SAN FRANCISCO (CN) - The city of Oakland asked a federal judge Thursday to stay forfeiture proceedings against a medical marijuana club while it defends its standing on appeal.
Government lawyers meanwhile urged the court to let it seize Harborside Health Center's Oakland and San Jose locations. It claims that the dispensaries sell marijuana in violation of the Controlled Substances Act.
While medical marijuana is legal in California, and voters have approved the recreational use of marijuana by adults in Washington and Colorado, it is still illegal under federal law.
Oakland sued the government in 2012 for abandoning its alleged promises not to interfere with a state's plan to regulate medical marijuana shops.
The government said the action could not survive because only parties named in forfeiture actions have standing to challenge them.
U.S. Magistrate Maria Elena James agreed in dismissing the case. She also ruled that the forfeiture proceeding did not constitute a final agency action that gave Oakland an avenue to sue under the Administrative Procedure Act.
As Oakland appeals to the 9th Circuit, it asked James to stay the forfeiture proceedings pending this appellate review.
Cedric Chao, attorney for Oakland, argued at a hearing Thursday that the city had standing to request a "moderate" stay because it presented serious legal issues by arguing that Oakland should have standing to challenge the government's seizure.
Precedent from the 9th Circuit allows for stays if serious legal questions are raised, Chao said.
"I don't have to prove the case on the merits," he continued. "I have to show serious legal issues, which we've done in spades."
Justice Department attorney Kathryn Wyer replied that, even if the court accepts that Oakland has raised serious legal questions, the city's argument "still doesn't hold up."
She said the court must consider the likelihood that Oakland will succeed on the merits of the case.
"Our view is there is no possible way Oakland could succeed," Wyer said, referring to the city's equitable estoppel and statute of limitations claims. "Both of those issues can be resolved as a matter of law."
Every act of selling marijuana at Harborside constitutes a new violation of the CSA and resets the statute of limitations, Wyer argued.
The government had said in earlier court filings that "the United States has never misrepresented the fact that marijuana distribution, possession, and cultivation remain illegal under federal law."
Wyer also argued that, even if the court granted a stay, it had limited jurisdiction over the issue and could do nothing more than preserve the status quo.
The "status quo was that the forfeiture cases were free to proceed," Wyer said. "If the court stays those cases it would be disrupting the status quo."
Chao strongly objected to this point, noting that the "status quo is determined at the time Oakland filed its appeal."
"The status quo was that Harborside was open," Chao said.
"If the forfeiture action proceeds and if for whatever reason Harborside is shut down, then Oakland and its 400,000 citizens would be injured," he added.