The Supreme Court ruled on Wednesday that a truck driver fired for failing a drug test after using a product which was falsely advertised to be free of THC may sue the manufacturer under a federal racketeering law.
In a 5-to-4 decision, written by Justice Amy Coney Barrett, the court sided with Douglas Horn, the driver, in a decision that could make it easier for people to sue companies under a federal racketeering statute that was originally aimed at fighting organized crime.
Justice Barrett wrote that the product’s manufacturer, a company called Medical Marijuana Inc., was fighting a battle with that plain language of the racketeering law.
“That is a battle it cannot win,” she wrote.
The case turned on a narrow question: whether Mr. Horn, could satisfy a requirement imposed by the law, the Racketeer Influenced and Corrupt Organizations Act, or RICO, to show that he had been injured in his “business or property.”
Justice Barrett was joined in the majority with the court’s three liberal justices, along with Justice Neil M. Gorsuch. Justice Clarence Thomas filed a dissent, as did Justice Brett M. Kavanaugh who was joined by Chief Justice John G. Roberts Jr. and Justice Samuel A. Alito Jr.
The case, Medical Marijuana Inc. v. Horn, No. 23-365, started after Mr. Horn, who suffered from accident-related chronic pain, came across an article in High Times, a magazine that covers the business and culture of marijuana, concerning a product called Dixie X. The article said it was rich in CBD, a component of hemp that does not produce the high associated with marijuana, but contained “0 percent THC,” the psychoactive ingredient in cannabis.
After using Dixie X, which the manufacturer has called a wellness product, Mr. Horn failed a drug test and was fired. Suspecting that the product was to blame, he bought another bottle and had it tested. The testing company found that it contained THC and refused to mail it back to Mr. Horn, fearing penalties under federal drug laws.
Mr. Horn sued under RICO, a law that was initially aimed at organized crime and allows an award of triple damages to plaintiffs who can show, among many other things, that the defendants’ racketeering activity injured them in their “business or property.” That phrase, the Supreme Court has previously said, excludes suits for personal injuries.
Mr. Horn said three defendants — Medical Marijuana Inc., Dixie Holdings and Red Dice Holdings — had engaged in a pattern of racketeering carried on through an enterprise that included mail and wire fraud.
A federal trial judge dismissed the suit, saying that Mr. Horn’s injury was personal. The U.S. Court of Appeals for the Second Circuit disagreed, saying that “the phrase ‘business or property’ focuses on the nature of the harm, not the source of the harm.”
