Earlier today, the jury in Reilly et al. v. 6480 Pickney, LLC et al. only needed a few hours to decide that Defendants’ marijuana grow operation had not caused injury to the neighboring property owned by Plaintiffs Hope and Michael Reilly. Because Judge Robert Blackburn had previously ruled that Defendants’ business activities satisfied certain elements of Plaintiffs’ RICO claims, the jury was only asked to decide whether, and to what extent, Defendants’ business had injured Plaintiffs and their property. The case had garnered significant attention in Colorado and beyond as the first to be tried following the Tenth Circuit’s holding that nuisance plaintiffs could use the federal civil racketeering statute to press their grievances against marijuana businesses.
In federal court in downtown Denver this morning, Plaintiffs’ closing argument identified five alleged injuries which they claimed resulted from the neighboring cannabis facility, including (1) “noxious” odors, (2) noise, (3) degraded views, (4) increased crime, and (5) loss of use and enjoyment of the property. Relying heavily on anecdotal evidence from Plaintiffs themselves and neighbors with evident hostility to the cannabis business, Plaintiffs’ attorney argued that the smells and sounds from the marijuana facility, as well as its mere presence, had damaged the Reillys’ property values and ruined their ability to enjoy their land.
Defendants countered that tax records actually demonstrated an increase in Plaintiffs’ property value since Defendants’ facility went in. And they argued that a reasonable person purchasing land in an agricultural area like the one where the parties’ properties are located would expect to experience the indicia of agricultural activity such as cultivation of marijuana plants.
In rebuttal, Plaintiffs went so far as to claim that the family’s experience as cannabis facility neighbors was so bad that certain happy “memories were gone.” The jury was not convinced.
It remains to be seen whether the verdict will stanch the flood of RICO-based claims against Colorado cannabis businesses that some commentators predicted in the wake of the Tenth Circuit’s decision. In the meantime, marijuana companies may want to consider how to manage their exposure to these types of claims.
Andrew Orr is a litigator who follows the cannabis industry, and has represented agricultural companies in a variety of commercial and other complex cases.