In Granny Purps, Inc. v. County of Santa Cruz, published August 5, 2020, the Sixth District Court of Appeal affirmed in part and reversed in part a trial court's dismissal of a lawsuit after an order sustaining a demurrer. The county's ordinance limited cultivation of medical marijuana to 99 plants. The plaintiff corporation's marijuana dispensary was growing thousands of marijuana plants. The county seized 2,200 marijuana plants from the plaintiff. The plaintiff presented two claims for damages. After the claims were denied, the plaintiff sued the county and two sheriff's deputies, asserting causes of action for conversion, trespass, and inverse condemnation. The complaint sought money damages, and an order requiring return of the plants by way of a writ of mandate, injunctive relief, and a cause of action for specific recovery of property. At the time the plaintiff filed the complaint, the Secretary of State had suspended the plaintiff's corporate status for failure to pay taxes. The plaintiff paid its taxes and revived its corporate status after the Government Claims Act's six-month limitations period running from denial of the claims had expired. The court sustained the county's demurrer without leave to amend.
The appellate court affirmed dismissal of the causes of action in the complaint seeking damages. Those causes of action (except inverse condemnation) were barred by the six-month statute of limitations. A suspended corporation loses the right to prosecute a lawsuit. Revival of the corporation after the time to commence an action has expired does not retroactively validate a lawsuit filed during corporate suspension. The statute of limitations did not apply to the equity causes of action in the complaint, however. A claim seeking return of property withheld by the government is not subject to the Government Claims Act, even though the property may be dissipated and the defendant may be compelled to pay damages in lieu of returning the property.
The appellate court also affirmed dismissal as to the inverse condemnation cause of action. The Government Claims Act does not apply to inverse condemnation. But the allegations were insufficient to state a claim. Seizure of property in connection with enforcing criminal laws is not inverse condemnation.
Finally, the court reversed the dismissal of the causes of action for specific return of property, mandamus, and declaratory relief seeking return of the plants. A plaintiff cannot sue for return of illegal property. But state law at the time permitted cultivation and possession of medical marijuana. The county's valid property regulation limiting the number of marijuana plants that could be grown did not render the plants contraband per se. Because the complaint alleged that the plants were not illegally grown under state law, the complaint stated a cause of action.
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