Marijuana Retail Report has published the article….The Rise of Cannabis Litigation Against Foreign Entities – Where Will You Litigate?

Penned by Harris Bricken Lawyer Jihee Ahn

Ahn writes…

As the industry evolves, so does it’s legal litigation issues

As the cannabis industry continues to evolve, our firm has seen a rise in inquiries relating to litigation between domestic parties and international parties. By the simple fact that a dispute involves a foreign party, a host of special considerations come into play – one of which is, where will this be litigated? Often, in an attempt to have the home court advantage, we are confronted with the situation that both sides have initiated lawsuits in their respective courts. Unfortunately, where the parties ultimately end up litigating is not a simple matter of who got to their courthouse first. In this article, we’ll provide an introduction to two principles that may come into play: international abstention and forum non conveniens.

International abstention

Colorado River Water Conservation Dist. v. United States, 424 U.S. 800 (1976), provides that a United States court may abstain from exercising its jurisdiction over a case based on “considerations of wise judicial administration, giving regard to conservation of judicial resources and comprehensive disposition of litigation.” A pretty nebulous standard, right? Luckily, the Colorado River Court also provides a list of factors that a court should consider in deciding whether to close its door on a particular case:

  • Whether either court has assumed jurisdiction over a res (property);
  • The relative convenience of the forums (i.e., where do the anticipated witnesses reside and/or are they beyond the Court’s subpoena power?);
  • The desirability of avoiding piecemeal litigation;
  • The order in which the forums obtained jurisdiction (i.e., has “more litigation” occurred in either action?);
  • What law controls;
  • Where the final relief needs to be enforced; and
  • Whether the foreign proceeding is adequate to protect the parties’ rights.

Abstaining from the exercise of jurisdiction is the exception, not the rule. So, unless the above factors weigh much more heavily in favor of litigating in a foreign court, a federal court in the United States should agree to allow the case.

The Rise of Cannabis Litigation Against Foreign Entities – Where Will You Litigate?