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Date: 08-20-2024
Case Style:
David Joshua Bartch v. Mackie A. Barch, et al.
Case Number: 1:18-Cv-3016
Judge: Gordon P. Gallagher
Court: United States District Court for the District of Colorado (Denver County)
Plaintiff's Attorney:
Defendant's Attorney:
Description:
Denver, Colorado breach of contract lawyers represented the Plaintiff and Defendant.
David Joshua Bartch ("Josh") and Mackie A. Barch ("Mackie")[1] were partners in Culta, LLC, a marijuana business licensed to operate under Maryland law. Josh temporarily relinquished his ownership in Culta. Even though Josh and Mackie had agreed Josh could later rejoin the business, Mackie prevented him from doing so. Josh sued Mackie and Mackie's company, Trellis Holdings Maryland, Inc. ("Trellis"), which holds a minority membership share in Culta, for breach of contract. In response, Mackie and Trellis did not plead an affirmative defense that the contract was illegal under federal drug laws. After a bench trial, the district court found Mackie and Trellis liable for breach of contract and awarded Josh $6.4 million in damages (the "original judgment"). Mackie and Trellis never appealed and also never paid.
Josh sought to enforce the original judgment. The district court granted postjudgment relief, ordering Mackie and Trellis to use their best efforts to sell Trellis's equity interest in Culta, to turn over the proceeds from any such sale, and to avoid devaluing Trellis's equity until the sale (the "judgment enforcement order"). Mackie and Trellis appealed (No. 23-1211), arguing-for the first time-that (1) Josh lacked standing to enforce the judgment because the redress he sought would violate the Controlled Substances Act ("CSA"), 21 U.S.C. §§ 801-904; and (2) the district court
lacked authority to award the relief under Colorado Rule of Civil Procedure ("C.R.C.P.") 69(g).
While that appeal was pending, Mackie and Trellis moved the district court to reconsider the original judgment under Federal Rule of Civil Procedure ("F.R.C.P.") 60(b)(4), making the same CSA standing argument. The court denied the motion (the "original judgment reconsideration order"), and Mackie and Trellis appealed (No. 241049). We consolidated the appeals. We affirm the original judgment. We vacate the judgment enforcement order due to public policy concerns and remand for further proceedings.
Outcome: This case presents a question about the nature and extent to which a federal court may act to resolve a dispute related to a marijuana business that operates legally under state law. Numerous federal courts have grappled with this question. Like most of them, we do not discern a simple answer.[2] We share the dissent's public policy concerns about
the judgment enforcement order but think the better course is to remand to the district court to address them.
Plaintiff's Experts:
Defendant's Experts:
Comments: