Clear and concise language is key…

American Family Mutual Insurance (“American”) sought relief for a declaratory judgment in Oregon seeking an order declaring that it was not responsible to defend Boones Ferry Berry Farms, Inc.(“Boones”) pursuant to the exclusion clause in the policy.  A Magistrate Judge found in favor of American and Boones appealed to the District Judge.

Defendants argued that under Oregon Law, the exclusion clause was ambiguous, therefore the policy should be construed in their favor and American had a duty to defendant them in the underlying state court contract action.

The main issue here was whether the loss of use of cannabis plants falls within the policy’s provision that property damage does not mean physical injury to cannabis plants.

Since the underlying state court contract issue specifically involved the injury to commercial cannabis plants the district judge affirmed the dismissal.

Am. Family Mut. Ins. Co. v. Big Bush Farms LLC,  United States District Court For The District Of Oregon Eugene Division Case No. 6:19-cv-1725-MK (D. Or. Jul. 29, 2020)

More Mislabeling and warranties…

In an unpublished opinion, Plaintiff Ricardo Santiago did not survive and Plaintiff Vaughn Frederick, barely survived a motion to dismiss their class action lawsuit against Total Life Changes LLC (“Defendants”).  In the suit, Plaintiffs claim that they ingested Defendant’s product.  The product was marketed as IASO TEA INSTANT with Broad Spectrum Hemp Extract.  The company claimed that the product contained 0.0% THC.  Despite Defendants claims, Plaintiffs failed mandatory drug test requirements.  The test revealed THC in their systems after they ingested the product.

This case comes down to warranty issues.  The only counts to survive was Frederick’s counts for liability under express and implied warranties.  This is because Santiago failed to provide pre suit notice to Defendants.  All attorneys should be aware of the pre suit notice requirements under warranty claims.  It is also interesting that mislabeled cannabis products can lead to breach of warranty issues.  Cannabis companies would be served in disclaiming all warranties in compliance with the Uniform Commercial Code on their products.

Santiago v. Total Life Changes LLC, United States District Court, Civil Action 20-18581(SDW)(LDW) (D.N.J. Nov. 2, 2021)

Texas Court Bans the Ban on Delta 8…

On November 5, 2021, A Travis County Court held a hearing on Sky Marketing Corporation’s (“Plaintiff”) petition for a Temporary Injunction against the Texas Department of Health and others (“Defendants”).  Plaintiff was seeking a Temporary Injunction asking the Court to reverse Defendants changes essentially declaring Delta 8 a controlled substance and effectively outlawing the sale of the substance in Texas.

The court made some interesting findings.  First, the court found that, “As a result of [Defendant’s] ultra vires actions…Plaintiffs will suffer imminent and irreparable harm such as brand erosion, reputational damage, including loss of customers’ goodwill, unsalvageable loss of nationwide customers, loss of market share, loss of marketing techniques, employee force reduction, revenue lost and costs incurred by not being able to manufacture, process, distribute, or sell hemp products that fall within the newly adopted definitions for “tetrahydrocannabinol” and/or “Marihuana extract,” having to relocate or shut down part of Plaintiffs’ businesses and contributing to the insolvency of Plaintiffs’ vendors and customers…”.

The Court further found that change in rules subjected, “all of Plaintiffs’ employees and similarly situated company employees and individual consumers to potential arrest and other criminal penalties.”  Finally, “[p]plaintiffs, along with other similarly situated individual consumers throughout Texas, will have no effective treatment to anxiety, depression, insomnia, migraines, loss of appetite, chronic pain, and nausea. Plaintiffs, along with these other individuals, may be forced to seek other dangerous alternatives, like opioids or street drugs.”

Sky Marketing Corp., Dba Hometown Hero V. Texas Department Of State Health Services, Et Al. D-1-Gn-21-006174

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LAWYER JOKE OF THE DAY

A lawyer defending a man accused of burglary tried this creative defense: “My client merely inserted his arm into the window and removed a few trifling articles. His arm is not himself, and I fail to see how you can punish the whole individual for an offense committed by his limb.”

“Well put,” the judge replied. “Using your logic, I sentence the defendant’s arm to one year’s imprisonment. He can accompany it or not, as he chooses.”

The defendant smiled. With his lawyer’s assistance, he detached his artificial limb, laid it on the bench, and walked out.

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.