Safe Streets Alliance et al v. Alternative Holistic Healing, LLC et al
ORDER RE: That the State Defendants Motion To Dismiss Count VII of Plaintiffs Complaint Under Rules 12(b)(1) and 12(b)(6) 83 , filed April 30, 2015, is granted; That the Pueblo Defendants Motion To Dismiss 85 , filed April 30, 2015, is granted, by Judge Robert E. Blackburn on 1/19/2016.(evana, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge Robert E. Blackburn
Civil Action No. 1:15-cv-00349-REB-CBS
SAFE STREETS ALLIANCE,
PHILLIS WINDY HOPE REILLY, and
MICHAEL P. REILLY,
ALTERNATIVE HOLISTIC HEALING, LLC, d/b/a Rocky Mountain Organic,
JOSEPH R. LICATA,
JASON M. LICATA,
6480 PICKNEY, LLC,
CAMP FEEL GOOD, LLC,
BLACKHAWK DEVELOPMENT CORPORATION,
WASHINGTON INTERNATIONAL INSURANCE CO.,
JOHN W. HICKENLOOPER, JR., 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
THE BOARD OF COUNTY COMMISSIONERS OF THE COUNTY OF PUEBLO, and
PUEBLO COUNTY LIQUOR & MARIJUANA LICENSING BOARD,
ORDER RE: MOTIONS TO DISMISS
The matters before me are (1) the State Defendants’ Motion To Dismiss
Count VII of Plaintiffs’ Complaint Under Rules 12(b)(1) and 12(b)(6) [#83],1 filed
“[#83]” is an example of the convention I use to identify the docket number assigned to a
specific paper by the court’s case management and electronic case filing system (CM/ECF). I use this
convention throughout this order.
April 30, 2015; and (2) the Pueblo Defendants’ Motion To Dismiss [#85], filed April
30, 2015. I grant the motions, dismiss Counts VII and VIII of the First Amended
Complaint, enter judgment in favor of both the state and Pueblo defendants as to those
severed counts, and also dismiss plaintiffs’ RICO claims against the Pueblo defendants.
I putatively have subject matter jurisdiction pursuant to 28 U.S.C. § 1331 (federal
II. STANDARD OF REVIEW
Defendants’ motions raise issues under both Fed. R. Civ. P. 12(b)(1) and
12(b)(6). A motion to dismiss under Fed. R. Civ. P. 12(b)(1) may consist of either a
facial or a factual attack on the complaint. Holt v. United States, 46 F.3d 1000, 1002
(10th Cir. 1995). Because defendants’ motion presents a facial attack, I must accept the
allegations of the complaint as true. Id. Plaintiff bears the burden of establishing that
subject matter jurisdiction exists. Henry v. Office of Thrift Supervision, 43 F.3d 507,
512 (10th Cir. 1994); Fritz v. Colorado, 223 F.Supp.2d 1197, 1199 (D. Colo. 2002).
When ruling on a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6), I must
determine whether the allegations of the complaint are sufficient to state a claim within
the meaning of Fed. R. Civ. P. 8(a). For many years, “courts followed the axiom that
dismissal is only appropriate where ‘it appears beyond doubt that the plaintiff can prove
no set of facts in support of his claim which would entitle him to relief.’” Kansas Penn
Gaming, LLC v. Collins, 656 F.3d 1210, 1214 (10th Cir. 2011) (quoting Conley v.
Gibson, 355 U.S. 41, 45-46, 78 S.Ct. 99, 102, 2 L.Ed.2d 80 (1957)). Noting that this
standard “has been questioned, criticized, and explained away long enough,” the
Supreme Court supplanted it in Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 562,
127 S.Ct. 1955, 1969, 167 L.Ed.2d 929 (2007). Pursuant to the dictates of Twombly, I
now review the complaint to determine whether it “‘contains enough facts to state a
claim to relief that is plausible on its face.’” Ridge at Red Hawk, L.L.C. v. Schneider,
493 F.3d 1174, 1177 (10th Cir. 2007) (quoting Twombly, 127 S.Ct. at 1974). “This
pleading requirement serves two purposes: to ensure that a defendant is placed on
notice of his or her alleged misconduct sufficient to prepare an appropriate defense, and
to avoid ginning up the costly machinery associated with our civil discovery regime on
the basis of a largely groundless claim.” Kansas Penn Gaming, 656 F.3d at 1215
(citation and internal quotation marks omitted).
As previously, I must accept all well-pleaded factual allegations of the complaint
as true. McDonald v. Kinder-Morgan, Inc., 287 F.3d 992, 997 (10th Cir. 2002).
Contrastingly, mere “labels and conclusions or a formulaic recitation of the elements of
a cause of action” will not be sufficient to defeat a motion to dismiss. Ashcroft v. Iqbal,
556 U.S. 662, 678, 129 S.Ct. 1937, 1949, 173 L.Ed.2d 868 (2009) (citations and internal
quotation marks omitted). See also Robbins v. Oklahoma, 519 F.3d 1242, 1247-48
(10th Cir. 2008) (“Without some factual allegation in the complaint, it is hard to see how
a claimant could satisfy the requirement of providing not only ‘fair notice’ of the nature of
the claim, but also ‘grounds' on which the claim rests.”) (quoting Twombly, 127 S.Ct. at
1974) (internal citations and footnote omitted). Moreover, to meet the plausibility
standard, the complaint must suggest “more than a sheer possibility that a defendant
has acted unlawfully.” Iqbal, 129 S.Ct. at 1949. See also Ridge at Red Hawk, 493
F.3d at 1177 (“[T]he mere metaphysical possibility that some plaintiff could prove some
set of facts in support of the pleaded claims is insufficient; the complaint must give the
court reason to believe that this plaintiff has a reasonable likelihood of mustering factual
support for these claims.") (emphases in original). For this reason, the complaint must
allege facts sufficient to “raise a right to relief above the speculative level.” Kansas
Penn Gaming, 656 F.3d at 1214 (quoting Twombly, 127 S.Ct. at 1965). The standard
will not be met where the allegations of the complaint are “so general that they
encompass a wide swath of conduct, much of it innocent.” Robbins, 519 F.3d at 1248.
Instead “[t]he allegations must be enough that, if assumed to be true, the plaintiff
plausibly (not just speculatively) has a claim for relief.” Id.
The nature and specificity of the allegations required to state a plausible claim
will vary based on context and will “require the reviewing court to draw on its judicial
experience and common sense.” Iqbal, 129 S.Ct. at 1950; see also Kansas Penn
Gaming, 656 F.3d at 1215. Nevertheless, the standard remains a liberal one, and “a
well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of
those facts is improbable, and that a recovery is very remote and unlikely.“ Dias v. City
and County of Denver, 567 F.3d 1169, 1178 (10th Cir. 2009) (quoting Twombly, 127
S.Ct. at 1965) (internal quotation marks omitted).
In 2012, Colorado voters approved Amendment 64, legalizing the cultivation,
manufacture, and possession of recreational marijuana in the state. Under the
Controlled Substances Act (“CSA”), 21 U.S.C. §§ 801-904, however, marijuana
continues to be classified as a Schedule I drug, which makes the manufacture,
distribution, or possession of marijuana a crime under federal law. Plaintiff Safe Streets
Alliance is “a membership organization whose members are interested in law
enforcement issues, particularly the enforcement of federal laws prohibiting the
cultivation, distribution, and possession of marijuana.” (Am. Compl. ¶ 8 at 4.)2 To that
end, they have brought this lawsuit, challenging the legality vel non of Amendment 64.
Both motions presently before me implicate Counts VII and VIII of the First
Amended Complaint,3 designated therein as the “Preemption Counts,” against Colorado
Governor John W. Hickenlooper, Executive Director of the Colorado Department of
Revenue Barbara J. Brohl, and Director of the Colorado Marijuana Enforcement
Division W. Lewis Koski. (the “state defendants”), as well as the Board of County
Commissioners of the County of Pueblo and the Pueblo County Liquor & Marijuana
Licensing Board (the “Pueblo defendants”). In addition, the Pueblo defendants’ motion
also challenges the remaining counts of the operative complaint, which charge the
Pueblo defendants and the remaining defendants in this lawsuit with various violations
The individual plaintiffs are landowners whose property sits adjacent to a recreational marijuana
grow operation in Rye, Colorado, and are members of Safe Streets Alliance.
I previously granted these defendants’ motions to sever these counts from the remaining
counts of the First Amended Complaint. (See Order Granting Motions To Sever [#114], filed July 14,
of the Racketeer Influenced and Corrupt Organizations Act (“RICO”), 18 U.S.C. §§
1961-1968. Because none of these claims ultimately are viable, I grant both motions to
As originally pled, Counts VII and VII of the complaint purported to state claims
directly under the Supremacy Clause, U.S. CONST. Art. IV, cl. 2.4 (See Compl. ¶ 124 at
38 & ¶ 131 at 39 [#1], filed February 19, 2015.) Not long after the complaint was filed,
however, the Supreme Court issued its opinion in Armstrong v. Exceptional Child
Center, Inc., – U.S. –, 135 S.Ct. 1378, 191 L.Ed.2d 471 (2015), in which it squarely
rejected the premise that there exists “an implied right of action under the Supremacy
Clause to seek injunctive relief against the enforcement or implementation of state
legislation.” Id., 135 S.Ct. at 1383 (citation and internal quotation marks omitted). The
Supremacy Clause, said the Court, is a rule of decision: “It instructs courts what to do
when state and federal law clash[.]” Id. It is not, however, “the source of any federal
rights, and certainly does not create a cause of action.” Id. (internal citations and
quotation marks omitted). Such a conclusion was found to be implicit in the history and
structure of the Supremacy Clause, as well as in its place within the broader context of
the Constitution itself:
It is unlikely that the Constitution gave Congress such broad
discretion [under the Necessary and Proper Clause, Art. I, §
8] with regard to the enactment of laws, while simultaneously
limiting Congress's power over the manner of their
implementation, making it impossible to leave the
The Supremacy Clause provides that “[t]his Constitution, and the Laws of the United States
which shall be made in Pursuance thereof; and all Treaties made, or which shall be made, under the
Authority of the United States, shall be the supreme Law of the Land; and the Judges in every State shall
be bound thereby, any Thing in the Constitution or Laws of any State to the Contrary notwithstanding.”
enforcement of federal law to federal actors. If the
Supremacy Clause includes a private right of action, then the
Constitution requires Congress to permit the enforcement of
its laws by private actors, significantly curtailing its ability to
guide the implementation of federal law. It would be strange
indeed to give a clause that makes federal law supreme a
reading that limits Congress's power to enforce that law, by
imposing mandatory private enforcement.
Id. at 1383-84. Thus, the Court concluded that there is no private right of action under
the Supremacy Clause itself.
In so holding, the Court acknowledged that it had “long held that federal courts
may in some circumstances grant injunctive relief against state officers who are
violating, or planning to violate, federal law,” but concluded that the Supremacy Clause
was not the source of that authority. Id. at 1384. Seizing on that concession, plaintiffs
promptly amended their complaint, invoking the power of “[f]ederal courts sitting in
equity . . . to set aside actions of state officials that are preempted under the Supremacy
Clause.” (First Amended Compl. ¶ 140 at 48 & ¶ 147 at 49 [#66], filed April 13, 2015.)
They thus claim that Counts VII and VIII state viable claims for injunctive relief.
I cannot agree. As Armstrong makes clear, the right to call on the equity
powers of a federal court to enjoin enforcement of an allegedly preempted state law
must be found in substantive federal law. See Armstrong, 135 S.Ct. at 1385.
Nevertheless, the court must be mindful that its equitable power “to enjoin unlawful
executive action is subject to express and implied statutory limitations. Courts of equity
can no more disregard statutory and constitutional requirements and provisions than
can courts of law.” Id. (internal citations and quotation marks omitted). Accordingly,
there is no room in which equity may operate if the federal statute either does not
provide a private right of action, see id. at 1387, or if the structure of the statute
otherwise “implicitly precludes private enforcement,” id. at 1385.
Neither of those circumstances pertains with respect to the CSA. There is a
strong presumption that criminal statutes, enacted for the protection of the general
public, do not create private rights of action. See Cannon v. University of Chicago,
441 U.S. 677, 690, 99 S.Ct. 1946, 1954, 60 L.Ed.2d 560 (1979); Love v. Delta Air
Lines, 310 F.3d 1347, 1352 (11th Cir. 2002); University of Colorado Hospital v.
Denver Publishing Co., 340 F.Supp.2d 1142, 1144 (D. Colo. 2004). Plaintiffs point to
nothing in the text of the CSA that includes the type of “rights-creating language” which
“explicitly confer[s] a right directly on a class of persons that includes the plaintiff” or
“identif[ies] the class for whose especial benefit the statute was enacted.” Love, 310
F.3d at 1352. See also Alexander v. Sandoval, 532 U.S. 275, 289, 121 S.Ct. 1511,
1521, 149 L.Ed.2d 517 (2001) (“Statutes that focus on the person regulated rather than
the individuals protected create no implication of an intent to confer rights on a particular
class of persons.”) (citation and internal quotation marks omitted). Thus, federal courts
uniformly have held that there are no private rights of action under the CSA. See, e.g.,
Durr v. Strickland, 602 F.3d 788, 789 (6th Cir.), cert. denied, 130 S.Ct. 2147 (2010);
Schneller v. Crozer Chester Medical Center, 387 Fed. Appx. 289, 293 (3rd Cir. 2010),
cert. denied, 131 S.Ct. 1684 (2011); Felmlee v. Oklahoma, 2014 WL 4597724 at *6
(N.D. Okla. Sept. 15, 2014), aff’d, 620 Fed. Appx. 648 (10th Cir. July 14, 2015); United
States v. Real Property & Improvements Located at 1840 Embarcadero, Oakland,
California, 932 F.Supp.2d 1064, 1072 (N.D. Cal. 2013); Jones v. Hobbs, 745
F.Supp.2d 886, 893 (E.D. Ark. 2010), aff’d, 658 F.3d 842 (8th Cir. 2011), cert.
dismissed, 133 S.Ct. 97 (2012); Bowling v. Haas, 2010 WL 3825467 at *3 (E.D. Ky.
Sept. 23, 2010); West v. Ray, 2010 WL 3825672 at *3 (M.D. Tenn. Sept. 24, 2010),
aff’d, 401 Fed. Appx. 72 (6th Cir. Nov. 4, 2010), cert. denied, 131 S.Ct. 941 (2011);
Ringo v. Lombardi, 2010 WL 3310240 at *2 (W.D. Mo. Aug. 19, 2010); McCallister v.
Purdue Pharma L.P., 164 F.Supp.2d 783, 793 & n.16 (S.D. W. Va. 2001).
Plaintiffs nevertheless insist that the structure of the CSA does not preclude
private enforcement. I am not persuaded. The Armstrong Court identified two factors
which it found demonstrated Congress’s “intent to foreclose” equitable relief in that
case. Both are at play in this instance as well.
First, the Armstrong Court noted that “the express provision of one method of
enforcing a substantive rule suggests that Congress intended to preclude others.”
Armstrong, 135 S.Ct. at 1385 (citation and internal quotation marks omitted). Plaintiffs’
suggestion that there is no such enforcement mechanism in the CSA’s preemption
clause, see 21 U.S.C. § 903, misses the mark. For the proper focus is not on the rule of
decision embodied in the preemption provision, but on those specific substantive
provisions of the CSA plaintiffs would seek to enforce by this lawsuit – that is, those that
criminalize the possession and distribution of marijuana. See, e.g., 21 U.S.C. §§ 841,
843, 848, 854, 856. Those provisions may be enforced criminally, see id. §§ 841-852,
civilly, see id. § 881, or administratively, see id. § 875. The availability of such a
panoply of remedies to enforce the nation’s drug laws strongly suggests that Congress
did not intend to provide additional recourse through private actions in equity.
More importantly, the authority to enforce these (and most other5) substantive
provisions of the CSA – or not – rests entirely with the United States Attorney General
and, by her delegation, the Department of Justice. See 21 U.S.C. § 871(a). See also
Schneller, 387 Fed. Appx. at 293; Shmatko v. Arizona CVS Stores LLC, 2014 WL
3809092 at *2 (D. Ariz. Aug. 1, 2014). Her charging discretion is the “special province”
of the Executive Branch:
The Attorney General and United States Attorneys retain
broad discretion to enforce the Nation's criminal laws. They
have this latitude because they are designated by statute as
the President's delegates to help him discharge his
constitutional responsibility to take Care that the Laws be
faithfully executed. . . . In the ordinary case, so long as the
prosecutor has probable cause to believe that the accused
committed an offense defined by statute, the decision
whether or not to prosecute, and what charge to file or bring
before a grand jury, generally rests entirely in his discretion.
United States v. Armstrong, 517 U.S. 456, 464, 116 S.Ct. 1480, 1486, 134 L.Ed.2d
687 (1996) (citations and internal quotation marks omitted). See also United States v.
Batchelder, 442 U.S. 114, 124, 99 S.Ct. 2198, 2204, 60 L.Ed.2d 755 (1979) (“Whether
to prosecute and what charge to file or bring before a grand jury are decisions that
generally rest in the prosecutor's discretion.”).6
There a limited number of instances in which states may be granted authority to enforce the
CSA. See 21 U.S.C. §§ 878(a) (Attorney General may designate state or local law enforcement officers
to perform specified duties under the CSA), 882(c)(1) (state may bring civil action to enforce provisions of
CSA against online pharmacies). There are no provisions of the CSA which expressly create private
rights of action, however. See id. § 882(c)(5) (“No private right of action is created under this
Although there are constitutional limits on this discretion, these principally implicate the
mandates of the Equal Protection Clause to prohibit the exercise of prosecutorial discretion “based upon
an unjustifiable standard such as race, religion, or other arbitrary classification.” Batchelder, 99 S.Ct. at
2205 n.9 (citation and internal quotation marks omitted)). In the absence of any suggestion that such
improper factors are implicated here, the government’s “conscious exercise of some selectivity in
enforcement is not in itself a federal constitutional violation.” Oyler v. Boles, 368 U.S. 448, 456, 82 S.Ct.
The recognition of this sweeping prosecutorial discretion addresses directly the
second factor identified in Armstrong as suggesting an intent to foreclose equitable
relief: the “judicially unadministrable nature” of the CSA. Armstrong, 135 S.Ct. at
1385. There certainly can be no more “judgment-laden standard” than that which
confers almost complete discretion on the Attorney General to determine whether to
assert the supremacy of federal law to challenge arguably conflicting state marijuana
laws. See id. The Department of Justice has made a conscious, reasoned decision to
allow the states which have enacted laws permitting the cultivation and sale of medical
and recreational marijuana to develop strong and effective regulatory and enforcement
schemes. See James M. Cole, Guidance Regarding Marijuana Enforcement, United
States Department of Justice, Office of the Deputy Attorney General (August 29, 2013)
[hereinafter “Guidance”] (available at http://www.justice.gov/iso/opa/resources/
3052013829132756857467.pdf) (last accessed January 19, 2016).7 Allowing private
litigants to interfere with that discretionary decision would create precisely the type of
“risk of inconsistent interpretations and misincentives” which strongly counsel against
recognizing an implicit right to a judicially created equitable remedy. See Armstrong,
501, 506, 7 L.Ed.2d 446 (1962).
DOJ has elected to focus its resources and efforts, including prosecution, on eight enforcement
priorities in relation to the manufacture, sale, and possession of marijuana. See Guidance. Noting that
“[o]utside of these enforcement priorities, the federal government has traditionally relied on states and
local law enforcement agencies to address marijuana activity through enforcement of their own narcotics
laws,” DOJ has determined to allow the states to develop and implement “strong and effective regulatory
and enforcement systems” consistent with federal enforcement priorities, and has advised federal
prosecutors to exercise their charging discretion in light of those same priorities. Id. See also Ryan Grim,
“Eric Holder Says DOJ Will Let Washington, Colorado Marijuana Laws Go Into Effect,” Huffington Post,
Politics (Aug. 29, 2013) (characterizing DOJ’s approach to state marijuana legalization as “trust but
verify”) (available at http://www.huffingtonpost.com/2013/08/29/eric-holder-marijuana-washingtoncolorado-doj_n_3837034.html) (last accessed January 19, 2016).
135 S.Ct. at 1385.
Accordingly, I find and conclude that Counts VII and VIII of the First Amended
Complaint fail to state viable claims for relief. Defendants’ motions to dismiss those
claims therefore will be granted on that basis, obviating the need to address defendants’
remaining arguments regarding these Counts.
This decision leaves only the question whether Counts I though VI of the First
Amended Complaint state viable claims under RICO against the Pueblo defendants.
Every federal appellate court to consider the issue has held that government entities are
not subject to RICO, either because they are incapable of forming a specific criminal
intent, see Gil Ramirez Group, L.L.C. v. Houston Independent School District, 786
F.3d 400, 412 (5th Cir. 2015); Rogers v. City of New York, 359 Fed. Appx. 201, 204
(2nd Cir. Dec. 31, 2009); Lancaster Community Hospital v. Antelope Valley Hospital
District, 940 F.2d 397, 404 (9th Cir. 1991), cert. denied, 112 S.Ct. 1168 (1992), and/or
because exemplary damages are not available against municipal corporations, see Gil
Ramirez Group, 786 F.3d at 412-13; Lancaster Community Hospital, 940 F.2d at
404-05; Genty v. Resolution Trust Corp., 937 F.2d 899, 914 (3rd Cir. 1991). Likewise,
federal district courts which have confronted this issue unanimously have refused to
impose RICO liability on government entities. See, e.g., Melcher v. Wiggins, 2014 WL
1600511 at *2 (S.D. Tex. April 21. 2014); Reyes v. City of Chicago, 585 F.Supp.2d
1010, 1014 (N.D. Ill. 2008); Frooks v. Town of Cortlandt, 997 F.Supp. 438, 457
(S.D.N.Y. 1998), aff’d, 182 F.3d 899 (2nd Cir. 1999); County of Oakland by Kuhn v.
City of Detroit, 784 F.Supp. 1275, 1283 (E.D. Mich. 1992); Biondolillo v. City of
Sunrise, 736 F. Supp. 258, 260-61 (S.D. Fla. 1990); Smallwood v. Jefferson County
Government, 743 F.Supp. 502, 504 (W.D. Ky 1990); Jade Aircraft Sales, Inc. v. City
of Bridgeport, 1990 WL 128573 at *1 (D. Conn. July 9, 1990); Victor v. White, 1989
WL 108276 at *5-6 (N.D. Cal. July 26, 1989); Albanese v. City Federal Savings and
Loan Association, 710 F.Supp. 563, 565 (D.N.J. 1989); Massey v. City of Oklahoma,
643 F.Supp. 81, 84-85 (W.D. Okla. 1986).
Plaintiffs’ arguments in contravention of this solid body of authority are
unpersuasive. The fact that government entities may be found to act with recklessness
or deliberate indifference in civil matters does not translate neatly to the issue of
criminal mens rea, such as is required to state a claim under RICO:
[R]acketeering activity is defined to mean various criminal
acts, requiring mens rea. In other words, a finding of
racketeering activity requires indictable criminal conduct.
Therefore, because only criminal violations suffice as
predicate acts under RICO, plaintiff must allege that
defendants committed the acts willfully or with actual
knowledge of the illegal activities.
Friedlob v. Trustees of Alpine Mutual Fund Trust, 905 F.Supp. 843, 859 (D. Colo.
1995) (internal citation omitted; emphases in original). The weight of persuasive
authority supports a conclusion that government entities cannot form specific criminal
intent. See Gil Ramirez Group, 786 F.3dat 412; Rogers, 359 Fed. Appx. at 204;
Lancaster Community Hospital, 940 F.2d at 404. See also City of Newport v. Fact
Concerts, Inc., 453 U.S. 247, 261, 101 S. Ct. 2748, 2757, 69 L. Ed. 2d 616 (1981)
(noting “respectable authority to the effect that municipal corporations can not, as such,
do a criminal act or a willful and malicious wrong” ) (citation and internal quotation
Nor am I convinced by plaintiffs’ suggestion that PacifiCare Health System, Inc.
v. Book, 538 U.S. 401, 123 S.Ct. 1531, 155 L.Ed.2d 578 (2003), undermines the wellreasoned authority to the effect that government entities cannot be liable under RICO
because they are immune from punitive damages.9 This argument has been soundly
rejected by at least two federal appellate courts. See Gil Ramirez Group, 786 F.3d at
412-13; Tengood v. City of Philadelphia, 529 Fed. Appx. 204, 209 n.4 (3rd Cir. June
17, 2013). As the Fifth Circuit cogently explained:
. . . . [T]o overcome municipal immunity from punitive
damages, Congress must clearly express its intention. No
such clear intent to overcome governmental immunity
appears in the RICO provision for treble damages.
The [PacifiCare] Court's ambivalence about punitive
damages complicates analysis here, but we believe
PacifiCare cannot salvage a claim against [the government
entity defendant]. First, the Supreme Court's
characterization of RICO treble damages as “remedial” in
PacifiCare cannot substitute for an express Congressional
In dicta, the Third Circuit has taken issue with this rationale, noting that “[c]ourts long have held
ordinary corporations civilly and criminally liable for the malicious torts or crimes of their high officers,
particularly when the corporation benefits from the officers' offensive conduct.” Genty, 937 F.2d at 909.
In this case, however, plaintiffs have not sued the individual members of the Pueblo Board of County
Commissioners or the Pueblo County Liquor & Marijuana Licensing Board. Instead, the Pueblo
defendants are sued as government entities. In that form, they have no capacity to form a criminal mens
rea, a fact which even the Genty court acknowledged. See id. (noting that “absent express statutory
authorization, the common law ordinarily did not allow criminal indictments against municipal corporations
for certain serious offenses”).
The Court in PacifiCare considered whether provisions contained in contracts between the
parties compelled arbitration of the plaintiff’s RICO claims where the arbitration provisions precluded an
award of punitive damages. PacifiCare, 123 S.Ct. at 1533. In addressing that question, the Court noted
that statutory treble damages provisions exist along a continuum, “serving remedial purposes in addition
to punitive objectives,” and that RICO’s provision is not entirely punitive but also serves remedial
purposes. Id. at 1535.
abrogation of municipal immunity from treble damages,
which, whatever the characterization, exceed actual provable
damages. . . . Second, nothing in PacifiCare contravenes
the Court's earlier holdings that treble-damages provisions
serve both compensatory and punitive functions. Third, the
narrow question posed in PacifiCare was whether an
arbitration agreement's ban on punitive damages included
RICO treble damages. The Court refused to interpret the
private parties' agreement, holding that threshold duty for an
arbitrator. PacifiCare has no bearing on the liability of
governmental entity defendants for treble damages under
For these reasons, we conclude that [plaintiff] cannot
proceed against [the government entity defendant] under
RICO's mandatory treble damage provision. Because
Congress wrote no single-damage alternative, and we lack
power to revise federal statutes, Appellants fail to state a
cognizable RICO claim against [the government entity
Gil Ramirez Group, 786 F.3d at 412-13 (other citations, internal quotation marks, and
footnotes omitted). See also Tengood, 529 Fed. Appx. at 209 n.4 (“Although . . .
language in PacifiCare explains that RICO's mandatory treble damages award is both
compensatory and punitive in nature, this fact was recognized in Genty [v. Resolution
Trust Corp., 937 F.2d at 910], and did not affect our holding in that case.”).
Accordingly, I find that plaintiffs cannot state viable claims under RICO against
the Pueblo defendants. The motion to dismiss those claims therefore must be granted.
THEREFORE, IT IS ORDERED as follows:
1. That the State Defendants’ Motion To Dismiss Count VII of Plaintiffs’
Complaint Under Rules 12(b)(1) and 12(b)(6) [#83], filed April 30, 2015, is granted;
2. That the Pueblo Defendants’ Motion To Dismiss [#85], filed April 30, 2015,
3. That Counts VII and VIII of the First Amended Complaint [#66], filed April
13, 2015, are dismissed with prejudice;
4. That Counts I through VI, inclusive, of the First Amended Complaint [#66],
filed April 13, 2015, are dismissed with prejudice as to the Pueblo defendants only;
5. That as to Counts VII and VIII of the First Amended Complaint [#66], filed
April 13, 2015, judgment with prejudice shall enter on behalf of defendants, 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; The Board of County Commissioners of the County of Pueblo; and Pueblo
County Liquor & Marijuana Licensing Board, and against plaintiffs, Safe Streets
Alliance; Phillis Windy Hope Reilly; and Michael P. Reilly;
6. That as to Counts I through VI, inclusive, of the First Amended Complaint
[#66], filed April 13, 2015, at the time judgment enters, judgment with prejudice shall
enter on behalf of defendants, The Board of County Commissioners of the County of
Pueblo; and Pueblo County Liquor & Marijuana Licensing Board, and against plaintiffs,
Safe Streets Alliance; Phillis Windy Hope Reilly; and Michael P. Reilly;
7. That defendants are awarded their costs associated with Counts VII and VIII
(see Order Granting Motion To Sever [#114], filed July 14, 2015), to be taxed by the
clerk of the court in the time and manner specified in Fed. R. Civ. P. 54(d)(1) and
8. That at the time judgment enters, the Pueblo defendants are to be awarded
any additional costs associated with Counts I through VI, inclusive, to be taxed by the
clerk of the court in the time and manner specified in Fed. R. Civ. P. 54(d)(1) and
D.C.COLO.LCivR 54.1; and
9. That defendants, 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; The Board of County Commissioners of the
County of Pueblo; and Pueblo County Liquor & Marijuana Licensing Board, are
dismissed as named parties to this action, and the case caption amended accordingly.
Dated January 19, 2016, at Denver, Colorado.
BY THE COURT:
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