Safe Sts. All. v. Hickenlooper - 859 F.3d 865 (10th Cir. 2017)

Rule:

To maintain an 18 U.S.C.S. § 1964(c) claim against any particular defendant, plaintiffs need only to have alleged facts plausibly demonstrating that a defendant conducted or participated, directly or indirectly, in the conduct of the racketeering enterprise's affairs. 18 U.S.C.S. § 1962(c). This, in turn, requires a showing that the defendant participated in the operation or management of the enterprise itself. Under the operation or management test, the defendant must have some part in directing the enterprise's affairs.

Facts:

Amendment 64 to the Colorado Constitution, Colo. Const. art. XVIII, § 16. Amendment 64 repealed many of the State's criminal and civil proscriptions on "recreational marijuana, and created a regulatory regime designed to ensure that marijuana is unadulterated and taxed, and that those operating marijuana-related enterprises were, from the State's perspective, licensed and qualified to do so. The three appeals at issue and two related motions to intervene raised disputes stemming from the alleged conflict between the Controlled Substances Act (CSA), 21 U.S.C. §§ 801-904, and the Colorado's new regime. In one of the cases, the plaintiff landowners brought civil RICO claims under § 1964(c) against a host of individuals and entities purportedly affiliated with that neighboring marijuana enterprise, contending that the recreational marijuana facility adjacent to their land has both interfered with their present use and enjoyment of the land and caused a diminution in its market value, e.g., by subjecting the land to the operation’s noxious emissions and by commencing that criminal enterprise nearby.

Issue:

1. Under the circumstances, did the plaintiffs properly allege RICO claims?
2. Were the plaintiffs precluded from seeking to enjoin Amendment 64 to the Colorado Constitution?

Answer:

1) Yes. 2) Yes.

Conclusion:

The Court held that the landowners properly alleged RICO claims since the landowners contended that marijuana growers engaged in an ongoing enterprise to cultivate marijuana in violation of federal law, and that the activity on property adjacent to the landowners' property directly injured the landowners' property by creating a nuisance from noxious odors and diminution in value from the odors and the proximity of criminal activity. Anent the second issue, the Court held that the plaintiffs were precluded from seeking to enjoin a state constitutional amendment legalizing recreational marijuana as preempted by the federal Controlled Substances Act (CSA), 21 U.S.C.S. § 801 et seq., under which activity related to marijuana remain illegal, since the CSA did not create any substantive rights enforceable by the landowners and the court's equitable authority did not extend to granting relief in the absence of a substantive right to relief.