In Medical Marijuana, Inc. v. Horn, No. 23-365 (Apr. 2, 2025), the U.S. Supreme Court held that a plaintiff could seek treble damages for business or property loss—even if the loss resulted from a personal injury—in a civil Racketeer Influenced and Corrupt Organizations Act (RICO) claim under 18 U.S.C. § 1964(c), which permitted a cause of action for “[a]ny person injured in his business or property” by reason of a criminal RICO violation.
In that case, the plaintiff—a commercial truck driver—sought relief from chronic pain that he sustained from a motor-vehicle accident by purchasing and taking Dixie X, a non-psychoactive cannabidiol (CBD) tincture produced by the defendant. Despite being informed by the defendant that its tinctures were free of tetrahydrocannabinol (THC), THC was detected in the plaintiff’s body after his employer selected him for a random drug screening.
After the plaintiff’s employer terminated his employment because he refused to complete a substance-abuse program on the grounds that it could be inferred as an admission to his drug use, and a third-party laboratory test initiated by the plaintiff detected THC in the product, the plaintiff brought a civil RICO claim against the defendant, alleging that it engaged in mail and wire fraud and that, as a result, he suffered a business or property injury in the form of lost employment under 18 U.S.C. § 1961(1) and (5), and 18 U.S.C. § 1964(c). The district court granted summary judgment for the defendant, finding that the plaintiff’s lost employment “flow[ed] from, and [was] derivative of, a personal injury he suffered” when he consumed the THC, and that 18 U.S.C. § 1964(c) offered no path to relief. Adopting a broad definition of the term “business,” the Second Circuit reversed, concluding that the plaintiff had been “injured in his business” when he lost his job, and thus rejected the “antecedent-personal-injury bar” rule that had been adopted by several circuits and prevented the recovery of business and property losses stemming from a personal injury. The U.S. Supreme Court granted certiorari to resolve the circuit split regarding this rule.
Associate Justice Amy Coney Barrett delivered the opinion of the Court, affirming the judgment of the Second Circuit and remanding for further proceedings, holding that the phrase “injured in his business or property” in the statute did not preclude the recovery of treble damages for all economic harms that resulted from personal injuries. The Court rejected the defendant’s term-of-art argument that “injury” under the RICO statute meant the “invasion of a legal right,” as defined by Restatement of the Law Second, Torts § 7, rather than its ordinary meaning of “harm” or “damage.” The Court pointed out that the specialized definition set forth in § 7 was not exclusive, and the context in this case cut decisively in favor of the ordinary meaning of “injury.” The Court further explained that the defendant’s argument stood in significant tension with case law that rejected the application of common-law principles, such as Restatement of the Law Second, Conflict of Laws § 377, to 18 U.S.C. § 1964(c) when those principles were not germane to the RICO statute and could generate results “far afield” from any reasonable interpretation of it.
In a dissenting opinion, Associate Justice Brett M. Kavanaugh agreed with the defendant that the term “injured” was a tort-law term of art and should be given its established common-law meaning under Restatement of the Law Second, Torts § 7. Thus, argued the dissent, “a plaintiff cannot circumvent RICO’s categorial exclusion of personal-injury suits simply by alleging that a personal injury resulted in losses of business or property, thereby converting otherwise excluded personal-injury suits into business-or property-injury suits.” The dissent pointed out that the categories of injury in tort law—including “personal injury” as defined by Restatement of the Law Second, Torts § 924 and the Introductory Note to Chapter 2 of that Restatement; “property injury”; and “business injury” as described in Division 9 of the Restatement of the Law, Torts—were widely recognized and clearly distinguished by the courts. Furthermore, the dissent argued that the injuries under tort law were distinct from the losses or damages that resulted from an injury. For example, negligently driving a car into a pedestrian inflicted a personal injury on the pedestrian, while the resulting damages under Restatement of the Law Second, Torts §§ 910 and 912, such as lost wages, medical expenses, and pain and suffering, were merely losses that resulted from that personal injury and not themselves a separate business or property injury.
The dissent further distinguished the case law cited by the majority regarding the Restatement of the Law Second, Conflict of Laws, pointing out that the case law was better understood as applying the presumption against extraterritoriality in an 18 U.S.C. § 1964(c) claim rather than a specific rule from the Restatement of the Law, Conflict of Laws; nothing about the case, said the dissent, suggested the Court should not also apply its other rule that, when Congress created a federal tort, it adopted the background of general tort law.
Lastly, the dissent joined the majority in rejecting the “antecedent-personal-injury bar” rule and agreed that plaintiffs who suffered both a personal injury and a business or property injury could recover their business or property injuries under 18 U.S.C. § 1964(c) and would not be barred by the fact that they also suffered a personal injury, pointing out that the Court’s hypotheticals based on torts under Restatement of the Law Second, Torts §§ 13, 222, 766A, 766B, 766C, and 912, did not necessarily bar recovery when the plaintiff suffered multiple injuries.
Read the full opinion here.