A federal judge this week
declined to issue a temporary restraining order (TRO) against a California sheriff who used civil forfeiture to
rob armored cars carrying money earned by state-licensed marijuana businesses. In his
ruling, U.S. District Judge John Holcomb said Empyreal Logistics, a Pennsylvania-based company that transports cash between businesses and banks, "may very well have an excellent case on the merits" but had failed to meet "the high burden" for a TRO.
San Bernardino County sheriff's deputies stopped Empyreal vans three times in November, December, and January. They seized cash during two of the stops, making off with a total of more than $1 million, which was transferred to the FBI so the Justice Department could pursue forfeiture under federal law. If the government prevails in those forfeiture proceedings, the sheriff's department will get to keep up to 80 percent of the money under the Justice Department's "equitable sharing" program. The earnings of state-licensed marijuana suppliers are not subject to forfeiture under California law.
Empyreal, which is represented by the Institute for Justice, argues that San Bernardino County Sheriff Shannon Dicus has no authority to seize money from businesses that are complying with state law, that the van searches violated the Fourth Amendment, and that the financial motive for the stops makes them inconsistent with due process. In addition to Dicus, Empyreal sued the Justice Department, Attorney General Merrick Garland, the FBI, FBI Director Christopher Wray, the head of the FBI's Los Angeles Field Office, the Drug Enforcement Administration (DEA), and DEA Administrator Anne Milgram. The company argues that federal officials, by collaborating with Dicus, are violating a congressional
spending rider that bars the Justice Department (which includes the FBI and the DEA) from interfering with the implementation of state medical marijuana laws.
Regarding that last claim, Holcomb said the evidence presented so far was not sufficient to establish that Empyreal and its clients were operating in accordance with California laws allowing medical use of marijuana. The company says three of the four businesses whose money was seized on November 16 had medical marijuana licenses. It says all of the money seized on December 9 came from such businesses.
"Empyreal bears the burden to show by a preponderance of evidence that it has strictly complied with state medical marijuana laws," Holcomb
writes. "Empyreal has not come close to meeting that burden. Empyreal's only evidence with respect to the issue of strict compliance is self-serving declarations from its CEO, Deirdra O'Gorman. The value of those declarations is limited."
Dan Alban, one of the Institute for Justice attorneys representing Empyreal, notes that "the appropriations rider requires DOJ to not spend any money interfering with a state's implementation of its medical cannabis laws." While "the rider does not protect every business that Empyreal serves," he says, "it should protect those with medical cannabis licenses that are in strict compliance with state law, and federal agencies should not be able to seize their proceeds."
Holcomb was also unpersuaded by the argument that Dicus had exceeded his authority, since that claim hinges on demonstrating that the businesses whose money his deputies seized were complying with state law. "Empyreal and its clients operate in full compliance with applicable state cannabis laws," the company
says in its TRO application. But in
Holcomb's view, that assurance is not enough to support a TRO, since "the only evidence that Empyreal presents is self-serving declarations from its CEO."
For similar reasons, Holcomb says, Empyreal has not shown that its constitutional claims against Dicus are likely to succeed. "Put simply, there is not enough evidence
at this time to suggest that Empyreal's Constitutional rights were violated," he writes. He emphasizes that his order "does not now address whether Empyreal's rights were violated, nor whether Defendants violated any laws."
Empyreal argues that the traffic stops were pretextual: ostensibly justified by minor traffic violations but actually aimed at generating revenue for the sheriff's department. Sheriff's Deputy Jonathan Franco claimed the November 16 stop, which resulted in the seizure of $712,000, was justified because the Empyreal van was following a tractor-trailer too closely. When the same deputies pulled over the same vehicle, driven by the same employee, on December 9, according to the
lawsuit that Empyreal filed on January 14, they claimed the driver "slightly exceeded the speed limit and prematurely activated his turn signal."
In that case, the complaint says, "the driver's operation of the Empyreal vehicle was completely lawful." The company says "the deputies had planned the stop in advance and would have pulled over the driver and the Empyreal vehicle regardless of how carefully or lawfully it was driven."
This time the deputies took about $350,000, which was something of a letdown. Based on an audio recording by the van's security system, Empyreal's lawsuit describes this exchange: "One of the deputies said, 'That's it?' and chuckled. He then said: 'You set the bar too high.' When another deputy remarked that he thought they'd get 'a million or two,' the [first] deputy responded, 'At least we got over a million'"—apparently referring to the combined take from the two seizures.
reason.com
