Judge Lynette Gridiron Winston, Case Number: 22PSCV00257, Date: 2023-12-14 Tentative Ruling

Judge: Lynette Gridiron Winston, Case: 22PSCV00257, Date: 2023-12-14 Tentative Ruling

The Court GRANTS Defendant Tucker Lincoln’s motion for judgment on the pleadings as to the First, Second, Third and Fifth Causes of Action with leave to amend. The Court GRANTS Defendant’s motion for judgment on the pleadings as to the Fourth Cause of Action. The Court will hear from Plaintiff as to whether the defects in the Fourth Cause of Action can be cured through amendment.

Plaintiff shall file and serve an Amended Complaint within 20 days of the Court’s order.

Defendant Tucker Lincoln is ordered to give notice of the Court’s ruling and file proof of service of same within five days of the Court’s order.

BACKGROUND

This is a nuisance action relating to the illegal sales of cannabis. On March 16, 2022, plaintiff City of El Monte (Plaintiff) filed this action against defendants Lino James Ibarra, Michael Atencio, Manuel Aquino, Joseph Hernandez, Jung Hsiang Chen, Ya Fen Hsu, Tucker Lincoln (Lincoln), Philip Gonzales, Shane Sapp, H.C. Rue Royale Partner LLC (collectively, Defendants) and Does 1 through 100, alleging causes of action for narcotics abatement (Health and Safety Code section 11570 et seq.), public nuisance (Civil Code section 3479 et seq.), violation of El Monte Municipal Code (EMMC Chapters 5.18 and Ch. 1.19), violation of unfair competition law (Business and Professions Code section 17200 et seq.), and violation of MAUCRSA (Business and Professions Code section 26000 et seq.)

On November 14, 2023, Lincoln filed the instant motion for judgment on the pleadings. On December 1, 2023, Plaintiff filed an opposition. On December 7, 2023, Lincoln replied.

A defendant may move for judgment on the pleadings when the “complaint does not state facts sufficient to constitute a cause of action against that defendant.” (Code Civ. Proc., § 438, subds. (b)(1), (c)(1)(B)(ii).)

A motion for judgment on the pleadings tests the legal sufficiency of the complaint and is analyzed in all material respects as though it were a demurrer. (Wise v. Pacific Gas & Electric Co. (2005) 132 Cal.App.4th 725, 738; Kapsimallis v. Allstate Insurance Co. (2002) 104 Cal.App.4th 667, 672.)

“A motion for judgment on the pleadings performs the same function as a general demurrer, and hence attacks only defects disclosed on the face of the pleadings or by matters that can be judicially noticed.” (Cloud v. Northrop Grumman Corp. (1998) 67 Cal.App.4th 995, 999 [citations omitted].)

PRELIMINARY ISSUES

Plaintiff’s opposition is 13 pages long, but contains no table of contents or table of authorities. (Cal. Rules of Court, rule 3.1113, subd. (f).) The Court will still consider the opposition, but admonishes Plaintiff to comply with the requirements of the California Rules of Court going forward.

Also, Lincoln’s reply papers contain an additional request for judicial notice. Generally, new evidence is not permitted on reply unless it fills in gaps in the evidence created by the opposing party’s opposition and is not raising new substantive issues for the first time; otherwise, a further hearing would be required to permit the opposing party to respond. (Jay v. Mahaffey (2013) 218 Cal.App.4th 1522, 1537-1538.) The additional request for judicial notice does not address issues raised in Plaintiff’s opposition. Therefore, the Court declines to consider it.

The Court GRANTS Lincoln’s request for judicial notice as to Exhibits 1 and 2, but DENIES as to Exhibit 3 for the reasons set forth above. (Evid. Code § 452.) The Court takes judicial notice of the foregoing documents only as to “the existence, content and authenticity of public records and other specified documents”; it does not take judicial notice of the truth of the factual matters asserted in those documents. (Dominguez v. Bonta (2022) 87 Cal. App. 5th 389, 400.)

MEET AND CONFER

Per Code of Civil Procedure section 439, subdivision (a), the parties were required to meet and confer telephonically or in person before bringing this motion for judgment on the pleadings. (Code Civ. Proc., § 439, subd. (a).) The Court finds the parties’ meet and confer efforts to be sufficient. (Kashfian Decl., ¶¶ 5-6.)[1]

Lincoln contends as a preliminary matter that Plaintiff lacks standing to bring this entire action because none of the conduct at issue occurred in the City of El Monte. The allegedly offending conduct occurred in Covina and West Covina. (Compl., ¶¶ 1, 20-28.) The Court agrees.

A municipal corporation has generally no extraterritorial powers of regulation. It may not exercise its governmental functions beyond its corporate boundaries. (See Const., art. XI, sec. 11; Oakland v. Brock (1937) 8 Cal.2d 639, 641. Further, “an action to abate a nuisance may be taken by the city attorney or city prosecutor of the city within which the nuisance exists, is kept, or is maintained.” (Health & Saf. Code, § 11571.5 (emphasis added).) Plaintiff contends that the fact that the offending conduct originates outside of a city’s boundaries does not necessarily undermine that city’s ability to sue for nuisance. (People v. City of Los Angeles (1958) 160 Cal.App.2d 494, 507 [“Respondent attacks this cause of action upon the grounds that by it, the city of Manhattan Beach seeks to give extraterritorial effect to its ordinance and therefore does not state a cause of action. This contention cannot be sustained.”]; see also People v. Selby Smelting and Lead Co. (1912) 163. Cal. 84, 88 [nuisance law governs the effect of one’s actions on the enjoyment of life or property another; it matters not where the nuisance originated].) Plaintiff argues that just because the allegedly offending conduct occurred in Covina and West Covina does not categorically mean it cannot have been a nuisance that interfered with Plaintiff’s rights within its boundaries.

The Complaint alleges that Lincoln, and other Defendants, sold and distributed cannabis without the proper license to do so in properties located in West Covina and Covina. (Compl., ¶¶ 18, 20-40.) However, the Complaint fails to allege any specific facts showing the specific effect of that conduct on Plaintiff. Unlike in City of Los Angeles and Selby Smelting, here Plaintiff fails to allege facts, as opposed to conclusions, showing how the alleged unlawful conduct affected or created a nuisance in the City of El Monte. The Complaint only alleges the involvement of the police in addressing the matter. (Id.) While Governmental entities like Plaintiff have strong interests in regulating controlled substances within their boundaries, the Complaint fails to allege any conduct or nuisance within its boundaries. Thus, the Court finds that Plaintiff lacks standing to assert these claims.[2]

Accordingly, the Court GRANTS the motion for judgment on the pleadings with leave to amend.

First Cause of Action – Narcotics Abatement (Health and Safety Code section 11570 et seq.)

“Every building or place used for the purpose of unlawfully selling, serving, storing, keeping, manufacturing, or giving away any controlled substance, precursor, or analog specified in this division, and every building or place wherein or upon which those acts take place, is a nuisance which shall be enjoined, abated, and prevented, and for which damages may be recovered, whether it is a public or private nuisance.” (Health & Safety Code § 11570.)

For the First Cause of Action, Defendant reiterates the argument from above that none of the allegedly offending conduct occurred within the boundaries of the City of El Monte. For the same reasons set forth above, the Court agrees. Additionally, the fact that Plaintiff’s claims are based in part on alleged violations of its municipal code is also unavailing as EMMC 5.18 applies to conduct within the City of El Monte. Again, the Complaint fails to allege any violations of its municipal code occurring within the City of El Monte.

Therefore, the Court GRANTS the motion for judgment on the pleadings as to the First Cause of Action with leave to amend.

“Anything which is injurious to health, including, but not limited to, the illegal sale of controlled substances, or is indecent or offensive to the senses, or an obstruction to the free use of property, so as to interfere with the comfortable enjoyment of life or property, or unlawfully obstructs the free passage or use, in the customary manner, of any navigable lake, or river, bay, stream, canal, or basin, or any public park, square, street, or highway, is a nuisance.” (Civ. Code § 3479.)

Lincoln contends the Second Cause of Action for public nuisance fails because it has not been brought in the name of the people of the State of California per Civil Code section 731. Lincoln then reiterates its contention that the alleged nuisance occurred outside Plaintiff’s city boundaries. Lincoln also contends that Plaintiff improperly seeks recovery of costs and other expenses related to the investigation, enforcement, and abatement of the illegal property conditions at issue, which are not recoverable. The Court finds two of these arguments unavailing.

First, as Plaintiff correctly contends, Code of Civil Procedure section 731 is permissive and does not mandate that public nuisance actions be brought in the name of the people of the State of California. (Code Civ. Proc., § 731, italics added [“A civil action may be brought in the name of the people of the State of California to abate a public nuisance…”]) Further, “Code of Civil Procedure section 731 gives ‘the city attorney of any town or city in which the nuisance exists, the authority to file a civil action to abate that nuisance pursuant to Civil Code sections 3479 through 3480.” (City and County of San Francisco v. Uber Technologies, Inc. (2019) 36 Cal.App.5th 66, 75.)

Second, whether Plaintiff improperly seeks recovery of costs and other expenses related to the investigation, enforcement, and abatement of the illegal property conditions at issue is the subject of a motion to strike, not a motion for judgment on the pleadings. (See Pierson v. Sharp Mem'l Hosp., Inc. (1989) 216 Cal.App.3d 340, 342 [“a motion to strike is generally used to reach defects in a pleading which are not subject to demurrer [or a motion for judgment on the pleadings].”])

However, for the same reasons set forth above, the Court agrees that the Complaint is deficient because Plaintiff fails to allege any facts showing the effects of the alleged nuisance in the City of El Monte.

Based on the foregoing, the Court GRANTS the motion for judgment on the pleadings as to the Second Cause of Action with leave to amend.

Third Cause of Action – Violation of El Monte Municipal Code (EMMC Chapters 5.18 and Ch. 1.19)

El Monte Municipal Code section 5.18.040 states that, “[n]o person may engage in any commercial cannabis activity within the city unless the person (1) has a valid commercial cannabis license issued by the city; (2) has a valid state license; (3) any other applicable approvals, including, but not limited to, a building permit and city business license, and (4) is currently in compliance with all applicable state and local laws and regulations pertaining to the commercial cannabis activity.” (El Monte Municipal Code § 5.18.040 (emphasis added); Compl., ¶ 66.)

Defendant contends the Third Cause of Action fails because, again, the alleged conduct at issue occurred outside of Plaintiff’s city boundaries. For the same reasons set forth above, the Court agrees. The Complaint fails to allege any facts showing that Defendant engaged in conduct within the City of El Monte in violation of EMMC Chapters 5.18 and Chapter 1.19. Plaintiff fails to allege facts showing that Defendant engaged in any commercial cannabis activity within the City of El Monte.

Based on the foregoing, the Court GRANTS the motion for judgment on the pleadings as to the Third Cause of Action with leave to amend.

Fourth Cause of Action - Violation of Unfair Competition Law (Business and Professions Code section 17200 et seq.)

Any person who engages, has engaged, or proposes to engage in unfair competition shall be liable for a civil penalty not to exceed two thousand five hundred dollars ($2,500) for each violation, which shall be assessed and recovered in a civil action brought in the name of the people of the State of California by the Attorney General, by any district attorney, by any county counsel authorized by agreement with the district attorney in actions involving violation of a county ordinance, by any city attorney of a city having a population in excess of 750,000, or by a county counsel of any county within which a city has a population in excess of 750,000, by any city attorney of any city and county, or, with the consent of the district attorney, by a city prosecutor in any city having a full-time city prosecutor, in any court of competent jurisdiction.

Defendant contends Plaintiff lacks standing to bring the Fourth Cause of Action because Plaintiff has not brought this action in the name of the City Attorney of El Monte, and because the population of El Monte does not exceed 750,000 people and there is no allegation that the action was authorized by the Los Angeles County District Attorney. (Kashfian Decl., ¶ 2; Request for Judicial Notice, Ex. 1.) Defendant further contends again that Plaintiff lacks standing because the alleged conduct did not occur in El Monte, civil penalties are limited to $2,500, and because Plaintiff was not actually injured. The Court agrees that Plaintiff lacks standing to bring this cause of action.

Business and Professions Code section 17206 mandates that actions to recover civil penalties for unfair competition be brought in the name of the people of the State of California by the specific government entities set forth therein. This cause of action is sought in the name of the City of El Monte. Further, nothing in the Complaint indicates that Plaintiff obtained the consent of the Los Angeles County District Attorney, which is required in a city with a population of less than 750,000 that has a full-time city prosecutor. Nor is the action brought by a city prosecutor. The Court further agrees with Defendant that the “city attorney in any city and county” language in the statute refers to a city that is also a county like San Francisco. (Reply, 11:2-10.) To hold otherwise would effectively render the other provisions in that statute meaningless because any city attorney could bring an unfair competition law claim without the authorization needed from a district attorney. (Young v. Midland Funding LLC (2023) 91 Cal.App.5th 63, 93 [a statutory interpretation that renders other provisions meaningless is to be avoided].) The Court also agrees that this cause of action fails because there are no facts to show that any unfair competition occurred in the City of El Monte.

Based on the foregoing, the Court GRANTS the motion for judgment on the pleadings as to the Fourth Cause of Action. The Court will hear further from Plaintiff on whether this defect can be cured through amendment.[3]

Fifth Cause of Action - Violation of MAUCRSA (Business and Professions Code section 26000 et seq.)

“A person engaging in commercial cannabis activity without a license as required by this division shall be subject to civil penalties of up to three times the amount of the license fee for each violation. Each day of operation shall constitute a separate violation of this section.” (Bus. & Prof. Code § 26038, subd. (a)(1).) "Actions for civil penalties pursuant to paragraph (2) of subdivision (a) shall be brought exclusively by the Attorney General on behalf of the people, on behalf of the department, or on behalf of the participating agency, or by a city or county counsel or city prosecutor in a city or county having a population in excess of 750,000." (Id., § 26038, subd. (e)(4).)

Defendant contends Plaintiff does not have standing to enforce the Medicinal and Adult Use Cannabis Regulation and Safety Act (MAUCRSA), because its enforcement is left primarily to the California Department of Cannabis Control, and because city attorneys in cities with less than 750,000 people are only allowed to seek civil penalties for unlicensed marijuana operations under Business and Professions Code section 26038, subdivisions (a)(1) and (a)(3). Defendant further contends that although the statutory language does not expressly state that city attorneys may only enforce such licensing violations occurring within their city limits, that is the only plausible interpretation. Finally, Defendant again argues that this cause of action fails because the allegedly offending conduct occurred outside Plaintiff’s city limits. The Court agrees that Plaintiff lacks standing to bring this action for the same reasons previously set forth above.

In addition, claims under Subdivision (a)(2) of Business and Professions Code section 26038 (for aiding and abetting) “shall be brought exclusively by the Attorney General on behalf of the people, on behalf of the department, or on behalf of the participating agency, or by a city or county counsel or city prosecutor in a city or county having a population in excess of 750,000.” (Bus. & Prof. Code § 26038, subd. (e)(4).) Thus, Plaintiff lacks standing to bring a claim for aiding and abetting. Claims under Subdivision (a)(3) (for management or control) “shall be brought exclusively by the Attorney General on behalf of the people, on behalf of the department, or on behalf of the participating agency, or by a city or county counsel, or city prosecutor.” (Bus. & Prof. Code § 26038, subd. (e)(5).) Again, there is no indication in the Complaint that this cause of action is brought by the City Attorney or with the authorization of the City Attorney. The Court notes there is no exclusive language for bringing claims for civil penalties for violation of Subdivision (a)(1). However, Subdivision (e)(3) does mandate how the civil penalties are to be disbursed if the action is brought by a city attorney or city prosecutor. (Bus. & Prof. Code § 26038, subd. (e)(3).) With respect to the conduct allegedly occurring outside of Plaintiff’s city boundaries, the Court agrees that Plaintiff lacks standing to enforce this statute without alleging facts showing that the violations occurred in the City of El Monte.

Based on the foregoing, the Court GRANTS the motion for judgment on the pleadings as to the Fifth Cause of Action with leave to amend.

Plaintiff shall file and serve an Amended Complaint within 20 days of the Court’s order.

Defendant Tucker Lincoln is ordered to give notice of the Court’s ruling and file proof of service of same within five days of the Court’s order.

[1] The Court notes that Lincoln brought this motion under both the statutory grounds and common law grounds for a motion for judgment on the pleadings. While there are differences between those types of motions they have no effect here, and thus the Court declines to address any such issues.

[2] The Court also agrees that the Complaint fails to contain any indication or statements that the attorneys are authorized by the City Attorney to bring this suit on behalf of the City of El Monte.

[3] The Court further notes that the statute provides for the available remedies and Plaintiff should only seek those remedies allowed by statute if leave to amend is granted.