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`Case 2:19-cv-01906-MCE-KJN Document 34 Filed 06/15/20 Page 1 of 8
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`UNITED STATES DISTRICT COURT
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`EASTERN DISTRICT OF CALIFORNIA
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`KENNETH GLASS, individually, and on
`behalf of all others similarly situated,
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`No. 2:19-cv-01906-MCE-KJN
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`MEMORANDUM AND ORDER
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`Plaintiff,
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`v.
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`GLOBAL WIDGET, LLC d/b/a HEMP
`BOMBS,
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`Defendant.
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`Plaintiff Kenneth Glass (“Plaintiff”) alleges, both on his own behalf and on behalf
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`of others similarly situated, a nationwide collective action claim against Defendant Global
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`Widget, LLC d/b/a Hemp Bombs (“Defendant”) on grounds that hemp cannabidiol
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`(“CBD”) products sold by Defendant were both misbranded and illegal. Plaintiff’s
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`operative First Amended Complaint (“FAC”) alleges eight different causes of action
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`made on various grounds, including breach of express warranty, breach of the implied
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`warranty of merchantability, unjust enrichment, and fraud, as well as for violations of
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`various state consumer protection, unfair competition, and false advertising.1
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`1 Counts V through VII of the FAC allege California statutory violations; Count VIII is for violations
`of Florida’s Deceptive and Unfair Practices Act.
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`Case 2:19-cv-01906-MCE-KJN Document 34 Filed 06/15/20 Page 2 of 8
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`Presently before the Court is Defendant’s Motion to Dismiss and/or Strike
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`pursuant to Federal Rules of Civil Procedure 12(b)(1), 12(b)(6) and 12(f). Alternatively,
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`Defendant requests that the Court either dismiss or stay the matter pursuant to the
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`primary jurisdiction doctrine pending imminent regulatory action by the United States
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`Food and Drug Administration (“FDA”) regarding CBD products.
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`As set forth below, because the Court concludes that a stay is indeed appropriate
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`under the circumstances of this matter, Defendant’s Motion (ECF No. 22) will be
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`GRANTED in that regard but is otherwise DENIED,2 without prejudice to refiling once the
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`stay in this case has been lifted.
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` BACKGROUND3
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`CBD is a naturally occurring phytocannabinoid found in certain strains of hemp,
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`and according to Plaintiff is a highly sought-after substance with medicinal properties
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`used to treat anxiety, insomnia, depression, diabetes, PTSD and chronic pain. CBD can
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`be ingested in numerous ways, including inhalation by smoke or vapor, as an aerosol
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`spray into the cheek, and by mouth. In addition, food and beverage items can be
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`infused with CBD as an alternative way of taking the substance. The production, sale
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`and distribution of CBD has becoming a booming business that “is gaining in popularity
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`among consumers with the legal CBD market projected to surpass $23 billion in annual
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`U.S. Sales by 2023,” according to Forbes Magazine. FAC, ECF No. 19, ¶ 12.
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`Defendant, a Florida corporation with a principal place of business in Tampa,
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`Florida, manufactures, sells, and globally distributes Hemp Bombs-branded products,
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`and is responsible for the advertising, marketing and packaging of CBD-infused edibles,
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`2 Because the Court believes that a stay in this matter is indicated pending further action by the
`FDA, and since such action may profoundly change just what claims Plaintiff can assert, the Court need
`not address Defendant’s remaining challenges to the sufficiency of Plaintiff’s pleadings at this time and
`declines to do so.
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` Unless otherwise noted, this section is drawn, at times verbatim, from the allegations of the FAC.
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`Case 2:19-cv-01906-MCE-KJN Document 34 Filed 06/15/20 Page 3 of 8
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`capsules, oils and vape products. According to the FAC, Plaintiff, a California resident,
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`purchased many of Defendant’s Hemp Bombs CBD products throughout 2019, most
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`recently in June of 2019,4 when he bought two packages of Hemp Bombs Gummies
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`from a gas station in Wheatland, California. He states that he relied on Defendant’s
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`labeling representations concerning the quantities of CBD his purchases contained, only
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`to later discover through testing that the products contained anywhere between 7 and
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`82.3 percent less CBD than stated on the label.
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`According to Plaintiff, Defendant also made specific representations on its website
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`that CBD was legal to sell in the United States, when in fact it is not. Id. at ¶¶ 22-23.
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`Plaintiff contends that he and other class members would not have purchased
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`Defendant’s products, or paid as much for those products, had they known the products
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`were mislabeled and falsely advertised. Id. at ¶ 29.
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`Defendant, in requesting a stay of these proceedings, claims that the FDA is
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`poised to issue CBD regulations soon that should provide substantial clarification and
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`guidance concerning the issues raised by this lawsuit. It alleges that the FDA conducted
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`a public hearing on CBD in 2019, and thereafter appointed an agency task force along
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`with a public docket for comment. Def.’s Mot, ECF No. 22-1, 10:15-17. On
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`November 25, 2019, the FDA issued a consumer update on CBD entitled “What you
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`Need to Know (And What We’re Working to Find Out) About Products Containing
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`Cannabis or Cannabis-derived Compounds, Including CBD.” The agency stated it
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`“recognizes the significant public interest” in such compounds, and “is working on
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`answering these questions through ongoing efforts including feedback from a recent
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`FDA hearing and information and data gathering through a public docket.” See Def.’s
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`Mot., 10-15-11:2, n.4 and citations contained therein.5 The FDA further advised that the
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`agency “is evaluating the regulatory frameworks that apply to certain [CBD products] that
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`4 While the FAC indicates these last purchases occurred in July 2019, Plaintiff indicates in his
`Opposition to the instant Motion that this was a scrivener’s error, with the correct time being June of 2019.
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` Whether or not the FDA considers CBD to be a dietary supplement remains in dispute according
`to Defendant, since the Agency has to date issued mixed messages on the issue.
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`are intended for non-drug uses, including whether and/or how the FDA might consider
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`updating its regulations, as well as whether potential legislation might be appropriate.”
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`Id.
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`The FDA’s efforts to provide further guidance to the public continue. On
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`January 13, 2020, the Chairman of the House Agricultural Committee, Collin Peterson
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`(D-MN), introduced bi-partisan legislation (H.R. 5587) that would allow hemp-derived
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`CBD (and substances containing CBD) to be marketed as dietary supplements, and
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`would require the FDA to immediately develop regulations to that effect.6 Defendant
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`also claims that regulatory efforts with important potential ramifications for this case are
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`underway in California, where the California Assembly has passed A.B. 228, which
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`would declare that foods (including dietary supplements), beverages and cosmetics
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`made with industrial hemp should not be considered adulterated, as Plaintiff alleges.
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`See id. at 11:7-10, citing FAC at ¶¶ 24-25. Defendant claims the Bill is currently pending
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`STANDARD
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`It is well-established that “[a] district court ‘has broad discretion to stay
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`proceedings as an incident to its power to control its own docket’ in an effort to promote
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`judicial economy.” DeMartini v. Johns, 693 F. App’x 534, 538 (9th Cir. 2017) (quoting
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`Clinton v. Jones, 520 U.S. 681, 706-707 (1997)); see also Landis v. North Am. Co.,
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`299 U.S. 248, 254-55 (1936) (“[T]he power to stay proceedings is incidental to the power
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`inherent in every court to control the dispositions of the cases on its docket with
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`economy of time and effort for itself, for counsel, and for litigants. How this can be done
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`calls for the exercise of judgment, which must weigh competing interests and maintain
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`an even balance.”).
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`6 See https://www.congress.gov/bill/116th-congress/house-bill/5587.
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`Case 2:19-cv-01906-MCE-KJN Document 34 Filed 06/15/20 Page 5 of 8
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`In determining the propriety of a stay, courts look to issues of judicial economy
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`and the prejudice to either party that may result if the stay is granted or denied. CMAX,
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`Inc. v. Hall, 300 F.2d 265, 268 (9th Cir. 1962). Whether to issue a stay in this regard is a
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`decision necessarily relegated to the court’s discretion. Nken v. Holder, 556 U.S. 418,
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`433-34 (2009).
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`ANALYSIS
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`On May 22, 2020, the Northern District of California issued its decision in
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`Colette v. CV Sciences, Inc., No. 2:19-cv-10227-VAP-JEM(x), 2020 WL 2739861.7
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`Colette, like the present matter, is a class action relating to the marketing and sale of
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`CBD products. Also similar to the case at bar, the plaintiff in Colette argues that she
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`would not have purchased products containing CBD if she knew they were not legally
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`sold in the United States. Id. at *1.8
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`The Northern District ultimately stayed the litigation pending before it, citing the
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`so-called “primary jurisdiction” doctrine. Importantly, the court noted that its case was
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`one of several cases already pending that relate to the marketing and sale of CBD
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`products, including four similar cases in the Northern and Central Districts alone. Id.
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`“The primary jurisdiction doctrine allows courts to stay proceedings, or to dismiss
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`a complaint without prejudice pending the resolution of an issue within the special
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`competence of an administrative agency.” Clark v. Time Warner Cable, 523 F.3d 1110,
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`1114 (9th Cir. 2008). It “is a prudential doctrine under which courts may, under
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`appropriate circumstances, determine that the initial decisionmaking responsibility
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`should be performed by the relevant agency rather than the courts.” GCB
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`7 While decided on May 22, 2020, after briefing in this matter concluded on March 16, 2020,
`defense counsel brought Colette to the Court’s attention by filing a Notice of Supplemental Authority
`attaching the decision on June 3, 2020. Plaintiff’s counsel has filed nothing in response to that
`submission.
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` It does not appear, however, that the Colette case contained evidence of misbranding like this
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`matter.
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`Case 2:19-cv-01906-MCE-KJN Document 34 Filed 06/15/20 Page 6 of 8
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`Communications, Inc. v. U.S. South Communications, Inc., 650 F.3d 1257, 1263-64
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`(9th Cir. 2011). As the GCB Communications court noted, the doctrine is useful “in
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`instances where the federal courts do have jurisdiction over an issue, but decide that a
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`claim requires resolution of an issue of first impression, or of a particularly complicated
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`issue that Congress has committed to a regulatory agency.” Id. at 1264.
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`Courts consider the following non-exhaustive factors in deciding whether the
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`primary jurisdiction doctrine applies: “(1) the need to resolve an issue that (2) has been
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`placed by Congress within the jurisdiction of an administrative body having regulatory
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`authority (3) pursuant to a statute that subjects an industry or activity to a comprehensive
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`regulatory authority that (4) requires expertise or uniformity in administration.” Syntek
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`Semiconductor Co., Ltd. v. Microchip Tech, Inc., 307 F.3d 775, 781 (9th Cir. 2002).
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`Colette found that consideration of these facts required applying the primary
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`jurisdiction doctrine given ongoing FDA activities in clarifying its position on CBD, and
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`this Court finds its reasoning in that regard persuasive. As the Northern District
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`observed, these cases raise “issues of first impression surrounding how the FDA intends
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`to classify and regulate the CBD.” 2020 WL 2739861 at *4. In addition, as Colette went
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`on to note, the only federal court to have addressed similar issues also invoked the
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`primary jurisdiction doctrine. That court was Southern District of Florida in Snyder v.
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`Green Roads of Florida, LLC, 430 F. Supp. 3d 1297 (S.D. Fla. 2020), a decision
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`extensively relied upon by Defendant in its brief opposing this Motion. Colette adopted
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`the “thoughtful” analysis of Snyder in invoking the primary jurisdiction doctrine, and this
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`court concurs. As Snyder explained:
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`“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
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`Case 2:19-cv-01906-MCE-KJN Document 34 Filed 06/15/20 Page 7 of 8
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`and nutrients, and because ingestible CBD products could be
`deemed to fall into any of those categories, they are within
`the FDA’s jurisdiction. Third, the Agriculture Improvement
`Act of 2018 (the “2018 Farm Bill”), explicitly recognized the
`FDA’s authority to regulate products containing cannabis-
`derived compounds, including hemp-derived products under
`the FDCA. 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
`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. Lastly, the FDA obviously has expressed
`an active
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`marketing of CBD products.
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`430 F. Supp. 3d at 1308 (as quoted by Colette, 2020 WL 2739861 at *5, internal
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`citations omitted).
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`Additionally, the plaintiff in Colette argues, as Plaintiff does here, that any
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`forthcoming regulatory action by the FDA cannot be retroactively applied to class claims
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`accrued prior to enactment of any new rules. Any presumption against retroactivity,
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`however, may be overcome by statutory authorization. Colette, 2020 WL 2739 at *5. As
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`Colette notes, whether cannabis regulations will apply retroactively is unknown, but
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`given the widespread use and sale of CBD products—and particularly the large number
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`of states that have legalized their sale—Congress may conclude that fairness,
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`practicality, and comity require retroactive legislation.” Id.
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`The FDA, as Colette recognized, “is working feverishly” to develop rules
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`concerning the regulation of CBD. Id. Consequently, since this Court agrees with
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`Colette and Snyder that the doctrine of primary jurisdiction applies, it should either “stay
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`the case pending an administrative ruling or dismiss the case without prejudice.”
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`Capaci v. Sports Research Corp., No. CV 19-3440 FMO (FFMx), 2020 WL 1482313 at
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`*8 (C.D. Cal. 2020). When a court concludes that further proceedings are contemplated,
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`a stay is indicated. Astiana v. Hain Celestial Group, Inc., 783 F.3d 753, 760 (9th Cir.
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`2015). Here, as in Colette, the fact that further judicial proceedings in this matter are
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`Case 2:19-cv-01906-MCE-KJN Document 34 Filed 06/15/20 Page 8 of 8
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`indeed contemplated mandates that a stay, as opposed to the complete relinquishment
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`entailed by a dismissal, be effected. Colette, 2020 WL 2739 at *5.
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`CONCLUSION
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`For all the foregoing reasons, the Court will stay this lawsuit until such time as the
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`FDA completes its rulemaking regarding the marketing, including labelling, of hemp-
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`derived ingestible products. Defendant’s Motion (ECF No. 22) is consequently
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`GRANTED9 to the extent it requests the above-referenced stay. Given the Court’s
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`decision to stay this matter, however, the remaining portions of said Motion, which ask
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`the Court to dismiss and/or strike portions of the proceedings, are DENIED without
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`prejudice to being renewed once the stay in this case has been lifted.
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`The parties are directed to notify the Court within ten (10) days after the expected
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`FDA regulations are issued. In the meantime, the parties shall file joint status reports
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`with the Court every ninety (90) days, beginning on September 15, 2020.
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`IT IS SO ORDERED.
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`Dated: June 15, 2020
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`9 Having determined that oral argument would not be of material assistance, the Court ordered this
`matter submitted on the briefs in accordance with E.D. Local Rule 230(g).
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