Gordon & Rees California Cannabis Team Secures Settlement and Dismissal for Harvest in a High Profile Anti-SLAPP Federal Lawsuit

March 2020

Gordon & Rees’ California cannabis team led by Douglas Smurr, Reid Dammann and Charles Berwanger utilized California’s anti-SLAPP statute to parlay a crucial defense settlement resulting in a dismissal with prejudice in favor of client Harvest of Pasadena, LLC (“Harvest”). The federal lawsuit Atrium Group, LLC vs. City of Pasadena, et al., was filed in District Court for the Central District of California.

Out of 122 applicants, Harvest was selected by the City of Pasadena as the top scoring applicant for the city’s highly prized 3rd District encompassing Old Pasadena. The second place finisher, the Atrium Group, LLC (“Atrium”) thereafter sued the City of Pasadena and Harvest for negligence, violation of federal due process, and declaratory judgment seeking injunctive relief ordering the City of Pasadena to cease processing Harvest’s cannabis permit and to disqualify Harvest from further consideration.

In response, the California cannabis team filed an anti-SLAPP special motion to strike, arguing that the statute was enacted specifically to address such lawsuits. Atrium’s lawsuit is indicative of “the new normal” where municipalities issuing the cannabis permits and the top scoring cannabis entity are subject to meritless claims by the losing entity. These lawsuits seek to replace the winning applicant in a costly, high stake legal battle to obtain a coveted retail cannabis permit worth millions of dollars.

Pursuant to the settlement and mutual release agreement, Harvest may only comment that the matter was settled on terms agreeable to all parties.