Federal Court Dismisses RICO Claims: Remedies Would Violate Federal Law

RICO claims in the cannabis industry have certainly evolved over the years, but the general trend of the Courts dismissing those claims or cases altogether has held fast. In Shulman, et al. v. Kaplan, et al., a case filed in the Central District of California, the plaintiffs – who are involved in the production, marketing, and sale of cannabis – enlisted the help of the defendants to help grow their business in 2017. The business relationship broke down, and plaintiffs filed a lawsuit claiming defendants engaged in illegal conduct that ultimately undermined plaintiffs’ cannabis business. This case was filed in federal court because two claims involve violations of RICO, and two claims involve violations of the Lanham Act. In his opinion published last week, Judge Birotte ruled all four claims should be dismissed for plaintiffs’ lack of standing because the Court is unable to grant the relief that relates to their harm.

Defendants had filed a motion to dismiss, arguing that plaintiffs did not have a legally cognizable interest (or basically, a legal right that would be upheld by the Court) in their RICO claims because plaintiffs’ damages relate to a cannabis business – loss of control over their

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