In January, my colleague, Jesse Mondry, wrote about Snyder v. Green Roads of Florida, a case in which the U.S. District Court for the Southern District of Florida stayed a class action lawsuit against a cannabidiol (“CBD”) company until the Food and Drug Administration (“FDA”) forges a legal path for the manufacture, sale and marketing of these products. The Court placed this case on hold, invoking the “primary jurisdiction doctrine.”
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.
If you regularly read our blog or keep a pulse on the hemp and CBD industry, you know that the Agriculture Improvement Act of 2018 (better known as the “2018 Farm Bill”) expressly recognizes FDA authority to regulate products containing hemp-derived products– including hemp-derived CBD (“Hemp CBD”). Moreover, Congress has repeatedly urged 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, 18 months following the passage of the 2018 Farm Bill, the FDA has yet to adopt formal regulations. Consequently, the industry has witnessed an uptick in CBD-related litigation, particularly false advertising consumer class action lawsuits.
In his January post, Jesse pondered whether other federal courts would find the Snyder order persuasive and whether they would stay other lawsuits against CBD companies pending issuance of FDA regulations. Five months later, the answer to this question is “tentatively yes”: some courts have followed suit; others have not. Two of these federal courts – one for the Central District of California and another for the Eastern District of California – directly cited to Snyder. These courts explained that although the FDA expressed its position about CBD products in its warning letters, these letters do not constitute final agency action and that the FDA has not formally established its position about the regulation of these products. Accordingly, those courts 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.
These more recent orders reveal that federal courts are indeed inclined to give deference to the FDA’s primary jurisdiction over CBD products, which will likely delay other CBD-related lawsuits until the FDA forges a legal pathway for these products. In addition, these orders show that the lack of FDA regulations further exacerbates confusion regarding the legal status of these products and emphasize the need for a comprehensive, uniform regulatory framework.
Until the FDA starts to act in its role of regulator, CBD companies should obtain sound legal advice regarding the federal and state regulations of these products. These companies should also ensure strict compliance with the FDCA’s manufacturing and labeling requirements – with all categories of products regulated by the FDA – to mitigate the risks of litigation.