August 14, 2015 11:34AM # RICO Suits Hit Colorado Pot Dealers (and Landlords and Bankers) By [Walter Olson](https://www.cato.org/people/walter-olson) --- SHARE I’ve been warning for years of the dangers of the federal Racketeering Influenced and Corrupt Organizations law and how it gives prosecutors and enterprising private lawyers leverage to target above-board businesses in search of punishment or profit. Since the law’s passage in 1970, RICO has seldom been used against violent organized crime. Instead, it has been aimed at a wide array of white-collar defendants, as William Anderson noted in [*Regulation* six years ago](https://object.cato.org/sites/cato.org/files/serials/files/regulation/2009/11/v32n4-2.pdf), and especially at [unpopular](http://www.pointoflaw.com/archives/2004/07/reason-to-repea.php) industries like gun and cigarette makers, as Cato’s Bob Levy [noted in 2000](https://www.cato.org/policy-report/marchapril-2000/when-theft-masquerades-law). The latest fillip is Sen. Sheldon Whitehouse’s [proposal to aim racketeering charges](https://www.cato.org/blog/sen-whitehouse-bring-rico-charges-against-climate-wrongthink) against groups that promote wrongful thinking on climate change. The [civil side](https://jenner.com/system/assets/publications/12740/original/Civil_RICO_2014.pdf?1393971640) of the statute (“civil RICO”), which can be used in private litigation, is especially susceptible to [tactical use](http://www.pointoflaw.com/archives/2006/10/the-broad-reach.php) by private lawyers who know that the vagueness of the law, the high cost of response, the triple-damages provisions, and the racketeering stigma especially are useful in forcing adversaries to the bargaining table. The more those adversaries value respectability, the more powerful the leverage. [Now comes word](http://wspa.com/ap/marijuana-opponents-using-racketeering-law-to-fight-industry/) that a Washington, D.C.-based tough-on-crime group calling itself the [Safe Streets Alliance](http://www.safestreetsalliance.org/index.php/news/2015/plaintiffs-file-suits-against-recreational-marijuana-businesses-and-state-marijuana-licensing-officials-to-vindicate-federal-drug-laws) has filed suit seeking, in its words, “to hold those involved with Colorado’s recreational marijuana industry liable under federal racketeering statute and to have Colorado marijuana business licenses held invalid.” Its press release is [at least honest enough](http://www.safestreetsalliance.org/index.php/news/2015/plaintiffs-file-suits-against-recreational-marijuana-businesses-and-state-marijuana-licensing-officials-to-vindicate-federal-drug-laws) to acknowledge that the targets include “the citizens of Colorado” for what it believes was their faulty decision to enact Amendment 64 in 2012. In one case SSA, representing a local Holiday Inn franchisee that didn’t care to have a medical marijuana shop near its business, succeeded in [forcing owner Jerry Olson (no relation) out of business](http://www.coloradosummitmagazine.com/Colorado-Summit-Magazine/Summer-Fall-2015/Going-to-Pot/). A key tactic in the suit — one quite familiar to those of us who follow hardball civil litigation in general — was to name as racketeering co-defendants a variety of risk-averse, often respectable businesses that had in some way done business with the main target. Thus [AP reports](http://wspa.com/ap/marijuana-opponents-using-racketeering-law-to-fight-industry/): > …just last week, a bonding company in Des Moines, Iowa, paid $50,000 to get out of the lawsuit. > > > “We are out of the business of bonding marijuana businesses in Colorado and elsewhere until this is settled politically,” said Therese Wielage, spokeswoman for Merchants Bonding Company Mutual. Thus does the litigation accomplish its goal whether or not it ultimately prevails before a judge: > “This lawsuit is meant more to have a chilling effect on others than it is to benefit the plaintiffs,” said Adam Wolf, Olson’s lawyer. SSA lawyer Brian Barnes of Cooper & Kirk doesn’t seem to contradict that: > “We’re putting a bounty on the heads of anyone doing business with the marijuana industry,” Barnes said. I’m occasionally asked why I bother to worry about the legal woes of unpopular industries whose goods I don’t even care to consume. A different way to look at the question is that almost anyone’s line of business — whether it be [soft drinks](http://overlawyered.com/2015/07/we-should-eliminate-them-from-the-food-supply/) or [accounting](http://www.manhattan-institute.org/html/cjm_16.htm) or [putting up visitors in one’s home](http://dc.urbanturf.com/articles/blog/retired_woman_facing_15000_fine_for_illegally_operating_bed_and_breakfast/10240) or charitable non-profit work or electioneering or [employing entry-level workers](https://www.google.com/webhp?hl=en#hl=en&q=racketeering+%22wage+theft%22) at minimum wage — is one public-vilification campaign, or one round of lawsuits, away from becoming an unpopular industry. ##### Related Tags [Constitutional Law](https://www.cato.org/constitutional-law), [Robert A. Levy Center for Constitutional Studies](https://www.cato.org/robert-levy-center-constitutional-studies) [![Creative Commons License](/build/cato_2020/images/creative-commons.svg)](http://creativecommons.org/licenses/by-nc-sa/4.0/) This work is licensed under a [Creative Commons Attribution-NonCommercial-ShareAlike 4.0 International License](https://creativecommons.org/licenses/by-nc-sa/4.0/).