Divided court approves civil RICO Liability for CBD product injuries
OPINION ASSESSMENT
The Racketeer Influenced and Corrupt Organizations Act provides federal criminal and civil penalties for harms from “racketeering.” Wednesday’s ruling in Medical Marijuana, Inc. (Katie Barlow)
The Racketeer Influenced and Corrupt Organizations Act provides for federal criminal and civil penalties for harms from “racketeering.” Wednesday’s ruling in Medical Marijuana, Inc v. Horn, like so many of the court’s RICO decisions, involves the civil penalties.
Douglas Horn was fired from his commercial truck driving job after he ingested a product marketed as including only CBD (cannabidiol, which is completely legal) rather than THC (tetrahydrocannabinol, which continues to be illegal in many contexts) and failed a drug test. Justice Amy Coney Barrett ruled for a court that was sharply divided on Wednesday, upholding liability for damages resulting from personal injury to a business. This is a victory for Horn. The case will now be returned to the lower court.
The court’s question relates to the RICO clause, which requires that the claimant show that they have been “injured by
s property or business.” For Barrett it is irrelevant that the injury to property or business may have occurred before or as a result of a personal injury. She acknowledges that “the statute does not allow recovery for every harm,” because “explicit permis
recovery” for harms to property and business “implicitly excludes recovery of harm to one’s own person.” But if his injuries force him to close his doors, he can recover for the loss of his business. But if his injuries force him to shut his doors, he can recover for the loss of his business.” In other words, she writes, “a plaintiff can seek damages for business or property loss regardless of whether the loss resulted from a personal injury.”[it]Barrett presents the main argument of the defendants (led byMedical Marijuana, Inc., one of the the businesses that made the THC-laced CBD products at the center of the case) as viewing the reference to a plaintiff “injured” in a particular way as having a “specialized” meaning under which the originating injury must be “an invasion of a business or property right” that amounts to “a business or property tort.” Under that theory, because the initial invasion here was purely personal (ingestion of Medical Marijuana products), Medical Marijuana would face liability. But Barrett finds that in the contest between “an ordinary and specialized meaning,” the “context cuts decisively in favor of ordinary meaning,” largely because the specialized meaning is most common for references to a type of “injury” rather than to the people that are “injured.”[ssion of]The defendants also urge the court to look to antitrust cases requiring allegations of “business or property injuries” to “track common-law torts.” Barrett rejects that argument, agreeing that the court’s “modern antitrust precedent forecloses recovery for certain economic harms” because of the court’s decision “to require … an injury of the type the antitrust laws were intended to prevent.” Previous cases, though, have conclude that “transplanting this … interpretation … into the RICO context would be inappropriate,” so she declines to do it here.[it]Barrett closes with caution, emphasizing that Horn’s case faces many obstacles. She emphasizes that Horn’s case faces many obstacles. The number of steps in Horn’s theory …, may make this requirement an insurmountable barrier in his case. Second, she highlights the requirement of a “pattern” of racketeering activities. His comments echo Justice Samuel Alito’s complaint in Monday’s argument in Rivers v. Guerrero about a “mini epidemic of cert petitions” that lead to arguments on the merits that are “quite a bit different from what we were sold at the petition stage.” His comments echo the complaint of Justice Samuel Alito in Monday’s argument in Rivers v. Guerrero about a “mini epidemic of cert petitions” that lead to arguments on the merits that are “quite a bit different from what we were sold at the petition stage.”[who]Justice Brett Kavanaugh, joined by Chief Justice John Roberts and Alito, filed a separate and vigorous dissent, expressing deep concern about the federalization of garden-variety tort litigation.
Despite the tone of the dissents, Barrett’s opinion seems to resolve the case on grounds that will not resonate widely in civil RICO litigation. Barrett’s opinion seems to resolve the case on grounds that will not resonate widely in civil RICO litigation.
