In a decision sure to be celebrated and cited by the plaintiffs’ bar, last week, by a 5-4 vote, the United States Supreme Court held, in Medical Marijuana, Inc. v. Horn, that “a plaintiff may seek treble damages [under federal civil RICO law] for business or property loss even if the loss resulted from a personal injury.” 604 U. S. ____ (2025). In this case, plaintiff Douglas Horn, a commercial truck driver, used a CBD product called “Dixie X,” advertised as THC-free by defendant Medical Marijuana, Inc. Weeks after use, plaintiff Horn failed a drug test and lost his job. After confirming the presence of THC in the Dixie X product through independent testing, plaintiff Horn sued the defendant manufacturer Medical Marijuana, Inc. under the federal Racketeer Influenced and Corrupt Organizations (RICO) law, claiming economic harm from his job loss due to the defendant’s false advertising of its CBD product. When Congress originally enacted the civil RICO law to allow individuals or entities harmed by organizations engaged in racketeering activity to bring claims against these organizations, Congress limited the availability of the RICO civil cause of action to “[a]ny person injured in his business or property” as articulated in the statute’s standing requirement at 18 U.S.C. § 1964(c). Even though everyone agrees that this standing requirement excludes personal injury losses from the reach of the civil RICO law, up until last week, there was a split among the federal circuits as to whether or not § 1964(c) accomplished a total ban on losses resulting from personal injury, with the Sixth, Seventh, and Eleventh Circuits all precluding relief for any economic loss that results from a personal injury, and the Second and Ninth Circuits allowing claims for economic injuries that derive from a personal injury. In last week’s decision, writing for the 5-4 majority to resolve this circuit split, Justice Barrett focused on the “ordinary meaning” of “injured” in the context of § 1964(c) claims to refuse the defendant’s argument to confine the scope of § 1964(c) to exclude any loss resulting from a personal injury. Notably, however, Justice Barrett’s majority opinion expressly did not address whether the truck driver had suffered a personal injury when he consumed THC or whether the term “business” encompasses all aspects of “employment.” The Court also did not provide further explanation on what types of injuries to “property” are covered by RICO. But the ruling definitely expanded RICO’s civil component by finding that personal injury claims that result in damages to “business or property” are not necessarily excluded. Even though the CBD manufacturer in this case argued that such an approach could increase liability for businesses, the Court offered cold comfort, noting that it is up to Congress to set these limits. Going forward, while plaintiff Horn’s case will proceed on remand, we can expect to see more civil RICO claims in general, and potentially more against cannabis operators in states like Illinois (in the Seventh Circuit), Michigan (in the Sixth Circuit), and Florida (in the Eleventh Circuit), where federal courts were by precedent, up until last week, unreceptive to the type of claim brought by this plaintiff against this cannabis product manufacturer.
