Two former Medford business owners are seeking $8.5 million in damages after their business license was revoked following a 2022 drug raid.

On Wednesday, their lawsuit was the subject of a hearing in U.S. District Court in Medford, where attorneys argued about whether the suit should be dismissed.

Kevin J. Jacoby, attorney for former RV Main owners Jonathan Quintero and Austen Letrick; Eric Mitton, attorney for the city of Medford and Medford police Sgt. Ben Lytle; and Johan Pietila, attorney for Jackson County sheriff’s Det. Ryan Groom, spoke by telephone before Magistrate Judge Mark D. Clarke to supplement written arguments.

Quintero and Letrick, owners of RV Main, filed their suit in September 2023 against the city of Medford, Jackson County and the two law enforcement officers who were part of the Illegal Marijuana Enforcement Team.

RV Main, which operated under the name ProPack & Ship, was located at 2728 W. Main St. in Medford. The business was a regular storefront, selling packaging and shipping supplies and providing shipping services. On a seasonal basis, ProPack & Ship would assist legal hemp growers with shipping their hemp.

Quintero and Letrick, who have not been criminally charged, shuttered ProPack & Ship on May 24, 2023, after the city of Medford revoked their business license due to the alleged “unlawful activity” occurring there that caused “an imminent threat to the life and property of customers at your business location,” according to a letter by then-city attorney Katie Zerkel that was cited in Quintero and Letrick’s complaint.

Zerkel was referring to a May 13, 2022, IMET raid in which authorities seized $1,191,970 in cash and 16 firearms suspected to be linked to proceeds from shipping illicit marijuana during search warrants served on the west Medford business and an east Medford home in the 2500 block of Tahitian Avenue, according to a news release issued at the time by the Jackson County Sheriff’s Office. The search warrants were served after law enforcement surveilled the business and conducted several undercover visits.

Quintero and Letrick, meanwhile, asserted in their complaint that no marijuana, related oils or drug buy/sell records were found by law enforcement and only items that are “consistent with a shipping and receiving business” were found.

Quintero and Letrick sued Lytle, Groom and their respective employers, demanding $8 million that the business lost for closing its doors and another half million for “mental anguish, humiliation, impairment of (Quintero’s and Letrick’s) reputation and out-of-pocket expenses,” their complaint states.

Pietila and Mitton responded in separate filings that the case should be dismissed — though Pietila said amending the complaint could be an alternative, while Mitton believed it could not.

Quintero and Letrick allege that Groom’s search warrant omitted certain details, including the legality or illegality of cannabis being shipped across state lines, as well as the ability of law enforcement to tell the difference between hemp and marijuana based on smell.

“The complaint alleges that Mr. Groom knew trained police dogs cannot distinguish between hemp and marijuana based on the smell alone. The distinction between (them) is a key distinction in this case because hemp can be legally shipped through a shipping service such as ProPack & Ship, while marijuana cannot,” Jacoby said in court. Had those facts “not been omitted, the circuit court likely would have sought some more information as to why … a search of the business premises would reveal … a crime.”

Judge Clarke disagreed.

“That really requires some speculation, doesn’t it?” the judge asked. 

Jacoby responded he did not believe it is speculation to believe circuit court would have denied the search warrant had it contained more facts. 

“The question is whether those facts are material to the determination of probable cause,” Jacoby said. “They truly are, because if it turned out that the cannabis … had test results that indicated it was under 0.3% (dry weight basis)” — i.e., the percentage of THC in a cannabis item after removing its moisture — “then it was not a crime. That is not evidence that can support a finding of probable cause.”

Clarke responded, “OK, I get your position.”

Mitton used his time during oral arguments to defend the city’s decision to revoke ProPack & Ship’s business license and question whether Quintero and Letrick “were the real parties involved.”

“We do have due process, and if you look at our case law, I think it’s fair due process for revocation of a business license,” Mitton said. 

The city attorney explained that, while Quintero appealed the business revocation to the city recorder, he paused the process afterwards to pursue public records requests and did not take the second step, which would be an appeal to City Council. 

Mitton also argued that ProPack & Ship is not a plaintiff in the complaint and that RV Main, which has ownership of the packing and shipping business, has dissolved. 

“So, then, you have these two individuals (Quintero and Letrick) … where there’s really no connection directly to the business license that was revoked,” Mitton said. “I don’t think we have the appropriate plaintiff for challenging ProPack & Ship’s business license.”

Jacoby responded that the city of Medford’s policies allow summary suspension, not revocation, of a business license.

“Summary revocation is not authorized by the code,” Jacoby said. 

He also said the city’s claim that Quintero and Letrick are not the plaintiffs “baffles me.”

“The city, in its May 20, 2022, letter to (Quintero), stated, ‘You hold this business license, and it’s suspended,'” Jacoby said. “At no point during the administrative (appeal) hearing that occurred did the city contend that Mr. Quintero was not a proper party — in fact, he was the only party that showed up to the hearing and requested (it).”

Clarke said at the conclusion of arguments that he would review case materials and issue a report and recommendation as soon as he could.

The judge’s recommendations could move the case forward to allow the attorneys to conduct discovery; order Quintero and Letrick to amend their complaint; or dismiss the case outright.