Oregon Cannabis Litigation: What’s Discovery Got to Do With It?

21 Mar Oregon Cannabis Litigation: What’s Discovery Got to Do With It?

Recently, we wrote about the increasing frequency of litigating cannabis business disputes in the courts, noting several possible causes for this change from the early days when private arbitration was the preferred forum. Meanwhile, the Oregon Liquor Control Commission (OLCC) is beginning to treat violators of the rules governing recreational marijuana much more seriously. One of the keys to prevailing in either (or any) forum, is efficient and thorough discovery. Cannabis businesses should take note the procedures governing discovery in Oregon trial courts (i.e. the Oregon Rules of Civil Procedure or ORCP) differ in several significant ways from those governing an OLCC contested case before an administrative law judge under the Oregon Attorney General’s Rules for the Office of Administrative Hearings.

This post highlights some of the important differences in the forms of discovery that any Oregon cannabis business entangled in a civil or administrative dispute should be aware of. By way of background, there are three forms for conducting written discovery upon an opposing party in the majority of state and federal courts: requests for the production of documents, requests for admission, and interrogatories. These three forms, along with depositions by oral examination (and subpoenas directed to nonparties), typically comprise the better part of preparing for dispositive motion practice, trial, or for an administrative hearing.

Legendary discovery artist, Tina Turner.

Document Requests and Requests for Admissions. The ORCP permits requests for the production of documents and requests for admissions. Unlike most jurisdictions, however, ORCP 45 requires filing of requests for admission and of responses. This means parties should take care in crafting requests and in ensuring the veracity of their answers as both will be before the court. The Attorney General’s rules permit request for admissions but contain no specific provision allowing document requests. Instead the agency or party must provide, upon the request by the agency or by a party, documents that that the party or agency “plans” to offer as evidence.

Interrogatories. In stark contrast to the federal rules of civil procedure and those of most state courts, interrogatories are not authorized in Oregon state courts. The inability to conduct discovery through interrogatories may be viewed as a blessing, as obtaining substantive and pertinent information is often difficult or nigh impossible when dealing with obstreperous opposing parties or their counsel. On the other hand, interrogatories may serve as a useful tool to “lock in” an opposing party to a particular set of facts or circumstances, to identify potential witnesses, and to (hopefully) narrow what is actually in dispute.

Although a discussion about the pros and cons of interrogatories may seem purely academic, it is not. That’s because the Attorney General’s rules permit parties to serve up to 20 interrogatories unless otherwise authorized, limited, or prohibited by the administrative law judge. Those rules also allow an agency to opt out of “some or all discovery methods,” but Chapter 845, Division 3, of the Oregon Administrative Rules (the OLCC-specific rules) does not do so. This means that a cannabis business in a dispute with the OLCC has a potentially powerful discovery tool at its disposal, one that is not available in state court.

Depositions. Any person or entity that has experienced litigation knows the fear of a deposition gone wrong and the joy of getting an opposing party to make a crucial admission on the record. The ORCP provides for depositions in the ordinary course, but the Attorney General’s rules prohibit depositions in contested cases without agency authorization. Unlike in state court, where a deposition is usually secured through a telephone call to opposing counsel to negotiate the date and location followed by a formal notice, a party seeking to depose an agency must petition the agency and send a copy of that petition to the administrative law judge. The agency itself then makes the call on whether it will allow itself to be deposed, and on what terms. There are several other caveats, but the takeaway is that a party should consider carefully if deposing an agency is critical to a contested case hearing and act promptly if so.