Sacramento Fined Homeowners $94 Million For Illegal Cannabis Grows — But Many Claim They’re Innocent

Speaker 1: 00:00 It's been two years since recreational marijuana sales became legal in California, but cities across the state have struggled with illegal cannabis cultivation for years. In 2017 the city of Sacramento launched an aggressive enforcement campaign. It's main tool, hefty fines against homeowners. The city has since issued about $94 million in penalties, but hundreds of homeowners are challenging the fines, claiming that they're innocent. They say their tenants grew pot without their knowledge, their attorney's call, the whole thing, and abuse of government power, Capitol public radios. Scott rod has this investigation. Speaker 2: 00:37 When Zhou, who Wayne got a citation in the mail last year for $137,000 he couldn't believe his eyes. Well, I should say I was very surprised, shocked, and you know, of course I was scared. I spoke to him recently through a Mandarin interpreter, the 63 year old bus driver lives in San Francisco. He bought a home in Sacramento two years ago as a retirement investment. He had saved for decades after immigrating to the U S from China until his retirement. He planned to rent the property to help cover the mortgage. Then his tenant turned the home into a massive indoor puck row. He says, without his knowledge, Daniel a homeowner has a responsibility. But of course in my case, I found a company to rent the property out. I went to see the house, you know, I feel I did what I could. Wing had no suspicion of illegal activity inside the home. Speaker 2: 01:30 After the bust, he wasn't charged with a crime. The city had no proof. He was involved in the marijuana grow, but they said he still owed more than a hundred thousand dollars in fines because it was on his property. So you can guys, I'm a victim here, me and home owners to whom this has happened, you know, we are victims and we have the ones who are being punished here. He says it's sent his life into a spiral. The ones who should be punished are the people who break the law, who grow the Mariana. And if anything, I wish the government would increase the penalty for those people. But wings tenant got off with a slap on the wrist, some community service in a few years of probation, no jail time. No fines. That's common. In these cases. In Sacramento, the city has issued at least 250 penalties against homeowners, but not one against the tenant. Defense attorneys argued Sacramento targets property owners for a reason because they're the ones with money. Speaker 3: 02:27 They go after the homeowners, one as a revenue tool, and second, because the homeowner is an easy target of opportunity. Speaker 2: 02:37 Malcolm seagull is a Sacramento based attorney and former federal prosecutor. He's represented several homeowners who faced these huge fines. Speaker 3: 02:44 They own a house that has equity in it. The homeowners have their backup up against the wall. Speaker 2: 02:51 Some defense attorneys point to comments from Sacramento. Mayor Darrell Steinberg at a city council hearing last year. At that point, the city had issued 12 $8 million in penalties for illegal cannabis cultivation. He said, collecting those fines should be a high priority because that's 12.8 million bucks and you know we're going to have a budget this year that is open $8 million. We're going to have a budget this year that is going to be lean. Since then, the city issued another $80 million in fines under the enforcement program. In a statement, Steinberg said illegal marijuana grows pose a danger to neighborhoods. Though he's willing to review the city's enforcement efforts. He did not respond to allegations that the fines are treated as a revenue stream. City attorney, Susanna Alcala would defended the large fines. Speaker 4: 03:38 It's creating a lot of havoc in the neighborhoods in which these activities pop up, creating an increased danger because of the organized crime activity and the criminal activity that surrounds these illegal cannabis houses. Um, and so we are going to do everything in our power to protect our neighbors. Speaker 2: 03:56 Let's take a step back. Everyone in this story agrees Sacramento has a problem with the legal marijuana grows and they agree something should be done, but they disagree over how to address it. The city solution is targeting property owners. They face a $500 penalty for each plant over the legal limit that often results in hundreds of thousands of dollars in fines. But many homeowners say their renters are the ones responsible and have challenged the penalties through the city's appeal process. That's why Sacramento has only collected about 6 million of the $94 million in fines issued so far would says she welcomes these challenges. Speaker 4: 04:35 If they don't have the ability to question the action we're about to take against them, then you know this program pretty much falls apart. Speaker 2: 04:43 Can't take the city to court right away. First you have to go through their appeal process. The hearings are supposed to be loose, informal, modeled after the system for challenging parking tickets except here there's a lot more at stake. The May 31st, 2019 hearing for the cannabis related administrative penalties on behalf of the city of Sacramento will now come to order. The hearing examiner may have a gavel, but they're not a judge and until recently they didn't even have a background in law. Homeowners argue it's nearly impossible for them to Mount a defense against the penalties. That's because Sacramento holds property owners liable for the fines even if they can prove they didn't know about a tenant illegally growing marijuana. An attorney for the city made this clear during Wing's hearing. She said he Speaker 5: 05:33 owned and leased the property upon which the illegal cannabis was found. Whether that was done so knowingly or unknowingly, it makes no difference to the factual determination today. Therefore, it's the city's position that the corresponding penalty is proper and should be upheld. Translation, Speaker 2: 05:47 it doesn't matter if Wayne was unaware of the pot grow inside. It's his property so the city believes he should pay up. Sacramento based attorney Scott Radcliffe says the city has taken this position against his clients as well. He calls it a troubling legal argument for the city to hold a landlord responsible for the acts of a tenant and find them several hundreds of thousands of dollars in fines as grossly draconian and a clear abuse of government power. The hearing examiner will occasionally reduce a penalty if they believe the property owner acted responsibly. That's what happened in Wing's case. His penalty was lowered to $35,000 in a way, he's fortunate. Cap radio reviewed hundreds of cases and found other rental property owners took reasonable steps as landlords, sometimes the same steps as Wang, but they still face the full penalty after the city rejected their appeal. And most appeals are rejected. Speaker 2: 06:41 On the other hand, a $35,000 fine for something the city acknowledges, weighing, may not have even known about, can be life altering. The hothouse psychological impact has been tremendous. You know, the, the, the way this has impacted my mood and the way I and my wife feel about this and it has caused us so much worry, and I'm still worrying about it all the time when paid the penalty, but it's challenging it in court. He's also the plaintiff in a separate lawsuit that claimed Sacramento's enforcement program is unconstitutional. Winning says he could have retired by now instead, he'll have to work for at least a few more years while also trying to clear his name in court in Sacramento. I'm Scott. Rod Speaker 6: 07:33 [inaudible].