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Last Thursday, Richard Dean gave us yet another excellent guest-post on primary jurisdiction. That under-appreciated doctrine is to Richard what preemption is to Bexis, or what dog shows are to Rachel, or what Ian Fleming and Dashiell Hammett (whose birthdays coincided with Richard’s May 28 post) are to us.

We had selected primary jurisdiction with the 16th pick in our DDL draft and, as with the NFL draft, that position is often where you get real value – under-the-radar gems. Primary jurisdiction is seldom located at the front of our minds, but given that we defend heavily regulated products, maybe it should be.

As if to drive that point home, a recent case turned on primary jurisdiction: Colette v. CV Sciences, Inc., 2020 WL 2739861 (C.D. Cal. May 22, 2020). In Colette, the plaintiffs filed a class action made up of purchasers of cannabidiol (CBD) products, including sprays, oil drops, gummies, capsules, etc. It was a nationwide class, with California and Arizona subclasses. The plaintiffs alleged that the CBD manufacturer sold illegal products because they contained an illegal ingredient (CBD) and were improperly labeled as dietary supplements. The defendant moved to dismiss or, in the alternative, to stay the case under the primary jurisdiction doctrine.

Among other forms of relief, the plaintiffs sought a declaratory judgment that the defendant had misrepresented the products, as well as an injunction halting such allegedly unlawful conduct. But the plaintiffs faced a problem in pursuing such relief; they claimed that they were now wise to the alleged misrepresentations and would not buy any of the products going forward. Because the plaintiffs had made it clear they would suffer no future injury, they had managed to plead themselves out of declaratory or injunctive relief. They lacked standing.

As for whatever claims remained, the Colette court ultimately stayed such claims based on primary jurisdiction. Why? The court reasoned that whether the products were misrepresented or illegal was an issue of first impression that was complicated and that Congress had committed to the FDA to determine.

Unsurprisingly, the plaintiffs were distressed by the prospect of a stay. A stayed case is not a won case. It is probably not even a case with much settlement pressure. The plaintiffs leaned heavily on the FDA’s November 2019 issuance of warning letters to certain CBD retailers to establish the illegality of the defendant’s actions, but — as we’ve pointed out before – warning letters do not constitute final agency action. So what we have right now in terms of regulatory action is an ongoing thing that is difficult, that is committed to agency expertise, and that is on the verge of some sort of final agency action, probably in the form of a guidance. Why would a court want to get in front of that? That question is especially vexing when so many courts are facing it, and the proliferation of inconsistent judicial decisions seems inevitable. In sum, Colette looks like a case that cries out for application of the primary jurisdiction doctrine. Let the regulatory experts figure out the nuances before the blunt forces of judicial fiats or jury verdicts bang out rough justice.

The plaintiffs tried to derail operation of primary jurisdiction by arguing that any forthcoming regulatory action might not be retroactive and that, in any event, courts are peculiarly competent to preside over consumer fraud actions. The Colette court rejected those arguments. First, retroactive application of the FDA’s decision regarding CBD products appeared to be more likely than not. Second, unlike the consumer fraud cases cited by the plaintiffs, here “the FDA has yet to issue rules and is working feverishly to do so.”

Primary jurisdiction is, at bottom, an exercise of prudential discretion. Given the ongoing controversy over regulation of CBD products, the need for expertise and uniformity, and the likelihood that some degree of regulation/clarification was imminent, the Colette court concluded that the better part of prudence counseled in favor of staying the litigation (the parts that survived the dismissals based on lack of standing) on the ground of primary jurisdiction.