Overview
A California District Court Judge has ruled that a plaintiff’s challenge regarding consumer products containing cannabidiol (CBD) may (eventually) continue to move forward, even in the absence of guidance from the Food and Drug Administration (FDA) – effectively breaking with the primary jurisdiction doctrine that retailers and manufacturers have come to rely upon as a defense to forestall litigation in recent months.
In the class-action lawsuit - Rodriguez v. Just Brands USA, Inc., et al., Case No. 2:20-cv-04829 (C.D. Cal., May 29, 2020), plaintiff Miguel Rodriguez stated that he purchased and received gummies, pet treats, and open-container e-cigarette cartridges online from Florida-based manufacturer Just Brands USA. Subsequent testing of the products purportedly determined, however, that the products contained less than the amount of CBD described on the product labeling – and in some instances, no detectable quantity of CBD content at all. Rodriguez brought suit against Just Brands alleging violations of state consumer protection and advertising regulations (including California’s Consumers Legal Remedies Act, Cal. Civ. Code § 1750, et seq.; California’s unfair competition and false advertising regulations, Cal. Bus. & Prof. Code § 17200, and 17500, et seq.; and Florida’s Deceptive and Unfair Trade Practices Act (FDUPTA), Fla. Stat. § 501.201, et. seq.), as well as claims of breach of express warranty, fraud, and unjust enrichment.
As previously discussed in our December 10, 2019 article, “New Class Action Filings and FDA Warnings Highlight Increased Regulatory and Litigation Risk for CBD Products,” the FDA takes the position that the addition of CBD to food and dietary supplements is not currently authorized under the Federal Food, Drug, and Cosmetic Act. More specifically, active drug ingredients (or substances that have been authorized for investigation as a new drug for which substantial clinical investigations have been instituted and made public) are excluded from the definition of the terms “food” or “dietary supplement” under the Act, under Sections 201(ll) and 201(ff)(3)(B), respectively, absent to premarket approval by the agency (or one of the few limited exemptions available under those provisions). The FDA continues to assert that foods and dietary supplements to which CBD has been added without premarket approval are unlawful because CBD is an active ingredient in an approved drug (Epidiolex®) that was subject to substantial clinical investigations that were made public.
Despite the FDA’s position, retailers and manufacturers have recently found some relief under the primary jurisdiction doctrine, where courts defer a decision on the merits pending further agency rulemaking and guidance. In our February 10, 2020 article, “Federal Court Presses 'Pause' Button on Budding CBD Litigation,” we noted that the primary jurisdiction doctrine – and a court’s decision as to whether to defer to agency action – involves the consideration of several factors, including whether: (1) an actual legal issue or controversy is brought before the court; (2) this issue has been placed under the jurisdiction of a federal agency with authority to regulate such products; (3) the federal agency is acting under a relevant statute "that subjects industry to a comprehensive regulatory scheme;" and (4) the regulatory scheme requires uniformity in administration. In Snyder v. Green Roads of Florida LLC, Case No. 0:19-cv-62342-UU (S.D. Fla., Jan. 3, 2020), for example, a Florida district court stayed a CBD-related labeling and advertising case under the primary jurisdiction doctrine, finding that the existing regulatory framework for product labeling was inadequate for the court to properly resolve the issues in the case; the court stated that it would “benefit greatly” from FDA rulemaking. Notably, California district courts also have adopted the primary jurisdiction defense (see, e.g., Colette et al. v. CV Sciences, Inc., Case No. 2:19-cv-10227 (C.D. Cal. 2019)).
In the present case involving these same two states, however, the Rodriguez court broke with previous (but not legally binding) district court rulings that relied on the primary jurisdiction doctrine, finding instead that any anticipated guidance or rulemaking from FDA would be unlikely to inform the court’s decision on the merits of this case with regard to CBD content labeling. More specifically, the court stated: “[f]or the FDA to have primary jurisdiction over this matter, its forthcoming guidelines must affect labeling standards for disclosing CBD content. However, the pending FDA guidelines mainly concern the sale of CBD products as medicine or dietary supplements with ‘unsubstantiated therapeutic claims,’ which violates the law and puts patients at risk.” (Order Denying Motion to Stay and Granting Motion to Dismiss, May 18, 2021). In a potentially distinguishing factor, the court stated that the case did not fall within the “limited set of circumstances under which primary jurisdiction applies,” because Rodriguez did not raise any controversy regarding the regulatory status of the products under the Act, per se – instead, claims were limited to the product labeling and advertising; therefore, the court concluded that any forthcoming FDA guidance was not ultimately needed to determine whether Just Brands misrepresented the CBD content in the gummies, dog treats, and foods, pet treats, and open-container e-cigarette cartridges. Id.
Notwithstanding the court’s determination, however, the judge ultimately dismissed the case without prejudice on the basis that Rodriguez lacked standing to seek injunctive relief, because he stated only that he “may” purchase similar products in the future (e.g., only a “possibility of future injury”). Id. Instead, the court stated, a claim for injunctive relief must be premised on a “firm intention to purchase the product in the future,” and an assertion that risk of further injury is “certainly impending.” Id. By dismissing the case without prejudice, however, plaintiff Rodriguez may amend his complaint and try again.
In the interim, and notwithstanding the FDA’s position regarding the addition of CBD to food and dietary supplements more generally, manufacturers and retailers of CBD-containing products should continue to carefully monitor developments at the federal and state levels as courts begin to splinter between reliance and reluctance regarding the use of the primary jurisdiction doctrine as a potential defense to class action litigation.
