Feds Keep Seizing Lawful Hemp Imports, CBD Co. Tells Court

Law360 (October 21, 2019, 6:07 PM EDT) — U.S. Customs and Border Protection will likely continue to seize lawful hemp shipped from foreign countries, a hemp importer said in a brief filed Monday in California federal court, giving renewed urgency to its proposed class action seeking an injunction against federal authorities.

California-based Innovative Nutraceuticals told that court that its putative class action should proceed as a single case because, among other reasons, the CBP continues to restrict the import of hemp nationwide, despite the passage of two federal farm bills that broadly legalized the crop.

The 2014 farm bill legalized the cultivation of hemp, defined as cannabis with less than 0.3% concentration of THC on a dry weight basis, for limited, industrial purposes. The 2018 farm bill kept the same legal limit of THC, while expanding legal protections for hemp by removing it from the Controlled Substances Act.

“The seizures are part of a pattern of officially sanctioned behavior violative of the federal rights of [Innovative] and the class members,” the filing said. “Since the defendants have repeatedly engaged in these injurious acts in the past, and have continued to do so, there is a sufficient possibility they again will engage in them.”

The brief is the latest volley in a suit initiated in July 2018 after federal authorities seized four shipments of foreign hemp bound for Innovative at airports in California, New Jersey and Kentucky between 2015 and 2018.

The hemp, which had been intended for the processing of CBD, was in violation of the Controlled Substances Act because it contained trace amounts of THC, the psychoactive component of cannabis, authorities said at the time. But the seized hemp had THC levels that were within legal limits as dictated by the 2014 farm bill, Innovative said in court documents.

In their second amended complaint, filed in July, Innovative said that seizures of legal hemp and CBD have continued even after the passage of the 2018 bill.

Innovative is seeking injunctions granting the return of seized hemp and compensatory damages on behalf of any parties who had their hemp or CBD confiscated by CBP or its parent agency, the U.S. Department of Homeland Security, since July 2012. Innovative also sought an injunction barring the federal authorities from seizing shipments of hemp or CBD in the future.

The government moved in September to dismiss most of the claims in the second amended complaint, arguing that Innovative lacked standing or that the cases should be litigated separately in the jurisdictions where the seizures actually took place.

Michael Chernis, an attorney for Innovative, told Law360 in an email that the government’s assertions were flimsy “technical arguments, along the lines of our client failed to touch third base before heading home.”

“In this way, the government is advancing a policy of CBP being beyond legal review. Fortunately, we don’t believe any of their arguments have merit, and firmly believe that this case will proceed one way or another, despite the government’s stalling efforts,” Chernis said.

An attorney with the U.S. Department of Justice, representing the government entities, did not immediately respond to a request for comment Monday.

Innovative is represented by Michael S. Chernis of Chernis Law Group PC, Paul L. Gabbert of Paul L. Gabbert Law Offices and Eric Honig of the Law Office of Eric Honig PLC.

The government is represented by Jasmin Yang, David M. Harris and Joanne S. Osinoff of the U.S Attorney’s Office for the Central District of California

The case is Innovative Nutraceuticals LLC v. United States of America et al., case number 5:18-cv-01400, in the U.S. District Court for the Central District of California.

–Additional reporting by Diana Novak Jones. Editing by Alanna Weissman.

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