Ontario City Hall

This photo shows the Ontario City Hall.


A marijuana dispensary which has never been able to open its doors in Ontario is suing the city for $7.5 million, alleging a violation of civil rights.

The matter, which has been ongoing for the city since it first banned recreational and medical marijuana dispensaries in April of 2014, per state law, may finally make its way to court.

On Tuesday, the Ontario City Council, after discussing the matter in executive session, came back into open session to unanimously decide to hire legal representation.

“We voted to hire Miller Nash law firm to handle the Scott Inc appeal for no more than $380 per hour. In open session,” wrote Council President Dan Capron in a text after the meeting. “It was unanimous.”

Scott Matthews, 420Ville marijuana dispensary owner, and his wife, Diana, are named as the complainants.

The couple had hoped to open a medical marijuana dispensary in 2015 at a location in the 400 block of North Oregon Street that they have owned since 1994. The Matthews’ and the city did not see eye-to-eye then on whether they should have been grandfathered in per state law due to a residential buffer. The city had also previously stated that Matthews’ required land-use application was not processed in time for the city’s deadline of July 16, 2015, the day the council enacted the ban.

In May of 2016, rather than proceed to trial, Matthews signed a settlement agreement with the city of Ontario.

Per the agreement in 2016, Matthews was required to drop his lawsuit, remove his dispensary’s sign and accept a “nonconforming use” designation for his secondhand shop, located near the dispensary.

However, he is now appealing the case, and to date City Manager Adam Brown says it has cost the city over $20,000 to defend the case.

“And it will cost us more as he appeals the case,” Brown said, a process for which Portland-based Miller Nash will be representing the city.

“He had us fill out the Land Use Compatibility Statement (LUCS) which stated that the property was not zoned for a dispensary,” Brown wrote in an email last week. “Once the city denied it through a LUCS form, he contested the denial in court and the city prevailed after a lot of legal work.

However, he is now appealing that decision through the court of appeals, Brown confirmed.

What the complaint states

A complaint filed with the Malheur County Circuit Court in April of 2020 by Matthews alleges their “case is about what happens when people working in the administration of a small town decide they do not like a particular business owned by a particular person. … The last refuge for businesses and people, like the plaintiffs, to fend off such targeting by a small town like the Defendant is in the Courts.”

The complaint states the Matthews’ property on North Oregon Street has been primarily used for commercial retail since 1977, and continues to this day. They state that the property was rezoned in 1985 for heavy industrial use and that the city’s code allows retail use in those zones, including for structures operating as such prior to the zoning change.

“Therefore, the Matthews have a conditional use permit, by operation of the City’s zoning code, to operate a retail use on the Property,” reads the complaint.

In November 2018, after voters overturned the city’s ban on marijuana dispensaries, an ordinance was adopted imposing conditions and a number of restrictions on businesses.

Matthews’ complaint states that the 500-foot buffer for residential areas established in Ordinance 2747-2018 “specifically harms” them.

According to the complaint, Matthews attempted to obtain land use compatibility statements in July 2019 to begin the process of obtaining a license from the Oregon Liquor Control Commission.

The complaint states that while the Matthews have a conditional use permit to operate a retail store on the property, the city filled out the LUCS form “stating that the Matthews could not operate a retail cannabis dispensary on the property.”

The lawsuit states that other similarly situated property owners have not had conditional use rights taken from them by the city, alleging the Matthews “have been singled out for unequal treatment by the city because the Matthews have been outspoken opponents” of the city’s ban on related industries.

The complaint further alleges the actions by the city were “intentional, retaliatory and intended to cause harm to the Matthews and their rights.”

The Matthews own a recreational dispensary in Huntington.

Their name has also recently come up in Jackpot, Nevada, which is situated on the southern Idaho border. Marijuana is legal in Nevada. Several people in Jackpot are interested in opening a dispensary, including the owner of the Stateline Liquor Store. According to an article in the Elko Daily Free Press, Scott Matthews offered him “a chance to buy into that company to open one in Jackpot.”

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