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November 2020

Phoenix Team Scores Big Wins for Two Major Arizona-Based Companies

Gordon Rees Scully Mansukhani Phoenix partners Leon Silver and Rebecca Cain and senior counsel Mary Curtin, recently obtained complete defense wins for two major Arizona-based companies.

In the first matter, a coalition of class action plaintiffs’ lawyers named a Harvest Health & Recreation subsidiary as defendant in a putative class action for allegedly violating various consumer protection laws.  Tempe, Arizona based Harvest is one of the nation’s largest cannabis retailers, operating 38 retail outlets in 6 states.  Under the relevant statutory scheme, Harvest faced a potential exposure in excess of $10 billion.

The Gordon & Rees Phoenix team approached the defense by challenging various aspects of the pleading one-by-one, and pursued a third-party claim against our client’s predecessor in interest – who initiated the text advertising program.  After a variety of procedural and substantive motions, the Court denied plaintiff’s motion for leave to file his Third Amended Complaint.  At the same time, our team discovered damaging information about the class representative that was confirmed in his deposition, which was commenced but never completed, as he walked out when faced with the results of our investigation. The ruling, combined with the newly discovered information led to our filing of a motion to dismiss, which the Court granted with prejudice.

In the second, the firm was asked to substitute in as counsel for an Arizona based franchisor in defense of claims brought by franchisees in two states. In addition to breach of contract and business tort related claims, the plaintiffs accused the franchisor of violations of consumer protection and franchise laws of each of the states in which they operated and Arizona.  The claimants alleged damages in excess of $1 million plus rescission and punitive damages.  Additionally, the Phoenix team had to navigate potential cross-claims by co-respondents, who were predecessors-in-interest to the franchised brand.

After receiving a favorable, although not case dispositive ruling on our motion to dismiss, the Phoenix team pursued a counterclaim based on a variety of breaches of the franchise agreement and notified the potential cross-claimants of claims against them as well.  As a result, we were able to successfully negotiate a walk away agreement between all parties.

Thus, both cases were resolved in our clients’ favor, dismissed with prejudice and no liability on our clients’ parts.