In January, my colleague Jesse Mondry wrote about Snyder against Green Roads in Florida, a case in which the US District Court for the southern district of Florida pending a class action lawsuit against a cannabidiol company ("CBD") and drug administration ("FDA") suggests a legal way to manufacture, sell, and market these products. The Court has put this case on hold, relying on the "primary jurisdiction doctrine".
The “primary jurisdiction doctrine” generally applies in cases where a claimant's claim implies the special competence of an administrative authority. This doctrine is a supervisory doctrine that is reserved for a limited number of circumstances that require a first impression problem or a particularly complex problem that Congress has assigned to an administrative authority.
If you read our blog regularly or keep the hemp and CBD industry up to date, you know that the 2018 Agricultural Improvement Act (better known as the '2018 Farm Bill') is the FDA's product regulatory mandate, that contain hemp products, expressly recognized. including hemp-derived CBD ("hemp-CBD"). In addition, Congress has repeatedly urged the FDA to complete the regulatory process to resolve the spread of CBD products, particularly food and supplements, in violation of the Food, Drug & Cosmetic Act ("FDCA"). But 18 months after the Farm Bill was passed in 2018, the FDA still has to issue formal regulations. As a result, the industry has seen an increase in CBD-related litigation, particularly class action lawsuits for false advertising to consumers.
In his January contribution, Jesse considered whether other federal courts would find the Snyder order convincing and whether they would uphold other lawsuits against CBD companies pending FDA regulations. Five months later, the answer to this question is “provisionally yes”: some courts have followed this example; others don't. Two of these federal courts – one for the Central District of California and one for the Eastern District of California – were directly quoted as Snyder. These courts stated that while the FDA's warning letters expressed its position on CBD products, these letters were not a final measure by the agency and that the FDA had not officially defined its position on regulating these products. Accordingly, these courts decided that they would benefit greatly from the FDA's upcoming rule-making efforts, and therefore approved the requests to stay while the FDA passed final rules.
These newer orders show that federal courts do tend to respect the FDA's primary jurisdiction over CBD products, which is likely to delay other CBD-related lawsuits until the FDA develops a legal route for those products. Furthermore, these orders show that the lack of FDA regulations further aggravates the confusion regarding the legal status of these products and underlines the need for a comprehensive, unified legal framework.
Until the FDA takes on its role as a regulator, CBD companies should seek sound legal advice on the federal and state regulations for these products. These companies should also ensure strict compliance with the FDCA's manufacturing and labeling requirements – with all product categories regulated by the FDA – to reduce the risk of litigation.