Another group files marijuana racketeering suit – this time against illicit California grower

A neighborhood group in Sonoma County, California, filed a racketeering lawsuit against an allegedly illegal cannabis operation that claims the grower is creating a “skunk-like stench”  near their homes and causing health problems.

The lawsuit, filed in federal court in San Francisco, makes similar claims to ones that have been made in recent racketeering suits involving licensed marijuana operations across the country.

The nine plaintiffs in the Sonoma County case allege that Green Earth Coffee, owned by Carlos Zambrano, operates about 40 greenhouses that emanate a “stench of cannabis” that pervades their homes, makes them sick and prevents them from enjoying their properties, the San Francisco Chronicle reported.

The county inspected the site in late May, according to the suit, and posted “stop” notices because the business was operating without permits. Licensed MJ firms in California continue to lose significant market share to illicit, unlicensed players.

The county reportedly hasn’t taken any enforcement action.

Tim Ricard, Sonoma County’s cannabis program manager, told the Chronicle that Zambrano was issued a notice to cease operations after his application for a 1-acre plantation was rejected, but that he filed an appeal.

The appeal is scheduled to be heard Friday. In the meantime, Zambrano could be fined up to $10,000 a day for continuing to operate illegally, Ricard told the newspaper.

Anti-racketeering lawsuits against licensed MJ cultivators have been proliferating in states such as Oregon, Colorado and Massachusetts since a June 2017 10th Circuit Court of Appeals ruling gave the claims some legal backing.

Under the Racketeer Influenced and Corrupt Organizations Act (RICO), defendants can be found liable for up to triple the damages.

One comment on “Another group files marijuana racketeering suit – this time against illicit California grower
  1. George Bianchini on

    RICO suits rarely succeed except for the law firms at billing time. I hope the Plaintiffs case is on contingency contract.

    RICO was never intended to cover Garden-variety commercial disputes, even those involving the JOINT (puns intended) commission of fraudulent activity.

    For RICO purposes, an enterprise must exist separate and apart from the pattern of racketeering activity in which it engages. By the limited information in the article, it does not appear to be more than a zoning and license violation. We are talking about growing a plant that is to stinky for neighbors, not an organized criminal enterprise.

    To violate RICO, a person must engage in a pattern of racketeering activity connected to an enterprise. The law defines 35 offenses as constituting racketeering, including gambling, murder, kidnapping, arson, drug dealing and bribery. Significantly, mail and wire fraud are included on the list. I did not see any of this activity in the story. Racketeering enterprises rarely apply for permits.

    The statistical record indicates that in 98 percent of the RICO appellate cases surveyed, which do not include RICO actions dismissed by the district courts but not appealed, plaintiffs and counsel invested extensive time and energies in litigation only to come away with a total loss. Arguably, in some of these actions the resources plaintiffs expended were probably far greater, and yielded poorer outcomes, than the potential corresponding outlays and results had they litigated any related common law claims in state courts.

    The plaintiffs might have been better off working with the grower to charcoal filter the green houses to mitigate the odors at the grow until the permit issue gets worked out. This area is also known for its cow pastures. The smells produced by these farms seem to be ok even though they can be toxic. Is the real issue maybe what is being grown?

    These are my personal opinions and I am not an attorney. Nor do I play one on TV!

    Reply

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