Cannabis Litigation: Selecting the Right Mediator for Your Marijuana or Hemp Lawsuit is Critical

Although Americans, and citizens of certain states in particular, have a reputation as a litigious bunch, the reality is that very few civil lawsuits actually go to trial. The vast majority of cases—perhaps more than 90%—end in settlement. This is certainly true in my practice and for most attorneys I know who specialize in business litigation.

Although litigants may resolve disputes informally, i.e. without the aid of a third party, disputes are often resolved via private mediation. See What’s the Point of Mediation? for a detailed primer on what mediation is (and is not) and how it works. For now just recall that mediation is different than arbitration because the mediator does not decide who is right and wrong. For this reason, mediation does not result in a binding decision unless the parties come to an agreement on terms to resolve the dispute (i.e. a settlement agreement). This post is about factors to consider in selecting a mediator for your marijuana or hemp dispute.

The primary reason cases settle is economic. Litigation in the 21st century is an expensive proposition. This is especially true in any document-intensive case. Our ability to create, share, and store vast amounts of electronic communications and documents (emails, texts, tweets, direct messages, etc.) across numerous platforms (Outlook, Facebook, Twitter, Signal, WhatsApp, LinkedIn, etc.) can give rise to the need to review and produce hundreds of thousands of documents. The cost of doing so is enormous. So when litigation is approached from a business perspective, it usually makes sense to attempt to settle a case rather than go through the risk and expense of trial.

Ordinarily the parties must jointly select a mediator, who can have a significant impact on whether the mediation will be successful. The term “successful” in this context means reaching a settlement agreement, not winning, or losing, or even liking the terms of settlement.

With that, let’s take a look at three criteria to consider when choosing a mediator:

Cost. This is straightforward enough. But don’t make the mistake of assuming that a $300/hour mediator is not as competent as a $900/hour mediator. If you are cost-sensitive, consider negotiating the length of the mediation statement and its exhibits (the more voluminous, the more time the mediator must spend reading, and time is money). You may also consider limiting the amount of preparation time you are willing to pay the mediator. On the other hand, consider the value in having a mediator that takes the time to understand the issues in your case and consider the significant litigation costs that you will incur if the mediation is not successful. So while there is merit to being judicious with mediation costs, there also is merit to spending to try to settle the case instead of incurring the additional costs of litigation if the mediation is not successful.

Experience. More and more, business disputes that involve cannabis are not much different than other commercial litigation. Although finding a mediator with knowledge about the cannabis industry may be helpful, it is not a requirement in any sense. Oftentimes, the parties can provide the mediator with sufficient cannabis-specific information that would be helpful. Look beyond just cannabis and for a mediator with knowledge or experience in the underlying legal issues – e.g. product liability, partnership, business valuations, employment, securities transactions, commercial leasing etc.

Mediators with judicial experience are often an excellent option. Former judges may have decided countless cases similar to yours,  may have insight into the court or judge in which your dispute is pending, and can probably provide a realistic perspective on the realities of going to trial.

Demeanor. Mediators have reputations among lawyers as to how they conduct a mediation. Some mediators take a in-depth approach to directing the parties to a settlement. Others are known as hard-nosed individuals who will be brutally honest with the parties. Some mediators take a less active approach and put the onus on the parties to do the hard work of resolving a dispute. Different cases and parties call for different approaches; the point here is not to neglect what approach is best for you.

The answer to what mediator is right for your case, like many lawyer answers, is “it depends.” But if you are serious about trying to resolve your dispute in mediation, you should carefully consider what characteristics of the mediator have the greatest chance of resulting in a settlement.