U.S. Attorney In L.A. Drops Forfeiture Cases Against Dispensary Landlords

The OC Weekly’s Nick Schou reports that the U.S. Justice Department has dropped a forfeiture case against an Anaheim office building whose owner rented space to a medical marijuana dispensary, thinking it counted as a legitimate business in light of the signals the feds were sending at the time. After insisting at a hearing last December that they were “absolutely” proceeding with the forfeiture despite a judge’s doubts, federal prosecutors changed their minds in recent months. At first they insisted that Tony Jalali, the software engineer who owns the $1.5 million property, promise never to deal with dispensaries again and agree to surprise inspections. In the end they were satisfied to be off the hook for Jalali’s legal fees, in return for which they dismissed the case with prejudice, meaning it cannot be brought again.

“I was shocked when the government first sued me and I realized that civil forfeiture meant the government could take my property from me even though I was not charged with any crime,” Jalali says in a press release from the Institute for Justice, which represented him along with local attorney Matthew Pappas. “I did not want to be bullied and stood up to the government to protect my property and my reputation.”

Today the U.S. Attorney’s Office for the Central District of California also dropped forfeiture actions against three landlords in Santa Ana and Los Angeles whose tenants have included dispensaries. “It’s pretty amazing for them to come up and dismiss the cases, pretty unusual,” Pappas tells Schou. “I think its a a major victory for patients, for citizens in general.” Pappas attributes the decisions to what Schou calls “the Obama administration’s recent ratcheting down [of] the war on marijuana.”

Presumably Schou is referring to the August 29 memo in which Deputy Attorney General James Cole indicated that the feds would take a light-handed approach in states with strict marijuana regulations. I’m not sure California qualifies, since the state neither licenses nor regulates dispensaries, which operate in a legal gray area as patient cooperatives or collectives. But if this forfeiture forbearance is part of a new policy, it could mark a difference between André Birotte, the U.S. attorney for the Central District of California (which includes Los Angeles and Orange counties), and Melinda Haag, the U.S. attorney for the Northern District of California, who after Cole’s memo let it be known that nothing had really changed.