Virtually all important business in the modern world is done either in person or via some form of electronic communication, and business in the cannabis and hemp industry is no different. In many of the larger business disputes our attorneys have litigated over the years, emails, text messages, and other electronically stored information (“ESI”) have often been crucial evidence in case-determinative resolutions of key factual disputes.
Parties to a lawsuit are expected by the court to preserve and retain information they reasonably expect could be relevant to the lawsuit; otherwise, the court might sanction a party that destroyed (intentionally or negligently – the technical term is “spoliated”) relevant information or allowed it to be destroyed. Therefore, a cannabis company facing a claim against it, or contemplating making a claim against an adversary, should promptly consult with experienced litigation counsel to understand and comply with its document preservation obligations. The first thing counsel should consider is, what ESI – and specifically, what categories of ESI, such as emails, text messages, or social media messages – is likely to contain information potentially relevant to the claim. The second is, what is the adversary likely to ask for, and when are those requests likely to occur.
Experienced firms often use document management software to help organize document production they receive from opposing parties, as well as documents they are assisting clients in producing. The goal in effective document management should be to enable the attorneys on a case to delegate as much of the document processing and review as possible to more junior and staff-level employees while maintaining rigorous and sensitive identification of key documents and enabling factual mastery of the matter by the responsible attorney, who is ultimately responsible for providing the client with key strategic guidance.
Effective document management should also include early discussions with clients and likely document custodians to enable the litigation team to understand the likely “universe” of documents/ESI. The team will then facilitate the production of responsive documents and materials from clients and ESI custodians. In our practice, for example, we have a suite of protocols we engage in with clients in order to make it as easy as possible for them to locate, identify, and provide us with ESI, such as apps which enable clients to preserve text messages and provide them to us in an admissible and presentable format.
In cases involving state-licensed cannabis businesses, proper retrieval and processing of client and opponent sales data stored in POS systems and state-tracking and reporting software can also be crucial to a host of possible issues. For example, when a client disagreed with a vendor on the balance owed relative to transactions that had taken place over a long period of time, we used Metrc and BioTrack data as evidence of damages in the complex commercial litigation which ensued. Similarly, Metrc tracking data can be at the heart of administrative matters such as license or worker permit revocation proceedings. Even the interaction between different software systems – such as a POS system and a tracking system – can prove important, such as when a state agency believes an oversale has occurred, but in reality, multiple sales were erroneously reported together because of a software issue.
The client of a law firm that is able to approach these issues with the assistance of a sophisticated and coordinated litigation team, especially one with deep practical experience and fluence in industry-standard systems and software, will have a substantial advantage in any adversarial situation.
You can contact Andrew DeWeese at email@example.com or (503) 488-5424.