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Underwood v. 1450 SE Orient, LLC

United States District Court, D. Oregon

September 5, 2019

LAURA L. UNDERWOOD, Plaintiff,
v.
1450 SE ORIENT, LLC dba KALEAFA, et al., Defendants.

          FINDINGS AND RECOMMENDATION

          Jolie A. Russo United States Magistrate Judge.

         Plaintiff Laura Underwood originally sued 226 defendants alleging violation of the Racketeer Influenced and Corrupt Organizations ACT (RICO), 18 U.S.C. § 1962, related to marijuana production on property (The Candy Farm) adjacent to her property. Plaintiff grouped defendants into three categories and on March 18, 2019, the Court severed the retail defendants and dismissed them from this action. On April 23, 2019, April 30, 2019, May 3, 2019, May 6, 2019, May 7, 2019, and May 20, 2019, the Court entered judgments as to certain dismissed retail defendants (ECF# 404, 416, 428, 429, 441, 464).

         On July 30, 2019, the Court granted a motion to dismiss filed or joined by the remaining defendants. The Court also granted plaintiff leave to file a second amended complaint to allege concrete financial loss due to decreased property value caused by the alleged acts prohibited by RICO.

         Certain retail defendants now move for an award of attorney fees as prevailing parties (ECF# 442, 466, 473, and 492).[1] For the reasons stated below, the motions should be denied.

         BACKGROUND

         As noted above, plaintiff sued 226 defendants for alleged violation of RICO primarily via violation of various provisions of the Controlled Substances Act.

         Plaintiff initially grouped the defendants as follows:

(1) Defendants who purchased and developed the Candy Farm Property for marijuana production, and produced marijuana products on the Candy Farm Property and the entity Defendants owned by them; (2) Defendants who cultivated marijuana for the Marijuana Operation on properties other than the Candy Farm Property; and (3) Defendants who sold marijuana products produced by the Marijuana Operation at their retail outlets.

See, e.g., Plaintiff's Response to Motion to Sever (ECF# 243) at p. 18.

         When the retail defendants were still part of the case, plaintiff alleged the defendants who purchased the Candy Farm were primarily responsible for the marijuana production near her property. See First Amended Complaint (ECF# 127) at ¶¶ 231-35. Plaintiff also alleged the off-site producing defendants provided marijuana to defendants directly linked to the Candy Farm for production of concentrated marijuana extracts. See, e.g., id. at ¶¶ 423-24. The retail defendants were not alleged to have had any role in the cultivation and farming practices necessary to produce marijuana at the Candy farm. Rather, plaintiff alleged those defendants joined the operation to sell the product at the retail level. See, e.g., id. at ¶¶ 243-45.

         Plaintiff alleged all defendants engaged in the production and sale of a controlled substance, through the marijuana operation, in violation of the Controlled Substances Act. 21 U.S.C. §§ 812, 823, 841, 844. Plaintiff further alleged violation of the Controlled Substances Act and other criminal statutes via the operation by advertising the sale of marijuana products, facilitating financial transactions, and reinvesting proceeds from the sale of marijuana. 21 U.S.C. §§ 843, 854; 18 U.S.C. §§ 1956, 1957. First Amended Complaint (doc. 127) at ¶ 453. Plaintiff alleged defendants' violation of the Controlled Substances Act and money laundering constituted a conspiracy to engage in a pattern of racketeering activity. Id. at ¶¶ 457-558. Accordingly, plaintiff asserted all defendants violated RICO by conspiring together to conduct the affairs of the marijuana operation. Id. at ¶¶ 561-64.

         Plaintiff alleged defendants injured her by:

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 sell. 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 (detailing the impact on ...


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