Blog

The Takeaway

In Horn,[1]  the U.S. Supreme Court held that under RICO[2] a plaintiff can recover for business or property loss even if the loss derived from a personal injury.

This may initially result in an increased number of alleged civil RICO claims, which could lead to increased risks for significant damages.

Case Background

Douglas Horn sought relief from chronic pain by purchasing and using Medical Marijuana, Inc.’s Dixie X. This product was advertised as being THC free, which Horn alleged was the reason he chose it.

Not long after, Horn was randomly drug tested at work and tested positive for THC. As a result, Horn was fired. Horn then brought a claim against Medical Marijuana, Inc. under RICO which provides for a cause of action for any person “injured in his business or property” by reason of a RICO violation. Plaintiff alleged Medical Marijuana, Inc. engaged in false or misleading advertising under the statute.

The District Court granted Medical Marijuana, Inc.’s summary judgment motion on the RICO claim. The court reasoned that Horn’s lost employment was derivative of a personal injury (the introduction of THC into his system). It then held that because a RICO plaintiff is not allowed to recover for a personal injury, that plaintiff also cannot “recover for a business or property harm that flows from an ‘antecedent personal injury.’” Medical Marijuana, Inc. v. Horn, 145 S. Ct. 931, 937 (2025).

Supreme Court Action

The Supreme Court granted certiorari to resolve a circuit split as to whether RICO denies a remedy for any economic loss—including loss to business and property—that derives from a personal injury.

The Court considered whether the statute, by implicitly foreclosing a remedy for personal injuries, also prohibits a remedy for business or property loss if that loss derived from a personal injury. Itheld that a RICO plaintiff can seek damages for business or property loss “regardless of whether the loss resulted from a personal injury.” Medical Marijuana, Inc., 145 S. Ct. at 939. In a 5-4 decision, the Court reasoned that the “business or property” requirement is meant to limit the kinds of harm for which the plaintiff can recover rather than the cause of the harm for which they may be seeking compensation. Accordingly, the Court held that while the statute’s phrase “injured in his business or property” may implicitly preclude claims for personal injury, it does not preclude recovery for all economic harms that may result from personal injuries.

Potential Impacts

While it may take time to see how this holding plays out across district courts, businesses could initially see an increase in the number of alleged RICO claims. This could also bring an increased risk of significant damages for an injury that previously may have only given rise to a tort claim.

The majority acknowledged this concern but noted there remain other limitations to bringing a civil RICO claim.

First, a plaintiff must show some direct relationship between the injury asserted and the injurious conduct; mere foreseeability is insufficient. Indeed, the Court noted that Horn may not be able to make this showing.

In addition, the Court recognized that harm arising from a single tort might not satisfy the RICO requirement that a plaintiff establish a pattern of racketeering activity. This includes identifying two or more predicate crimes.

Nonetheless, the Court recognized that civil RICO “has undeniably evolved into something quite different from the original conception of its enactors” such that if the “breadth of the statute leads to the undue proliferation of RICO suits, the correction must lie with Congress.” Id. at 946.

Even so, because RICO allows a plaintiff to recover triple damages as well as attorney fees, it could prove to be a powerful tool for plaintiffs to seek higher-dollar compensation. Thus, it’s important for defense attorneys to stay aware of possible changes in the litigation landscape now that the Supreme Court has broadened the path for certain RICO claims previously not allowed in many circuits, including the Seventh.

[1] Medical Marijuana, Inc. v. Douglas J. Horn, No. 23-365

[2] Racketeer Influenced and Corrupt Organizations