What is the Future of Cannabis Product Liability Litigation?
Tuesday, June 5, 2018
by: Melissa K. Roeder

Section: Spring 2018

Author Bio

Melissa K. Roeder, Of Counsel in Foley & Mansfield’s Seattle office, has more than a decade of general civil litigation and insurance defense experience.  Well recognized in the Pacific Northwest defense community, she delivers effective and practical solutions to her clients in the fields of asbestos, toxic tort and cannabis/marijuana law. Her motto is "don't do it if you don't enjoy it." Melissa’s play fair attitude and solid reputation has been the key to her successes inside and out of the courtroom. Melissa is a member of the DRI Board of Directors, is Past-President of Washington Defense Trial Lawyers (WDTL), and a member of Federation of Defense and Corporate Counsel (FDCC).Melissa is the 2018 Chair of the DRI Marijuana Law seminar and was Vice Chair in 2017.

In this era of a billion dollar product industry where more and more states are legalizing marijuana use, there is a significant absence of legal precedent to provide guidance on cannabis product liability issues. In fact, there have only been a total of two cases dealing with cannabis product liability issues.  The first was a 2015 Colorado class action against a cannabis grower for pesticide use.  The second was a wrongful death matter filed in Colorado against a manufacturer of cannabis-infused candy.

While each state’s laws differ, the Restatement (Third) of Torts: Products Liability provides three potential claim theories: (1) defective design; (2) manufacturing flaw; and (3) inadequate instructions or warnings.

Product liability litigation is likely to include physical injury claims arising from intoxication, as well as long-term medical effects including addiction.  We can also expect to see consumer suits alleging deceptive and improper marketing, such as campaigns targeting minors.  Companies selling marijuana products for medical use could also be subject to the same sorts of claims asserted against makers of conventional prescription drugs, such as failing to warn about potential side effects.

For now, the industry is likely to stay dominated by smaller, regional companies, but will eventually attract larger, national and multinational players.

The number of consumers and enormity of money involved in this emerging industry will inevitably create a cottage industry of marijuana lawsuits.  This primer is a prediction as to where this litigation is headed – with the primary focus being on cannabis growers, ancillary product manufacturers, and dispensaries.  And for more in-depth information, please consider registering for the 3rd Annual DRI Marijuana Law Seminar, June 26-27, Chicago  www.dri.org

I. Product Liability Issues: Looking Into the Crystal Ball

A. Medical Marijuana

Medical marijuana has the added challenge of a potential medical malpractice component.  Product manufactures will want to be cognizant of the information that is provided not only to the consumer, but also to the consumer’s physician.  Warnings, instructions, and lists of side effects for patients may need to be more in depth than for recreational users.  Manufacturers should also anticipate product class actions alleging that the product purchased does not provide the medical benefits proclaimed.

Schedule One designation severely limits the ability to conduct the research necessary to show the claimed benefits of cannabis products.  Significant problems related to determining the appropriate dosage and potency levels for marijuana arise because cannabis remains illegal under federal law while public health science and methods are developing.  Thus, there are comparatively few epidemiologic studies examining the health risks and benefits of marijuana.

The industry may look for guidance from the nutraceutical industry (dietary supplement industry) on labeling and marketing of benefits as nutraceuticals often contain vague health benefit claims and use careful label language explaining the lack of testing or FDA approval of the claimed health benefits.

B. Edibles

Edible marijuana products include a range of items from chocolate bars, baked goods, and candies, to graham crackers and potato chips.

Edibles are prime for product liability claims based upon potential dosage and potency issues.  However, detailed labels, child-proof containers, and elimination of contaminants will minimize exposure to potential litigation.

There has been one dose/label case litigated to date.  In 2014, Richard Kirk allegedly consumed cannabis-infused candy and killed his wife the same day.  His criminal defense attorneys related his actions to his cannabis-infused intoxication.  The estate sued the dispensary and edibles maker, alleging a failure to warn of the candy’s potency and side effects.  Kirk, et al. v. Nutritional Elements, Inc. et al., 2016-CV-31310, Denver County Court. 

C.  Labeling

Tetrahydrocannabinol (THC) is the main psychoactive ingredient in marijuana.  State regulations for edible products generally establish 10 mg of THC as one “serving,” and mandate that each serving be individually wrapped.

However, the 10 mg standard for edibles may not be understood by some consumers.  For example, is 10 mg safe for an 18-year-old but unsafe for a 65-year-old?  Younger and older people metabolize substances differently.  Also unknown is what level of THC in a person's system makes it unsafe to drive a car.  The paucity of science also means no baseline standards really exist for how a product should be labeled.  These are scenarios which will most likely be sorted out in court.

In the meantime, companies should be sure that dosage is accurately labeled and ensure they use high-quality labs to check their products.  Adequate labeling should involve explaining the concentration of THC and provide warnings against use with certain activities like driving, underage use, use in pregnancy/breastfeeding, or in use with combination of other prescriptions and non-prescription drugs. A labeling reference resource can be found at Labeling, Packaging and Product Safety – R 1000 Series & Retail Marijuana Rules and Definitions, Colorado Department of Revenue.

D.  Child-Proof Containers

Packagers and dispensaries will want to choose the design of the products carefully and be mindful of desirability and availability to children.  Child-resistant packaging standards can be found at ASTM D3475-13.

E.  Contaminants

As mentioned above, the very first cannabis litigation was a class-action dealing with pesticide contaminants.  In 2015, consumers filed a class action against LivWell, Inc. for use of fungicide Eagle 20 in its growing process which released carcinogenic hydrogen cyanide upon ignition.  Flores v. LivWell Inc., No. 2015-cv-33528 (Colo. Dist. Ct. Oct. 5, 2015).  The lawsuit was dismissed and there is still no guide from the EPA, FDA, or Department of Agriculture as to approved pesticides or fungicides.

Other anticipated product liability risks arise from contamination by mold and fungus.  This “gray” area will be ripe for future litigation.  Currently, the best guide for a prudent grower may be the regulations applied to the tobacco industry.

F.  Vaporizers and Vape Pens

Smoking any plant has the possibility of introducing respiratory irritants. Given the temperatures involved, it is possible that the chemical substances may convert into toxic nanoparticles.  The tobacco industry can provide guidance on misleading advertisements relating to additives and the warnings required on the packaging.  We also anticipate seeing an increase in litigation related to faulty batteries and exploding pens, which have been the subject of recent lawsuits against e-cigarette manufacturers.

G. Industry Equipment

Trimmers, extraction equipment, grow lights, and watering systems are all equipment used in the growing and production industry.  Attention to safety guards, safety warnings, and handling instructions should comport with the American National Standards Institute (ANSI) safety standards to avoid potential product liability lawsuits.  Additional standards are published by OSHA (federal and state), Consumer Product Safety Commission (CPSC) and Association of Equipment Manufacturers (AEM).

II.  Litigation Timeline: When and Where is Uncertain

A timeline for when product liability litigation is expected to take off is hard to predict.  When suits are filed may depend in part on when the plaintiffs’ bar perceives targets with deep enough pockets to make litigation worth the effort.  This may depend on “market concentration” in the industry. For now, the industry is likely to stay dominated by smaller, regional companies, but will eventually attract larger, national and multinational players.  However, most large companies will not be seriously interested in the market until marijuana is legal at the federal level.  Given the current administration, that may be a minimum of three to five years down the road.

Product liability litigation is also a function of when people start reporting injuries.  Given the lack of epidemiological studies, we may not be aware of the health effects for several years down the road

III.  Conclusion

Cannabis product liability cases will be on the rise.  As noted above, liability targets will range from the grow house to the ultimate consumer of the product.  Until cannabis is removed from the Schedule One list, individual states will implement their own product liability rules and regulations.  We can anticipate that each of the states will be watching each other closely and following all marijuana litigation that comes down the pipeline.