ARGUMENT ANALYSIS

Supreme Court considers truck driver’s RICO case over CBD product that cost him his job  

The Supreme Court heard oral arguments on Tuesday in the case of a truck driver who was fired from his job after a wellness product marketed as free of THC, the active ingredient in marijuana,  caused him to fail a routine drug test. Douglas Horn sued the maker of the CBD product he took for chronic pain under federal racketeering law for economic harm.

But the companies that manufacture the product told the justices on Tuesday that because Horn’s injuries were personal, rather than harm to his business or property, they did not fall under the Racketeer Influenced and Corrupt Organizations Act. Of relevance here, RICO, a federal law initially passed to target organized crime, creates a private cause of action, which allows a person “injured in his business or property” by racketeering activity to recover triple damages.  

Horn bought Medical Marijuana’s hemp-based Dixie X after reading that it contained CBD but no THC. CBD is completely legal but THC continues in some contexts to be illegal. When Horn failed a THC blood test, he was fired from his job and lost his insurance and pension benefits.

Horn sued, alleging that the makers of Dixie X had engaged in mail and wire fraud that caused him to suffer injury to “business or property.”

Lisa Blatt, representing the manufacturers, told the justices on Tuesday that Horn’s unwanted ingestion of THC was an injury to his body, a purely “personal” injury, and not an injury to “business or property.” Horn’s economic losses, she argued, are the “damages he sustain[ed]” because of that injury.

Easha Anand, representing Horn, argued that the lost employment plainly is an injury to “business” that should bring the case within the wheelhouse of RICO. The lower court agreed with Horn, permitting his suit to proceed, before the companies took the case to the Supreme Court.

The text of the civil RICO statute, the companies argued at the Supreme Court, unlike its criminal counterpart, plainly requires a plaintiff to be “injured in his business or property.” That language, they said, reflects an indisputable intention to exclude the only other major kind of injury the law recognizes – injury to the person (the kind of thing for which people hire “personal injury” lawyers).

Horn’s premise – that civil RICO is available if the “personal” injury leads to “business or property” damages – would have sweeping implications, the companies argued, making RICO available to any tort plaintiff who can produce a receipt for lost wages or other economic loss. And the Clayton Act, an important antitrust statute, Blatt told the justices, limits private suits to plaintiffs with injuries to “business or property,” for which the Supreme Court routinely has rejected personal injury claims. The same result, she argued, should apply here.

For Horn, though, “injured” is the same thing as “harmed,” and the harm he suffered to his business (loss of employment) is a classic injury to business of the type that the civil RICO statute reaches.  Anand also emphasized that in RICO Congress made clear that the act “shall be liberally construed to effectuate its remedial purposes.” That rule of construction, she said, suggests that in the event of any doubt the court should permit Horn’s suit to proceed.

Although several of the justices peppered Blatt with tough questions about how to reconcile her argument with RICO’s text, the tone on Tuesday was often withering during Anand’s allotted time. Chief Justice John Roberts started early in Anand’s presentation to press the view that the “‘business or property’ limitation [was] intended to be a significant limitation on the reach of RICO,” something “pretty central to the heart of RICO,” and that her position seemed likely to vitiate that limitation.

Justice Brett Kavanaugh was even more pointed, criticizing the idea that Horn could “get around that limitation … by characterizing the lost wages or medical expenses as separate injuries to your business or property.”

And Horn’s position, Kavanaugh warned, would create “a dramatic, really radical shift in how tort suits are brought throughout the United States.”

As I suggested above, some justices – especially Justice Elena Kagan – challenged Blatt’s reading of the text. Kagan, for example, pushed Blatt to help her to “figure out … the most normal, natural reading of the statutory language.” But I don’t see that perspective carrying a majority when Roberts and Kavanaugh seem firmly settled against liability. There might be a dissent when the case is decided, but I doubt it will be a close one, and I really doubt if a majority will find its way to liability here.