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Mendocino County is gearing up for a court battle over a federal subpoena ordering local officials to surrender records from its now-defunct medical marijuana permitting program, including what county attorneys say is legally protected medical and financial information.

Despite repeated queries, Mendocino County officials say they do not know who the target of the criminal grand jury might be -- growers, users or public officials.

Some observers have suggested federal authorities hope to get their hands on nearly $830,000 in revenue the program generated when it was active.

Attorneys for the county, as well as advocacy groups behind a "friend of the court" brief, say a variety of court rulings and the Tenth Amendment support the county's right to establish protocols under California's 1996 Compassionate Use Act without interference from the federal government, which does not recognize a medical use for marijuana.

They also cite precedent for maintaining the kind of confidentiality that would be breached were the county to surrender its records as ordered -- particularly patient condition information and financial account and payment records supplied by growers who applied for county permits.

"We would definitely rather not send people's names and parcel numbers and how much money they expended to the feds," said longtime county Supervisor Dan Hamburg, who assumed the board chairmanship last week.

A San Francisco defense attorney hired to fight the subpoena has lodged a formal motion that contends, in part, that the county is prevented from releasing confidential medical information because of criminal sanctions outlined in the 2004 California Medical Marijuana Program Act under which the county's regulations were developed.

"(It) is clear that if the county were to comply with this subpoena, the bulk of its disclosure would constitute sensitive medical information concerning the participants," wrote the attorney, William Osterhoudt.

The subpoena also seeks information on county financial accounts, specifically those used by the Sheriff's and District Attorney's offices, and those related to funds collected through the permitting program.

The permitting plan approved in March 2010 was abandoned a year ago after the threat of a federal lawsuit. It allowed qualified medical marijuana cooperatives to grow up to 99 plants if they complied with numerous conditions aimed at easing the impact on neighbors, the environment and crime rates.

Collectives paid $1,500 for the permits, monthly inspection fees of about $500 and $50 each for special numbered zip ties identifying each authorized plant. There were 95 entities that applied in the 2011-12 fiscal year, 91 of which were approved, Sheriff Tom Allman said.

Though that program was scrapped, medical marijuana users still may grow up to 25 plants under an ordinance adopted in 2008 and modified several times since then.

Although the permit program had been suspended, the U.S. Attorney's Office empaneled a grand jury that issued an Oct. 23 subpoena ordering the county to turn over "any and all records" from the program going back to January 2010. The order includes all application and inspection records, financial account numbers, and communication of any kind between the county, permit holders and applicants, and third-party inspectors.

The county, which recently set aside $10,000 to hire Osterhoudt, responded Dec. 21 with a motion to quash the subpoena, calling it overbroad, improper government intrusion that puts privileged attorney-client and doctor-patient communication at risk without identifying any relevance to a criminal target or prosecution.

The government, Osterhoudt wrote, "is apparently on something of a fishing expedition, casting a wide net to ensnare patients participating in the medical marijuana program, while simultaneously striking a heavy blow to that program and the county's right to maintain it."

A Jan. 29 hearing date is set in U.S. District Court in San Francisco at which the county will ask Northern California District Judge Richard Seeborg to nullify the order.

Osterhoudt declined comment on the subject, as did Mendocino County Counsel Thomas Parker.

Attorneys are looking in part to a 2007 district court ruling involving a private Oregon clinic that successfully quashed a subpoena seeking records on 17 medical marijuana patients.

San Francisco attorney Adam Wolf, who wrote a brief in support of the county on behalf of medical marijuana groups, said that ruling raises the possibility that a federal subpoena could "trump" state sovereignty given a showing of necessity and relevance. But the ruling also said the state had a legitimate interest in the integrity of its program and in maintaining its contract to maintain participants' confidentiality, he said.

According to Wolf, the U.S. Attorney's Office maintains that participants in Mendocino County's program relinquished the privilege to keep medical and financial information confidential when they provided it to the county and to those who cultivated their marijuana.

Permit applicants also had to acknowledge that the county ordinance did not protect them from federal prosecution.

But Hamburg and Wolf said that's not the same as waiving confidentiality. Even so, supervisors tweaked the ordinance language last week to make explicit what they said was always implicit. The ordinance now states that any medical marijuana information provided to the county or generated by the ordinance "was always intended to be treated as confidential medical information under state and federal law."

Supporters say any breach of that confidentiality would destroy faith in the county, voiding very deliberate efforts to balance community interests and maintain some oversight of the medical marijuana trade.

"It would effectively move those operations underground," Wolf said.

You can reach Staff WriterMary Callahan at 521-5249 or mary.callahan@pressdemocrat.com.