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RICO, what is it good for?… Business losses arising from personal injury claims?

4/21/25

By: Stephanie N. Miller and Kevin R. Stone

An unlikely alignment of justices¹ on the Supreme Court may have opened Pandora’s box for Racketeer Influenced and Corrupt Organizations Act (“RICO”) claims with their decision in Medical Marijuana, Inc. v. Horn, 604 U.S. __ (2025). The court resolved a circuit split in favor of an interpretation of the statute that allows for the pursuit of a civil RICO claim where an injury to business or property flows from a personal injury, paving the road for plaintiffs to seek treble damages and attorney’s fees.²

The facts of Medical Marijuana, Inc. v. Horn are interesting. As truck driver Douglas Horn sought out a CBD product to treat pain from a prior injury, he knew it was imperative that the product not contain any THC because he was subject to drug testing for his employment. He selected a product that seemed safe because it advertised zero percent THC, but after taking the product, Horn failed a drug test and was fired when he refused to seek treatment for substance abuse. When subsequent testing of the product revealed it did contain THC, Horn sued the manufacturer for civil RICO and other claims. 

The district court granted summary judgment for the manufacturer on the RICO claim, reasoning that Horn’s loss of employment flowed from a “personal injury”—unknowingly ingesting THC—upon which civil RICO claims cannot be based. The Second Circuit reversed, deciding that although civil RICO “implicitly excludes recovery for personal injuries,” a plaintiff may recover for a business loss even when those losses resulted from a personal injury.

In affirming the Second Circuit, the Supreme Court addressed the question of whether “civil RICO bars recovery for all business or property harms that derive from a personal injury,” regardless of whether the plaintiff claims to have suffered any personal injury. In deciding, the court undertook a linguistic analysis of the statute’s use of the word “injured,” concluding that while Section 1964(c) “implicitly excludes recovery for harms to one’s person,” the statute only limits the kinds of harm one can recover for, not the cause of the harm. For clarity, the court provided an example where a gas station owner suffers a beating during a robbery – under RICO, he could not recover for his pain and suffering, but he could recover for the loss of his business if the injuries required him to shut down his business. As such, injuries to business or property may be recovered, even if they happen to flow from a personal injury. 

Notably, the court passed on the opportunity to decide whether a loss of employment is a loss to one’s business or property. This leaves a ripe argument for defendants to try to exclude a large swath of claims from plaintiffs who are employees versus those who own a business or property.

Nor does this ruling lower the high bar for establishing the core elements of a civil RICO claim – an enterprise, actual knowledge of criminal activity, “a pattern of racketeering activity” and a violation of one of the statute’s list of 35 organized crimes.

As we await the outcome of Horn’s civil RICO claim and watch for expansion of claims due to this ruling, the attorneys of FMG have the expertise to guide your business through such matters. For more information, please contact Kevin R. Stone (kevin.stone@fmglaw.com) and Stephanie N. Miller (stephanie.miller@fmglaw.com). 

1. Justices Barrett, Sotomayor, Kagan, Gorsuch, and Jackson constituted the majority in the 5 to 4 ruling. 
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2. 18 U.S.C. § 1964 (c) ↩︎

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