A South Florida US District Court recently made a decision to hold an alleged class action lawsuit against a merchant selling CBD products. This was due to the pending of Food & Drug Administration’s ruling concerning the advertisement and labeling of hemp-based edible products.
The accused company, Florida-based Green Roads, is not the only one facing such a lawsuit, other firms with similar suits to answer include;
- JustCBD – facing class-action litigation very similar to Green Roads
- Charlotte’s Web – also facing charges of improper advertisement of CBD-based products
- Curaleaf-facing class-action suits for security violations
But does the South Florida Green Roads status quo means that companies that sell hemp-based items can continue operating in violation and think of the repercussions afterward?
No, it isn’t for a couple of reasons! But first, let’s understand the nature of the case.
Accused: Green Roads (GR)
The complaint: Snyder petitioners claim Green Roads misrepresented the level/amount of cannabinoid in its items and made Snyder overpay for the cannabinoid oil. The plaintiffs claim the amount in the product label never matched Snyder’s CBD oil never matched what was on the label. Another Green Roads product bought by the petitioners—called the Relax Box—had similar issues.
Snyder petitioners are after a class action suit against all Green Road sales.
Green Roads is being accused of two things:
- Unfair enrichment and,
- Acting against the Florida Deceptive and Unfair Trade Practices Act (FDUPTA).
The defendant: Green Roads dismissed the claims for two reasons, saying;
- The case lacked a standing,
- It also lacked a claim for relief,
Instead, Green Roads requested a ruling based on the main jurisdiction doctrine.
The Court: The District Court granted some of GR’s motions and held the rest of the suit. It laid off some of Snyder’s complaints because;
(1) The complainant had a lack of standing, to the point plaintiffs were after a class action on items they never bought.
It then requested the petitioners to base the case on their items purchased.
The court also threw off GR’s claims that the complainant failed to state a claim and allowed the accuser to retain claims of acting against FDUPTA and unfair enrichment.
The decision to hold the case pending FDA’s say-so came after the court considered that the matter of CBD marketing and labeling is still under the FDA’s lens, and the Administration’s guidance will be of benefit in making a verdict.
So why is it not a good idea to continue acting in violation of existing rules?
- The ruling in CR is not binding on other US courts
- The ruling in CR has only taken a break in proceedings—it’s still too early to predict a verdict.
- FDA’s rules may not favor the respondent, and that may place other perpetrators in hot soup!
Anything can happen. So it is still difficult to tell which side will walk home triumphant.
In a nutshell, it is advisable to keep operating within existing laws as we wait for the FDA to make a long-standing decision on CBD products.
Author Bio: Blair Thomas has been a music producer, bouncer, screenwriter and for over a decade has been the proud Co-Founder of eMerchantBroker, the highest rated CBD merchant account shopify provider in the country. He has climbed in the Himalayas, survived a hurricane, and lived on a gold mine in the Yukon. He currently calls Thailand his home with a lifetime collection of his favorite books.