On April 2, 2025, the United States Supreme Court handed down a decision expanding the type of civil actions that can be brought under the federal Racketeer Influenced and Corrupt Organizations Act (“RICO”). In a 5-4 opinion, the Court held that a plaintiff may recover on claims stemming from personal injury under civil RICO §1964(c) if they can be shown to have caused the plaintiff economic harm.
Section 1964(c) provides that “[a]ny person injured in his business or property by reason of a violation of [RICO] may sue.” Prior to the Court’s April 2 ruling, circuits were split over whether §1964(c) excludes recovery for harm to business or property caused by personal injury. The Sixth, Seventh, and Eleventh Circuits each ruled that RICO excludes economic harm that arises from personal injuries. The Second and Ninth Circuits allowed civil RICO claims for economic harms in personal injury cases.
This circuit split was resolved in Medical Marijuana, Inc., et al. v. Horn, No. 23-365, 2025 WL 978102 (U.S. April 2, 2025). The plaintiff, Douglass J. Horn, is a truck driver who filed suit after failing a drug test because he had THC in his system. Horn started using “Dixie X,” a tincture infused with cannabidiol (“CBD”), following a car accident. Dixie X advertised that it contained 0% tetrahydrocannabinol (“THC”). Unlike CBD, THC has mind-altering properties associated with marijuana and is generally illegal in concentrations greater than 0.3%. When Horn’s employer flagged him for a random drug test Horn tested positive for THC and subsequently lost his job. Horn had the Dixie X tested and found it contained illegal levels of THC.
Horn sued Medical Marijuana, the company that makes Dixie X, and others alleging they were operating a RICO enterprise. The District Court held that Horn’s loss of employment stemmed from a personal injury – ingesting Dixie X – so he could not recover under §1964(c). Horn appealed, and the Second Circuit reversed. The Second Circuit held that an antecedent personal injury does not bar recovery for all business and property injuries that derive from that personal injury. Medical Marijuana appealed the case to the Supreme Court. The Supreme Court held that one who is “injured in his business or property” is not precluded from recovering the economic harms flowing from personal injuries, thus ruling in favor for Horn and resolving the circuit split.
The Supreme Court opening the door to recovery for personal injuries under civil RICO has significant implications. This decision widens the application of the civil RICO statue and increases the pool of future plaintiffs. Corporate clients may see an increase in tortious interference, defamation, and other personal injury claims brought under the RICO statute in the future.