Under the Racketeer Influence and Corrupt Organizations Act (RICO), an individual can bring a civil action for an injury to the individual’s business or property caused by a RICO violation (referred to as “civil RICO”). 18 U.S.C. § 1964(c). But this statute presented a question that many courts have been grappling with for years: does civil RICO allow an individual to sue for injuries to the individual’s business or property if those injuries are derived from a personal injury? On April 2, 2025, the Supreme Court of the United States answered the question in Medical Marijuana, Inc. v. Horn, holding that under civil RICO, “a plaintiff can seek damages for business or properly loss regardless of whether the loss resulted from a personal injury.”
Background: Civil RICO
When most people hear about RICO, they think of large-scale criminal prosecutions against organized crime. While RICO is predominantly a criminal statute, it also has a section that creates a private right of action for “[a]ny person injured in his business or property by reason of a violation of [RICO].” 18 U.S.C. § 1964(c). When a person’s business or property is injured because of a RICO violation, that person may recover treble damages as well as “the cost of the suit, including reasonable attorney’s fees.” Id.
The Supreme Court provided several examples of when civil RICO may apply—some more colorful than others. For example, the Supreme Court recognized that civil RICO allows for recovery of a ransom payment. Additionally, “a human-trafficking victim can sue for her business or property harm.” Finally, “if Tony Soprano drains a bank account using a computer password obtained by violence, Mr. Soprano has injured the account holder’s property by taking his money.” While these examples from the Supreme Court may seem like they would be inapplicable to most businesses, the case that the Supreme Court was addressing demonstrates just how easy it may be for some plaintiffs to bring civil RICO claims.
Medical Marijuana, Inc. v. Horn – The Facts
In Medical Marijuana, Inc. v. Horn, Douglas Horn, a commercial truck driver, began to use a product sold by Medical Marijuana, Inc. called “Dixie X” to treat his chronic pain. Dixie X was infused with cannabidiol (CBD), which does not have the mind-altering properties, unlike tetrahydrocannabinol (THC), associated with marijuana.
As a commercial truck driver, Mr. Horn knew that a positive drug test could cost him his job, so Mr. Horn was wary of any product that might contain THC. Relying on Medical Marijuana’s advertising that stated that Dixie X was “0% THC” and “legal to consume both here in the US and in many countries abroad,” Mr. Horn bought a bottle to give it a try.
A few weeks later, Mr. Horn was randomly selected for a drug screening. Mr. Horn’s test came back positive for THC. Because of his positive drug test and his refusal to complete a substance-abuse program, Mr. Horn’s employer fired him. Mr. Horn then had the bottle of Dixie X tested, which came back positive for THC.
Mr. Horn sued Medical Marijuana raising a civil RICO claim. As the Supreme Court explained, Mr. Horn “alleged that Medical Marijuana was a RICO ‘enterprise’ engaged in marketing, distributing, and selling Dixie X . . . [and] also asserted that Medical Marijuana’s false or misleading advertising satisfied the elements of mail and wire fraud and that those crimes constituted a ‘pattern of racketeering activity.’” Stated differently, Mr. Horn was alleging that he faced harm to his business and property (loss of his job) by reason of Medical Marijuana’s alleged RICO violations (mail and wire fraud).
Medical Marijuana, Inc. v. Horn – The Supreme Court’s Decision
After winding its way through the judicial system, the case ultimately ended up at the Supreme Court to address one question: “whether civil RICO bars recovery for all business or property harms that derive from a personal injury.” In a 5-4 decision, the Supreme Court held that “a plaintiff can seek damages for business or property loss regardless of whether the loss resulted from a personal injury.”
The Supreme Court reasoned that § 1964(c) requires a plaintiff prove that “his business or property has been harmed or damaged,” and nothing more. Even so, § 1964(c) “implicitly excludes recovery for harm to one’s person.” While an owner of a gas station that is beaten in a robbery cannot recovery under civil RICO for his pain and suffering, he can recover for the loss of business if his injuries force him to shut his doors. Nonetheless, a plaintiff can recover for damages for business or property losses resulting from a RICO violation, even if those damages resulted from a personal injury.
Based on this reasoning, the Supreme Court agreed with Mr. Horn and remanded the case to allow Mr. Horn to continue with his civil RICO claim against Medical Marijuana.
What This Means for Companies
With the Supreme Court’s holding in Medical Marijuana, Inc. v. Horn, plaintiffs can now attempt to reconstrue ordinary tort claims into civil RICO claims in an effort to recover automatic treble damages and attorney’s fees. Justice Kavanaugh’s dissent laid out this troubling new possibility in detail, explaining that “plaintiffs could easily plead everyday product liability claims as federal RICO claims, at least so long as there were two or more instances of fraud that a plaintiff could cast as a ‘pattern’ of racketeering activity.” Going further, he warned that under Mr. Horn’s view—which the Court did not explicitly reject—“plaintiff’s could routinely bring RICO claims for personal injuries from drug mislabeling, dangerous products, medical malpractice, car accidents, and health consequences from pollution, to name a few.”
For companies, this case represents an opportunity for plaintiffs and (more accurately) plaintiff’s counsel to file civil RICO actions in run-of-the-mill personal injury cases. Because the Supreme Court left open the question of whether civil RICO plaintiffs can claim lost wages and medical expenses as business or property injuries, plaintiffs can attempt to triple their medical expenses and lost wage damages resulting from a personal injury by filing a civil RICO claim—creating a real concern for businesses that these novel civil RICO claim increase litigation exposure in personal injury cases.
Justice Kavanaugh aptly noted the concerns for businesses under this new reality: “American businesses facing novel RICO suits with treble damages would incur significantly increased litigation exposure and corresponding settlement pressure. Their insurance premiums would rise. And all of those costs would mean higher prices for consumers, and fewer jobs and lower wages for workers.”
These novel civil RICO actions also present difficulties to many traditional personal-injury counsel that are not well-versed in the nuances and intricacies of defending against RICO violations. As a result, many companies may have to retain counsel to defend against the personal-injury aspects of the claim and counsel to defend against the RICO violation allegations, as well as appellate counsel to challenge any adverse rulings.
