Sacramento has made significant changes to its illegal cannabis cultivation enforcement program, in the face of mounting legal challenges and allegations of racism.
The underlying problem is real: Hundreds of houses across Sacramento have been converted to illegal grow operations in recent years.
But the city’s enforcement approach has faced intense scrutiny, after issuing more than $100 million in fines since 2017. The city has collected only about 10% of those penalties, since most are challenged.
The city pursued hefty fines against the people who owned the properties where cultivation was discovered, even if they weren’t the ones caught growing the cannabis. An investigative series from CapRadio found many of these property owners were individual landlords who claimed tenants took advantage of them. The city issued six-figure fines against them; on occasion, individual penalties topped $1 million.
New reporting from CapRadio has uncovered further details about how the city has operated its controversial enforcement system:
- A review of more than 40 search warrant affidavits from 2018 and 2019 shows how the Sacramento Municipal Utility District (SMUD) routinely sent the Sacramento Police Department lists of customers who used unusually high amounts of electricity, which can indicate an illegal cannabis grow.
- Police launched investigations into individual addresses based on the lists, which were broken down by zip code. Police often conducted minimal in-person surveillance into the suspected grow homes, underscoring the importance of the bulk data handed over by SMUD.
- SMUD readily provided police with detailed electrical information on customers who lived next to suspected marijuana grow houses but were not under investigation. Police used this data to compare with homes under investigation and included the information in publicly-available search warrant applications.
- In court documents, police disclosed sensitive information — such as Social Security and passport numbers — of people associated with suspected grow houses, including property owners who claimed innocence and later had penalties cleared. SMUD provided police with at least some of this personal information about its customers.
- A recent lawsuit from the Electronic Frontier Foundation (EFF), a digital privacy watchdog, alleges the city of Sacramento, Sacramento police and SMUD discriminated against Asian property owners in disclosing electricity usage data and enforcing penalties. Transcripts and audio of an appeal hearing obtained by CapRadio confirm one specific allegation of racist action by a former city official. During a 2019 hearing, a deputy city attorney stated, “You know that there is a problem with Asian people and grow houses,” while questioning an Asian American property manager.
- After facing dozens of lawsuits from property owners, the city has made substantial concessions to its enforcement program, affording property owners stronger protections.
The Asian American Liberation Network, a plaintiff in the EFF lawsuit, alleged racial discrimination is baked into the city’s enforcement program.
“It's very problematic,” said Megan Sapigao, the organization’s co-executive director. “It's going outside the confines of the law, scooping up massive amounts of data and specifically target[ing] the Asian American community.”
It's very problematic. It's going outside the confines of the law, scooping up massive amounts of data and specifically target[ing] the Asian American community.
EFF wants the court to establish clearer, stricter parameters for when utility companies can hand over customer data to law enforcement.
SMUD spokerson Lindsay VanLaningham said in an email that the utility denies any wrongdoing.
“We agree that our customer usage data should be (and is) treated with care,” she wrote. “However, the California Public Records Act permits and sometimes requires the sharing of such information with local law enforcement agencies.”
Tim Swanson, a spokesperson for the city of Sacramento, said in an email the city received the lawsuit and “is in the process of evaluating it,” but did not provide further comment.
Zach Eaton, spokesperson for the Sacramento Police Department, said the department “does not provide comment on pending litigation.”
SMUD discloses bulk data, participates in investigations
The city of Sacramento revamped its cannabis cultivation rules in 2017, allowing residents to grow a maximum of six plants in their homes. Growing more than the limit came with a steep fine — $500 per plant.
The city claimed the penalties were based on the plant’s estimated street value and intended to minimize crime — including violent incidents — associated with illegal grows.
Growing marijuana indoors demands a lot of electricity. Police relied on SMUD to send lists of high-usage customers in order to launch investigations, according to a review of more than 40 search warrant applications from 2018 and 2019.
“The Sacramento Police Department periodically receives lists of residences using unusually high amounts of power from the Sacramento Municipal Utility District,” a Sacramento police officer wrote in a December 2018 search warrant application.
Some SMUD employees actively participated in launching these police investigations into customers, according to court documents. A number of search warrant applications state investigations started with a “tip,” “complaint” or “alert” from a SMUD analyst.
The EFF filed a lawsuit in September over SMUD sending lists of suspicious customers to police.
“SMUD’s ongoing dragnet of its customers’ utility usage and subsequent disclosure eviscerates their reasonable expectations of privacy and violates California law,” the lawsuit claims.
Beth Colgan, a professor at UCLA School of Law, said there may be issues under federal law, too.
“It strikes me that there are Constitutional problems,” she said, after reviewing search warrant documents from multiple cases.
In recent years, according to Colgan, the U.S. Supreme Court restricted police from obtaining detailed records from cell phone providers without first obtaining a warrant.
“There's something very similar happening here,” she said.
According to the lawsuit, SMUD’s so-called “smart meters” allow the company to collect detailed electricity usage data on its customers.
EFF wants to limit the practice of handing over this data to law enforcement, and argues that disclosure should require a court order or clear evidence of a previously ongoing investigation into a specific home.
CapRadio found that the electrical data provided by SMUD served as the starting point and crux of many investigations. Dozens of search warrant applications describe minimal follow-up surveillance of houses under suspicion. One application describes no in-person surveillance.
When officers did conduct surveillance, they often pointed out prosaic property features — such as a security gate on a front door, a fence around a yard or a “Beware of Dog” sign — as indications of an illegal grow house.
In some cases, police used contradictory justifications to support search warrant requests. A number of applications, for example, described metal bars on a home’s front windows as a security measure commonplace at grow houses. But when one officer encountered a home without metal bars, they claimed this also indicated a grow house.
“Based on my experience, I’ve found that front windows will often not have bars on the outside and will instead be fortified from the inside,” the officer stated in a search warrant application. “This is done to not have the residence stand out as an illegal marijuana grow.”
When police launched an investigation into a specific home, an officer would often pull electricity usage information on neighboring homes going back months, according to court documents reviewed by CapRadio. Police compared the information to show how suspected grow homes consumed substantially more electricity than the average customer.
Police included this detailed usage data on neighboring homes in public court documents.
And they also disclosed sensitive identification information — including social security and driver's license numbers — about people associated with suspected grow homes. Sometimes, that included landlords who later claimed innocence and had their penalties wiped out.
Laurie Levenson, a professor of criminal law at Loyola Law School, said this is concerning.
“It's terribly unfair to release somebody's personal information,” she said. “Because that type of information can be easily misused.”
According to Levenson, it would have been law enforcement’s responsibility to seal or redact this personal information to keep it from the public record.
Zuhu Wang, a retired bus driver in San Francisco, bought a South Sacramento house in 2017. He was 61 at the time and planned to move in after retiring. Until then, he decided to rent the property.
Wang hired a property management company to run tenant background checks and draft a lease, which specifically prohibited illicit drug activity.
But his tenant started growing hundreds of cannabis plants. The city fined Wang over $137,000, which he challenged through the city’s appeal process.
At an appeal hearing in May of 2019, then-Deputy City Attorney Melissa Bickel cross-examined Wang’s property manager, who is Asian American. She began asking questions about real estate and illegal cannabis cultivation.
“Now, because you are in the community,” Bickel said, “and I don't want to be disrespectful, but Asian as well, you know that there is a problem with Asian people and grow houses.”
Wang’s attorney objected. The property manager pushed back at the racist comment.
“There's many people — different race — they do that, too,” he said. “Only Asian? No.”
Bickel apologized and withdrew the question.
When contacted by email, Bickel — who now works for Yolo County — declined to comment and directed inquiries to the Sacramento city attorney’s office. The city attorney’s office did not respond to an emailed request for comment.
In its recent lawsuit, the Electronic Frontier Foundation claimed the city and SMUD targeted Asian property owners and highlighted Bickel’s comments as an example. CapRadio confirmed the incident after obtaining audio recordings and transcripts of the hearing.
The lawsuit also alleges that a Sacramento police officer “removed non-Asian names” from a customer list provided by SMUD.
In the first two years of the enforcement program, according to EFF, Sacramento issued 86% of penalties against homeowners “whose names are discernably [sic] Asian.”
City makes concessions
The city has made a series of changes to its cannabis enforcement program, after facing more than 80 lawsuits from property owners.
In late 2019, it softened a controversial ordinance that held landlords liable for illegal cannabis grows, even if they could prove they had no knowledge of illicit activity.
The city made further concessions in a settlement with Wang, the South Sacramento property owner. He originally paid a reduced penalty of $35,000, but maintained his innocence. His attorney filed a lawsuit challenging the reduced fine.
In a settlement this August, first reported by the Sacramento Bee, the city agreed to pay Wang $45,000 and cover his attorneys fees of $650,000. The agreement also included substantial changes to the city’s enforcement program. The city must now give a warning before issuing a fine, allowing property owners 30 days to correct any violations. And the city attorney’s office is now obligated to provide any exculpatory evidence that points to a property owner’s innocence.
In the last couple years, the city has significantly reduced the number of fines it issued. Lawyers who challenged the city’s enforcement program say the drop is a result of increased scrutiny and tighter requirements, as well as enforcement challenges posed by the pandemic.
The city issued $85 million in fines from 2018 to 2019, according to a spreadsheet the city provided to Wang’s attorney, and less than $10 million from 2020 to 2021.
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