Dealey was born in 1963, when his family lived on a ranch eight miles outside Whitehall, Montana. When he was two years old, his family moved to Richland, Washington, for a year, and then on to Newport, and Eugene, Oregon, where his parents were divorced. James lived with his mother and survived for a time on food stamps and housing assistance. His mother could not find work in Eugene and moved to Portland. Dealey stayed in Eugene and supported himself throughout most of his high school years. He graduated from South Eugene High School and attended the University of Oregon, dropping out to enter politics.