CITY BACK TO COURT IN POT FIGHT

A newly appointed judge listened to arguments about Gilroy's zoning
rules Thursday as he deliberated about whether to shut down the
city's medical marijuana dispensary during a sparsely attended hearing.

Judge Kevin McKenney will decide within 90 days whether to grant the
city a "summary judgment," which would indicate that no legal facts
are in dispute. If that happens, the city would be granted a
permanent injunction to shut down MediLeaf, which has been open in
west Gilroy for nearly eight months.

McKenney replaces Judge Kevin Murphy, who denied the city a
preliminary injunction against MediLeaf in December.

"One can't speculate on what's going to happen," said Berliner-Cohen
attorney Andy Faber, who is representing the city.

MediLeaf opened without a business license at 1321 First St. near
Togo's on Nov. 9 after the City Council rejected an ordinance to
regulate such operations. The cannabis club sells more than 20
varieties. It has acquired more than 4,000 members since opening,
according to its directors.

MediLeaf representatives have maintained that the dispensary uses a
not-for-profit model and therefore does not require a business
license. City officials say that is not the case, claiming that
dispensary directors knowingly defied city zoning laws.

On Dec. 15, Judge Murphy listed three reasons for not granting the
city a injunction. First, he said the dispensary would not cause
"irreparable harm" by staying open. Secondly, he said it was not
clear whether the city would prevail when the matter goes to trial.
Finally, he said Gilroy's City Council committed a Brown Act
violation when it approved a resolution in closed session on Nov. 16
that allowed city attorneys to take legal action against the
dispensary. The council corrected that violation in December by
approving the resolution in open session.

McKenney did not bring up any aspect of Murphy's previous decision
while presiding Thursday.

Unlike the December hearing, which attracted about 30 people, the
courtroom in San Jose's Old Court House was largely empty Thursday.
Police Chief Denise Turner, dressed in police blues, sat in the
audience to listen to the attorneys' arguments. Turner has voiced her
opposition to an ordinance that would regulate dispensaries. MediLeaf
director Batzi Kuburovich, who was often on the edge of his seat, was
also present as was Gilroy's anti-marijuana community activist Ron Kirkish.

McKenney kicked off the 20-minute hearing by asking MediLeaf attorney
James Roberts to explain why he felt the situation in Gilroy was
different than a case in the Southern California city of Claremont,
in which a judge upheld a ban on medical marijuana dispensaries. Then
McKenney mostly remained silent, while Roberts and Faber argued back and forth.

In the 2009 case of Kruse vs. Claremont, a judge reinforced an
injunction barring Darrell Kruse and Claremont All Natural Nutrition
Aids Buyers Information Service - or CANNABIS - from operating a
dispensary within the city of Claremont. In the 2008 case of Corona
vs. Ronald Naulls, a judge issued a preliminary injunction that
prevented a medical marijuana dispensary from continuing operations
in the city of Corona.

Roberts said the situation in Gilroy was different because Claremont
had much more specific zoning regulations that outline where certain
businesses can exist.

He also said it was different from a case in the southern California
city of Corona because that city had a specific plan ordinance in
place while Gilroy did not.

Gilroy had an opportunity to approve an ordinance that would have
regulated medical marijuana dispensaries, but that never happened,
Roberts said. Although the city ultimately decided to approve a
moratorium on medical cannabis dispensaries, that did not happen
until after MediLeaf had opened, Roberts said.

"(The city) had an opportunity to come through if they wanted to
regulate this form of business," Roberts said.

Meanwhile, Faber said both the cases in Corona and Claremont were
almost identical to the case in Gilroy.

"I think that both Naulls and Kruse are 100 percent on point to the
Gilroy situation," Faber said in reference to the Corona and Claremont cases.

MediLeaf had tried to get approval from the city, but the city denied
the ordinance that would have allowed that to happen, Faber said.

Both attorneys, donned in three-piece suits, crossed their arms at
times while their opponents made their case. Roberts occasionally
would take off his glasses and wave them about while making his point.

McKenney ultimately told the attorneys that he would issue an order
in response, but he did not indicate when that may happen.

Although McKenney has up to 90 days to do that, Faber said judges
typically respond sooner.

If the judge approves the summary judgment, City Administrator Tom
Haglund said Thursday that the city would consult with the city
attorney to determine how to enforce the order. If the judge denies
the city's request, then the city will seek a trial, Faber said.

If a judge approves an order, MediLeaf could appeal the decision, Faber said.

MediLeaf has contributed sales tax dollars to the city, but City
Finance Director Christina Turner said this week that the city does
not reveal tax information about specific businesses.

Kuburovich, one of MediLeaf's directors, said the dispensary has
helped stimulate the economy and has elicited no complaints from police.

The cannabis club also has set up shop in two locations in San Jose
and is working with the City of Sunnyvale to open there.

Kuburovich said he looks forward to continuing to operate in Gilroy as well.

"We're happy to be open seven days a week to serve our patients,"
Kuburovich said.

Jonathan Partridge