RULING OVERTURNED FOR MEDICAL MARIJUANA ADVOCATES

SACRAMENTO -- A federal district judge in Sacramento has overruled a
magistrate judge's order on how prosecutors must handle at least 6,000
client and patient files seized from an attorney-physician couple who
advocate the medical use of marijuana.

U.S. Magistrate Judge Gregory G. Hollows last month ordered prosecutors to
use an independent, court-appointed special master to review the files and
determine which of them the government could legally access. He also
ordered that the special master segregate initial-visit questionnaires and
medical records of the clients and patients and return those documents to
the couple.

But U.S. District Judge Garland E. Burrell Jr. overturned both orders,
ruling that the evidence supports the prosecutors' contention that they are
entitled to review all the documents, including computer-generated files.

Burrell approved the government's request that Thomas Flynn, chief of the
appellate section of the U.S. attorney's office, supervise a "taint team"
to weed out and return "inadvertently seized" documents not covered by the
search warrant.

Attorney Dale Schafer and his wife, Dr. Marion "Molly" Fry, challenged a
search of their California Medical Research Center in the El Dorado County
town of Cool. They asserted that their communications with clients and
patients are privileged.

In addition to the center's offices, raids by drug agents on Sept. 28-29
included the couple's nearby Greenwood home and a storage unit in Cool. A
U-Haul truck took seized computer and hard-copy files to Sacramento, where
they were placed in the custody of the federal court, pending a ruling on
the legality of the search.

Schafer and Fry have yet to be formally charged with a crime, but Drug
Enforcement Administration agents alleged in an affidavit in support of
search warrants that the lawyer and doctor were engaged in the unlawful
prescription, cultivation and sales of marijuana.

Hollows noted in his order the prosecution theory that marijuana possession
or distribution is a federal crime regardless of claimed medical necessity.

"Because the government need not produce evidence of various afflictions in
its case, the (medical records are) not relevant," Hollows wrote.
"Moreover, even if tangentially relevant because an accused may attempt to
present a defense based on the overruled medical necessity theory, the
sensitivity attached to such documentation on account of medical or
personal privacy weigh against a needless production and dissemination at
this stage of the proceedings.

"In addition, the court does not see the need to have each person's
questionnaire produced as the individual information cannot possibly supply
a reason why a certain person might be entitled to possess marijuana."

But Burrell decided that giving things back to Schafer and Fry could weaken
a case against them. "It is premature for the court to determine the ...
value of this evidence to the array of federal crimes that could be
involved," he wrote.

As for a special master, there is no need for one "because there is no
indication that the businesses were engaged in any lawful business,"
Burrell found. Thus, he ruled, the special investigative restrictions
prescribed in case law and imposed by Hollows are unnecessary.

Schafer's attorney, J. David Nick of San Francisco, immediately notified
Burrell that he will take the matter to the 9th U.S. Circuit Court of
Appeals. Nick could not be reached Tuesday for comment.

In support of his conclusion that there is no legitimacy to the couple's
operation, Burrell cited these allegations in the DEA search warrant
affidavit: The Medical Research Center's advertised Web site address is
www.cannabisdoctor.com.

When an undercover agent called the center and asked if Schafer could
represent him in a car accident case, the agent was informed that "Mr.
Schafer only does medical marijuana and refers all other matters to an
attorney in Placerville."

An informant who is trading information for leniency in his own case told a
DEA agent that, during the time the informant was employed by Schafer and
Fry, they supplied certificates for clients who sought to justify marijuana
possession under the Compassionate Use Act, a 1996 ballot measure
permitting Californians to employ marijuana therapy when recommended by a
doctor.

"In light of the nature of the business, the law enforcement officials may
review the seized items," Burrell ruled. He ordered the material turned
over immediately to the DEA "so that the United States can proceed with its
investigation."