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Marijuana racketeering case dismissed for now

A racketeering lawsuit over marijuana production has been dismissed but the Oregon landowners will be able to refile an amended complaint against their neighbors.
Mateusz Perkowski

Capital Press

Published on August 22, 2018 9:51AM

A racketeering lawsuit over marijuana production has been dismissed but the Oregon landowners will be able to refile an amended complaint against their neighbors.

Mateusz Perkowski/Capital Press

A racketeering lawsuit over marijuana production has been dismissed but the Oregon landowners will be able to refile an amended complaint against their neighbors.


A federal judge has dismissed a racketeering lawsuit filed by Oregon landowners against neighbors who allegedly produce marijuana but the plaintiffs can refile their complaint.

Last year, several people filed a lawsuit accusing neighboring property owners near Lebanon, Ore., of growing marijuana in violation of the Racketeer Influence and Corrupt Organization Act.

U.S. District Judge Michael McShane has now ruled that the injuries alleged by the plaintiffs, including unpleasant noises, foul odors and reduced property values, aren’t the kind that can be compensated under RICO.

The 10 plaintiffs — Robert Ainsworth and Tami Ainsworth, Karl and Lucinda Frink, Gordon and Elaine Griswold, John and Linda Lindsey and William and Suzanne Whitaker — claimed they’d been adversely affected by a “persistent stench,” traffic, greenhouse fans and guard dogs.

According to the complaint, because marijuana remains illegal under federal law regardless of its legalization in Oregon, RICO has been violated by the defendants: Mark Owenby, Michelle Page, Jenny Silveira, Howard Brown, William Templeton, Elisha Templeton and Bryan Philp.

Whether or not the marijuana is still grown at the site is a point of dispute — the defendants say it’s hasn’t operated since October 2017 while plaintiffs claim it’s still functional.

Though the judge found that the plaintiffs have constitutional standing to file the lawsuit, he has decided that diminished “use and enjoyment” doesn’t qualify as an “injury to property” under RICO, even considering their “out-of-pocket expenses for firearms, fencing, gates, and security cameras.”

Such costs arise from an alleged personal injury that’s not covered by RICO “because those losses are derivative of their emotional distress and not a property interest recognized under Oregon law,” McShane said.

The reduction in the plaintiffs’ property values is speculative, since they haven’t shown any attempt to “rent, sell or otherwise monetize their property interests,” rendering the alleged harm “abstract” and uncompensable under RICO, he said.

However, the judge will allow the landowners to amend their complaint to make such a claim “in good faith” and he agreed that the marijuana operation was a plausible cause of any alleged reduction in property value.

“If plaintiffs cannot sue to vindicate the federal drug laws and recover for any compensable injuries, it is difficult to imagine a person who could,” McShane said.

Capital Press was unable to reach the plaintiffs’ attorney, Rachel McCart, for comment.

Alex Tinker, attorney for the defendants, called the ruling “a very well reasoned opinion” that recognized the facts don’t allow for a RICO case to move forward in the 9th U.S. Circuit Court of Appeals.

A similar case was allowed to proceed in the 10th Circuit, which has different case law regarding RICO.

Tinker said he expects it will be difficult for the plaintiffs to “plead around” the problems identified by McShane, which may bode poorly for several other marijuana-related lawsuit filed by the same attorney.

“At the very least, it should give the plaintiffs a bit of pause in those cases,” he said.



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