Again in April 2020, Apothio sued the County of Kern and the California Division of Fish and Wildlife, alleging that in October 2019, state and county regulation enforcement brokers entered its farm fields and ordered the destruction of 500 acres of hemp crops price roughly $1 billion. Apothio claims the companies’ search warrant was faulty as a result of it included an incorrect description of Apothio’s principal, Trent Jones, the acreage grown, and since it ignored Apothio’s standing as a analysis entity below California regulation. Most lately, the defendant companies filed motions to dismiss Apothio’s case is in its entirety as a result of its crops represent contraband below federal regulation, and Apothio can’t have a property curiosity in such contraband.

Whereas the civil case commenced, Mr. Jones was then arraigned for felony misdemeanor fees for the unlawful cultivation and sale of marijuana (primarily based on the info of this case) in October 2020. Based mostly on this growth, the defendant companies filed for a movement to remain discovery (basically, pause discovery) within the case pending (1) completion of the felony investigation of Mr. Jones, or (2) at the least a choice on the motions to dismiss.

For everybody’s profit, the Courtroom issued a prolonged opinion breaking down its resolution.  It began with the defendant companies’ request to remain discovery pending completion of the felony investigation. It famous: “a celebration has no constitutional proper to a keep of civil proceedings throughout the pendency of a felony investigation or prosecution, nor does the Structure shield a celebration from being pressured to decide on between the results of asserting or waiving his Fifth Modification rights within the civil proceedings.” In contemplating whether or not to situation a keep, the courtroom ought to take into account the extent to which the defendant’s Fifth Modification rights are implicated, in addition to the next 5 Keating elements:

  • The curiosity of the plaintiffs in continuing expeditiously with this litigation or any explicit side of it, and the potential prejudice to the plaintiffs of a delay;
  • The burden which any explicit side of the proceedings might impose on defendants;
  • The comfort of the courtroom within the administration of its instances, and the environment friendly use of judicial assets;
  • The pursuits of individuals not events to the civil litigation; and
  • The curiosity of the general public within the pending civil and felony litigation.

Total, the Courtroom was not satisfied that Mr. Jones’ Fifth Modification privilege would implicate nice points within the civil case:

Even when the felony case trigger Jones, in his particular person capability, to claim his Fifth Modification privilege given the factual and authorized overlap between the investigation and the civil case right here, company defendants are entitled to no such privilege. Nor does the privilege lengthen to company data. Furthermore, a custodian of company data “has no privilege to refuse manufacturing [even if] their contents are inclined to incriminate him.” … Defendants should elicit useful testimony from unnamed company representatives and compel manufacturing of related data given the inapplicability of the Fifth Modification privilege to the company entities. The extent to which Jones’s Fifth Modification rights are implicated doesn’t warrant a keep of this motion. (Citations omitted).

The Courtroom then mentioned every Keating issue, discovering that on steadiness, these elements favored Apothio’s place as nicely:

  • “This issue weighs in [Apothio’s] favor” – Apothio had claimed an curiosity in accumulating proof whereas it’s nonetheless recent, earlier than witnesses’ reminiscences fade and proof turns into stale; Apothio had additionally claimed its continued monetary viability was threatened so long as the litigation continued.
  • “To the extent that the Plaintiff is making an attempt to misuse the civil discovery course of and acquire supplies from an ongoing felony investigation, the Courtroom finds {that a} keep can be warranted” – this was extremely fact-dependent and was largely a wash.
  • “This issue weighs in Plaintiff’s favor” – Apothio had contended the environment friendly use of judicial assets can be to proceed with discovery, as that might result in a faster decision of the case and facilitate lifelike settlement negotiations.
  • As to the curiosity of events and non-parties, the Courtroom discovered that the final precept of “the general public has an curiosity in comparatively speedy decision of civil issues” to outweigh any argument the defendant companies supplied.

Finally, the Courtroom refused to remain discovery primarily based on the continuing felony proceedings. Nevertheless, it then thought-about the defendant companies’ request to remain discovery pending decision of their motions to dismiss. In deciding this situation, it famous the general consideration can be to steadiness “the hurt produced by a delay in discovery towards the chance that the movement might be granted and fully remove the necessity for such discovery.” Two necessities have to be met for a keep to be issued:

  • The pending movement have to be doubtlessly dispositive of your entire case, or at the least dispositive on the difficulty at which discovery is aimed.
  • The pending, doubtlessly dispositive movement will be determined absent extra discovery.

As to the primary prong, the defendant companies argued their pending motions to dismiss will eliminate the criticism basically as a result of Apothio’s crops are legally and factually contraband below federal regulation, and Apothio can haven’t any property curiosity in such contraband. The Courtroom agreed, writing it had taken a “preliminary peek” at Apothio’s opposition and located it unconvincing on its face, with none want for additional discovery. Subsequently, the Courtroom granted the defendant companies’ request for a keep pending a choice on their motions to dismiss. This was a fairly large blow to Apothio – now, the events are basically frozen of their efforts till the defendants’ motions are heard.

This case and opinion will certainly be one to observe – not just for the excessive stakes at play, but in addition for the perception into how civil and felony proceedings intersect, how the federal courts are typically and treating hemp corporations, and the deference proven to authorities company events. We’ll report again when the motions are heard, as that call will definitely be telling.