A federal judge handling the CVS Pharmacy lawsuit against the city of Sebastopol may dismiss the case for lack of jurisdiction, suggesting the matter properly belongs in state court.
U.S. District Court Judge Edward M. Chen announced his reservations about the case in an order signed last week inviting the parties to argue he's wrong to worry.
But the notice creates an uncertain future for CVS's legal fight over the city's decision to stop issuing drive-thru window permits — a move the national drug store chain claims was designed to torpedo its controversial plans for a downtown project.
With the development in the case last Wednesday, “it's rather obvious that CVS has some issues that it will need to wrestle with,” City Attorney Larry McLaughlin said.
CVS, through its California subsidiary, Longs Drug Stores, and Armstrong Development Properties Inc., a developer of CVS Pharmacy, and J.P. Morgan Chase Bank sites around the country, had filed its case in state court in the first place.
But, for reasons unknown, CVS attorneys had the case dismissed so they could file in federal court, McLaughlin said.
The state suit was dismissed “with prejudice,” meaning CVS is prevented from refiling the same case in state court, McLaughlin suit. Whether a modified suit could still be filed at the state level is not clear.
But McLaughlin said the city and the outside legal firm hired to handle the CVS litigation are still analyzing the judge's order to determine what the potential outcomes are.
“We are unclear about how it would all play out exactly,” said Edward Grutzmacher, lead attorney for the city. “I don't want to speculate too much about what happens if or when the federal court decides there is no federal jurisdiction.”
At issue is whether the City Council, in the winter of 2012, properly put a freeze on building permits for projects with drive-thru windows when only one such project was pending: the CVS/Chase Bank development that had been granted design approval the previous summer after two dozen acrimonious hearings over 16 months.