Supreme Court to consider truck driver’s RICO lawsuit over CBD product that costed him his job
ARGUMENT ANALYSIS
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 CBD product maker for economic harm under federal racketeering laws. RICO is a federal law that was originally passed to target organized criminals. It creates a private cause-of-action, which allows someone “injured” in his business or properties by racketeering activities to recover triple damages.
Horn purchased Medical Marijuana’s hemp-based Dixie X when he read that it contained CBD, but no THC. Horn was fired from his job and lost his insurance and pension benefits when he failed a THC blood test. He sued, alleging that the makers of Dixie X had engaged in mail-wire fraud which caused him to suffer injury to “business or property.” 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
” 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. The Clayton Act, a key antitrust statute, Blatt said, limits private lawsuits to plaintiffs who have suffered injuries to “business or properties.” For this reason, the Supreme Court has routinely rejected personal injury claims. She argued that the same result should apply in this case. 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.[ed]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
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 instance, asked Blatt to help her “figure out… the most natural, normal reading of the statutory text.” But, I don’t think that perspective will carry a majority, especially since Roberts and Kavanaugh are firmly against liability. I don’t think there will be a majority in this case. I doubt that it will be close.
