Verdict for Marijuana Grower May Reduce Threat of Ruinous RICO Liability

A Colorado jury rejected claims that an indoor cultivation facility had injured the owners of a neighboring horse ranch.


Fox31 screen shot

One of the many problems that state-licensed marijuana businesses face as a result of continuing federal prohibition is potentially ruinous liability under the Racketeer Influenced and Corrupt Organizations Act (RICO), which allows people injured by illegal enterprises to sue for triple damages. Judging from the outcome of the first such case to reach a verdict, that threat may be less serious than it first seemed.

Last week a Denver jury rejected RICO claims by a couple who complained that an indoor marijuana cultivation facility had impaired their enjoyment of their property and reduced its value. Michael and Hope Reilly, who own a horse ranch in Pueblo County, said a nearby warehouse (right) where state-licensed cultivator Parker Walton grows marijuana had spoiled their view, generated noise and unpleasant odors, and offended them with its flagrant violation of federal law. During the three-day trial, Walton's lawyer, Matthew Buck, presented evidence that the warehouse was not the source of the smell that bothered the Reillys and noted that the value of their property has been rising in recent years.

"We came in with hard science to show there was no odor," Walton told Denver's CBS station. The warehouse has an odor control system that does not vent to the outside, and there are several outdoor marijuana grows in the area, both legal and illegal.

While the Reillys argued that the value of their property would have risen more but for Walton's warehouse, Buck told The Denver Post, "proving damages is almost impossible in cases like these in a state like Colorado, where property values are skyrocketing." The plaintiffs' closing argument, Buck told Westword, "was basically that my client was producing odor and that it couldn't possibly be from any of the other numerous legal and illegal grows in Pueblo County, that marijuana has increased crime in the area, and that the plaintiff's property values had been decreased." Buck, meanwhile, argued that "the plaintiffs had presented no evidence my client had damaged them."

The Reillys' lawsuit, which they filed in 2015 along with the anti-drug group Safe Streets Alliance, was dismissed by a federal judge in 2016 but revived last year by the U.S. Court of Appeals for the 10th Circuit. "We are not suggesting that every private citizen purportedly aggrieved by another person, a group, or an enterprise that is manufacturing, distributing, selling, or using marijuana may pursue a claim under RICO," the appeals court said. "Nor are we implying that every person tangentially injured in his business or property by such activities has a viable RICO claim. Rather, we hold only that the Reillys alleged sufficient facts to plausibly establish the requisite elements of their claims against the Marijuana Growers here. The Reillys therefore must be permitted to attempt to prove their RICO claims."

The jury took just a few hours to decide that the Reillys had failed to show Walton's operation was the proximate cause of any injury to them. University of Denver law professor Sam Kamin thinks the verdict will take some wind out of efforts by opponents of legalization to use RICO lawsuits as a weapon against cannabusinesses. "This isn't the kind of loss where plaintiffs would be forever forbidden from bringing these kinds of suits," he told the Post. "But it might chill the enthusiasm for bringing them in the future."

NEXT: A Mom Gets in Trouble for Being a Sex Offender Even Though She Wasn't Convicted of a Sex Crime

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  1. Now the lawsuit abusers should have to pay for the legal expenses of those abusively sued! Like in other nations!

    1. I think anyone who loses a lawsuit should have to pay the other party’s attorney’s fees.

    2. Can we bring a RICO suit against the lawyers and their law firms? If not, how do we get such a law onto the books? What with most legislators being parasitical lawyers in the first place?

      1. Step 1 Get all the lawyers out of congress.

  2. Noise and odors are a tresspass. And just because your land value went up, doesn’t mean that you were not damaged by the tresspass.

    Pot growers are like gays, refugees and Muslims, a sacred class to Libertarians. But that fact should not make them immune from paying for any damages they cause to other people’s property.

    1. Odors on a horse property are most likely emanating from the barn, unless they muck stalls religiously.

      1. And you want to talk about what stinks?

        and offended them with its flagrant violation of federal law

        I’d say plaintiffs were full of horseshit.

    2. Noise and odors are a tresspass.

      So, now we come to it. This is basically ‘you damn kids!’. Somebody’s kids play in the street you call the cops? Somebody grows a honeysuckle bush you serve them? Somebody’s dog barks you send them to the cornfield?

      1. It all depends on how much it effects my quiet enjoyment of my property. If the kids are in the street blasting loud music at 2 am, yes I will call the cops. If the people next door decide to start a greenhouse business and the stench from it makes it impossible to enjoy my yard, damn right I am suing them.

        It is funny how little respect for property and property rights some Libertarians have.

        1. Sorry, but taking offense at “flagrant violation of federal law” is no tort. These people had a huge stick up their asses. I doubt they would have filed suit if they knew they could end up paying the defendants legal bills.

        2. Yes, but if you buy a farm and your neighbor also has a farm, I think the expectations are a bit different. Seems to me that the situation is quite different in a residential neighborhood.

        3. Really? Because that’s not in agreement with your original post where you stated – flatly – that noise and odors are tresspass. Period.

    3. Yeah, sure, they can be. But the plaintiffs demonstrated that they were not producing any offensive odors.

      And if you own property in an agricultural area, you must expect some noise and smells.

      Presumably they have a big pile of manure somewhere on their horse farm. Do they really want to open up the question of odors that neighbors might be able to smell?

      1. Presumably they have a big pile of manure somewhere on their horse farm. Do they really want to open up the question of odors that neighbors might be able to smell?

        I smell a counter suit. Pun intended.

    4. noise and odours ARE trespass, but plaintiffs failed to establish that these offenses existed.

      Pot growers are simply farmers, not much different than those who grow corn, raise dairy cows, mushrooms, etc.
      FACT: the federal Constitution nowhere grants any eiuthority to FedGov to hve any concern or action over what we do/do not put into our bodies. Nor concerning what crop anyone grows/doesn’t grow.
      On the other hand, that document very clearly DOES provide that FedGof SHALL concern itself with immigration, refugees, requirements/restrictioins for who may/mayn’t enter this country and for how long, and as to establishihg a uniform pathway toward becoming a citizen.
      As to sodomites and moslems, it is mute, except that the moslem religioni can never be allowed to be established as the naitonal religion in the US.

      Cannabis is something about which FedGov have NO authority, even if it does, have, might, or could move in interstate commerce.

      And no, I DO NOT use the stuff, and have no interest in doing so. But I’ve read my Cosntituton.. have YOU read YOUR copy? If not, shame on you. Get one and read it.

    5. Noise and odors are a trespass. So…. no grilling. No burning leaves or debris. No parties unless they are done silently with no food odors. No planting fragrant herbs or flowers. No livestock. No children playing unless they do it absolutely silently. No rotting vegetation at the edge of your pond. No hammering noise. No painting smells. No mowing grass or brush (the fresh mown grass odor is famous).

      Do you shoot all the birds on your property so they don’t tweet and cause noise? Do you shoot all the animals so their musk and poop don’t cause “odors”? Do you mow down all the wildflowers so they don’t cause odors?

      So, you can own property, but you can’t USE it.

    6. Wow John. Did you even read the article? The defendants attorneys proved that the odors could not be coming from them with the non-venting odor control system. Perhaps you and Michael and Hope Reilly get together and smoke a joint because y’all so uptight we could shove a lump of coal up your butt and have a diamond in a week.

  3. good jury.

  4. I agree that RICO is absurd here.
    However, this does bring up the ridiculousness of the situation. We have the states actively licensing things that are federally illegal. In every other situation, the federal jurisdiction overrules the state. This is a house of cards built upon shifting sand. One or the other has to give on Marijuana.

    1. What is the federal police power to prohibit pot?

      1. The power of might.

    2. Yes, the ridiculousness is that the feds still have cannabis listed as a controlled substance.

    3. I’m hoping a Colin Allred victory over Petty Pete Sessions is the tipping point. The Sessions and Allred ads are all over the TV and online ads here in Dallas. Though cannabis reform is never mentioned – I guess they think it’s still a political “third rail” in this part of the country – Allred’s all “Pete wants to take away health care from poor people / supports damaging the environment / voted for tax breaks for the rich” and Sessions has to resort to “NANCY PELOSI SUCKUP”. I do hope Allred prevails after all this. As long as Petty Pete is in charge of the HRC nothing’s gonna move forward on reforming MJ laws.

    4. >>>We have the states actively licensing things that are federally illegal.

      it’s beautiful.

    5. In every other situation, the federal jurisdiction overrules the state

      No, actually, in very few situation does it.

      States are not sub-units of the Federal government. They are quasi-autonomous governments and have a significant amount of sovereignty.

    6. Since the Constitution, and all laws and treaties made persuant thereto, comprise the Supreme Law of the Land, and since the federal laws concerning marijuana in any way are NOT “persuant thereto”. and since laws made NOT “persuant thereto” are null, void, and of no effect, FedGov MUST butt out of the matter entirely. They have NO call to be meddling with that weed.

      Furthe,r federal jurisdictioin does NOT trump state and/or local.

      Further, when one considers the origin and history of the “COntrolled Substances Act” it becomes abundantly clear that this law was something certain private individuals, with a definite point of their own financial gain in view, lied to and manipulated, and most likely bought off the COngress to enact the law. The Schedule One classification of marijuana is entirely a falsification. It does NOT align with the stated definitioin of Sched One substances. Any law based on falsehood is also null, void, and of no effect. Those who fight to maintain that false classification ought be dealt with under the law.

  5. Michael and Hope Reilly, who own a horse ranch in Pueblo County, said a nearby warehouse (right) where state-licensed cultivator Parker Walton grows marijuana had spoiled their view…

    Tough shit, you’re not entitled to a nice view just because you live in CO. My neighbors recently built a new covered deck on their house that partially blocks the mountain views from my deck. It never even crossed my mind to sue them over it.

    …generated noise and unpleasant odors

    How could they tell there were “unpleasant odors” when they live on a horse ranch? I’d think the smell of horseshit would overpower any smell from a marijuana grow. As for the noise, tough shit.

    …and offended them with its flagrant violation of federal law.

    Cry me fucking river, you whiny pussies.

    1. Imagine, if you couldn’t block the “view”, then if you build a house with a view of the distant mountains, it would be like you controlled every inch of land between you and that mountain. No one would have property rights, and someone behind you could make you knock your house down, because you were blocking THEIR view.

  6. Just like some environmental do good ers, go to court, Sue someone to inflict monetary damage enough to shut things down. Pay court costs or legal fees or something equally benign.

  7. The only way this will “chill the enthusiasm” is if the plaintiffs and, more importantly, their lawyers have to pay for all the time, energy and resources that they caused everyone to waste. We NEED a credible loser-pays system in the US.

  8. Thank God for RICO.
    If it wasn’t for RICO, America wouldn’t be Number One in prison population.
    Such numbers should make any American proud.

    1. Some countries keep that number low with executions. A subset of those countries finish the executions before the handcuffs are on to make the criminal justice system much more cost effective.

      1. Then imagine how many people we’d have in prison if the cops had to stop shooting people? We can barely afford to cage all the potheads we have now.

        1. If you were to write out a detailed description of your idea of a “pothead” I’m certain it will be so far from the mark of reality you could sell it as cultural fiction.

      2. Yup. Fifty nine cents is far less of a public outlay of resources than tens of thousands to prosecute a full jury trial, host the accused in the local CrowBar Hotel, then warehouse him in the for profit larger version of same if convicted, at a cost of about $45K/year.

  9. the Racketeer Influenced and Corrupt Organizations Act (RICO), which allows people injured by illegal enterprises to sue for triple damages.

    Hmmm … this is interesting, but as a matter of general principle, I try to have only one pending court case at a time. I guess I’ll have to leave my car where it is currently parked until my current court case and any possible jail time resulting from it is over. Then I’ll see if it is damaged when I return to bring it home.


Please to post comments

Comments are closed.