Defendants hit back in CBD content lawsuits: ‘Naturally occurring nutrients have an 80% safe harbor’

By Elaine Watson contact

- Last updated on GMT

Picture: GettyImages-Monica Click
Picture: GettyImages-Monica Click

Related tags: Cbd, Hemp, hemp extracts, Cannabis

Defendants in a recent spate of lawsuits alleging discrepancies between the amount of CBD advertised on pack and the amount contained in the products, have hit back in motions to dismiss, with one arguing that such cases should be stayed until the FDA weighs in with specific CBD-related regulations.

Attorneys representing the makers of Diamond CBD Oil cited in one of the lawsuits* did not confirm that it contained the 550mg CBD stated on pack (plaintiffs alleged it contained “significantly​” less – without providing any evidence/test results) but noted that current labeling legislation permits some variations for naturally occurring nutrients such as CBD.

“CBD, as a naturally occurring (indigenous) nutrient in a hemp extract, is a Class II nutrient as defined in 21 CFR § 101.9(g)(3)(ii). Thus, CBD, as a naturally occurring nutrient, has a 20% tolerance (including “[r]easonable excesses”) permitted between the actual content and the labeled amount.”

CBD lawsuits should be stayed pending FDA regulations, says defendant

The attorneys went on to note that the lawsuit should in any case be stayed (put on ice) on primary jurisdiction grounds as both state and federal regulations on CBD could be imminent.

To the extent that there is any arguable doubt over the tolerances allowed for contentlabeling of naturally occurring (indigenous) nutrients, the Florida Dept of Agriculture &Consumer Services (FDACS) and the FDA are poised to issueCBD regulations and guidance. Rather than create a patchwork of interpretations, the court shouldabstain based on the primary jurisdiction doctrine until the FDACS and FDA have spoken.”

The legal status of CBD

While the plaintiffs don’t argue that using CBD is unlawful (on the grounds that the FDA does not consider CBD to be a lawful dietary ingredient), the defendants seem to anticipate the argument, and make the case that the CBD-containing ‘full spectrum hemp extract’ in the Diamond CBD products is not the same as the isolated CBD used in some drugs.

The two drugs containing CBD to date - Epidiolex and Sativex -  are each highly concentrated solutions of CBD (and in the case of Sativex an equal amount of THC) made from an isolate and dedicated toward treatment of unique medical conditions, whereas Defendant’s CBD Product is offered only at radically lower concentrations and is not for the treatment or prevention of any disease.

“Thus, the CBD ingredient is a different article than the ingredient investigated and approved as a drug; therefore, the CBD ingredient used by Defendants is not excluded from being legally used as a dietary ingredient in a dietary supplement.”

Plaintiff does not provide details of how, when and where the tests were conducted

In a motion to dismiss a similar lawsuit** vs Just Brands USA, Inc., Just Brands FL, LLC And SSGI Financial Services, Inc., the defendants don’t explicitly defend the CBD levels stated on their honey tinctures on pack, but focus on what they see as fundamental weaknesses in the lawsuit.

Gaddis ​[the plaintiff] does not… provide any specific allegations about when the test was conducted, how it was conducted, who conducted it, or what specific product was used for testing and how that product was acquired​… [Gaddis alleged that JustCBD Honey Liquid Tincture contained less than half of the 100mg CBD stated on pack, while JustCBD Apple Rings Gummies, which advertised 250mg CBD, contained a ‘non-detectable quantity’ ​of CBD​].

“Similarly, how does one test carried out on one product one time make it plausible that all products with a CBD content sold nationwide for an unspecified number of years did not provide the requisite level of CBD?”

Attorney: 'This could set the stage for additional similar lawsuits in various states across the country'​

None of the defendants responded to requests for comment when the cases were filed in the fall​,​ but attorneys contacted by FoodNavigator-USA said CBD is potentially fertile ground for the plaintiff's bar.

There comments came as an analysis of best-selling CBD products conducted by The Clean Label Project​ ​revealed that more than 30% of the top 10 best-selling CBD products inaccurately stated the amount of CBD in their products (ie. lab testing showed more than 20% variance from the label claim, either above or below). 

Brian P. Sylvester, special counsel at Foley & Lardner LLP, said: "I think it would be reasonable to conclude that the plaintiff’s bar will be focusing more attention on CBD-infused foods and dietary supplements, and this will include scrutinizing advertised levels of CBD.​​

"We’ve already heard from FDA that as part of their regulatory enforcement activity (i.e., warning letters issued to firms that market unapproved new drugs that allegedly contain CBD), FDA has tested the chemical content of cannabinoid compounds in some of the products, and many were found to not contain the levels of CBD they claimed to contain. Plaintiffs have taken note of these findings."​​

'These issues will likely culminate in a battle of experts'

So are these clear cut cases (the products either contain the stated levels of CBD or they don’t) or are there some shades of gray here? And if so, is there likely to be some back and forth over testing methodologies and the choice of laboratory?

"In the absence of a detailed regulatory framework and established testing guidelines, there is likely to be some wrangling over not only the testing standards and methodologies themselves, but also other factors affecting the results such as shelf life and product degradation," ​​said Meghana Shah, partner at Eversheds Sutherland.

"As is often the case, these issues will likely culminate in a battle of experts."​​

*Potter v Potnetwork Holdings, Inc., Diamond CBD, Inc., And First Capital Venture Co.,​​ Case No. 1:19-cv-24017, filed in the U.S. District Court for the Southern District of Florida

**Gaddis v. Just Brands USA Inc., et al.​​, Case No. 0:19-cv-62067, filed in the U.S. District Court for the Southern District of Florida.

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