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Appeals Court hears dispute over Frozen 4’s pledged charitable donation and whether fund reasonably relied on the promise
Summary
The Cook Family Charitable Fund says Frozen 4 promised $50,000–$100,000 to support programming for disproportionately impacted communities and that the fund spent tens of thousands in reliance; Frozen 4 says the parties’ conduct satisfied licensing requirements and that the complaint fails under charitable-subscription law and pleading standards.
The Appeals Court heard argument in Cook Family Charitable Fund v. Frozen 4 LLC about whether allegations that a cannabis license applicant promised a donation in exchange for community-support status state viable claims for misrepresentation or charitable subscription.
Ed Daly and Elizabeth Potonova, counsel for the Cook Family Charitable Fund, said the complaint alleges a multi-step agreement beginning in mid-2019: Frozen 4 asked the fund to be its community support organization, Frozen 4 told the fund the donation would enable programming for disproportionately impacted communities and the fund then expended money and developed programming in reliance on the pledge. The complaint, Daly said, includes a press-release draft the parties exchanged and alleges a $100,000 pledge and earlier references to $50,000.
Nicholas Delakis, counsel for Frozen 4, said the company’s actions satisfied the Cannabis Control Commission’s 2019 guidance and that the fund’s reading of events conflates a general commitment to donate with a binding charitable subscription. Delakis argued that no firm amount or payment schedule was ever finalized early enough for the fund to reasonably rely on a specific $100,000 pledge and that the fund’s expenditures were not the kind of detrimental reliance required to survive dismissal under charitable-subscription precedent.
Judges questioned whether the complaint, read as a whole and accepting its allegations, plausibly pled a promise, reasonable reliance and resulting injury. The parties also discussed later changes in the commission’s guidance that the defense said explain why Frozen 4 declined to proceed with the previously discussed relationship.
The panel took the case under advisement after argument; no ruling was announced at the hearing.
