After Judge Denies American Seed Genetic’s Appeal, Industrial Hemp Manufacturing Moves Forward with Lawsuit
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After Judge Denies American Seed Genetic’s Appeal, Industrial Hemp Manufacturing Moves Forward with Lawsuit

The appeal process took about a year before a North Carolina judge allowed the case to proceed in trial court.

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May 6, 2020

A judge in the North Carolina Court of Appeals has ruled that the trial court has personal jurisdiction of a case involving two hemp companies. Now, Hemp Inc. has announced one of its subsidiary’s plans to continue with its lawsuit against American Seed Genetic.

In October 2018, Hemp Inc. subsidiary Industrial Hemp Manufacturing (IHM) LLC filed a lawsuit against American Seed Genetic LLC in North Carolina’s Wake County Superior Court over a 2018 deal concerning industrial hemp seeds.

IHM planned to plant seeds for 1,000 acres of hemp biomass production, but because American Seed Genetic said its seed had a germination rate of 97%, company officials said they would send 103 pounds of seed—instead of a previously agreed-upon 100—to IHM, according to a press release from Hemp Inc. Instead, American Seed Genetic sent IHM seeds with a 24% germination rate, according to IHM’s complaint.

In December 2018, the defendant tried to dismiss the complaint “for lack of personal jurisdiction,” according to court records, and after that motion was denied in February 2019, the defendant filed to appeal.

On May 3, Hemp Inc. announced via the release its intentions to move forward with its suit against American Seed Genetic, following appellate judge Christopher Brook’s March 3 denial of the defendant’s appeal.

“This was an unfortunate situation that will take more time but we won’t quit until this has been adjudicated,” Bruce Perlowin, CEO of Hemp Inc., said in a prepared statement. “This lawsuit could award IHM $10,000,000 or more for incidental and consequential damages so it’s worth the wait.”

In its complaint in Wake County Superior Court, the plaintiff alleged that it had paid a 10% down payment of $70,000 to American Seed Genetic, out of a previously agreed-upon amount of $700,000.

For multiple claims for relief, IHM claimed to suffer damages of at least $70,000, “plus interest at the highest amount allowed by law; and court costs and attorney's fees pursuant to the Contract, any applicable statute, or the equitable power of the Court.” Two other claims for relief outline damages totaling at least $25,000.