Country Mutual gets burned….

This case addressed the issue of the difference between federally-legal hemp and federally-illegal cannabis. The case involved an Oregon fire loss arising under a homeowner’s insurance policy issued by Country Mutual to Peter and Wendy Bogard. The Bogards were legally growing hemp in accordance with a Oregon law. They used that hemp to make CBD products, including a CBD salve called Dr. B’s CBD. The crop was destroyed by fire in January 2019.

The Bogards submitted an insurance claim and Country Mutual denied coverage based on the policy’s Controlled Substance exclusion. Such exclusion excluded losses of substances “as defined by the Federal Food and Drug Law at 21 U.S.C.A. Sections 811 and 812, regardless of whether the controlled substance is legal under any state law. The case boiled down to how much THC was in the hemp. County Mutual relied on Oregon regulations to determine that the hemp was a banned controlled substance under the exclusion clause in the policy.

The court ruled against County Mutual.  The court reasoned that it is the insurance company’s burden of proving an exclusion to coverage applies. It further noted that the rules under federal law for determining what was a controlled substance were different than those of Oregon. Thus, the exclusion did not apply.

The importance of this case for claimants is that just because your claim is denied doesn’t mean the insurance company is right. The lesson for insurance companies is that it is important to understand the nuisances if different regulations in different jurisdictions.

Bogard v. Cty. Mut. Ins. Co., No. 1:19-CV-00705-AA, 2021 WL 4269991 (D. Or. Sept. 20, 2021)

Things are getting scary for Curaleaf …

Last issue I commented on the product liability issues facing Curaleaf for mislabeling their products. Well, there is more to it. The following are other product liability cases filed against Curaleaf in addition to the Crawford case I mentioned the last time.

Plaintiff, Diane Dillard, alleges the drops she took contained THC without a warning label.  The case is in Oregon District Court. 

Dillard v. Curaleaf, Inc., 3:21-cv-01514

Plaintiff, Jennifer Laugheed alleges that the Select One CBD drops she took contained THC without a warning label.  The case is in Oregon District Court. 

Laugheed v. Curaleaf, Inc., 3:21-cv-01497

Three Plaintiffs allege that the Select One CBD drops they took contained THC without a warning label.  The case is in Oregon District Court. 

Lopez et al v. Curaleaf, Inc., 3:21-cv-01465

Plaintiff, Brady Palmer, alleges that the Select One CBD drops he took contained THC without a warning label.  The case is in Oregon District Court.

Palmer v. Curaleaf, Inc., 3:21-cv-01434

Plaintiff, Kathleen Menard, alleges that the Select One CBD drops she took contained THC without a warning label.  The case is in Oregon District Court.

Menard v. Curaleaf, Inc., 3:21-cv-01433

On its face, liability seems clear here. I hope they have a good insurance policy. I will keep you posted. Be careful out there!

The Saga Continues …

Illinois’ licensing issues are currently a mess. The Illinois Supreme Court recently ordered that several lawsuits be consolidated to avoid potentially inconsistent rulings.

The lawsuits claim among other things that the awarding of five points to veteran-owned applicants is unconstitutional, and that state regulators unfairly failed to recognize applicants that lived in an area that qualified for social equity status. On the other hand, one of the Plaintiffs, Green Equity, alleges that regulators erroneously awarded social equity points based on the residences of its employees, not its owners.

It will be interesting!

Lawyer joke of the day …

A 50-year-old lawyer who had been practicing since he was 25 passed away and arrived at the Pearly Gates for judgment. The lawyer said to St. Peter, “There must be some mistake! I’m only 50 years old, that’s far too young to die.” St. Peter frowned and consulted his book. “That’s funny, when we add up your billing records, you should be at least 83 by now!”

Jason Morgan Roberts is an Attorney and Legal Commentator in the Chicagoland Area.  He can be reached at [email protected].  His commentary is not to be considered legal advice.