Like coworkers to donuts, the cannabis industry has attracted a host of adjacent industries that interface with the business of marijuana in one way or another. Some, like security, cash management, and analytical services, support the industry in ways that are integral to its success. Others . . . do not. Enter the Oregon attorney who has been busy of late filing civil RICO complaints against what at this point constitutes a significant minority of Oregon cannabis businesses.
The joys of civil RICO claims came onto the Oregon industry radar in 2017, when over 70 people and entities were sued by an attorney who owned property adjacent to several of the defendants’ businesses. The lawsuit alleged that the activities of marijuana businesses on adjacent properties had diminished the value of the plaintiff’s land. This was not in and of itself novel — cannabis businesses face nuisance-type complaints from neighbors with some regularity. Last year’s innovation was the addition of federal civil RICO claims to a garden-variety neighbor dispute, following the measured success of this tactic in a 10th Circuit case out of Colorado. The first case settled earlier this year.
While the terms of the settlement are confidential, it seems to have been favorable enough that RICO-infused property disputes have become a cottage industry. To that end, two other civil RICO complaints have been filed, with the latest coming in this past Friday. Filed on behalf of a property owner in Sandy, Oregon, the complaint alleges diminution to the value of the plaintiff’s property due to odors, alleged harassment, and the undesirability of living next to an “illegal drug manufacturing site that might easily explode and set the whole neighborhood on fire.”
The merits of the claims aside, the complaint appears to follow an emerging pattern in anti-cannabis litigation: getting nuisance-based neighbor disputes into federal courts using the federal prohibition of cannabis and “Reefer Madness”-type scaremongering. And while some of the more florid language in the complaint is amusing, civil RICO actions are quite serious, with the potential for triple damages and attorneys’ fees if a plaintiff prevails. We’ll be posting updates as we work through the details of the complaint. In the meantime, be nice to your neighbors, and take lawsuits like this seriously. If you or someone you know is affected by this kind of lawsuit, we can help. Contact our experienced litigation team today to discuss your options.