A.M. Splash: Oakland Sues U.S. Over Marijuana; Calif. Leads U.S. in Foreclosure Drop; Suit Filed Against Central Subway; Gas Prices Drop

The city of Oakland took the unusual step Wednesday of filing a suit in an attempt to stop the federal government from seizing and closing down one of the largest medical marijuana dispensaries in the city. Attorneys for Harborside Health Center said the suit against the federal government appears to be the first such action by a municipality on behalf of a marijuana dispensary.

California, the state that led the U.S. into the housing boom and bust with some of the most reckless subprime mortgage lending, is now leading the way out. A plunge in new defaults in California helped push U.S. foreclosure filings to the lowest level in almost five years, according to RealtyTrac Inc., a seller of home-loan data. Across the country, 531,576 properties received notices of default, auction or repossession in the third quarter, down 13 percent from a year earlier and the lowest since 2007. One in every 248 households got a filing, RealyTrac said today.

Gasoline prices slid again on Wednesday throughout the Bay Area and California, offering further relief for drivers in the San Jose, Oakland and San Francisco regions, according to the Gas Buddy website. The average price for gasoline Wednesday was $4.65 in the East Bay, down 1 cent from Tuesday; $4.65 in the South Bay, down 1 cent; and $4.73 in the San Francisco area, unchanged from Tuesday. California gasoline prices averaged $4.65, down less than a 1 cent.

A day before federal transportation officials are expected to give $942.2 million to the controversial Central Subway, opponents of the project on Wednesday filed suit to stop construction of a station with a Union Square entrance. The lawsuit, filed by subway critics Save Muni, is the latest, and so far most aggressive, effort to stall or kill construction of the 1.7-mile subway from Caltrain to Chinatown. The suit contends that the Municipal Transportation Agency's plans to build an entrance to the Union Square/Market Street station in the square violated a City Charter prohibition of nonrecreational uses in city parks. It seeks to force the Municipal Transportation Agency to move the station or put its location to a public vote.

The family of Michaela Garecht is awaiting results of lab tests to tell them if a bone fragment found in a Linden well belongs to the Hayward girl who went missing 24 years ago. Hayward police said Thursday morning that a 3-inch bone fragment unearthed with other remains in February was sent to an Arizona lab initially and has been forwarded to a Virginia lab for further analysis.

Resignation and sadness greeted hometown cycling hero Levi Leipheimer's admission that for almost a decade he used illegal performance-enhancing drugs to race in the sport's top echelons. "It's tragic anytime a professional athlete cheats to win, and that's really what we're talking about here," said Sonoma County Board of Supervisors Chairwoman Shirlee Zane, a cycling enthusiast.

Shares of San Ramon-based Chevron plunged on Wednesday, the first trading day after the oil company said its third quarter would be weaker than the second quarter. Chevron's shares sank 4.2 percent, or $4.91, and finished at $112.45. The energy giant was hobbled by the Richmond refinery fire, which slashed the company's refining capacity by 92,000 barrels a day. The fuel factory has a capacity of 245,000 barrels a day. The reduction means the refinery is operating at roughly 63 percent capacity, the company report shows.

Solyndra has been slapped with several objections to its plan to reorganize its finances, including opposition from Alameda County, the U.S. Energy Department and the Internal Revenue Service. The objections come at the same time Solyndra is attempting to sell its solar equipment factory in Fremont. Solyndra has struck a deal to sell the plant to Seagate Technology for $90.3 million.

A group protesting the lack of housing for thousands of San Franciscans briefly took over a vacant building in the heart of the Castro district on Wednesday evening as part of a worldwide day of action aimed at drawing attention to the plight of homeless people. About 50 protesters gathered at Dolores Park at 5 p.m. and listened to music for an hour before marching down 18th Street, chanting "Homes not jails." Shortly after 6 p.m., protesters wearing black masks broke into an empty building at 535 Castro St. and hung a sign reading, "Gentrification Equals Assimilation."