Sixth Circuit Denies Local Roots' Bid to Challenge Perry Dispensary Settlement

January 6th, 2024 Legal & Crime
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In a recent ruling by the Sixth Circuit, Local Roots, a cannabis company, was denied the opportunity to challenge a settlement between the City of Perry, Michigan, and its competitor, Liberty Wellness. This decision upholds the allowance of more than one dispensary in Perry, a point of contention for Local Roots.

The case unfolded as Local Roots, which had secured a conditional marijuana retailer license in late 2022 under the assumption of being Perry's sole dispensary, attempted to intervene in a lawsuit filed by Liberty Wellness against the city. Liberty Wellness's owner, Jonathan Moses, had sued the city in October 2022, arguing that the city's decision to issue only one license was against the voters' preference for eight licenses. Despite Local Roots filing a motion to intervene, the trial judge concluded the case with prejudice before addressing their motion.

During oral arguments in October, the skepticism of the circuit judges towards Local Roots' position was evident. U.S. Circuit Judge John B. Nalbandian, who later authored the panel's opinion, remarked on the unusual nature of Local Roots' attempt to keep the lawsuit active despite both primary parties seeking its conclusion.

The Sixth Circuit panel supported the lower court's decision to endorse the settlement between Liberty Wellness and the City of Perry, effectively dismissing the action with prejudice. This meant Local Roots could not pursue claims within this lawsuit to maintain its status as the only cannabis retailer in Perry.

The panel further clarified that Local Roots' motion to intervene was moot due to the immediate agreement between Liberty Wellness and the city to dismiss the case, leaving no room for intervention. Additionally, the panel noted that all parties in a litigation must typically agree to a settlement before dismissal, but this doesn't apply until a motion to intervene is granted, which in this case, it wasn't.

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