Fired Truck Driver Sues Over Fraudulent CBD Oil Labels
A truck driver was fired for failing a drug test after taking CBD oil that was guaranteed to have zero THC.
Four years ago, a truck driver lost his job after his drug screen returned positive for THC. The only problem? He never used THC, only CBD oil. Now, his lawsuit against the CBD oil company looks like it will finally find a courtroom. And the verdict could have a huge impact for consumers and companies, including regulations around CBD oil labels.
The case could finally deliver consequences that have been brewing for a long time. In the rush to market, many CBD oil manufacturers let their standards slip. A study, published in Journal of the American Medical Association (2017), found that nearly seventy percent of the products it tested had amounts of CBD and THC that differed from percentages indicated on the label.
In response, many companies hired third party testers to verify their products and win back consumer trust. Still, the industry suffers from a lack of consumer confidence, and is ripe for government regulation.
The results of the lawsuit could bring new federal guidelines for CBD oil labels and serious consequences for dishonest or sloppy businesses. But only if it the company is found guilty on the two counts against it.
How Can a Man Lose his Job Over CBD Oil?
Douglas Horn was a veteran over-the-road truck driver living in New York. In February 2012, he was in a crash that left him with serious back and shoulder pain. Six months after the accident, Horn saw an ad in High Times for CBD oil that could relieve pain, from a company called Medical Marijuana Inc. Intrigued, he ordered a bottle.
The ad claimed Dixie X Elixir contained zero percent THC, less than even the 0.3 percent promised by other companies. As a trucker who was accustomed to random drug testing, Horn knew the importance of staying away from THC. His job depended on it.
To this day, the CBD oil labels for Medical Marijuana Inc products promise only “trace amounts” of THC and claim to be lab tested. But that’s not what Horn received. On Oct. 9, 2012, Horn was summoned for a drug test. Two days later, he lost his job. The reasoning: His urine tested positive for high levels of THC metabolite.
Horn promptly ordered another bottle of Dixie X and sent it to a lab for testing. The lab called him days later saying they couldn’t return the bottle because it contained so much THC. Suddenly, Horn had a case.
A Lawsuit Over CBD Oil Labels
Since his firing, Horn has been routinely blocked from getting other jobs due to his drug test failure. No trucking company wants to hire a driver who could be a liability in the event of a crash.
Horn lawyered up and sued Medical Marijuana Inc., hoping to recoup the income he has lost. Originally, he sued for nine charges: deceptive business practices, breach of contract, breach of warranty, unjust enrichment, fraudulent inducement, racketeering, violations of products liability statues, negligence, and infliction of emotional distress.
On seven charges, the Western District of New York court sided with the CBD company. Claiming there was no evidence of claims like intentional emotional distress and negligence. However, the court agreed the lawsuit could move forward with charges of racketeering (what they call a RICO case) and fraud.
RICO charges relate to ongoing criminal enterprises. They were first created to help the U.S. take down the mafia. Now, these are used to expand the scope of prosecution for ongoing criminal organizations (or regular businesses that engage in recurring criminal acts). It brings stiff penalties.
If Horn wins that charge, he will be a very rich man — and his victory would make other CBD companies quite uneasy.
A New Wrinkle Emerges
While the lawsuit is ostensibly about CBD oil labels, it may be won or lost on how the court sees the High Times piece. While Horn claims he responded to an ad — the company says it was an article — which the company did not write or verify before it went to press.
According to the court documents, the ad was indeed an article. But it quoted Tripp Keber, the managing director of Dixie LLC (Medical Marijuana Inc. is its parent company) that directly produced the CBD product.
In the article, he stated: “We are importing industrial hemp from outside the U.S. using an FDA import license — it’s below federal guidelines for THC, which is 0.3 percent — and we are taking that hemp and extracting the CBD. We have meticulously reviewed state and federal statutes, and we do not believe that we’re operating in conflict with any federal law.”
That sounds a lot like an ad. To make matters muddier, Keber also features on several YouTube videos — which Horn claimed he watched — making similar claims about the CBD oil labels for Dixie Elixirs. And evidence of the company’s website at the time reiterates those claims.
CBD Oil Labels: What the Future Holds
Whether or not Horn wins his case, there’s likely to be a chilling effect on the way CBD companies operate. And that’s a good thing. CBD oil labels ought to provide credible evidence of what’s inside the bottle. This helps consumers make intelligent, consistent decisions about how to take their medicine.
If that means a few companies have to spend more money on third-party tests, so be it. A little extra money spent now, in the service of adequately preparing cannabis patients, is well worth it.
If Horn wins his case, the effect could be even stronger. But it could also lead to a wave of copycat lawsuits. If that means more people receive compensation for mislabeled products, that may also be worthwhile, even if good companies spend extra cash in court costs.
In late 2019, the FDA issued a crackdown on fifteen CBD companies “marketing unapproved new human and animals drugs, for selling CBD products as dietary supplements, and adding CBD to human, animal foods.” So, the reckoning for an unregulated CBD market has definitely come.
Let’s hope no matter who prevails, consumers and patients receive better information going forward.