Source: https://www.docketalarm.com/cases/Florida_Southern_District_Court/0--19-cv-62342/Snyder_et_al_v._Greens_Road_of_Florida_LLC/25/
Timestamp: 2020-08-08 09:12:21
Document Index: 528278596

Matched Legal Cases: ['§ 1332', '§ 501', '§501', '§ 501', '§ 343', '§ 301', '§ 321', '§ 101', '§ 101', '§ 581', 'art 101', 'art 101', '§ 893', '§ 101', '§ 343', '§ 1639']

Snyder et al v. Greens Road of Florida LLC, 0:19-cv-62342, No. 25 (S.D.Fla. Jan. 3, 2020)
Case 0:19-cv-62342-AHS Document 25 Entered on FLSD Docket 01/03/2020 Page 1 of 16
`SOUTHERN DISTRICT OF FLORIDA
`Case No. 0:19-cv-62342-UU
`BROOK SNYDER, et al.,
`GREEN ROADS OF FLORIDA LLC
`____________________________________/
`ORDER ON MOTION TO DISMISS
`This cause is before the Court on Defendant’s Motion to Dismiss or, in the Alternative, to
`Stay (D.E. 15) (the “Motion”). The Motion is fully briefed. For the reasons stated below, the
`Complaint is dismissed to the extent Plaintiffs have failed to allege facts sufficient to demonstrate
`their standing to pursue class action claims based on products they did not purchase and for
`injunctive relief. Also, for reasons explained below, the action is stayed pursuant to the primary
`jurisdiction doctrine. In all other respects, the Motion is DENIED.
` Defendant, a Florida limited liability company that maintains its principal place of
`business in Deerfield Beach, Florida, is a manufacturer, distributor and seller of cannabidiol
`(“CBD”) products including but not limited to CBD Oil, CBD Gummies, CBD capsules, CBD
`Terpenes, CBD Topicals, CBD Syrups, CBD Tea and CBD Coffee. D.E. 1 ¶¶ 1–2. Plaintiff Snyder,
`a citizen of Florida, purchased a 250mg version of Defendant’s CBD Oil through Defendant’s
`website for a total purchase price of $43.74. Id. ¶¶ 34, 43. Plaintiff Terry, a citizen of Ohio,
`purchased a “Relax Box” through Defendant’s website for a total purchase price of $104.14. Id.
`¶¶ 35, 40. The Relax Box contained CBD Gummies, CBD Tea, and CBD Oil. Id. ¶ 40. Each
`Case 0:19-cv-62342-AHS Document 25 Entered on FLSD Docket 01/03/2020 Page 2 of 16
`Plaintiff claims that he relied on the product labels in making his decision to purchase, that the
`product labels misrepresented the amount of CBD that each product contained and that, as a result,
`each was over-charged for the products each purchased. Id. ¶¶ 12, 41–42.
`The Complaint alleges federal subject matter jurisdiction pursuant to the Class Action
`Fairness Act of 2005, 28 U.S.C. §§ 1332(d)(2) and (6) “because the aggregate sum of the claims
`of the members of the putative class exceeds $5 million, exclusive of interest and costs, because
`Plaintiffs bring this action on behalf of a proposed class that is comprised of over one hundred
`members, and because at least one of the members of the proposed class is a citizen of a different
`state than Green Roads.” Id. ¶ 37. It contains two claims: Count I for Unjust Enrichment by both
`Plaintiffs on behalf of a nationwide class of all purchasers of all of Defendant’s products within
`the applicable limitations period; and Count II by Snyder on behalf of the Florida subclass of all
`Florida purchasers of all of Defendant’s products for violation of the Florida Deceptive and Unfair
`Trade Practices Act (“FDUPTA”), FLA. STAT. §§ 501.201, et. seq.
`The State of Florida Department of Agriculture and Conservation Services (“FDACS”)
`regulates CBD products, including their labelling in respect to the number of milligrams of hemp
`extract contained in a CBD product. FLA. DEP’T OF AGRIC. AND CONSUMER SERV., DIV. OF FOOD
`SAFETY, Final Rule
`5K-4.034
`– Hemp Extract
`(effective
`2020),
`https://www.flrules.org/gateway/RuleNo.asp?id=5K-4.034. The Food and Drug Administration
`(“FDA”) is actively considering the regulation of CBD products, including the “manufacturing,
`product quality, marketing, labeling, and sale of products containing cannabis or cannabis-derived
`products.” See U.S. FOOD & DRUG ADMIN., Scientific Data and Information About Products
`Containing Cannabis or Cannabis-Derived Compounds; Extension of Comment Period, 84 Fed.
`Reg. 28822, 28823 (June 20, 2019).
`Case 0:19-cv-62342-AHS Document 25 Entered on FLSD Docket 01/03/2020 Page 3 of 16
`A. Rule 12(b)(1)
`Rule 12(b)(1) of the Federal Rules of Civil Procedure allows for the dismissal of a claim
`when it is determined that the Court lacks subject-matter jurisdiction. Federal courts are bound by
`Article III of the United States Constitution to adjudicating only actual “cases” or “controversies.”
`Allen v. Wright, 468 U.S. 737, 104 S. Ct. 3315, 82 L. Ed. 2d 556 (1984). Article III standing is a
`jurisdictional requirement that cannot be waived and, as such, may be brought up at any time in
`the proceeding. See Smith v. GTE Corp., 236 F.3d 1292, 1299 (11th Cir. 2001). “Because standing
`is jurisdictional, a dismissal for lack of standing has the same effect as a dismissal for lack of
`subject matter jurisdiction under Fed. R. Civ. P. 12(b)(1).” Stalley v. Orlando Reg’l Healthcare
`Sys., Inc., 524 F.3d 1229, 1232 (11th Cir. 2008) (citation and internal quotation marks omitted).
`“A dismissal for lack of subject matter jurisdiction is not a judgment on the merits and is entered
`without prejudice.” Id. (citation omitted).
`B. Rule 12(b)(6)
`To state a claim for relief, Federal Rule of Civil Procedure 8(a)(2) requires only “a short
`and plain statement of the claim showing that the pleader is entitled to relief.” While a court, at
`this stage of the litigation, must consider the allegations contained in the plaintiff’s complaint as
`true, this rule “is inapplicable to legal conclusions.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009).
`In practice, to survive a Rule 12(b)(6) motion to dismiss, “a complaint must contain sufficient
`factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Id. (quoting
`Twombly, 550 U.S. at 570). A claim has facial plausibility when the plaintiff pleads factual
`content that allows the court to draw the reasonable inference that the defendant is liable for the
`misconduct alleged. Id. The plausibility standard requires more than a sheer possibility that a
`Case 0:19-cv-62342-AHS Document 25 Entered on FLSD Docket 01/03/2020 Page 4 of 16
`defendant has acted unlawfully. Id. When a complaint pleads facts that are merely consistent with
`a defendant’s liability, it stops short of the line between possibility and plausibility of entitlement
`to relief. Id. Determining whether a complaint states a plausible claim for relief is a context-
`specific undertaking that requires the court to draw on its judicial experience and common sense.
`Id. at 679.
`C. Motion to Stay
`It is well-established that a district court has the inherent authority to stay its own
`proceedings. See, e.g., Landis v. North Am. Water Works and Elec. Co., 299 U.S. 248, 254 (1936)
`(“[T]he power to stay proceedings is incidental to the power inherent in every court to control the
`disposition of the causes on its docket with economy of time and effort for itself . . . .”); see also
`Ortega Trujillo v. Conover & Co. Commc’ns, Inc., 221 F.3d 1262, 1264 (11th Cir. 2000)
`(evaluating district court’s sua sponte stay of case pending resolution of a related foreign matter
`for abuse of discretion). “Stays of proceedings can also promote judicial economy, reduce
`confusion and prejudice, and prevent possibly inconsistent resolutions.” Lopez v. Miami-Dade
`Cty., 145 F. Supp. 3d 1206, 1208 (S.D. Fla. 2015) (quotations omitted).
`A. Standing
`As set forth by the United States Supreme Court in Spokeo v. Robbins, 136 S. Ct. 1540
`(2016), Article III standing requires a plaintiff to have (1) suffered an injury in fact, (2) that is
`fairly traceable to the challenged conduct of the defendant, and (3) that is likely to be redressed by
`a favorable judicial decision. To establish “injury in fact,” a plaintiff must show that he or she
`suffered an “‘invasion of a legally protected interest’ that is ‘concrete and particularized’ and
`‘actual or imminent, not conjectural of hypothetical.’” Id. at 1548 (quoting Lujan v. Defenders of
`Case 0:19-cv-62342-AHS Document 25 Entered on FLSD Docket 01/03/2020 Page 5 of 16
`Wildlife, 504 U.S. 555, 560 (1992)). For the injury to be “concrete,” it must be “real” and not
`abstract; however, it need not be tangible. Id. Dismissal is appropriate under Fed. R. Civ. P. 12
`(b)(1) if the plaintiff does not satisfy Article III standing requirements. See Stalley, 524 F.3d at
`1232.
`These principles are applicable in the class action context. “[It] is well-settled that prior to
`the certification of a class . . . the district court must determine that at least one named class
`representative has Article III standing to raise each class subclaim.” Prado- Steiman v. Bush, 221
`F.3d 1266, 1279 (11th Cir. 2000). “Only after the court determines the issues for which the named
`plaintiffs have standing should it address the question whether the named plaintiffs have
`representative capacity, as defined by Rule 23(a) to assert the rights of others.” Id. at 1280 (quoting
`Griffin v. Dugger, 823 F.2d 1476, 1482 (11th Cir. 1987)). Thus, district courts have addressed
`class plaintiff standing early in litigation—prior to a motion for class certification having been
`filed. See, e.g., Weiss v. General Motors LLC, No. 19-cv-21442-RNS, 2019 WL 5394621, at *3
`(S.D. Fla. Oct. 22, 2019).
`Defendant argues pursuant to Fed. R. Civ. P. 12(b)(1) that Plaintiffs lack standing in respect
`of the claims pled and that therefore the Complaint should be dismissed. D.E. 15 at 4–7. The Court
`agrees with Defendant that: (1) Plaintiffs lack standing to sue for products they did not purchase;
`and (2) they have failed to allege a future injury sufficient to support a claim for injunctive relief.
`i. Products Not Purchased
`In Ohio State Troopers Association, Inc. v. Point Blank Enterprises, Inc., 347 F. Supp. 3d
`1207 (S.D. Fla. 2018), this very Court considered whether in a consumer class action a putative
`class plaintiff has standing to bring claims on account of products not purchased. After a thorough
`review of the Eleventh Circuit precedent, this Court held that an unnamed plaintiff in a consumer
`Case 0:19-cv-62342-AHS Document 25 Entered on FLSD Docket 01/03/2020 Page 6 of 16
`class action generally lacks standing to challenge the marketing of a non-purchased product
`because the plaintiff has suffered no injury-in-fact. Id. at 1220–22. In reaching this conclusion, the
`undersigned considered authority from other jurisdictions allowing that a plaintiff may have
`standing to assert claims for unnamed class members based on products he or she did not purchase
`so long as the products and alleged misrepresentations are substantially similar. Id. However, the
`prevailing view in this Circuit seems to be otherwise and to be more in line with Supreme Court
`precedent. See Simon v. Eastern Kentucky Welfare Rights Organization, 426 U.S. 26, 96 S. Ct.
`1917, 48 L. Ed. 2d 450 (1976) (representative class plaintiffs must show personal injury); Wooden
`v. Bd. Of Regents of Univ. Sys. Of Ga., 247 F.3d 1262, 1288 (11th Cir. 2001) (“[J]ust as a plaintiff
`cannot pursue an individual claim unless he proves standing, a plaintiff cannot represent a class
`unless he has standing to raise the claims of the class he seeks to represent.”); Prado-Steiman, 221
`F.3d at 1278–83; Griffin, 823 F.2d at 1483 (“This individual injury requirement is not met by
`alleging that injury has been suffered by other, unidentified members of the class to which [the
`plaintiff] belong[s] and which [he] purport[s] to represent.”) (alteration in original) (quotation
`marks omitted); Dapeer v. Neutrogena Corp., 95 F. Supp. 3d 1366, 1373 (S.D. Fla. 2015) (holding
`that the plaintiff lacked “standing to bring claims on behalf of the Neutrogena products he did not
`purchase because he cannot conceivably allege any injuries from products he never purchased or
`used”); Garcia v. Kashi Co., 43 F. Supp. 3d 1359, 1393–94 (S.D. Fla. 2014) (“[A] named plaintiff
`in a consumer class action lacks standing to challenge a non-purchased product because there is
`no injury-in-fact as to that product, even if he purchased a substantially similar product . . . . The
`Court agrees with Toback[ v. GNC Holdings, Inc., No. 13-cv-80526-JIC, 2013 U.S. Dist. LEXIS
`131135, at *15 (S.D. Fla. Sept. 13, 2014)] that, in the Eleventh Circuit, a named plaintiff in a
`consumer class action cannot raise claims relating to those other products which he did not
`Case 0:19-cv-62342-AHS Document 25 Entered on FLSD Docket 01/03/2020 Page 7 of 16
`purchase.”) (quotation marks omitted). Therefore, without reciting again the reasons explained in
`Ohio State Troopers, 347 F. Supp. 3d at 1218–23, the undersigned finds that Plaintiffs do not have
`standing to assert claims based on the marketing of products that they did not purchase and that
`therefore the classes described in the Complaint are overbroad.
`ii. Injunctive Relief
`Defendant further argues that Plaintiffs have failed to allege a prospective injury which
`would confer standing to seek injunctive relief. D.E. 15 at 6. Plaintiffs respond by pointing to the
`following allegations: “[i]f [Plaintiffs] could rely upon the truthfulness of [Defendant’s] labeling,
`[they] would continue to purchase [Defendant’s] Products in the future.” D.E. 19 at 8 (citing D.E.
`1 ¶¶ 42,44).
`When a party seeks injunctive relief, he or she must show “that the alleged injury is not too
`speculative for Article III purposes—that the injury is certainly impending.” Ohio State Troopers,
`347 F. Supp 3d at 1219 (quoting Clapper v. Amnety Int’l USA, 568 U.S. 398, 409 (2013)). “The
`‘injury-in-fact’ demanded by Article III requires an additional showing when injunctive relief is
`sought. ‘In addition to past injury, a plaintiff seeking injunctive relief ‘must show a sufficient
`likelihood that [she] will be affected by the allegedly unlawful conduct in the future.” Ohio State
`Troopers, 347 F. Supp. 3d at 1223, 1227 (FDUPTA injunctive relief claim barred by lack of
`standing) (quoting Houston v. Marod Supermarkets, Inc. 733 F.3d 1323, 1328 (11th Cir. 2013));
`see also Marty v. Anheuser-Busch Co., LLC, 43 F. Supp. 3d 1333, 1351–52 (S.D. Fla. 2014)
`(finding that plaintiffs in a putative class action alleging that brewer of domestic beer made
`misrepresentations that led consumers to believe the beer was brewed in Germany lacked standing
`to seek injunctive relief because the complaint contained only allegations of past injury).
`Case 0:19-cv-62342-AHS Document 25 Entered on FLSD Docket 01/03/2020 Page 8 of 16
`Plaintiffs simply have not alleged a likelihood of future injury. In fact, Plaintiffs allegations
`make clear that they will not purchase more of Defendant’s products so long as the labelling does
`not meet their standards. Accordingly, Plaintiffs lack standing to assert a claim for injunctive relief.
`B. Failure to State A Claim
`Defendant next argues that the Complaint should be dismissed pursuant to Rule 12(b)(6)
`as follows: Count I (Unjust Enrichment) fails to state a claim because Plaintiffs acknowledge an
`express contract with Defendant and because they have an adequate remedy at law; Count II
`(FDUPTA) fails to state a claim because the Defendant’s labelling is protected by FDUPTA’s safe
`harbor, §501.212(1); because Plaintiff Snyder cannot allege deception to a reasonable consumer;
`and because Plaintiff Snyder has failed to allege actual damages. D.E. 15 at 7–15.
`i. Count I: Unjust Enrichment
`The Court is not persuaded by Defendant’s argument that Plaintiffs cannot state a claim for
`unjust enrichment and a claim under FDUPTA at the same time. First, the Court rejects
`Defendant’s characterization of Plaintiff’s claims as being based on an “express contract.” Id. at
`15. Plaintiffs have not sued based on a contract—which would presume that there was a meeting
`of the minds when Plaintiffs purchased the subject products. Rather, Plaintiffs claim that they
`purchased the products as a result of deception and that, as a result, Defendant wrongfully deprived
`them of their funds. See, In re Monat Hair Car Prods. Mktg, Sales Practices, & Prods. Liab. Litig.,
`MDL No. 2841, 2019 U.S. Dist. LEXIS 184328, at *18 (S.D. Fla. Oct. 23, 2019). Second, the mere
`existence of the FDUPTA claim does not establish that Plaintiffs have an adequate remedy at law.
`Whether Plaintiffs prevail on that claim is, at this stage, a speculative possibility. See In re Horizon
`Organic Milk Plus DHA Omega-3 Mktg. & Sales Practice Litig., 955 F. Supp. 2d 1311, 1337–38
`(S.D. Fla. 2013). Accordingly, the Court will not dismiss Count I.
`Case 0:19-cv-62342-AHS Document 25 Entered on FLSD Docket 01/03/2020 Page 9 of 16
`ii. Count II: FDUPTA
`1. Safe Harbor
`FDUPTA does not apply to “[a]n act or practice required or specifically permitted by
`federal or state law.” FLA. STAT. § 501.212(1). Defendant argues that FDUPTA’s safe harbor
`immunizes it from liability because its labelling adheres to national uniform standards contained
`in the Nutrition Labeling and Education Act of 1990 (the “NLEA”), 21 U.S.C. § 343-1, which
`amended the Food Drug and Cosmetic Act of 1938 (the “FDCA”), 21 U.S.C. §§ 301–399i. D.E.
`15 at 7–10. In order to make this argument on a 12(b)(6) motion, Defendant must persuade the
`Court that—taking Plaintiffs’ allegations as true—CBD is a dietary supplement within the
`meaning of 21 U.S.C. §§ 321(ff)(3)(B)(i), that CBD is a naturally-occurring Class II nutrient
`within the meaning of the pertinent regulation, 21 C.F.R. § 101.9(g)(3), and that the CBD content
`declared on Defendant’s labels is at least equal to 80% of the stated value, 21 C.F.R. §
`101.9(g)(4)(ii). See Fla. v. Tenet Healthcare Corp, 420 F. Supp. 2d 1288, 1310 (S.D. Fla. 2005)
`(placing the burden on the defendant on a FDUPTA claim to show “that a specific federal or state
`law affirmatively authorized it to engage in the conduct alleged”). But the Complaint says little
`about the characteristics of CBD as incorporated in Defendant’s products and about Defendant’s
`manufacturing process. Without these additional facts—and probably others—the Court cannot
`conclude as a matter of law that the products that Plaintiffs purchased are properly classified as
`dietary supplements, that they qualify as Class II nutrients, and that Defendant can rely on the 80%
`standard, 21 C.F.R. § 101.9(g)(4)(ii), to avoid liability.
`2. Deception to a Reasonable Consumer
`According to Defendant, Plaintiff Snyder’s FDUPTA claim does not meet the reasonable
`consumer standard because: (1) the QR codes on the bottles of CBD oil of the type Plaintiff Snyder
`Case 0:19-cv-62342-AHS Document 25 Entered on FLSD Docket 01/03/2020 Page 10 of 16
`purchased clearly link to a certificate from an independent testing laboratory disclosing the amount
`of CBD in each batch; and (2) the certificates of the CBD content are available at the point of sale
`on the website itself. D.E. 15 at 13. However, the Court does not read the Complaint as conceding
`these facts. Rather, what Plaintiffs allege is that Defendant is in possession of certificates attesting
`to the percentage of CBD—not that the certificates are available to consumers. D.E. 1 ¶¶ 22, 24,
`25. Accordingly, because Defendant relies on facts outside the four corners of the Complaint, its
`argument fails.
`3. Actual Damages
`In a related argument, Defendant contends that Plaintiff Snyder has failed to allege, and
`cannot allege, actual damages as required by FDUPTA because the lab results and QR codes
`disclosed the specific CBD content of the batch from which Plaintiff Snyder’s bottle of CBD oil
`was produced. D.E. 15 at 14. This argument depends, again, on facts outside the four corners of
`the Complaint and therefore fails. Nonetheless, the Court notes that Plaintiffs are complaining they
`each paid a “premium” for the oil in the mistaken belief that it contained amount of CBD
`represented on the label. D.E. 1 ¶¶ 42, 44. The “premium price theory of damages” has been
`recognized by multiple courts applying FDUPTA. See Smith v. Wm. Wrigley Jr. Co., 663 F. Supp.
`2d 1336, 1339–40 (S.D. Fla. 2009); Horizon Organic Milk, 955 F. Supp. 2d at 1333, 1338; see
`also Fitzpatrick v. Gen. Mills, Inc., 635 F.3d 1279, 1280 (11th Cir. 2011) (appeal of district court’s
`ruling on class certification).
`C. Motion to Stay Based on Primary Jurisdiction
`Defendant moves, in the alternative, for a stay based on the primary jurisdiction doctrine.
`D.E. 15 at 16. The primary jurisdiction doctrine applies where a plaintiff’s claims implicate a
`federal agency’s expertise with a regulated product. See United States v. W. Pac. R.R. Co., 352
`Case 0:19-cv-62342-AHS Document 25 Entered on FLSD Docket 01/03/2020 Page 11 of 16
`U.S. 59, 64, 77 S. Ct. 161, 1 L. Ed.2d 126 (1956) (explaining that the primary jurisdiction doctrine
`applies “whenever enforcement of [a] claim requires the resolution of issues which, under a
`regulatory scheme, have been placed within the special competence of an administrative body”).
`Plaintiffs oppose a stay arguing that a court can apply the existing regulations to adjudicate their
`misrepresentation claims and because when and whether the relevant agencies will act, if at all,
`with respect to CBD product-content labelling is indefinite. D.E. 19 at 15.
`i. Florida CBD Regulation
`Effective January 1, 2020, the state of Florida began regulating CBD products, including
`their labelling with respect to the number of milligrams of hemp extract contained in a product.
`FLA. DEP’T OF AGRIC. AND CONSUMER SERV., DIV. OF FOOD SAFETY, Final Rule 5K-4.034 – Hemp
`Extract (effective Jan. 1, 2020), https://www.flrules.org/gateway/RuleNo.asp?id=5K-4.034
`(“Hemp or Hemp Extract intended to be ingested is a Food . . . .”). “‘Hemp Extract’ is defined in
`Section 581.217(3)(e), F.S. Hemp Extract does not include any material, compound, mixture, or
`preparation that contains any quantity of Synthetic Cannabinoids as defined in Section
`893.03(1)(c)190, F.S.” Id. § (2)(e). Section 581.217(3)(e) defines “hemp extract” as “a substance
`or compound intended for ingestion that is derived from or contains hemp and that does not contain
`other controlled substances.”1 FLA. STAT. § 581.217(3)(e). “Food consisting of or containing Hemp
`Extract must be labeled as required by Chapter 500, F.S., Section 581.217(7), F.S. and 21 CFR
`101, as incorporated by reference in Section 5K-4002(4), F.A.C., and must declare the number of
`milligrams of Hemp Extract.” Rule 5K-4.034 § (6)(a). 21 C.F.R. Part 101 is the FDA’s
`implementing regulations on “food labeling.” Part 101 specifically includes the 80% safe harbor
`1 Synthetic cannabinoids, “unless specifically excepted or unless listed in another schedule or contained within a
`pharmaceutical product approved by the United States Food and Drug Administration,” are illicit Schedule I controlled
`substances. FLA. STAT. § 893.03(1)(c)190.
`Case 0:19-cv-62342-AHS Document 25 Entered on FLSD Docket 01/03/2020 Page 12 of 16
`for Class II nutrients at Section 101.9(g)(4)(ii). See 21 C.F.R. § 101.9(g)(4)(ii). “If specific
`cannabinoids are marketed, the number of milligrams of each cannabinoid per serving must be
`declared on the label. The serving size shall be displayed on the nutrient facts label of the product.”
`Rule 5K-4.034 § (6)(b).
`ii. Federal CBD Regulation
`Regulatory oversight of CBD ingestible products, including labelling, is currently the
`subject of rulemaking at the FDA. The FDA recently has conducted a public hearing and instituted
`an agency task force on CBD regulation. U.S. FOOD & DRUG ADMIN., Scientific Data and
`Information About Products Containing Cannabis or Cannabis-Derived Compounds; Public
`Hearing; Request for Comments, 84 Fed. Reg. 12969 (Apr. 3, 2019). In its Notice of Public
`Hearing, the FDA stated: “Regulatory oversight of products containing cannabis or cannabis
`derived compounds is complex and involves multiple Federal and State agencies.” 84 Fed. Reg. at
`12970. It also made clear that it was concerned with labelling of products containing cannabis-
`derived, including hemp-derived, compounds. 84 Fed. Reg. at 12971–72. Although the FDA
`rulemaking process is ongoing, the FDA is under considerable pressure from Congress and
`industry to expedite the publication of regulations and policy guidance regarding CBD products.2
`2 S. REP. NO. 116-110, at 108 (2019) (“Within 90 days of enactment of this act, the FDA shall provide the Committee
`with a report regarding the agency’s progress toward obtaining and analyzing data to help determine a policy of
`enforcement discretion and the process in which CBD meeting the definition of hemp will be evaluated for use in
`products. Within 120 days of enactment of this act, the FDA shall issue a policy of enforcement discretion with regard
`to certain products containing CBD meeting the definition of hemp as defined by section 297A of the Agricultural
`Marketing Act of 1964 (7 U.S.C. 1639)”); Satish Kini, et al., Cannabis and Hemp: Regulatory Green Light or Still a
`Dream?,
`A.B.A.
`(Apr.
`15,
`2019),
`https://www.americanbar.org/groups/business_law/publications/blt/2019/05/cannabis/ (reporting that the FDA is
`under significant political pressure to expedite its policy-making regarding the regulation of hemp-derived products).
`More recently, Senate Majority Leader Mitch McConnell moved to include report language in the FY2020
`appropriations bill requiring the FDA to hasten progress toward regulating the market for CBD products. AIMED
`ALLIANCE, Congressional
`Leaders
`Pressure
`FDA
`Act Quickly
`on CBD
`Regulation,
`https://aimedalliance.org/congressional-leaders-pressure-fda-to-act-quickly-on-cbd-regulation/ (last visited Jan. 2,
`2020).
`Case 0:19-cv-62342-AHS Document 25 Entered on FLSD Docket 01/03/2020 Page 13 of 16
`iii. Primary Jurisdiction Doctrine Application
`State police powers traditionally included the marketing and regulation of food, but the
`NLEA provides that no state may directly or indirectly establish any requirement for the labelling
`of food that is not “identical” to the FDCA. 21 U.S.C. § 343-1(a). Thus, the FDCA
`comprehensively regulates food and beverage labelling. See id.; Pom Wonderful LLC v. Coca-
`Cola Co., 573 U.S. 102, 112 (2014). Florida classifies CBD as a food subject to labelling
`requirements, and the FDA has not yet promulgated CBD labelling regulations. Rule 5K-4.034 §
`(1); U.S. FOOD & DRUG ADMIN., FDA Regulation of Cannabis and Cannabis-Derived Products,
`Including Cannabidiol (CBD) (content current as of Dec. 31, 2019), https://www.fda.gov/news-
`events/public-health-focus/fda-regulation-cannabis-and-cannabis-derived-products-including-
`cannabidiol-cbd.3
`In Greenfield v. Yucatan Foods, L.P., 18 F. Supp. 3d 1371 (S.D. Fla. 2014), the Court
`applied the primary jurisdiction doctrine to stay a putative class action alleging violations of
`FDUTPA and a Florida state law claim for unjust enrichment. Id. at 1375–76. There, the defendant
`allegedly deceptively labelled its food products with “evaporated cane juice” rather than “sugar.”
`Id. at 1373. Although the plaintiff “alleged three state law claims, her complaint turn[ed] on
`whether the term ‘evaporated cane juice’ is false and misleading under the FDCA and its
`implementing regulations,” which led the Court to consider the FDA’s position on evaporated cane
`juice. Id. at 1374. After analyzing the state of the applicable, not yet final, FDA regulations, the
`Court stayed the matter under the primary jurisdiction doctrine because of the “unresolved issue
`of food labeling law that the interpreting agency is actively considering.” Id. at 1375.
`3 Defendant raises federal preemption as an issue with respect to its argument that Count II should be dismissed
`under Rule 12(b)(6). D.E. 15 at 8.
`Case 0:19-cv-62342-AHS Document 25 Entered on FLSD Docket 01/03/2020 Page 14 of 16
`Courts consider four factors when applying the primary jurisdiction doctrine: (1) the need
`to resolve an issue that (2) has been placed by Congress within the jurisdiction of an administrative
`body having regulatory authority (3) pursuant to a statute that subjects an industry activity to a
`comprehensive regulatory scheme that (4) requires expertise or uniformity in administration.
`Horizon Organic Milk, 955 F. Supp. 2d at 1348. The four factors are not exclusive and courts seem
`heavily influenced by a fifth factor in cases implicating FDA jurisdiction: whether the FDA has
`shown any interest in the issues presented by the litigants. See id. at 1351 (noting that courts have
`dismissed on primary jurisdiction grounds when “the FDA continues to be actively involved in
`monitoring and evaluating . . . labeling”); Greenfield, 18 F. Supp. 3d at 1376. All of the relevant
`factors are present in this case as follows:
`First, it appears to the Court that the FDA is exercising regulatory authority over ingestible
`and other CBD products, but there is uncertainty with respect to whether the FDA will conclude
`that some or all CBD products are food additives, supplements or nutrients that can be safely
`marketed to the public and, if nutrients, whether the labelling standards and requirements for CBD
`products will be different or the same as for other nutrients. Thus, there appears to be a need for
`consistent guidance. Second, the FDA appears to be properly exercising their regulatory authority;
`the FDA regulates, among other matters, food additives, supplements and nutrients, and because
`ingestible CBD products could be deemed to fall into any of these categories, they are within the
`FDA’s jurisdiction. Third, the Agriculture Improvement Act of 2018 (the “2018 Farm Bill”), Pub.
`L. No. 115-334, 132 Stat. 4908–11, explicitly recognized the FDA’s authority to regulate products
`containing cannabis-derived compounds, including hemp-derived products under the FDCA. 7
`U.S.C. §§ 1639(o)–(s). Fourth, the exercise of regulatory authority by the FDA over the labelling
`of ingestible CBD products requires both expertise and uniformity in administration. The need is
`Case 0:19-cv-62342-AHS Document 25 Entered on FLSD Docket 01/03/2020 Page 15 of 16
`well-illustrated by the fact that, among other issues with which the FDA is concerned, are whether
`CBD products pose safety risks, how the mode of delivery affects safety, whether there are dosage
`considerations related to safety, whether there is a need for manufacturing standards, and whether
`there are standardized definitions for the ingredients in, for example, hemp oil. U.S. FOOD & DRUG
`ADMIN., FDA Regulation of Cannabis and Cannabis-Derived Products, Including Cannabidiol
`(CBD) (content current as of Dec. 31, 2019), https://www.fda.gov/news-events/public-health-
`focus/fda-regulation-cannabis-and-cannabis-derived-products-including-cannabidiol-cbd. Lastly,
`the FDA obviously has expressed an active interest in regulating the manufacture and marketing
`of CBD products. Id. (“FDA continues to be concerned at the proliferation of products asserting
`to contain CBD that are marketed for therapeutic or medical uses although they have not been
`approved by the FDA.”); 84 Fed. Reg. 12969 (notice of public hearing).
`In finding that the factors militating in favor of application of the doctrine of primary
`jurisdiction are present in this case, the undersigned emphasizes that she has nonetheless
`considered Plaintiffs’ arguments that there may be regulatory delays and that further regulation is
`unnecessary to resolve the labelling dispute at the heart of the case. However, as noted above, the
`rulemaking processes at the federal level is active. Given that this case is in the nature of public
`interest litigation, the delay occasioned by a stay under the current circumstances, would not
`prejudice Plaintiffs to any significant degree.
`As for the adequacy of the current regulatory framework to resolve the issue posed by this
`case, the Court vehemently disagrees. The FDA regulations currently provide little guidance with
`respect to whether C