Safe Streets Alliance v. Alt. Holistic Healing, LLC
| Decision Date | 08 February 2016 |
| Docket Number | Civil Action No. 15-cv-00349-REB-CBS |
| Parties | SAFE STREETS ALLIANCE, PHILLIS WINDY HOPE REILLY, and MICHAEL P. REILLY, Plaintiffs, v. ALTERNATIVE HOLISTIC HEALING, LLC, d/b/a Rocky Mountain Organic, JOSEPH R. LICATA, JASON M. LICATA, 6480 PICKNEY, LLC, PARKER WALTON, CAMP FEEL GOOD, LLC, ROGER GUZMAN, BLACKHAWK DEVELOPMENT CORP., and WASHINGTON INTERNATIONAL INSURANCE CO. Defendants. |
| Court | U.S. District Court — District of Colorado |
RECOMMENDATION REGARDING DEFENDANTS' MOTIONS TO DISMISS
THIS MATTER comes before the court on the following motions: (1) Defendants Blackhawk Development Corporation and Roger Guzman's (collectively, the "Blackhawk Defendants") Motion to Dismiss (doc. #77); (2) Defendant Washington International Insurance Company's Motion to Dismiss First Amended Complaint (doc. #81); and (3) Defendants Alternative Holistic Healing, LLC, Camp Feel Good, LLC, 6480 Pickney, LLC, Jason Licata, Joseph Licata, and Parker Walton's (collectively, the "Alternative Holistic Healing Defendants") Motion to Dismiss (doc. #86). The Plaintiffs, Safe Streets Alliance, Phillis Windy Hope Reilly and Michael P. Reilly, filed a Consolidated Response to Defendants' Motions (doc. #97), which was followed by Defendants' reply briefs (doc. #98, #108, and #112).
Pursuant to the Order of Reference (doc. #8) dated February 20, 2015 and separate memoranda dated April 28, 2015 (doc. #79), April 30, 2015 (doc. #84), and May 1, 2015 (doc. #87), the instant motions were referred to this Magistrate Judge. The court has reviewed the motions to dismiss and related briefing, the pleadings, the entire case file, and the applicable law, and is sufficiently advised in the premises. For the following reasons, I recommend that Defendants' motions to dismiss be granted.
See Complaint, at p. 1.
The First Amended Complaint named as defendants Alternative Holistic Healing, LLC,Joseph Licata, Jason Licata, 6480 Pickney, LLC, Parker Walton, Camp Feel Good, LLC, Roger Guzman, Blackhawk Development Corporation and Washington International Insurance Co. (hereinafter collectively identified as the "Individual Defendants"). Plaintiffs also asserted claims against John W. Hickenlooper in his official capacity as Governor of Colorado, Barbara J. Brohl, in her official capacity as Executive Director of the Colorado Department of Revenue, W. Lewis Koski, in his official capacity as Director of the Colorado Marijuana Enforcement Division (hereinafter collectively identified as the ), as well as the Board of County Commissioners of the County of Pueblo, and the Pueblo County Liquor and Marijuana Licensing Board (hereinafter collectively identified as the "Pueblo Defendants").1 Counts I through VI asserted RICO claims against all or some of the Individual Defendants and the Pueblo Defendants. Counts VII and VIII presented claims for federal preemption of state and local marijuana licensing against the State and Pueblo Defendants, respectively.
In their Prayer for Relief, Plaintiffs seek to recover on behalf of the Reillys "three times the damages to their property that was caused by the Individual and Pueblo Defendants' racketeering activities." In addition, the Reillys and Safe Streets Alliance seek to enjoin the Individual and Pueblo Defendants from continuing to engage in racketeering activities, stop "the State Defendants from issuing additional marijuana business and occupational licenses," prevent"the Pueblo Defendants from issuing additional marijuana business licenses," and vacate and set aside "the marijuana business licenses issued by the Pueblo Defendants." Plaintiffs also seek a judicial declaration "that the State Defendants' issuance of marijuana business and occupational licenses is preempted by federal law," that the "Pueblo Defendants' issuance of marijuana business licenses is preempted by federal law," "that those portions of the Colorado Constitution and the Retail Marijuana Code that purport to authorize or facilitate violations of the federal drug laws are preempted by federal law," and that "those portions of the Pueblo County Code that purport to authorize or facilitate violations of the federal drug laws are preempted by federal law." Finally, Plaintiffs wish to recover "their reasonable costs, including attorneys' fees, incurred in bringing this litigation."2
On July 14, 2015, Judge Blackburn granted the State and Pueblo Defendants' motion to sever Plaintiffs' preemption claims from their RICO claims. On January 19, 2016, the district court entered an Order (doc. #118) granting the motions to dismiss filed by the State and Pueblo Defendants, which challenged Counts VII and VII (the "Preemption Counts") of the First Amended Complaint, as well as the RICO claims asserted against the Pueblo Defendants. In his Order, Judge Blackburn concluded that the Preemption Counts failed to state viable claims for relief against the State and Pueblo Defendants as there "is no private right of action under the Supremacy Clause itself" and no private right of action for legal or equitable relief under the Controlled Substances Act. Judge Blackburn further held that Counts I through VI of the First Amended Complaint did not state viable RICO claims against the Pueblo Defendants because governmental entities are either incapable of forming a specific criminal intent or becauseexemplary damages are not available against municipal corporations. In light of Judge Blackburn's Order, this case is proceeding only against the Individual Defendants and only as to their own alleged RICO violations.
The Individual Defendants have moved to dismiss this action pursuant to Fed. R. Civ. P. 12(b)(1) and (B)(6). With slight variation, the pending motions argue that Plaintiffs' allegations fail to demonstrate a under Article III and do not satisfy the standing and proximate cause requirements for viable claims under RICO. In sum, the Individual Defendants contend that the injuries described in the First Amended Complaint are limited to alleged interference with the Reilly's use and enjoyment of their property, as well as an adverse impact on the fair market value of that property. Defendants argue that these injuries are too speculative or intangible to sustain private claims under RICO. The Individual Defendants further assert that the First Amended Complaint does not allege any facts that plausibly demonstrate that Plaintiff Safe Streets Alliance has suffered any harm from their marijuana-related activities.
Plaintiffs' Consolidated Response argues, to the contrary, that "[t]his is an action by landowners whose property is being damaged by a neighboring criminal conspiracy" and that the court "should refuse to hold that Defendants can diminish the value of Plaintiffs' property by openly manufacturing illegal drugs nearby without being the legal cause of any injury." See Plaintiffs' Consolidated Response, at 1 and 2.
More recently, Plaintiffs filed a Second Amended Complaint (doc. #126) that purports to amplify on the injuries allegedly caused by the Individual Defendants' marijuana cultivation and distribution activities. More specifically, Plaintiffs asserts that the Reillys "are now experiencing an unpleasant odor on their land caused by Defendants' conduct" and that "thesmell that now burdens [the Reillys'] property is not in any sense premised on contingent future events." Plaintiffs insist that they "are entitled to proceed based on [that unpleasant odor and resulting] injury to [the Reillys'] property without regard to whether their other alleged injuries are actionable." See Plaintiffs' Motion for Leave to File Supplemental Complaint (doc. #117), at 5.
Although this court allowed Plaintiffs to filed their Second Amended Complaint, I did not strike the pending motions to dismiss as the Individual Defendants' arguments for dismissal have not changed. I did, however, allow the parties to file supplemental briefs to address the legal implications, if any, of the new factual allegations in the Second Amended Complaint. Plaintiffs filed their Supplemental Response to The Private Rico Defendants' Motions to Dismiss (doc. #127) on February 5, 2016. The Second Amended Complaint is the operative pleading and the parties' arguments are fully briefed.
Rule 12(b)(1) empowers a court to dismiss a complaint for lack of subject matter jurisdiction. See Fed. R. Civ. P. 12(b)(1).
Dismissal under Rule 12(b)(1) is not a judgment on the merits of a plaintiff's case, but only a determination that the court lacks...
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