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In the past few months, the cannabidiol (CBD) industry has seen an uptick in consumer class actions lawsuits.<\/p>\n
In virtually all of those cases, the complaints were filed shortly after new rounds of warning letters<\/a> were issued by the FDA. The complaints, which were filed by the same plaintiff’s law firms, make nearly identical legal claims: (1) the CBD products are illegal drugs, foods, or dietary supplements that violate the FDA guidelines; (2) the CBD products make impermissible health claims; and\/or (3) the CBD products are mislabeled in terms of their CBD content.<\/p>\n As a result, CBD companies have raised similar legal defenses, resulting in U.S. courts having to rule on similar legal issues that will most certainly shape the future of the CBD industry.<\/p>\n Although these cases address similar legal issues, courts that have already ruled on these issues have ruled differently, causing additional confusion on the legality of CBD products.<\/p>\n For example, in January, Judge Ursula Ungaro from the U.S. District Court for the Southern District of Florida stayed a CBD class action relating to the marketing and sale of CBD products — Snyder v. Green Roads of Florida<\/em><\/a>, 430 F. Supp. 3d 1297 (S.D. Fla. 2020) — until the FDA forges a legal path for the manufacture, sale, and marketing of the products. Ungaro placed this case on hold, invoking the “primary jurisdiction doctrine.”<\/p>\n The primary jurisdiction doctrine generally applies in cases where a plaintiff’s claim implicates the special competence of an administrative agency. This doctrine is a prudential doctrine that is reserved for a limited set of circumstances that require resolution of an issue of first impression or of a particularly complex issue that Congress has assigned to an administrative agency.<\/p>\n As you already know if you read this column and keep a pulse on the hemp and CBD industry, the Agriculture Improvement Act of 2018, better known as the 2018 Farm Bill<\/a>, expressly recognizes the FDA’s authority to regulate products containing hemp-derived products, including hemp-derived CBD. Moreover, Congress has repeatedly<\/a> urged<\/a> the FDA to complete the rulemaking process to solve the proliferation of CBD products, particularly foods and dietary supplements, in violation of the Food, Drug & Cosmetic Act (FDCA). Yet, nearly two years following the passage of the 2018 Farm Bill, the FDA<\/a> has yet to adopt formal regulations.<\/p>\n In light of this, Ungaro concluded that “FDA regulations currently provide little guidance with respect to whether CBD ingestibles, in all their variations are food, supplements, nutrients or additives and what labeling standards are applicable to each iteration,” and thus, deemed the existing regulatory framework inadequate to resolve these issues.<\/p>\n Other U.S. courts, which recently considered whether CBD companies labeled their CBD products in violation of federal law, found Ungaro’s opinion persuasive. These courts, including one in the Central District of California — Colette v. CV Sciences, Inc.<\/em><\/a>, No. 2:19-cv-10228-VAP-JEM(x) (“Colette<\/em>”) — and another in the Eastern District of California — Glass v. Global Widget, LLC<\/em><\/a>, No. 2:19-cv-01906-MCE-KJN (“Glass<\/em>”), explained that although the FDA expressed its position about CBD products in its warning letters<\/a>, these letters do not amount to final agency action and that the FDA has yet to formally express its position on the regulation of these products. The Colette<\/em> Court also wrote that “the number of CBD class actions currently pending in the federal district courts makes clear the danger of inconsistent adjudications.” Accordingly, the Collette<\/em> Court, and the Glass <\/em>Court, which closely followed the Snyder<\/em> and Colette <\/em>analyses, concluded that they would benefit greatly from the FDA’s pending rulemaking efforts, and thus, granted the motions to stay while the FDA adopts final rules.<\/p>\n These orders suggest that federal courts might be inclined to give deference to the FDA’s primary jurisdiction over CBD products, which would likely delay other CBD-related lawsuits until the FDA forges a legal pathway for these products.<\/p>\n However, in the months between the Snyder<\/em> order and those issued in May by the California U.S. District Courts, other federal courts have rejected the primary jurisdiction doctrine defense and have reached a different conclusion from that made by the Snyder<\/em>, Colette<\/em> and Glass<\/em> courts.<\/p>\n In Potter v. Potnetwork Holdings, Inc., et al.<\/em><\/a>, No. 19-24017-Civ-Scola, for instance, Judge Robert Scola for the Southern District of Florida — the same district as Ungaro’s — denied putting this case on hold based on the primary jurisdiction doctrine. Although Scola began his analysis much the same way as Ungaro did in Snyder<\/em>, Scola ultimately agreed with the plaintiff’s argument that despite the adoption of formal CBD regulations, the FDA would not modify disclosure requirements regarding the accurate content of a product, and thus, would not allow manufacturers to lie about the exact amount of CBD contained in their product in its formal rules.<\/p>\n These inconsistent rulings by federal courts — including courts in the same district — show that the lack of FDA regulations is causing growing confusion regarding the legal status of these products and emphasize the need for the agency to develop a comprehensive, uniform regulatory framework.<\/p>\n So until the FDA starts to serve its role of regulator, CBD companies, especially deep-pocketed ones, should obtain sound legal advice regarding the federal and state regulations<\/a> of these products and should ensure strict compliance with the FDCA’s manufacturing<\/a> and labeling<\/a> requirements — these requirements apply to any category of products regulated by the FDA — to mitigate the risks of litigation.<\/p>\n <\/p>\n Tags:<\/b> NATHALIE BOUGENIES<\/p>\n<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"See Campaign: <\/strong>https:\/\/abovethelaw.com\/2020\/04\/keep-the-fda-off-your-back-dont-make-medical-claims-about-cbd-products\/<\/a>
Contact Information:<\/b>
NATHALIE BOUGENIES<\/p>\n
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In the past few months, the cannabidiol (CBD) industry has seen an uptick in consumer class actions lawsuits. In virtually all of those cases, the complaints were filed shortly after new rounds of warning letters were issued by the FDA. The complaints, which were filed by the same plaintiff’s law firms, make nearly identical legal claims: (1) … Continue reading Patchwork Of Judicial Decisions Exacerbates Confusion On Legality Of CBD Products<\/span><\/a> Continue Reading