/>iNot every blog post contains earth-shattering news. Count this among that group, but I encourage you not to ignore the implications and possibly the forecasting for cannabis operators in litigation going forward in this little case in Washington.
A federal judge in Seattle has ruled that a cannabis businessman cannot maintain his claim against local law enforcement even though the officers damaged his property during a seize related to charges that were ultimately dropped. Veterans of the cannabis industry are unfortunately used to court rulings that do not appear to yield “just” results because they are based on the federal illegality of marijuana. Here, though, there is a much more mundane explanation:
Levi Lyon did not read the fine print, and, even if he did, he arguably shouldn’t have understood it to mean what the court interpreted it to mean. Welcome to the party, Mr. Lyon.
What Happened?
Our friends at Law360 have set out the background nicely:
According to the court record, the Thurston County Narcotics Task Force and state cannabis board arrested Lyon and seized some of his business property, including laptops and two buses, in November 2019. While he was charged with three felonies that another county attempted to prosecute him for, those charges were dropped in early 2021, the court record said.
Lyon sought to get his seized property back through a forfeiture hearing, but the Thurston County Prosecuting Attorney’s Office offered him a deal where he could get this stuff back in exchange for a “parking/storage fee,” the court record said. The two sides signed the agreement on March 12, 2021, the court record said.
But the county returned the buses in damaged condition requiring extensive repairs, Lyon claimed in court filings.
Lyon sued. He soon realized, however, that the agreement he signed with the prosecutors included a provision stating that he “waived any future claims related to this proceeding and waived any further legal action related to this matter.”
The Ruling
The federal judge concluded that “[t]he correct interpretation of that waiver, therefore, is that plaintiff Lyon forfeited the right to bring any claim whatsoever that relates to the seizure and storage of his property… This includes the very causes of action and subject matter of the claims brought [] here.”
The court reached this conclusion despite the fact that the court expressly noted that (1) “the [the narcotics task force] did not allow Mr. Lyon to view the buses prior to signing the stipulated order” and (2) the task force also did not return all of the property it had seized.
A reasonable person might ask how Lyon could have waived his rights to make a claim for damage to his property when he wasn’t allowed to view the property before signing the so-called waiver. “But the court ruled that the place to dispute these claims was in the forfeiture hearing, and by signing the agreement Lyon essentially closed off his ability to dispute the conditions of his products. Additionally, the agreement explicitly precluded him from bringing any claims in court,” the judge said.
The Takeaway?
So, what’s the moral of the story? Perhaps it’s just that the court system is one big screw job to the cannabis industry. And that may be true to some extent.
But I think there is a more important lesson, and that is that the law of the contract (even the “fine print”) sometimes matters even more in the cannabis industry. If you are a cannabis operator worried about getting the raw end of a court decision, make sure you don’t give the court an easy out. Don’t trust that law enforcement’s interests are aligned with yours. And when in doubt, call a lawyer. We know a few.
Oh yeah, and sometimes you just get hosed. Sometimes I guess there aren’t enough rocks.
