A federal judge has ruled that a group of Petaluma neighbors cannot sue a cannabis company and its lead grower under a federal racketeering and corruption law because bad odors and noise are nuisances that don’t cause the kind of measurable financial losses required to pursue the case.
U.S. District Judge Jon Tigar’s Dec. 27 ruling halted what may have been the first attempt in California to use the civil portion of the Racketeer Influenced and Corrupt Organizations Act, passed in 1970 to combat the mafia and organized crime, to stop marijuana cultivation since it was legalized for recreational use.
The plaintiffs argued that the operation’s “sickening cannabis odor” and loud noise diminished the value and enjoyment of their properties. But Tigar, in his 11-page decision dismissing the case, wrote that the neighbors’ complaints amounted to nuisances and personal injuries, which are “not compensable under RICO.”
The decision came about six weeks after cultivator Carlos Zambrano and his business partners with Green Earth Coffee ceased all operations at the Adobe Road property as part of an agreement with Sonoma County’s permitting department, which contended they had not complied with all local rules.
Attorney Joe Rogoway, who represents Zambrano and his partners, said the judge’s ruling was a win for his clients and other marijuana operators facing opposition from neighbors who don’t like the smell of marijuana.
“RICO is not the appropriate venue to remedy cannabis odor,” Rogoway said. “This was the marrow of their claim, this was the central component of their case that’s been thrown out by the federal court. It certainly is a big victory for the defense.”
The plaintiffs, four families who live on Herrerias Way, were given 30 days to amend their complaint and try again to seek a civil remedy using the RICO Act, which is designed to punish ongoing criminal activity by allowing plaintiffs to be awarded triple the amount of monetary damages they prove plus legal fees.
They could instead try to sue Zambrano and Green Earth Coffee in Sonoma County Superior Court, which has different standards for a legal case alleging financial losses. Kevin Block said his clients are interested in trying to recuperate the money they’ve spent on attorney fees and are still deciding whether to continue pursuing a civil case.
The San Francisco judge’s decision diverges from the findings of a panel of federal judges in Colorado.
The 10th Circuit Court of Appeals decided that the RICO Act can be used to prosecute a state-licensed marijuana business.
However, the Colorado plaintiffs still failed to prevail in that case after a jury ruled in favor of the marijuana cultivation firm, finding the facility did not hurt neighboring property values.
Block said his clients — Stefan and Carol Bokaie; Surinder and Marie Uppal and their son, Gurjiwan Uppal; Brenda and Patrick Ward; and Neera and Sandeep Bhandari — believe they had already prevailed because the cannabis farm ultimately was shut down.
“We won — that’s my view,” Block said.
And they contend the county would not have shut down the operation when it did if they had not filed their federal lawsuit in August, three months after Zambrano and Green Earth Coffee began growing marijuana at the property, a 15-acre parcel running behind the backyards of four rural estates on Herrerias Way.