Seachange Or Ripplewave? U.S. Supreme Court's Personal Injury RICO Ruling

On April 2, 2025, the U.S. Supreme Court ruled in a 5-4 decision that although the Racketeer Influenced and Corruption Organizations Act (RICO) does not permit recovery for personal injuries, it does permit claims for business or property loss resulting from personal injuries. Medical Marijuana Inc., et al. v. Horn. The Court's interpretation of section 1964(c) purports to resolve a circuit split over this question and could significantly broaden the scope of damages available under RICO. As highlighted by the dissent, the decision provides an avenue for plaintiff's lawyers to convert garden variety state tort claims into federal RICO claims where treble damages are available. That said, the majority leaves open several key questions that may serve as significant limiting factors. In addition, the demanding elements of a RICO claim, including the requirement of a pattern of racketeering activity and proximate cause, could act as constraints on future claims. Time will tell whether plaintiffs' lawyers take advantage of this decision to expand RICO lawsuits and seek out treble damages for the "business or property" portion of any damages flowing from personal injuries. If they do, there could be a significant uptick in RICO lawsuits, especially in the mass tort context where commonly asserted damages such as lost wages and medical expenses could be construed as injuries to "business or property."

In Medical Marijuana Inc., plaintiff Douglas Horn tested positive for tetrahydrocannabinol (THC) after consuming defendants' cannabidiol (CBD) products to treat his back and shoulder pain. After refusing to engage in a substance abuse program, Horn was fired from his trucking job. Mr. Horn argued that defendants falsely marketed their CBD product as containing "0% THC" and that this fraud constituted a "pattern of racketeering activity" which led to his job loss. Horn sought to recover his lost wages under RICO.

Justice Barrett, writing for the majority and joined by Justices Sotomayor, Kagan, Gorsuch, and Jackson, noted that section 1964(c) provides that "[a]ny person injured in his business or property by reason of a violation of [RICO] may sue ...." The Court found that the ordinary meaning of "injured" is "hurt, damaged, or wounded" and it observed that personal injuries can, in some instances, lead to damages to "business or property." While conceding that RICO generally excludes claims for personal injuries, the Court concluded that the "business or property" requirement "operates with respect to the kinds of harm for which the plaintiff can recover, not the cause of the harm for which he seeks relief." The Court gave an example to illustrate:

[I]f the owner of a gas station is beaten in a robbery, he cannot recover for his pain and suffering. But if his injuries force him to shut his doors, he can recover for the loss of his business.

Thus, even though Mr. Horn's underlying claim was based on a purported personal injury (unwanted ingestion of THC), the loss of his job could qualify as an injury to his business.

The majority rejected arguments that it should transplant antitrust precedent onto RICO claims. Modern antitrust law does not permit damages deriving from personal injuries and has limited recovery under the Clayton Act to "a particular kind of injury — namely, an 'injury of the type the antitrust laws were intended to prevent.'" But, the Court rejected the notion that RICO should be similarly limited to unique "racketeering injuries." Under the plain language of 1964(c), all that is needed is business or property "harm" resulting from the predicate acts, there is no extra requirement of some additional "racketeering injury."

The majority left certain key questions unanswered and also downplayed the seemingly broad implications of its decision by pointing out several factors that should limit RICO claims in the future. As an initial matter, the Court did not decide whether Mr. Horn had actually suffered any personal injury at all by consuming unwanted THC. Although Mr. Horn had not alleged any bodily damage from the THC (indeed, he did not even know he had consumed it until the blood test returned positive), the District Court below concluded there was a personal injury and neither party raised that issue on appeal.

The Court also pointed to RICO's direct-relationship requirement as a way to mitigate potential far-reaching consequences of its decision, providing an antidote to Justice Kavanaugh's dissent which predicts that the majority decision will spawn a torrent of federalized tort claims. The "by reason of" language in section 1964(c) requires a direct relation between the injury asserted and the alleged injurious conduct. Given the multi-step chain of causation in Horn's theory of his case (that a misrepresentation about THC content ultimately resulted in his job loss) the Court noted that "this requirement may present an insurmountable obstacle in his case."

Then, there is also RICO's requirement that plaintiff establish a "pattern" of racketeering activity. A single tort is not enough; there must be two or more predicate acts within a single scheme. This means that one-off slip and fall cases will not be sufficient to state a RICO claim.

Finally, the Court noted that "business or property" does not necessarily encompass all monetary harms — it did not express any view on whether lost wages would qualify as an injury to "business," nor did it decide whether medical expenses are an injury to "property." Those questions were expressly left for another day.

The Court limited its decision solely to the narrow issue of whether "injured in his business or property" precludes recovery for all economic harms that result from personal injuries. It does not. The exact contours of what that means will now play out in the lower courts and the decision will likely, as Justice Kavanaugh notes, leave "substantial confusion in its wake."