Pot, property values are the focus of the next federal trial
Pot, property values are the focus of the next federal trial
A federal trial in Colorado could have far-reaching effects on the fledgling administration of the United States. marijuana industry if a jury joins a couple who say that having a cannabis business as a neighbor harms the value of their property.
The trial, which begins Monday in Denver, is the first time a jury will consider a lawsuit with a federal law against organized crime to attack cannabis companies. But the marijuana industry has been closely watching the case since 2015, when lawyers from a firm based in Washington, DC, first filed their extensive complaint on behalf of Hope and Michael Reilly.
Brian Barnes, one of the couple's lawyers, said they bought the southern Colorado land for their views of Pikes Peak and that they have since built a house on the rural property. They also walk and ride horses there.
But they claim that the "unpleasant and sharp smells" of a nearby indoor marijuana crop have affected the value of the property and its ability to use and enjoy it.
"That's not right," Barnes said. "It is not right to have people who violate federal law and injure others."
A lawyer of the company object of the plans of the demand to argue that the property of the couple has not been damaged, relying in part on the tax assessments of the county of the land of the Reilly that increases over time.
Vulnerability to similar lawsuits is one of the many risks faced by licensed marijuana businesses in the states that still violate federal law. Costumes that use the same strategy have been presented in California, Massachusetts and Oregon.
Reflecting Reilly's complaint, several claim that the smell of marijuana damages the ability of neighboring property owners to enjoy their land or the value of their property.
The question now is whether the jurors accept the argument.
"They can claim a $ 1 million fall in the value of the property, but if a jury disagrees and says $ 5,000, it's not a big problem," said Rob Mikos, a law professor at Vanderbilt University who He specializes in drug laws. "That's why there are many eyes in the case."
The Congress created the Law of Corrupt and Infiltrated Organizations of Criminals, better known as RICO, to attack the mafia in the 1970s, allowing prosecutors to argue that the leaders of a criminal enterprise should pay a price along with the defendants Of lower level.
But the law against organized crime also allows private parties to file lawsuits alleging that their business or property has been damaged by a criminal enterprise. Those who prove it can be compensated financially for damages three times, plus the expenses of the lawyers.
As of 2015, opponents of the marijuana industry decided to use the strategy against companies that produce or sell marijuana products, along with investors, insurers, state regulators and other players. The cannabis companies immediately saw the danger of high legal fees or payments ordered by the court.
That concern only grew when a Denver-based federal appeals court ruled in 2017 that the Reillys could use the law against organized crime to sue the licensed cannabis producer near their property. The insurance companies and other entities originally named in the Reillys lawsuit were phased out, some of them after reaching financial agreements outside the courts.
The case focuses on properties in Pueblo County, where local officials viewed marijuana as an opportunity to boost an area left by the steel industry. Most Colorado counties prohibit outdoor growing, forcing potters to find expensive storage space.
The town officials placed their sunny and flat plains as the alternative. They created financial incentives with the hope of attracting farmers to open fields or cavernous buildings that other industries left vacant.
Parker Walton was one of the first to arrive, and bought 40 acres in the rural town of Rye in 2014.
Barnes said the Reillys made three separate land purchases between 2011 and 2014, which gradually reached more than 100 acres. They learned about plans for the marijuana business that borders their final purchase four months after completing the sale, he said.
Walton built a 5,000-square-foot (465-square-meter) building to grow and harvest marijuana plants inland. The Reillys filed their lawsuit in early 2015. A year later, Walton announced the company's first crop through Instagram, taking a picture of a strain called "Purple Trainwreck" hanging to heal in a dark room.
Fewer than five people, including Walton, work for the company, which sells its products in retail stores, said his lawyer, Matthew Buck.
Buck said he is confident the juries will decide that Reillys' property has not been damaged. However, Buck warned that the defense against a similar lawsuit has a high cost to the marijuana businesses, while the plaintiffs with the support of a large law firm have little to lose.
Cooper & Kirk, the firm that handles the couple's lawsuit, has a conservative reputation, including a founding partner who worked for the US Department of Justice. UU During the Reagan administration. Barnes said the members of the firm were "concerned" when states began to legalize the use of marijuana by adults due to the conflict inherent in federal law, and brainstormed about legal strategies.
Walton created a website this month to raise money for his defense. He wrote that a loss could endanger "all legal cannabis operations in all states."
But some lawyers who have defended companies in similar lawsuits said those fears have been exaggerated.
Adam Wolf, a lawyer from California, said he believes the lawsuits are aimed primarily at scaring third-party companies into breaking ties with marijuana companies or persuading cannabis companies to close their doors. But in the long term, Wolf said the US Supreme Court. UU It has curtailed lawsuits that make claims of civil extortion against other industries.
The courts could apply the same logic to cannabis, he argued.
"What the plaintiffs seemed to be saying is that anyone who has touched, in any case, any marijuana business is potentially responsible," Wolf said. "And that is an argument widely rejected by the courts."
Barnes, however, said the amount of extortion suits awaiting an action suggests that lawyers without ties to his firm believe in the strategy.
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Kathleen Foody is a member of the AP marijuana team. Follow her on twitter.com/katiefoody
Find the full coverage of marijuana AP here: apnews.com/tag/LegalMarijuana
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