Oakland pot club case goes to magistrate OAKLAND City's disagreement with federal government centers on how deadline for forfeiting property is determined

A selection of available medical marijuana is displayed in a glass case at the Harborside Health Center dispensary in Oakland, Calif. on Thursday, July 12, 2012. The Department of Justice served notice that it will seize the assets and shut down Harborside within 20 days. less A selection of available medical marijuana is displayed in a glass case at the Harborside Health Center dispensary in Oakland, Calif. on Thursday, July 12, 2012. The Department of Justice served notice that it ... more Photo: Paul Chinn, The Chronicle Photo: Paul Chinn, The Chronicle Image 1 of / 1 Caption Close Oakland pot club case goes to magistrate 1 / 1 Back to Gallery

The city of Oakland, fighting the federal government's attempt to shut down the nation's largest medical marijuana dispensary, is accusing the government of trying to win the case by bullying the building owner into evicting the pot club under the threat of losing her property.

Justice Department lawyers counter that Oakland has no legitimate voice in the case and is only trying to protect the "windfall" it collects in taxes from the "illegal marijuana distribution activities" at Harborside Health Center.

The dispute, scheduled to be argued Dec. 20 before a federal magistrate in San Francisco, may turn on whether Harborside's alleged lawbreaking is more like the operations of an illegal bingo game or a cigar smuggler. Those were the subjects of two previous cases that reached opposite conclusions about whether the legal deadline for forfeiture is measured from the time the government first learns of lawbreaking.

Harborside, located along the Oakland Estuary at 1840 Embarcadero, supplies marijuana to 108,000 patients. U.S. Attorney Melinda Haag filed a suit in July seeking to shutter the dispensary and force the property owner to forfeit the building to the government because it houses operations that violate federal law.

The dispensary opposes the suit and remains in operation. But the property owner, businesswoman Ana Chretien - who says she was unaware until recently that Harborside was breaking federal law - filed motions last month to prohibit illegal activities in the building, which would put the dispensary out of business.

An Alameda County judge refused to order a shutdown Nov. 30, saying a state court couldn't base an eviction on federal law. There's no such obstacle in federal court, where U.S. Magistrate Maria-Elena James is scheduled to hear Chretien's motion next week.

Oakland has cried foul, saying the government pressured Chretien to seek eviction to short-circuit the city's separate lawsuit over Harborside. That suit, filed in October, argues that U.S. authorities waited too long to try to seize the property. The federal statute of limitations is five years, but the dispensary openly started distributing marijuana six years ago.

Using 'back door'

To support their claim of government coercion, city lawyers cited Chretien's statement in court papers that the government wants her "to take all expeditious steps to halt Harborside's activities" and that she fears loss of her property unless the dispensary is evicted.

The government, Oakland attorney Cedric Chao alleged, "is attempting to do through the back door ... what it is unable to do directly through its illegal forfeiture action." At the Dec. 20 hearing, Chao will ask James to put Chretien's eviction request on hold until she rules on the city's suit.

Federal government lawyers replied last week that Oakland has no property rights in Harborside and no right to interfere with the forfeiture suit or the eviction proceedings.

They also disputed the city's claim that the government had five years to seek eviction from the time the dispensary started operating.

Statute of limitations

That five-year clock starts running anew with each illegal drug sale, said government lawyers, who cited a ruling in 2010 by a federal appeals court in Chicago in the case of an illegal smuggler of Cuban cigars. Although federal authorities were aware of the smuggling operation more than five years before they sought forfeiture of his home, the court said, they acted legally within five years of the date they first seized cigars at the home.

But Chao said Monday that Harborside is more like the case of the illegal Tennessee bingo games the government started investigating in 1988 and shut down in 1994, seizing more than $500,000. A federal appeals court in Cincinnati overturned the seizure in 1998, saying the five-year timetable had started when federal agents first learned of the illegal operation.