Cannabis Litigation: Know Your Statutes of Limitation!

Cannabis Litigation: Know Your Statutes of Limitation!

A recent ruling in the Elevations Plus, LLC v City Council of Riverbank, Eastern District of California case reminded me of something: Whenever you are undergoing administrative proceedings, you should always know the relevant statute of limitations. Limitation periods are laws that determine the expiration date of a claim. In theory, they make sense and are helpful – they are based on the concept that claims that are not made within a reasonable time should be abolished. After all, defendants deserve rest after a period of time. However, sometimes potential clients come to us months or even weeks late, and in the end there is not much we can do to help as courts always use these formalities to get cases done quickly.

Here is the underlying timing of the events in Elevations Plus: Plaintiff, Elevations Plus (“EP”) alleged that it applied for a cannabis retail permit in a timely manner in August 2017 and paid the required application fee under the Riverbank City’s regulatory structure for commercial purposes having paid cannabis activities. At the time, the city only accepted four applications and EP was the fourth. The city approved two of the first four and then delayed the decision on the EP’s request.

In January 2018, the city council approved a six-month moratorium on further approvals to assess the actual progress and performance of the first two approved applicants. In June 2018, the city council extended this moratorium for another year. In January 2019, the city council AGAIN extended this moratorium for another year. During this two-year period, the EP continued its efforts, had its architectural and site plan approved, and the Urban Planning Commission even voted unanimously to recommend approval of the EP’s motion in December 2019. Then the city council denied the EP’s motion in January 2020, noting that it had concerns about the sustainability of a third marijuana dispenser in the area. However, four months later, the city voted to approve the development agreement and conditional use permit for another pharmacy, law Mart (which proposed a double the size of the store).

Frustrating, isn’t it? Convincing, isn’t it? The EP then sued the city in June 2020 (more than five months later) claiming it had wrongly denied the EP’s ability to move forward with the approval process. Unfortunately for EP, the city dismissed the case immediately because EP failed to initiate the lawsuit within the 90-day statute of limitations under California Government Code Section 65009: “[N]o A claim or proceeding is maintained by a person in any of the following cases, unless the claim or proceeding is initiated and served within 90 days of the decision of the legislature … “

The parties conducted a legal analysis and EP argued that section 65009 was not applicable as the city had not issued a public notice in connection with the January 2020 hearing:

“If an authority wishes the provisions of this subsection to apply to a matter, it shall include in any public notice issued under this title a notice that essentially contains the following:” If you are the (type of action proposed) in court You may be limited to addressing only the subjects raised by you or someone else at the public hearing described in this notice or in written correspondence to the (public entity conducting the hearing) at or prior to the public hearing. ”Government Code Section 65009 (b) (2).

However, the court completely rejected the EP’s argument and clarified that section 65009 (b) (2) does not require a specific form of communication to the EP. The city was only required to send or deliver a notice of the hearing at least ten days before the hearing under Section 65091 of the Government Code, which it did. As a result, EP filed its lawsuit at least two months late and the lawsuit had to be dismissed. The ruling of the Court of Justice failed to mention the reasoning behind the case and that was the end of the road for the EP.

We always advise our cannabis customers, in administrative disputes or otherwise, to keep certain deadlines in mind and this is just one example of why this is so important. If you find yourself in a similar situation, contact our litigation team as early as possible so you don’t make the same mistake.