New Ruling: Marijuana Company Can Keep Complainants Out Of Court

Published on October 24, 2019 by the FairShake Team

Eaze, a smoker-dispensary matchmaker sometimes known as the “Uber of weed,” enlisted high-power law firm Boies Schiller Flexner LLP to make its case for consumer arbitration instead of litigating in a courtroom. The company convinced a San Francisco district court judge that a potential class action lawsuit under the Telephone Consumer Protection Act (TCPA) over the company’s telemarketing practices should instead be sent to binding arbitration.

Image via Unsplash
Consumer arbitration is the private legal hearing referred to in the Eaze terms of service contract. The system has garnered controversy in recent years; it typically requires customers to bring cases individually rather than as a class.

Fewer than 4,000 consumers claims are filed annually with the American Arbitration Association, even as tens of millions of American customers annually have disputes that aren’t adequately resolved by corporate customer response teams.

A release by Eaze over Business Wire presented more details on the ruling:

In her lawsuit, Plaintiff Farrah Williams, attempted to circumvent the arbitration agreement in Eaze’s Terms of Service by arguing that cannabis contracts cannot be “formed” because cannabis is illegal under federal law. The court rejected this claim, thus preserving the ability of cannabis businesses, operating where cannabis is legal under state law, to enter into and enforce basic contracts with customers, individuals, and other businesses.

“This ruling is enormously important for the entire industry, as contracts across California and nationally could have been invalidated had the court found for the Plaintiff,” said Andrea Lobato, Chief Risk Officer at Eaze. “We are pleased to have successfully defended the basic right of legal cannabis companies to enter into contracts.”

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