Three witnesses won’t be charged in Ohio football rape case: documents

(Reuters) – At least three members of a high school football team in Steubenville, Ohio, received word they would not be prosecuted just days before testifying against teammates accused of raping a 16-year-old girl, according to documents obtained by Reuters.

In letters from Ohio Attorney General Mike DeWine’s office addressed to each student’s lawyer, the state committed to not prosecuting Evan Westlake, Anthony Craig and Mark Cole, three witnesses for the prosecution.

But DeWine said on Thursday his office had made no deal with any of the witnesses involved in the case.

“We have offered nothing, made no promises to any witness in this case. … No deals have been cut with anybody,” DeWine told WTOV television in comments confirmed by his spokesman.

The case has unsettled Steubenville, a city of 19,000 near the Pennsylvania border where football has a powerful influence.

Community leaders have criticized authorities, voicing suspicion they have avoided charging more players who could have been involved in order to protect the school’s beloved football program.

Days after the letters were sent, all three players testified at a pre-trial hearing against teammates Ma’lik Richmond and Trenton Mays, both 16, who were charged with raping a classmate at a party attended by many teammates last August. Richmond and Mays were set to be tried as juveniles in February.

Although evidence in the criminal case showed each player “may not have conducted himself in a responsible or appropriate manner, his behavior did not rise to the level of any criminal conduct,” all three letters say. “Therefore, we will not prosecute your client for his actions on August 11-12, 2012.”

Walter Madison, an attorney who represents one of the students charged with rape, verified the letters’ authenticity, but declined to comment further.

The letters can protect the players from criminal charges, said John Burkoff, a criminal law professor at the University of Pittsburgh.

“If the government says that it won’t prosecute you and then changes its mind, you can argue that it can’t go back on that,” he said. “It’s constitutional estoppel (an impediment).”

The letter to Westlake, dated September 28, was signed by Ohio Associate Attorney General Marianne Hemmeter. The other two letters were signed by Ohio Associate Assistant Attorney General Jennifer Brumby and dated October 9, three days before the trio testified against their teammates. Brumby and Hemmeter conducted the questioning at that hearing.

Attorney General spokesman Dan Tierney said the state decided the students would go uncharged only for the crime of illegal use of a minor in nudity-oriented material.

“We would stand by the attorney general’s previous comments,” he told Reuters on Thursday.

The case shot to national prominence last week when the online activist group Anonymous made public a picture of the purported rape victim being carried by her wrists and ankles by two young men. Anonymous also released a video that showed several other young men joking about an assault.

(Editing by Daniel Trotta and Peter Cooney)

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Affleck, Argo win big at Critics' Choice Awards

LOS ANGELES (AP) — Hours after a surprise snub in Academy Award nominations, Ben Affleck won best director and his film "Argo" was named best picture at the Critics' Choice Movie Awards.

Affleck, whose film was nominated for seven Oscars including best picture but not best director, accepted the award Thursday night at the Broadcast Film Critics Association's 18th annual awards in Los Angeles, joking as he took the trophy that he'd "like to thank the Academy."

Daniel Day-Lewis from "Lincoln" and Jessica Chastain from "Zero Dark Thirty" both added to earlier Oscar nods with Critics' Choice wins in the top acting categories.

Philip Seymour Hoffman won best supporting actor for his role in "The Master" and Anne Hathaway won best supporting actor for "Les Miserables."

The ceremony was broadcast on the CW network.

___

The night's winners:

Best Picture: Argo

Actor: Daniel Day-Lewis

Actress: Jessica Chastain

Supporting Actor: Philip Seymour Hoffman

Supporting Actress: Anne Hathaway

Young Actor/Actress - Quvenzhane Wallis

Acting Ensemble: Silver Linings Playbook

Director: Ben Affleck

Original Screenplay: Quentin Tarantino

Adapted Screenplay: Tony Kushner

Cinematography: Claudio Miranda (Life of Pi)

Art Direction: Sarah Greenwood/Katie Spencer (Anna Karenina)

Editing: William Goldenberg/Dylan Tichenor (Zero Dark Thirty)

Costume Design: Jacqueline Durran (Anna Karenina)

Makeup: Cloud Atlas

Visual Effects: Life of Pi

Animated Feature: Wreck-It Ralph

Action Movie: Skyfall

Actor in an Action Movie - Daniel Craig

Actress in an Action Movie - Jennifer Lawrence

Comedy - Silver Linings Playbook

Actor in a Comedy - Bradley Cooper

Actress in a Comedy - Jennifer Lawrence

Sci-Fi/Horror Movie - Looper

Foreign Language Film - Amour

Documentary Feature - Searching for Sugarman

Song - Skyfall

Score - John Williams

___

Online:

www.criticschoice.com

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Parental Consent Rule May Proceed for a Circumcision Ritual, a Judge Says

New York City health officials may proceed temporarily with a plan to require parental consent before an infant may undergo a particular Jewish circumcision ritual, a federal judge ruled Thursday.

City officials say 12 cases of herpes simplex virus have likely resulted from the procedure, known as metzitzah b’peh, since 2000, including one Brooklyn case reported this week. Two infants died, and two suffered permanent brain damage. Most Jews no longer practice metzitzah b’peh, in which the circumciser uses his mouth to suck blood from the wound, but it remains common among some ultra-Orthodox communities.

Citing the risk of infection, health officials in September introduced a regulation that would require parents to provide written consent stating that they were aware of the health risks.

But the Central Rabbinical Congress of the United States and Canada, Agudath Israel of America, and the International Bris Association sued in October to stop the rule from taking effect, calling it an infringement of their constitutional rights. They also denied the procedure posed a risk and asked a federal court to put the rule on hold while the litigation proceeded.

In denying the request for a preliminary injunction, Judge Naomi Reice Buchwald of the United States District Court for the Southern District wrote that the risks were clear.

“In light of the quality of the evidence presented in support of the regulation, we conclude that a continued injunction against enforcement of the regulation would not serve the public interest,” she wrote.

City lawyers said they were gratified by the ruling, but Andrew Moesel, a spokesman for the plaintiffs, said the groups would appeal. “We continue to believe that this case is a wrongful and unnecessary intrusion into the rights of freedom of religion and speech,” he said.

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Herbalife fires back at hedge fund giant

Herbalife Chief Executive Michael Johnson was tired of a powerful hedge fund manager bad-mouthing his company.

So he put on a show Thursday before hundreds of investors at the Four Seasons hotel in Manhattan, rebutting claims that the Los Angeles nutritional supplement company is a pyramid scheme. The presentation accused hedge fund giant Bill Ackman of lies and snobbery, compared Herbalife to the Girl Scouts and featured the company's president entreating that "the world needs more hugs."

Who says Wall Street is more boring these days?

The company's two-hour defense of itself is the latest in a battle since Ackman's Pershing Square Capital Management labeled Herbalife as "the best-managed pyramid scheme in the history of the world," during a similar presentation he made late last month. The outspoken fund manager has made a $1-billion bet that the stock would plunge in value.

"Just the very nature of the 'battle' has never been seen in the history of the Earth," said Tim Ramey, an analyst with D.A. Davidson and Co. "This was a very, very orchestrated attack."

Herbalife has hired a battalion of researchers to prove that it has a legitimate and stable business model. Executives held back no punches Thursday before a crowd of investors and analysts, labeling Ackman an elitist who made "false statements," "distortions" and "misrepresentations" about Herbalife and vowing to use "every means available to protect our reputation."

"In recent weeks, there's been a tremendous amount of misinformation about Herbalife," Johnson said. "This misinformation has found its way into the marketplace. Therefore we are sitting with you to correct some of this today."

In addition to outside experts brought in to bolster Herbalife's claims, company executives went through Pershing's presentation last month, disputing individual slides.

To the complaint that Herbalife is not focused on its products, Chief Operating Officer Rich Goudis showed figures indicating that the company spends millions on research and development.

To a Pershing slide that accused Herbalife of having a small distribution network, the company countered with a map of more than 300 company-run distribution points and showing its expansion in Indonesia and South Korea.

To a Pershing slide showing Herbalife products as more expensive than competitors' per 200-calorie servings, the company offered its own slide that compared the prices of the products per unit and showed costs in line with those of its competitors.

"Pershing intentionally used a misleading metric," Goudis said. "They did this to knowingly create a false impression."

They paraded out experts.

Kim Rory, representing Lieberman Research Worldwide, said distributors she surveyed had joined Herbalife because they wanted to get a discount on the products for personal use. Few signed up because they thought they'd make a large amount of money, and about two-thirds would recommend being a distributor to friends, she said.

Anne Coughlan, a professor at the Kellogg School of Management, defended Herbalife's marketing structure and disputed the allegation that it is a pyramid scheme.

"I didn't even see a scintilla of evidence that would suggest to me any hint that this company is running anything but a legitimate multi-level marketing program," she said.

Perhaps the most personal attacks came from Herbalife President Des Walsh, who said he was "highly offended" by Ackman's portrayal of Herbalife's nutrition clubs and defended the company for bringing nutritional products to poor neighborhoods.

After showing a video featuring happy distributors in crowded nutrition clubs, Walsh suggested that Ackman was out of touch with real America.

"This doesn't look like a country club in Westchester, Connecticut, but let me tell you, inside this club is real America," he said. (Earlier in the presentation, Walsh explained that people come to the club for a hug, adding, "the world needs more hugs.")

His comments echo a note sent out last week by D.A. Davidson analyst Ramey, who has a "buy" rating on Herbalife.

"Perhaps where Mr. Ackman lives he never sees a car with the 'Lose weight, ask me how' message across the rear window," he wrote. "I can tell Mr. Ackman that in my hometown, which is not quite Chappaqua, Herbalife is an iconic and widely recognized brand."

Ackman responded quickly Thursday, saying that Herbalife's presentation "distorted, mischaracterized and outright ignored large portions of our presentation," and that he had been contacted by people who provided more information into Herbalife's business practices, which he will soon reveal.

The unusual fight on Wall Street ramped up in December, when Ackman laid out his case against Herbalife in a three-hour, 200-plus slide presentation. He questioned whether the company was focused on recruiting new distributors, who pay to join the company, instead of on selling products. His announcement sent the company's stock down 36% and turned heads when analysts heard he'd sold short 20 million Herbalife shares.

Ackman's biggest beef with Herbalife focused on its so-called multi-level marketing model, which he said led to only those at the top of the company making money. More than 90% of distributors break even or lose money, he said. Ackman even drew UCLA into the controversy, saying Herbalife mentioned a lab at the university multiple times during each investor presentation to lend itself legitimacy.

Herbalife shares recovered some of their losses in the weeks after Ackman's presentation as some investors expressed confidence in the company. Hedge fund Third Point said it was taking an 8.2% stake in Herbalife, betting that the company would survive Ackman's assault.

Analysts at Thursday's meeting seemed supportive of Herbalife, with some expressing their belief in the company during a question-and-answer period after the presentation. One analyst urged the company to fight back against Pershing Square's method of "slandering" the company.

"It was a good, thorough presentation that certainly accomplished the job of defending the legitimacy of their business model," Ramey said.

Still, not all investors were convinced by the presentation. Herbalife's stock closed down 71 cents, or 1.8%, at $39.24. That may be because on Wednesday the Securities and Exchange Commission opened an investigation into Herbalife, according to published reports.

alana.semuels@latimes.com

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Irvine City Council overhauls oversight, spending on Great Park

Capping a raucous eight-hour-plus meeting, the Irvine City Council early Wednesday voted to overhaul the oversight and spending on the beleaguered Orange County Great Park while authorizing an audit of the more than $220 million that so far has been spent on the ambitious project.

A newly elected City Council majority voted 3 to 2 to terminate contracts with two firms that had been paid a combined $1.1 million a year for consulting, lobbying, marketing and public relations. One of those firms — Forde & Mollrich public relations — has been paid $12.4 million since county voters approved the Great Park plan in 2002.

"We need to stop talking about building a Great Park and actually start building a Great Park," council member Jeff Lalloway said.

The council, by the same split vote, also changed the composition of the Great Park's board of directors, shedding four non-elected members and handing control to Irvine's five council members.

The actions mark a significant turning point in the decade-long effort to turn the former El Toro Marine base into a 1,447-acre municipal park with man-made canyons, rivers, forests and gardens that planners hoped would rival New York's Central Park.

The city hoped to finish and maintain the park for years to come with $1.4 billion in state redevelopment funds. But that money vanished last year as part of the cutbacks to deal with California's massive budget deficit.

"We've gone through $220 million, but where has it gone?" council member Christina Shea said of the project's initial funding from developers in exchange for the right to build around the site. "The fact of the matter is the money is almost gone. It can't be business as usual."

The council majority said the changes will bring accountability and efficiencies to a project that critics say has been larded with wasteful spending and no-bid contracts. For all that has been spent, only about 200 acres of the park has been developed and half of that is leased to farmers.

But council members Larry Agran and Beth Krom, who have steered the course of the project since its inception, voted against reconfiguring the Great Park's board of directors and canceling the contracts with the two firms.

Krom has called the move a "witch hunt" against her and Agran. Feuding between liberal and conservative factions on the council has long shaped Irvine politics.

"This is a power play," she said. "There's a new sheriff in town."

The council meeting stretched long into the night, with the final vote coming Wednesday at 1:34 a.m. Tensions were high in the packed chambers with cheering, clapping and heckling coming from the crowd.

At one point council member Lalloway lamented that he "couldn't hear himself think."

During public comments, newly elected Orange County Supervisor Todd Spitzer chastised the council for "fighting like schoolchildren." Earlier this week he said that if the Irvine's new council majority can't make progress on the Great Park, he would seek a ballot initiative to have the county take over.

And Spitzer angrily told Agran that his stewardship of the project had been a failure.

"You know what?" he said. "It's their vision now. You're in the minority."

mike.anton@latimes.com

rhea.mahbubani@latimes.com

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Three top U.S. wireless carriers to embrace BlackBerry 10

LAS VEGAS (Reuters) – Three of the top U.S. cellphone carriers signaled this week that they would support Research In Motion’s BlackBerry 10 products, the first of which are due to be unveiled Jan 30, offering a hopeful sign for RIM’s comeback effort.

Executives at Verizon Communications , AT&T Inc and T-Mobile USA all said they are looking forward to the devices, which will be crucial for RIM’s chances of regaining lost ground from rivals such as Apple Inc and Samsung Electronics .

“We’re hopeful its going to be a good device,” Lowell McAdam, chief executive of Verizon Communications, majority owner of the biggest U.S. mobile service Verizon Wireless.

“We’ll carry it,” McAdam said in an interview at the Consumer Electronics Show in Las Vegas.

BlackBerry 10 is RIM’s next-generation mobile operating platform and it is preparing to launch new smartphones later this month. Word that major carriers will offer the devices is good news for RIM.

RIM, which once commanded the lead in the smartphone market, has rapidly lost ground to Apple’s iPhone and Samsung’s line of Galaxy products, especially in North American and European markets, as customers abandon its aging BlackBerry devices.

It has been testing the new BlackBerry 10 devices with carriers so they can assess their compatibility with networks.

No. 4 U.S. mobile provider T-Mobile USA, a unit of Deutsche Telekom , also plans to carry the new BlackBerry 10.

“We’re extremely optimistic that it’s going to be a successful product and our business customers are extremely interested in it,” Chief Executive John Legere said.

AT&T has promised to support the BlackBerry 10 platform, according to Chief Marketing Officer David Christopher, but he would not discuss specific devices.

However, AT&T handset executive Jeff Bradley made it clear that the No. 2 U.S. mobile operator would carry the phone.

“It’s logical to expect our current (BlackBerry) customers will have the best BlackBerry devices to choose from in the future,” Bradley said.

(Reporting By Sinead Carew; Editing by Cynthia Osterman)

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'Lincoln,' 'Les Miz' look for big Oscar haul

BEVERLY HILLS, Calif. (AP) — Crusaders for good, old-fashioned Western democracy look to be the key figures vying for this year's Academy Awards.

Best-picture favorites for Thursday morning's Oscar nominations include the history-based "Lincoln," ''Zero Dark Thirty," ''Les Miserables" and "Argo." Among other prospects are "Django Unchained" and "Life of Pi."

This year's nominations come earlier than usual in Hollywood's long awards season, leaving the awards picture a bit murkier. By the time Oscar nominations come out most years, the Golden Globes already have given their trophies, helping to sort out prospective front-runners for show business' biggest night.

The nominations this time precede the Golden Globes ceremony, which follows on Sunday.

Thursday's nominees will be announced at 8:40 a.m. EST by Emma Stone and Seth MacFarlane, the host of the Feb. 24 Oscar show.

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Americans Under 50 Fare Poorly on Health Measures, New Report Says

Younger Americans die earlier and live in poorer health than their counterparts in other developed countries, with far higher rates of death from guns, car accidents and drug addiction, according to a new analysis of health and longevity in the United States.

Researchers have known for some time that the United States fares poorly in comparison with other rich countries, a trend established in the 1980s. But most studies have focused on older ages, when the majority of people die.

The findings were stark. Deaths before age 50 accounted for about two-thirds of the difference in life expectancy between males in the United States and their counterparts in 16 other developed countries, and about one-third of the difference for females. The countries in the analysis included Canada, Japan, Australia, France, Germany and Spain.

The 378-page study by a panel of experts convened by the Institute of Medicine and the National Research Council is the first to systematically compare death rates and health measures for people of all ages, including American youths. It went further than other studies in documenting the full range of causes of death, from diseases to accidents to violence. It was based on a broad review of mortality and health studies and statistics.

The panel called the pattern of higher rates of disease and shorter lives “the U.S. health disadvantage,” and said it was responsible for dragging the country to the bottom in terms of life expectancy over the past 30 years. American men ranked last in life expectancy among the 17 countries in the study, and American women ranked second to last.

“Something fundamental is going wrong,” said Dr. Steven Woolf, chairman of the Department of Family Medicine at Virginia Commonwealth University, who led the panel. “This is not the product of a particular administration or political party. Something at the core is causing the U.S. to slip behind these other high-income countries. And it’s getting worse.”

Car accidents, gun violence and drug overdoses were major contributors to years of life lost by Americans before age 50.

The rate of firearm homicides was 20 times higher in the United States than in the other countries, according to the report, which cited a 2011 study of 23 countries. And though suicide rates were lower in the United States, firearm suicide rates were six times higher.

Sixty-nine percent of all American homicide deaths in 2007 involved firearms, compared with an average of 26 percent in other countries, the study said. “The bottom line is that we are not preventing damaging health behaviors,” said Samuel Preston, a demographer and sociologist at the University of Pennsylvania, who was on the panel. “You can blame that on public health officials, or on the health care system. No one understands where responsibility lies.”

Panelists were surprised at just how consistently Americans ended up at the bottom of the rankings. The United States had the second-highest death rate from the most common form of heart disease, the kind that causes heart attacks, and the second-highest death rate from lung disease, a legacy of high smoking rates in past decades. American adults also have the highest diabetes rates.

Youths fared no better. The United States has the highest infant mortality rate among these countries, and its young people have the highest rates of sexually transmitted diseases, teen pregnancy and deaths from car crashes. Americans lose more years of life before age 50 to alcohol and drug abuse than people in any of the other countries.

Americans also had the lowest probability over all of surviving to the age of 50. The report’s second chapter details health indicators for youths where the United States ranks near or at the bottom. There are so many that the list takes up four pages. Chronic diseases, including heart disease, also played a role for people under 50.

“We expected to see some bad news and some good news,” Dr. Woolf said. “But the U.S. ranked near and at the bottom in almost every heath indicator. That stunned us.”

There were bright spots. Death rates from cancers that can be detected with tests, like breast cancer, were lower in the United States. Adults had better control over their cholesterol and high blood pressure. And the very oldest Americans — above 75 — tended to outlive their counterparts.

The panel sought to explain the poor performance. It noted the United States has a highly fragmented health care system, with limited primary care resources and a large uninsured population. It has the highest rates of poverty among the countries studied.

Education also played a role. Americans who have not graduated from high school die from diabetes at three times the rate of those with some college, Dr. Woolf said. In the other countries, more generous social safety nets buffer families from the health consequences of poverty, the report said.

Still, even the people most likely to be healthy, like college-educated Americans and those with high incomes, fare worse on many health indicators.

The report also explored less conventional explanations. Could cultural factors like individualism and dislike of government interference play a role? Americans are less likely to wear seat belts and more likely to ride motorcycles without helmets.    

The United States is a bigger, more heterogeneous society with greater levels of economic inequality, and comparing its health outcomes to those in countries like Sweden or France may seem lopsided. But the panelists point out that this country spends more on health care than any other in the survey. And as recently as the 1950s, Americans scored better in life expectancy and disease than many of the other countries in the current study.

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Consumer bureau to unveil new mortgage standards

In sweeping new rules aimed at fixing the home lending market, the Consumer Financial Protection Bureau on Thursday will define a "qualified mortgage" — one a borrower can actually be expected to pay back — while in effect banning a slew of dicey loans at the center of the financial crisis.

The regulations, among the most important handed down yet by the 18-month-old agency, also aim to loosen the choking loan standards that have prevailed since the housing crash. They do so by limiting bankers' liability for prime loans that can be sold to government-backed mortgage giants such as Fannie Mae.

The rules, to be phased in over the coming year, aim to improve access for creditworthy borrowers to today's historically low-interest loans and to create a stable and predictable housing finance system for banks and their customers alike.

Complying with the rules would provide a "safe harbor" shielding lenders from being sued for one of the most frequent and bitter complaints of the subprime era: sticking borrowers with unaffordable loans, then selling off the loans — and the risk.

One leading consumer advocate said the bureau had gone too far out of its way to accommodate bankers, whose loose lending had triggered the foreclosure crisis and the worst economic collapse since the 1930s.

The bureau's action "invites abusive lending and erodes the progress made by Dodd-Frank," the landmark regulatory reform bill passed after the financial crisis, said Alys Cohen, an attorney with the National Consumer Law Center.

"The safe harbor the bureau has afforded for prime loans provides absolute shelter to lenders who knowingly make unaffordable loans, in direct violation of congressional intent," said Cohen, who was to appear at a home lending forum Thursday in Baltimore with bureau officials.

The safe harbor provision shields lenders only from lawsuits over borrowers' ability to pay. Consumers would still be able to pursue claims that lenders violated other laws, such as those governing deceptive advertising or wrongful foreclosures.

The rules met with relief from mortgage bankers, who had feared Draconian restrictions from the bureau, created by consumer advocate Elizabeth Warren. The former Harvard law professor, newly sworn in as a U.S. senator, was so at odds with the industry and congressional Republicans that President Obama backed away from appointing her to head the agency after tapping her to set it up.

"The goal of this regulation, ensuring that borrowers receive loans that they can repay, is in everyone's best interest. We cannot, and should not, go back to the high-risk lending environment of the early 2000s," Debra W. Still, chairwoman of the Mortgage Bankers Assn., said in a statement.

Consumer bureau Director Richard Cordray, who was scheduled to formally unveil the rules Thursday, said the aim was to achieve "the true essence of 'responsible lending.'"

"The American dream of homeownership was shaken to its foundations," Cordray said in prepared remarks. "But, in the wake of the financial crash, we have been experiencing a housing market that is tough on people in just the opposite way — credit is achingly tight."

The qualified mortgage rules rest on the principle of ability to pay, the goal Congress told the bureau to implement in the regulatory reform law passed after the financial crisis. Senior officials at the consumer agency briefed reporters on it Wednesday.

The rules notably limit a potential borrower's total payments, including those for property taxes, fire insurance and non-housing debt such as credit cards, to 43% of gross income.

During the housing boom, aggressive lenders had set the bar at 50% or higher for mortgage payments alone — disregarding other debt — and then allowed borrowers to qualify by merely stating their incomes, with no documentation.

The rules simultaneously aim to ban mainstream use of the riskiest practices of the housing bubble, such as loans made without checking tax returns and pay stubs; loans with payments so low that the loan balance rises instead of falls; and qualifying borrowers based on low "teaser" rates instead of fully adjusted payments.

Certain subprime loans to borrowers with credit problems could be qualified mortgages, but not the loosely underwritten loans that helped fuel the housing boom and bust.

Lenders would still have to determine that borrowers could afford to repay such loans, which would carry significantly higher interest rates than prime mortgages. They also could be challenged more easily in court — for instance, by borrowers claiming a lender gave them a loan that left them too little money to live on, even though their debt payments were only 43% of their incomes.

Lenders are expected to continue lending outside the guidelines in some cases. For example, jumbo mortgages — those too big for purchase by Fannie and Freddie — are often written to affluent borrowers who for a variety of reasons choose to pay interest only for a period of time. There's no reason that practice should stop, senior consumer bureau officials said.

Lenders will be given a year to phase in compliance with the new rules. Some question certain limits imposed by the regulations, such as limits of 3% on points and fees that borrowers could be charged upfront, and the 43% cap on total debt payments.

The 3% fee limit would be hard to meet in some cases, said the mortgage trade group's Still.

Laguna Beach mortgage broker Richard Cirelli said that the debt ratio could pose problems, especially in expensive real estate markets.

"Capping the debt limit at 43% is going to create some problems," Cirelli said. "Especially for first-time buyers in California. It's still pretty expensive here."

scott.reckard@latimes.com

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Judge rejects bid to shut Oakland pot dispensary

OAKLAND — The nation's largest medical marijuana dispensary won a round in federal court this week, with a judge rejecting efforts by Harborside Health Center's landlords in Oakland and San Jose to immediately shut down operations.

The property owners have been under pressure since federal prosecutors last summer threatened to seize the buildings, arguing that pot sales were in violation of federal law. But in her ruling, Chief Magistrate Judge Maria-Elena James said that "any argument about the urgency of stopping Harborside's activity rings hollow" — since the landlords had known for years that it was a medical cannabis dispensary.

Allowing Harborside to stay open while a fuller legal airing of the issues took place, James continued, would not cause the landlords irreparable harm.

In her ruling in U.S. District Court in San Francisco, James also found that the property owners had no legal standing to seek an immediate end to sales at the dispensary by contending they violated the federal Controlled Substances Act.

Harborside — which serves more than 108,000 patients — now will have the opportunity to battle the federal civil forfeiture actions in court.

"We look forward to proving our case in front of a jury, and continue to believe we will prevail," Harborside's executive director, Steve DeAngelo, said in a statement.

The city of Oakland also has sued to prevent the property forfeiture, contending that federal prosecutors had missed a five-year statute of limitations and misled city officials with promises that they would not go after dispensaries complying with state and local laws.

In her ruling, James ordered Oakland's case be coordinated with the forfeiture cases.

Monday's ruling sets the stage for what could be a precedent-setting battle over clashing federal and state marijuana laws.

Cedric Chao, an attorney for Oakland, has argued that closure of the dispensaries would deprive the city of tax revenue and force Harborside's patients into the underground market, driving up crime.

"The city of Oakland could not be more pleased" by James' ruling, Chao said. "The patients can continue to get the medicine. They won't be thrown in the streets. There won't be an immediate public health crisis. There won't be a public safety crisis."

The U.S. attorney's office repeatedly has declined to comment on the ongoing litigation. Prosecutors have filed a motion to toss Oakland's suit, contending the city has no legal standing to weigh in. That issue will be heard at a hearing on Jan. 31.

lee.romney@latimes.com

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