Fighting the government and winning can seem like a pipe dream for anyone who feels that they’ve been wronged by bureaucracy. But hard-fought legal victories do happen sometimes — and for one California cannabis company, it recently resulted in a seven-figure payout.
David Ju, the owner of a Los Angeles area cannabis company, won a nearly $1.9 million verdict earlier this month against the city of Baldwin Park and multiple public officials after a jury agreed the local politicians had committed fraud during the city’s cannabis licensing process. Shockingly, both the individual politicians and the city are now responsible for paying Ju the damages.
Oren Bitan, an LA attorney who was not involved in the case but reviewed its details, said in an email to SFGATE that winning a case like this was “extremely difficult” and “historically rare.” Usually, Bitan said, the legal system protects public officials from being personally liable for actions they take while in government office.
The case is only the latest twist in a yearslong criminal affair in Baldwin Park, a city east of Downtown LA in Los Angeles County. A 2022 investigation by the Los Angeles Times found the city’s cannabis licensing scheme was rife with corruption, including allegations that bribes as high as $250,000 were being paid to city officials in brown paper bags in order to get coveted permits to work in the legal cannabis industry.
A web of local politicians and city employees was eventually connected to the fraudulent scheme by federal officials, leading to criminal charges. The “corrupt” former Baldwin Park City Councilmember Ricardo Pacheco admitted in 2020 to accepting bribes to facilitate pot licenses, according to a Department of Justice news release. In 2023, former Compton City Councilmember Isaac Jacob Galvan was arrested on charges of facilitating bribes to Baldwin Park officials for cannabis permits. And in 2024, Edgar Pascual Cisneros, who was the city manager for the nearby city of Commerce, and Robert Manuel Nacionales-Tafoya, who was the city attorney for Baldwin Park, admitted to participating in the bribery scheme for cannabis permits.
Baldwin Park’s troubles are one of the most notable examples of corruption in the licensing of marijuana businesses. California’s cannabis laws give local governments nearly complete control over the licensing process, and Baldwin Park, like most municipalities, has limited the number of permits issued to pot companies. That, in turn, increases the value of each license and leads to “greater incentives for corruption committed by government officials,” according to a 2023 state audit.
Ju’s civil case centered around his attempt to license a cannabis business in Baldwin Park, with his lawsuit alleging that “a conspiracy amongst greedy and corrupt city Officials and Politicians” defrauded him. The lawsuit names Nacionales-Tafoya, Galvan and Pacheco as defendants, as well as Manuel Lozano, a current Baldwin Park councilmember, and Lourdes Morales, a former clerk for the city. The suit also argues the city of Baldwin Park was negligent for hiring and supervising the city employees who allegedly committed the fraud.
The city of Baldwin Park countersued Ju, saying he had breached his contract with the city by failing to pay city fees, but the jury unanimously sided with Ju’s claims while also rejecting the city’s countersuit. The jury awarded Ju $1.6 million in damages from the current and former officials, and $290,000 from the city of Baldwin Park.
The city of Baldwin Park and Lozano did not return an SFGATE request for comment.
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David Gabriel Torres-Siegrist, the attorney representing Ju, said the case was “an uphill battle” but was thankful to the jurors for siding against the officials. “These strangers from the community came forward and said no, you’re not going to get away with this. They held this city and these people accountable,” Torres-Siegrist said in an interview with SFGATE.
Bitan said this was the first case he knew of where a cannabis company successfully received a civil settlement against local politicians for engaging in corrupt licensing. “Overall, this should serve as a cautionary tale for other jurisdictions to hopefully chill this type of behavior,” Bitan said.
Torres-Siegrist said that he is already working on other lawsuits against Baldwin Park and expects to file at least five more against the city.
*This article was originally posted on SFGATE.com and is reposted with permission.