As anticipated, additional class action lawsuits have been filed against two more CBD companies, both in federal court in California. As is typical for these types of cases, the consumer-plaintiffs are alleging that the companies' products are mislabeled as dietary supplements or contain "the illegal dietary ingredient CBD". The complaints are based upon alleged violations of state law violations, including false advertising and unfair competition laws, as well as California's Sherman Food, Drug, and Cosmetic Law, which adopts federal labeling regulations as the state's food labeling requirements. The consumer-plaintiffs in both cases are seeking compensatory damages, statutory damages, disgorgement, pre- and post-judgment interest, and attorney fees.
We expect this trend of litigation against CBD companies to continue as plaintiffs' attorneys seize the opportunity to share in the multi-billion dollar cannabis industry. We invite you to review our article from last month on this topic and review our recommendations for mitigating risk to avoid litigation: https://www.reedsmith.com/en/perspectives/2019/11/as-consumer-litigation-mounts
Two more CBD companies are facing proposed class actions by consumers who say they would not have purchased their products if they had known they were not compliant with U.S. Food and Drug Administration guidelines.