A group of Petaluma neighbors is suing a nearby cannabis grower in what may be the first case in California using a federal racketeering and corruption law to seek to bar cultivation of marijuana since it was legalized for recreational use.
Four families living on Herrerias Way east of Petaluma filed the suit this week in U.S. District Court in San Francisco. They claim the growers, including Carlos Zambrano and his partners in Green Earth Coffee, are raising cannabis without local permits or state licenses and have prevented residents from enjoying their homes because of noxious odors and noise.
Stefan Bokaie, who with his wife, Carol Bokaie, are plaintiffs in the case, said the group took legal action because they are frustrated that Sonoma County’s code enforcement process has so far failed to stop cultivation from occurring in about 40 greenhouses erected this spring on the 15-acre property on Adobe Road near his home.
“If there’s an illegal cannabis grow, it should be shut down; it’s very simple,” said Bokaie, who has lived on Herrerias Way for about three years.
They’re using a little-known civil statue of the federal Racketeer-Influenced and Corrupt Organization Act to sue Zambrano and Green Earth, following a tactic used in Colorado, Oregon and Massachusetts by businesses and residents trying to rid their neighborhoods of cannabis activity in states that have legalized pot.
Zambrano was out of the country and unavailable for an interview this week, according to his attorney, Joe Rogoway.
Rogoway said Zambrano and his partners have been trying to conform their operations to local and state law and believed they were following guidelines provided to them by county officials for moving an existing cannabis-growing operation from a different Petaluma area property to the Adobe Road site.
“That cultivation was occurring only because the county told them they could do it there,” Rogoway said. “It’s fundamentally unfair.”
Public records show Sonoma County has taken steps to halt cannabis production at the Adobe Road site since late May when a code enforcement officer inspected the property. Zambrano is appealing the county’s May 29 notice ordering the company to cease all cannabis activities on the land. A hearing on the issue is scheduled for this morning.
“The county’s position is it is an illegal operation,” said Tim Ricard, the county’s cannabis program manager.
The other plaintiffs in the lawsuit are Surinder and Marie Uppal and their son, Gurjiwan Uppal; Brenda and Patrick Ward; and Neera and Sandeep Bhandari. All are residents of Herrerias Way, a short dead-end road on Petaluma’s eastern outskirts surrounded by vineyards. They are seeking unspecified punitive damages and an injunction to halt any cannabis production taking place.
In addition to Green Earth, the lawsuit also names the property owner, a company called Flying Rooster, as well as Exchange Bank, which recorded a deed of trust for the property in 2015. Gary Hartwick, president and CEO of Exchange Bank, said the bank no longer has any ties to the property, after a severance process begun several months ago when he learned there was marijuana cultivation occurring on the site. Hartwick said the claims against his bank have no merit.
“The unfortunate thing is a group of residents — who instead of searching for the actual information — are making very false statements with respect to Exchange Bank,” Hartwick said. “They have never asked us the question, ‘Do you finance growing operations?’ We do not.”
Zambrano and Green Earth began cultivating cannabis on the Adobe Road property sometime around April in about 40 hoop houses set up in the center of a vineyard, according to the lawsuit.
The neighbors claim in their lawsuit that the strong skunky smell of cannabis cloaked the neighborhood starting around that time. The stench created or exacerbated health problems, worsening Brenda Ward’s asthma and making Carol Bokaie nauseous, among other reactions, according to the suit. The neighbors claim they must keep their windows closed and homes sealed up to avoid the stench, and they and their children have stopped spending time outside.
Most significantly, the Uppals claim the stench of cannabis has caused significant breathing problems for their son, Gurjiwan, who is a paraplegic and relies on a breathing tube.
“Family members must remain near Gurjiwan at all times to guard against the risk of suffocation,” according to the complaint.
Their Napa-based attorney, Kevin Block, said they are not against marijuana’s legalization but they do wish to be protected from the impacts of illegal cultivation. Block said Sonoma County has failed to do that.
“They’re seeking an injunction shutting down the operation and they’re seeking damages to compensate for what they’ve lived with over these past few months and potentially for the diminished property value,” Block said.
The federal lawsuit has the potential to put a further chill on Sonoma County’s cannabis industry, which has struggled to take hold under what many in the industry have described as overly burdensome regulations that favor well-financed businesses over smaller local operators.
Alexa Wall, board chairwoman of the Sonoma County Growers Alliance, said Zambrano and Green Earth are not members of the local cannabis industry advocacy group, primarily made up of local growers. County records filed by Green Earth stated the group first began cultivation in March 2017 at a property on Moro Street outside Petaluma.
Local cannabis industry attorney Omar Figureoa, who has no connection to Zambrano or his businesses, said that it appears the growers were not following county rules, but he said it was troublesome that the lawsuit was going forward even as the county was taking measures to shut their farm down.
“It’s not like this is a good actor who is being targeted unfairly,” Figureoa said. “My take on it is the neighbors got exasperated because they don’t think the county is doing anything. But the county is just following due process.”
Rogoway said his clients have been transparent with the county in their attempt to legitimize operations, submitting permits for the Moro Street location, then moving to Adobe Road after learning it was too close to an existing drug rehabilitation facility.
Rogoway called Sonoma County’s marijuana regulations “illusory” and said the county’s rules are entrapping cultivators “into a sphere of illegality” by giving false promises to clients like his “who are trying to do nothing other than be a lawful cultivator.” Green Earth has spent more than $400,000 on permitting fees and consultants to get its paperwork in order, he said.
Sonoma County agricultural officials have approved 18 cultivators to operate small-scale, outdoor farms since it began accepting applications for cannabis businesses in July 2017, according to Ricard. Larger projects, such as Green Earth’s, must go through the planning department, which has not approved any outdoor cultivation projects.
“The county has failed to meet their end of this agreement,” Rogoway said.
Peter Henning, an expert in civil RICO cases and a professor of law at Wayne State University in Michigan, said civil RICO cases are difficult to prove and many are dismissed early on. Among several hurdles, the plaintiffs must prove the illegal conduct has been continuing over time, and a general rule of thumb is it must have been taking place for at least one year, he said. They will also have to prove the farm has diminished the value of their properties.
If they prevail, the plaintiffs can be awarded triple the amount they prove in damages in addition to attorney’s fees.
“RICO is designed to be punitive — that’s the allure of RICO,” Henning said. “They’re looking for a big judgment, essentially to force the marijuana farmer out of business.”
Today, Rogoway will argue his client’s case at a code enforcement hearing at Sonoma County’s planning department. He said he believes they can show they followed the advice of Sonoma County staff, and that any missteps can be attributed to county failings.
Bokaie, one of the Herrerias Way plaintiffs, said he believes it is just a matter of time before Sonoma County itself is sued if it fails to more strongly enforce laws protecting residents and the environment from illegal actors in the newly legalized industry.
“I know cannabis is here to stay,” Bokaie said. “But we went through hell for three months.”
You can reach Staff Writer Julie Johnson at 707-521-5220 or firstname.lastname@example.org. On Twitter @jjpressdem.