Appeals court denies head shop owner’s request

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A Wisconsin appeals court on Monday shot down a Delavan head shop’s continued attempt to recover $110,000 worth of seized incense products that contained synthetic marijuana.

The Drug Enforcement Agency seized the 8,000 packages of incense from The Smoke Shack LLC in September 2012. The products contained LR-11 and UR-144, two synthetic cannabinoids that were not scheduled as an illegal substance at the time of the seizure. The shop’s owner, David Yarmo, consented to the search, thinking the incense did not contain any illegal substances, but was told by the DEA that he would have to “sue them” when he tried to get the packets back.

First, in a November 2012 petition, and then a federal lawsuit filed in July 2013 against the United States, The Smoke Shack sought the return of the property. But Attorney General Eric Holder criminalized the drugs on a temporary basis in May 2013. As a result, Eastern District of Wisconsin Judge Rudolph Randa threw out the motion and suggested The Smoke Shack refile its suit to recoup the losses from the seized property.

The Smoke Shack did so, claiming the DEA seized the store’s products with no legal grounds to do so. Randa threw that out as well, and The Smoke Shack appealed.

The 7th U.S. Circuit Court of Appeals upheld Randa’s decision Monday.

The Smoke Shop argued the DEA was confiscating the incense solely for forfeiture, and not for a pending criminal investigation.

But the opinion, authored by Judge Joel Flaum, noted that while the DEA didn’t have a search warrant, its agents took local police with them and served a grand jury subpoena six months after the search. No charges have been filed in federal court, however.

According to Flaum’s opinion, The Smoke Shack failed to file a claim with the DEA prior to filing suit.

John Markham, an attorney with Markham & Read, Boston, said he and his client are weighing whether to appeal to the U.S. Supreme Court. He said it’s important to highlight that while law enforcement is supported by the community, they “may go too far with their power.”

Matthew Krueger, an assistant U.S. attorney, referred questions to a department spokesman, who could not immediately be reached.

Yarmo was arrested in April on drug charges, but they were dropped last month. Markham said those charges were based on a search that happened after the one in question.

If his client ultimately prevails, Markham said, the government would have to pay the amount Yarmo would have made from the sale of the seized incense. Follow @eheisigWLJ