Legal bills in city’s marijuana fight released

The logo of a proposed medical marijuana dispensary, which the

A San Jose law firm representing the city of Gilroy in its
efforts to keep medical marijuana dispensary MediLeaf out of town
has released more than 60 pages of attorney bills that offer a
glimpse into the city’s $200,000-plus legal tab.
A San Jose law firm representing the city of Gilroy in its efforts to keep medical marijuana dispensary MediLeaf out of town has released more than 60 pages of attorney bills that offer a glimpse into the city’s $200,000-plus legal tab.

Berliner Cohen released copies of the bills – 62 pages worth totaling $202,500 – following a public records request by the Dispatch. The copies are heavily redacted, with many details regarding meetings between city officials and attorneys blacked out.

“I had originally forecast it would be more than $300,000,” said Gilroy City Councilman Perry Woodward, who is also a partner in the San Jose law firm, Terra Law LLP. “We got pretty lucky to get out of it spending what we did.”

The bills show the city first met with attorneys on Nov. 17, 2009 – eight days after MediLeaf opened at 1321 First St.. The city spent $13,695 on legal services during the first four days, according to invoices, and attorneys had interactions with many city officials, including City Administrator Tom Haglund, Mayor Al Pinheiro, Gilroy Police Department Chief Denise Turner, City Clerk Shawna Freels and Councilman Bob Dillon over the course of the legal battle, which hasn’t officially ended.

The Council voted 4-3 Dec. 30, 2009 to reapprove litigation against MediLeaf, which had been operating without a business license. The council had voted in favor of litigation six weeks earlier in closed session, but were advised by Berliner Cohen to vote on the matter in public to prevent a potential violation of the Brown Act, a state code that governs public meetings.

Dillon, Mayor Al Pinheiro, Councilman Dion Bracco and Councilwoman Cat Tucker approved the lawsuit during the public meeting, while Woodward, Councilman Peter Arellano and Councilman Craig Gartman voted against.

Dillon said Wednesday he felt the city’s money had been appropriately spent.

“You either control what happens in your city or you don’t. If people don’t comply, they have to be brought to heel,” Dillon said.

Pinheiro said it wasn’t a matter of whether spending more than $200,000 was worth it. The city’s fight was about enforcing its laws, he said.

“Obviously we would have rather not spent the money, but we have rules and regulations that need to be followed,” Pinheiro said. “You’ve got to protect the city’s rules and regulations, and that’s it. It’s a matter of having city laws and enforcing them, and that’s what we did.”

Woodward, who opposed the lawsuit, said spending that much money wasn’t necessary.

“I still wish we had that money back to spend on other things. That was all for one dispensary,” he said.

MediLeaf was forced to close Aug. 9, 2010 after Superior Court Judge Kevin McKenney issued an eight-page order on July 20 upholding the city’s claim that MediLeaf was operating without a business license.

Attorneys for MediLeaf filed a notice to appeal the injunction the day after McKenney’s decision and requested the dispensary be allowed to operate during the appeal process. McKenney denied MediLeaf’s request on Sept. 13, 2010.

The dispensary maintains it used a not-for-profit model and therefore did not require a business license.

On Dec. 9, 2010, dozens of undercover law enforcement officers from across Santa Clara County raided eight homes and MediLeaf offices in Gilroy, Morgan Hill and San Jose as part of an eight-month investigation of illegal sales of marijuana and money laundering into the medicinal pot club.

The operators of MediLeaf are co-directors Neil Forrest and Goyoko “Batzi” Kuburovich.

David Tompkins, Assistant Santa Clara County District Attorney, said Wednesday no charges had been filed in the case against MediLeaf.

Woodward called Gilroy’s success in the case a “short-term win,” and said it was naive and ridiculous if people thought spending the money to close MediLeaf had stopped marijuana sales in the city.

On Feb. 1, Justice Patricia Bamattre-Manoukian, of the California Court of Appeal for the Sixth District, denied MediLeaf’s request to remain open until the court issued its decision in MediLeaf’s appeal.

Though MediLeaf lost a push to stay open during the investigation, the dispensary’s appeal of a decision that forced its closure for operating without a license is still active, Berliner Cohen attorney Andy Faber said.

He said the city is, for now, just playing the waiting game.

“We’re now just waiting for the appellate court to set a date,” Faber said.

If MediLeaf were to win an appeal and the case continued – which is unlikely – the city could be on the hook for even more money, Woodward said.

“This money we spent may be all of it, but it may not be,” Woodward said. “If we lose (the appeal) – we probably won’t – but if we lose, we’ll go back to the trial court. There’s going to be thousands of more dollars spent, at the minimum. There’s a very good chance we could still spend considerably more considering the shifting landscape.”

City’s battle with MediLeaf

– Nov. 9, 2009: MediLeaf opens at 1321 First St. in Gilroy

– Nov. 16, 2009: City Council approves litigation against MediLeaf in closed session

– Dec. 30, 2009: Council votes 4-3 to publicly approve litigation

– July 20, 2010: Judge upholds city’s claim that MediLeaf was operating without a business license

– Aug. 9, 2010: MediLeaf forced to shut down

– Sept. 13, 2010: MediLeaf’s petition to stay open during appeal denied

– Dec. 9, 2010: MediLeaf offices and homes of its founders are raided by law enforcement officers in Gilroy, Morgan Hill and San Jose

– Feb. 1, 2011: Judge denies MediLeaf’s appeal to stay open during investigation

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