United States District Court, D. Oregon, Portland Division
E. McCart, PRESERVE LEGAL SOLUTIONS, PC, Attorney for
DeCristo, JDC LAW, LLC, Attorney for Defendants.
OPINION & ORDER
A. HERNÁNDEZ UNITED STATES DISTRICT JUDGE.
Gary Rodney Shoultz and Judy Ann Shoultz (collectively,
“Plaintiffs”) allege that Defendants Patrick Lee
Derrick, Katherine Kinslow, Judith E. Lucke, and Samuel
Stocks-Ladd (collectively, “Defendants”) have
conspired and engaged in a pattern of racketeering activity,
in violation of the federal Racketeer Influenced and Corrupt
Organizations Act (“RICO”), 18 U.S.C. §
1962(c), (d). According to Plaintiffs, Defendants violated
RICO by forming an enterprise, on a property adjacent to
where Plaintiffs live, for the purpose of producing and
distributing marijuana. Plaintiffs allege that Defendants
have interfered with Plaintiffs' use and enjoyment of
their property, and that Defendants harmed Plaintiffs by
diminishing the value of their property.
move to dismiss Plaintiffs' Complaint for two reasons:
(1) Plaintiffs fail to establish two of the elements of a
RICO claim-that Defendants conduct or participate in the
conduct of an association-in-fact enterprise, and that the
alleged marijuana operation in this case is an
association-in-fact, as defined by RICO; and (2) Plaintiffs
fail to establish RICO standing because they do not allege
injuries compensable under RICO. The Court grants
Defendants' motion to dismiss because Plaintiffs fail to
allege injuries compensable under RICO.
retired senior citizens, bought property in Colton, Oregon,
in 1980. Compl. ¶ 1, 15, ECF 1. They built a home,
raised a family, and continue to live on the property.
Id. In 2014, Defendant Lucke purchased property (the
“Elwood Property”) in the immediate vicinity of
Plaintiffs' home. Id.
along with Defendants Derrick, Kinslow, and Stocks-Ladd,
invested capital and developed a marijuana production
facility (the “marijuana operation”) on the
Elwood Property. Id. at ¶¶ 5-8. Defendants
have produced marijuana on the Elwood Property, trafficked
marijuana produced on the Elwood Property, and
“knowingly received proceeds from such
marijuana operation has negatively impacted Plaintiffs by
interfering with their use and enjoyment of their property.
Id. at ¶ 38. The production includes the use of
two large greenhouses, equipped with loud, large, commercial
exhaust fans which operate 24 hours a day, seven days a week.
Id. at ¶ 16. When they are running at high
speeds, the intense noise from the fans can be unbearably
loud, making it difficult for Plaintiffs to sleep and scaring
Plaintiffs' dog. Id. at ¶ 16, 20. In
addition, the marijuana production creates a strong and
pervasive stench on Plaintiffs' property, particularly on
warm or humid days. Id. at ¶¶ 17, 20. As a
result of the noise and the odors from the marijuana
production, Plaintiffs no longer enjoy gardening or being
outside on their property. Id. at ¶ 18.
Plaintiffs are also afraid of the prospect of violence after
participants in the marijuana operation repeatedly fired
automatic weapons into the field immediately adjacent to
Plaintiffs' property on October 15, 2017. Id. at
¶19. Plaintiffs allege that Defendants have diminished
the market value of Plaintiffs' property by “making
it more difficult to sell.” Id. at ¶ 38.
motion to dismiss for failure to state a claim may be granted
only when there is no cognizable legal theory to support the
claim or when the complaint lacks sufficient factual
allegations to state a facially plausible claim for relief.
Shroyer v. New Cingular Wireless Servs.,
Inc., 622 F.3d 1035, 1041 (9th Cir. 2010). In
evaluating the sufficiency of a complaint's factual
allegations, the court must accept all material facts alleged
in the complaint as true and construe them in the light most
favorable to the non-moving party. Wilson v.
Hewlett-Packard Co., 668 F.3d 1136, 1140 (9th Cir.
2012). However, the court need not accept unsupported
conclusory allegations as truthful. Holden v.
Hagopian, 978 F.2d 1115, 1121 (9th Cir. 1992); see
also Warren v. Fox Family Worldwide, Inc., 328 F.3d
1136, 1139 (9th Cir. 2003) (“we do not necessarily
assume the truth of legal conclusions merely because they are
cast in the form of factual allegations”) (internal
quotation marks and alterations omitted).
maintain a federal civil RICO claim, a plaintiff must allege
that the defendant engaged in: “(1) conduct (2) of an
enterprise (3) through a pattern (4) of racketeering
activity.” Chaset v. Fleer/Skybox Int'l,
LP, 300 F.3d 1083, 1086 (9th Cir. 2002) (citing 18
U.S.C. §§ 1962(c), 1964(c)); see also Black v.
Corvel Enter. Comp Inc., No. 17-55956, 2018 WL 6620082,
at *1 (9th Cir. Dec. 17, 2018). In addition, a plaintiff must
establish that the defendant “caused injury to
plaintiff's business or property.” Id.
Defendants challenge the first and second elements of
Plaintiffs' claim. Defendants argue that Plaintiffs fail
to set forth adequate allegations as to Defendants'
conduct and the characterization of the marijuana operation
as an “association-in-fact enterprise.” In
addition, Defendants contend that Plaintiffs ...