Cannabis Litigation in the Time of COVID-19

cannabis litigation coronavirus

Last week, I wrote about the sad and anti-climatic ending of the first cannabis patent infringement case. UCANN is in the same predicament as many other businesses in the industry, and most experts expect the pandemic to create a surge of bankruptcy cases in the second half of this year. Civil courts are seeing tons of filings directly relating to COVID-19 as well – employees are suing their employers over leave and workplace safety issues, contract parties are suing each other over force majeure provisions, and businesses are suing their insurers for controversial coverage. This trend isn’t hitting the cannabis industry any differently as handshake deals and poor documentation often leads to courtroom disputes.

Unfortunately, these new cases are just adding to the strain that most courts in the United States have felt for a long, long time. For example, cases in the Los Angeles Superior Court have easily taken longer than two years from start to finish. Our experiences in the Multnomah County Circuit Court (Portland, Oregon) are nominally better. And that, coupled with the fact that most courts have now been essentially shut down since March, means litigating is going to require a whole new level of patience.

Federal courts are no different. We primarily litigate in the Central District of California, Northern District of California, District of Oregon, and the Western District of Washington. Jury trials are presently suspended in all four of these jurisdictions. Some hearings are being conducted via telephone or videoconference, while others have also been postponed until after July, but basically, indefinitely. Unfortunately, the evolving nature of the coronavirus leads most to believe that this will continue for another month or so, or even longer. And, even when the courts begin to operate even semi-“normally,” it’s likely that the postponed criminal trials and hearings will be first in line for completion.

So what does that mean for litigants today? It kind of depends on where you are in the litigation process. If you were essentially at the finish line and were scheduled for trial (or are scheduled for trial in the coming months), you may be facing a few months delay – depending on how backlogged the court has become. If you were in the middle of discovery and motion practice, the delay may be months or even years – the inability to travel and/or gather for in-person depositions or the delay in receiving an order on a highly contested motion can hugely impact the timing of resolution. On the other hand, there may be minimal to no delay at all – written discovery can obviously be complete remotely, and most attorneys and court reporters are equipped to handle virtual depositions (although it’s certainly less than ideal so some attorneys choose not to pursue them).

What about potential litigants? If you have claims to be pursued and the funds to pursue them, we really recommend getting those complaints filed as soon as possible. For one, the beginning of a case requires the least amount of in-person interaction unless heavy motion practice is involved – for example, California courts often hold “Case Management Conferences” that are overwhelmingly attended via telephone by out-of-area attorneys. For another, your awesome breach of contract claim may become useless if your defendant also falls victim to the economic downturn and files for bankruptcy or becomes insolvent. In a time when a ton of people are racing to the courthouse, it’s better to get a spot in line.

No matter your circumstances, now is a good time to evaluate the best means of resolving a dispute. Does mediation or arbitration make more sense? Is it time to give settlement talks a second try? If you’d like to know your options, check out our webinar from last year and let us know how we can help.

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