Reefer Brief: Claims over Mood-Altering Certificates

Plaintiff Green Family Farm Int., LLC (“GFF”) grew and delivered hemp product to Plaintiff A Distribution Company LLC (“ADC”), which ADC then supplied to Defendant Mood Product Group LLC (“Mood”) pursuant to a contract between ADC and Mood. The products were to be sold on Mood’s website. ADC also provided Mood with the results of tests relating to GFF’s products for publication on Mood’s website. In its suit against Mood, GFF alleges that Mood altered hose test results.

Mood’s business focuses on the sale of lawful THC-based hemp products, which means, as Reefer Brief devotees know, those that have a concentration of Delta-9 THC that is less than 0.3% of the dry weight of the product. GFF was the exclusive grower of all THCA flower provided to Mood (through ADC) and sold on Mood’s website, Hellomood.com, until late November 2023. In connection with these sales, GFF provided Mood with both pre-harvest of post-harvest Certificates of Analysis (COAs) relating to its products. Beginning late in 2023, Mood allegedly replaced GFF’s name with its own on the GFF’s post-harvest COAs. GFF ceased supplying Mood with product in November 2023, but it alleges that Mood continues to sell the same strains of THCA flower previously grown and supplied by GFF and it uses the altered versions of GFF’s post-harvest COAs to sell THCA flower grown and procured from unknown third parties.

The Plaintiffs brought three statutory claims against Mood, plus conversion and unjust enrichment, and sought punitive damages and attorneys fees. In A Distribution Company LLC v. Mood Product Group LLC, a North Carolina court ruled on Mood’s motion to dismiss. The court dismissed one statutory claim in whole and one in part, another survived. The conversion claim failed, both because GFF willingly sent the COAs to Mood, so it came into possession of the COAs lawfully, and because GFF retained originals of its COAs.

The claim that comes the closest to the interests of this Blog is the one for unjust enrichment, and the court’s reasoning there is interesting. The complaint alleges that Mood gained a benefit through its use of the altered COAs. However, the benefit it obtained was by using the COAs as altered, and the alteration was something that Mood did itself. That strikes me as a bit persnickety. Why isn’t the original COA considered the raw material out of which the altered COA was created? 

In any case, What began as a seven-count complaint is shaved down to one and a half. And because no Reefer Brief post is complete without some strange litigation practices, two of the seven counts were claims for punitive damages and attorneys fees. The court had to instruct plaintiffs’ attorneys that those are remedies, not causes of action.