. "On November 27, plaintiff Adam DaSilva filed suit against Infinite Product Co alleging the company sells food, supplement and cosmetic products that are unapproved new drugs in violation of federal law. DaSilva said in the proposed class action suit that Infinite Product’s CBD products are misleadingly labeled and are illegal to sell. In the complaint, DaSilva pointed to the FDA’s recent warning letter to Infinite Products, detailing numerous violations regarding its products, including skin creams and gummies"
A California company that manufactured chocolate with CBD was "hit with a proposed class action in California federal court claiming the candies don’t contain the advertised amounts of CBD and THC." There were also a few cases where truck drivers failed THC-in-blood test after using CBD product
National Law Review
https://www.natlawreview.com/article/proposed-class-action-alleges-company-s-cbd-products-violate-federal-law
Law360
https://www.law360.com/classaction/articles/1225673/cbd-chocolate-maker-sued-over-product-content
CBD Chocolate Maker Sued Over Product Content
By Sarah Jarvis
Law360 (December 5, 2019, 6:20 PM EST) -- A company that manufactures CBD-infused chocolates was hit with a proposed class action in California federal court claiming the candies don’t contain the advertised amounts of CBD and THC.
Tuesday’s complaint alleges that Florida-based Bhang Corp. violated several state and federal laws by claiming its chocolate products contained far greater amounts of THC and CBD than they actually did in order to charge consumers premium prices.
Plaintiff Charles Ballard said he purchased various types of Bhang medicinal chocolate from 2016 through 2018 without knowing the products’ labels were “false, deceptive and/or misleading.” He said that independent lab testing he commissioned showed the actual amounts of THC, which is marijuana's psychoactive component, and CBD, a compound found in hemp thought to have healing properties, were substantially less than what was stated on the packages and in marketing materials.
“The amounts and/or levels of THC and/or CBD are not only material, but the primary reason consumers purchase THC and/or CBD products such as Bhang Products,” Ballard said in the complaint, adding that he would not have bought the candies or paid a premium price had the labels not been "misleading."
Ballard said Bhang and 25 unidentified individuals, including shareholders, executive officers and managers, knowingly misrepresented the amounts of THC and CBD in the products in order to induce consumers to purchase them.
“At the time defendants made the false claims, defendants knew or should have known that these statements, representations, and warranties were false or made them without knowledge of their truth or veracity,” Ballard said.
Ballard is seeking to represent two classes of customers — a national class and a California class — who purchased Bhang’s chocolate products for personal use from Dec. 4, 2014, through Dec. 31, 2018. The classes’ claims are for more than $5 million, and the classes consist of “many thousands” of people, according to the complaint.
“Defendants’ misrepresentations and other conduct, described herein, violated the ‘unfair’ prong of [California’s unfair competition law] in that its conduct is substantially injurious to consumers, offends public policy, and is immoral, unethical, oppressive, and unscrupulous, as the gravity of the conduct outweighs any alleged benefits,” Ballard said.
The lawsuit's claims include fraud, negligent misrepresentation and violation of California’s unfair competition and false advertising laws. Ballard and the proposed classes are seeking compensatory and punitive damages, prejudgment interest, attorney fees and court orders “to correct, destroy, and change all false and misleading labeling terms relating to defendants’ statements and representations,” according to the complaint.
Counsel for Ballard and the proposed class and a representative of Bhang did not immediately respond to requests for comment Thursday.
Similar proposed class actions filed by consumers claiming the cannabis products they purchased don’t contain the advertised amounts of CBD have recently cropped up in other states, including Florida and Massachusetts.
Ballard and the proposed classes are represented by Reuben D. Nathan of Nathan & Associates APC and by Ross Cornell of the Law Offices of Ross Cornell APC.
Counsel information for Bhang was not available Thursday.
The case is Ballard v. Bhang Corp., case number 5:19-cv-02329, in the U.S. District Court for the Central District of California.
--Additional reporting by Diana Novak Jones. Editing by Jill Coffey.
National Law Review
https://www.natlawreview.com/article/proposed-class-action-alleges-company-s-cbd-products-violate-federal-law
Proposed Class Action Alleges Company’s CBD Products Violate Federal Law
Wednesday, December 4, 2019
As our readers may recall, on November 25, FDA issued warning letters to 15 companies for illegally selling FDA-regulated products containing cannabidiol (CBD) in violation of the Federal Food, Drug, and Cosmetic Act (FD&C Act). FDA alleged that CBD lacks an appropriate regulatory status in the products and, in some cases along with product claims, causes them to be marketed unlawfully.
One of the warning letters was sent to Infinite Product Company LLLP DBA Infinite CBD, in which FDA alleged Infinite was marketing unapproved drugs containing CBD. The FDA cited claims on the company’s website that CBD could alleviate symptoms of autism and can treat diseases like hepatitis, cancer, and Tourette’s syndrome.
On November 27, plaintiff Adam DaSilva filed suit against Infinite Product Co alleging the company sells food, supplement and cosmetic products that are unapproved new drugs in violation of federal law. DaSilva said in the proposed class action suit that Infinite Product’s CBD products are misleadingly labeled and are illegal to sell. In the complaint, DaSilva pointed to the FDA’s recent warning letter to Infinite Products, detailing numerous violations regarding its products, including skin creams and gummies. According to the complaint, there are “[m]any unanswered questions and data gaps about CBD toxicity exist, and some of the available data raise serious concerns about potential harm from CBD.” Indeed, DaSilva noted that, in a revised Consumer Update, FDA stated that it “is not aware of any basis to conclude that CBD is [generally recognized as safe (GRAS)] for use in conventional [human or animal] food.”
The lawsuit appears to be one of the first private actions filed as a result of FDA’s recent warning letters that allege the use of CBD runs afoul of federal regulations. We will continue to monitor this case as well as other CBD-related lawsuits and regulatory actions.
© 2019 Keller and Heckman LLP
Law360
https://www.law360.com/classaction/articles/1225673/cbd-chocolate-maker-sued-over-product-content
CBD Chocolate Maker Sued Over Product Content
By Sarah Jarvis
Law360 (December 5, 2019, 6:20 PM EST) -- A company that manufactures CBD-infused chocolates was hit with a proposed class action in California federal court claiming the candies don’t contain the advertised amounts of CBD and THC.
Tuesday’s complaint alleges that Florida-based Bhang Corp. violated several state and federal laws by claiming its chocolate products contained far greater amounts of THC and CBD than they actually did in order to charge consumers premium prices.
Plaintiff Charles Ballard said he purchased various types of Bhang medicinal chocolate from 2016 through 2018 without knowing the products’ labels were “false, deceptive and/or misleading.” He said that independent lab testing he commissioned showed the actual amounts of THC, which is marijuana's psychoactive component, and CBD, a compound found in hemp thought to have healing properties, were substantially less than what was stated on the packages and in marketing materials.
“The amounts and/or levels of THC and/or CBD are not only material, but the primary reason consumers purchase THC and/or CBD products such as Bhang Products,” Ballard said in the complaint, adding that he would not have bought the candies or paid a premium price had the labels not been "misleading."
Ballard said Bhang and 25 unidentified individuals, including shareholders, executive officers and managers, knowingly misrepresented the amounts of THC and CBD in the products in order to induce consumers to purchase them.
“At the time defendants made the false claims, defendants knew or should have known that these statements, representations, and warranties were false or made them without knowledge of their truth or veracity,” Ballard said.
Ballard is seeking to represent two classes of customers — a national class and a California class — who purchased Bhang’s chocolate products for personal use from Dec. 4, 2014, through Dec. 31, 2018. The classes’ claims are for more than $5 million, and the classes consist of “many thousands” of people, according to the complaint.
“Defendants’ misrepresentations and other conduct, described herein, violated the ‘unfair’ prong of [California’s unfair competition law] in that its conduct is substantially injurious to consumers, offends public policy, and is immoral, unethical, oppressive, and unscrupulous, as the gravity of the conduct outweighs any alleged benefits,” Ballard said.
The lawsuit's claims include fraud, negligent misrepresentation and violation of California’s unfair competition and false advertising laws. Ballard and the proposed classes are seeking compensatory and punitive damages, prejudgment interest, attorney fees and court orders “to correct, destroy, and change all false and misleading labeling terms relating to defendants’ statements and representations,” according to the complaint.
Counsel for Ballard and the proposed class and a representative of Bhang did not immediately respond to requests for comment Thursday.
Similar proposed class actions filed by consumers claiming the cannabis products they purchased don’t contain the advertised amounts of CBD have recently cropped up in other states, including Florida and Massachusetts.
Ballard and the proposed classes are represented by Reuben D. Nathan of Nathan & Associates APC and by Ross Cornell of the Law Offices of Ross Cornell APC.
Counsel information for Bhang was not available Thursday.
The case is Ballard v. Bhang Corp., case number 5:19-cv-02329, in the U.S. District Court for the Central District of California.
--Additional reporting by Diana Novak Jones. Editing by Jill Coffey.
Land Line
https://landline.media/truckers-cbd-oil-lawsuit-survives-rico-claims/
Trucker’s CBD oil lawsuit survives RICO claims
November 26, 2019
•
Tyson Fisher
|
A truck driver suing a CBD oil company after testing positive for marijuana and losing his job has cleared another hurdle in his lawsuit. A federal judge in New York determined that the CBD oil is not considered a controlled substance. Nevertheless, other RICO claims still stand.
On Nov. 21, U.S. District Court Judge Frank P. Geraci Jr. revised a ruling made in April that allowed Douglas Horn to move forward with two of nine claims in his lawsuit against Medical Marijuana Inc. and other companies associated with the product Dixie X CBD. The April ruling allowed Horn to continue the lawsuit on the basis of violations of the Racketeer Influenced and Corrupt Organization Act.
However, both parties contested that ruling. Horn wanted the court to rule the CBD oil as a Schedule I controlled substance. Meanwhile, defendants wanted the remaining two counts dismissed. Judge Geraci denied Horn’s motion, but granted part of Medical Marijuana’s motion.
The recent decision was based on whether or not Dixie X is considered a controlled substance.
CBD oil yields positive THC results
In February 2012, Horn, an over-the-road hazmat trucker at the time, suffered injuries from a vehicle crash. Several months after the crash, Horn looked into natural medicine as alternatives for the prescription medication he was taking because of the crash.
Approximately six months later, Horn responded to a High Times magazine ad from Dixie Botanicals regarding an industrial hemp product called Dixie X. The ad stated the product contained “0.00 THC.” THC, or tetrahydrocannabinol, is the main psychoactive property in marijuana.
Rather, the product contained CBD, formally known as cannabidiol. Along with THC, CBD is one of 113 cannabinoids found in marijuana. Dixie claimed that the product treats inflammation and pain.
In October 2012, Horn submitted a random drug screening as required by the U.S. Department of Transportation. A few days later, he was told that he had tested positive for a high level of THC. Horn was subsequently fired. He had worked for the company for 10 years and had driven professionally for nearly 30 years.
Following his termination, Horn bought some more of the Dixie X CBD oil to have a laboratory independently test the product for THC.
The laboratory explained to Horn that they could not return the product to him after discovering it contained levels of THC well over the federal limit per U.S. Drug Enforcement Administration regulations and therefore illegal.
In August 2015, Horn filed a lawsuit against Medical Marijuana Inc., Dixie Holdings, Red Dice Holdings and Dixie Botanicals claiming the following:
•Deceptive business practices/false advertising.
•RICO violation.
•Fraudulent inducement.
•Violations of products liability statutes.
•Breach of contract.
•Breach of express warranty.
•Unjust enrichment.
•Negligence.
•Negligent infliction of emotional harm.
Question of ‘controlled substance’
In the April decision allowing claims of violating the RICO Act, the court determined that Dixie X constituted a controlled substance under the Controlled Substances Act.
“Dixie X is a mixture that contains extract from the Cannabis sativa plant,” the court explained. “Defendants do not contend that the CBD byproduct from the extraction process can be described as anything other than a ‘resin extracted from’ the cannabis sativa plant. And Dixie X cannot come within any exception because resin extracts are explicitly excluded.”
Defendants disputed that Dixie X CBD oil contained resin extract and thus constituted marijuana. Meanwhile, Horn agreed with the conclusion, but argued the reasoning. He contends that any product that contains any amount of THC was a Schedule I controlled substance in 2012.
On Nov. 21, the court disagreed with Horn’s assertion while agreeing with Medical Marijuana Inc.
“Because plaintiffs have not presented any evidence to show that Dixie X contains either synthetic THC or natural THC derived from marijuana – as the CSA defines that term – plaintiffs cannot prove their RICO claim to the extent it is premised on the allegation that Dixie X is a controlled substance,” the court determined.
However, the court still upheld claims of RICO Act violations related to the CBD oil.
In addition to RICO violations stemming from distribution of a controlled substance, Horn also alleges RICO violations based on mail and wire fraud.
According to 18 U.S.C. § 1961(1)(B), mail and wire fraud constitute racketeering activity. More specifically, mail and wire fraud statutes prohibit communication that involves any scheme to “defraud, or for obtaining money or property by means of false or fraudulent pretenses, representations, or promises,” according to the court opinion.
“There is evidence that defendants advertised in at least three different media – on their website, in YouTube videos, and via their customer service representatives – that Dixie X did not contain THC,” the court ruled. “There is evidence that these statements were false; indeed, defendants’ own testing revealed that the product contained detectible amounts of THC. Because defendants tested Dixie X and found that it contained THC yet advertised to the contrary, there is a basis to conclude that these statements were not mere misstatements or puffery but part of a scheme to defraud.”
As a result, the court will allow Horn to proceed with RICO violations derived from mail/wire fraud. RICO claims based on CBD oil being a controlled substance are dismissed.
Another class action lawsuit
Another trucker is suing a Florida-based company that markets CBD gummies after he failed a drug employment screening due to the presence of THC in his system.
Driver Trevor Darrow filed a class action complaint on October 28 in U.S. District Court for the Northern District of Illinois against Just Brands USA, alleging the company violated the Illinois Consumer Fraud and Deceptive Trade Practices act by mislabeling their JustCBD products as having “no THC.”
The class is open to any person who within three years of the filing, purchased JustCBD products with the “no THC” label in the state of Illinois. The class is not limited to truck drivers, nor those who failed a drug test as a result.
No comments:
Post a Comment