Briefly stated, the primary jurisdiction doctrine is designed to preserve a proper working relationship between courts and administrative agencies. See Gary P. Gengel, Kegan A. Brown & Robert J. Denicola, “Use of Primary Jurisdiction Doctrine to Defend Litigation Involving Contaminated Sites,” In-House Couns. Apr. 2014. The primary jurisdiction doctrine allows a court to stay litigation pending resolution of an issue being considered by an administrative agency. See Clark v. Time Warner Cable, 523 F. 3d 1110, 1114 (9th Cir. 2008). Recently, the U.S. District Court for the Central District of California addressed this doctrine in Dasilva v. Infinite Product Co., 2021 WL 900642 (C.D. Cal. Mar. 5, 2021).
In Dasilva, the plaintiff filed a class action against a defendant marketer of CBD products. The plaintiff’s amended complaint sought to certify a nationwide class and various state subclasses of consumers. The plaintiff alleged that Infinite’s sales and labeling of CBD products breached express and implied warranties and violated California’s Unfair Competition Law, False Advertising Law, and Consumer Legal Remedies Act. Id. at *1. The plaintiff also sought declaratory relief under the Declaratory Judgment Act. Infinite sold a variety of products containing CBD on its website. Dasilva purchased one of those products from Infinite’s website.
On November 22, 2019, the Center for Drug Evaluation and Research at the FDA sent a letter to Infinite and advised that the FDA reviewed the website and found sales and advertising related to several products that were “unapproved new drugs” and “misbranded drugs” in violation of the Food, Drug, and Cosmetics Act (FDCA). Id. The letter further noted that statements on the website and social media platforms indicated medical uses for the CBD products, despite the lack of prior approval by the FDA. The letter also pointed out that several of the defendant’s CBD products may be considered “adulterated human foods” or “unapproved new animal drugs” due to the presence of CBD, potentially in violation of the FDCA. Id.
The plaintiff argued that he, as well as other class members, would not have purchased any of the CBD products or would have paid less for them “if they were aware of the misleading labeling of the products by defendant.” Id. Although the item Dasilva purchased was not discussed in the FDA letter, he argued that it was improperly labeled as a dietary supplement because it is, in fact, a misbranded drug. Id. Infinite filed a motion to dismiss based on preemption, failure to state a claim, and lack of subject matter jurisdiction, and further moved to stay the proceedings pursuant to the primary jurisdiction doctrine.
In deciding whether to stay the class action pursuant to the primary jurisdiction doctrine, the Dasilva court considered the following non-exhaustive factors: “(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 or activity to a comprehensive regulatory authority that (4) requires expertise or uniformity in administration.” Id. at *2 (citing Syntek Semiconductor Co., Ltd. v. Microchip Tech., Inc., 307 F.3d 775, 781 (9th Cir. 2002)).
The Dasilva court held that the primary jurisdiction doctrine applies where the “initial decision-making responsibility should be performed by the relevant agency rather than the courts.” GCB Commc’ns, Inc. v. U.S. S. Commc’ns, Inc., 650 F.3d 1257, 1263–64 (9th Cir. 2011). Although the primary jurisdiction doctrine applies in “limited circumstances,” and “a court should not invoke primary jurisdiction when the agency is aware of but has expressed no interest in the subject matter of the litigation,” the FDA and Congress have separately expressed interest in regulating CBD. Astiana v. Hain Celestial Grp., Inc., 783 F.3d 753, 760–61 (9th Cir. 2015).
In granting Infinite’s motion to dismiss and staying the case, the Dasilva court noted that the FDA was within its purview to exercise rulemaking authority over the definitions and regulation of CBD products. The court further recognized, however, that there is “‘uncertainty’ regarding whether specific CBD products constitute drugs, food additives, dietary supplements, or nutrients, and whether labelling standards for CBD will be the same as with respect to other types of products under the FDCA and existing FDA regulations.” Id. at *2 (citing Synder v. Green Roads of Fla., LLC, 430 F. Supp. 3d 1297, 1308 (S.D. Fla. 2020)).
The court also stressed uncertainty about how to adjudicate the plaintiff’s claims, given the lack of clarity as to whether Infinite’s CBD product was a drug, dietary supplement, or food product, and the applicable standards and held that “consistent guidance and uniform administration are needed in this area, particularly given potential safety concerns.” Id. (citing Syntek, 307 F.3d at 781).
As the industry awaits specific regulations from the FDA, practitioners must be aware of the primary jurisdiction doctrine’s effect on CBD class actions; likewise, CBD companies should also be aware of the doctrine’s implications as litigation progresses.
