz 8 Superior Court, in an attempt to invalidate Santa Cruz’s delivery ordinances. 2 9 The cannabis delivery company plaintiff in that action, East of Eden, moved for a 10 preliminary injunction arguing that Santa Cruz County Code sections 7.130.050, 11 subdivision (C), and 7.130.110, subdivision (F)(1), were preempted by Regulation 12 5416(d). The Superior Court found that East of Eden failed to show a probability of 13 success on the merits, because Sections 26200 and 26090 “make clear that local control 14 has been preserved by the State statutory scheme and that Santa Cruz County’s 15 ordinances do not conflict with State law, are not preempted, nor are they 16 unconstitutional.” (RJN, Ex. 37 [Santa Cruz Opp., filed September 5, 2019]; Ex. 38 17 [Order, filed September 18, 2019]). 18 The BCC’s Complaint-in-Intervention asserted that Santa Cruz’s ordinances 19 violated Regulation 5416(d) and therefore could not be enforced. (RJN, Ex. 40 at ¶¶ 1, 3, 20 22-23.) The BCC specifically argued that “[a] judicial declaration that [Regulation 21 5416(d)] is valid, that the County Cannabis Codes violate MAUCRSA, and [Regulation 22 5416(d)] is necessary and appropriate to prevent the Respondents from enforcing local 23 laws that contravene MAUCRSA and [Regulation 5416(d)].” (RJN, Exh. 40 at 23.) The 24 BCC further alleged that: 25 2 The original plaintiff in the East of Eden case was a cannabis business. The Superior 26 Court denied its request for a preliminary injunction, stating that Proposition 64’s express 27 protection for local control over deliveries meant that the “likelihood of success on the merits” standard had not been met. (See RJN, Ex. 38, pp. 2-3.) That litigation clearly 28 demonstrates the uncertainty the BCC’s regulation has created. {CW098713.3} 7 Plaintiffs’ Reply Brief Regarding Standing and Ripeness 1 A judicial order permanently enjoining the Respondents from enforcing the 2 Santa Cruz County Code sections 7.130.050, subdivisions (A) & (C), 7.130.090, and 7.130.110 (A) & (F) is necessary and appropriate to prevent 3 Respondents from violating the Bureau’s statutory rights to regulate commercial cannabis activities within the state and the statutory rights 4 of the Bureau’s licensees to deliver commercial cannabis to any jurisdiction within the state. 5 (RJN, Exh. 40 at ¶ 24 [bold added].) 6 In light of this statement before another Superior Court, the BCC may not now 7 legitimately claim that Regulation 5416(a) does not preempt the Plaintiffs’ ordinances. 8 The existence of the East of Eden action flies in the face of the BCC’s argument that “it is 9 reasonably possible to comply with both” Regulation 5416(d) and the Plaintiffs’ 10 ordinances. (See Opp. at p. 17.) Most telling is that the BCC fails to even mention its 11 intervention in the East of Eden lawsuit, much less confront its implications. 12 2. The BCC Fails to Refute that Plaintiffs Have Standing Under Both 13 Government Code Section 11350 and Code of Civil Procedure Section 1060. 14 The BCC argues that since the Court mentioned that it may treat this action as a 15 mandamus proceeding, the “interested person” standard of Government Code section 16 11350 does not apply. The BCC is incorrect. 17 a. The Legislature Granted Plaintiffs Standing to Challenge a 18 Regulation as “Interested Persons” in Government Code Section 11350. 19 Government Code section 11350 states: “[a]ny interested person may obtain a 20 judicial declaration as to the validity of any regulation or order of repeal by bringing an 21 action for declaratory relief in the superior court in accordance with the Code of Civil 22 Procedure.” This standard is appropriate for actions brought to challenge regulations. 23 (Environmental Protection Information Center v. Department of Forestry and Fire 24 Protection (1996) 43 Cal.App.4th 1011, 1017-1018 (“Environmental Protection 25 Information Center”); see also Woods v. Superior Court (1981) 28 Cal.3d 668, 682.) 26 The BCC fails to show how Plaintiffs do not meet this standard. Indeed, the BCC 27 failed to make even a colorable argument that Regulation 5416(d) plainly conflicts with 28 {CW098713.3} 8 Plaintiffs’ Reply Brief Regarding Standing and Ripeness 1 Sections 26090 and 26200. The BCC’s “rules and regulations shall be consistent with the 2 purposes and intent” of Proposition 64. (§ 26013, subd. (a).) 3 The intent of Proposition 64, among other things, is to preserve the ability of local 4 jurisdictions to regulate or ban cannabis delivery within their boundaries if they see fit. 3 5 Consistent with this intent, Sections 26090, subdivision (e), and 26200 preserve local 6 control over cannabis regulation, painstakingly gained over many years, beginning with 7 medical marijuana businesses. 8 Section 26200, subdivision (a)(1), expressly states that these statutes “shall not be 9 interpreted to supersede or limit the authority of a local jurisdiction to adopt and enforce 10 local ordinances to…completely prohibit the establishment or operation” of cannabis 11 delivery businesses within its boundaries. (§ 26200, subd. (a)(1).) 12 Ignoring these statutory provisions, the BCC argues that Proposition 64’s stated 13 goal to implement a statewide licensing regulation, and enforcement system “to legalize, 14 control, and regulate … the sale of non-medical marijuana” somehow gives the BCC the 15 authority to implement a statewide licensing program for delivery, including into local 16 jurisdictions that ban delivery. (See Opp. at p 39, and fn. 20.) The BCC even concedes 17 that Plaintiff City of Tehachapi’s “total prohibition” ordinance “is likely preempted 18 because it obstructs the implementation of a state wide commercial cannabis program,” 19 yet somehow this ordinance “does not implicate [Regulation 5416(d)] or invoke any right 20 21 3 See, e.g., RJN, Exh. 50 (AB 2020, Legislative Counsel’s Digest, stating that Prop. 64/AUMA “authorizes a person who obtains a state license under AUMA to engage in 22 commercial adult-use cannabis activity pursuant to that license and applicable local 23 ordinances.” (bold added); RJN, Exh. 54 (AB 97, Legislative Counsel’s Digest, noting that both a state license and compliance with “applicable local ordinances” are required 24 to engage in any commercial adult-use cannabis activity); § 26055, subdivision (d) [as amended by AB 97], confirming that BCC “shall not approve an application for a state 25 license under this division if approval of the state license will violate the provisions of any local ordinance or regulation adopted in accordance with Section 26200”; Id. at subd. 26 (f) [local authorities to advise BCC of changes to local requirements]; Id. at subd. (g) 27 [where a local jurisdiction advises BCC that an activity is contrary to local ordinance, BCC is affirmatively required to deny any license application seeking to conduct such an 28 activity locally]. {CW098713.3} 9 Plaintiffs’ Reply Brief Regarding Standing and Ripeness 1 of the city or duty of the Defendants in this case” and therefore raises no actual 2 controversy. (Opp. at pp. 38-39.) 3 This strained logic not only ignores the text of Sections 26090, subdivision (e), 4 and 26200, subdivision (a), but also runs directly counter to the BCC’s position in the 5 East of Eden action, where it alleged that the County of Santa Cruz’s ban on non-local 6 deliveries did in fact raise an actual controversy. (RJN, Exh. 40, at pp. 5-6.) 7 Further, the BCC does not refute that Regulation 5416(d) creates regulatory 8 uncertainty sufficient to create a ripe controversy for all Plaintiffs. A declaration from 9 this Court is needed, because “the consequences of a deferred decision will be lingering 10 uncertainty in the law, especially when there is widespread public interest in the answer 11 to a particular legal question.” (Communities for a Better Environment v. State Energy 12 Resources Conservation and Development Com. (2017) 19 Cal.App.5th 725, 734 13 (distinguishing Pacific Legal Foundation v. California Coastal Com. (1982) 33 Cal.3d 14 158 (“Pacific Legal Foundation”).) The BCC’s own prior appearance in East of Eden 15 only confirms that litigation over the scope of Regulation 5416(d) is inevitable due to the 16 “lingering uncertainty” in its application. 17 b. Plaintiffs Have Additional Standing Under Code of Civil Procedure Section 1060. 18 Next, the BCC fails to mention that one of the purposes of Code of Civil 19 Procedure section 1060 declaratory relief is to “liquidate doubts with respect to 20 uncertainties or controversies which might otherwise result in litigation.” (In re Claudia 21 E. (2008) 163 Cal.App.4th 627, 633; Alameda County Land Use Assn. v. City of Hayward 22 (1995) 38 Cal.App.4th 1716, 1723; Zeitlin v. Arneburgh (1963) 59 Cal.2d 901, 905.) 23 Declaratory relief applies broadly to challenges of state agency actions, even where no 24 specific agency decision is attacked. (See Californians for Native Salmon and Steelhead 25 Assn. v. Department of Forestry (1990) 221 Cal.App.3d 1419, 1422.) If the facts “show 26 the existence of an actual controversy, between appellants and respondents, appellants 27 have ‘stated a legally sufficient complaint’ for declaratory relief and it was an abuse of 28 {CW098713.3} 10 Plaintiffs’ Reply Brief Regarding Standing and Ripeness 1 discretion to dismiss the action.” (Id., at p. 1426, citing Zeitlin v. Arneburgh, supra, 59 2 Cal.2d at p. 908.) 3 The BCC also fails to refute that declaratory relief under Code of Civil Procedure 4 section 1060 is necessary to resolve questions that are bound to be the subject of future 5 litigation, as undoubtedly Regulation 5416(d) will be. (See Communities for a Better 6 Environment v. State Energy Resources Conservation and Development Com., supra, 19 7 Cal.App.5th at p. 735. The court distinguished Pacific Legal Foundation, supra, in a 8 challenge to a statute that restricted judicial review of an agency’s decisions, since: 9 [N]o factual context from an individual Energy Commission certification proceeding is necessary, or even useful, to resolution of the constitutional 10 question raised. Moreover, the constitutional question will necessarily be implicated in every future judicial proceeding seeking review of an Energy 11 Commission decision. 12 (Id. at pp. 734-39, italics omitted [reviewing cases finding the ripeness element satisfied 13 where direct challenges are raised to the legality of an enactment, including where, as 14 here, delay in decision will result in “lingering uncertainty in the law”]; see also 15 Qualified Patients Ass’n v. City of Anaheim (2010) 187 Cal.App.4th 734, 756 [whether 16 Medical Marijuana Program Act preempted local city ordinance was “an actual 17 controversy between the parties relating to their respective legal rights and duties” and 18 “stated a legally sufficient complaint for declaratory relief,” which had to be addressed by 19 the trial court in the first instance]; Environmental Protection Information Center, supra, 20 43 Cal.App.4th at pp. 1019-20 [association deprived by regulation of right to comment on 21 timber harvest plans was an interested party entitled to challenge regulation].) 22 As East of Eden and this action show, Regulation 5416(d) has already been 23 challenged twice in its short lifespan; this is certainly not unexpected given Regulation 24 5416(d)’s blatant encroachment on protected local authority. 25 B. The BCC’s Argument that Regulation 5416(d) Does Not Preempt Plaintiffs’ Ordinances Misses the Point of This Litigation. 26 Without disputing these points, the BCC instead insists that Plaintiffs fail to show 27 28 {CW098713.3} 11 Plaintiffs’ Reply Brief Regarding Standing and Ripeness 1 how each ordinance is “preempted” by Regulation 5416(d). 4 The BCC claims that 2 Regulation 5416(d) does not preempt the Plaintiffs’ local ordinances because it does not 3 conflict with them. As the BCC asserts, under California preemption doctrine, a 4 “conflict” exists, sufficient to establish preemption, if the local ordinance: (1) duplicates 5 the state statute; (2) contradicts the statute; or (3) enters an area fully occupied by general 6 law. (Opp. at p. 13; Kirby v. County of Fresno (2015) 242 Cal.App.4th 940, 954.) The 7 BCC’s arguments in this regard must fail, since each of the Plaintiffs’ ordinances directly 8 contradicts Regulation 5416(d). 9 1. Plaintiffs’ Ordinances Do Not Duplicate State Law, But Rather Are Consistent with Business and Professions Code Provisions Preserving 10 Local Control to Ban Cannabis Delivery. 11 First, the BCC claims there is no duplication of state statutes. Contrary to the 12 BCC’s claims, Plaintiffs have not alleged that their respective ordinances are coextensive 13 with state law. Rather, the ordinances are a valid exercise of their police power as 14 expressly permitted by and consistent with Business and Professions Code section 26200, 15 which states: 16 This division shall not be interpreted to supersede or limit the authority of a local jurisdiction to adopt and enforce local ordinances to regulate 17 businesses licensed under this division, including, but not limited to, local zoning and land use requirements, business license requirements, and 18 requirements related to reducing exposure to secondhand smoke, or to completely prohibit the establishment or operation of one or more types 19 of businesses licensed under this division within the local jurisdiction. 20 (§ 26200, subd. (a) (1), bold added.) 21 Section 26200 specifically protects local jurisdictions against state-level 22 regulatory encroachment. Notably, this proscription against preemption is not qualified, 23 4 To be clear, Plaintiffs agree that their respective ordinances do not conflict with, and are 24 not preempted by, Sections 26200, subdivision (a), and 26090, subdivision (e), as consistent with the East of Eden order denying the preliminary injunction. (RJN, Exh. 38, 25 at p. 3.) Rather, it is Regulation 5416(d) that purports to preempt their respective ordinances, despite BCC’s new position in its Opposition that there can be no 26 preemption. That is the heart of this dispute: Regulation 5416(d) conflicts with Sections 27 26200 and 26090 (and therefore also with Plaintiffs’ ordinances), and thus must be declared void. BCC’s arguments in its Opposition against Regulation 5416(d)’s 28 preemption are directly contrary to BCC’s position in East of Eden. {CW098713.3} 12 Plaintiffs’ Reply Brief Regarding Standing and Ripeness 1 as the first words of the provision demonstrate: “This division shall not be interpreted to 2 supersede or limit the authority of a local jurisdiction to adopt and enforce local 3 ordinances to regulate businesses licensed under this division … .” (§ 26200, subd. (a) 4 (1).) Following those words are examples of local regulatory authority (zoning, land use, 5 and the right to completely prohibit the establishment or operation of cannabis 6 businesses), not constraints on local government authority. These examples establish that 7 complete prohibition at the local level is fully consistent with the statutory scheme and 8 purpose. 9 Defendants next allege that “Plaintiffs believe that it is a violation of state law for 10 state licensees to deliver to local jurisdictions that prohibit local delivery.” (Opp. at p. 14) 11 Defendants allege that these “Plaintiffs mistakenly believe that passing local laws 12 governing cannabis fundamentally alters state law; and therefore, when a local ordinance 13 prohibits a cannabis related activity, state law must also prohibit that activity from within 14 their jurisdictional borders.” (Ibid., citing § 26090, subd. (e).) 15 This is incorrect. Plaintiffs have passed local ordinances regulating or banning 16 cannabis delivery in their jurisdictions pursuant to the express protections of local control 17 that are spelled out in Sections 26090, subdivision (e), and 26200, subdivision (a). Rather 18 than being “coextensive with” these statutes, Plaintiffs’ ordinances are consistent with 19 Plaintiffs’ police power, and the intent and purpose of Proposition 64, as codified in these 20 two sections. 5 21 2. Regulation 5416(d) Directly Contradicts Plaintiffs’ Ordinances. 22 The BCC asserts that the Plaintiffs’ Ordinances do not conflict with state law. It 23 argues that “[w]hile local laws which totally prohibit all retail activity including delivery 24 5 Defendants allege that 26090, subdivision (e), is ambiguous as it is not clear whether 25 the “local law” referenced is the local law of the jurisdiction banning delivery or the local law of the jurisdiction where the license is established. (Opp. at p. 15.) Besides being a 26 red herring, this is simply untrue. Section 26200 expressly states that these statutes “shall not be interpreted to supersede or limit the authority of a local jurisdiction to adopt and 27 enforce local ordinances to…completely prohibit the establishment or operation” of cannabis delivery businesses within its boundaries. (§ 26200, subd. (a)(1).) Section 28 26055’s licensing requirements does not change this plain language. {CW098713.3} 13 Plaintiffs’ Reply Brief Regarding Standing and Ripeness 1 may be preempted for other reasons, [Regulation 5416(d)] itself does not create an 2 irreconcilable contradiction.” (Opp. at p. 16). That is because, according to the BCC’s 3 view, Regulation 5415(d) “does not command local jurisdictions to do anything, neither 4 does it prohibit them from doing anything.” (Ibid.) 5 This logic is utterly inconsistent with the BCC’s position in the East of Eden 6 action, in which the agency asserted that it had the authority to preempt local regulation 7 concerning deliveries, and that Regulation 5416(d) was intended to do so and did so. 6 8 But beyond Plaintiff County of Santa Cruz’s ordinance, all other Plaintiffs’ 9 ordinances in this case directly conflict with Regulation 5416(d). As the BCC concedes, 10 each Plaintiff jurisdiction’s ordinance either bans all cannabis delivery entirely, 7 bans all 11 deliveries by non-local businesses, 8 or restricts delivery through regulations or licensing 12 requirements. 9 Regulation 5416(d) directly contradicts and attempts to override these 13 bans and regulations, both by its express language permitting delivery “to any jurisdiction 14 within the State of California,” and by the BCC’s own interpretation of its objectives and 15 6 RJN, Ex. 39 (BCC Motion to Intervene, filed November 18, 2019) at p. 4:14-15 16 (“[Regulation 5416(d)] ... authorizes a licensed commercial cannabis retail business to deliver cannabis and cannabis products throughout the state, … .”); see also BCC 17 Complaint-in-Intervention, ¶ 2, RJN, Ex. 40 (“The Bureau seeks a judicial declaration validating the Cannabis Delivery Regulation. The Court should permanently enjoin 18 Santa Cruz County… from enforcing local laws that violate the Cannabis Delivery Regulation.”); ¶ 22 (“The Cannabis Delivery Regulation permits delivery by a state 19 licensed commercial cannabis retailer to a physical address to any jurisdiction within the 20 State of California as long as the licensee complies with MAUCRSA and its implementing regulations. Inconsistent with MAUCRSA and the Cannabis Delivery 21 Regulation, the County Cannabis Codes prohibit commercial cannabis retailers licensed by the Bureau and other local jurisdictions from delivering in unincorporated Santa Cruz 22 County, but allow delivery by commercial cannabis retailers licensed by the Bureau and Santa Cruz County.”) 23 7 See, Opp. at pp. 25-39 (cities of Agoura Hills, Arcadia, Clovis, Covina, Downey, 24 McFarland, Newman, Palmdale, Riverside, San Pablo, and Tehachapi); see also, pp. 44- 45 (Patterson, Beverly Hills [prohibiting all non-medical cannabis delivery but allowing 25 medical delivery], and Temecula [same].) 26 8 See, Opp. at pp. 39-43 (cities of Dixon, Oakdale, Sonora, and Turlock, and County of Santa Cruz). 27 9 See, Opp. at pp. 21-25 (cities of Angels Camp, Atwater, Ceres, Riverbank, Tracy); see 28 also, pp. 45-46 (Vacaville). {CW098713.3} 14 Plaintiffs’ Reply Brief