amended counterclaims: douglas county board of commissioners vs. s.e.c.a.m., llc; mile high medical...

8/4/2019 AMENDED COUNTERCLAIMS: DOUGLAS COUNTY BOARD OF COMMISSIONERS VS. S.E.C.A.M., LLC; MILE HIGH MEDICAL GARDENS, LLC; and HATCH

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DISTRICT COURT, DOUGLAS COUNTY, COLORADO

Court Address: 4000 Justice Way, Suite 2009

Castle Rock, CO 80209

BOARD OF COUNTY COMMISSIONERS OFDOUGLAS COUNTY,

Plaintiff,

v.

S.E.C.A.M., LLC; MILE HIGH MEDICAL GARDENS,

LLC; and HATCH WELLNESS CENTER, LLC,

Defendants.__________________________

HATCH WELLNESS CENTER, LLC, Individually,

And A.J.D., by and through his next friend, Cassandra

Deutsch, ELIZABETH A. SMALLWOOD, ADAM W.

HOGIN, MICHAEL S. PERKINS, TARA A. BARNHILL,

MICHAEL D. PARMARICO, and VALERI LOFTON,

Individually and

On Behalf of All Similarly Situated Persons,

Counterclaim Plaintiffs,

v.

BOARD OF COUNTY COMMISSIONERS OF

DOUGLAS COUNTY,

Counterclaim Defendant.

__________________________________________________

Attorney or Party Without Attorney (Name and Address):

Andrew B. Reid, Esq., Reg. No. 25116Springer and Steinberg, P.C.

1600 Broadway Suite 1200

Denver, Colorado 80202

(303) 861-2800(303) 832-7116 (f)

[email protected]

Attorneys for Defendant Hatch Wellness Center, LLC

COURT USE ONLY _________________________

Case Number: 2011CV296

Division: 6

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AMENDED COUNTERCLAIMS OF HATCH WELLNESS CENTER, LLC,

AND OF CLASS ACTION CLAIMANTS

AGAINST BOARD OF COUNTY COMMISSIONERS OF DOUGLAS COUNTY

HATCH WELLNESS CENTER, LLC, individually, and A.J.D., ELIZABETH A.

SMALLWOOD, ADAM W. HOGIN, MICHAEL S. PERKINS, TARA A. BARNHILL,

MICHAEL D. PARMARICO, and VALERI LOFTON, individually and on behalf of all

similarly situated persons, by and through their counsel, Andrew B. Reid of the law firm of

Springer and Steinberg, P.C., hereby allege and aver the following as its Counterclaims Against

the Board of County Commissioners of Douglas County for declaratory judgment and injunction

pursuant to the Colorado Constitution, Article XVIII, Section 14, and C.R.C.P. 8, 23, 57, 65, and

106 or, alternatively for damages pursuant to the Colorado Constitution, Article II, Section 15,

and / or C.R.S. Sections 29-20-201 et. seq. and / or C.R.S. Sections 38-1-101 et. seq. for a

regulatory taking and / or inverse condemnation of property, as follows:

I. PARTIES, JURISDICTION, AND VENUE

1. Counterclaim Plaintiff Hatch Wellness Center, LLC (Hatch), located in

unincorporated Douglas County, Colorado, is a limited liability company formed in June, 2008,

pursuant to the laws of the State of Colorado for the purpose of providing wellness services

including the growing and/or dispensing medical marijuana. Hatch opened and began supplying

medical marijuana medication to patients with qualifying medical conditions, including the

individual counterclaim Plaintiffs herein and others, and their caregivers, residing in

unincorporated Douglas County on or about August 1, 2009. Hatch has continuously engaged in

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the business of providing medical marijuana to qualify patients and caregivers from August 1,

2009 to the present day.

2. Counterclaim Plaintiff A.J.D., by and through his caregiver mother and next

friend, Cassandra Deutsch, is a 17 year old resident of Douglas County, Colorado, suffering from

life-threatening brain cancer near his spinal cord. He undergoes chemotherapy for his condition

approximately every four weeks. The chemotherapy and other medical treatments for his

condition, including prescription medication, has made it very difficult for him to consume food

and maintain his weight and health and to talk and engage in a normal life. Accordingly, his

physician recommended and he began using marijuana as a medication. The use of marijuana

has helped increase his ability to consume food and maintain his weight so that he can have and

can endure the ongoing chemotherapy, has helped him to be able to talk and lead a more normal

and enjoyable life, and has helped him to decrease or stop much of his previous and more

harmful prescription medication. The medical marijuana medication has helped to save or

extend the life of Plaintiff A.J.D. As a qualifying medical marijuana patient, Plaintiff A.J.D.

obtains his medication from Hatch which provides the medication to him free of charge through

his caregiver mother due to lack of sufficient financial resources of his family.

3. Plaintiff Elizabeth Smallwood is an adult resident of Douglas County, Colorado,

suffering from fibromyalgia and lupus. Her chronic pain from her medical conditions and the

prescriptive medication therefore deprived her of enjoyment of her life and interfered with her

ability to work. After starting to use marijuana as medication for her conditions upon the

recommendation of her physician, Plaintiff Smallwood was able to decrease or stop much of her

previous and more harmful prescription medication, to resume a more normal and enjoyable life,

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and to go back to work. As a qualifying medical marijuana patient, Plaintiff Smallwood obtains

her medication from Hatch.

4. Plaintiff Adam W. Hogin is an adult resident of Douglas County, Colorado,

suffering from hear problems and having had open heart surgery. Subsequent to his surgery, he

continued to suffer from severely irregular heart rhythms and his physician recommended

medical marijuana as medication for his condition. After starting to use marijuana as medication

for his condition upon the recommendation of his physician, Plaintiff Hogins heart rhythms

became more stable and he was able to decrease or stop much of his previous and more harmful

prescription medication for his condition, and to resume a more normal and enjoyable life. As a

qualifying medical marijuana patient, Plaintiff Smallwood obtains his medication from Hatch.

5. Plaintiff Michael S. Perkins is an adult resident of Douglas County, Colorado,

suffering from severe chronic back pain following surgery on his spine and was initially

prescribed heavy pain-killers and addictive opiates for his pain. After starting to use marijuana

as medication for his condition upon the recommendation of his physician, Plaintiff Perkins was

able to decrease or stop much of his previous and more harmful prescription medication for his

condition, and to resume a more normal and enjoyable life. As a qualifying medical marijuana

patient, Plaintiff Perkins obtains his medication from Hatch.

6. Plaintiff Tara S. Barnhill, a former nurse, is an adult resident of Douglas County,

Colorado, suffering from terminal cancer. She underwent, unsuccessfully, extensive

chemotherapy and other severely invasive and debilitating medical treatments for her condition,

including prescription medication, which made it very difficult for her to consume food and

maintain her weight and health and to engage in a normal life. Accordingly, her physician

recommended and she began using marijuana as a medication. The use of marijuana has helped

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increase her ability to consume food and maintain her weight so that she can cease much of her

debilitating treatment and return to a more normal and enjoyable life. The medical marijuana

medication has helped to extend and make more enjoyable the remaining life of Plaintiff

Barnhill. As a qualifying medical marijuana patient, Plaintiff Barnhill obtains her medication

from Hatch.

7. Plaintiff Michael D. Pamarico is an adult resident of Douglas County, Colorado,

suffering from diabetes. Among other problems, his medical condition increased the pressure in

his eyes interfering with his eyesight and ability to fully engage in his life activities including

driving. After starting to use marijuana as medication for his condition upon the

recommendation of his physician, Plaintiff Pamarico eyesight improved and he was able to

decrease or stop much of his previous and more harmful prescription medication for his

condition, and to resume a more normal and enjoyable life. As a qualifying medical marijuana

patient, Plaintiff Pamarico obtains his medication from Hatch.

8. Plaintiff Valeri Lofton is an adult resident of Colorado who provides caregiver

services to her husband pursuant to Colorado law for qualifying medical marijuana patients in

Douglas County, Colorado. Plaintiff Loftons husband suffers from cancer and the illness and

severely invasive and debilitating medical treatments for his condition, including prescription

medication, made it very difficult for him to consume food and maintain his weight and health

and to engage in a normal life. Accordingly, his physician recommended and he began using

marijuana as a medication. The use of marijuana has helped increase his ability to consume food

and maintain her weight so that he can return to a more normal and enjoyable life. The medical

marijuana medication has helped to extend and make his life more enjoyable. As a qualifying

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medical marijuana patient caregiver, Plaintiff Lofton obtains her husbands medication from

Hatch.

9. Counterclaim Plaintiffs A.J.D., Smallwood, Hogin, Perkins, Barnhill, Pamarico,

and Lofton, in their representative capacity, collectively referred to as Class Representatives,

bring their claims individually and as a Class Action under C.R.C.P. 23 on behalf of a Class

consisting of all persons (Class Claimants) residing in unincorporated Douglas County who

suffer from medical conditions that qualify each to use marijuana as medication for said

conditions pursuant to and within the protections of the Constitution of the State of Colorado,

and their caregivers. A subclass of Class Claimants are those persons that have further been

diagnosed by physicians with such qualifying medical conditions and has received physician

recommendations of marijuana and marijuana products as medication for such conditions. A

subclass of Class Claimants are those persons that have been diagnosed by physicians with such

qualifying medical conditions and have received physician recommendations of marijuana and

marijuana products as medication for such conditions, and who are provided their medication

from Hatch directly, or indirectly through their caregivers.

10. The Class is so numerous that joinder of all members is impracticable. As of

March 31, 2011, residents of Colorado had submitted 137,555 applications with the Colorado

Department of Public Health and Environment (CDPHE) for official registration pursuant to

the Colorado Constitution as qualifying users of marijuana for medication. Over one-half of the

applications were from the Denver-Metro area, including unincorporated Douglas County. As of

March 31, 2011, the CDPHE had approved 123,890 applications, including applications from

residents and medical marijuana users from unincorporated Douglas County. Hatch has and

continues to the date of this pleading to provide medical marijuana medication to hundreds of

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qualifying medical marijuana patients residing in Douglas County, directly and through their

caregivers.

11. The claims of the Class Representatives listed herein are typical of the claims of

the other members of the Class, as said Class Representatives and all other members have been

injured or are threatened with injury in exactly the same way by the unconstitutional denial or

substantive and unreasonable infringement, or threatened denial or infringement, upon their

constitutional right of access to their medication by the ban of medical marijuana businesses in

unincorporated Douglas County as set forth by the claim of the Board of County Commissioners

of Douglas County (Board) in its underlying action against all of the medical marijuana

businesses (the Defendants in that action) in unincorporated Douglas County.

12. Class Representatives will fairly and adequately represent the interests of the

Class and has retained counsel competent and experienced in Class Action litigation.

13. Class Representatives have no interests that are contrary to or in conflict with

those of the Class or of Hatch.

14. A Class Action is superior to other available methods available for the fair and

efficient adjudication of this controversy. As the ban upon all medical marijuana businesses that

is requested by the Board would substantively affect and injure the interests and constitutional

rights of access of each member of the Class, including the individual Class Representatives

listed herein, each member of the Class is a necessary party to this action. No relief can be

fashioned by the Court upon the claim of the Board that would not affect the interests and

constitutional rights of each member of the Class. Each member of the Class, therefore, is

indispensable and is required to be joined as a party to this action and the underlying action

either as an individual party or as a member of the Class. The burden of individual litigation

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makes it virtually impossible for the Class members individually to seek redress for the

unconstitutional conduct alleged herein. Furthermore, as the acts of the Board are applicable to

all members of the Class, the declaratory and injunctive relief requested herein is appropriate

with respect to the Class as a whole.

15. As the identities of the medical marijuana users in unincorporated Douglas

County can be ascertained either through the records of the underlying action Defendants

required to be kept by law or by the CDPHE registration records, and as the Class seeks

declaratory and equitable relief rather individual monetary damages, the Class Representatives

know of no difficulty that will be encountered in the management of this litigation that would

preclude its maintenance as a Class Action.

16. Common questions of law and fact exist as to all members of the Class and

predominate over any questions affecting solely individual members of the Class. Among the

questions of law and fact common to the Class: Whether the ban on medical marijuana

businesses in unincorporated Douglas County unconstitutionally deprives or infringes upon each

Class members right of access to medication directly or indirectly through his or her caregiver.

17. Counterclaim Defendant Board of County Commissioners of Douglas County is

the governing body of Douglas County, Colorado. Douglas County is a statutory county and

political subdivision of the State of Colorado responsible in part for conducting elections upon

County referendums, enacting County zoning regulations, and enforcing County regulations and

restrictions. As to the request herein for injunctive relief, the Board by its members are sued in

their official and individual capacities.

18. Jurisdiction arises in this Court pursuant to the Article II, Section 15, and Article

XVIII, Section 14, of the Constitution of Colorado, and to C.R.S. 13-51-101, et. seq. (2010),

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and C.R.C.P. 23, 57, 65, and 106. A declaratory judgment in this case would terminate the

extreme and widespread uncertainty or controversy giving rise to this proceeding. An injunction

would stop the extreme and widespread harm and jeopardy resulting from the challenged

referendum to the Counterclaim Class Plaintiffs and tens of thousands of citizens and residents of

Douglas County suffering from debilitating and life-threatening medical conditions that could

benefit from the use of marijuana as a medication for their conditions.

19. Venue is proper in this Court pursuant to C.R.C.P. 98(c).

II. FACTUAL BACKGROUND AND GENERAL ALLEGATIONS

A. Colorado Constitution, Article 18, Section 14

20. On November 7, 2000, the People of Colorado acting by approximately one

million Colorado voters, including the adult Plaintiffs and PCRLP members, approved

Amendment 20 as an initiated constitutional amendment.

21. Amendment 20 was a compassionate measure designed to address the compelling

medical need for improvement of the quality of life, and often the saving and extension of life, of

hundreds of thousands of Colorado citizens and residents with debilitating medical conditions. It

was a medical need unmet by any other medication and subject to the expert diagnosis and

recommendation by Colorado physicians as the appropriate medication. So significant is this

right that even prior to the Amendment a patients access to life-saving medication has been

viewed as a medical necessity in defense to criminal charges and as a human right under

international law.

22. Amendment 20, now Section 14 of Article 18 of the Colorado Constitution,

guarantees patients diagnosed by physicians as having a debilitating medical condition, and their

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primary care-givers, a constitutional right to engage in the use of marijuana for medical

purposes. Id. The medical marijuana provisions of the Colorado Constitution secure individual

constitutional rights available to allcitizens and residents statewide, including those in

unincorporated Douglas County.

23. Use under the Colorado Constitution includes the acquisition, possession,

production, use, and transportation of marijuana and paraphernalia related to the administration

of marijuana. Id. Read consistent with Article 18, Section 14(2)(d) of the Colorado

Constitution, this definition also includes the manufacture, sale, distribution, and dispensing of

medical marijuana.

24. Recognizing that many patients may need or desire assistance in the use of

medical marijuana, the Colorado Constitution also authorizes patients to employ primary care-

givers to assist them. Id.

25. Section 14 constitutionally further excepts the medical use of marijuana from

Colorados criminal laws governing the acquisition, possession, manufacture, production, use,

sale, distribution, dispensing, or transportation of marijuana and provides medical marijuana

patients and care-givers an affirmative defense to arrest and prosecution. Id. at 14(2)(a) and

(b).

26. The Colorado Constitution further provides for strict confidentiality of medical

marijuana patient and care-giver information. It expressly forbids disclosure of any such

information to any other agency other than the state health agency, except to law enforcement

agencies and, even then, solely for the purpose of establishing the patients or care-givers

status as a registered medical marijuana user. Id. at 14(3)(a).

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27. These provisions of the Colorado Constitution established a state regulatory

scheme for qualifying patient access to medical marijuana administered by the state health

agency designated by the Governor. Id. at 14(1)(g), 14(2)(b), and 14(3).

28. The Constitution directed the state health agency to enact rules of administration.

Id. at 14(9).

29. Pursuant to the Colorado Constitution, the Governor designated the CDPHE as

the state health agency having the sole constitutional authority and responsibility for the

implementation and administration of the Colorado medical marijuana program.

30. As of March 31, 2011, the CDPHE reported that it had issued approximately

124,000 valid registry ID cards to patients in every county in Colorado. Fifty-six percent of the

patients were from the Denver-Metro area, including Douglas County.

B. House Bill 10-1284, As Amended

31. The Colorado Constitution further directed the State legislature to enact such

legislation as may be necessary for implementation of [the Amendment]. Colorado

Constitution, Article 18, Section 14(8). On June 7, 2010, the Governor signed legislation

enacted by the General Assembly implementing Article 18, Section 14 of the Colorado

Constitution. H.B. 10-1284 (2010) (the Colorado Medical Marijuana Code, C.R.S. 12-43.3-

101 et. seq. and the Medical Marijuana Program, C.R.S. 25-1.5-106) and S.B. 10-109. On or

about June 2, 2011, the Governor signed a medical marijuana business clean up bill, H.B. 11-

1043, having an effective date of July 1, 2011.

32. Under the Constitution, the General Assembly was tasked with implement[ing]

rules to ensure patients suffering from legitimate debilitating medical conditions are able to

safely gain access to medical marijuana . Colorado Constitution, Article 18, Section 14(2)

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(d). This legislation was supposed to address the practical anomaly of having a constitutional

right of access to medication but no infrastructure to provide it. The focus of the implementing

legislation and the statutory authorization and establishment of medical marijuana businesses

was thus constitutionally required to be on making medical marijuana readily available to

patients suffering from debilitating medical conditions.

33. The General Assembly created a regulatory business scheme of state licensed

medical marijuana cultivators, product manufacturers, and dispensers of medical marijuana

purportedly to make the constitutionally secured medication readily available to registered

patients and care-givers. C.R.S. 25-1.5-106(1)(a); C.R.S. 12-43.3-101 et. seq.

C. Local Bans and Regulations As Unconstitutional Restraints

on Patient Access to Medication

34. However, in addition to establishing the state scheme for making medical

marijuana available to patients, the General Assembly added provisions which defeated its very

purpose of guaranteeing ready access to the medication by authorizing local authorities, counties,

cities and other municipalities, to each issue their own regulatory schemes of local licenses and

regulations. C.R.S. 12-43.3-103(2)(a), 12-43.3-301, and 12-43.3-310. In a further

unconstitutional restraint on access to medication, the General Assembly gave local authorities

the power to prohibit altogether state licensed medical marijuana cultivators, product

manufacturers, and dispensers from their counties and communities. C.R.S. 12-43.3-103(2)

(a), 12-43.3-106 (Local Option), 12-43.3-310(1).

35. The medical marijuana legislation contains provisions allowing medical

marijuana businesses with pending applications to continue operating while the application

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process is completed by the State, unless effective July 1, 2011, the local municipality or

county has issued a ban on such businesses.

36. On November 2, 2010, the County of Douglas approved by referendum a ban of

medical marijuana cultivators, product manufacturers, and dispensers, in unincorporated Douglas

County.

37. The Douglas County ban threatens thousands of residents of the County, including

Counterclaim Plaintiff Class and Class Representatives, who are registered patients with

constitutionally secured patient access to doctor recommended medication. The ban effectively

prevents the delivery of this medication by dispensaries, cultivators, or manufacturers to patients

in those municipalities and counties.

38. Many patients, including members of the Counterclaim Plaintiff Class and Class

Representatives, who are very seriously ill or bed ridden and due to their medical conditions

unable travel to a provider in a county or municipality that has not banned medical marijuana

dispensaries, and now cannot even have their medication delivered to them, are effectively and

unconstitutionally denied access to their medication. They are condemned by these

unconstitutional bans on their access to medication to suffer unnecessarily and even die

prematurely.

39. Nowhere in the Colorado Constitution is there any mention of a local option or

a local licensing authority or of any authorization for local regulations and standards for, or the

banning outright of, the medical use of marijuana, including the acquisition, possession,

manufacture, production, use, sale, distribution, dispensing, or transportation of the medication.

There are no constitutional provisions authorizing any municipality or county to interfere with

patient and care-giver access to medication by banning outright or regulating to death activities

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associated with the acquisition, possession, manufacture, production, use, sale, distribution,

dispensing, or transportation of marijuana of medical marijuana. The Colorado Constitutions

express granting of regulatory authority solely to the state health agency coupled with its

exclusion of any provisions giving regulatory authority to either the Department of Revenue or

local governments over medical marijuana clearly indicate the intent in the Constitution to limit

all medical marijuana regulation to the state heath agency under a statewide scheme.

40. Regardless of what the General Assembly, or Douglas County, may think of a

constitutional amendment expressed through the will of the People of Colorado, it can only enact

legislation that satisfies the mandates of the Colorado Constitution, including the provisions on

patient access to medical marijuana. It cannot amend the Colorado Constitution by legislation,

as it has done with the Constitutions scheme through the local option and licensing.

D. Qualifying Medical Marijuana Patients Are and Will Be

Severely Harmed by the Challenged Legislation

41. The Douglas County ban, if enacted, will impact the statewide scheme of ready

access to medication established by the Colorado Constitution for medical marijuana patients.

The thousands of qualifying patients who reside in unincorporated Douglas County will be

effectively deprived of ready or all access to their medication. Many will face the hard choice of

going without or of obtaining their medication in violation of H.B. 10-1284 and running the risk

of arrest and loss of their legal right to use the medication.

42. It is for these reasons that Counterclaim Plaintiff Hatch and the thousands of

qualifying unincorporated Douglas County medical marijuana patients and their care-givers must

have immediate relief. No other relief that might be available to them is adequate under the

circumstances.

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III. NO COMPELLING GOVERNMENTAL INTEREST OR RATIONAL BASIS

EXISTS FOR INFRINGEMENT OF THE CONSTITUTIONALLY SECURED

RIGHT OF ACCESS OF THOUSANDS OF QUALIFYING

MEDICAL MARIJUANA PATIENTS TO THEIR MEDICATION

43. Doctors, dentists, and other medical providers routinely prescribe and pharmacies

routinely dispense in Douglas County and every municipality in the county a great many

controlled pharmaceutical narcotics such as Fentanyl, oxymorphone, hydromorphone, morphine,

and codeine, universally recognized as far more potent than medical marijuana. The use of these

medicinal substances is illegal unless pursuant to a doctors or dentists prescription. 21 U.S.C.

801, et seq. Yet, with H.B. 10-1284, patients have much greater access to these far more

potent pharmaceutical narcotics prescribed for the same pain than they have to medical

marijuana.

44. Nearly all medicines have toxic, potentially lethal effects. But marijuana

(cannabis) is not such a substance. There is no record in the extensive medical literature

describing a proven, documented cannabis-induced fatality. Marijuana's therapeutic ratio is

impossible to quantify because it is so high. Marijuana, in its natural form, is one of the safest

therapeutically active substances known to man.

45. Even alcohol, which is readily available without a doctors approval, is

immensely more harmful and dangerous to the user and our society than marijuana.

46. The right of a qualifying patent or his or her care-giver to medical marijuana is an

individual constitutional right analogous to those civil rights guaranteed by the Bill of Rights

found in Article 2 of the Colorado Constitution. Furthermore, a denial of medical care is a

deprivation of an interest in liberty or life that implicates rights to due process under both the

federal and state constitutions. These vested interests extend to the care-givers and others,

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12-43.3-102(2), 12-43.3-103(2), 12-43.3-104(5), 12-43.3-106, 12-43.3-301, 12-43.3-302, 12-

43.3-303, 12-43.3-310, 12-43.3-311, 12-43.3-312, 12-43.3-601, 12-43.3-701, and12-43.3-901.

V. SECOND CLAIM FOR DECLARATORY JUDGMENT

(DOUGLAS COUNTY BAN)

52. Counterclaim Plaintiffs incorporate by reference each and every allegation above.

53. Counterclaim Plaintiffs seek a ruling by the Court that local Douglas County is

not empowered to wholly ban a constitutionally permitted use or industry within its boundaries.

53. Counterclaim Plaintiffs seek a ruling by the Court that any attempt to apply the

provisions of the Douglas County medical marijuana ban to Defendant Hatch would constitute

retroactive legislation which is impermissible under Article II, Section 11, of the Colorado

Constitution.

54. Counterclaim Plaintiffs seek a ruling by the Court that, as a matter of law, the

Douglas County medical marijuana ban resolution and referendum are unconstitutional under the

Article XVIII, Section 14, of the Colorado Constitution.

55. Counterclaim Plaintiffs seek a ruling by the Court that, as a matter of law, Hatch,

being in operation prior to Douglas County medical marijuana ban resolution and referendum, is

not subject to the ban.

VI. CLAIM FOR INJUNCTIVE RELIEF

56. Counterclaim Plaintiffs incorporate by reference each and every allegation above.

57. As to Douglas County by the Counterclaim Defendant Board of County

Commissioners of Douglas County and its members, Plaintiffs seek an order permanently,

preliminary, and / or temporarily enjoining them from implementing, enforcing or otherwise

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acting upon any resolution or referendum banning medical marijuana businesses in

unincorporated Douglas County, including Hatch.

VII. ALTERNATIVE CLAIM FOR DAMAGES

(BY COUNTERCLAIMANT HATCH ONLY)

58. Alternatively, in the event that this Court finds the Douglas County ban medical

marijuana business lawful and that it applies to Hatch, Counterclaim Plaintiff Hatch incorporates

by reference each and every allegation above.

59. Hatch began the business of lawfully dispensing medical marijuana to qualifying

patients following the enactment by initiative of Constitutional Amendment 20 and prior to an

October 20, 2009, resolution by Douglas County enacting a temporary prohibition on all medical

marijuana businesses (the Moratorium). Hatch was grandfathered in and not affected by the

Moratorium.

60. On or about November, 2009, Hatch applied for a sales tax license from the State

of Colorado for the sale and dispensing of medical marijuana and related services. On June 8,

2010, the State of Colorado issued Hatch a sales tax license which is valid through December 31,

2011.

61. On or prior to July 1, 2010, Hatch submitted its application to the State of

Colorado for a medical marijuana business license under state law pertaining to such businesses.

The application is and has been pending for issuance by the State of Colorado.

62. On or about September 29, 2010, Douglas County issued Hatch a letter

declaration that its medical marijuana dispensary business is a legal, nonconforming, use under

the Douglas County zoning code.

63. At the time of the enactment of the unincorporated Douglas County ban, on or

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about November 2, 2010, by Board resolution and referendum election, Hatch possessed and at

all times has possessed a vested property interest and right in its business.

64. On or about June 10, 2011, Daniel J. Hartman, Director of the Medical Marijuana

Enforcement Division of the Colorado Department of Revenue, issued a Notice of Proposed

Denial to Hatch informing Hatch of the States intention to deny Hatchs medical marijuana

business license application for the sole reason of the ban by Douglas County on medical

marijuana businesses in unincorporated Douglas County.

65. On or about June 15, 2011, Tommy Barrella, Commander of the South Metro

Drug Task Force, having law enforcement jurisdiction over unincorporated Douglas County and

in consultation with Douglas County officials and the Defendant Board, issued a written letter to

Hatch informing it that as a result of the States June 10, 2011 notification Hatch would be

engaging in unlawful conduct through its operation of a medical marijuana business without a

medical marijuana business license from the State after July 1, 2011, and would be subject to

possible criminal enforcement of the States drug laws.

66. The ban on medical marijuana businesses in unincorporated Douglas County

takes, or threatens to take, away or impair permanently the vested property interests and rights of

Hatch and constitutes a regulatory taking subject to just compensation by Douglas County under

Article II, Section 15, of the Colorado Constitution and / or C.R.S. Sections 29-20-201 et. seq.

and / or C.R.S. Sections 38-1-101 et. seq.

WHEREFORE, for the reasons stated above,

A. Counterclaim Plaintiffs respectfully request a declaratory judgment from

the Court that:

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1. The medical marijuana statutory provisions pertaining to the local

licensing authority of Douglas County to enact any ban of medical marijuana businesses in

unincorporated Douglas County are unconstitutional;

2. Hatch, being in operation prior to Douglas County medical

marijuana ban resolution and referendum, is not subject to the ban; and

3. The Douglas County medical marijuana ban resolution and

referendum are unconstitutional.

B. Counterclaim Plaintiffs respectfully request an order from the Court,

permanent, preliminary, and / or temporary, enjoining, jointly and severally, Douglas County by

the Counterclaim Defendant Board of County Commissioners of Douglas County and its

members from implementing, enforcing or otherwise acting upon any resolution or referendum

banning medical marijuana businesses in unincorporated Douglas County, including Hatch.

C. Should the Court rule that the ban on medical marijuana businesses in

unincorporated Douglas County is constitutional and that Hatch is subject to the ban,

Counterclaim Plaintiff Hatch respectfully requests the award of damages as just compensation

for a regulation taking pursuant to Article II, Section 15, of the Colorado Constitution and / or

C.R.S. Sections 29-20-201 et. seq. and / or C.R.S. Sections 38-1-101 et. seq..

D. Counterclaim Plaintiffs respectfully request any further relief the Court

may deem just and proper.

Respectfully submitted this 24thday of June, 2011.

SPRINGER AND STEINBERG, P.C.

___/s/ Andrew B. Reid______________________

Andrew B. Reid, Reg. # 25116

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1600 Broadway, Suite 1200

Denver, CO 80202

Tel: 303.861.2800Fax: 303.832.7116

Email: [email protected]

Attorneys for Counterclaim PlaintiffsOriginal signature on file atSpringer and Steinberg, P.C.

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CERTIFICATE OF SERVICE

The undersigned hereby certifies that this day he has caused the above and forgoing

document entitled AMENDED COUNTERCLAIMS OF HATCH WELLNESS CENTER,

LLC, AND OF CLASS ACTION CLAIMANTS AGAINST BOARD OF COUNTYCOMMISSIONERS OF DOUGLAS COUNTY to be served upon counsel for the parties

and the Colorado Attorney General, via LexisNexis File & Serve e-filing and / or U.S.

Mail, first class postage prepaid, as follows:

Lance J. Ingalls, Attorney

Kelly Dunnaway, AttorneyOffice of the Douglas County Attorney

100 Third Street

Castle Rock, CO 80104

Gregory Goodman, AttorneyGoodman Legal Consulting LLC

6901 S. Pierce Street, Suite 100-ILittleton, CO 80128

Colorado Attorney Generals Office1525 Sherman Street, 5th Floor

Denver, Colorado 80203

Dated: _06/24/2011 _________ /s/ Andrew B. Reid_______________

Original signature on file at

Springer and Steinberg, P.C.

amended counterclaims: douglas county board of commissioners vs. s.e.c.a.m., llc; mile high medical...

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