Cannabis Litigation: Mediation Tips

Our litigation team regularly attends mediations both before a lawsuit is filed and while a lawsuit is pending. We’ve covered mediation in the past, but for those who are unfamiliar, mediation is essentially a conference in which parties sit down together, generally with a neutral third party, to see if they can resolve cannabis litigation or a pre-litigation dispute outside of a court.

When reasonable minds prevail, an effective mediator (who is often a seasoned attorney or even a retired judge) can work with the parties to see the strengths and weaknesses of their cases, the cost vs. benefit analysis of filing or continuing a lawsuit, and what settlement options are available. Importantly, a mediator can NOT make the parties settle – it is truly up to the parties to put their best foots forward and participate in their mediation in good faith.

Mediations often take all day (sometimes, even multiple days) and our team has witnessed the gambit of model and no-no behaviors over the years. They are often filed well after cannabis litigation commences. Here are my general tips for how clients should prepare for and conduct themselves at a mediation:

  1. Be prepared. Most mediations begin well ahead of the actual day of – briefs breaking down the facts, legal arguments, and posture of the case are typically required to be submitted (so the mediator is familiar with what’s going on) and attorneys often engage in settlement negotiations beforehand as well. It’s important for clients to review and have knowledge of these things because they are just as much a participant in the mediation as their attorney. It’s also important for clients to make sure they and their attorney are on the same page in terms of what they expect to happen and what their goals are – we unfortunately have all had the situation come up where the client comes in the morning of and decides they want to take a “hard stance” and start by demanding millions of dollars more than what was discussed, or conversely, wanting to insist that they didn’t do anything wrong and shouldn’t have to pay a dime. The more a client is in tune with their legal team, the more efficient and effective a mediation typically will be.
  2. Tell the truth. This is a general rule in litigation (especially in cannabis litigation), but there is a fine line between “puffing” and lying. Of course, focusing on the strengths of a case is important and necessary – mediations are negotiations, after all! However, lying or stretching the truth too much can be counterproductive and cause the mediator to become skeptical of a client’s position. At the end of the day, mediators are humans and their ability to push one side or both sides of a dispute is absolutely affected by how they perceive the case themselves.
  3. Be receptive. It’s a guarantee that clients will hear things they don’t want to hear at mediations. Why? Because the mediator’s goal is to get both sides to a compromise – and they can’t do that unless they bring light to bad facts or weak arguments. This is not to say that clients should run away from any fight. Clients should not let themselves be bullied and question what they’re hearing, but it’s not helpful to anyone for a client to dig in their heels and stop listening to what they’re being told just because they don’t like that the mediator isn’t 100% on their side.
  4. Don’t give up too early. As I mentioned earlier, effective mediations often take all day or multiple days, and there can be several impasses during that time. Feelings of “this will never work” or “we will never reach a middle ground” will inevitably come up. It’s important to remember that negotiations take time and require mental breaks. Again, this is not to say that everyone who goes to mediation must settle – we’ve all attended mediations where everyone is putting their best efforts to settle and it just can’t happen. It’s more to say that mediation is a process (and sometimes, an uncomfortable process), and it’s important to remember that lulls and steps backward are pretty normal.
  5. If you are successful in settling your case, get a settlement document signed before everyone leaves. This is so important because everyone involved in a mediation is often fatigued by the time a settlement happens. I’ve personally had to stay up until 3:00 a.m. to ensure a settlement document was signed before everyone left. But, this is something that cannot be skipped – especially, when the settlement terms are numerous or more complex. Hashing out terms for another day, or leaving questions unanswered, can bring the parties right back to where they started (in a contentious position) and settlements can completely unravel because of it. It’s the worst case scenario to settle, leave, and find out the next day that the cannabis litigation will not end because nobody signed an agreement and the other side had a change of heart. Work with the mediator to hash out and write as much of the settlement as possible so the parties can walk away with closure and a sense of true resolution.

For additional posts on mediation, check out:

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