Justices OK Personal Injury as Racketeering Suit Basis (1)

The US Supreme Court said a commercial truck driver, who was fired over a failed drug test, can proceed with an anti-racketeering lawsuit that seeks to hold the maker of a CBD oil liable for his lost wages.

In an unusual 5-4 lineup, Justice Amy Coney Barrett wrote that a plaintiff can seek triple damages for business or property loss under the Racketeer Influenced and Corrupt Organizations Act even if the loss resulted from a personal injury. Barrett’s ruling Wednesday was joined by Justice Neil Gorsuch and the court’s three liberal justices.

Douglas Horn sued Medical Marijuana Inc. and Dixie Holdings LLC in 2015 after he took its CBD product Dixie X to treat his chronic pain and was then fired after a routine drug test showed THC in his system. Horn said Dixie X was falsely advertised as being THC free.

RICO allows people hurt by a criminal enterprise to sue for triple damages, but the Dixie X manufacturers argued the US Court of Appeals for the Second Circuit was wrong to let Horn’s case go forward.

The law doesn’t cover economic damages arising from personal injuries—like lost wages or medical expenses, the companies said.

The majority agreed that RICO specifically prohibits a plaintiff from recovering personal injury damages. But it said the statute doesn’t bar recovery for economic damages that result from a personal injury.

In doing so, the court acknowledged that RICO has evolved “into something quite different from the original conception of its enactors.” More RICO suits are brought against ordinary businesses than against the archetypal mobster, Barrett wrote. But that’s a problem for Congress, not the court, she said.

The principal dissent, written by Justice Brett Kavanaugh, criticized the majority both for its conclusion and for what it refused to decide—that is, whether lost wages and medical expenses are in fact economic damages that are available under RICO.

By “punting” on that critical question, the court leaves “substantial confusion in its wake,” Kavanaugh wrote.

Kavanaugh was joined by Chief Justice John Roberts and Justice Samuel Alito. Justice Clarence Thomas wrote a separate dissent, saying he would have dismissed the case.

The case is Medical Marijuana, Inc. v. Horn, U.S., No. 23-365.