Douglas Horn worked as a commercial truck driver for 14 years. He suffered debilitating pain after a serious accident. Horn came across an ad for a new “CBD-rich medicine” called “Dixie X” that claimed to have no THC, the psychoactive ingredient in marijuana.
Horn did extensive research to ensure the product was THC-free. This included watching YouTube reviews, visiting the manufacturer’s website, and calling the company. Reassured, Horn tried the product in 2012.
Weeks later, Horn failed a drug test at work. He was subsequently fired from his job. Horn purchased another bottle of Dixie X and had it independently tested.
The test confirmed the presence of THC, despite the product being advertised as THC-free. In 2015, Horn sued Medical Marijuana Inc. and other companies involved in distributing Dixie X.
He filed the lawsuit in the Western District of New York. Horn alleged that the companies violated the Controlled Substances Act and engaged in mail and wire fraud. A key question in Horn’s lawsuit is whether he has standing to sue under the RICO Act.
Supreme Court weighs RICO standing
The Racketeer Influenced and Corrupt Organizations (RICO) Act allows civil lawsuits for business or property harms. It also allows plaintiffs to collect triple damages.
A federal district court initially ruled against Horn. However, the New York-based 2nd US Circuit Court of Appeals later allowed his suit to move forward. The companies appealed this ruling to the Supreme Court.
On Tuesday, the Supreme Court heard oral arguments in the case, now known as Medical Marijuana, Inc. v. Horn. The justices appeared sharply divided on the central issue.
This issue is whether Horn’s job loss constitutes an injury to his “business or property” under the RICO Act. Some of the court’s liberal justices, especially Justice Elena Kagan, seemed sympathetic to Horn’s argument. “If you’re harmed when you lose a job, then you’ve been injured in your business, haven’t you?” Kagan asked the companies’ lawyer.
However, some conservative justices expressed concerns about dramatically expanding civil RICO lawsuits. Justice Brett Kavanaugh described Horn’s position as a “dramatic, really radical shift in how tort shifts are brought throughout the United States.”
The Supreme Court’s decision in the case is expected next year. If the court sides with Horn, the case will return to the lower courts for further proceedings.
Ultimately, the ruling could have major implications for the ability of individuals to seek damages under RICO for economic harms resulting from personal injuries.
