United States District Court, D. Oregon
LAURA L. UNDERWOOD, Plaintiff,
1450 SE ORIENT, LLC dba KALEAFA, et al, Defendants.
FINDINGS & RECOMMENDATION
A. RUSSO UNITED STATES MAGISTRATE JUDGE.
Laura Underwood originally brought this action against 226
defendants alleging violation of the Racketeer Influenced and
Corrupt Organizations ACT (RICO), 18 U.S.C. § 1962
related to marijuana production on property adjacent to her
property. Plaintiff grouped defendants into the following
categories: (1) defendants who purchased the neighboring
property, “Candy Farm Property, ” in order to
produce marijuana and marijuana products on that Property;
(2) defendants who cultivated marijuana for the Candy Farm
Property on properties other than the Candy Farm Property;
and (3) defendants who sold marijuana products produced by
the Candy Farm Property at their retail outlets. On March 18,
2019, the court severed the retail defendants from this
April 16, 2019, plaintiff filed a RICO case statement.
Defendants 7Points, Inc., Robert Marion Elam, Michael R.
Munzing, Certified Portland, LLC, Adam Kirkwood, East Fork
Agriculture LLC, Joel Matthew Fischer, Aaron Howard, Nathan
Cole Howard, Joseph River Perkins, Mason Reed Walker, High
Noon Farm LLC, Tyson Lewis, Gregory Perrin, Willamette Valley
Resources, LLC, David Kline, Darlene Siegel, Sugar Tree Farm,
LLC, Steven Penman, and Jason Reynolds now move to dismiss.
The other defendants joined in the motion to dismiss. The
court held oral argument on June 12, 2019. For the reasons
stated below, defendants' motion to dismiss should be
granted, and plaintiff's request for leave to file a
second amended complaint should be allowed.
is an Oregon property owner who lives immediately adjacent to
the former Oregon Candy Farm located at 48620 SE Highway 26
in Sandy, Oregon (Candy Farm Property). First Amended
Complaint (doc. 127) at ¶ 1. Defendants
Alexander Pavich, Evette Pavich and Nicholas Pavich own and
control defendant N&A (the Pavich Defendants). Plaintiff
alleges that in August 2013, defendant N&A acquired the
Candy Farm Property for the purposes of cultivating
marijuana, manufacturing concentrated marijuana extracts and
producing marijuana-infused products to sell. Plaintiff
alleges these activities constitute a criminal enterprise
(the Marijuana Operation). Plaintiff further alleges each of
the Pavich defendants agreed to make a financial investment
in the Marijuana Operation, and in exchange, each of them
would receive a portion of the Marijuana Operation proceeds.
Id. at ¶¶ 231-32.
alleges the Pavich defendants and defendant Aligra Marie
Rainy developed the Candy Farm Property beginning in
September 2013 in preparation for the Marijuana Operation.
Id. at ¶¶ 233-344. Plaintiff further
alleges the Pavich defendants formed other companies such as
defendant Chronic Creations, LLC and defendant Oregon Candy
Farm, LLC to manufacture marijuana products and market and
sell those products. Id. at e.g.,
alleges other defendants such as defendant 7Points, Inc. also
joined in the Marijuana Operation to produce marijuana for
Chronic Creations and OCF. Id. at e.g.,
¶¶ 423-24. In addition, plaintiff alleges numerous
other defendants such as Alpha Alternative Solutions, LLC
joined in the Operation to sell the marijuana products at the
retail level. Id. at e.g., ¶¶
alleges all defendants engaged in the production and sale of
a controlled substance in violation of the Controlled
Substances Act. 21 U.S.C. §§ 812, 823, 841, 844.
Plaintiff further alleges violation of the Controlled
Substances Act and other criminal statutes through
advertisements of marijuana products, facilitation of
financial transactions, and reinvestment of proceeds from
marijuana sales. 21 U.S.C. §§ 843, 854; 18 U.S.C.
§§ 1956, 1957. First Amended Complaint (doc.
127) at ¶ 453. Plaintiff alleges
defendants' violation of the Controlled Substances Act
and involvement in money laundering constitutes a conspiracy
to engage in a pattern of racketeering activity. First
Amended Complaint (doc. 127) at ¶¶ 457-558.
Accordingly, plaintiff asserts all defendants violated RICO
by conspiring to conduct the affairs of the Marijuana
Operation. Id. at ¶¶ 561-64. Plaintiff
alleges all defendants specifically violated 18 U.S.C. §
1962(c) (use of an enterprise to conduct a pattern of
racketeering activity) and 18 U.S.C. § 1962(d)
(conspiracy to conduct such activity).
alleges defendants' violation of RICO caused her injury
interfering with Plaintiff's use and enjoyment of
Plaintiff's Property, burdening it with noxious odors,
diminishing its market value and making it more difficult to
As a direct result of Plaintiff's Property's
diminished market value, the amount of credit Plaintiff was
able to obtain based upon the value of Plaintiff's
Property was materially decreased.
First Amended Complaint (doc. 127) at ¶ 566;
see also ¶¶ 447-452 (describing in detail
the impact on plaintiff's property).
assert the complaint must be dismissed because plaintiff has
not and cannot allege an injury ...