A California appellate court rejected appellant Integral Associates Dena LLC’s motion to strike against SweetFlower Pasadena LLC in an opinion filed Thursday. The appellant’s motion was made after SweetFlower petitioned the City of Pasadena to set aside any permits granted to the appellant.
The court recounted that, in June 2019, the City of Pasadena selected SweetFlower, Integral, and four other candidates to apply for a retail cannabis conditional use permit. In January 2020, the City approved Integral’s conditional use permit application and denied SweetFlower’s after competing businesses had secured the remaining available positions for cannabis-related businesses in City districts.
In June 2020, the City Manager issued new rules for reviewing cannabis-related permit applications following a change in the candidate’s ownership or management. The new rule states that a change in management would undermine the legislative intent behind the application process and directly impact the scoring the candidate receives; if there is a change in control in the candidate’s business, the candidate loses the right to proceed with the cannabis permitting process and its application would be rejected.
Later that month, SweetFlower wrote to the City alleging Integral had a change in ownership at the time Integral had filed its initial application, the court said. In July 2020, the City found no material change of control at Integral.
In October 2020, SweetFlower filed a verified petition and a complaint for declaratory relief, wherein SweetFlower asserted its previous allegations. Integral responded, filing a special motion to strike the petition; Integral argued that SweetFlower’s legal action was based on information provided by Integral in connection to its application for cannabis-related City permits, which they say are protected free speech. SweetFlower’s petition should be struck, Integral argued, because their petition harms Integral’s petitioning activity.
The trial court denied Integral’s special motion to strike, ruling the causes of action arose from the City’s decision following an investigation, not protected speech of petitioning activity as Integral claimed. The appellate court agreed, granting SweetFlower costs in the process. In finding that the trial court did not err, the appellate court wrote that “Integral did not carry its threshold burden to demonstrate SweetFlower’s claims arose from protected activity.”
Integral is represented by Carlson & Nicholas, while SweetFlower is represented by Nossman LLP.
