The Supreme Court’s decision clarifies the civil damages provision of the Racketeer Influenced and Corrupt Organizations (RICO) Act.
On April 2, 2025, the Supreme Court issued a decision in Medical Marijuana, Inc. v. Horn, resolving a circuit split as to whether a plaintiff may recover damages under RICO for business or property harm that derives from a personal injury.
Factual Background
Douglas Horn purchased and consumed a product called “Dixie X” produced by Medical Marijuana, Inc. It was marketed as a non-psychoactive cannabidiol (CBD) tincture purportedly free of tetrahydrocannabinol (THC). However, a few weeks later, Horn tested positive for THC during a random drug screening at his workplace, and he was fired after refusing to participate in a substance abuse program.
Horn filed a lawsuit under the Racketeer Influenced and Corrupt Organizations Act (RICO), which creates a cause of action for “[a]ny person injured in his business or property.” 18 U.S.C. § 1964(c). He alleged that Medical Marijuana was a RICO “enterprise” engaged in marketing, distributing and selling Dixie X, as well as 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.”
Lower Court Proceedings
The District Court for the Western District of New York granted summary judgment to Medical Marijuana. That court determined that Horn’s lost employment flowed from a personal injury—the ingestion of Dixie X—and because RICO does not allow a plaintiff to recover for a personal injury, Horn could not recover for a business or property harm resulting from that personal injury.
The Second Circuit reversed the District Court’s decision. It first determined that Horn’s injury— lost employment—constituted an injury to his “business” because “business” under § 1964(c) includes “commercial or industrial establishment or enterprise,” as well as “an individual’s ‘employment.’” It then rejected the District Court’s conclusion that Horn could not recover for a business or property harm that flowed from an antecedent personal injury, holding that RICO does not exclude recovery for all business and property injuries that derive from a personal injury.
In so holding, the Second Circuit deepened a split among the circuits, aligning with the Ninth Circuit, which was previously split from the Sixth, Seventh and Eleventh Circuits. The Supreme Court thus granted certiorari.
Supreme Court Decision
The Court addressed the following limited question: “whether civil RICO bars recovery for all business or property harms that derive from a personal injury,” ultimately answering in the negative. The Court explicitly did not answer the following questions: (1) “whether Horn suffered an antecedent personal injury”; (2) whether the Second Circuit’s interpretation that “business” includes “employment” under § 1964(c) was correct; and (3) what it means for a plaintiff to be “injured in his … property” under § 1964(c).
The majority opinion, written by Justice Barrett, clarified that RICO’s civil provision does not require a plaintiff to show that their business or property loss was caused exclusively by a non-personal injury. Justice Barrett explained that the statute’s focus is on the kinds of harm that are recoverable—not the causes of that harm. Therefore, harms to business or property are recoverable, even if they are caused by personal injury.
The Court rejected Medical Marijuana’s argument that the term “injury” should be interpreted as a term of art, meaning the “invasion of a legal right.” Medical Marijuana argued on this basis that “injured in his business or property” should be interpreted to refer to a business or property tort. The majority explained that the term “injury” should be interpreted using its ordinary meaning—to mean “harm” or “damage”—and not as a term of art referring to a legal right. However, Medical Marijuana’s argument was accepted by three of the justices, who joined a dissent authored by Justice Kavanaugh.
The Court briefly addressed Medical Marijuana’s concern that the decision would “eviscerate RICO’s ‘business or property’ limitation” and “transform garden-variety personal-injury claims into RICO suits for treble damages.” The Court noted that there are other constraints on civil RICO claims. First, RICO has a direct-relationship requirement—the injury asserted must be directly related to the injurious conduct alleged. Second, a plaintiff must establish a pattern of racketeering activity to allege a RICO claim, which requires identifying two or more predicate crimes—harm resulting from a single tort is insufficient. Third, § 1964(c) is limited by the terms “business” and “property,” and thus not every monetary harm would necessarily implicate RICO. That said, the Court acknowledged that civil RICO has evolved but left it to Congress to address RICO’s potential overbreadth by amending the statutory language.
Legal Implications
This decision broadens the types of harms that can be addressed by civil RICO claims and thus allows for the more expansive use of RICO to address business and professional harms that derive from personal injury. Plaintiffs will likely attempt to use this decision to bring more RICO cases, a concern noted by both the majority and dissenting opinions and a furtherance of recent trends, with an almost 20% increase in RICO cases brought in the year ending March 31, 2024, compared to the previous year. RICO claims are attractive to potential plaintiffs in light of the potential for treble damages, as well as the “almost inevitable stigmatizing effect” of the “mere assertion of a RICO claim.” See Moss v. BMO Harris Bank, N.A., 258 F. Supp.3d 289, 297 (E.D.N.Y. 2017) (internal citations omitted).
That being said, the Court also highlighted three constraints on civil RICO causes of action, which should provide fertile grounds for defendants to file dispositive motions.
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