As we discussed previously, a truck driver and his wife brought suit in New York federal court against three companies selling a CBD oil product the trucker claims caused him to fail a drug test and thereby lose his job.
Back in April, the U.S. District Court Judge, Frank Geraci, dismissed several of plaintiffs’ claims, leaving only two claims for fraudulent inducement and civil RICO. As a result, plaintiffs then moved under Federal Rule of Civil Procedure 54(b) for entry of partial final judgment as to the failed claims. Plaintiffs filed this motion in an attempt to appeal the failed claims to the Court of Appeals for the Second Circuit. However, Judge Geraci was not as eager to let plaintiffs engage in a piecemeal appeal and declined to grant plaintiffs’ motions under Rule 54(b). The Court explained:
Both the surviving claims and the failed claims arise from the same underlying set of facts: Plaintiffs’ purchase and use of Defendants’ product and Douglas’s subsequent failed drug test. Thus, if Plaintiffs were permitted to appeal some of their claims, the Second Circuit would be “forced to review identical facts” in any subsequent appeal after trial.
Plaintiffs must now wait for their two surviving claims to be fully litigated before moving forward with an appeal.
In related news, we have recently noted multiple other lawsuits being filed in the Southern District of Florida and the District of Massachusetts similarly alleging that companies selling CBD oil products improperly labeled the amount of CBD the products contained. At this stage, we don’t know whether the lawsuits have merit. Regardless, they provide an important reminder: Although CBD is the subject of much promise and expectation, it is held to the same labeling and advertising standards as all other products. Label claims must be truthful and not misleading and product benefit claims must be substantiated with competent and reliable scientific evidence.