PBKM, LLC v. Kutak Rock, LLP

Plaintiffs filed a lawsuit for legal malpractice against a law firm and other entities that the plaintiffs hired to form corporate entities in order to apply for cannabis dispensary licenses as social-equity applicants. Plaintiffs alleged that the defendants created an unnecessarily complicated, multi-layered corporate structure that did not meet the law’s social-equity requirements and that two of the plaintiffs’ ten applications were denied for that reason. The trial court dismissed the complaint, finding that there was no malpractice and that the plaintiffs’ could not recover for their loss of chance to participate in the lottery. The appellate court disagreed, finding that it was not convinced that the corporate structure satisfied the social-equity requirements of the state law and that, under the unique facts of the facts, where the chance of winning the applicant lottery could be calculated to a mathematical certainty, the law should allow a remedy for the plaintiffs’ lost chance at participating in the lottery. The appellate court reversed dismissal of the legal malpractice count, but affirmed dismissal of the remaining counts. (VAN TINE and HOWSE, concurring)