Gilroy City Council
June 1, 2026

June 1, 2026 | 5:00 PM Page 1 of 8 City Council
Regular Meeting

CITY COUNCIL

REGULAR MEETING
AGENDA

CITY COUNCIL CHAMBERS, CITY HALL
7351 ROSANNA STREET, GILROY, CA
95020

AMENDED AGENDA
Added items 7.8 and 7.9
Item 8.1 has been continued to the August 3rd
City Council Meeting and
added 2 closed session items
5:00 PM SPECIAL MEETING
6:00 PM REGULAR MEETING
MONDAY, JUNE 1, 2026 | 5:00 PM
MAYOR
Greg Bozzo

COUNCIL MEMBERS
Dion Bracco
Tom Cline
Terence Fugazzi
Zach Hilton
Carol Marques
Kelly Ramirez
CITY COUNCIL PACKET MATERIALS ARE AVAILABLE ONLINE AT www.cityofgilroy.org AGENDA CLOSING TIME IS 5:00 P.M. THE TUESDAY PRIOR TO THE MEETING

COMMENTS BY THE PUBLIC WILL BE TAKEN ON AGENDA ITEMS BEFORE ACTION IS TAKEN BY THE CITY COUNCIL. Public testimony is subject to reasonable regulations, including but not limited to time restrictions for each individual speaker. **Please limit your comments to 3 minutes.** The amount of time allowed per speaker may vary at the Mayor’s discretion depending on the number of speakers and length of the agenda.

Written comments on any agenda item may be emailed to the City Clerk’s Office at [email protected] or mailed to the Gilroy City Clerk’s Office at City Hall, 7351 Rosanna Street, Gilroy, CA 95020. Comments received by the City Clerk’s Office by 1 p.m. on the day of a Council meeting will be distributed to the City Council prior to or at the meeting and available for public inspection with the agenda packet located in the lobby of Administration at City Hall, 7351 Rosanna Street prior to the meeting. Any correspondence received will be incorporated into the meeting record. Items received after the 1 p.m. deadline will be provided to the City Council as soon as practicable. Written comments are also available on the City’s Public Records Portal at bit.ly/3NuS1IN.

In compliance with the Americans with Disabilities Act, the City will make reasonable arrangements to ensure accessibility to this meeting. If you need special assistance to participate in this meeting, please contact the City Clerk’s Office at least 72 hours prior to the meeting at (408) 846-0204 or [email protected] to help ensure that reasonable arrangements can be made.

If you challenge any planning or land use decision made at this meeting in court, you may be limited to raising only those issues you or someone else raised at the public hearing held at this meeting, or in written correspondence delivered to the City Council at, or prior to, the public hearing. Please take notice that the time

June 1, 2026 | 5:00 PM Page 2 of 8 City Council
Regular Meeting
within which to seek judicial review of any final administrative determination reached at this meeting is governed by Section 1094.6 of the California Code of Civil Procedure.

A Closed Session may be called during this meeting pursuant to Government Code Section 54956.9 (d)(2) if a point has been reached where, in the opinion of the legislative body of the City on the advice of its legal counsel, based on existing facts and circumstances, there is a significant exposure to litigation against the City.

Materials related to an item on this agenda submitted to the City Council after distribution of the agenda packet are available with the agenda packet on the City website at www.cityofgilroy.org subject to the Staff’s ability to post the documents before the meeting.

KNOW YOUR RIGHTS UNDER THE GILROY OPEN GOVERNMENT ORDINANCE Government's duty is to serve the public, reaching its decisions in full view of the public. Commissions, task forces, councils and other agencies of the City exist to conduct the people's business. This ordinance assures that deliberations are conducted before the people and that City operations are open to the people's review.

FOR MORE INFORMATION ON YOUR RIGHTS UNDER THE OPEN GOVERNMENT

ORDINANCE, TO RECEIVE A FREE COPY OF THE ORDINANCE OR TO REPORT A

VIOLATION OF THE ORDINANCE, CONTACT THE OPEN GOVERNMENT COMMISSION STAFF AT (408) 846-0204.

If you need assistance with translation and would like to speak during public comment, please contact the City Clerk a minimum of 72 hours prior to the meeting at 408-846-0204 or e-mail the City Clerk’s Office at [email protected].

Si necesita un intérprete durante la junta y gustaría dar un comentario público, comuníquese con el Secretario de la Ciudad un mínimo de 72 horas antes de la junta al 408- 846-0204 o envíe un correo electrónico a la Oficina del Secretario de la Ciudad a [email protected].

To access written translation during the meeting, please scan the QR Code or click this link:

Para acceder a la traducción durante la reunión, por favor escanee el código QR o haga clic en el enlace:
bit.ly/3FBiGA0
Choose Language and Click Attend | Seleccione su lenguaje y haga clic en asistir
Use a headset on your phone for audio or read the transcript on your device.

Use sus auriculares para escuchar el audio o leer la transcripción en el dispositivo.

1. SPECIAL MEETING - 5:00 PM

1.1. Call to Order

June 1, 2026 | 5:00 PM Page 3 of 8 City Council
Regular Meeting

1.2. Roll Call

1.3. Appeal Hearing of the Final Decision in the Matter of the Administrative Hearing regarding Business License and Tobacco Retailer's Permit Issued to Account No. 16606725 - The Rock Zone, located at 1323 First Street, Gilroy, California

2. OPPORTUNITY FOR PUBLIC COMMENT
The agenda for this regular meeting is outlined as follows:

3. REGULAR MEETING- 6:00 PM

3.1. Call to Order

3.2. Roll Call

3.3. City Clerk's Report on Posting the Agenda

3.4. Pledge of Allegiance

3.5. Invocation

3.6. Orders of the Day

3.7. Employee Introductions

4. PRESENTATIONS TO THE COUNCIL

4.1. PUBLIC COMMENT BY MEMBERS OF THE PUBLIC ON ITEMS NOT ON THE

AGENDA BUT WITHIN THE SUBJECT MATTER JURISDICTION OF THE CITY

COUNCIL
This portion of the meeting is reserved for persons desiring to address the Council on matters within the Gilroy City Council’s jurisdiction but not on the agenda. Persons wishing to address the Council are requested to complete a Speaker’s Card located at the entrances and handed to the City Clerk. Speakers are limited to 1 to 3 minutes each, varying at the Mayor’s discretion depending on the number of speakers and length of the agenda. The law does not permit Council action or extended discussion of any item not on the agenda except under special circumstances. If Council action is requested, the Council may place the matter on a future agenda.

Written comments to address the Council on matters not on this agenda may be e-mailed to the City Clerk’s Office at [email protected] or mailed to the Gilroy City Clerk’s Office at City Hall, 7351 Rosanna Street, Gilroy, CA 95020. Comments received by the City Clerk’s Office by 1:00 pm on the day of a Council meeting will be distributed to the City Council prior to or at the meeting and available for public inspection with the agenda packet located in the lobby of Administration at City Hall, 7351 Rosanna Street, prior to the meeting. Any correspondence received will be incorporated into the meeting record. Items received after the 1:00pm deadline will be provided to the City Council as soon as practicable. Written material provided by public members under this section

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Regular Meeting
of the agenda will be limited to 10 pages in hard copy. An unlimited amount of material may be provided electronically.

5. REPORTS OF COUNCIL MEMBERS
Council Member Bracco – Downtown Committee, Santa Clara County Library Joint Powers Authority, Santa Clara Water Commission, Santa Clara Valley Water Joint Water Resources Committee, SCRWA
Council Member Fugazzi – Santa Clara Water Commission (alternate), Silicon Valley Regional Interoperability Authority Board (alternate), SCRWA, Visit Gilroy California Welcome Center, VTA Mobility Partnership Committee
Council Member Marques – ABAG, Downtown Committee, Santa Clara County Library Joint Powers Authority (alternate), Santa Clara Valley Habitat Agency Governing Board, Santa Clara Valley Habitat Agency Implementation Board, SCRWA (alternate) Council Member Hilton – CalTrain Policy Group, Santa Clara County Expressway Plan 2040 Advisory Board (alternate), Silicon Valley Clean Energy Authority JPA Board, South County Youth Task Force Policy Team, VTA Policy Advisory Committee Council Member Ramirez – ABAG (alternate), Gilroy Gardens Board of Directors (alternate), Gilroy Sister Cities, Gilroy Youth Task Force (alternate), SCRWA, Santa Clara Housing and Community Development Advisory Committee
Council Member Cline – CalTrain Policy Group (alternate), Gilroy Sister Cities (alternate), Gilroy Youth Task Force, Santa Clara County Expressway Plan 2040 Advisory Board, Silicon Valley Clean Energy Authority JPA Board (alternate), Silicon Valley Regional Interoperability Authority Board, Visit Gilroy California Welcome Center (alternate), VTA Mobility Partnership Committee, VTA Policy Advisory Committee (alternate)
Mayor Bozzo – Gilroy Gardens Board of Directors, Santa Clara Valley Water Joint Water Resources Committee, South County Youth Task Force Policy Team, VTA Board of Directors (alternate), Santa Clara Housing and Community Development Advisory Committee (alternate)

6. BOARD AND COMMISSION INTERVIEWS

6.1. Interviews for Open Seats on the Youth Commission with Future Appointment on June 15, 2026

7. CONSENT CALENDAR
All matters listed under the Consent Calendar are considered by the City Council to be routine and will be enacted by one motion. There will be no separate discussion of these items unless a request is made by a member of the City Council or a member of the public.

Any person desiring to speak on any item on the consent calendar should ask to have that item removed from the consent calendar prior to the time the City Council votes to approve. If removed, the item will be discussed in the order in which it appears.

June 1, 2026 | 5:00 PM Page 5 of 8 City Council
Regular Meeting

7.1. Approve the May 18, 2026 City Council Regular Meeting Minutes

7.2. Contract Amendment with Jensen Landscape Services, Inc. under the Existing Multi-Year Agreement (Year 2 of 3) for a One-Time Landscaping Scope, Enhancements, and Weed Abatement Services, establishing a Revised Year Two Not-to-Exceed Amount of $1,189,295

7.3. Claim of Saileel Vijaykar (The City Administrator recommends a "yes" vote under the Consent Calendar shall constitute denial of the claim)

7.4. Claim of Lisa & Joel Neilsen (The City Administrator recommends a "yes" vote under the Consent Calendar shall constitute denial of the claim)

7.5. Claim of Rebecca Beyer (The City Administrator recommends a "yes" vote under the Consent Calendar shall constitute denial of the claim)

7.6. Consent to the Assignment of the Carry the Vision Opioid Remediation Services Agreement to PitStop Outreach

7.7. Consent the Appointment of Arts and Culture Commissioner to Fill the Remainder of a Term Ending 12/31/2027

7.8. Consent the City Administrator's Recommendation to Appoint Michael O'Connell to the Department Head Position of Interim Utilities Director

7.9. Adopt a Resolution Opposing the Development of a Federal Detention Facility in South Santa Clara County

8. PUBLIC HEARINGS

8.1. Public Hearing on Downtown Gilroy Street Banner Policy and Program Guidelines and Fee Schedule Amendment

1. Staff Report:

John Doughty, Public Works Director

2. Public Comment

3. Recommended Action:

This public hearing has been continued to the August 3, 2026 Regular City Council meeting.

8.2. Introduction and First Reading of an Ordinance Amending Chapter 30, Article II and XIX of the Gilroy City Code, Relating to Tobacco Retailers and Smoke Shops

1. Disclosure of Ex-Parte Communications

2. Staff Report:

Sharon Goei, Community Development Director

3. Open Public Hearing

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Regular Meeting

4. Close Public Hearing

5. Recommended Action:

1. Determine the proposed ordinance is statutorily exempt from the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines Section 15061 (b)(3) for the adoption of an ordinance relating to tobacco retailers and smoke shops;

2. Motion to read the ordinance by title only and waive further reading of the ordinance; and

3. Introduce an ordinance amending Chapter 30, Article II and XIX of the Gilroy City Code, relating to tobacco retailers and smoke shops.

9. UNFINISHED BUSINESS

9.1. Council Direction on a Draft Ordinance Amending Chapter 13 of the Gilroy City Code Relating to Tobacco Retailer Permits

1. Staff Report:

Sharon Goei, Community Development Director

2. Public Comment

3. Recommended Action:

Council provide direction on any changes to the draft ordinance.

9.2. Receive an Update and Provide Direction on Campaign Finance Laws, including Contribution Limits and Voluntary Expenditure Limits

1. Staff Report:

Harjot Sangha, Assistant City Administrator

2. Public Comment

3. Recommended Action:

Receive the report, discuss the policy considerations related to campaign finance regulations, and provide direction, if any.

9.3. Council Discussion and Adoption of a Resolution of the City Council of the City of Gilroy Placing a Ballot Measure Proposal to Add a 0.25% Dedicated Public Safety Special Transactions and Use Tax at the November 3, 2026, General Municipal Elections

1. Staff Report:

Harjot Sangha, Assistant City Administrator

2. Public Comment

3. Recommended Action:

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Regular Meeting

1. Council discussion and consideration of placing a public safety dedicated special transaction and use tax for the November 3, 2026, statewide general election.

2. If Council wishes to proceed with the public safety dedicated special transactions and use tax, adopt a resolution of the City Council of the City of Gilroy submitting to the qualified electors of the City of Gilroy, at the November 3, 2026, general municipal election previously called by Resolution No. 2026-29, a ballot measure to add Article V, sections 22.33 through and including 22.48 to Chapter 22 of the Gilroy City Code imposing a 0.25% (one-quarter of one percent) public safety special transactions and use tax; and

3. Council review and provide additional direction regarding the draft Public Safety Special Transactions and Use Tax Implementation Plan.

10. INTRODUCTION OF NEW BUSINESS

10.1. Consider Re-opening Wayland and Hanna Parking Lots at Las Animas Veterans Park

1. Staff Report:

John Doughty, Public Works Director

2. Public Comment

3. Recommended Action:

Receive the report, consider community input and provide direction on whether to initiate trial re-opening of Wayland Lane Parking Lot and/or Hanna Street Parking Lot at Las Animas Veterans Park.

11. CITY ADMINISTRATOR'S REPORTS

12. CITY ATTORNEY'S REPORTS

13. CLOSED SESSION

13.1. CONFERENCE WITH LABOR NEGOTIATORS - COLLECTIVE BARGAINING UNITS Pursuant to GC Section 54957.6 and GCC Section 17 A.11 (4) Collective Bargaining Units: AFSCME Local 101 (General & Supervisory Units) Representing Employees Affiliated with AFSCME, Local 101; Local 2805, IAFF Fire Unit Representing Gilroy Firefighters
City Negotiators: Matt Morley, City Administrator; LeeAnn McPhillips, Human Resources Director/Risk Manager
Anticipated lssues(s) Under Negotiation: Wages, Hours, Benefits, Working Conditions; Memorandums of Understanding: City of Gilroy and Gilroy Fire

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Regular Meeting
Fighters Local 2805, City of Gilroy and AFSCME, Local 101 General & Supervisory Units

13.2. Public Employee Appointment/Employment Pursuant to Government Code Section 54957 and Gilroy City Code Section 17A.11(2)
Name/Title: Human Resources Director/Risk Manager

13.3. Public Employee Appointment/Employment Pursuant to Government Code Section 54957 and Gilroy City Code Section 17A.11(2)
Name/Title: Utilities Director

14. ADJOURN TO OPEN SESSION
Report of any action taken in Closed Session and vote or abstention of each Council Member if required by Government Code Section 54957.1 and GCC Section 17A.13(b); Public Report of the vote to continue in closed session if required under GCC Section 17A.11(5).

15. ADJOURNMENT

1.3. City of Gilroy

STAFF REPORT
Agenda Item Title: Appeal Hearing of the Final Decision in the Matter of the Administrative Hearing regarding Business License and
Tobacco Retailer's Permit Issued to Account No. 16606725 - The Rock Zone, located at 1323 First Street, Gilroy, California Meeting Date: June 1, 2026
From: Matt Morley, City Administrator
Department: Administration
Submitted by: Kim Mancera, City Clerk
Prepared by: Harjot Sangha, Assistant City Administrator STRATEGIC PLAN GOALS:

RECOMMENDATION
City Council conducts the Appeal Hearing pursuant to Resolution 97-17 in the following order of proceedings:

1. Mayor's introduction of the Item.

2. The City Attorney's explanation of the City of Gilroy City Code and the resolution governing this Appeal hearing and the process to be followed.

3. Public Comment.

4. Opening Argument by Appellant, The Rock Zone — 10 minutes

5. Opening Argument by Respondent, City Staff — 10 minutes

6. Rebuttal Argument by Appellant, The Rock Zone — 5 minutes

7. Rebuttal Argument by Respondent, City Staff — 5 minutes

8. City Council Deliberation.

9. Possible Action:
i. Deny the Appeal. This action upholds the Decision of the Administrative Hearing Officer to Modify Business License No. 16606725 and Tobacco Retailer’s Permit for Account No.
16606725 issued to The Rock Zone. A Resolution of the City Council, making certain findings, is attached.

1.3. ii. Grant the Appeal. This action overturns the Decision by the Administrative Hearing Officer to Modify Business License No. 16606725 and Tobacco Retailer’s Permit for Account No.
16606725 issued to The Rock Zone. Appropriate action is a motion to continue the matter to a date certain to bring back the final Resolution Granting Appeal of The Rock Zone and overturning the Decision by the Administrative Hearing Officer to Modify Business License No. 16606725 and Tobacco Retailer’s Permit for Account No. 16606725 issued to The Rock Zone.
iii. Modify Business License No. 16606725 and Tobacco Retailer’s Permit for Account No. 16606725. This action requires a Resolution of the City Council, making certain findings, to be adopted. The appropriate action is a motion to continue the matter to a date certain to bring back the final Resolution Modifying the Decision of the Administrative Hearing Officer to Modify Business License No. 16606725 and Tobacco Retailer’s Permit for Account No. 16606725 issued to The Rock Zone.

10.Continuation to a date certain, if necessary, for adoption of the modified/final resolution.

EXECUTIVE SUMMARY
On March 3, 2026, the City initiated administrative proceedings pursuant to Gilroy City Code Section 13.45 following multiple Police Department enforcement actions involving alleged illegal tobacco products, flavored tobacco products, controlled substances, and related business operations at The Rock Zone located at 1323 First Street. The matter was heard before independent Administrative Hearing Officer Alan Seltzer pursuant to Resolution No. 97-17 over multiple hearing dates after a continuance requested by the business owner’s attorney.

Following the evidentiary hearing, the Hearing Officer issued a written Administrative Decision dated April 28, 2026. On May 12, 2026, the business owner timely appealed the Hearing Officer’s decision to the City Council pursuant to Resolution No. 97-17 (enclosed within Attachment 1).

The City Council’s role is appellate in nature and is limited to review of the administrative record and oral and written argument submitted by the parties.

BACKGROUND
Gilroy City Code Section 13.45 (enclosed within Attachment 1) authorizes the City to revoke, suspend, or modify a business license when the Chief of Police determines that

1.3. a licensee or business operation violates City code provisions or other applicable laws, or operates in a manner detrimental to public welfare.

Resolution No. 97-17 establishes the City’s administrative hearing procedures and authorizes the appointment of a Hearing Officer to conduct administrative hearings and issue decisions.

On January 23, 2026, Interim Chief of Police Scot Smithee submitted a memorandum recommending initiation of business license revocation proceedings for The Rock Zone based upon multiple enforcement actions and alleged violations involving tobacco products and controlled substances.

On March 3, 2026, the City issued a Notice for Administrative Hearing regarding Business License No. 16606725 for The Rock Zone.

The matter was assigned to independent Administrative Hearing Officer Alan Seltzer.

ANALYSIS
Chronology of Events
• November 15, 2024: Gilroy Police Department conducted an undercover operation at The Rock Zone during which officers allegedly purchased flavored nicotine products, and a mushroom product later confirmed to contain psilocybin. • March 6, 2025: Gilroy Police Department and California Department of Tax and Fee Administration (CDTFA) executed a search warrant at the business, resulting in the seizure of alleged illegal tobacco and psilocybin (mushroom) products.
• January 8, 2026: Gilroy Police Department and Code Enforcement conducted a compliance inspection during which approximately 306 tobacco-related items were seized.
• January 23, 2026: Police Chief recommended that the City proceed with a business license revocation process for The Rock Zone. (enclosed within Attachment 1)
• March 3, 2026: The City issued the Notice for Administrative Hearing pursuant to GMC Section 13.45. (Attachment 1)
• March 11, 2026: A prehearing order was issued by the Hearing Officer to allow parties to submit relevant documents for the hearing. (Attachment 2) • March 17, 2026: Counsel, Steve M. Defilippis of Picone & Defilippis, for The Rock Zone, requested a continuance to prepare for the hearing. The City agreed to this request. (Attachment 3)
• March 18, 2026: The Hearing Officer granted the continuance and rescheduled the hearing to April 3, 2026. (Attachment 4)

1.3. • April 1, 2026: A pre-hearing conference was conducted regarding requests for a stay and continuance associated with related criminal proceedings. (Attachment 14 – transcript)
• April 2, 2026: A March 30, 2026, email from Steve Defilippis, Attorney of Respondent, and a corresponding response from Hearing Officer Alan Seltzer addressing the points raised regarding the release of police reports pending the conclusion of a related criminal case. (Attachment 5)
• April 3, 2026: The administrative hearing commenced before the Hearing Officer.

Police Department personnel testified regarding enforcement operations, inspections, seized products, and related investigations. The Hearing Officer heard arguments from Mr. Defilippis regarding his request for the stay and continuance. The Hearing Officer declined to rule on the request for a stay before the City had an opportunity to present evidence establishing a prima facie case that a violation warranting relief under GCC Section 13.45 had occurred.(Attachment 15 – transcript)
• April 6, 2026: The Hearing Officer issued an Administrative Order denying the respondent’s request for a stay and continuing the hearing to April 17, 2026. (Attachment 6)
• April 17, 2026: The hearing resumed, and additional testimony and documentary evidence were presented regarding Tobacco Retailer Permit status, seized products, and California flavored tobacco law exemptions. (Attachment 16 – transcript)
• April 28, 2026: Hearing Officer Alan Seltzer issued a written Administrative Decision. (Attachment 7, Exhibits considered in the Decision are enclosed within and referenced as corresponding Exhibit)
• May 7, 2026: Respondent’s attorney submitted a request for reconsideration of the Hearing Officer’s decision and penalty. (Attachment 8) • May 8, 2026: The Hearing Officer denied reconsideration and advised that the respondent’s remedy was an appeal to the City Council pursuant to Resolution No. 97-17. (Attachment 9)
• May 12, 2026: Respondent’s attorney formally appealed the Hearing Officer’s decision to the City Council. (Attachment 10)
• May 18, 2026: City Clerk issued notice of Administrative Appeal Hearing, setting June 1, 2026, at 5:00 p.m., as the date and time for the Appeal Hearing before the City Council. (Attachment 11)
Appeal Issues Raised by Appellant
The appeal (Attachment 8) submitted by the appellant took exceptions to the following matters as stated in the April 28, 2026, decision of the Hearing Officer (summarized):

1. The City failed to establish that all seized products were unlawful;

2. The Hearing Officer improperly relied upon generalized officer testimony;

3. Certain products allegedly qualified for exemptions under California law; and

4. The imposed penalties are excessive and financially burdensome.

1.3. The Hearing Officer addressed these issues within the written Administrative Decision and related procedural orders.

City Attorney has prepared three memorandums for the City Council related to this Appeal Hearing:
• A memorandum outlining a summary of The Rock Zone appeal, which contains a chronology of events and addresses each of the exceptions taken by The Rock Zone. (Attachment 12 - Exhibit 1).
• A memorandum containing the Order of Proceedings for the Appeal Hearing, which is also outlined in the Recommendations section of this staff report. (Attachment 12 – Exhibit 2)
• A memorandum outlining the Actions required by the City Council on such an Appeal Hearing and substantial evidence. (Attachment 12 – Exhibit 3).

Council Appeal Process and Standard of Review
The appeal hearing is conducted pursuant to Resolution No. 97-17. Under the Resolution, the Hearing Officer conducts the evidentiary hearing and issues a written decision. The City Council functions in an appellate capacity, with its review confined to the administrative record and oral and written argument submitted by the parties.

Section VII of Resolution No. 97-17 provides that:
“Upon consideration of the entire record of the hearing, including the Hearing Officer’s decision and the exceptions and written argument that were filed with the City Clerk, the City Council may adopt the Hearing Officer’s decision in its entirety, or the decision may be rejected or modified.” Accordingly, the City Council’s role is not to conduct a new evidentiary hearing or retry the matter, but rather to evaluate the administrative record developed before the Hearing Officer and determine whether the decision should be upheld, modified, or overturned. Attachment 7, and related Exhibits 1 through 11, are core to the Hearing Officer’s decision, encompassing evidence considered, a summary of testimonies, the Hearing Officer’s analysis, findings of fact, and conclusions of law. All other attachments are relevant to the administrative hearing process and chronology of events.

In evaluating the appeal, the City Council should determine whether substantial evidence exists in the administrative record to support the Hearing Officer’s findings and decision. “Substantial evidence” means evidence that reasonably supports the decision reached. It does not require undisputed evidence or that the evidence supporting the decision outweighs all contrary evidence.

Council Options
Pursuant to Resolution No. 97-17 and the City Attorney’s procedural memorandum (see separate attachment), the City Council has the following options:

1.3. 1. Deny the Appeal. This action upholds the Decision of the Administrative Hearing Officer to Modify Business License No. 16606725 and Tobacco Retailer’s Permit for Account No. 16606725 issued to The Rock Zone. A Resolution of the City Council, making certain findings, is attached (Attachment 13).

2. Grant the Appeal. This action overturns the Decision by the Administrative Hearing Officer to modify Business License No. 16606725 and Tobacco Retailer’s Permit for Account No. 16606725 issued to The Rock Zone.

Appropriate action is a motion to continue the matter to a date certain to bring back the final Resolution Granting Appeal of The Rock Zone and overturning the Decision by the Administrative Hearing Officer to Modify Business License No. 16606725 and Tobacco Retailer’s Permit for Account No. 16606725 issued to The Rock Zone.

3. Modify Business License No. 16606725 and Tobacco Retailer’s Permit for Account No. 16606725. This action requires a Resolution of the City Council, making certain findings, to be adopted. The appropriate action is a motion to continue the matter to a date certain to bring back the final Resolution Modifying the Decision of the Administrative Hearing Officer to Modify Business License No. 16606725 and Tobacco Retailer’s Permit for Account No. 16606725 issued to The Rock Zone.

ALTERNATIVES
Council’s options are outlined above in the Analysis Section.

FISCAL IMPACT/FUNDING SOURCE
There is no direct fiscal impact from considering the appeal beyond the existing administrative, enforcement, and legal costs of the proceedings.

NEXT STEPS
Pending Council deliberation and decision, staff will carry out the directive and/or return to Council with modified resolutions, if necessary.

Attachments:
• Attachment 1 through 11 – Related to the Administrative Hearing Process to date, as referenced within the staff report.
• Attachment 12 – (Exhibits 1 through 3) City Attorney Memorandums to Council • Attachment 13 – Resolution Upholding Hearing Officer’s Decision

1.3. • Attachment 14 through 16 – Transcripts of the Hearings on April 1, 2026; April 3, 2026; and April 17, 2026, respectively.

March 3, 2026
Adel Ammari
The Rock Zone
1323 1st Street
Gilroy, CA 95020
Subject: Administrative Hearing Notice and Notice of Violation – The Rock Zone Dear Mr. Ammari:

Enclosed please find a packet of materials pertaining to The Rock Zone, located at 1323 1st Street, Gilroy, California.

The packet includes:

1. Notice of Administrative Hearing Regarding Business License No. 16606725, scheduled for March 19, 2026, at 9:00 a.m., to be conducted via telephone and/or Zoom, concerning a recommendation to revoke the business license pursuant to Gilroy City Code Section 13.45. The packet also includes:
o A copy of the Chief of Police’s Memorandum dated January 23, 2026, outlining the basis for the recommendation.
o Relevant excerpts of Gilroy City Code Sections 13.2, 13.4, and 13.45; and o A copy of the City’s Administrative Hearing Policy (Resolution No. 97-17).

2. Notice of Violation (Case No. CE26-0010) issued by the Community Development Department’s Code Enforcement Division, dated March 3, 2026, regarding unpermitted construction identified during an inspection conducted on January 8, 2026. The Notice details applicable code sections and required corrective actions, including submission of a demolition permit application by March 19, 2026.

Please review all enclosed materials carefully. If you have questions regarding the administrative hearing, please feel free to contact me. Questions regarding the Notice of Violation should be directed to the Community Development Department as indicated in the notice.

Sincerely,
Harjot Sangha
Finance Director
Phone: 408-846-0294 | Email: [email protected] CC: Property Owner
City of Gilroy
7351 Rosanna Street
Gilroy, California
95020-6197
Finance Department
Telephone (408) 846-0420
[email protected]
http://www.cityofgilroy.org

13.2 Required; compliance with chapter.

The carrying on of any business, trade, calling, profession, or occupation without first having procured a license from the city so to do, or without complying with any and all regulations of such business, trade, calling, profession, or occupation, shall be deemed a separate violation of this chapter for each and every day that such business, trade, calling, profession, or occupation is carried on. (Ord. No. 646, § 2; Ord. No. 91-4, § 2, 3-4-91) The Gilroy City Code is current through Ordinance 2025-11, passed December 8, 2025.

Gilroy City Code 13.2 Required; compliance with chapter. Page 1 of 3

13.4 Separate license required for each branch of a fixed place of business; required for each type of business transacted at same location; exemption. (a) A separate license must be obtained for each branch or location of a fixed place of business transacted and carried on, and for each separate type of business at the same location, and each license shall authorize the licensee to transact and carry on only the business licensed thereby at the location or in the manner designated in such license; provided, the warehouses and distributing plants used in connection with and identical to a business licensed under the provisions of this chapter shall not be deemed to be separate places of business or branch establishments. Every person engaging in a business at a fixed place of business in the city, as herein defined, and who has procured a license therefor, shall have the right to deliver the goods, wares or merchandise for which such license was issued, at any place in the city, without procuring any additional license therefor.
(b) Every person engaging in any transient business in the city, as herein defined, and who has procured a license therefor, shall have the right to sell the goods, wares or merchandise or engage in the business for which such transient license was issued at a fixed place of business without procuring any additional license therefor.
(c) In the issuance of transient licenses and licenses for fixed places of business, no discrimination or distinction shall ever be made against nonresidents of the city in favor of residents of the city, and residents and nonresidents of the city shall be entitled to equal rights in all matters relating to the issuances of licenses. (Ord. No. 646, § 4; Ord. No. 91-4, § 4, 3-4-91) The Gilroy City Code is current through Ordinance 2025-11, passed December 8, 2025.

Gilroy City Code 13.4 Separate license required for each branch of a fixed place of business; required for each type of business transacted at same location; exemption.

13.45 Revocation or suspension; violation; notice; hearing.

In the event that the chief of police has reasonable cause to believe and does believe that any licensee or other person employed by or representing such licensee is violating any of the provisions of this chapter or any other law or ordinance relating to the business of the licensee, or is conducting or has conducted or operated such business so as to be detrimental to the public morals or the public welfare, all facts and information relating to such alleged violation or conduct shall be reported to the city administrator. Prior to taking action affecting the license, the City Administrator, at his sole discretion, shall elect to proceed according to either subsection (1) or subsection (2) below.
(1) A hearing shall be set for a regular or special meeting of the city council, and the licensee shall be given at least ten (10) days written notice by registered or certified mail of the substance of the alleged violation and the date of said hearing. The city council shall hear and receive evidence, written and oral, upon all issues involved, and shall have the power to revoke, modify or suspend such license. The decision of the city council shall be final and binding upon all parties. (2) The matter shall be set for an administrative hearing to revoke, modify, or suspend the license pursuant to the city’s administrative hearing policy, if such a policy has been adopted by the city council. (Ord. No. 823, § 1, 7-1-68; Ord. No. 99-24, § I, 12-20-99; Ord. No. 2002-02, § I, 1-3-00) The Gilroy City Code is current through Ordinance 2025-11, passed December 8, 2025.

Gilroy City Code 13.45 Revocation or suspension; violation; notice; hearing. Page 3 of 3

Case #: CE26-0010
March 3, 2026

PROPERTY OWNER/AGENT OF SERVICE

JOSE NUNEZ

WRR CA PROPERTIES LLC
84 W SANTA CLARA ST, STE 770
SAN JOSE, CA 95113
Subject: NOTICE OF VIOLATION – Unpermitted Construction Property Address: 1323 First St. APN: 790-43-017
Dear Property Owner,
On January 8, 2026, the Community Development Department’s Code Enforcement Division conducted an inspection of the subject property located at 1323 First Street. Unpermitted construction was identified during the inspection.

As a result, you are being issued this Notice of Violation that details the violations and corrective actions required.

Violations
GCC Section 1.7 – General Penalty; Continuing Violations Any person, firm or corporation, whether, as principal, agent, employee or otherwise, who violates any of the provisions of this Code or who fails to comply with any of the mandatory requirements of this Code is guilty of an infraction, and upon conviction thereof, shall be punished as set forth below. Except as otherwise provided, every such person shall be guilty of a separate offense for each and every day during any portion of which any violation is committed, continued or permitted by such person, and shall be punishable accordingly. Any violation of this title or of the codes incorporated thereunder, following three (3) prior convictions therefor, shall constitute a misdemeanor. 2025 California Building Code
[A] 105.1 Required
Any owner or owner’s authorized agent who intends to construct, enlarge, alter, repair, move, demolish or change the occupancy of a building or structure, or to erect, install, enlarge, alter, repair, remove, convert or replace any electrical, gas, mechanical or plumbing system, the installation of which is regulated by this code, or to cause any such work to be performed, shall first make application to the building official and obtain the required permit.
[A] 114.1 Unlawful Acts
It shall be unlawful for any person, firm or corporation to erect, construct, alter, extend, repair, move, City of Gilroy
7351 Rosanna Street
Gilroy, California
95020
http://www.cityofgilroy.org

remove, demolish or occupy any building, structure or equipment regulated by this code, or cause same to be done, in conflict with or in violation of any of the provisions of this code.

Order to Correct Violations

1. On or before March 19, 2026, submit an application for a demolition permit to the Community Development Department Building Division to remove the unpermitted construction inside the business. Contact the Building Division (408) 846-0437 for further information.

If the corrective actions are not completed by the compliance date, the City of Gilroy may pursue additional enforcement actions available to the City, including issuing administrative penalties or recording a lien against the subject property.

If you have any questions, please contact Community Development Director Sharon Goei at 408-846- 0467 or [email protected].

Sincerely,
Sharon Goei
Community Development Director
City of Gilroy

RESOLUTION NO. 97-
17 A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF GILROY ADOPTING A MUNICIPAL

ADMINISTRATIVE HEARING
POLICY WHEREAS, the Gilroy Municipal Code requires permits or licenses for persons engaged in various activities including, but not limited to, peddling or soliciting or vending;
operating dances, dance halls, barrooms, adult businesses, cardrooms or food establishments; keeping animals and fowl; conducting bingo games; holding large meetings or parades;
and WHEREAS, the Gilroy Municipal Code may require
an administrative hearing prior to denying, suspending, or revoking the above described permits or licenses;
and WHEREAS, administrative hearings may also be
required prior to the exercise of certain municipal authority powers, such as to abate a nuisance;
and WHEREAS, the Gilroy Municipal Code does not
provide express administrati ve hearing procedures for each of the administrative hearings necessary for the City' sorderly operation and regulation;
and WHEREAS, the City Administrator recormnends that a
City policy be adopted to govern administrative hearings in the City;
and WHEREAS, policies of the City may be adopted
by resolution or formal motion of the City Council;
and WHEREAS, it is the intent of the City Council to adopt a
municipal administrative hearing policy that provides a meaningful opportuni ty to be heard and that maintains an informal hearing process that may be utilized by City officials acting as hearing officers in the absence of other express hearing requirements; andRPJ\ 333146.
01 71- 022104706002 1- RESOLUTION

WHEREAS, the City Council considers and finds that
significant public and private interests are served by establishing an informal, efficient and readily accessible public hearing process that is neither technical nor cumbersome.

NOW, THEREFORE, BE IT RESOLVED THAT the following
administrative hearing procedures are adopted as a matter of City policy, which procedures should be complied whenever there is no alternative procedure provided by the Gilroy Municipal Code, whenever the City conducts administrative hearings such as are aforementioned.

SECTION 1 - NOTICE Notice
of the date, time and location of any administrative hearing shall be given to the applicant, appellant, owner or operator as the case may be ( hereafter " Applicant") by mail at least ten days prior to the hearing, which mail shall be addressed to the Applicant' s most recent address on file with the City. If the hearing regards apermit, license, or application, notice shall be mailed to the applicant/ appellant's address shown on the face of that document. The notice may enclose acopy of this Resolution and a statement that the hearing will proceed pursuant to the provisions contained herein. SECTION
II - HEARING OFFICER The City
Administrator may serve as a Hearing Officer, or may designate any other person, including but notlimited to other City officials or employees, to be a Hearing Officer. To maintain
an efficient and fair hearing, the Hearing Officer may set time limits or implement other rules of procedure, provided that a meaningful opportunity tobeheard is preserved. RPJ\ 333146. 2-
0171- 022104706002 RESOLUTION NO. 97- 17

SECTION III - RECORD OF HEARING The
City shall be responsible for making a record of the hearing either by audio or video tape. The Hearing Officer shall lodge this record with the City Clerk who shall maintain the record for one ( 1) year from the conclusion of the hearing. If requested in writing by the Applicant, the City shall have the hearing record transcribed atthe Applicant' scost. The City may require that a reasonable deposit in the amount of the estimated cost of preparation accompany any request for a transcribed record. SECTION IV - EVIDENCE The Hearing
Officer shall rule on the admissibility of any evidence. Formal rules of evidence shall not apply and the Hearing Officer shall not be bound by the California Evidence Code or the Federal Rules of Evidence. No oath is required for witness testimony. However, a witness may request that his or her own testimony be
provided under oath, which factor may be considered by the hearing officer when weighing the evidence. Documentary evidence shall be marked for identification purposes, and copies of all such evidence shall be maintained by the City Clerk with the record of the hearing for one (1) year after the conclusion of the hearing. Crossexamination of witnesses shall not be permitted. SECTION V - HEARING OFFICER' S DECISION Within a
reasonable time not to exceed thirty ( 30) days from the date the hearing is closed, the Hearing Officer shall submit awri tten decision to the City Clerk. Such decision shall contain written findings of fact, which must be supported by substantial evidence in the record as a whole, and which findings must support the Hearing Officer' s decision. A copy of the decision shall be RPJ\ 333146. 3-
0171- 022104706002 RESOLUTION NO. 97- 17

promptly mailed to the Applicant.

SECTION VI - APPEAL OF HEARING OFFICER'S DECISION Not
later than 15 days after the Hearing Officer's decision is mailed to the Applicant, the Applicant may appeal the decision by filing with the city Clerk written exceptions toany portion ofthe decision together with written argument in support of each exception and the amount of fees for an appeal to the City Council as fixed by resolution or by ordinance. The City Clerk shall place the appeal on an agenda for a City Council meeting which permits atleast ten day notice to the Applicant and which will allow the appeal to be heard no more than 45 days after the City Clerk' s receipt ofthe appeal. The City Clerk shall notify the Applicant of the date, time and location that the appeal shall be heard at least ten days prior tothe meeting. SECTION
VII - ACTION BY CITY COUNCIL ON APPEAL Appeal to
the City Council shall be confined to oral and written argument and the administrative record. Upon consideration of the entire record of the hearing, including the Hearing Officer' s decision and the exceptions and written argument that were filed with the City Clerk, the City Council may adopt the Hearing Officer' s decision in its entirety or the decision may be rejected or modified. SECTION VIII -
STATUTE OF LIMITATIONS Pursuant to Code
of Civil Procedure Section 1094. 6, any petition for judicial review shall be filed not later than ninety days after the City Council makes its final decision. The provisions of Section 1094.6 shall apply to any such action. RPJ\ 333146. 01
71-022104706002 4-

RESOLUTION
NO. 97-17

PASSED AND ADOPTED this 3rd day of March, 1997 by the
following vote:

AYES: COUNCILMEMBERS: GILROY, MORALES, ROGERS, ROWLISON,

SPRINGER, VALDEZ, GAGE
NOES: COUNCILMEMBERS: NONE
ABSENT: COUNCILMEMBERS: NONE
Susanne E. Steinmetz, City Cl
RPJ\333146 01
71-
022104706002 5-RESOLUTION NO.

I, RHONDA PELLIN, Deputy City Clerk of the City ofGilroy, do hereby certify that the attached Resolution No. 97-17 isanoriginal resolution, duly adopted by the Council of the City of Gilroy ataregular meeting of said Council held on the 3rd dayof March, 1997, at which meeting a
quorum was
present. IN WITNESS WHEREOF, Ihave hereunto set my hand and affixed the Official Seal of the City of Gilroy this 6th day of March,
1997.

1 BEFORE A HEARING OFFICER
OF THE

CITY OF GILROY
In the matter of the Administrative Hearing
regarding Business License No. 16606725
THE ROCK ZONE, Respondent

PRE-HEARING ORDER
Business License Revocation
Proceeding for the premises at
1323 First Street, Gilroy, CA
Pursuant to the Notice dated March 3, 2026, this matter is scheduled for hearing on March 19, 2026, at 9:00 am, remotely on the Zoom platform. The hearing shall be held pursuant to the City of Gilroy (city) Municipal Administrative Hearing Policy, Resolution No. 97-17. Therefore, the following shall be applicable:

A. Procedure

1. Formal rules of evidence shall not apply, and the Hearing Officer shall not be bound by the California Evidence Code or the Federal Rules of Evidence.

2. No oath is required for a witness to testify. However, a witness may request that his or her own testimony be provided under oath, which factor may be considered by the Hearing Officer when weighing the evidence.

3. The hearing shall be recorded.

4. Cross-examination shall not be permitted.

B. Order of Presentation

1. Opening statement from the city and testimony from its witnesses.

2. Opening statement from respondent and testimony from its witnesses.

3. Rebuttal testimony to the extent allowed by the Hearing Officer.

4. If requested, closing arguments may be presented on behalf of the city and respondent.

2 C. Submission of Evidence
The parties shall have until March 16, 2026, no later than 4:00 pm, to submit any relevant documents to Harjot Sangha, City Finance Director, at [email protected], who shall transmit the documents to the other party upon receipt.

IT IS SO ORDERED.

Dated: March 11, 2026
ALAN SELTZER, Hearing Officer

1 Harjot Sangha
From: Harjot Sangha
Sent: Wednesday, March 18, 2026 10:18 AM
To: 'Karen Flores'; Steve
Subject: RE: EXTERNAL - Fwd: Administrative Hearing 3/19 Time Sensitive Importance: High
Good afternoon,
I did not receive Mr. Defilippis' email. Thank you for forwarding it. I did receive Karen’s email from earlier in the day and the voice message.

The Administrative Hearing Officer has accepted the request and continued the hearing to Friday, April 3, at 9 am. He will be issuing a continuance order, which I will remit later today. The meeting link and joining instructions will remain the same; the meeting will be conducted via Zoom.

For the Notice of Violation regarding unpermitted construction identified during the inspection, please contact Community Development Director Sharon Goei at 408-846-0467 or [email protected].

Please let me know if you have any additional questions.

Thank you,
Harjot Sangha  Finance Director
Finance Department
7351 Rosanna Street, Gilroy, CA 95020
Cell 408.888.6690  Direct 408.846.0294
http://www.cityofgilroy.org
From: Karen Flores <[email protected]>
Sent: Tuesday, March 17, 2026 5:24 PM
To: Harjot Sangha <[email protected]>
Cc: Steve <[email protected]>
Subject: Re: EXTERNAL - Fwd: Administrative Hearing 3/19 Time Sensitive Good afternoon,

2 I am including Mr. Defilippis on this email; he also emailed you directly. Below is his email.

Karen C. Flores
Assistant to
STEVE M. DEFILIPPIS, Esq.
---------- Forwarded message ---------
From: Steve Defilippis <[email protected]>
Date: Tue, Mar 17, 2026 at 3:34 PM
Subject: URGENT-Upcoming Administrative Hearing 3/19 on Adel Ammari dba Rock Zone (1323 1st St.) To: [email protected] <[email protected]> Cc: [email protected] <[email protected]>, Karen Flores <[email protected]> Mr. Sangha,
Good afternoon. I was just retained regarding the above matter that is scheduled for this Thursday. My staff has been trying to reach you to discuss this matter. I have very limited information, and obviously this case involves very serious allegations with potentially severe consequences to my client. I would like to do two things immediately: First, I am requesting a continuance of the hearing so that I can investigate and properly prepare for this hearing; Secondly, I would like to discuss with you the deconstruction\remediation being requested by the City so that I can properly direct my client as to what is needed to be accomplished in the short run and once we have a plan to do that work, to set up a reasonable date for my client to bring the property into compliance with the City's request.

Please contact me immediately so we can discuss how to best move forward with this hearing and the building code issues. Easiest way to reach me is by cell phone (408-307-9362).

Looking forward to working with you to bring this matter to an early and honorable resolution.

Steve M. Defilippis, Esq.

Picone & Defilippis
625 N. 1st Street
San Jose, CA 95112
T: 408-292-0441
F:408-287-6550
This Email is covered by the Electronic Communications Privacy Act, 18 U.S.C. §§ 2510-2521 and is legally privileged. This communication constitutes an electronic communication within the meaning of the Electronic Communications Privacy Act, 18 U.S.C. 2510, and its disclosures is strictly limited to the recipient intended by the sender of this message. The information contained in or attached to this electronic mail is confidential and is intended only for the use of the individual(s) or entity(ies) to which it is addressed. If you are not the intended recipient, or the person responsible for delivering and/or forwarding this correspondence to the intended recipient, do not use or disclose this electronic mail or any of its contents and/or attachments. If you have received this electronic mail in error, please notify us immediately by electronic reply, and delete the electronic mail correspondence.

3 On Tue, Mar 17, 2026 at 4:29 PM Harjot Sangha <[email protected]> wrote:

Hi Karen,
Confirming receipt of your request via email and voice message. I will circle back if that is a possibility, given it is two days out.

Thank you,
Harjot Sangha  Finance Director
Finance Department
7351 Rosanna Street, Gilroy, CA 95020
Cell 408.888.6690  Direct 408.846.0294
http://www.cityofgilroy.org
From: Karen Flores <[email protected]>
Sent: Tuesday, March 17, 2026 11:32 AM
To: Harjot Sangha <[email protected]>
Subject: EXTERNAL - Fwd: Administrative Hearing 3/19 Time Sensitive

4 Good morning Mr. Sangha,
I sent this email below but noted that you are listed on a letter to Mr. Ammari dated March 3, 2026.

Could you please advise whether we can reschedule this hearing as we have been retained to appear in this matter?
I appreciate your time in advance.

Karen C. Flores
Assistant to
STEVE M. DEFILIPPIS, Esq.

RYAN RAMSEYER, Esq.

NICOLE A. ALVARADO, Esq. &
CARLIN LOZINSKY, Esq.

PICONE & DEFILIPPIS, A P.L.C.
625 North First Street
San Jose, CA 95112
PH: (408) 292-0441
FX: (408) 287-6550
[email protected]
**ATTORNEY-CLIENT PRIVILEGED; DO NOT FORWARD WITHOUT PERMISSION.

This communication constitutes an electronic communication within the meaning of the Electronic Communications Privacy Act, 18 U.S.C. 2510, and its disclosures is strictly limited to the recipient intended by the sender of this message.

This communication may contain confidential and privileged material for the sole use of the intended recipient, and receipt by anyone other than the intended recipient does not constitute a loss of the confidential privileged nature of the communication. Any review or distribution by others is strictly prohibited. If you are not the intended recipient, please contact the sender by return electronic mail and delete all copies of this communication. Thank you.

CAUTION: This email originated from an External Source. Please use proper judgment and caution when opening attachments, clicking links, or responding to this email.

5 ---------- Forwarded message ---------
From: Karen Flores <[email protected]>
Date: Tue, Mar 17, 2026 at 8:31 AM
Subject: Administrative Hearing 3/19 Time Sensitive
To: <[email protected]>

Good morning,
Our office has just been retained to represent Adel Ammari in a matter scheduled for an Administrative hearing this Thursday.

I apologize for the short notice. I had a family loss over the weekend and was out on Monday. I was notified we had been retained by Adel Ammari.

Could you please advise how we can request a continuance so that Mr. Defilippis can appear on his behalf?
Thank you.

Karen C. Flores
Assistant to
STEVE M. DEFILIPPIS, Esq.

RYAN RAMSEYER, Esq.

NICOLE A. ALVARADO, Esq. &
CARLIN LOZINSKY, Esq.

PICONE & DEFILIPPIS, A P.L.C.
625 North First Street
San Jose, CA 95112
PH: (408) 292-0441
FX: (408) 287-6550
[email protected]
**ATTORNEY-CLIENT PRIVILEGED; DO NOT FORWARD WITHOUT PERMISSION.

6 This communication constitutes an electronic communication within the meaning of the Electronic Communications Privacy Act, 18 U.S.C. 2510, and its disclosures is strictly limited to the recipient intended by the sender of this message.

This communication may contain confidential and privileged material for the sole use of the intended recipient, and receipt by anyone other than the intended recipient does not constitute a loss of the confidential privileged nature of the communication. Any review or distribution by others is strictly prohibited. If you are not the intended recipient, please contact the sender by return electronic mail and delete all copies of this communication. Thank you.

1 BEFORE A HEARING OFFICER
OF THE

CITY OF GILROY
In the matter of the Administrative Hearing
regarding Business License No. 16606725
THE ROCK ZONE, Respondent

ADMINISTRATIVE ORDER

CONTINUING HEARING
Business License Revocation
Proceeding for the premises at
1323 First Street, Gilroy, CA
Pursuant to Notice dated March 3, 2026, this matter was originally scheduled for hearing on March 19, 2026, at 9:00 am, remotely on the Zoom platform. On March 17, 2026, Steve M. Defilippis, of Picone & Defilippis, notified City Finance Director Harjot Sangha that he had just been retained by Respondent as counsel in this proceeding and requested a continuance to properly prepare for the hearing. The City’s representatives agreed to the request.

Good Cause Appearing, the hearing on this matter shall be continued from March 19, 2026, at 9:00 am, to April 3, 2026, at 9:00 am. City Finance Director Harjot Sangha shall provide the parties instructions for attending the continued hearing remotely on Zoom.

IT IS SO ORDERED.

Dated: March 18, 2026
ALAN SELTZER, Hearing Officer

1 Harjot Sangha
From: [email protected]
Sent: Thursday, April 2, 2026 3:30 PM
To: Harjot Sangha
Subject: FW: EXTERNAL - Fwd: AMARI: UTL and Tobacco Articles Attachments: img-cb293f4e-a5b5-43fc-9206-07d3e30dfd7e
Please forward the following to the city’s representatives and Mr. Defiilippis in response to the email from Mr. Defillipis below.

As the parties have been informed, the hearing in the Business License No. 16606725 Revocation Proceeding, scheduled tomorrow morning, is being held pursuant to Gilroy Municipal Code §13.45(2) and City Council Resolution No. 97-17. The hearing is informal. Formal rules of evidence do not apply, there is no cross-examination, and there is no provision for discovery. The Hearing Officer’s decision shall be based only on the evidence presented at the hearing, including the testimony of witnesses and documentary evidence entered into the record by the Hearing Officer, as well as matters subject to administrative notice.

The record at this point includes only the packet of materials, dated March 3, 2026, addressed to Adel Ammari, which is entitled “Administrative Hearing Notice and Notice of Violation – The Rock Zone," which has been received by all parties. No police reports have been entered into the record and, therefore, they are not part of the record of decision at this preliminary point of the proceedings. If this remains the case, they may not be considered in rendering a decision in this matter, which iequires determining if the city has shown by the preponderance of the evidence whether respondent has violated “...any of the provisions of this chapter or any other law or ordinance relating to the business of the license, or is conducting or has conducted or operated such business so as to be detrimental to the public morals or the public welfare” as set for in Gilroy Municipal Code §13.45.

The Hearing Officer issued a Pre-Hearing Order dated March 11,2026. As set forth in that Order, the hearing will proceed tomorrow first with the city’s opening statement and testimony followed by the respondent’s opening statement and testimony. The city will have the opportunity during the presentation of its case to present evidence satisfying its burden of proof that a violation warranting relief under Gilroy Municipal Code §13.45 has occurred. It is anticipated that the city's testimony may also be relevant to identifying the city’s interest in the determination whether a stay of proceedings should be issued and, if so, the conditions to which it should be made subject.

As the Hearing Officer stated at the pre-hearing conference held April 1, 2026, the parties should be prepared to address both respondent’s request for a stay and the merits of this case. Thus, respondent, in presenting his case in chief, may renew his request for a stay of these proceedings or seek a continuance as indicated in the email below. The issuance of a stay is discretionary, not mandatory. In considering whether to grant a stay, the factors identified in Avant! Corp. v. Superior Court (2000) 79 Cal.App.4th 876, will be considered.

2 Alan Seltzer, Hearing Officer

From: Steve Defilippis <[email protected]>
Date: Thursday, April 2, 2026 at 11:58 AM
To: [email protected] <[email protected]>
Cc: Harjot Sangha <[email protected]>
Subject: Fw: EXTERNAL - Fwd: AMARI: UTL and Tobacco Articles Please see the email exchange below. The City is not willing to release the reports and case materials, which should be voluminous, pending the conclusion of the criminal case. Obviously, I cannot prepare a defense to these allegations without seeing these materials. There should be at least one (possibly two, for the searches in March of 2025 and January of 2026) set(s) of search warrant materials (affidavit in support of the warrant, the warrant itself, and a return on the warrant listing all items seized), reports for the November 2024 buys at the Rock Zone, reports for the March 2025 execution of the warrant and related photos and videos of the search, and the reports, photos and related videos of the January 6 and January 8, 2026 arrest and search (these dates came from our discussions on the record yesterday, as I am unclear as to the exact dates). Of course, pursuant to Gilroy PD policy, each of the involved officers would have been wearing body worn cameras during these events, and there also should be a master list of all the items seized. While I can understand the City's reluctance to make these materials available to the public, no such issue is presented by denying the respondent access to the very materials being relied upon by the City to seek the revocation of the license held by Mr. Ammari and the Rock Zone.

This development seems to support the request for a stay, as the City is both seeking to go forward with the hearing, while at the same time precluding respondent from seeing any of the evidence being brought against him. This would certainly appear to be a clear violation of due process, and clearly demonstrates the prejudice that Mr. Ammari and the Rock Zone will suffer from moving forward with this hearing prior to the conclusion of the criminal matter so that the materials can be provided to Respondent. I have also requested the identity of the witnesses who will testify for the City, but no information has been forthcoming.

Accordingly, I am bringing these matters to your attention as further support for the requested stay, as well as to advise you that I will be unable to be adequately prepared to go forward with the substantive (non-stay related) portion of the hearing tomorrow in light of being denied access to ALL of the relevant materials the City is relying upon. Based on these factors, I will still be seeking the requested stay, and if denied, will then request an order that the materials be provided, and that a continuance is needed until they are produced and I have had an opportunity to properly prepare.

I suppose, as a footnote, it is also relevant that some or all of these reports have been provided to yourself. It would seem to be quite fundamental that anything provided to a hearing officer would be discoverable to all parties, yet this has not been done by the City. Finally, I would assume that most (or perhaps all) of the witnesses have reviewed these reports prior to testifying, again supporting the need for them. Thus, if there is a need for preclusion of those materials being provided to the Respondent, then the prejudice analysis in light of that preclusion falls in favor of Mr. Ammari and supports the stay.

Let me know if you need anything further. Otherwise, I will see everyone at 9:00 AM tomorrow.

Steve M. Defilippis, Esq.

Picone & Defilippis
625 N. 1st Street
San Jose, CA 95112
T: 408-292-0441
F:408-287-6550

3 This Email is covered by the Electronic Communications Privacy Act, 18 U.S.C. §§ 2510-2521 and is legally privileged. This communication constitutes an electronic communication within the meaning of the Electronic Communications Privacy Act, 18 U.S.C. 2510, and its disclosures is strictly limited to the recipient intended by the sender of this message. The information contained in or attached to this electronic mail is confidential and is intended only for the use of the individual(s) or entity(ies) to which it is addressed. If you are not the intended recipient, or the person responsible for delivering and/or forwarding this correspondence to the intended recipient, do not use or disclose this electronic mail or any of its contents and/or attachments. If you have received this electronic mail in error, please notify us immediately by electronic reply, and delete the electronic mail correspondence.

Thank you.
----- Forwarded Message -----
From: Harjot Sangha <[email protected]>
To: Steve Defilippis <[email protected]>
Cc: Karen Flores <[email protected]>
Sent: Thursday, April 2, 2026 at 08:25:06 AM PDT
Subject: RE: EXTERNAL - Fwd: AMARI: UTL and Tobacco Articles Steve – Mr. Seltzer has determined not to rely on the reports and will instead rely on the evidence that City staff will present.

Thank you,
Harjot
From: Steve Defilippis <[email protected]>
Sent: Thursday, April 2, 2026 8:20 AM
To: Harjot Sangha <[email protected]>
Cc: Karen Flores <[email protected]>
Subject: Re: EXTERNAL - Fwd: AMARI: UTL and Tobacco Articles

Thanks Harjot. However, it appears that Mr. Seltzer had access to the reports, as he was familiar with what searches occurred, the arrest, and subsequent investigation. Please forward whatever has been submitted to the hearing officer. Thanks.

Steve M. Defilippis, Esq.

Picone & Defilippis
625 N. 1st Street
San Jose, CA 95112
T: 408-292-0441
F:408-287-6550
This Email is covered by the Electronic Communications Privacy Act, 18 U.S.C. §§ 2510-2521 and is legally privileged. This communication constitutes an electronic communication within the meaning of the Electronic Communications Privacy Act, 18 U.S.C. 2510, and its disclosures is strictly limited to the recipient intended by the sender of this message. The information contained in or attached to this electronic mail is confidential and is intended only for the use of the individual(s) or entity(ies) to which

4 it is addressed. If you are not the intended recipient, or the person responsible for delivering and/or forwarding this correspondence to the intended recipient, do not use or disclose this electronic mail or any of its contents and/or attachments. If you have received this electronic mail in error, please notify us immediately by electronic reply, and delete the electronic mail correspondence.

Thank you.

On Thursday, April 2, 2026 at 08:09:57 AM PDT, Harjot Sangha <[email protected]> wrote:

Steve,
Confirming receipt. With respect to the police reports, I've been advised that due to the ongoing criminal proceedings, the City cannot release the police reports, as those will be made available by the DA as part of those proceedings. Hearing Officer has been advised of the same. I understand the business owner has furnished you with all other documents remitted to them.

There were no new submissions from the City's side.

Thank you,
Harjot Sangha Finance Director
Finance Department
7351 Rosanna Street, Gilroy, CA 95020
Cell 408.888.6690 C Direct 408.846.0294
http://www.cityofgilroy.org
-----Original Message-----
From: Steve <[email protected]>
Sent: Wednesday, April 1, 2026 4:50 PM
To: Harjot Sangha <[email protected]>
Cc: Karen Flores <[email protected]>
Subject: EXTERNAL - Fwd: AMARI: UTL and Tobacco Articles CAUTION: This email originated from an External Source. Please use proper judgment and caution when opening attachments, clicking links, or responding to this email.

Harjot,
Attached please find some materials that I will be utilizing at the hearing of this matter. Please forward your materials as soon as possible. Thank you.

Sent from my iPhone
Steve M. Defilippis
Picone & Defilippis, A P.L.C.
625 N 1st Street
San Jose, CA 95112
408-292-0441

1 BEFORE A HEARING OFFICER
OF THE

CITY OF GILROY
In the matter of the Administrative Hearing
regarding Business License No. 16606725
THE ROCK ZONE, Respondent

ADMINISTRATIVE ORDER

CONTINUING HEARING AND

DENYING REQUEST FOR STAY

OF PROCEEDING
Business License Revocation
Proceeding for the premises at
1323 First Street, Gilroy, CA
Pursuant to the “Notice for Administrative Hearing Regarding Business License No. 16606725,” dated March 3, 2026, and after a continuance granted at the request of respondent’s counsel, the hearing in this matter commenced on April 3, 2026, at 9:00 am, remotely on the Zoom platform. The purpose of the hearing was to consider the recommendation by the Gilroy Chief of Police to proceed with the business license revocation process for The Rock Zone, operating at 1323 First Street, pursuant to City of Gilroy Municipal Code (GMC) §13.45, and the city’s Administrative Hearing Policy, Resolution No. 97-17. Steve M. Defilippis, of Picone & Defilippis, appeared on behalf of Adel Ammari and The Rock Zone. Gilroy Police Department Sargeant Guerin, and Officers Ludden, Tong, and Remmick appeared and testified under oath on behalf of the city.

Before the city presented its case, Mr. Defilippis requested (1) a stay of the proceeding, asserting it was required to protect the fifth amendment privilege held by Mr.

Ammari in a related criminal action and (2) a continuance, arguing that he had been denied meaningful access to the city’s evidence against Mr. Ammari. The Hearing Officer declined to rule on Mr. Defilippis’s requests before hearing the City's case, ruling that after the city had the opportunity to present evidence in support of establishing a prima facia case that a violation warranting relief under Gilroy Municipal Code §13.45 had occurred, respondent, in presenting his case in chief, could renew his request for a stay or continuance.

Following the City's testimony, Mr. Defilippis renewed his request for a stay and, alternatively, a continuance. After considering argument from Mr. Defilippis, the following rulings were made:

1. Respondent’s Request for a Stay of the Proceedings pending completion of the criminal trial in which Mr. Ammari is a defendant was DENIED.

2 At the hearing, the Hearing Officer stated on the record that a stay was not constitutionally required, but discretionary under applicable case law. He noted that the corporation holding the business license does not possess a Fifth Amendment privilege, and that Mr. Ammari, to the extent he was listed as an individual on the license, could protect his privilege by declining to testify personally, while the corporation could present testimony through another agent or employee. The ruling denying the stay is supported by the following authority.

In Avant! Corp. v. Superior Court (2000) 79 Cal. App.4th 876, the court recognized the well-established rule that corporations have no privilege against selfincrimination (at 884), and that California courts have consistently held that the government may conduct administratively proceedings contemporaneously with criminal proceedings arising from the same conduct, and that it is even permissible to draw an adverse inference from the invocation of the fifth amendment privilege in a civil or administrative proceeding. It stated:

Concluding that the administrative law judge's refusal to stay the civil proceeding was not an abuse of discretion, Keating, citing Baxter v.

Palmigiano (1976) 425 U.S. 308, 318 [96 S. Ct. 1551, 1557, 47 L. Ed. 2d 810], held that "[a] defendant has no absolute right not to be forced to choose between testifying in a civil matter and asserting his Fifth Amendment privilege. Not only is it permissible to conduct a civil proceeding at the same time as a related criminal proceeding, even if that necessitates invocation of the Fifth Amendment privilege, but it is even permissible for the trier of fact to draw adverse inferences from the invocation of the Fifth Amendment in a civil proceeding.” (Keating v.

Office of Thrift Supervision, supra, 45 F.3d at p. 326.)” Avant! Corp. at 866-67.

GMC §13.5 requires a business license to state among other things, “the name of the person to whom issued” and “the name of the business licensed.” The “Business Name” on Business License Number 16606725 at issue in this proceeding is The Rock Zone.1 The Business Owner to whom the license was issued is a corporation – ATML, Inc.

ATML, Inc. has no Fifth Amendment privilege rights and there is no basis for Mr.

Defilippis’s stay request with respect to that corporation. Adel Ammari is also listed on the Business License under “Business Owner(s).”2 Even if he is an individual business owner and listed licensee, Mr. Ammari has no absolute right to a stay. 1 The Hearing Officer has taken administrative notice of Business License Number 16606725. 2 As set forth in this Order, in ruling on the motion, the Hearing Officer has assumed that in addition to ATML, Inc., Mr. Ammari was also listed on the Business License as an owner to whom the license was issued. At the continued hearing, the parties are asked to specifically address Mr. Ammari’s status with respect to being listed under the title

3 In Avant! Corp., supra, in addition to Avant! Corporation's claim of privilege, Avant! also asserted that its corporate employees had Fifth Amendment interests, which must begiven serious consideration. In response the court acknowledged, while true, those interests were “not overriding,” particularly where the trial court had fashioned a remedy to protect the employees' Fifth Amendment rights. Id. at 886-87 As noted at the hearing, in this proceeding, Mr. Ammari’s fifth amendment rights to silence have been protected and accommodated. Under the governing Administrative Hearing Policy, Resolution No. 97-17, Mr. Ammari cannot be called as a witness. He cannot be compelled to testify. There is no provision for discovery or the subpoena of documents or witnesses. And, if he chooses to testify in this proceeding, he cannot be made subject to cross-examination. Thus, he is in complete control of the scope of his testimony and ability to preserve his right against self-incrimination. Second, ATML, Inc. is a, if not the sole, licensee in this license revocation proceeding. Mr. Ammari is identified as ATML, Inc.’s agent for service of process and its officers in ATML, Inc.’s corporation documents filed with the California Secretary of State. ATML, Inc. may identify another person to act as its agent and testify in this proceeding without implicating Mr. Ammari’s Fifth Amendment privilege.

In addition to considering the extent to which Mr. Ammari’s Fifth Amendment rights are implicated in this proceeding and accommodated as set forth above, the hearing officer has also considered the following additional five factors identified in Keating and Avant! Corporation in determining whether a civil proceeding should be stayed pending the disposition of the parallel criminal proceeding:
(1) the interest of the city in proceeding expeditiously with this proceeding or any particular aspect of it, and the potential prejudice to city of a delay.

There was no reason to prevent that part of the proceeding involving the city’s presentation of its own evidence. That presentation did not implicate Mr. Ammari’s Fifth Amendment privilege and as discussed further below, allowed the respondent to learn the evidence the city relied upon to satisfy its burden of proof that violations warranting relief under Gilroy Municipal Code §13.45 had occurred. By proceeding without a stay, the city’s witnesses testified to three separate violations between November 15, 2024, and January 8, 2026, providing respondent the facts upon which the city’s case is based.

Although Mr. Defilippis presented argument that these violations have occurred over a long period of time, that the determination of what is an illegal tobacco product has been “Business Owner(s)” on Business License Number 16606725. If Mr. Ammari’s status is other than a licensee, in lieu of the consideration of the five factors identified in Keating and Avant! Corporation and findings made in this Order that show that his fifth amendment rights are accommodated in this proceeding, unequivocal denial of the stay request would have been appropriate.

4 complex over that time, that Mr. Ammari has learned what is and is not allowed by the creation of the UTL, and that there are no illegal products being sold at The Rock Zone now, the city should not be forced to rely on representations of Mr. Ammari’s current compliance when it has a compelling regulatory interest in the prompt resolution of this matter to prevent future health and safety violations.

And, as the court in Avant! Corp. stated at 887: “To require the city to wait for the result of the related criminal action ‘would increase the danger of prejudice resulting from the loss of evidence, including the inability of witnesses to recall specific facts, or the possible death of a party.’ [Citation omitted.]” Id. at 887. (2) the burden which any particular aspect of the proceedings may impose on respondent.

As explained above, the procedures governing this proceeding protect Mr.

Ammari’s Fifth Amendment rights. He cannot be called as a witness. He cannot be compelled to testify. And, if he chooses to testify in this proceeding, he cannot be made subject to cross-examination. Thus, he is in complete control of the scope of his testimony and ability to preserve his right against self-incrimination. In addition, assuming he is a licensee, he is not the only licensee to whom the Business License in this case was issued, and ATML, Inc., which has no Fifth Amendment privilege, may appoint a different agent with no Fifth Amendment rights implicated to testify on its behalf.
(3) the convenience of the court in the management of its cases, and the efficient use of judicial resources.

A stay of these proceedings pending completion of the related criminal case in which Mr. Ammari is a defendant could last for many months if not years if he is convicted and then exhausts his appellate rights. Mr. Defilippis is not Mr. Ammari’s criminal counsel and cannot make any guarantee how long the criminal process may take. As stated above, the potential loss of witnesses, evidence and even the hearing officer, favor proceeding with the hearing.3
(4) the interests of persons not parties to the civil litigation; and (5) the interest of the public in the pending civil and criminal litigation.

The public interest in tobacco licensing is strong as reflected in the extensive state and local regulatory structure for tobacco licensing and favors proceeding with the 3 In Avant! Corp., in stating that denial of the stay motion clearly promotes the convenience of the court, the court quoted U.S. v. Private Sanitation Industry Ass'n (E.D.N.Y. 1992)811 F.Supp. 802, 808: "[C]onvenience of the courts is best served when motions to stay proceedings are discouraged."

5 hearing. Staying enforcement of that regulatory framework is counter to its protective purpose.

In conclusion, Mr. Ammari’s Fifth Amendment rights are accommodated by the procedures governing this proceeding, and weighing the additional five factors identified in Keating and Avant! Corp. favor denying the stay request.

2. Respondent’s Request for a Continuance was granted, and the hearing was continued to April 17, 2026, at 10:00 am without objection.

A hearing officer is not an independent judicial officer of the state and has no more authority than granted by city ordinances and resolutions. As stated above, the city’s Administrative Hearing Policy, Resolution No. 97-17, has no provision for discovery or the subpoena of witnesses or documents. In granting the continuance request, the Hearing Officer recognized that respondent only learned the facts upon which the city’s license revocation case was based at the April 3, 2026, hearing, and required additional time to prepare its response.

It also became apparent that the city’s witnesses needed time to confirm that all the confiscated products testified about were in fact illegal under the applicable provisions of the Gilroy Municipal Code 13.45 and related state law, specifically Professions Code Section 22974.2. In that regard, the parties were directed to return on April 17, 2026, with information about whether any of the confiscated products were on the Unflavored Tobacco List (UTL) established by AB 3218 and SB 1230 that was signed into law in September 2024.

ORDER
Good Cause Appearing, the hearing on this matter shall be continued to April 17, 2026, at 10:00 am. City Finance Director Harjot Sangha shall provide the parties instructions for attending the continued hearing remotely on Zoom.

IT IS SO ORDERED.

Dated: April 6, 2026
ALAN SELTZER, Hearing Officer

1 BEFORE A HEARING OFFICER
OF THE

CITY OF GILROY
In the matter of the Administrative Hearing
regarding Business License No. 16606725
THE ROCK ZONE, Respondent

ADMINISTRATIVE DECISION
Business License Revocation
Proceeding for the premises at
1323 First Street, Gilroy, CA

STATEMENT OF THE CASE
Pursuant to the “Notice for Administrative Hearing Regarding Business License No. 16606725,” dated March 3, 2026, this matter was initially scheduled for hearing on March 19, 2026, at 9:00 am, remotely on the Zoom platform. The purpose of the hearing was to consider the Chief of Police’s recommendation to proceed with the business license revocation process for The Rock Zone, operating at 1323 First Street, pursuant to the City of Gilroy (city) Municipal Code (GMC) §13.45, and Municipal Administrative Hearing Policy, Resolution No. 97-17.

On March 17, 2026, Steve M. Defilippis, of Picone & Defilippis, notified City Finance Director Harjot Sangha that he had just been retained by respondent as counsel and requested a continuance to properly prepare for the hearing. The City’s representatives agreed to the request. Therefore, an Order Continuing the Hearing to April 3, 2026, was entered March 18, 2026.

On March 30, Mr. Defilippis requested a stay of this proceeding based on the assertion that Mr. Ammari was the defendant in a related criminal action and that a stay was necessary to protect his fifth amendment privilege against self-incrimination. A prehearing conference attended by Mr. Defilippis and assistant City Attorney Jolie Houston was held on March 31, 2026. At the conclusion of the hearing, the parties were informed that they should be prepared to address both respondent’s request for a stay and the merits of this case and that after the city presented its case, respondent, in presenting its case in chief, could renew its request for a stay or seek a continuance.

On April 3, 2026, this hearing commenced remotely on the zoom platform. The Business Owner and Adel Ammari appeared with their attorney, Steve M. Defilippis.

They were accompanied by Elizabeth Vera, an employee of The Rock Zone, who observed the hearing. Gilroy Police Department Sargeant Geoffrey Guerin, Officer Doug Ludden, Officer Don Tong, and Officer Doug Remmick appeared and testified under oath. Also present was Harjot Sangha, who hosted the meeting. Gilroy Police Department

2 Captain Luke Powell and Community Development Director Sharon Goei observed the proceedings but did not testify.

At the commencement of respondent’s case, after the city’s witnesses testified, the Hearing Officer denied respondent’s stay request and continued the hearing to April 17, 2026. An Order Continuing Hearing and Denying Request for Stay issued April 6, 2026.

On April 17, 2026, the hearing resumed remotely on the zoom platform. Gilroy Police Department Sargeant Guerin, Corporal Remmick, Officer Ludden, and Arica Hernandez, the City’s Supervising Accounting Technician appeared and testified under oath. Gilroy Police Department Captain Luke Powell, Officer Don Tong, and Community Development Director Sharon Goei observed the proceedings but did not testify. Steve Defilippis, Esq., represented the Rock Zone and examined its employees Elizabeth Vera and Amy Davis, who testified under oath. Adel Ammari appeared at the hearing but did not testify. Also present was Harjot Sangha, who hosted the meeting.

EVIDENCE CONSIDERED
The following exhibit was presented and accepted into evidence at the hearing on April 3, 2026:

Exhibit 1. The packet of materials mailed to Adel Ammari by Mr. Sangha, dated March 3, 2026.
1 The following exhibits were presented and accepted into evidence at the hearing on April 17, 2026:

Exhibit 2. National Law Review Article “California Bans Online Sales of Flavored Tobacco Products Effective January 1, 2025,” submitted by Respondent.

Exhibit 3. Tobacco law Blog article “California Finalizes Unflavored Tobacco List Regulations,” submitted by Respondent.

Exhibit 4. Article entitled “California to increase tobacco retailer license fee,” submitted by Respondent.

Exhibit 5. Unflavored Tobacco List (utl-2026-04-01), submitted by Respondent.

Exhibit 6. Statement of Haley Edwards, transcribed from email sent April 15, 2026. 1 Exhibit 1 contains the Notice for Administrative Hearing Regarding Business License No. 16606725, excerpts from the Gilroy City Code, the memorandum from Chief of Police Smithee recommending this business license revocation proceeding, and a copy of Resolution No. 97-17.

3 After testimony concluded at the hearing on April 17, 2026, the Hearing Officer left the record open until the end of the April 20, 2026, business day, for the City to submit official records relating to the status of Respondent’s Tobacco Retailer’s Permit (TRP) and for the Respondent to submit the photograph of The Rock Zone store entry signage referenced in Ms. Vera’s testimony. Both parties were given until the end of the April 20, 2026, to submit briefing about the scope of the exemption allowing the sale of flavored shisha tobacco products in California Health & Safety Code §104559.5(c).

On April 17, 2026, Sargeant Guerin, on behalf of the city, submitted the following documents that were accepted into evidence:

Exhibit 7. Regulatory Permit issued to The Rock Zone on 05/21/2024, with License Expiration Date 12/31/2024.

Exhibit 8. Regulatory Permit issued to The Rock Zone ATML, Inc. on 02/04/2026, with License Expiration Date 12/31/2026.

Exhibit 9. Email from Sargeant Guerin dated 4/17/26 attaching regulatory permits and links to (1) Health & Safety Code §104559.5; (2) California Attorney General Unflavored Tobacco List Regulations; (3) Health & Safety Code §104559.1; (4) California Department of Justice Unflavored Tobacco List (UTL). 2 On April 20, 2026, Steve Defilippis, on behalf of respondent, filed his post hearing submission that was accepted into evidence as:

Exhibit 10. Cover letter (2 pages); photographic attachments (4 pages); business license and regulatory permit documents (8 pages).3
In addition, the Hearing Officer has taken administrative notice of the Gilroy Municipal Code, including Chapter 13,
4 as well as the city’s Finance Department
business license records, including:

Exhibit 11. Finance Department Receipt dated 1/21/2025 for The Rock Zone Tobacco Permit.
5 2https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=HSC&sectionNum=104559.5 https://oag.ca.gov/tobacco/flavorban/regulations
https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=104559.1&lawCode=HSC https://utl.doj.ca.gov/
3 The contents of Exhibit 10 are further identified and discussed in the Analysis section below. 4 All citations are to the Gilroy Municipal Code unless otherwise noted. 5 An administrative hearing officer in California can take administrative notice of records of a city department, including “Facts not reasonably subject to dispute and capable of immediate and accurate determination by resort to official sources.” Cf. Evidence Code § 452(h).

4 SUMMARY OF TESTIMONY
THE HEARING ON APRIL 3, 2026
Sergeant Guerin
Sergeant Guerin testified that he supervises the Gilroy Police Department's AntiCrime Team, whose primary focus is investigation and suppression of criminal street gang activity and narcotics crimes. He stated that his team also handles other enforcement duties, including illegal tobacco enforcement. Sergeant Guerin explained that City Hall had received complaints that several smoke shops in Gilroy were potentially selling illegal products, including flavored nicotine and other illegal items. In response to those complaints, his team was directed to investigate to see if the complaints about violations of state and local law were true. Sergeant Guerin next provided an overview of three enforcement actions involving The Rock Zone.

First, on November 15th, 2024, he directed his team to conduct an undercover operation at The Rock Zone. He stated that Officer David Ludden entered the store in plainclothes and purchased Zimo wintergreen flavored nicotine pouches and a Polk a Dot Magic Mushroom chocolate bar. Sergeant Guerin stated the mushroom bar case was referred to the Santa Clara County District Attorney due to potential psilocybin content, a controlled substance. He also stated the flavored nicotine matter was referred to the California Department of Tax and Fee Administration (CDTFA).

Sergeant Guerin explained that after the District Attorney's Office subsequently informed him that criminal charges would be filed against Adel Ammari related to the mushroom bar sale, a search warrant was obtained and executed on March 6, 2025.

Officer Don Tong was the lead investigator, and CDTFA agents participated. During the search, officers on the scene located two additional Polk a Dot mushroom bars, like the one that was purchased during the November 15th undercover operation. Sergeant Guerin testified that CDTFA agents separately seized flavored tobacco products. He acknowledged that he did not have specifics on what they took; he just knew it was a several boxes of flavored nicotine product.

Sergeant Guerin testified that in response to complaints that the Rock Zone was continuing to sell flavored, tobacco product, his team conducted a compliance inspection on January 8, 2026, with City code enforcement officers. CDTFA was not present and Corporal Doug Remmick led the inspection. He stated that approximately 306 items of flavored tobacco products were located and confiscated.

5 Corporal Remmick
Corporal Remmick testified regarding two matters: the November 15, 2024, undercover operation and the January 8, 2026, compliance inspection.

Corporal Remmick stated that an undercover operation was conducted on November 15, 2024, at which time he directed Detective Ludden to enter The Rock Zone in an undercover capacity. He testified that Detective Ludden purchased some wintergreen flavored nicotine pouches and a magic mushroom bar, which claimed to be mushroom or psilocybin. He acknowledged that at the time of the operation, he was not sure if the bar actually contained psilocybin. However, once the items were booked into evidence and the mushroom bar was sent to the lab in Santa Clara County, lab testing confirmed the presence of psilocybin in the bar.

Corporal Remmick also testified that he led the compliance inspection on January 8, 2026. Upon arrival, he made contact with an employee, whom he identified as Amy Lorraine Davis. He stated he spoke with her throughout the inspection, explaining the process. He also stated he spoke by phone with the owner, Adel Ammari, who did not object to the inspection. During the inspection, approximately 306 items of flavored tobacco products were confiscated. He said those items are currently being held at the Gilroy Police Department pending transfer to the California Department of Tax and Fee Administration.

Detective Ludden
Detective Ludden testified regarding his participation in the November 15, 2024, undercover operation at The Rock Zone. He said he entered the store in plainclothes, without a uniform or identifying information, and approached the employee at the front.

He asked whether the store carried "Zyn" nicotine pouches. The employee indicated they were out of Zyn’s due to a shortage but showed him similar flavored nicotine pouches called "Zimo." Ludden said he purchased one Wintergreen Zimo flavored nicotine pouch.

Detective Ludden continued by stating that while he was looking around the store, he saw some little chocolate bars that were called Polk a Dots, with labeling stating the bars contained mushrooms and had 200mg of magic per piece. He said the store employee told him if he wanted to microdose to take four tabs, and that anything more than that would make you feel it way more “and you start like, trippin.” Detective Ludden testified he purchased both the Zimo pouch and the Polk a Dot bar and then met with Corporal Remmick following the purchase.

Officer Tong
Officer Tong testified regarding the execution of the search warrant on March 6,

6 2025, at The Rock Zone. He stated that on that date, he and members of the Anti-Crime Team executed a search warrant based on the prior undercover investigation described by Corporal Remmick and Detective Ludden. The warrant was predicated on the psilocybin mushroom bar purchased by Detective Ludden in November 2024. CDTFA agents accompanied the team and participated in a simultaneous compliance check for flavored tobacco violations.

Officer Tong stated that during the search, officers located multiple items of contraband, including flavored tobacco products and additional psilocybin mushroom bars. He testified that all items seized by the police department were booked into evidence at the Gilroy Police Department and are still being held pending transfer to the CDTFA. Officer Tong added that CDTFA agents also seized a significant quantity of items, which remain in their possession.

Steve M. Defilippis
After the city concluded its presentation, respondent’s counsel, Mr. Defilippis renewed his request for a stay or continuance. His argument on behalf of those requests, the colloquy with the Hearing Officer regarding them, and the ruling on them are addressed and stated in the Order Continuing Hearing and Denying Request for Stay, issued April 6, 2026. During his presentation, Mr. Defilippis expressed concern that the testimony of the city’s police officers contained many conclusive statements about what was contained in the 306 items seized in the January 2026 inspection. He contended that they were hookah tobacco products that appear on the Unflavored Tobacco List (“UTL”) as permitted items, meaning they may have been improperly seized. He questioned whether a comparison with the UTL had been made to determine if these confiscated items are listed or unlisted products. He added that he had submitted documents related to the UTL for the record but had not yet been able to compare the UTL against the specific seized items because he lacked a detailed inventory list.

In response to Mr. Defilippis’s argument, Sergeant Guerin stated that after the UTL was published in December 2025, his team compared seized product from other smoke shops against the list and returned items that turned out to be legal. He stated he did not believe any products seized from The Rock Zone needed to be returned but deferred to Corporal Remmick for confirmation.6 When asked by the Hearing Officer whether any of the products seized in January 2026 appeared on the UTL as legally authorized products, Corporal Remmick stated he would need to review every product individually to 100% confirm his answer.
6 Sargeant Guerin also stated that prior to the UTL's publication, his team relied on guidance from the CDTFA in enforcing the flavored tobacco ban, and that in some cases product was seized that later proved to be legal and was returned.

7 In continuing the hearing until April 17, 2026, the Hearing Officer requested that the city address the question of whether the flavored tobacco seized from The Rock Zone on January 8, 2026, was on the UTL. In addition, the Order Continuing Hearing and Denying Request for Stay issued April 6, 2026, requested that the parties address Mr.

Ammari’s status with respect to being listed under the name ATML, Inc., the “Business Owner(s)” on Business License Number 16606725.

THE HEARING ON APRIL 17, 2026
The City’s Presentation
Arica Hernandez
Arica Hernandez works for the City of Gilroy as a Supervising Accounting Technician. She addressed the question about Mr. Ammari’s status with respect to being listed on Business License Number 16606725. She testified that Business License Number 16606725 was issued to ATML, Inc. Mr. Ammari’s name was listed below on the License as the contact person for the corporation, not as the licensee.

Sargeant Guerin
Sargeant Guerin requested that Corporal Remmick address the Hearing Officer’s question of whether the seized flavored tobacco from The Rock Zone was on the UTL.

Corporal Remmick
Corporal Remmick testified that after the hearing on April 3, 2026, he reinventoried the products seized during the inspection of The Rock Zone conducted on January 8, 2026. He stated that he counted 314 items and compared those items to the UTL currently posted on the California Department of Justice website. He stated that 126 items, consisting of cigars and loose-leaf cigar wraps, were on the approved list.7 Of the remaining 188 illegal products, he testified that a majority of those items were hookah or flavored shisha tobacco products. He explained that there was a partial exemption for the sale of flavored shisha tobacco where the retailer restricts entry to anyone under 21 years of age. He stated that The Rock Zone does not restrict entry like that.

Respondent’s Presentation
Mr. Defilippis first asked that his exhibits be placed in evidence. See Exhibits 2-6, inclusive. He then called Corporal Remmick, Sargeant Geurin, Officer Tong and Officer Ludden as witnesses. The Hearing Officer ruled that Municipal Administrative Hearing 7 Seargent Guerin later offered that they would be returned to the Respondent.

8 Policy, Resolution No. 97-17, had no provision to subpoena witnesses or compel testimony, and that the officers were not required to testify.8 The officers declined to testify. Mr. Defillipis next requested that The Rock Zone employees Elizabeth Vera and Amy Davis testify. Both did so under oath.

Elizabeth Vera
Ms. Vera testified that she has been an employee of The Rock Zone since 2004.

She testified that the store identifies everyone who purchases tobacco products to make sure they are 21 years old. She said if someone comes in the store, they must establish that they are 21 to purchase tobacco products, including hookah tobacco. She said there are multiple signs inside the store that advise you must be 21 years old to purchase tobacco products. She said she believed the hookah tobacco seized on January 6, 2026, was legal to sell because she checked to see if the people are over the age of 21 years old.

She added that before 2025 and publication of the UTL, there was nothing to help determine if products were illegal.

Ms. Vera testified that she was present during the police searches of March 6, 2025, and January 8, 2026. She said that hookah tobacco was seized during both searches, adding under questioning that hookah products seized in January 2026 were previously present in the store in March 2025, but not taken then. She reiterated that she thought those products were legal to sell because she “cards” to make sure people are over the age of 21.

Amy Davis
Ms. Davis testified that she has been an employee of The Rock Zone for two years, since the middle of 2024. She stated she was present during the search of the store conducted in January 2026.

Ms. Davis testified that at the time of the January 2026 search, there was a sign at the front door of the store stating you must be 21 years old to enter. She said the sign had been there since she started her employment two years ago. She testified the sign states:
“Under 21 – No Tobacco, No Vape, We Card, Please have ID ready.” She was asked by Mr. Defilippis when operating the store, if someone looks close to the age of 21, does she ask for identification. She responded she asked for identification not only of persons appearing close to 21 years old, but anyone purchasing tobacco products. She explained that if an older person was not carded, a younger customer over 21 in the store would get upset.
8 As Mr. Defilippis was aware, Section IV of the Municipal Administrative Hearing Policy, Resolution No. 97-17, prohibits cross-examination. Attempting to call the officers as witnesses in his direct case or presentation was an attempt to evade that prohibition and not permitted on this separate ground.

9 She described her experience during the January 8, 2026, search. She was told to stand in a corner and, in the beginning, not to touch her phone. She said she was not allowed to examine what was taken from the store and did not ask for an inventory. She believed all items taken related to hookah tobacco were legal so long as she was carding people to make sure they were over 21.

City’s Rebuttal
Corporal Remmick
Corporal Remmick initially responded to the claim of partial exemption that allows for the sale of hookah or shisha tobacco. He said for a tobacco retailer to legally sell hookah tobacco, the retailer must be in compliance with all laws, which included having a valid TRP from the city during the search on January 8, 2026.

Arica Hernandez
Ms. Hernandez testified that the TRP for The Rock Zone expired on December 31, 2024. See Exhibit 7. She stated that no reapplication for a TRP was submitted until February 2026, when a TRP erroneously issued prematurely while enforcement activities were in process and the permit application remained under review. See Exhibit 8. 9 Sargeant Guerin
Sargeant Guerin testified that if The Rock Zone did not have a TRP, it could not sell hookah tobacco. He said that when his team conducted its investigation of smoke shops, he was told The Rock Zone did not have a TRP. He also commented on the restriction on selling hookah tobacco as it pertains to persons under 21 years of age. He said that sale was permissible only if minors were prohibited from entrance into the store; i.e. persons under 21 cannot enter the premises.

Officer Ludden
Officer Ludden testified that when he conducted his undercover inspection of The Rock Zone on November 15, 2024, he was not asked for identification when he purchased products that day. He said that undermined The Rock Zone employees’ testimony that they card everyone despite how old they appear. 9 At this point, Mr. Difilippis interjected that The Rock Zone had a retailer’s license for the period 10/2/2025- 10/1/2026. He then admitted the License was from the State CDTFA, not the city.

10 Steve Defilippis Closing
Mr. Defilippis concluded by stating that there was no UTL to guide the Respondent until December 2025. With respect to restricting entry to persons under 21, he argued that The Rock Zone is not just a tobacco shop; there are numerous other products sold there. He stated that the hookah tobacco sale restriction is for the purchase of that product, not entry to the premises.

ANALYSIS
A. Applicable Law

1. Local License Requirement
GMC §13.2 requires that all businesses operating in the City of Gilroy must obtain a city-issued business license. Additional regulatory permits may be required depending on the business type.10 In this case, The Rock Zone was required to have a TRP to operate as a tobacco retailer. See §13.68. Selling tobacco without a valid TRP is unlawful and a violation of both §13.2 and 13.68. Similarly, selling flavored or otherwise prohibited tobacco products violates both §13.2 and §13.68.

2. California Health & Safety Code §104559.5
California Health & Safety Code §104559.5(b)(1) prohibits the sale of flavored tobacco products as follows:
(b)(1) A tobacco retailer, or any of the tobacco retailer's agents or employees, shall not sell, offer for sale, or possess with the intent to sell or offer for sale, a flavored tobacco product or a tobacco product flavor enhancer.

Shisha or hookah tobacco is subject to an exemption from this prohibition if all four requirements of §104559.5(c) are met:
(c) Subdivision (b) does not apply to the sale of flavored shisha tobacco products by a hookah tobacco retailer if all of the following conditions are met:
10 GMC §13.2: “The carrying on of any business, trade, calling, profession, or occupation without first having procured a license from the city so to do, or without complying with any and all regulations of such business, trade, calling, profession, or occupation, shall be deemed a separate violation of this chapter for each and every day that such business, trade, calling, profession, or occupation is carried on.”

11 (1) The hookah tobacco retailer has a valid license to sell tobacco products issued pursuant to Chapter 2 (commencing with Section 22971.7) of Division 8.6 of the Business and Professions Code.
(2) The hookah tobacco retailer does not permit any person under 21 years of age to be present or enter the premises at any time. (3) The hookah tobacco retailer shall operate in accordance with all relevant state and local laws relating to the sale of tobacco products. (4) If consumption of tobacco products is allowed on the premises of the hookah tobacco retailer, the hookah tobacco retailer shall operate in accordance with all state and local laws relating to the consumption of tobacco products on the premises of a tobacco retailer, including, but not limited to, Section 6404.5 of the Labor Code.
(Emphasis added.)
Thus, the exemption for shisha tobacco from the prohibition in subsection (b)(1) requires the exclusion of persons under 21 from entering the store (no entry at all) and compliance with all relevant state and local laws relating to the sale of tobacco products.

3. The Unflavored Tobacco List (UTL)
In 2020, Senate Bill 793 banned flavored tobacco products (subject to certain exceptions) and tobacco product flavor enhancers in California. See Health & Safety Code, § 104559.5. Assembly Bill 3218, which went into effect on January 1, 2025, amended the flavored tobacco ban put in place five years earlier by Senate Bill 793 and established the Unflavored Tobacco List (UTL), a list of covered tobacco products that are permissibly unflavored under the law. See Health & Safety Code, § 104559.1(a).

Products not appearing on the UTL are subject to seizure, and state and local law enforcement agencies are authorized to seek civil penalties against retailers of products not appearing on the list. Assembly Bill 3218 required the Attorney General to establish and maintain the UTL on or before December 31, 2025. See Health & Safety Code, § 104559.1(m). Thus, to be sold legally in California, a covered tobacco product must be included on this list; otherwise, it is classified as a prohibited flavored tobacco product.

4. Revocation of a Business License
The grounds for and process by which a business license may be revoked, suspended or modified is governed by GMC §13.45, which states in its pertinent part:

12 In the event that the chief of police has reasonable cause to believe and does believe that any licensee or other person employed by or representing such licensee is violating any of the provisions of this chapter or any other law or ordinance relating to the business of the licensee, or is conducting or has conducted or operated such business so as to be detrimental to the public morals or the public welfare, all facts and information relating to such alleged violation or conduct shall be reported to the city administrator. Prior to taking action affecting the license, the City Administrator, at his sole discretion, shall elect to proceed according to either subsection (1) or subsection (2) below. (Emphasis added.) ........
(2) The matter shall be set for an administrative hearing to revoke, modify, or suspend the license pursuant to the city’s administrative hearing policy, if such a policy has been adopted by the city council.

City Council Resolution No. 97-17 adopted the municipal administrative hearing policies that govern this proceeding. It provides that the formal rules of evidence shall not apply; cross-examination shall not be permitted; no discovery is authorized; and no oath is required for a witness to testify (however, a witness may request that his or her own testimony be provided under oath, which factor may be considered by the Hearing Officer when weighing the evidence).

B. Evaluation of the Evidence and Reasons for the Decision

1. Did The Rock Zone Operate without a TRP?
When Police Chief Smithee recommended initiation of the business license revocation process for The Rock Zone on January 23, 2026 (see Exhibit 1), The Rock Zone did not have a TRP. Thus, this matter proceeded as a business license revocation matter, not a TRP revocation.

The testimony of Ms. Hernandez, supported by Exhibits 7 and 8, suggests that The Rock Zone did not have a regulatory permit from the city for over a year between the expiration of The Rock Zone’s TRP on 12/31/2024 (Exhibit 7) and the issuance of the subsequent TRP to The Rock Zone ATML INC, with an issue date of 2/4/26 (Exhibit 8).

This would mean that Rock Zone also did not have a TRP when the city conducted its inspection of the store on March 6, 2025, and January 8, 2026. However, as discussed below, the record as a whole does not support such a finding.

In his post-hearing submission, Mr. Defilippis included a copy of Mr. Ammari’s Tobacco Retailer Permit Application dated 1/8/25 (Exhibit 10, p.15), and the Regulatory Permit issued to The Rock Zone with an issue date of 1/31/2025 and an expiration date of

13 12/31/2025 (Exhibit 10, p.18, referred to as “Regulatory Permit 012805”). Regulatory Permit 012805 largely fills the gap between 12/31/2024 and 2/4/2026. Because of the submission of this additional 2025 Regulatory Permit, the Hearing Officer took administrative notice of the city’s regulatory permit files in the Finance Department.

There is no hard copy of Regulatory Permit 012805 in the Finance Department’s administrative records, nor is the permit contained within the excel data base in which TRPs are stored. However, the city’s files contain a hard copy of the receipt for payment by Adel Ammari of the permit fee to renew The Rock Zone “Tobacco Permit”, dated 1/21/2025, in the sum of $100.00. See Exhibit 11. Based on the evidence showing the issuance of Regulatory Permit 012805, the Hearing Officer finds that The Rock Zone was reissued Regulatory Permit 012805 on 1/31/25, but that it was not properly filed in the city’s physical files and electronic data base. This explains why Ms. Hernandez did not see Regulatory Permit 012805 when she was checking the data base during her testimony.

Substantial evidence supports the following findings. The Rock Zone had a TRP (Exhibit 8) during 2024 when the November 15, 2024, undercover operation took place.

There was a one-month gap when there was no effective TRP from the expiration of Exhibit 8 on 12/31/2024 to the issuance of Regulatory Permit 012805 on 1/31/2025. The next gap commenced on 12/31/2025, when Regulatory Permit 012805 expired. That gap continued until 2/4/26 when the permit reflected in Exhibit 8 commenced. Thus, The Rock Zone had no TRP when the January 8, 2026, store search/inspection took place and when Chief Smithee initiated this proceeding on January 23, 2026.

The sale of tobacco products without a TRP during these short gaps violates §§13.2 and 13.68. However, respondent’s efforts to obtain regulatory permits to comply with the city’s permit requirements during this enforcement period is a mitigating factor in determining the appropriate penalty to be imposed.

2. The Search on November 15, 2024.

The undisputed evidence in the record is that an undercover inspection of The Rock Zone was conducted on November 15, 2024, during which Officer Ludden purchased one Zimo wintergreen flavored nicotine pouch and a “Polk a Dot” mushroom magic bar, which claimed to be mushroom or psilocybin. Corporal Remmick testified that lab testing in Santa Clara County confirmed the presence of psilocybin in the bar.11 Respondent presented no evidence regarding this operation. The Officers’ testimony provides substantial evidence that the sale of these two illegal products occurred on 11 Psilocybin is a Schedule I controlled substance. Health & Safety Code §11054. A person who possesses for sale a controlled substance may be punished by imprisonment pursuant to Health & Safety Code §11378.

14 November 15, 2024.12

3. The Search on March 6, 2025.

Similarly, it is undisputed that a search warrant for The Rock Zone premises was obtained and executed on March 6, 2025, at which time Officer Don Tong was the city’s lead investigator, and CDTFA agents participated. Officer Tong testified that the warrant was predicated on the psilocybin mushroom bar purchased by Detective Ludden on November 15, 2024. Sargeant Guerin and Officer Tong testified that during the search, officers on the scene seized two additional Polk a Dot mushroom magic bars, like the one that was purchased during the November 15th undercover operation. The Officers’ testimony provides substantial evidence that these two illegal products were available for sale on March 6, 2025, in violation of California law.

Sargeant Guerin and Officer Tong also testified that CDTFA agents separately seized flavored tobacco products during the search conducted March 6, 2025. Ms. Vera testified that she was present when hookah tobacco was seized by the CDTFA during the that search. However, Sargeant Guerin acknowledged that he did not have specifics on what the CDTFA took. Officer Tong stated that the boxes of flavored nicotine product seized by CDTFA agents remain in their possession. Ms. Vera provided no specific details about the seized products. Thus, the record does not provide an adequate foundation to include the seizure of tobacco products by the CDTFA on March 6, 2025, as grounds to base the revocation or suspension of The Rock Zone’s business license.

4. The Inspection of January 8, 2026.

Corporal Remmick inventoried the products seized during the inspection of The Rock Zone conducted on January 8, 2026. He counted 314 items and compared those items to the UTL currently posted on the California Department of Justice website. He admitted that 126 items, consisting of cigars and loose-leaf cigar wraps, were on the approved list. Of the remaining 188 illegal products, he testified that a majority of those items were hookah or flavored shisha tobacco products.

At the hearing, the Officers explained that there is a partial exemption for the sale of flavored shisha tobacco where the retailer restricts anyone under 21 years of age from entering the store premises. They stated that The Rock Zone does not restrict entry but allows persons under 21 to enter the store. The employee witnesses for The Rock Zone admitted that persons under 21 were allowed to enter the store but relied on their testimony that they “carded” everyone who purchased tobacco products to assert the sale of hookah tobacco was legal. In 12 Evidence Code §664 states: “It is presumed that official duty has been regularly performed.” The Officers’ testimony satisfies the substantial evidence test that constitutes the City’s burden of proof in this administrative proceeding.

15 addition, Mr. Defilippis argued that the hookah tobacco sale restriction prohibits the purchase of that product by minors, not entry by minors into a tobacco retailer’s premises.

In fact, as stated above, Health & Safety Code §104559.5(c)(2) “...does not permit any person under 21 years of age to be present or enter [a hookah tobacco retailer’s] premises at any time.” In his post-hearing submission, Mr. Defilippis admits that §104559.5(c)(2) contains a “requirement for barring entry into the premises for minors.” He contends, however, that this requirement only came into existence with the UTL and, therefore, “did not exist when the first search occurred in March 2025,” and “had just come out in December 2025, very shortly before the January 8 search.” Exhibit 10, p.1. He argues this gave little time for the respondent to learn these requirements.

Actually, Health & Safety Code §104559.5(c) and its “no entry” requirement for minors in subsection (2), has been in effect since December 2022. Section 104559.5, which includes the hookah flavored tobacco restrictions in subdivision (c), was originally enacted on August 28, 2020, as part of Senate Bill 793. Its implementation was delayed by a referendum challenge, and it took effect on December 21, 2022, after it was upheld by voters as Proposition 31. Thus, the “no entry for minors” provision had been in effect for some time before the seizure of the flavored hookah tobacco by the CDTFA on March 6, 2025, and the Gilroy Police Department on January 8, 2026.

As stated above, California Health & Safety Code §104559.5(b)(1) prohibits the sale of flavored tobacco products. The Rock Zone’s practice of allowing minors to enter its store while it sold shisha or hookah tobacco disqualified it from the safe harbor in subsection (c) and violated Health & Safety Code §104559.5(b)(1), thereby subjecting its business license to revocation or suspension pursuant to GMC §13.45.

5. The Consideration of Mitigating Factors
Respondent’s Exhibit 10, pp. 1-2, requests consideration of various factors in determining the appropriate penalty in this case. In seeking probation, Mr. Defilippis contends that the owner had a good faith belief that hookah tobacco was legal and that his belief that barring entry to minors was not required to sell flavored hookah tobacco was reasonable. He supports this contention with statements that the laws governing tobacco sales are complex and were even more so before publication of the UTL. He asserts that this is shown by the fact that hookah tobacco was left in the store following the March 2025 search, and that an inventory of the 314 items seized on January 8, 2026, resulted in a finding that 126 items were legal and the majority of the remaining 188 items were hookah tobacco. However, the record in this proceeding does not support Respondent’s portrait of complexity and request for leniency for respondent’s prohibited sale of flavored shisha tobacco.

First, the rules about the sale of hookah tobacco were in effect years before

16 publication of the UTL. As stated above, the “no entry” requirement for minors in Health & Safety Code §104559.5(c)(2) went into effect in December 2022. Second, there was no confusion on the part of the Police Officers who testified that California law required the exclusion of minors from the store to sell hookah tobacco. And, as to The Rock Zone employees’ understanding of the legality of selling hookah tobacco, Ms. Vera testified that hookah tobacco was seized during the searches on both March 6, 2025, and January 8, 2026. Her testimony that hookah products seized in January 2026 were previously present in the store in March 2025, does not give rise to confusion about “whether the signage and carding of patrons was sufficient, or if there needed to be an absolute exclusion” as contended by Mr. Defilippis in Exhibit 10, at p. 2. The identify of products on the UTL is the subject of separate regulations from the “no entry” requirements in §104559.5(c) that must be satisfied to legally sell shisha or hookah tobacco.

The Hearing Officer is aware of the signage the owner posted giving notice that sales to anyone under 21 was prohibited and the testimony of The Rock Zone employees that they card all purchasers of tobacco products. However, “carding” patrons does not comply with the clear requirements of §104559.5(c) and the employees’ testimony was undermined by the testimony of Officer Ludden who stated that he was not asked for identification when he purchased products during his undercover inspection of The Rock Zone on November 15, 2024.

On the other hand, Respondent has demonstrated it had TRPs in 2024, 2025, and 2026, and the violation for selling tobacco products without a regulatory permit is limited to the month from 12/31/2024 to 1/31/2025 and the thirty-five days between12/31/2025 to 2/4/2026.

In addition, Mr. Ammari’s counsel has repeatedly represented that his client has sought to achieve full compliance with the law, and in this regard, during the April 3, 2026 hearing, Community Development Director Goei acknowledged that Mr. Ammari had remedied the Notice of Violation dated March 3, 2026, for unpermitted construction identified by the Code Enforcement Division during its inspection of The Rock Zone on January 8, 2026. See NOV in Exhibit 1.

6. Disposition
The undercover purchase of the Zimo Wintergreen flavored nicotine pouch on November 15, 2024, and the sale and possession for sale of the Polk a Dot mushroom magic chocolate bars on November 15, 2024, and again on March 6, 2025, constitute violations of law warranting a penalty pursuant to §13.45. Similarly, the sale of flavored shisha or hookah tobacco without complying with requirements of Health & Safety Code §104559.5(c) supports imposition of a penalty pursuant to §13.45.

17 GMC §13.45 grants the Hearing Officer the authority to revoke, modify, or suspend The Rock Zone’s business license. In imposing an appropriate penalty, the Hearing Officer is mindful of Mr. Defilippis’s representation that Mr. Ammari has been in business for over thirty years within the city and that this is the first revocation proceeding to which he has been subjected. In choosing not to revoke The Rock Zone’s business license, the Hearing Officer is also mindful that revocation of a business license has the additional impact of §13.46, which provides: “If a license is revoked under Section 13.45..., no license of a similar nature, shall be issued for a period of one (1) year from the date of said revocation to the same licensee, nor to any other applicant acting on his behalf.”
After consideration of mitigating factors and the duration and recurrence of the proven violations of state laws and city ordinances relating to the business of the licensee over the enforcement period, The Rock Zone’s business license shall be modified so that it may not sell any “tobacco product” as that term is defined in GMC §13.66 for six months from the effective date of this Decision. The Rock Zone’s current Regulatory Permit similarly shall be modified to prohibit the sale of tobacco products for the same period.

FINDINGS OF FACT

1. Business License Number 16606725 was issued to the business named The Rock Zone operating at 1323 First Street, Gilroy, California.

2. The Business Owner to whom Business License Number 16606725 was issued is a corporation, ATML, Inc (the “Licensee”).

3. The character of the business licensed in Business License Number 16606725 is tobacco retailer.

4. On November 15, 2024, an undercover inspection of The Rock Zone was conducted by the Gilroy Police Department, during which an undercover police officer purchased from the Licensee one Zimo wintergreen flavored nicotine pouch and a “Polk a Dot” mushroom magic bar containing psilocybin, a Schedule I controlled substance.

5. A search warrant for The Rock Zone premises was obtained and executed on March 6, 2025, during which time Gilroy Police Officers seized two additional Polk a Dot mushroom magic bars that were in the possession of the Licensee with the intent to sell or offer for sale.

6. CDTFA agents also participated in the search conducted on March 6, 2025, and during that search, CDTFA agents separately seized flavored tobacco products.

18 7. On January 8, 2026, Gilroy Police Officers conducted a compliance inspection of The Rock Zone during which 314 tobacco product items were seized. After those items were compared to the UTL currently posted on the California Department of Justice website, 126 were on the approved list and found to be legal. Of the remaining 188 illegal products, a majority of those items were hookah or flavored shisha tobacco products in possession of the Licensee with the intent to offer for sale.

8. Based on the violations discovered during the operations conducted on November 15, 2024, March 6, 2025, and January 8, 2026, Chief of Police Scot Smithee recommended the city proceed with a business license revocation process for The Rock Zone pursuant to GMC §13.45.

9. Notice of Hearing in this proceeding was served on the parties on March 3, 2026.

10.The hearing in this proceeding commenced on April 3, 2026, and concluded on April 17, 2026. The record closed on April 20, 2026.

11.Steve M. Defillipis represented the respondent business, business licensee and Adel Ammari in this proceeding.

12.The Rock Zone has had a Tobacco Retailer’s Permit, also known as a TRP or Regulatory Permit, during the city’s enforcement/investigation period from November 15, 2024, though January 23, 2026, except for an initial one-month gap from 12/31/2024 to 1/31/2025, and then from 12/31/2025, until 2/4/2026.

13.The Rock Zone had no TRP or Regulatory Permit when the January 8, 2026, store search/inspection took place and when Chief Smithee made his recommendation initiating this proceeding on January 23, 2026.

14.At the hearing, respondent and its employees admitted that they allowed persons under 21 to enter the store’s premises.

15.At the hearing, respondent and its employees contended that because they “carded” or inspected the identification of all purchasers of tobacco products, the sale of flavored shisha tobacco products was legal.

16.If any statement under the above heading is determined to be a conclusion of law, it is to be treated as such.

19 CONCLUSIONS OF LAW

1. ATML, Inc, the Business Owner to whom Business License Number 16606725 was issued, is a corporation that does not possess a Fifth Amendment privilege against self-incrimination.

2. As a Tobacco Retailer, The Rock Zone was required to obtain a TRP to operate as a tobacco retailer. Selling tobacco without a valid TRP is unlawful and a violation of both GMC §13.2 and §13.68.

3. California Health & Safety Code §104559.5(b)(1) provides that a tobacco retailer, or any of the tobacco retailer's agents or employees, shall not sell, offer for sale, or possess with the intent to sell or offer for sale, a flavored tobacco product or a tobacco product flavor enhancer.

4. California Health & Safety Code §104559.5(c)(2) requires that a hookah tobacco retailer not permit any person under 21 years of age to be present or enter the retailer’s premises at any time.

5. The Rock Zone’s employees allowed persons under the age of 21 to enter the store’s premises while offering for sale flavored shisha or hookah tobacco products in violation of the requirements of Health & Safety Code §104559.5(c).

6. Substantial evidence supports the finding that The Rock Zone illegally sold a Zimo Wintergreen flavored nicotine pouch and Polk a Dot mushroom magic chocolate bar on November 15, 2024, possessed with the intent to sell two Polk a Dot mushroom magic chocolate bars again on March 6, 2025, and possessed with the intent to sell flavored shisha or hookah tobacco products without complying with requirements of Health & Safety Code §104559.5(c) on March 6, 2025 and January 8, 2026.

7. The purchase of a Zimo Wintergreen flavored nicotine pouch from an employee of the Rock Zone by an undercover Gilroy police officer on November 15, 2024, constitutes a violation of law relating to the business of the licensee and conduct detrimental to the public welfare warranting imposition of a penalty pursuant to GMC §13.45.

8. The sale of and possession with the intent to sell Polk a Dot mushroom magic chocolate bars containing a Class 1 controlled substance on November 15, 2024, and again on March 6, 2025, constitute violations of law relating to the business of the licensee and conduct detrimental to the public welfare warranting imposition of a penalty pursuant to GMC §13.45.

9. The possession with the intent to sell flavored shisha or hookah tobacco on March 6, 2025, and January 8, 2026, without complying with requirements of Health & Safety

20 Code §104559.5(c) constitute violations of law relating to the business of the licensee and conduct detrimental to the public welfare warranting imposition of a penalty pursuant to GMC §13.45.

10.GMC §13.45 grants the Hearing Officer the authority to revoke, modify, or suspend The Rock Zone’s business license upon a finding that a licensee, or a person employed by or representing the licensee, has violated any provision of Chapter 13 or any other law or ordinance relating to the business of the licensee, or has conducted the business so as to be detrimental to the public morals or public welfare.

11.The Hearing Officer has authority to impose a modification or condition on Business License No. 16606725, including a prohibition on the sale of tobacco products, as a lesser sanction in lieu of full revocation, consistent with the remedial purposes of Chapter 13 and the Tobacco Retailer's Permit provisions of Article VIII of Chapter 13.

12.The term "tobacco product" as used in this Decision has the meaning set forth in GMC § 13.66.

13.The violations established at this hearing, are serious, but do not, under the specific facts presented, warrant outright revocation of the Licensee's general business license at this time. A six-month prohibition on tobacco product sales is proportionate to the violations found and serves the public interest in promoting compliance with the City's business license and tobacco retail regulations.

14.If any statement under the above heading is determined to be a finding of fact, it is to be treated as such.

DECISION AND ORDER
Based upon the foregoing Findings of Fact and Conclusions of Law, the Hearing Officer hereby ORDERS as follows:

1. No Revocation. Business License No. 16606725 issued to The Rock Zone ATML Inc (Account No. 16606725) is not revoked at this time.

2. Modification of Business License. Business License No. 16606725 (Account No. 16606725) is hereby modified effective on the date this Decision becomes final (the "Effective Date"). As a condition of the continued validity of said License, The Rock Zone ATML Inc is prohibited from selling any "tobacco product," as that term is defined in GMC § 13.66, at the premises located at 1323 First Street, Gilroy, California, for a period of six (6) months from the Effective Date (the "Restriction Period"). For clarity, Business License No. 16606725 otherwise remains in full force and effect during the Restriction Period, except as limited by this modification.

21 3. Modification of Tobacco Retailer's Permit / Regulatory Permit. The Tobacco Retailer's Permit (Regulatory Permit) issued to The Rock Zone ATML Inc for Account No. 16606725 is hereby similarly modified for the same six (6) month period from the Effective Date. During the Restriction Period, said Permit shall confer no authority to sell any tobacco product as defined in GMC § 13.66, and The Rock Zone ATML Inc shall not sell or offer for sale any such tobacco product at the above-referenced premises.

4. Resumption of Tobacco Sales. Upon the expiration of the six (6) month Restriction Period, and provided that no further violations have occurred, Business License No. 16606725 and the Tobacco Retailer's Permit/Regulatory Permit shall automatically revert to their unmodified terms, authorizing the retail sale of tobacco products in accordance with applicable law, without further action required by the Licensee, unless otherwise directed by the City.

5. Notice of Compliance. The Licensee shall, within five (5) business days of the Effective Date, remove or conspicuously cover all tobacco product displays, signage, and advertising at the premises that may indicate the availability of tobacco products for purchase. Failure to comply with the terms of this Order may result in further enforcement action, including but not limited to revocation of Business License No. 16606725 and/or the Tobacco Retailer's Permit.

6. Effective Date. This Decision shall become final and effective upon expiration of the appeal period set forth below, if no timely appeal is filed.

IT IS SO ORDERED.

Dated: April 28, 2026
Alan Seltzer, Hearing Officer
Respondent is hereby notified that not later than 15 days after the Hearing Officer’s decision is mailed to the respondent, the respondent may appeal the decision by filing with the City Clerk written exceptions to any portion of the decision together with written argument in support of each exception and the amount of fees for an appeal to the City Council as fixed by resolution or by ordinance. See City Council Resolution No. 97- 17, Section VI.

March 3, 2026
Adel Ammari
The Rock Zone
1323 1st Street
Gilroy, CA 95020
Subject: Administrative Hearing Notice and Notice of Violation – The Rock Zone Dear Mr. Ammari:

Enclosed please find a packet of materials pertaining to The Rock Zone, located at 1323 1st Street, Gilroy, California.

The packet includes:

1. Notice of Administrative Hearing Regarding Business License No. 16606725, scheduled for March 19, 2026, at 9:00 a.m., to be conducted via telephone and/or Zoom, concerning a recommendation to revoke the business license pursuant to Gilroy City Code Section 13.45. The packet also includes:
o A copy of the Chief of Police’s Memorandum dated January 23, 2026, outlining the basis for the recommendation.
o Relevant excerpts of Gilroy City Code Sections 13.2, 13.4, and 13.45; and o A copy of the City’s Administrative Hearing Policy (Resolution No. 97-17).

2. Notice of Violation (Case No. CE26-0010) issued by the Community Development Department’s Code Enforcement Division, dated March 3, 2026, regarding unpermitted construction identified during an inspection conducted on January 8, 2026. The Notice details applicable code sections and required corrective actions, including submission of a demolition permit application by March 19, 2026.

Please review all enclosed materials carefully. If you have questions regarding the administrative hearing, please feel free to contact me. Questions regarding the Notice of Violation should be directed to the Community Development Department as indicated in the notice.

Sincerely,
Harjot Sangha
Finance Director
Phone: 408-846-0294 | Email: [email protected] CC: Property Owner
City of Gilroy
7351 Rosanna Street
Gilroy, California
95020-6197
Finance Department
Telephone (408) 846-0420
[email protected]
http://www.cityofgilroy.org

13.2 Required; compliance with chapter.

The carrying on of any business, trade, calling, profession, or occupation without first having procured a license from the city so to do, or without complying with any and all regulations of such business, trade, calling, profession, or occupation, shall be deemed a separate violation of this chapter for each and every day that such business, trade, calling, profession, or occupation is carried on. (Ord. No. 646, § 2; Ord. No. 91-4, § 2, 3-4-91) The Gilroy City Code is current through Ordinance 2025-11, passed December 8, 2025.

Gilroy City Code 13.2 Required; compliance with chapter. Page 1 of 3

13.4 Separate license required for each branch of a fixed place of business; required for each type of business transacted at same location; exemption. (a) A separate license must be obtained for each branch or location of a fixed place of business transacted and carried on, and for each separate type of business at the same location, and each license shall authorize the licensee to transact and carry on only the business licensed thereby at the location or in the manner designated in such license; provided, the warehouses and distributing plants used in connection with and identical to a business licensed under the provisions of this chapter shall not be deemed to be separate places of business or branch establishments. Every person engaging in a business at a fixed place of business in the city, as herein defined, and who has procured a license therefor, shall have the right to deliver the goods, wares or merchandise for which such license was issued, at any place in the city, without procuring any additional license therefor.
(b) Every person engaging in any transient business in the city, as herein defined, and who has procured a license therefor, shall have the right to sell the goods, wares or merchandise or engage in the business for which such transient license was issued at a fixed place of business without procuring any additional license therefor.
(c) In the issuance of transient licenses and licenses for fixed places of business, no discrimination or distinction shall ever be made against nonresidents of the city in favor of residents of the city, and residents and nonresidents of the city shall be entitled to equal rights in all matters relating to the issuances of licenses. (Ord. No. 646, § 4; Ord. No. 91-4, § 4, 3-4-91) The Gilroy City Code is current through Ordinance 2025-11, passed December 8, 2025.

Gilroy City Code 13.4 Separate license required for each branch of a fixed place of business; required for each type of business transacted at same location; exemption.

13.45 Revocation or suspension; violation; notice; hearing.

In the event that the chief of police has reasonable cause to believe and does believe that any licensee or other person employed by or representing such licensee is violating any of the provisions of this chapter or any other law or ordinance relating to the business of the licensee, or is conducting or has conducted or operated such business so as to be detrimental to the public morals or the public welfare, all facts and information relating to such alleged violation or conduct shall be reported to the city administrator. Prior to taking action affecting the license, the City Administrator, at his sole discretion, shall elect to proceed according to either subsection (1) or subsection (2) below.
(1) A hearing shall be set for a regular or special meeting of the city council, and the licensee shall be given at least ten (10) days written notice by registered or certified mail of the substance of the alleged violation and the date of said hearing. The city council shall hear and receive evidence, written and oral, upon all issues involved, and shall have the power to revoke, modify or suspend such license. The decision of the city council shall be final and binding upon all parties. (2) The matter shall be set for an administrative hearing to revoke, modify, or suspend the license pursuant to the city’s administrative hearing policy, if such a policy has been adopted by the city council. (Ord. No. 823, § 1, 7-1-68; Ord. No. 99-24, § I, 12-20-99; Ord. No. 2002-02, § I, 1-3-00) The Gilroy City Code is current through Ordinance 2025-11, passed December 8, 2025.

Gilroy City Code 13.45 Revocation or suspension; violation; notice; hearing. Page 3 of 3

Case #: CE26-0010
March 3, 2026

PROPERTY OWNER/AGENT OF SERVICE

JOSE NUNEZ

WRR CA PROPERTIES LLC
84 W SANTA CLARA ST, STE 770
SAN JOSE, CA 95113
Subject: NOTICE OF VIOLATION – Unpermitted Construction Property Address: 1323 First St. APN: 790-43-017
Dear Property Owner,
On January 8, 2026, the Community Development Department’s Code Enforcement Division conducted an inspection of the subject property located at 1323 First Street. Unpermitted construction was identified during the inspection.

As a result, you are being issued this Notice of Violation that details the violations and corrective actions required.

Violations
GCC Section 1.7 – General Penalty; Continuing Violations Any person, firm or corporation, whether, as principal, agent, employee or otherwise, who violates any of the provisions of this Code or who fails to comply with any of the mandatory requirements of this Code is guilty of an infraction, and upon conviction thereof, shall be punished as set forth below. Except as otherwise provided, every such person shall be guilty of a separate offense for each and every day during any portion of which any violation is committed, continued or permitted by such person, and shall be punishable accordingly. Any violation of this title or of the codes incorporated thereunder, following three (3) prior convictions therefor, shall constitute a misdemeanor. 2025 California Building Code
[A] 105.1 Required
Any owner or owner’s authorized agent who intends to construct, enlarge, alter, repair, move, demolish or change the occupancy of a building or structure, or to erect, install, enlarge, alter, repair, remove, convert or replace any electrical, gas, mechanical or plumbing system, the installation of which is regulated by this code, or to cause any such work to be performed, shall first make application to the building official and obtain the required permit.
[A] 114.1 Unlawful Acts
It shall be unlawful for any person, firm or corporation to erect, construct, alter, extend, repair, move, City of Gilroy
7351 Rosanna Street
Gilroy, California
95020
http://www.cityofgilroy.org

remove, demolish or occupy any building, structure or equipment regulated by this code, or cause same to be done, in conflict with or in violation of any of the provisions of this code.

Order to Correct Violations

1. On or before March 19, 2026, submit an application for a demolition permit to the Community Development Department Building Division to remove the unpermitted construction inside the business. Contact the Building Division (408) 846-0437 for further information.

If the corrective actions are not completed by the compliance date, the City of Gilroy may pursue additional enforcement actions available to the City, including issuing administrative penalties or recording a lien against the subject property.

If you have any questions, please contact Community Development Director Sharon Goei at 408-846- 0467 or [email protected].

Sincerely,
Sharon Goei
Community Development Director
City of Gilroy

RESOLUTION NO. 97-
17 A RESOLUTION OF THE CITY COUNCIL OF THE

CITY OF GILROY ADOPTING A MUNICIPAL

ADMINISTRATIVE HEARING
POLICY WHEREAS, the Gilroy Municipal Code requires permits or licenses for persons engaged in various activities including, but not limited to, peddling or soliciting or vending;
operating dances, dance halls, barrooms, adult businesses, cardrooms or food establishments; keeping animals and fowl; conducting bingo games; holding large meetings or parades;
and WHEREAS, the Gilroy Municipal Code may require
an administrative hearing prior to denying, suspending, or revoking the above described permits or licenses;
and WHEREAS, administrative hearings may also be
required prior to the exercise of certain municipal authority powers, such as to abate a nuisance;
and WHEREAS, the Gilroy Municipal Code does not
provide express administrati ve hearing procedures for each of the administrative hearings necessary for the City' sorderly operation and regulation;
and WHEREAS, the City Administrator recormnends that a
City policy be adopted to govern administrative hearings in the City;
and WHEREAS, policies of the City may be adopted
by resolution or formal motion of the City Council;
and WHEREAS, it is the intent of the City Council to adopt a
municipal administrative hearing policy that provides a meaningful opportuni ty to be heard and that maintains an informal hearing process that may be utilized by City officials acting as hearing officers in the absence of other express hearing requirements; andRPJ\ 333146.
01 71- 022104706002 1- RESOLUTION

WHEREAS, the City Council considers and finds that
significant public and private interests are served by establishing an informal, efficient and readily accessible public hearing process that is neither technical nor cumbersome.

NOW, THEREFORE, BE IT RESOLVED THAT the following
administrative hearing procedures are adopted as a matter of City policy, which procedures should be complied whenever there is no alternative procedure provided by the Gilroy Municipal Code, whenever the City conducts administrative hearings such as are aforementioned.

SECTION 1 - NOTICE Notice
of the date, time and location of any administrative hearing shall be given to the applicant, appellant, owner or operator as the case may be ( hereafter " Applicant") by mail at least ten days prior to the hearing, which mail shall be addressed to the Applicant' s most recent address on file with the City. If the hearing regards apermit, license, or application, notice shall be mailed to the applicant/ appellant's address shown on the face of that document. The notice may enclose acopy of this Resolution and a statement that the hearing will proceed pursuant to the provisions contained herein. SECTION
II - HEARING OFFICER The City
Administrator may serve as a Hearing Officer, or may designate any other person, including but notlimited to other City officials or employees, to be a Hearing Officer. To maintain
an efficient and fair hearing, the Hearing Officer may set time limits or implement other rules of procedure, provided that a meaningful opportunity tobeheard is preserved. RPJ\ 333146. 2-
0171- 022104706002 RESOLUTION NO. 97- 17

SECTION III - RECORD OF HEARING The
City shall be responsible for making a record of the hearing either by audio or video tape. The Hearing Officer shall lodge this record with the City Clerk who shall maintain the record for one ( 1) year from the conclusion of the hearing. If requested in writing by the Applicant, the City shall have the hearing record transcribed atthe Applicant' scost. The City may require that a reasonable deposit in the amount of the estimated cost of preparation accompany any request for a transcribed record. SECTION IV - EVIDENCE The Hearing
Officer shall rule on the admissibility of any evidence. Formal rules of evidence shall not apply and the Hearing Officer shall not be bound by the California Evidence Code or the Federal Rules of Evidence. No oath is required for witness testimony. However, a witness may request that his or her own testimony be
provided under oath, which factor may be considered by the hearing officer when weighing the evidence. Documentary evidence shall be marked for identification purposes, and copies of all such evidence shall be maintained by the City Clerk with the record of the hearing for one (1) year after the conclusion of the hearing. Crossexamination of witnesses shall not be permitted. SECTION V - HEARING OFFICER' S DECISION Within a
reasonable time not to exceed thirty ( 30) days from the date the hearing is closed, the Hearing Officer shall submit awri tten decision to the City Clerk. Such decision shall contain written findings of fact, which must be supported by substantial evidence in the record as a whole, and which findings must support the Hearing Officer' s decision. A copy of the decision shall be RPJ\ 333146. 3-
0171- 022104706002 RESOLUTION NO. 97- 17

promptly mailed to the Applicant.

SECTION VI - APPEAL OF HEARING OFFICER'S DECISION Not
later than 15 days after the Hearing Officer's decision is mailed to the Applicant, the Applicant may appeal the decision by filing with the city Clerk written exceptions toany portion ofthe decision together with written argument in support of each exception and the amount of fees for an appeal to the City Council as fixed by resolution or by ordinance. The City Clerk shall place the appeal on an agenda for a City Council meeting which permits atleast ten day notice to the Applicant and which will allow the appeal to be heard no more than 45 days after the City Clerk' s receipt ofthe appeal. The City Clerk shall notify the Applicant of the date, time and location that the appeal shall be heard at least ten days prior tothe meeting. SECTION
VII - ACTION BY CITY COUNCIL ON APPEAL Appeal to
the City Council shall be confined to oral and written argument and the administrative record. Upon consideration of the entire record of the hearing, including the Hearing Officer' s decision and the exceptions and written argument that were filed with the City Clerk, the City Council may adopt the Hearing Officer' s decision in its entirety or the decision may be rejected or modified. SECTION VIII -
STATUTE OF LIMITATIONS Pursuant to Code
of Civil Procedure Section 1094. 6, any petition for judicial review shall be filed not later than ninety days after the City Council makes its final decision. The provisions of Section 1094.6 shall apply to any such action. RPJ\ 333146. 01
71-022104706002 4-

RESOLUTION
NO. 97-17

PASSED AND ADOPTED this 3rd day of March, 1997 by the
following vote:

AYES: COUNCILMEMBERS: GILROY, MORALES, ROGERS, ROWLISON,

SPRINGER, VALDEZ, GAGE
NOES: COUNCILMEMBERS: NONE
ABSENT: COUNCILMEMBERS: NONE
Susanne E. Steinmetz, City Cl
RPJ\333146 01
71-
022104706002 5-RESOLUTION NO.

I, RHONDA PELLIN, Deputy City Clerk of the City ofGilroy, do hereby certify that the attached Resolution No. 97-17 isanoriginal resolution, duly adopted by the Council of the City of Gilroy ataregular meeting of said Council held on the 3rd dayof March, 1997, at which meeting a
quorum was
present. IN WITNESS WHEREOF, Ihave hereunto set my hand and affixed the Official Seal of the City of Gilroy this 6th day of March,
1997.

April 01, 2026
Volume XVI, Number 91
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California Bans Online Sales of
Flavored Tobacco Products
Effective January 1, 2025
by: Azim Chowdhury, Keller and Heckman LLP - The Continuum of Risk Posted On Friday, October 25, 2024

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On August 28, 2024, the California legislature passed two laws – Assembly Bill 3218 (“AB 3218”) and Senate Bill 1230 (“SB 1230”) – that expand the scope of the state’s enforcement powers against flavored tobacco products. These laws, which have been signed by the Governor and are set to go into effect on January 1, 2025, will have a significant impact on the tobacco, nicotine, and vapor product industries.

Prohibition of Online Sales of Flavored Products
AB 3218 makes a seemingly minor, but very significant, change to Section 30101.7 of the California Revenue and Taxation Code, which outlines the conditions that tobacco product delivery sellers (i.e., online retailers that deliver products directly to adult California consumers) must meet to sell tobacco products in the state. The law adds an additional condition that provides that delivery sellers must comply with all “applicable state laws or local ordinances that impose[] restrictions on the retail sale of cigarettes or tobacco products directly to the public from a retail location . . . as if the delivery sales occurred entirely within the state and place.” In short, this added provision will make online delivery sellers subject to the same restrictions as tobacco product retailers. Therefore, since the California flavor ban explicitly prohibits the sale of flavored tobacco products at brick-and-mortar retail stores and vending machines, once AB 3218 goes into effect, the sale of such products by delivery sellers will be treated as retail sales and, therefore, prohibited — closing the last remaining avenue to sell flavored tobacco products to California adult consumers.

Expanded Definition of Nicotine
Both AB 3218 and SB 1230 expand the definition of “nicotine” beyond tobaccoderived nicotine to include synthetically derived nicotine and nicotine analogs.

Under the revised definition, nicotine will consist of “any form of the chemical nicotine, including any salt or complex, regardless of whether the chemical is naturally or synthetically derived, and includes nicotinic alkaloids and nicotine 49NEW ARTICLES
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analogs.” We note that while this expanded definition pulls synthetic nicotine and nicotine analog products into the state flavor ban, this new definition appears to be limited to the flavor ban and, therefore, would not apply to California tax regulations.

Characterizing Flavor Expanded
Of note, both laws revise the definition of “characterizing flavor” to now capture “menthol sensation” products, which do not contain menthol flavor ingredients but typically contain synthetic cooling agents like WS-3. Characterizing flavor is now defined as any “taste or odor, distinguishable by an ordinary consumer either prior to or during the consumption of a tobacco product, other than the taste or odor of tobacco, including, but not limited to, tastes or odors relating to any fruit, chocolate, vanilla, honey, candy, cocoa, dessert, alcoholic beverage, menthol, mint, wintergreen, herb, or spice, or a cooling sensation distinguishable by an ordinary consumer during the consumption of a tobacco product.” Unflavored Tobacco List
AB 3218 prohibits wholesalers, distributors, and delivery sellers from selling or attempting to sell tobacco products that are not listed on the “Unflavored Tobacco List” (“UTL”). The UTL, which will be published on the Attorney General’s website by December 31, 2025, will catalogue all tobacco products that lack characterizing flavor and are thus eligible for sale in California. Entities that sell or intend to sell unlisted products within the state may be fined up to $10,000 per violation.

While the Attorney General will promulgate the specific regulations implementing UTL, AB 3218 states that tobacco product manufacturers and importers will be required to report to the Attorney General the unflavored tobacco products that these entities manufacture or import for sale or distribution in California.

Manufacturers and importers will have to follow reporting procedures similar to those in states that have passed PMTA directory regulations, “including the submission of an attestation signed under penalty of perjury that the product in question is unflavored.”
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AB 3218 authorizes the Attorney General to issue fines (up to $50,000) against entities that report tobacco products as lacking a characterizing flavor if the entities did not have a reasonable basis to do so. The Attorney General will also have the power to charge reporting entities up to $1,000 for each product that they submit for UTL listing and for relisting applications.

CDTFA Authority
Both laws also authorize the California Department of Tax and Fee Administration (“CDTFA”) and other state or local law enforcement agencies to seize and, when appropriate, destroy flavored tobacco products from retailers that sold or intended to sell the products. Violators may also be fined $50 for each individual package of flavored tobacco products that was seized. AB 3218 makes wholesalers subject to the same treatment.
© 2026 Keller and Heckman LLP
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Tobacco Law Blog
California Finalizes Unflavored Tobacco List
Regulations
By Troutman Pepper Locke Tobacco Practice, Bryan Haynes & Zie Alere on September 23, 2025
In August, the California Department of Justice (DOJ) finalized regulations to implement California’s unflavored tobacco list (UTL) law, which the state enacted in 2024. The new regulations include detailed filing requirements for manufacturers and importers to have their tobacco products legally sold in California.

The deadline for applicants to be considered for the initial publication of the UTL is October 9, 2025.

What Is the UTL?
The UTL is a forthcoming list of unflavored tobacco products allowed to be sold in California. The DOJ will publish the UTL on or before December 31, 2025. After this publication, distributors, wholesalers, and delivery sellers will be prohibited from selling “any tobacco product not appearing on the UTL or any tobacco product flavor enhancer to any retailer, wholesaler, or other person for sale in California.” Cal. Health & Safety Code § 104559.1(o)(1).

Additionally, any product not listed on the UTL “shall be deemed a flavored tobacco product” under California’s general flavor ban statute. This means that tobacco retailers will similarly be prohibited from selling any unlisted products. See Cal. Health & Safety Code § 104559.5(b)(1).

What Products are Covered?

The UTL requirements generally apply to “tobacco products,” which are defined as follows:
(i) A product containing, made, or derived from tobacco or nicotine that is intended for human consumption, whether smoked, heated, chewed, absorbed, dissolved, inhaled, snorted, sniffed, or ingested by any other means, including cigarettes, cigars, little cigars, chewing tobacco, pipe tobacco, or snuff. (ii) An electronic device that delivers nicotine or other vaporized liquids to the person inhaling from the device, including an electronic cigarette, cigar, pipe, or hookah.
(iii) Any component, part, or accessory of a tobacco product, whether or not sold separately.

Cal. Health & Safety Code § 104559.5(a)(17).

However, regarding items (ii) and (iii), the UTL regulations indicate that listing is not required “for any electronic device that is not sold with nicotine or liquid intended to be vaporized and inhaled from the device, or for any separately sold accessory, component, or part … unless that accessory, component, or part contains nicotine or liquid intended to be vaporized and inhaled from the accessory, component, or part.” Cal. Code Regs. tit. 11, § 945(d).

Further, the definition of “tobacco product” for purposes of the UTL “excludes looseleaf tobacco, premium cigars, and shisha tobacco products,” as those terms are defined for purposes of California’s general flavor ban statute, Cal. Health & Safety Code § 104559.5. See Cal. Health & Safety Code § 104559.1(s)(3).

How Do I List My Products?
Manufacturers and importers of tobacco products must apply through the UTL portal by October 9, 2025, to be considered for inclusion on the initial publication of the list.

See Cal. Code Regs. tit. 11, § 947(f). Within the UTL application, each brand style must be separately submitted for consideration through either a “product form” or a “variant form.”

Product forms must contain detailed descriptions of each brand style, including, among other things, trademark ownership details, physical characteristics, and any determinations made by other government agencies regarding the flavor of the brand style. A product form must also note whether the brand style has received premarket authorization from the U.S. Food and Drug Administration (FDA), along with explanations and supporting documentation related to the product’s FDA premarket review status. See Cal. Code Regs. tit. 11, § 945. A sample of each brand style submitted through a product form must be sent to DOJ for review. See Cal. Code Regs. tit. 11, § 947(b)(5).

Variant forms are abbreviated filings for products similar to those for which the applicant has already completed a product form. A “variant” is “a Brand Style that is identical to that Predicate Brand Style in all respects, with the exception of the universal product code, manufacturing stock keeping unit number, packaging or labeling (including multipacks), inclusion (or non-inclusion) of an electronic device (as part of a multipack), or Product count per package. ‘Variant’ does not include any Brand Style with a packaging difference that imparts flavor.” Cal. Code Regs. tit. 11, § 942(r). A “predicate brand style” is “a Brand Style for which an Applicant has previously completed a product form.” Cal. Code Regs. tit. 11, § 942(m).

A variant form may be filed only for of the following types of variants:

1. Variants with packaging designed for a market outside of California, including exports;

2. Variants with different packaging or different Product count per package, unless the packaging itself imparts flavor;

3. Variants with promotional packaging or discount Brand Styles;

4. Language on packaging different from Predicate Brand Style, e.g. French or Spanish;

5. Variants with a different universal product code or stock keeping unit;

6. Multipacks; and,

7. Multipacks with electronic devices.

Cal. Code Regs. tit. 11, § 946(c). Notably, applicants are not required to submit samples of brand styles submitted through variant forms. See Cal. Code Regs. tit. 11, § 947(b)(5).

Application and Renewal Fees
The initial application fee is $300.00 per brand style submitted through a product form and $150.00 per brand style submitted through a variant form. To maintain their products’ listing, applicants must annually pay a fee of $150.00 per brand style alongside a renewal application. See Cal. Code Regs. tit. 11, §§ 951 (regarding renewal applications), 954 (regarding fees).

Why It Matters
The UTL statute, as implemented by the recent regulations, imposes a new hurdle for manufacturers and importers seeking to sell their products in California. Although the law seeks to restrict the sale of flavored products, the regulatory compliance burden falls primarily on companies selling unflavored products because they must ensure their products are listed to be legally sold in California.

Our team regularly advises on compliance with novel state regulatory frameworks like the California UTL regime. If you have questions about the UTL requirements as they relate to your business, our team is happy to assist.

Copyright © 2026, Troutman Pepper Locke. All Rights Reserved.

TOBACCO (/TOBACCO)
California to increase
tobacco retailer license fee
Higher fees do nothing to stop the
underground market that is already
costing the state an estimated $1.5
billion a year in lost tax revenue,
California Fuels & Convenience Alliance
says
By Diane Adam (/profile/diane-adam) on Oct. 07, 2025
California (https://www.cspdailynews.com/tobacco/filteredcigarettes-ban-californias-santa-cruz-county-be-implemented2027) tobacco retailers, including convenience stores, will soon face an increase in their annual state tobacco retailer license fee.

Signed on Friday by Gov. Gavin Newsom, Assembly Bill 573 will now require each application for a retailer license filed on or after July 1, 2026, to be accompanied by a fee of $450 per retail location.

The current fee for the tobacco retailer license is $265 per year, which has been unchanged since 2016, the bill states.

Convenience stores in California will soon face an increase in their annual state tobacco retailer license fee. | Shutterstock

Under the legislation, the California Department of Tax and Fee Administration (CDTFA) will receive funding to continue and expand its flavored tobacco product seizure and enforcement operations.

California's ban
(https://www.cspdailynews.com/tobacco/california-votersuphold-ban-flavored-tobacco-sales) on all flavored tobacco sales in the state took effect in December 2022.

The bill states that the “passage of California’s law banning the sale of most flavored tobacco products resulted in a significant increase in seizure costs that have drastically affected the total number of inspections the CDTFA is able to complete.”
Democratic state assembly member Chris Rogers, who introduced the bill, said “CDTFA is currently only able to visit 11% of tobacco retailers each year and, without additional funding from the state tobacco license, those inspection numbers will continue to decline.”
The increase of the tobacco retailer fee will make sure more retailers are inspected annually by the CDTFA, the bill states, and it adds that it would “bolster compliance with the state (https://www.cspdailynews.com/tobacco/fdas-center-tobaccoproducts-steps-enforcement-efforts-illicit-e-cigarettes) flavored tobacco licensing and tax laws and the Stop Tobacco Access to Kids Enforcement Act.”
The California Fuels & Convenience Alliance (CFCA), which has advocated for the convenience-store industry since 1952 in California, told CSP Daily News that it is “deeply” disappointed that the governor signed this legislation.

This bill “imposes a substantial increase in tobacco licensing fees on compliant retailers
(https://www.cspdailynews.com/tobacco/nato-executivedirector-discusses-state-vapor-nicotine-pouches-conveniencestores) while doing little to curb the state’s rampant illicit tobacco trade,” CFCA said. “This bill is intended to enhance enforcement of the state’s flavored tobacco ban, yet it fails to address the real source of the problem, which is illegal sales occurring online and outside of the regulated marketplace.”
CFCA members
(https://www.cspdailynews.com/tobacco/california-flavoredtobacco-sales-ban-would-devastate-small-retailers-opponentssay) are responsible small business owners who have fully complied with state law by removing flavored products from their shelves, the association said.

“Despite their compliance, they continue to lose business to illicit sellers who face minimal enforcement,” CFCA said. “Burdening legitimate operators with dramatically higher license fees is unfair and counterproductive because it raises costs for small retailers while doing nothing to stop the underground market that is already costing California an estimated $1.5 billion a year in lost tax revenue.”
Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here (/membership/?
utm_source=website&utm_medium=CSPDNcontent&utm_campaign=membership). tobacco (/article/tobacco)
news (/article/news-csp)
cigarettes (/article/cigarettes)
OTP (/article/otp)
(/profile/diane-adam)
Diane Adam is an editor for CSP

VIEW ALL ARTICLES BY THIS AUTHOR
(/PROFILE/DIANE-ADAM)

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Attachment 7 – Exhibit 5
“Unflavored Tobacco List – utl-2026-04-01.csv”
The Excel file is very large and can be accessed by visiting the link here.

1 Harjot Sangha
From: Geoffrey Guerin
Sent: Friday, April 17, 2026 11:59 AM
To: Harjot Sangha
Cc: Sharon Goei; Luke Powell; Arica Hernandez; Douglas Remmick Subject: Additional information to be submitted to Alan Seltzer for Rock Zone Hearing Harjot,
Please forward the following information to Hearing Officer Seltzer.

I have included links to applicable California Health & Safety Code sections relevant to Rock Zone’s sale of flavored tobacco and hookah/shisha products. Specifically, HSC §104559.5 defines a “hookah tobacco retailer” and outlines the prohibition on the sale of flavored tobacco products, as well as the limited exception under subdivision (c), which requires strict compliance with all listed conditions.

As outlined in HSC §104559.5(b)(1), a tobacco retailer, or any of its agents or employees, shall not sell, offer for sale, or possess with the intent to sell any flavored tobacco product or tobacco product flavor enhancer.

Additionally, I have included a link to the California Department of Justice website regarding Unflavored Tobacco List (UTL) regulations. Under HSC §104559.1, the Attorney General maintains a list of tobacco product brand styles that lack a characterizing flavor. For a product to be legally sold in California, it must appear on the UTL; otherwise, it is classified as a prohibited flavored tobacco product pursuant to HSC §§104559.1(g) and 104559.5(a)(6).

Relevant links:
 https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=HSC&sectionNu m=104559.5
 https://oag.ca.gov/tobacco/flavorban/regulations
 https://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=104559.1&law Code=HSC
 https://utl.doj.ca.gov/
Please let me know if any additional information is needed.

Thank you ,
Geoff

City of Gilroy
FINANCE - DEPT 20
7351 Rosanna St
Gilroy, CA 95020
(408) 846-0300
Welcome
01/21/2025 12:30PM Natalia B
002828-0042    000039571
Payment Effective Date  01/21/2025

MISCELLANEOUS
TOBACCO PERMIT (TOBACC)
2025    Item: TOBACC
1 @ $100.0000
TOBACCO PERMIT
(TOBACC)                    $100.00
--------------
$100.00
Subtotal                        $100.00
Total                           $100.00
CASH                            $100.00
--------------
Change due                        $0.00
Paid by: ADEL AMMARI
Comments: THE ROCK ZONE TOBACCO RENEWAL
2025
Thank you for your payment
CUSTOMER COPY

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.
.
.
.
.
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. . . . . . . . . . . . . . . . . . . . . . . . . . . .

PICONE & DEFILIPPIS, A P.L.C.

A Professional Law Corporation
625 N. First Street
San Jose, CA 95112
(408)292-0441 Fax: (408)287-6550
STEVE M. DEFILIPPIS
STEPHEN S. PICONE

RYAN RAMSEYER
__________
NICOLE A. ALVARADO

CARLIN LOZINSKY

AVERY DOTTERER

TRANEICE BAKER
______
May 7, 2026
Alan Seltzer
Administrative Hearing Officer
Via Email @ [email protected]
Re: Amari/Rock Zone Request for Reconsideration
Dear Mr. Seltzer,
On behalf of my clients, Adel Ammari and The Rock Zone, I am respectfully requesting that you reconsider the penalty being recommended in your April 28, 2026 decision. Please consider the following in reviewing this issue.

Mr. Amari is operating a small, family business, and while corporate owned, the corporation simply consist of himself and no other investors or partners. While the store sells tobacco products, it also sells other items, but the cash flow to keep the business running is primarily based upon the sale of the tobacco products. Removing those items from the store will significantly impact his ability to generate revenue.

While the length of the suspension, by itself, will have a far reaching impact upon its ability to continue to operate, other factors need to be considered here. What you were not aware of is that the state separately imposes significant penalties in situations of this type. Mr. Ammari is facing fines of over $70,000 based on the products that were seized. The state calculates its fines based on each individual item that is possessed by the vendor. In other words, if a single box of a particular tobacco product contains 50 separate items, 50 separate fines are imposed. These fines will, by themselves, have a devastating impact upon this small business. Adding a six month suspension of the ability to sell tobacco products onto that will ensure that the business will be unable to generate enough income to stay open.

It is apparent from the decision in this case that causing the closure of the business, or long-term revocation of the license, was not your intent. I am hopeful, that you will reconsider the length of the

May 7, 2026

suspension, factoring in the huge financial penalties that the state will be imposing, and modify this decision to ensure that while the business is penalized, it is not wiped out by the nature of the sanction.

Thank you for considering this matter.

Very Truly Yours,
Steve M. Defilippis
STEVE M. DEFILIPPIS
SMD\ds

1 BEFORE A HEARING OFFICER
OF THE

CITY OF GILROY
In the matter of the Administrative Hearing
regarding Business License No. 16606725
THE ROCK ZONE, Respondent

RESPONSE TO REQUEST

FOR RECONSIDERATION
Business License Revocation
Proceeding for the premises at
1323 First Street, Gilroy, CA
On May 7, 2026, Steve M. Defilippis, of Picone & Defilippis, requested reconsideration of the penalty stated in the Decision rendered in this proceeding dated April 28, 2026.

In response, the Hearing Officer finds:

1. The Hearing Officer has only that authority granted by Resolution No. 97-17.

There is no provision for reconsideration of a final decision by a Hearing Officer in Resolution No. 97-17.

2. Respondent’s remedy is to appeal the Decision pursuant to section VI of Resolution No. 97-17, to the City Council by filing with the City Clerk a written exception to that portion of the decision sought to be reconsidered together with written arguments in support of the exception not later than 15 days after the Hearing Officer’s decision was mailed to the respondent.

IT IS SO ORDERED.

Dated: May 8, 2026
ALAN SELTZER, Hearing Officer

PICONE & DEFILIPPIS, A P.L.C.

A Professional Law Corporation
625 N First Street
San Jose, CA 9 5112
(408)292-0441 Fax: (408)287-6550

STEVE M DEFILIPPIS
STEPHENS. PICONE

RYAN RAMSEYER
NICOLEA. ALVARADO

CARLIN LOZINSKY

AVERY DOTTERER

TRANEJCE BAKER
May 12, 2026
City Clerk of Gilroy
AT1N: Kim Mancera
7351 Rosanna St.

Gilroy, CA 95020
Phone:408-846-0204
Fax: 408-852-2651
cityclerk@cityofgilroy .ora:

[email protected]
Re: Appeal of The Administrative Hearing Decision Regarding The Rock Zone, Bus. Lie. #16606725
TO THE CITY COUNCIL AND THE HONORABLE CITY COUNCIL MEMBERS:

On behalf of the respondents in this matter, Adel Ammari (owner) and The Rock Zone (Bus. Lie. #16606725), please consider this as a formal appeal of the decision issued on April 28, 2026 by Alan Seltzer, administrative hearing officer in the above matter.

Respondent takes exception to the following matters as stated in the April 28, 2026 decision of Mr.

Seltzer:

1. Failure to establish the violations claimed: As will be apparent from the transcript of the proceedings in this matter, the City failed to establish that any particular items found on the business premises of The Rock Zone were in fact illegal. Only conclusory statements of officers that items were illegal were presented, but the items were never identified in any respect, or shown to be outside of the law. Because Respondent was never told what items were in fact seized, and which ones were claimed to be illegal, he was effectively precluded from being able to effectively defend against the accusations levied. In fact, at one point, the seizing officer testified that they were actually incorrect on at least half of the items that were seized, had now determined that those items were in fact legal, and it was disputed as to whether the remaining items were legal or illegal since the majority of the . . . . . . . . . . . . . . . . . . . . . . . . . . . .

May 11, 2026
Page2
remaining items could be lawfully sold, but only based on a question of whether proper signage and age verification would suffice or if exclusion from the premises of minors was required.

2. Due process violations based on the failure to produce existing materials identifying what was in fact seized from The Rock Zone: the City refused to provide police reports or other documents showing what in fact was taken from the premises of The Rock Zone, any listing of what the items seized consisted of, the search warrant used to obtain those items, the body worn camera footage of the officers during the search, laboratory testing reports of the seized materials, or any other materials that were created in connection with the investigation into The Rock Zone. It is a fundamental premise of due process that an accuser, here the City of Gilroy, must identify the basis for actions being taken against a citizen. Numerous materials existed to give Respondent the ability to meet the accusations being levied by the City, yet the City claimed that it had no duty to provide those materials to Counsel for respondent. This is a fundamental violation of due process, and a violation of simple rules of fair play, and common sense in how a proceeding must occur.

3. Stay or continuance of the proceedings: here, respondent timely requested a continuance of the hearing, and a stay of the proceedings pending the outcome of the related criminal charges that have been brought, and which arise out of the exact same set of circumstances as were being alleged as the basis of the license revocation proceedings. As noted in number two, above, Counsel was denied any of the documents that were in the sole possession of the city, and was required to defend this action blindly, only learning of what the accusations were during the actual hearing. The city based its claim that it didn't have to produce materials on a theory of their being a "ongoing investigation" yet all of these materials were things that would have to be produced ultimately in the existing criminal case.

Until those materials were produced, there should be no basis for the City to go forward with this administrative proceeding. This request was timely, made, and should have been granted.

4. The penalty is excessive: Respondent Adel Amari is operating a small, family business, and while corporate owned, the corporation simply consist of himself and no other investors or partners. While the store, The Rock Zone, sells tobacco products, it also sells other items, but the cash flow to keep the business running is primarily based upon the sale of the tobacco products. Removing those items from the store will significantly impact his ability to generate revenue.

While the length of the suspension, by itself, will have a far-reaching impact upon its ability to continue to operate, other factors need to be considered here. Please be aware that the state separately imposes significant penalties in situations of this type. Mr. Ammari is facing fines of over $70,000 based on the products that were seized. The state calculates its fines based on each individual item that is possessed by the vendor. In other words, if a single box of a particular tobacco product contains 50 separate items, 50 separate fines are imposed. These fines will, by themselves, have a devastating impact upon this small business. Adding a six-month suspension of the ability to sell tobacco products onto that will ensure that the business will be unable to generate enough income to stay open.

It is apparent from the decision in this case that causing the closure of the business, or long-term revocation of the license, was not the intent of the hearing officer. It is respectfully requested that the Council reconsider the length of the suspension, factoring in the huge financial penalties that the state will be imposing, and modify this decision to ensure that while the business is penalized, it is not wiped out by the nature of the sanction.

May 11, 2026
Page3
Respondent is currently in the process of requesting and obtaining the recording, made by the hearing officer, and obtaining a transcript of the same for use in this proceeding on appeal. Once that transcript is prepared, the actual recording and the transcript thereof will be presented for consideration. It is respectfully requested that the City Council calendar this matter for consideration at an upcoming hearing, once the transcripts have been able to be secured. It is further requested that the parties be permitted to appear at the hearing of this matter to present argument regarding this requested relief.

Thank you for your attention to this matter.

PICONE & DEFILIPPIS, A P.L.C.

By: Stwe M .. 9Je/ifippi6
STEVE M. DEFILIPPIS
Attorneys For Respondent
cc: Harjot Sangha (City of Gilroy) via email
Enc. Response to Request for Consideration

BEFORE A HEARING OFFICER
OF THE

CITY OF GILROY
In the matter of the Administrative Hearing
regarding Business License No. 16606725
THE ROCK ZONE, Respondent

RESPONSE TO REQUEST

FOR RECONSIDERATION
Business License Revocation
Proceeding for the premises at
1323 First Street, Gilroy, CA
On May 7, 2026, Steve M. Defilippis, of Picone & Defilippis, requested reconsideration of the penalty stated in the Decision rendered in this proceeding dated April 28, 2026.

In response, the Hearing Officer finds:

1. The Hearing Officer has only that authority granted by Resolution No. 97-17.

There is no provision for reconsideration of a final decision by a Hearing Officer in Resolution No. 97-17.

2. Respondent's remedy is to appeal the Decision pursuant to section VI of Resolution No. 97-17, to the City Council by filing with the City Clerk a written exception to that portion of the decision sought to be reconsidered together with written arguments in support of the exception not later than 15 days after the Hearing Officer's decision was mailed to the respondent.

IT IS SO ORDERED.

Dated: May 8, 2026
1 ALAN SELTZER, Hearing Officer

Kim Mancera, CMC
City Clerk
CC: Matt Morley, City Administrator | File Copy
Steve Defilippis, Respondent Attorney
May 18, 2026
Adel Ammari
The Rock Zone
1323 First Street
Gilroy, CA 95020
City of Gilroy
7351 Rosanna Street
Gilroy, California
95020
City Clerk’s Office
Phone: (408) 846-0204
http://www.cityofgilroy.org
RE: NOTICE OF ADMINISTRATIVE APPEAL HEARING
Dear Business Owner,
This Notice provides the date, time, and location of the appeal hearing to the Gilroy City Council regarding the hearing officer’s administrative decision order dated April 28, 2026, rendered in the matter of the Administrative Hearing regarding Business License No. 16606725 issued to The Rock Zone. The appeal hearing will be conducted pursuant to the provisions of Resolution No. 97-17.

The appeal hearing will be held as follows:

Date: June 1, 2026
Time: 5:00 p.m.

Location: In-Person
Address: City of Gilroy – Council Chambers
7351 Rosanna Street
Gilroy, CA 95020
Should you have any questions regarding this Notice or the scheduled date and time to appear, please contact me at [email protected], or via phone at (408) 846-0204.

Sincerely,

-1-

MEMORANDUM
TO: Mayor Bozzo and City Councilmembers
FROM: Jolie Houston, Assistant City Attorney
RE: The Rock Zone Appeal – Summary
Monday, June 1, 2026
DATE: May 27, 2026
The Appeal of the City of Gilroy’s (City) Hearing Officer’s Decision (Decision) to modify Business License No. 16606725 and Tobacco Retailer’s Permit for Account No. 16606725 for The Rock Zone is scheduled to be heard by the City Council on June 1, 2026, at 5:00 p.m. The general concept of this Appeal Hearing is that the Hearing Officer holds a hearing, and the City Council acts like an “appellate court” with its review limited to the existing administrative record and oral argument.

The Administrative Hearing (Hearing) was held pursuant to City’s Administrative Hearing Policy adopted by Resolution 97-17 (Hearing Policy).

The Hearing was scheduled for March 19, 2026.

On January 23, 2026, the Police Chief issued a memorandum recommending the City proceed with a business license revocation for The Rock Zone.

On March 3, 2026, the City issued a Notice of Administrative Hearing pursuant to Gilroy City Code (GCC) Section 13.45.

On March 11, 2026, a Pre-Hearing Order was issued. This Order allowed the parties until March 16, 2026, by 4:00 p.m., to submit relevant documents to Mr. Sangha, who would then transmit the documents to the parties.

On March 17, 2026, The Rock Zone’s attorney, Steve M. Defilippis, of Picone & Defilippis, requested a continuance of the Hearing. The City agreed to this request.

On March 18, 2026, an Order Continuing the Hearing to April 3, 2026, was issued.

On March 30, 2026, Mr. Defilippis requested a stay of the proceedings based on the assertion that Mr. Ammari (business owner) was the defendant in a related criminal action and that a stay was necessary to protect his client’s Fifth Amendment privilege against selfincrimination.

On April 1, 2026, a pre-hearing conference was held, and at the conclusion of that

-2-
conference both parties were informed to be prepared to address the stay and the merits of the case at the Hearing on April 3, 2026.

On April 2, 2026, the Hearing Officer via email clarified what would be included in the packet of materials for the “Administrative Hearing Notice and Notice of Violation-The Rock Zone.”
On April 3, 2026, the Hearing was held remotely via Zoom. The Hearing Officer heard arguments from Mr. Defilippis regarding his request for the stay and continuance. The Hearing Officer declined to rule on the request for a stay before the City had an opportunity to present evidence in support of establishing a prima facie case that a violation warranting relief under GCC Section 13.45 had occurred.

Following the City’s testimony, Mr. Defilippis renewed his request for a stay and alternatively, a continuance. After considering the arguments from Mr. Defilippis, the Hearing Officer determined that Mr. Ammari’s Fifth Amendment rights were accommodated by the Hearing Policy and relevant case law supported denying the request for a stay. In addition, the Hearing Officer granted the Request for Continuance. The Hearing Officer determined that a continuance would allow the parties time to confirm that the confiscated products were in fact illegal under the GCC and related state law.

On April 6, 2026, an Order Continuing the Hearing and Denying the Request for Stay of Proceedings was issued. The Hearing was continued to April 17, 2026.

On April 17, 2026, the Hearing resumed via Zoom. After testimony concluded, the Hearing Officer left the administrative record open until April 20, 2026, for the City to submit official records relating to the status of the Respondent’s (business owner) Tobacco Retailer’s Permit. In addition, both parties were given until April 20, 2026, to submit briefing concerning the scope of the Health and Safety Code exemption allowing the sale of flavored shisha tobacco products.

On April 28, 2026, the Decision was issued. The Decision provided notice of the right to Appeal pursuant to the Hearing Policy.

On May 7, 2026, Mr. Defilippis requested reconsideration of the penalty recommended in the Decision.

On May 8, 2026, The Hearing Officer responded to the Request for Reconsideration stating that the remedy provided for in Policy 97-17 would be an Appeal.

On May 12, 2026, Mr. Defilippis raised four exceptions in support of the Appeal. They are more specifically detailed in his letter.

On May 18, 2026, the City issued a Notice of Administrative Appeal Hearing for June 1, 2026, at 5:00 p.m.

-3-
The formal appeal by The Rock Zone provided four exceptions to the April 28, 2026, Decision. They are briefly addressed below.

Exception 1. Failure to establish the violations claimed. Based upon the Findings of Fact and Conclusions of Law the Hearing Officer’s Decision is supported by substantial evidence in the administrative record.

Exception 2. Due process violations based on the failure to produce existing materials identifying what was in fact seized from The Rock Zone. The Hearing Officer advised the parties that his decision will be based only on evidence presented at the hearing, including testimony of witnesses and documentary evidence entered into the record by the Hearing Officer, as well as matters subject to administrative notice. He determined that the police reports were not entered into the record and they would not be made part of the record of decision in the proceedings. He advised the parties his decision required determining if the City has shown by the preponderance of the evidence whether The Rock Zone has violated any the provisions of the GCC or any other law or ordinance relating to the business of the license, or is conducting or has conducted or operated such business so as to be detrimental to the public morals or public welfare as set forth in GCC Section 13.45. (Email dated Apri 2, 2026) Exception 3. Stay or continuance of the proceedings. The request was timely and should have been granted. The Hearing Officer granted the first continuance at the request of The Rock Zone’s counsel. On April 3, 2026, the continued Hearing, the Hearing Officer considered City’s testimony and the renewed request for a stay and alternatively, a continuance made by Mr. Defilippis. The Hearing Officer denied the request for a stay and granted the continuance until April 17, 2026. On May 7, 2026, Mr. Defilippis requested reconsideration of the matter, specifically the penalty. The Hearing Officer advised that pursuant to the Hearing Policy the only available remedy was an appeal to the City Council.

Exception 4. The penalty is excessive. After considering the oral and written testimony in the administrative record, the Hearing Officer determined that the violations established at the Hearing were serious, but did not, under the specific facts presented, warrant an outright revocation of Business License No. 16606725. He found that a “six-month prohibition on tobacco product sales is proportionate to the violations found and serves the public interest in promoting compliance with the City’s business and tobacco retail regulations.” Since the concurrent state enforcement action was not part of the Hearing, the Hearing Officer did not, and could not, consider evidence the business owner of The Rock Zone would be facing significant penalties for violations of state laws and regulations.

-1-
Order of Proceedings – June 1, 2026 City Council Meeting Appeal from the Hearing Officer’s Decision to Modify Business License No. 16606725 and Tobacco Retailer’s Permit for Account No. 16606725, The Rock Zone, 1323 First Street, Gilroy CA.

I. Mayor’s Introduction of the Item.

II. City Attorney’s Explanation of the City of Gilroy City Code (GCC) (GCC Article VIII, Tobacco Retailer Permit, Section 13.65 et seq, and GCC Chapter 13, Licenses, Sections

13.2 and 13.45) governing this Appeal Hearing.

III. Public Comment.

Although this is not a Public Hearing, pursuant to Section 54954.3 of the Government Code, members of the Public who wish to address the Council on this matter may do so at this time.

IV. Opening Argument by Appellant, The Rock Zone (10 mins) V. Opening Argument by Respondent, City Staff (10 mins) VI. Rebuttal Argument by Appellant, The Rock Zone (5 mins) VII. Rebuttal Argument by Respondent, City Staff (5 mins) NOTE- At this Appeal Hearing there will be no addition oral or written testimony. The Council’s review is limited to the administrative record and oral argument. (Policy 97-17) VIII. City Council Deliberation.

Possible Actions:

A. Deny the Appeal. This action upholds the Decision of the Administrative Hearing Officer to Modify Business License No. 16606725 and Tobacco Retailer’s Permit for Account No. 16606725 issued to The Rock Zone. A Resolution of the City Council, making certain findings, is attached.

B. Grant the Appeal. This action overturns the Decision by the Administrative Hearing Officer to Modify Business License No. 16606725 and Tobacco Retailer’s Permit for Account No. 16606725 issued to The Rock Zone.

Appropriate action is a motion to continue the matter to a date certain to bring back the final Resolution Granting Appeal of The Rock Zone and overturning the Decision by the Administrative Hearing Officer to Modify Business License No. 16606725 and Tobacco Retailer’s Permit for Account No. 16606725 issued to The Rock Zone.

C. Modify Business License No. 16606725 and Tobacco Retailer’s Permit for Account No. 16606725. This action requires a Resolution of the City Council, making certain findings, be adopted. The appropriate action is a motion to continue the matter to a date certain to bring back the final Resolution Modifying the Decision of the Administrative Hearing Officer to Modify Business License

-2-
No. 16606725 and Tobacco Retailer’s Permit for Account No. 16606725 issued to The Rock Zone.

IX. Adjourn the Special City Council Meeting of June 1, 2026.

MEMORANDUM
TO: Mayor Bozzo and City Councilmembers
FROM: Jolie Houston, Assistant City Attorney
RE: The Rock Zone Appeal – Substantial Evidence
DATE: May 27, 2026
The Appeal of the City of Gilroy’s (City) Hearing Officer’s Decision (Decision) to modify Business License No. 16606725 and Tobacco Retailer’s Permit for Account No. 16606725 for The Rock Zone is scheduled to be heard by the City Council at 5:00 p.m. on June 1, 2026. This Administrative Hearing (Hearing) is being held pursuant to City’s Administrative Hearing Policy adopted by Resolution 97-17 (Hearing Policy). The general concept is that the Hearing Officer holds a hearing, and the City Council acts like an appellate court, with its review limited to the administrative record and oral argument. Section VII of the Hearing Policy provides as follows:

SECTION VII – ACTION BY CITY COUNCIL ON APPEAL
Appeal to the City Council shall be confined to oral and written argument and the administrative record. Upon consideration of the entire record of the hearing, including the Hearing Officer’s decision and the exceptions and written argument that were filed with the City Clerk, the City Council may adopt the Hearing Officer’s decision in its entirety, or the decision may be rejected or modified.

Under the Hearing Policy, the City Council has the power to adopt the Decision, or reject it, or modify it. If your decision is to modify the business license, then if the matter is tested in court, the legal standard would be whether or not “substantial evidence” exists to support your decision. In other words, is there sufficient evidence in the record in front of you (that is, the record of the administrative hearing before the Hearing Officer) to support a decision to modify the Business License and/or Tobacco Retailer’s Permit?
“Substantial evidence” means that there is evidence in the record supporting the decision.

It does not mean that the evidence is conclusive, or that it is even more compelling than evidence that may point in the other direction. In other words, the substantial evidence test does not presume that there is only one result that could be reached. Often in such matters there is substantial evidence that would support a decision going either way. It is for the City Council to make a decision supported by substantial evidence; if that decision is supported by substantial evidence, then it should be upheld in a court, even if the court believes that the weight of evidence may have been in the other direction.

RESOLUTION NO. 2026-XX

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GILROY
ADOPTING THE ADMINISTRATIVE HEARING OFFICER’S DECISION REGARDING BUSINESS LICENSE NO. 16606725 AND TOBACCO RETAILER’S PERMIT NO. 16606725 ISSUED TO THE ROCK ZONE, LOCATED AT 1323 FIRST STREET,

GILROY, CALIFORNIA
WHEREAS, Gilroy Municipal Code Section 13.45 authorizes the City to suspend, revoke, or modify a business license where the Chief of Police determines that violations of law or City code have occurred in connection with the operation of the business; and
WHEREAS, the City’s Administrative Hearing Policy established by Resolution No. 97- 17 authorizes the appointment of a Hearing Officer to conduct administrative hearings and issue written decisions; and
WHEREAS, on March 3, 2026, the City issued a Notice for Administrative Hearing concerning Business License No. 16606725 to The Rock Zone located at 1323 First Street, Gilroy, California; and
WHEREAS, Administrative Hearing Officer Alan Seltzer conducted administrative proceedings pursuant to Resolution No. 97-17, including hearings held on April 3, 2026, and April 17, 2026; and
WHEREAS, the Hearing Officer considered testimony, documentary evidence, written submissions, procedural motions, and the administrative record developed during the proceedings; and
WHEREAS, on April 28, 2026, the Hearing Officer issued a written Administrative Decision regarding Business License No. 16606725 and related Tobacco Retailer’s Permit No. 16606725; and
WHEREAS, via a letter dated May 12, 2026, Steve M. Defilippis, Attorney representing Adel Ammari and The Rock Zone, timely appealed the Hearing Officer’s Administrative Decision to the City Council pursuant to Resolution No. 97-17; and WHEREAS, pursuant to Section VII of Resolution No. 97-17, the City Council’s review on appeal is confined to oral and written argument and the administrative record; and WHEREAS, the City Council has reviewed and considered:

1. the complete administrative record;

2. the Hearing Officer’s Administrative Decision;

3. the written appeal submitted by the appellant;

4. oral arguments presented to the City Council; and

5. all other materials submitted in connection with the appeal proceedings.

Resolution No. 2026-XX
Appeal Hearing Regarding The Rock Zone
City Council Special Meeting | June 1, 2026

NOW, THEREFORE, BE IT RESOLVED THAT THE CITY COUNCIL OF THE CITY OF GILROY DOES HEREBY FIND, DETERMINE, AND RESOLVE AS FOLLOWS:

SECTION 1. The foregoing recitals are true and correct and are incorporated herein by this reference.

SECTION 2. The City Council finds that the administrative proceedings conducted before the Hearing Officer complied with the procedures established under Resolution No. 97-17 and afforded appellant due process, including notice and opportunity to be heard.

SECTION 3. The City Council finds that substantial evidence exists within the administrative record to support the Hearing Officer’s findings and Administrative Decision dated April 28, 2026, including evidence relating to:
a) enforcement actions conducted by the Gilroy Police Department; b) testimony regarding undercover operations, inspections, and seizures; c) evidence concerning flavored tobacco products and controlled substances; d) business operations conducted at the premises; and
e) violations of applicable laws and City regulations.

SECTION 4. The City Council further finds that the Hearing Officer properly considered the evidence and arguments presented by both the City and appellant, including arguments relating to:
a) alleged legality of seized products;
b) applicability of exemptions under California law;
c) procedural objections;
d) requests for stay; and
e) administrative penalties and remedies.

SECTION 5. Pursuant to Resolution No. 97-17, the City Council hereby adopts and affirms the Administrative Decision of Hearing Officer Alan Seltzer dated April 28, 2026, regarding Business License No. 16606725 and Tobacco Retailer’s Permit No. 16606725 issued to The Rock Zone.

SECTION 6. The appeal filed by Steve M. Defilippis, Attorney representing Adel Ammari and The Rock Zone, is hereby denied.

Resolution No. 2026-XX
Appeal Hearing Regarding The Rock Zone
City Council Special Meeting | June 1, 2026

SECTION 7. The City Administrator, City Attorney, Finance Director, Police Chief, and all other appropriate City officials are authorized and directed to take all actions necessary to implement this Resolution and the Hearing Officer’s Administrative Decision.

PASSED, APPROVED, AND ADOPTED this 1st day of June 2026, by the following roll call vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

APPROVED:

______________________________

Greg Bozzo, Mayor
ATTEST:

Kim Mancera, City Clerk

Resolution No. 2026-XX
Appeal Hearing Regarding The Rock Zone
City Council Special Meeting | June 1, 2026

CERTIFICATE OF THE CLERK
I, KIM MANCERA, City Clerk of the City of Gilroy, do hereby certify that the attached Resolution No. 2026-XX is an original resolution, or true and correct copy of a City Resolution, duly adopted by the Council of the City of Gilroy at a Special Meeting held Monday, June 1, 2026, with a quorum present.

IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Official Seal of the City of Gilroy this Date.
____________________________________
Kim Mancera
City Clerk of the City of Gilroy
(Seal)

Administrative Hearing: The Rock Zone – Pre-hearing Conference Transcript – April 1, 2026 Transcript by Rev.com Page 1 of 15
Alan Seltzer (Administrative Hearing Officer) (00:02):

All right, let me start again. It's, um, April 1st, 2:00 in the afternoon. My name is Alan Seltzer and I'm the independent hearing officer who's been assigned to hear this matter, which is the, um, uh, license revocation involving the Rock Zone. Um, I asked for this meeting because, um, Mr. Defilippis, you represent, uh, the, the business owner, Mr. Amari, correct? Steve Defilippis (Respondent Attorney) (00:34):

That's correct. And the business, of course, itself.

Alan Seltzer (Administrative Hearing Officer) (00:37):

Okay. Um, on Monday, um, you've submitted a request to stay the proceeding raising, um, the property owner's Mr. Amari's, uh, Fifth Amendment privilege, uh, against self-incrimination. So far I've got it, right? (Laughs).

Steve Defilippis (Respondent Attorney) (00:58):

That's correct.

Alan Seltzer (Administrative Hearing Officer) (00:58):

Okay. So let me tell you, I'm gonna ask you each to address some of my concerns and then figure out how we should deal with this procedurally. Um, so I understand that there's no automatic stay. This is subject to my discretion whether to stay the case, and in doing so, I have to basically hear from you, Mr.

Defilippis, and also the city attorney, as to whether there's a substantial prejudice to the criminal defense i- if, if the hearing was to go forward. And it just, to the extent that that's an issue, I may have to try to balance the issues, I mean, balance the interests in accommodating, uh, the interests which I'm gonna try to identify in a moment.
(01:42):

Um, so I, I did receive the, um, stay request and I've read some of the cases and I see, I can see how in, um, the Pacers versus Superior Court case that you cited, Mr. Defilippis, that a stay of discovery would be appropriate because requiring answering discovery would compel, um, testimony in violation of the Fifth Amendment privilege.
(02:13):

Um, so I, I, I see that's a, a discovery, uh, issue, um, but I was intrigued by the Black versus State Bar case that you also cited, where the California Supreme Court basically held that there was no immunity, um, from proceeding. There was no, no stay, there was no problem, um, in proceeding with a disciplinary hearing, which this might be more like a disciplinary hearing than it is a civil proceeding involving discovery because in Black v. State Bar, the, the person could have just declined to testify and protected their privilege. So, um, and, and I, I'm gonna ask you to try to address one of my concerns is that there's no cross-examination in this proceeding.
(03:07):

So, um, if Mr. Amari has an interest in testifying, I'm not making any assumptions whether he was, would be and whether it's self-incrimination privile... against self-incri... cri... crimination privilege is even at issue, but assuming he would've te- testify, he couldn't be cross-examined so he could limit his testimony in a way that might protect that privilege.
(03:31):

Administrative Hearing: The Rock Zone – Pre-hearing Conference Transcript – April 1, 2026 Transcript by Rev.com Page 2 of 15
Um, so I, that's, you know, and then I have to balance issues. And I just wanna get this out on the table and hear from you. Um, I know that, Mr. Defilippis, you have suggested that, um, you would, uh, consent or agree to, uh, Mr. Amari removing all prohibited, um, products during the pendency of the stay from the store. That's, that was, that's the offer I saw in your state request. D- did I get that right? Steve Defilippis (Respondent Attorney) (04:05):

That is correct. And, and there are no longer any, uh, prohibited items, uh, in the store.

Alan Seltzer (Administrative Hearing Officer) (04:12):

But if I was to accept that as a basis for balancing the city's concern, then, um, I would think that the city would have the right to go in and inspect and, and ensure that during the pendency of a stay.

Steve Defilippis (Respondent Attorney) (04:27):

Absolutely.

Alan Seltzer (Administrative Hearing Officer) (04:28):

Okay.

Steve Defilippis (Respondent Attorney) (04:28):

And that, uh, that was part of, uh, what I had suggested as well in my, uh, uh, emailAlan Seltzer (Administrative Hearing Officer) (04:34):

Okay.

Steve Defilippis (Respondent Attorney) (04:34):
... to, uh, uh, yourself.

Alan Seltzer (Administrative Hearing Officer) (04:37):

All right. So I might have missed the, the, the agreement to that as well. On the other hand, I, I, if the city was not amenable to that, I, I have looked at and see that I could suspend the tobacco retail permit.

I, I as- I assume that, um, the business, um, sells more than tobacco products, so you could agree, uh, to, in balancing the city's interest, uh, to, to, to a suspension of the tobacco permit pending the criminal trial, just throwing that out.
(05:16):

Um, and so what is, you know, I'm gonna ask Ms. Houston to address what the, um, city's interests are in terms of, uh, agreeing to a stay or opposing a stay. And, um, uh, in that regard, uh, in preparing for the hearing, I just wanna say I note that, and I wanna make sure I understand that on January 6th, um, Mr., Um, Amari met with an officer Carillo where he was, uh, uh, arrested and posted bail. Um, and is that the criminal case that's, uh, caught, prompted your request? Steve Defilippis (Respondent Attorney) (05:59):

That is, that is the arrest that resulted in the, uh, the criminal prosecution, yes.

Alan Seltzer (Administrative Hearing Officer) (06:04):

Administrative Hearing: The Rock Zone – Pre-hearing Conference Transcript – April 1, 2026 Transcript by Rev.com Page 3 of 15
Okay. Well, that, that's, that's helpful to know. So in that regard then, after January 6th, 2026, the police reentered the store, I believe. I'm not sure. You'll have to let me know, but I think, um, after... No, it was after the, um, March 2025, um, I'm looking at my notes here, search warrant that was served, um, that on January 8th, I think that's two days after this meeting at which Mr. Amari was arrested, the police went back to the store and found more flavored nicotine. So I see that, you know, there's some issues of trust and, and, and compliance. Um, so I think I've given you as much as I could figure out in the short time I've had this state request, and I think what I'm gonna do since I have the request, I'm gonna ask Ms. Houston to address, you know, whether or not a stay is something the city would agree to, and under what terms, and then just help me, um, uh, understand the city's position as to whether a stay is even required in this particular case.

Jolie Houston (Assistant City Attorney) (07:32):

Mm-hm. Okay. First, um, again, I'm not going to the substance of the business license revocation or not since I'm not advising you on that and I, it's this, I'm not, there's gonna be staff members that will be putting onAlan Seltzer (Administrative Hearing Officer) (07:48):
[inaudible 00:07:49].

Jolie Houston (Assistant City Attorney) (07:48):
... the city's case. IAlan Seltzer (Administrative Hearing Officer) (07:50):

And Ms.- Ms. Houston, I get that and for the record, I just want... I've asked the attorneys here solely for the purpose of addressing a stay requestJolie Houston (Assistant City Attorney) (07:59):

Yeah.

Alan Seltzer (Administrative Hearing Officer) (07:59):
... a procedural request, and to help brief me on what my discretion is. All right? Because it's a case of first impression for this hearing officer.

Jolie Houston (Assistant City Attorney) (08:09):

Yeah. So, um, again, I, I just wanted to make the record clear on that. Um, the city attorney's office is not recommending this proceeding be stayed. We don't believe it is relevant to this administrative hearing.

The, uh, the business owner is represented by an attorney. The attorney can put on the case for him, um, and if there are issues of due process or first, first amendment protections, they can be noted for the record and then the hearing, the, it can be proceed- it can proceed. And as you mentioned, there is no cross-examination. So, um, again, Mr. Def- Defilippis can put on the case for his client and that will be the evidence that you will hear and decide on and it will... And if there are some objections, they'll be noted in the record, and if this gets appealed to counsel, those objections will be in the record that go to counsel and then ultimately if there's a writ taken, they will be in the record that will go to Superior Court.
(09:25):

Administrative Hearing: The Rock Zone – Pre-hearing Conference Transcript – April 1, 2026 Transcript by Rev.com Page 4 of 15
But, um, we don't believe that a stay is required, is required by law. We don't believe that it's necessary in this case. And as I would say for an example, because this is an administrative hearing, um, when there is a DUI conviction trial that's going on for someone that's alleged or being prosecuted for DUI, the DMV can still run a parallel track for a revocation of a driver's license that driver's [inaudible 00:10:04]- (10:03):
... revocation of a driver's license. That driver's license hearing is not going to be stayed because there's a criminal prosecution. And so there is, I think, a good analogy. We want this administrative proceeding to go forward. If there's any objections, the applicant is represented by an attorney, it can be put into the record. And the hearing officer, based on the city's evidence and testimony can make a decision.

And it, and it does not require the applicant's, um, testimony. And again, as you mentioned, there's no First Amendment requirement. Uh, I mean, First Amendment, no, um, cross-examine requirement, sorry.

PART 1 OF 4 ENDS [00:10:04]
Alan Seltzer (Administrative Hearing Officer) (10:51):

Okay. Mr. Def- Defilippis, uh, your take.

Steve Defilippis (Respondent Attorney) (10:56):

Thank you. Uh, I have a much different, uh, analysis of this and, uh, part of it, uh, stems from an understanding of the, uh, the criminal process itself. Um, first of all, uh, while I appreciate Ms. Houston's reference to, uh, a DUI case, when the administrative hearing occurs in a DUI case, it is the criminal defendant who requests the, uh, administrative hearing. Um, there is essentially an automatic suspension that occurs that the, uh, DUI defendant can just allow to, uh, to go forward. Um, and, uh, it's simply a temporary, uh, suspension of, uh, the driving privilege. The, uh, actual suspension lasts 30 days, and the balance of the suspension is, uh, allows driving to and from work. So it is very minimal impingement upon the, uh, the DUI defendant, uh, and that was a, uh, concern that was brought up, uh, by the, uh, concerns about driving, uh, you know, when you are someone who drinks and gets behind the wheel. Um, so it isAlan Seltzer (Administrative Hearing Officer) (12:18):

So you, you're saying that in the DUI, uh, hyp- hypothetical, it's the criminal defendant who requests the hearing, otherwise the suspension goes forward?
Steve Defilippis (Respondent Attorney) (12:28):

That's correct.

Alan Seltzer (Administrative Hearing Officer) (12:28):

Okay.

Steve Defilippis (Respondent Attorney) (12:29):

Um, you have to, you have 10 days to, uh, request the, uh, administrative hearing and, uh, uh, it is the criminal defendant that has to make that request. Uh, if they make the request, the hearing, uh, goes forward and there's a stay of the, uh, suspension pending the outcome of the hearing. Um, also, uh, uh, sometimes that hearing can actually be stayed pending the outcome of the criminal DUI case as well, uh,

Administrative Hearing: The Rock Zone – Pre-hearing Conference Transcript – April 1, 2026 Transcript by Rev.com Page 5 of 15
or it can go forward if the, uh, the criminal defendant chooses, uh, to have it go forward. Here, the concern is not simply that there's going to be discovery, uh, uh, that has to be answered under oath. It is not a concern that the, uh, uh, there will be cross-examination. Um, a criminal defendant does not have to provide discovery in a criminal case until 30 days before trial, uh, and that's only if the prosecutor provides all discovery and provides a witness list to the, uh, the defendant and then the defendant has to respond back with discovery.
(13:47):

So for instance, in a, uh, uh, typical out of custody case, uh, those can proceed six months to a year, uh, and longer. And most of that time the prosecutor is not aware of what the defense is in the case. Um, and there is no requirement that the defendant have to, uh, provide information to the, uh, the prosecution. Here, you would have a recorded proceeding. And part of this, I think, does have to go to, you know, how is this matter going to be defended in the administrative proceeding? Uh, there's going to be issues of the understanding of the, uh, uh, of the business and the business owner as to what is and is not allowed to be sold in, uh, a tobacco store. And really the only person that can put that on is, uh, Mr. Omari. Mr. Omari would be the only one that can, can say what he knew and what he understood as the, uh, uh, governing, uh, principles that he had to, uh, to do business under.

Alan Seltzer (Administrative Hearing Officer) (15:06):

Can I ask you a question on that?
Steve Defilippis (Respondent Attorney) (15:07):

Sure.

Alan Seltzer (Administrative Hearing Officer) (15:07):

I mean, wha- uh, what's the relevance of his understanding if, and I have still t- need time to prepare for this hearing, if the issue is whether or not illegal products were sold? Steve Defilippis (Respondent Attorney) (15:20):

Uh, his understanding and his, his history, uh, in the business would go to what the ultimate punishment, uh, should be and whether, uh, uh, you know, his license gets taken away, does it get suspended for, uh, a period of time. And if it gets suspended for a period of time, is it going to be a short period of time, a long period of time? Uh, are there going to be, uh, any kind of fines levied? Uh, is, uh, uh, you know, is this something where essentially what you can do is allow the, uh, business owner to go back to, uh, uh, continuing his business assuming that he no longer violates, uh, any of these rules and has that understanding of, uh, what the, uh, uh, the rules are and, uh, um, you know, does it underessentially a probationary, uh, type of, uh, uh, term. (16:19):

So I believe that is relevant. And what's going to happen is you're gonna have a recorded, uh, uh, proceeding where Mr. Omari gives, uh, testimony. Even though it's just direct examination with no cross, it requires him to divulge what his, uh, particular, uh, uh, defense is going to be, which would also be a defense in the, uh, uh, the criminal case. So it's sort of essentially forcing him to have to divulge matters that, uh, um, would affect the outcome of the, uh, the criminal case. The concerns that the city raises, um, the city did these actions back in November of '24 and March of '25. And Mr. Omari continued to do business after, uh, those events occurred, and there was fairly significant period of

Administrative Hearing: The Rock Zone – Pre-hearing Conference Transcript – April 1, 2026 Transcript by Rev.com Page 6 of 15
time, um, about, uh, uh, we're at, uh, a little over a year from, uh, uh, the last time that, uh, uh, evidence items were seized from the, uh, from the business and, uh, myAlan Seltzer (Administrative Hearing Officer) (17:44):

Yet you're... You're saying, you're saying Mar- the March 6th, 2025 seizure becauseSteve Defilippis (Respondent Attorney) (17:53):

Yes.

Alan Seltzer (Administrative Hearing Officer) (17:54):

But, uh, have you received the, the police reports in this case? I, I, I was under the impression you have.

Steve Defilippis (Respondent Attorney) (18:02):

I have not been provided anything by the city in connection with the, uh, administrative proceedings other than, uh, um, the notices of the hearing.

Alan Seltzer (Administrative Hearing Officer) (18:15):

Oh, uh, I thought I was, had, had, uh, requested that, uh, documents that were to be submitted at the hearing be p- be exchanged beforeSteve Defilippis (Respondent Attorney) (18:27):

I, I believe that the, uh, the exchange on that, uh, and Mr. Sangha can, uh, confirm this is going to be the close of business today.

Harjot Sangha (Finance Director) (18:39):

That is correct. Uh, the, uh, business owner was provided, uh, with instructions on how to request the police, uh, reports. I'm not sure if they've shared it with their legal counsel or not, or if they've requested copies or not.

Alan Seltzer (Administrative Hearing Officer) (18:52):

Okay. All right. So why don't you continue then? I'm sorry to have raisedSteve Defilippis (Respondent Attorney) (18:59):

Thank you. Uh, so my position is that the, the lack of cross-examination and lack of discovery are not, uh, um, essentially, uh, turning points in the determination of whether, uh, a stay should be, uh, utilized.

And the reason I brought up the fact that, uh, there is, uh, uh, you know, basically a one-year period of time that the business has continued to, to operate, uh, shows that the, uh, uh, the city is not being prejudiced by the ongoing, uh, uh, operation of the business that, uh, should there be any, uh, uh, stay imposed, as I have suggested in my, uh, request. Um, the city should be able to come in at any time and, uh, make, uh, its own determination of whether there is still compliance with the, uh, um... (20:03):
... Of whether there is still compliance with the, uh, uh, terms of the, uh, the city codes. Um, there is deconstruction that, uh, was part of, uh, this proceeding. Um, that has been, uh, already done. Uh, we're simply waiting for the city to, uh, umPage 159 of 530 Administrative Hearing: The Rock Zone – Pre-hearing Conference Transcript – April 1, 2026 Transcript by Rev.com Page 7 of 15
PART 2 OF 4 ENDS [00:20:04]
Alan Seltzer (Administrative Hearing Officer) (20:24):

Let, let me clarify something. Uh, my understanding is that the land use permit issue is not part of my jurisdiction. I'm only dealing with the revocation of, uh, the proposed revocation of a business license.

So just, just so you know, I don't believe, and in fact, I do not have jurisdiction over the land use issue.

Steve Defilippis (Respondent Attorney) (20:45):

Yeah. Uh, my, my understanding just simply came from reviewing the limited documents that I've received, uh, uh, which basically, uh, uh, throw both of those issues kinda together and I, I assume that it was, both were being considered.

Alan Seltzer (Administrative Hearing Officer) (21:03):

Well, this, this, this pre-hearing conference might have some (laughs) other good resultsSteve Defilippis (Respondent Attorney) (21:09):

Yeah.

Alan Seltzer (Administrative Hearing Officer) (21:09):
... clarifying what's going on.

Steve Defilippis (Respondent Attorney) (21:10):

Narrow, narrow some things down for us.

Alan Seltzer (Administrative Hearing Officer) (21:12):

Yeah.

Steve Defilippis (Respondent Attorney) (21:12):

Uh, but I think that's also a, uh, a good point to bring up because, uh, what it does show is, it shows the, uh, the efforts that my client is making to, uh, uh, to be in compliance with the city. Uh, you know, he's a 72-year-old man, um, who has, uh, you know, been involved in this business for 30 years and, uh, has not had any problems in the past until, uh, this particular, uh, event. And, uh, now that it's come to light, everything that's been requested of him, he has, he has done and is continuing to, uh, make every effort that he can to, uh, comply with the, uh, the city rules. So I think that, uh... Uh, I'm sorry, was there something you wanted toAlan Seltzer (Administrative Hearing Officer) (22:01):

Yeah, before you leave this area, uh, you have, you're not gonna get the police reports till tonight, apparently. But if you were under the... You knew that after March and after the arrest, there was another police, um, uh, search of the, uh, facilities and illegal flavored, uh, tobacco products were seized. Would that change your c- um, argument with respect to the city's interests? Steve Defilippis (Respondent Attorney) (22:36):

Administrative Hearing: The Rock Zone – Pre-hearing Conference Transcript – April 1, 2026 Transcript by Rev.com Page 8 of 15
Well, it may be confusion on the part of my client, but, uh, my understanding was that the last time that they came back, what they took was, uh, hookah tobacco. And, uh, uh, it was his understanding that the hookah tobacco was, uh, uh, essentially allowed as one of the items that can be sold. Uh, so I don't believe that, uh, this last seizure was anything that, uh, uh, uh, supports the, uh, the city's position on, uh, uh, the license revocation issue.

Alan Seltzer (Administrative Hearing Officer) (23:21):

All right. Okay. Keep going. I'm sorry to interrupt, but...

Steve Defilippis (Respondent Attorney) (23:27):

It's all right. Uh, best to ask those questions as we're going along, uh, or otherwise we forget them. UmAlan Seltzer (Administrative Hearing Officer) (23:33):

It's, it, it's my MO. I'm sorry about that, but I, I'm fact finding and I need to understand what's going on.

Steve Defilippis (Respondent Attorney) (23:41):

Uh, good.
(23:42):

Uh, in any event, uh, I think, uh, really what I can, what I can summarize this as is, is this is a, this is an individual that, uh, has had long history of compliance with the city. This, uh, recent turn of events, um, he's been involved in, in taking care of, uh, uh, to make sure that he is no longer in, out of compliance with the, uh, the city rules. And he's doing everything that he can to, uh, to make sure that, uh, he has the ability to move forward with, uh, with this business. It's a business he's, he's long had. And, uh, uh, you know, what we're trying to do is we're trying to avoid there being any kind of, uh, um, ongoing issues, uh, that impact the, uh, the criminal case.
(24:35):

Uh, you know, this is the guy who's gotten to 72 years old without, uh, any, uh, criminal history. Uh, he does not have any, uh, adverse background. Uh, he's been a contributing member of the, uh, the Gilroy community. And, uh, uh, what we're looking for is a short period of time. It's probably gonna be somewhere between, uh, three and six months, and probably closer to the three than to the six. And, uh, trying to get the, uh, the matter just simply put off so that there is no impact on the, uh, the criminal case.

Alan Seltzer (Administrative Hearing Officer) (25:14):

All right. Well, you have m- made me think about my discretion in terms of ultimately deciding this case and what type of, uh, penalty or what discretion I have on that regard, but now I w- I need to focus on the stay, um, request. Um, Ms. Houston, uh, anything to say in response? Jolie Houston (Assistant City Attorney) (25:42):

Um, no. I would say that we still wanna proceed with the administrative hearing. Um, I don't know all the background. I haven't read the police reports. I haven't... I'm not part of that prosecution.

Alan Seltzer (Administrative Hearing Officer) (25:56):

Mm-hmm.

Administrative Hearing: The Rock Zone – Pre-hearing Conference Transcript – April 1, 2026 Transcript by Rev.com Page 9 of 15
Jolie Houston (Assistant City Attorney) (25:57):

I know tomorrow or I... It's Friday, I guess. (laughs) It's Friday. Um, uh, there will be city witnesses there that will be able to talk to the prejudice of the city if there was a stay. (26:12):

Um, and I haven't talked to, uh, you know, I haven't been involved in the criminal prosecution or the, the... Not the criminal prosecution, the, uh, city's background on all of this. (26:26):

But, I do not see how, um, we can't go forward with this hearing because it is about his business license and it has nothing to do with the, um, the criminal case. Because this is a local code section that's being in... I- it's, it's a local permit that is being violated, and if you violate the, the city's local rules, the way the business license ordinance is set up is it's a regulatory business license, not just revenue raising. (27:09):

So if there is cause to believe that there are violations of the Gilroy Code or local codes, um, there can be a recommendation to revoke the business license. And so it is just the business license, it's just the Gilroy Code sections. Um, and so I, I believe very strongly that it can go forward and it should not have ...

And if he wants to testify, he can, uh...
(27:37):

Um, but I do think that there is, there is prejudice to the city if this business continues to operate, um, because there were violations of the tobacco permit regulations in the city's code. And I, in trying to just say, "Oh, well, we'll catch him with, with ongoing inspections," I, I, as a representative of this, as the city, I can't, I can't recommend that. I, I think these two hearings can go forward. Uh, the criminal can do what it needs to do, but this is just the local codes.
(28:16):

And, you know, the DA or the... Whoever's prosecuting these other cases, they don't enforce our codes and we don't enforce their codes. So it is, it is a separate enforcement, two different enforcement arms.

Alan Seltzer (Administrative Hearing Officer) (28:32):

A- a- and I, I have to look at the code a little more closely. Um, it, it sounds like almost with respect to viola- if I pro- if the violation is proven, uh, what Mr. Defilippis has talked to me about today is the, goes to the penalty, whether suspension versus, um, revocation, if that's an option, that his client might wanna testify to that.
(29:01):

Is it... That, that's what I, I heard you say, Mr. Defilippis. It may not be a strict defense that, "We didn't sell this," uh, but he might want... I don't know what his testimony's gonna be. I'm not sure, um, how essential his testimony is to the defense as to whether the violation occurred, that is the basis of the revocation.
(29:21):

But it's something, uh, you know, I... We have such a short period of time. I'm gonna keep the hearing on schedule, but I'm not sure whether this is gonna turn out to be a, a bifurcated hearing on the stay issue before going forward.
(29:36):

Administrative Hearing: The Rock Zone – Pre-hearing Conference Transcript – April 1, 2026 Transcript by Rev.com Page 10 of 15
Um, what I'd like to do is, uh, you know, I, I remember when I was, uh, an attorney and I got a, um, a complaint. And I needed to get a t- there was a TRO scheduled the next day. I had to stay up all night and write a brief. (laughs).
(29:52):

If you, either of you have anything more to, that you think I should consider, uh, before deciding how to proceed on Friday morning at the hearing, because I don't think- (30:03):
... deciding how to proceed on Friday morning at the hearing because I don't think I'm gonna have time to actually make a decision in advance. Um, and if we do have a hearing, Ms. Houston, I, uh, I have cleared my calendar for next Thursday if we can't, if we're gonna turn this matter into a stay hearing on Friday morning and, and I hear the city's witnesses as to why there's a concern and, um, that is juwarrants, um, either no stay or a more significant stay in the nature of a suspension of the t- uh, and Mr. ...
(30:39):

I'm tip- tipping my hand. I'm just, all I can think of is suspension of the temporary, I me- I'm sorry, tobacco retail permit pending the, um, during the stay to, to protect the city. These are the things that are in my head, but I don't know how to, how it's gonna come out. So if you have anything you wanna provide, please give it to Mr. Sangha by the close of business. No, actually a little earlier, by 4:00 tomorrow so he can get it to me and I can actually read it.

PART 3 OF 4 ENDS [00:30:04]
Steve Defilippis (Respondent Attorney) (31:07):

Okay.

Jolie Houston (Assistant City Attorney) (31:07):

Okay, yeah.

Steve Defilippis (Respondent Attorney) (31:07):

UmJolie Houston (Assistant City Attorney) (31:09):

And I'd like, I didn't ... Yeah, I, I know that the, Mr. Sangha is coordinating the documents and everything because I, I wasn't, I wasn't involved in all of that.

Alan Seltzer (Administrative Hearing Officer) (31:21):

Mm-hmm.

Jolie Houston (Assistant City Attorney) (31:22):

Uh, but I'm glad that they're going to be going out today for both sides and for you, Mr. Seltzer. The other thing that I do wanna clarify that might help is with the city's business license and the way the revocation hearings are set up through the policy 97-17- Alan Seltzer (Administrative Hearing Officer) (31:42):

Administrative Hearing: The Rock Zone – Pre-hearing Conference Transcript – April 1, 2026 Transcript by Rev.com Page 11 of 15
Mm-hmm.

Jolie Houston (Assistant City Attorney) (31:43):
... which I've had hearings under. Um, there, it's revocation modification or, um, so there's, there's several options. You can revoke it, you can modify it, or you can deny the request to revoke it. These are all appealable to the city council and the city council also has those options to revoke, modify, or deny.

So, um, there, there are some options and it didn't ... I never thought about even bringing them up to you until now that, yeah, there are some, there ... Uh, so a suspension until the criminal case is, I would believe, an option under that, um, resolution 97-17.

Alan Seltzer (Administrative Hearing Officer) (32:39):

And do you, uh, do you think I have the, um, authority to impose that on my own, or does that n- need to be an agreement between the two, the p- two parties, theJolie Houston (Assistant City Attorney) (32:47):

IAlan Seltzer (Administrative Hearing Officer) (32:48):
... the respondent and the city?
Jolie Houston (Assistant City Attorney) (32:49):

I believe it's under your authority under resolution 97-17. There's the notice and then there's the hearing and then there's the hearing officer's decision to do, you know, you're supposed to make written findings and then that can be appealed to the city council where that's when I get involved with the city council. But, um, just from memory of 97-17, I believe those are your options andAlan Seltzer (Administrative Hearing Officer) (33:17):

Okay. UmJolie Houston (Assistant City Attorney) (33:18):
... I have that, I have that resolution on my desk somewhere, but (laughs) I don't wanna waste your time trying to find it.

Alan Seltzer (Administrative Hearing Officer) (33:24):

Yeah.

Jolie Houston (Assistant City Attorney) (33:24):

Are you done?
Alan Seltzer (Administrative Hearing Officer) (33:24):

I, I have it right here. (laughs)
Jolie Houston (Assistant City Attorney) (33:24):

Yeah.

Administrative Hearing: The Rock Zone – Pre-hearing Conference Transcript – April 1, 2026 Transcript by Rev.com Page 12 of 15
Alan Seltzer (Administrative Hearing Officer) (33:26):

So I'll look at it. All right. Anybody wanna tell me anything else? Here's what I think, and I'mSteve Defilippis (Respondent Attorney) (33:31):

Yes.

Alan Seltzer (Administrative Hearing Officer) (33:31):

Go, go ahead.

Steve Defilippis (Respondent Attorney) (33:33):

Could, could I just interject something very quick?
Alan Seltzer (Administrative Hearing Officer) (33:34):

Please, please do.

Steve Defilippis (Respondent Attorney) (33:36):

Uh, um, you had mentioned, uh, clearing your calendar for next Thursday. I'm actually out of the country, uh, uh, as of, uh, next, uh, Tuesday evening. UmAlan Seltzer (Administrative Hearing Officer) (33:51):

Mm-hmm.

Steve Defilippis (Respondent Attorney) (33:52):
... and I've got, uh, pretty booked calendars on Monday and Tuesday. Um, so we'd have to figure out a different date, uh, if we could, uhAlan Seltzer (Administrative Hearing Officer) (34:02):

When do you return?
Steve Defilippis (Respondent Attorney) (34:04):

Uh, on theAlan Seltzer (Administrative Hearing Officer) (34:05):

When are you next available?
Steve Defilippis (Respondent Attorney) (34:07):

Yeah. It ... Let me just check my calendar here. I'm actually back, uh, and working on the 15th, um, but I'm pretty booked up that day.

Alan Seltzer (Administrative Hearing Officer) (34:44):

But the 16th or 17th would be fine then.

Steve Defilippis (Respondent Attorney) (34:47):

Administrative Hearing: The Rock Zone – Pre-hearing Conference Transcript – April 1, 2026 Transcript by Rev.com Page 13 of 15
16th ... Se- se- seAlan Seltzer (Administrative Hearing Officer) (34:53):

Right now, I'm looking at the 16th in the afternoon and any time during the 17th. I'm holding my schedule open. And this is just, uh, f- f- for planning purposes and, andSteve Defilippis (Respondent Attorney) (35:08):

You, you mentioned those medical appointments. Uh, I've, uh, I'm getting my right hip replaced, uh, and I've got a pre-op, uh, on the afternoon of the 16th at 3:30. Uh, I don't know how flexible you are on times, but, uh, probably would have at least a few hours before that, uh, to, uhAlan Seltzer (Administrative Hearing Officer) (35:27):
(laughs)
Steve Defilippis (Respondent Attorney) (35:28):
... do something.

Alan Seltzer (Administrative Hearing Officer) (35:29):

Doctor's, doctor's appointments are dominating all of our schedules. So Friday the 17th will, uhSteve Defilippis (Respondent Attorney) (35:35):

Friday the 17th is ... I've got a couple of matters, but I think I can have an associate appear on those.

Alan Seltzer (Administrative Hearing Officer) (35:48):

I would appreciate that because I too have a, aSteve Defilippis (Respondent Attorney) (35:51):

Yeah.

Alan Seltzer (Administrative Hearing Officer) (35:52):
... very limitedJolie Houston (Assistant City Attorney) (35:53):

Yeah.

Alan Seltzer (Administrative Hearing Officer) (35:53):
... schedule.

Steve Defilippis (Respondent Attorney) (35:54):

I could do, I could do the 17th, uh ...

Alan Seltzer (Administrative Hearing Officer) (35:56):

Administrative Hearing: The Rock Zone – Pre-hearing Conference Transcript – April 1, 2026 Transcript by Rev.com Page 14 of 15
Okay. And Ms. Houston, I'm ... It's just, uh, we'll talk about all of that on Friday, but at least the city will have an understanding that if there was a, um, a, a, a continuance or a interim stay, um, we would, we would reconvene on the 17th, um, as a pos- as, as a date that would work for at least Mr. Defilippis and hopefully the city. All right.

Steve Defilippis (Respondent Attorney) (36:28):

Mr. Seltzer, uh, is it ... Am I correct in my understanding that what we're dealing with on Friday is the stay issue and then if the, uh, the stay doesn't, uh, uh, happen, then, uh, we'll be back on the 17th for the actual hearing?
Alan Seltzer (Administrative Hearing Officer) (36:45):

I'm not sure. I was thinking if the stay doesn't happen, we'd have the hearing. Um, but that's something that you might want to address. Uh, like I said, I have t- until 4:00 tomorrow. Please help me out.

Steve Defilippis (Respondent Attorney) (36:58):

Okay.

Alan Seltzer (Administrative Hearing Officer) (36:59):

UmSteve Defilippis (Respondent Attorney) (37:00):

I'll know more when I see the documents that, uh, Mr. Sangha, uh, provides this afternoon.

Alan Seltzer (Administrative Hearing Officer) (37:06):

Okay. So that could be a possibility. I, I also want to have the ... Whatever decision is gonna be rendered on a stay or needs to happen in April, so we'll figure this one out. Um, all right, well, thank you. You threw me a curveball and we'll see how I can handle it on, uh, Friday morning at least.

Steve Defilippis (Respondent Attorney) (37:28):

All right.

Alan Seltzer (Administrative Hearing Officer) (37:29):

One of those maybe.

Jolie Houston (Assistant City Attorney) (37:29):

Okay. Thank you. Thank you, all the parties. Thank you.

Alan Seltzer (Administrative Hearing Officer) (37:33):

Yeah.

Jolie Houston (Assistant City Attorney) (37:33):

This was a good day callSteve Defilippis (Respondent Attorney) (37:33):

Administrative Hearing: The Rock Zone – Pre-hearing Conference Transcript – April 1, 2026 Transcript by Rev.com Page 15 of 15
Appreciated, they taking the timeJolie Houston (Assistant City Attorney) (37:34):
... to have this pre-hearing hearing. Okay.

Alan Seltzer (Administrative Hearing Officer) (37:35):

All right.

Steve Defilippis (Respondent Attorney) (37:35):
[inaudible 00:37:37] taking the time.

Alan Seltzer (Administrative Hearing Officer) (37:38):

So I'm gonna, I'm gonna, I'm gonna close the, the hearing and the record. The, you can stop the recording. Thank you very much. Bye everyone.

Jolie Houston (Assistant City Attorney) (37:46):

Thank you.

Alan Seltzer (Administrative Hearing Officer) (37:46):

See you Friday morning at 9:00.

Steve Defilippis (Respondent Attorney) (37:48):

All right. Take care.

PART 4 OF 4 ENDS [00:37:51]

Administrative Hearing: The Rock Zone – Transcript – April 3, 2026 Transcript by Rev.com Page 1 of 30
Alan Seltzer (Administrative Hearing Officer) (00:00:02):

Well, the recording let me know (laughs). My name is Alan Seltzer. I'm not a representative or an employee of the City of Gilroy. I'm an independent hearing examiner assigned to hear this case, which is the administrative hearing regarding business license number 16606725 issued to The Rock Zone located at 1323 1st Street in Gilroy. I hope I had that correct. First, I'm gonna ask, uh, people on the screen. We're on a z- it's, um, April 3rd, I believe, 9:00 in the morning. I'm gonna ask the people on the screen to identify themselves starting with Mr. De- Defilippis.

Steve Defilippis (Respondent Attorney) (00:00:45):

Uh, good morning, sir. Uh, I'm Steve Defilippis. Uh, I represent, uh, Mr. Ammari as well as, uh, The Rock Zone. Mr. Ammari is, uh, seated to my left. Uh, and, uh, Elizabeth Vera, uh, who is affiliated with, uh, The Rock Zone is seated to my right.

Alan Seltzer (Administrative Hearing Officer) (00:01:06):

And Vera is spelled?
Steve Defilippis (Respondent Attorney) (00:01:08):

V-E-R-A.

Alan Seltzer (Administrative Hearing Officer) (00:01:10):

Okay. Good morning, Elizabeth. Mr. Ammari, good morning as well.

Adel Ammari (Respondent) (00:01:13):

Good morning.

Elizabeth Vera (Respondent Employee) (00:01:13):

Good morning.

Alan Seltzer (Administrative Hearing Officer) (00:01:15):

All right. Um, also, um, below, um, I see Mr. Powell, Officer Powell.

Luke Powell (Police Captain) (00:01:26):

Good morning, everybody. Uh, Captain Luke Powell, Gilroy Police Department.

Alan Seltzer (Administrative Hearing Officer) (00:01:33):

Luke Powell. A- a- a- a- anyone else? I see, um, uh, Sergeant Guerin. Is itGeoffrey Guerin (Police Sergeant) (00:01:42):

Hi, good morning. Yes. Uh, Geoff Guerin from Gilroy PDA supervisor, anti-crime team. And I do have a couple of my, uh, team members, um, on standby if we need them to jump on, uh, at any time.

Alan Seltzer (Administrative Hearing Officer) (00:01:55):

Okay. Um, and, um, Sharon, would you identify yourself for the record?

Administrative Hearing: The Rock Zone – Transcript – April 3, 2026 Transcript by Rev.com Page 2 of 30
Sharon Goei (Community Development Director) (00:02:03):

Yes. Uh, Sharon Goei, community development director, City of Gilroy.

Alan Seltzer (Administrative Hearing Officer) (00:02:08):

Okay. And also, uh, with us is, um, uh, Mr. Sangha, who is the city's finance director and the meeting host and providing me technical assistance, which I definitely need in, uh, handling remote hearings. (00:02:25):

Um, so, um, before we start, a couple points of information. This proceeding is governed by resolution number 9717 of the Gilroy City Council, which, uh, adopts a municipal hearing administrative policy.

According to this, um, policy, this is an informal hearing. I'm doing fact finding, uh, and issuing a decision. The formal and technical rules of evidence do not apply and I'll take any evidence that's relevant, uh, which is, uh, relied upon by, um, responsible persons accustomed, you know, to, who do this in the conduct of serious business.
(00:03:09):

No oath is, uh, required to testify. However, under the policy, a witness may request that his or her own testimony be provided under oath and I'm allowed to weigh that in considering the evidence. So let's do a little, um, uh, administration right here. Um, who are the individuals right now who at this point know they intend to testify?
(00:03:39):

Would you identify yourselves?
Geoffrey Guerin (Police Sergeant) (00:03:42):

Um, I suppose I'm probably gonna testify.

Alan Seltzer (Administrative Hearing Officer) (00:03:45):

So that's, um, Sergeant Guerin. Anybody else from the city at this time? Okay. Mr. Defilippis, anyone from your side know that they're going to testify at this point? Steve Defilippis (Respondent Attorney) (00:03:59):

Uh, potentially Mr. Ammari.

Alan Seltzer (Administrative Hearing Officer) (00:04:01):

Okay. All right, let me have, um, Sergeant Garren and Mr. Ammari raise your right hand. Do you swear or affirm that the testimony that you will give in this matter will be the truth? M- Sergeant Guerin? Geoffrey Guerin (Police Sergeant) (00:04:17):

Yes, I do.

Alan Seltzer (Administrative Hearing Officer) (00:04:18):

And Mr. Ammari?
Adel Ammari (Respondent) (00:04:20):

Yes, I do.

Administrative Hearing: The Rock Zone – Transcript – April 3, 2026 Transcript by Rev.com Page 3 of 30
Alan Seltzer (Administrative Hearing Officer) (00:04:21):

Thank you very much. Um, now the, as you know, the hearing will beSteve Defilippis (Respondent Attorney) (00:04:26):

Mr. Seltzer, before, before we begin, I do wanna address the state issue.

Alan Seltzer (Administrative Hearing Officer) (00:04:30):

Well, I, I'm gonna, I'm gonna let you do that after the city testifies.

Steve Defilippis (Respondent Attorney) (00:04:34):

Well, and, and in my opinion, that is denying the motion, uh, uh, at this point because the idea of, of going forward with the hearing and then considering the stay issue, uh, does not, uh, I think satisfy, uh, the due process issues that are involved in this, uh, in this case. And, and I'm concerned about that because the city knows everything. They know ... I don't know who Officer, uh, Guerin is. Um, that's a name that I've never heard before. Uh, I don't know who, uh, uh, Mr. Powell is. I don't know if he's an officer. I don't know what his, uh, position with Gilroy PD is. I don't know what he did or did not do in relation to this case. I haven't seen the reports in this case. I don't know who the witnesses are. (00:05:32):

I don't know who I can call as witnesses at this point because I haven't seen what the city has and what the city knows. The city knows everything because they have all the information. They did all of the actions. I'm deprived of that information. So I don't even know who to, who to call as witnesses at this point.

Alan Seltzer (Administrative Hearing Officer) (00:05:55):

Mr. Defilippis, I, I, I have done a lot of ... You've made, given me the opportunity to do a lot of research on this issue, and so I believe it is proper for me to find a middle path to try to accommodate the interests of both parties. I think I'm doing that by allowing the ... Because I have no information either. I have only, the only, um ... I haven't gotten to this part of the, my introduction of my admonitions.

There's only the notice and the, um, that went out to everybody, um, uh, setting this hearing and there's, uh, provisions of the Gilroy Municipal Code and a memorandum dated January 23, 2026 from the Chief of Police, which you have and I have. That's the only document that's in the record at this time, and I will identify it again at, as in my hearing introduction. You and I are both gonna learn what the city's case is.
(00:06:58):

And you're ... When you, when they're done, because there's no provision for discovery, I have no ability to issue a subpoena, uh, in advance of a hearing. It's an informal process. There's an appeal to the city council. But what I'm gonna do is give us all an opportunity to hear the city's case because when you do have your ch- it's ... Again, you, you, you, you, uh, preempted me a little bit from giving, uh, my whole admonition, but, um, when the city's finished with this case, then you can renew your stay motion, ask for a continuance based on some of the conc- concerns you've just identified. But I think we, it will be in everyone's best interest if we hear the city's case because as I wrote in my memorandum yesterday responding to your email, by testifying, the city also gives us information to weigh in, in considering your stay request.
(00:07:56):

Administrative Hearing: The Rock Zone – Transcript – April 3, 2026 Transcript by Rev.com Page 4 of 30
So that's how I'm gonna proceed and, um, let's move on at this point.

Steve Defilippis (Respondent Attorney) (00:08:01):

If I can just note one thing and I'll be very quick. Um, uh, you should know absolutely nothing at this point. That, uh, that is the proper way for a hearing officer to come into a, uh, case. But a respondent, on the other hand, should be able to know what it is that the city is accusing my client of and what the factual information is behind those accusations. We've gotten the accusations but we haven't gotten any of the information. I shouldn't have to learn that at a hearing.

Alan Seltzer (Administrative Hearing Officer) (00:08:38):

Well, that, that's a question that you should address to the city council with respect to the policy it adopted. I'm bound by that. I'm a hearing officer, I don't have independent authority. And so I'm bound by the resolution that gives the rules for how to conduct this proceeding, all right? That's where, that's where we are. And so, uh, your, your concerns are noted in the record and, um, I'm gonna move on.

Steve Defilippis (Respondent Attorney) (00:09:03):

All right. Thank you.

Alan Seltzer (Administrative Hearing Officer) (00:09:04):

Okay. I appreciate the concerns though, believe me. Um, all right. I think I've said th- th- this is being recorded and very significantly, not only is there no discovery, uh, we just talked about it, there's no cross-examination allowed. So each party gets to present its case and then I have to weigh that in issuing a decision.
(00:09:28):

Okay. So the, uh, the, what I, as in the pre-hearing order, the way we're gonna proceed is that the city will, um, uh, present its case. Right now, it, it has the burden of, uh, proving by a preponderance of evidence that, um, the violations, uh, violations occurred that warrant the remedy in, I think it's 13.45 of the Gilroy Municipal Code.
(00:09:57):

Um, so first I'm gonna hear from the city. They can give an opening statement and then testimony. Then I'll hear from, um, Mr. Defilippis and The Rock Zone. And as I said, I clearly recognize you will renew your stay request and may request a continuance. We'll deal with that at that point. Um, how we proceed after that, we'll see.
(00:10:23):

Um, when the hearing is concluded, I'm required to issue a written decision. So you will not have a decision today in writing, obviously. So there, there will be a written decision and that decision is subject to appeal to the city council not later than 15 days after the decision is mailed to the respondent licensee.
(00:10:46):

Um, in preparing for this hearing, what I've reviewed is the packet of materials, um, mailed to Adel Ammari by Mr. Sangha. It's dated March 3, 2026 and it includes the notice of this hearing, the excerpts from the Gilroy Municipal Code including 13.45, uh, which is the most relevant. It includes the memorandum fr- from, um, Harjot Sangha to Scott, from Scot Smithee, the Chief of Police, recommending this process, uh, based on three, um, actions and violations stated in that memo. And

Administrative Hearing: The Rock Zone – Transcript – April 3, 2026 Transcript by Rev.com Page 5 of 30
then there is a, um, March 3, 2026, um, notice of violation related to unpermitted construction, which is not within my jurisdiction, but it was part of the, um, the notice. (00:11:49):

All right, uh, I'm gonna ask everyone to make sure their cell phones are off. I'm doing mine. And, um, it's the city's case. Sergeant, uh, Sergeant Guerin, I believe you were, or Captain Powell, someone's gotta put on a case for the city. I'm, I'm listening.

Geoffrey Guerin (Police Sergeant) (00:12:13):

Okay. Um, I guess I could start. I'm, I'm limited to just what, uh, my, uh, team, uh, did and I just start at the beginning, I suppose. Um, and, uh, the beginning is that the city, um, had received complaints on, uh, several, um, smoke shops within the, uh, city that they were potentially selling illegal products to include flavored nicotine and, and other illegal products. Um, the s- the complaints came through City Hall. I, I, they did not come to, through the police department, so I, I never was able to speak to any individuals with any specific information, but we, my team was directed to, to investigate this to see if this was, um, these were true, uh, violations of state law and, and others. So on, uh, November 15th, uh, 2024, um, I had my team conduct, um, an operationAlan Seltzer (Administrative Hearing Officer) (00:13:19):

And I, I'm gonna ask some questions just so I understand. When you say team, what, what team are we dis- discussing?
Geoffrey Guerin (Police Sergeant) (00:13:26):

Yeah, sorry. Um, so yeah, just a little background. Um, I supervise, um, a specialized team within the police department that's called the anti-crime team. Our primary, uh, focus is, uh, investigation and suppression of, uh, gang, criminal, uh, street gang, um, uh, crimes, as well as any narcotics crimes. And we're generally tasked with other, uh, types of, uh, duties, um, to include something like this, uh, tobacco, uh, illegal, um, tobacco enforcement, um, cases as well.

Alan Seltzer (Administrative Hearing Officer) (00:13:58):

Okay.

Geoffrey Guerin (Police Sergeant) (00:13:59):

I have, I also have a team of, uh, four, um, uh, f- uh, investigators, a corporal and some officers, um, who, um, participated in these, um, inspections and operations, I guess you will.

Alan Seltzer (Administrative Hearing Officer) (00:14:23):

All right. Continue with your testimony.

Geoffrey Guerin (Police Sergeant) (00:14:25):

Okay. So, um, so in response to these complaints, um, I directed my team to conduct an operation into these, um, the various smoke shops within the city. And on, um, November 15th, uh, 2024, um, one of our officers in my team, Officer David Ludden, um, went into The Rock Zone, um, uh, in an undercover p- um, capacity. So no uniform, no identifying information, just looked like a regular guy, uh, walked into the store and purchased, um, some flavored nicotine product, which, uh, specifically were the Zimo's,

Administrative Hearing: The Rock Zone – Transcript – April 3, 2026 Transcript by Rev.com Page 6 of 30
um, nicotine, the winter green nicotine pouches. And also he purchased a PolkaDot Magic Mushroom, um, bar.

Alan Seltzer (Administrative Hearing Officer) (00:15:19):

Okay. Would you just repeat Zimo's, Z-I-M-O apostrophe S? Geoffrey Guerin (Police Sergeant) (00:15:24):

I believe so, yes.

Alan Seltzer (Administrative Hearing Officer) (00:15:26):

And what, Zimo's pouch? I, I justGeoffrey Guerin (Police Sergeant) (00:15:29):

Right, a, a nicotine, uhAlan Seltzer (Administrative Hearing Officer) (00:15:30):

Nicotine.

Geoffrey Guerin (Police Sergeant) (00:15:31):
... pouch.

Alan Seltzer (Administrative Hearing Officer) (00:15:32):

Okay. You'll have to excuse me, I'm not familiar with some of these products. Go ahead.

Geoffrey Guerin (Police Sergeant) (00:15:40):

Um, okay, so afterAlan Seltzer (Administrative Hearing Officer) (00:15:42):

And a coc- a coconutGeoffrey Guerin (Police Sergeant) (00:15:44):

Um, the, I think it's the br- the brand is PolkaDot, umAlan Seltzer (Administrative Hearing Officer) (00:15:47):

Oh, PolkaDot.

Geoffrey Guerin (Police Sergeant) (00:15:47):
... and it's, uh, branded as a Magic Mushroom bar. Um, so we took that, um, we sent the Magic Mushroom bar case to the district attorney because that, uh, we, we believe that possibly would qualify under, um, a criminal, uh, statute of, uh, selling, um, narcotics, uh, because of the potential, um, psilocybin, uh, contained in that bar, which is also known as mushrooms or Magic Mushroom. Um, so we sent that case to the district attorney just for review and we, uh, contacted the CDTFA, which is the California Department of Tax and Fee Administration, uh, because as we understood at the time, they, they handled these types of, um, violations of the law with the flavored, uh, nicotine ban.

Administrative Hearing: The Rock Zone – Transcript – April 3, 2026 Transcript by Rev.com Page 7 of 30
(00:16:51):

So, um, the DA, the district attorney in Santa Clara County did initially, um, did not file any charges on the Mushroom bar, um, until the following year I was contacted by the district attorney's office and was informed that they were gonna file, um, criminal charges, um, I think on Mr. Ammari, uh, for the sales of the bar.
(00:17:22):

Um, so with that, um, we, uh, we wrote a search warrant for The Rock Zone, um, related to the mudthe ma- the Mushroom bar case and the team served that warrant on March 6th of 2025. Um, Officer, uh, Investigator Don Tong was the, um, investigating officer on that warrant.

Alan Seltzer (Administrative Hearing Officer) (00:17:55):

D-O-N?
Geoffrey Guerin (Police Sergeant) (00:17:56):

Uh, T-O-N-G.

Alan Seltzer (Administrative Hearing Officer) (00:17:58):

Don Tong was the investigating officer. Okay, thank you.

Geoffrey Guerin (Police Sergeant) (00:18:03):

Um, so on that day, um, the officers on scene contacted, uh, a clerk. Uh, they identified the clerk as Haley Edwards, um, and conducted a search of, uh, The Rock Zone. And during that search, they located ... The officers, um, located two additional PolkaDot Mush- Mushroom bars similar to the one that were purchased during the November 15 undercover operation.
(00:18:38):

Um, that was the extent of the police department side of it. Um, we did have, um, agents from the, uh, CDTFA with us on that day and they seized, uh, other product, um, which is, um, was like flavored tobacco flavored nicotine type product. They did their inventory on that. I, I don't have the specifics on what they took. I just knew it was, uh, several, um, boxes of flavored nicotine product. (00:19:12):

Um, and I believe, um, Mr. Ammari was, uh, arrested on the warrant for the mesh in bar. Not on that day, it was several weeks or maybe a month before then. Um, and, and he was not contacted on the day that we served the warrant in March of 2025. Um, s- so that was that. And then, umAlan Seltzer (Administrative Hearing Officer) (00:19:39):

Yeah, I'm a little confused. March 6th, I think you said, 2025 was when the search warrant was executed by Don Tong, your investigator, uh, accompanied by the CT- CDTFA. And the city's testimony, your testimony, is that you found two additional PolkaDot bars and that's the city's involvement and that's what you're testifying to today. You're not ta- you're not testifying about the C, um, uh, the acronym, CDTFA's search, correct?
Geoffrey Guerin (Police Sergeant) (00:20:13):

Correct. I just know they were there and, and the, and they seized other product that I don't know exactlyPage 175 of 530
Administrative Hearing: The Rock Zone – Transcript – April 3, 2026 Transcript by Rev.com Page 8 of 30
Alan Seltzer (Administrative Hearing Officer) (00:20:18):

Okay.

Geoffrey Guerin (Police Sergeant) (00:20:18):
... what it was.

Alan Seltzer (Administrative Hearing Officer) (00:20:20):

Okay. Is, uh, so far you've identified David Ludden and Don Tong. Are they available to testify to these, umGeoffrey Guerin (Police Sergeant) (00:20:30):

Yes.

Alan Seltzer (Administrative Hearing Officer) (00:20:31):

Okay. All right. Continue the, uh, giving, you give me the overview. Okay.

Geoffrey Guerin (Police Sergeant) (00:20:34):

All right.

Alan Seltzer (Administrative Hearing Officer) (00:20:35):

So, and then Mr. Ammari's arrest you said was?
Geoffrey Guerin (Police Sergeant) (00:20:38):

That was prior, uh ... Uh, no, I'm sorry. Um, I believe that was ... Oh, I'm sorry. I'm, uh, I believe he was arrested by another officer on another day, which was later on, I guess it was the following year, in January of 2026, if I understand that correctly.

Alan Seltzer (Administrative Hearing Officer) (00:20:57):

Okay.

Geoffrey Guerin (Police Sergeant) (00:20:58):

Um, I wasn't involved in that arrest, I just know that. Um, so then, and thenAlan Seltzer (Administrative Hearing Officer) (00:21:07):

Continue, please.

Geoffrey Guerin (Police Sergeant) (00:21:08):

And then, um, so then in response to some more complaints that The Rock Zone was continuing to sell flavored, uh, tobacco product, um, we were directed to conduct an, another, an, an ins- an inspection of the shop, which, uh, we did on January 8th of 2026. Um, we were with, um, officers or agents of the city's code enforcement on that, on that day. Um, CDTFA was not with us on that day. We conducted the inspection. Uh, that was, um, Corporal Remmick's, um, case. Uh, he took the lead on that, uh, on that day. And then, um, they conducted the inspection and they found 306 items of flavored tobacco type products. And that was the extent of our involvement in The Rock Zone.

Administrative Hearing: The Rock Zone – Transcript – April 3, 2026 Transcript by Rev.com Page 9 of 30
Alan Seltzer (Administrative Hearing Officer) (00:22:26):

Okay. Um, are, are you gonna have any, um, other officers who are involved in these, um, activities, these ins- investigations and inspections, uh, um, testify? Because you've given me an overview, I'd like to hear from the officers.

Geoffrey Guerin (Police Sergeant) (00:22:53):

Um, yes, they are available. If we'd like them to jump on and testify to their part in, in this, yes.

Alan Seltzer (Administrative Hearing Officer) (00:23:01):

Okay. Uh, um, I'll await that.

Geoffrey Guerin (Sergeant) (00:23:03):

In this, yes.

Alan Seltzer (Administrative Hearing Officer) (00:23:03):

Okay. Uh, um, I'll await then.

PART 1 OF 4 ENDS [00:23:04]
Geoffrey Guerin (Police Sergeant) (00:23:04):

Okay. Give me one second and just let me, uh, well, I guess we could probably start with, um, do you have a preference who we start with or how, how would you like me to [inaudible 00:23:15]? Alan Seltzer (Administrative Hearing Officer) (00:23:14):

It's the city's case, so I'll, I'll defer to you.

Geoffrey Guerin (Police Sergeant) (00:23:18):

Okay. All right. Give me a second and I will have, uh, Corporal Remmick. I'll have just Corporal Remmick start, um, with that. Give me one second.

Alan Seltzer (Administrative Hearing Officer) (00:23:51):

All right. For the record, um, th- th- the silence now is, um, Sergeant Guerin is, um, bringing on Corporal Remmick to testify and we'll await his joining the Zoom meeting.

Steve Defilippis (Respondent Attorney) (00:24:16):

Mr. Seltzer, uh, could we have a minute, uh, before, uh, we start back up? Alan Seltzer (Administrative Hearing Officer) (00:24:22):

Sure. Um, [inaudible 00:24:23] Mr. Sangha, let's, um, what time is it right now? I'm sorry. (laughs) My, 9:
20-
Harjot Sangha (Finance Director) (00:24:30):
9:25.

Administrative Hearing: The Rock Zone – Transcript – April 3, 2026 Transcript by Rev.com Page 10 of 30
Alan Seltzer (Administrative Hearing Officer) (00:24:31):

It's 9:25. We're gonna go off the record and, um, when, uh, Corporal Remmick is here, we'll go back on.

All right, everybody, take a break.

Steve Defilippis (Respondent Attorney) (00:24:40):

Thank you.

Geoffrey Guerin (Police Sergeant) (00:25:24):

Okay. Looks like Doug's on, so I g- guess whenever we're ready to start, um, we'll be ready.

Alan Seltzer (Administrative Hearing Officer) (00:25:56):

I'm gonna go. Okay, Sergeant Guerin, I'm sorry. Um, we stopped the, um, recording while you were finding, um, uh, Corporal Remmick and his, uh ... So I'm gonna ask everybody to come back on screen and, um, Mr. Sangha, tell me when, um, you're back on and- (00:30:04):

Okay. Um, uh, Sergeant Guerin, um, are, are you ready to have officer, uh, I mean, Corporal Remmick testify?
Geoffrey Guerin (Police Sergeant) (00:30:14):

Yes, he's here and, uh, ready to go, umAlan Seltzer (Administrative Hearing Officer) (00:30:17):

Okay. Um, Corporal Remmick, would you, um, raise your right hand? Do you s- wait, I'm sorry. You do not have to testify under oath, um, under this resolution, but any individuals who intend to testify, um, uh, and wish to do so under oath, um, uh, ha- can do so and I can, um, consider the fact that you testified under oath in weighing the evidence. So do you wanna be sworn in? Douglas Remmick (Police Corporal) (00:30:51):

Sure.

Alan Seltzer (Administrative Hearing Officer) (00:30:52):

Um, please raise your right hand. Do you swear or affirm that the testimony that you will give in this matter will be the truth?
Douglas Remmick (Police Corporal) (00:30:59):

Yes.

Alan Seltzer (Administrative Hearing Officer) (00:31:00):

Okay, please proceed with your testimony.

Douglas Remmick (Police Corporal) (00:31:08):

Um, okay. So, um, we conducted a undercover operation on, uh, November 15th of 2024. I had, um, Detective Ludden in a undercover capacity go in and, uh, at that time, he purchased some, um, flavored

Administrative Hearing: The Rock Zone – Transcript – April 3, 2026 Transcript by Rev.com Page 11 of 30
n- nicotine pouches, Wintergreen and he also, um, purchased, um, a Dot magic mushroom bar, which it, it was claimed to be mushroom or psilocybin. And at the time, we weren't sure if it was actually contained psilocybin. And it, it actually did once we sent it to the lab in Santa Clara County. Um, so we also had, uh, that violation. All that stuff was, uh, booked into evidence and, um, Detective Ludden also wrote an undercover, uh, supplemental report for that incident. I don't have anything else on that incident.

Alan Seltzer (Administrative Hearing Officer) (00:32:17):

All right. Um, Sergeant ... Okay. Um, all right, if that's the scope of your testimonyGeoffrey Guerin (Police Sergeant) (00:32:27):

And then actually, he could probably talk, um, Corporal Remmick, if you can also just, uh, speak on the inspection that, um, you took the lead on on January of 2026 at the Rock Zone.

Douglas Remmick (Police Corporal) (00:32:40):

Okay. Um, so that inspection took place on, um, January 8th of 2026 and, um, I took the lead on that investigation. Um, we went in, made contact with an employee there. Um, my major ... The majority of the time there during that incident, I was speaking with the employee, um, and it just explaining the process of what we were doing. I actually talked to the owner, um, Mr. Ammari on the phone, um, and he understood that we were there and didn't object to the, um, inspection. During the inspection, we ended up confiscating approximately 306 items of flavored tobacco products, which we seized, um, and are currently holding here at the police department, um, pending sending them to the California Department of Tax and Fee Administration. And I don't have anything further on that inspection.

Alan Seltzer (Administrative Hearing Officer) (00:34:02):

Okay. Um, do you know the name of the employee that you spoke with? Douglas Remmick (Police Corporal) (00:34:08):

Yeah, I do.

Alan Seltzer (Administrative Hearing Officer) (00:34:09):

Could you tell me that?
Douglas Remmick (Police Corporal) (00:34:10):

Yeah, let me just pull, um, her information up here on the report. It was Amy Lorraine Davis.

Alan Seltzer (Administrative Hearing Officer) (00:34:19):

Okay. So you are holding these items and you're sending them to the California Department of, um, [inaudible 00:34:33]-
Douglas Remmick (Police Corporal) (00:34:32):

Pass CDTFA. Yeah.

Alan Seltzer (Administrative Hearing Officer) (00:34:36):

Administrative Hearing: The Rock Zone – Transcript – April 3, 2026 Transcript by Rev.com Page 12 of 30
Okay. All right. And that concludes your testimony?
Douglas Remmick (Police Corporal) (00:34:42):

Yes.

Alan Seltzer (Administrative Hearing Officer) (00:34:43):

All right. Sergeant Guerin, your next witness.

Geoffrey Guerin (Police Sergeant) (00:34:48):

Okay. Uh, we will have, uh, Officer David Ludden join us here, uh, momentarily.

Douglas Remmick (Police Corporal) (00:34:55):

He's right here next to me. He's joining right now.

Alan Seltzer (Administrative Hearing Officer) (00:35:03):

Okay. Um, would you ... Uh, Officer Ludden, do you, um, uh, wish to be sworn in? You don't have to, but if you are sworn and I can consider that in weighing the evidence.

Douglas Remmick (Police Corporal) (00:35:16):

He's logging in right now.

Alan Seltzer (Administrative Hearing Officer) (00:35:18):

Oh, I'm sorry. (laughs)
Douglas Remmick (Police Corporal) (00:35:19):

That's okay.

Geoffrey Guerin (Police Sergeant) (00:35:43):

All right. I think David's on. David, can you hear us?
David Ludden (Police Officer) (00:35:46):

Yes. Can you hear me?
Geoffrey Guerin (Police Sergeant) (00:35:47):

Okay. Yes,
Alan Seltzer (Administrative Hearing Officer) (00:35:48):

Yes. Uh, uh, uh, um, Officer Ludden, my name is Alan Seltzer. I'm the hearing officer and before you testify, you have the option of being, uh, sworn in and providing your testimony under oath and if you do so, I can consider that in weighing the evidence. So do you wish to be sworn in? David Ludden (Police Officer) (00:36:06):

Yes.