Case Name: The City of San Jose v. Victoria Foxx, et al.
Case No.: 2015-1-CV-280765

Currently before the Court is defendants Victoria Foxx (“Foxx”), Parthenon Trust (“Parthenon”), Sacha Nemcov (“Nemcov”) and Amsterdam’s Garden’s (“Amsterdam”) (collectively, “Defendants”) motion for judgment on the pleadings as to plaintiff the City of San Jose’s (the “City”) complaint.

I. Factual and Procedural Background

On May 5, 2015, the City filed its complaint against Defendants, in which it alleges the following: Foxx, Parthenon, and Nemcov own commercial property at 2142 The Alameda, San Jose, CA (the “Property”). (Compl., ¶ 2.) The defendants permit Amsterdam to operate a medical marijuana dispensary at that location. (Compl., ¶ 3.) Under the San Jose Municipal Code (“SJMC”), it is unlawful to operate a medical marijuana dispensary in a commercial zone. (Compl., ¶ 34.) In addition, an entity may not operate a medical marijuana collective unless that entity obtains a Zoning Code Verification certificate. (Compl., ¶ 55.) Defendants violated the SJMC because the Property is located in a commercial zone and Defendants did not apply for or obtain a Zoning Code Verification certificate. (Compl., ¶¶ 35, 56.) The City asserts two causes of action for public nuisance.

On September 10, 2014, Defendants filed their answer, asserting a general denial and nine affirmative defenses.

Defendants filed the instant motion for judgment on the pleadings on March 29, 2016. The City filed its opposition on July 6, 2016. On July 12, 2016, Defendants filed their reply.

II. Request for Judicial Notice

In connection with their opposition to the motion, the City asks the Court to take judicial notice of the SJMC and a United States Department of Justice Memorandum concerning the Department’s marijuana enforcement policy. The request is GRANTED. (See Evid. Code, § 452, subd. (b); City and County of San Francisco v. Pacello (1978) 85 Cal.App.3d 637, 642, fn. 1 [stating that the court may take judicial notice of sections of a city’s municipal code]; People ex rel. Totten v. Colonia Chiques (2007) 156 Cal.App.4th 31, 38, fn. 3 [taking judicial notice of written law enforcement policy].)

III. Motion for Judgment on the Pleadings

Defendants move for judgment on the pleadings on the ground that the complaint fails to state sufficient facts to constitute a cause of action. (Code Civ. Proc., § 438, subd. (c)(1)(B)(ii).) They contend that the SJMC violates the 5th Amendment of the United States Constitution and, therefore, may not serve as the basis for an action for public nuisance. (See Welton v. City of Los Angeles (1976) 18 Cal.3d 497, 507 [stating that a public nuisance statute may be enforced only in a manner consistent with constitutional protections].) In particular, Defendants assert that the SJMC compels them to reveal financial and operational information subjecting them to a substantial hazard of self-incrimination under federal drug laws.

A. Legal Standards

The Fifth Amendment of the United States Constitution provides, in pertinent part, that “[n]o person … shall be compelled in any criminal case to be a witness against himself….” (U.S. Const. amend. V.) There are four requirements necessary to trigger the privilege: “the information sought must be (i) ‘incriminating’; (ii) ‘personal to the defendant’; (iii) obtained by ‘compulsion’; and (iv) ‘testimonial or communicative in nature.’” (Izazaga v. Sup. Ct. (1991) 54 Cal.3d 356, 366.) Evidence that does not implicate each of these requirements is outside the scope of the privilege. (Id. at p. 367.) The privilege only applies to individuals and may not be asserted by a corporation, partner, or any other entity. (Braswell v. United States (1988) 487 U.S. 99, 104-108; United States v. Kordel (1970) 397 U.S. 1, 7, fn. 9; Avant! Corp. v. Sup.Ct. (2000) 79 Cal.App.4th 876, 884-885.)

The Fifth Amendment may provide a defense to the enforcement of a statute that compels a defendant to reveal self-incriminating information. (California v. Byers (1971) 402 U.S. 424, 427.) However, “the Fifth Amendment does not always demand substantial undercutting of valid and essential government regulation when the means to effect that regulation necessarily include disclosure of information which could lead to self-incrimination.” (U.S. v. Flores (9th Cir. 1985) 753 F.2d 1499, 1501.) In these circumstances, the conflict between the government’s need to regulate and the privilege against self-incrimination “must be resolved in terms of balancing the public need on the one hand, and the individual claim to constitutional protections on the other….” (Ibid., internal citations omitted.) In determining whether the threat of self-incrimination outweighs the government’s need to regulate, the court considers the following factors: (1) whether the disclosure requirement targets a highly selective group inherently suspect of criminal activities, rather than the public generally; (2) whether the requirement involves an area permeated with criminal statutes, rather than an essentially noncriminal and regulatory area of inquiry; and (3) the extent to which the compelled disclosures would themselves confront the defendant with substantial hazards of self-incrimination. (Ibid.; see also U.S. S.E.C. v. Fehn (9th Cir. 1996) 97 F.3d 1276, 1291-1292.)

B. Amsterdam and Parthenon’s Assertion of the Privilege

Preliminarily, Amsterdam and Parthenon cannot assert the privilege against self-incrimination as the privilege does not apply to an artificial entity such as a corporation or a trust. (See Braswell, supra, 487 U.S. at pp. 104-108.) Accordingly, the motion for judgment on the pleadings as to these entities is DENIED.

C. Foxx and Nemcov’s Assertion of the Privilege

Foxx and Nemcov argue that the enforcement of SJMC sections 6.88.300, 6.88.320, 6.88.330(A)(C), 6.88.600, 6.88.700, and 6.88.820. In opposition, the City contends that these provisions do not compel Foxx or Nemcov to incriminate themselves because they are alleged owners of the Property, not the dispensary’s owners or managers or the individual participants in the operation of the dispensary. This argument is well-taken.

As previously noted, the privilege attaches only if: “the information sought [is] (i) ‘incriminating’; (ii) ‘personal to the defendant’; (iii) obtained by ‘compulsion’; and (iv) ‘testimonial or communicative in nature.’” (Izazaga, supra, 54 Cal.3d at p. 366.) Under the SJMC, only the owners, managers, or individual members participating in the cultivation, manufacturing, transporting or dispensing of medical marijuana are required to provide the City with information concerning the operation of the dispensary. (See SJMC, § 6.88.330.) Since the SJMC does not compel Foxx and Nemcov, the alleged owners of the Property, to provide any information to the City, they cannot assert the privilege.

In reply, Foxx and Nemcov argue that they may invoke the Fifth Amendment defense on several grounds. First, they contend that they may invoke the privilege because the SJMC compels other defendants to provide incriminating information that could lead to their indictment as co-conspirators. This argument is not persuasive. As the privilege is personal to the individual in question, a litigant may not invoke the Fifth Amendment on behalf of another. (People v. Chandler (1971) 17 Cal.App.3d 798, 803, disapproved on other grounds by People v. Hill (1992) 3 Cal.4th 959; People v. Chandler (1971) 17 Cal.App.3d 798, 803, disapproved on other grounds by People v. Hill (1992) 3 Cal.4th 959; see also Fisher v. U.S. (1976) 425 U.S. 391, 409 [stating that the Fifth Amendment privilege “protects a person only against being incriminated by his own compelled testimonial communications”].) Therefore, Foxx and Nemcov may not invoke the privilege against self-incrimination of individual owners, managers, or participating members of a medical marijuana dispensary even though these other defendants’ failure to invoke the privilege could lead to the disclosure of evidence incriminating Foxx and Nemcov. Second, Foxx and Nemcov assert that they may invoke the privilege because SJMC section 6.88.700 prevents any owner from refusing to allow, impede, obstruct or interfere with the City’s inspection of a medical marijuana dispensary. However, this provision does not compel them to make a testimonial communication to the City; it merely prevents them from interfering with the City’s inspection of the other defendants’ records. (Fisher, supra, 425 U.S. at p. 408 [stating that the Fifth Amendment privilege does not prevent “the compelled production of every sort of incriminating evidence but applies only when the accused is compelled to make a [t]estimonial [c]ommunication that is incriminating”].) Since this provision does not require Foxx and Nemcov to produce incriminating records they were personally compelled to create, the Fifth Amendment privilege is inapplicable.

In light of the foregoing, Foxx and Nemcov fail to demonstrate that enforcement of the SJMC would violate their privilege against self-incrimination. Accordingly, the motion for judgment on the pleadings as to these defendants is DENIED.