Supreme Court Expands RICO Reach: What It Means for Personal Injury Claims

The landscape of personal injury law has been significantly altered by a recent Supreme Court decision. In a landmark ruling, the Court has expanded the reach of the Racketeer Influenced and Corrupt Organizations Act (RICO) to include certain personal injury claims, potentially opening new avenues for plaintiffs seeking compensation. This decision, Medical Marijuana, Inc. v. Horn, could have far-reaching implications for both plaintiffs and defendants in personal injury litigation.

Understanding RICO and Its Traditional Scope

Enacted in 1970, RICO was initially designed to combat organized crime by targeting racketeering activities. The Act provides both criminal penalties and a civil cause of action for individuals or entities injured by such activities. To establish a civil RICO claim, a plaintiff must demonstrate a violation of RICO, injury to their business or property, and a direct causal link between the violation and the injury.

Traditionally, RICO claims have been limited to injuries to “business or property,” excluding personal injuries. This limitation stemmed from the Act’s focus on economic harms caused by organized crime. However, recent court decisions have begun to challenge this strict interpretation, leading to a circuit split regarding whether economic harms arising from personal injuries could be recoverable under RICO.

The Medical Marijuana, Inc. v. Horn Decision: A Game Changer

The Supreme Court’s decision in Medical Marijuana, Inc. v. Horn, No. 23-365, resolves this circuit split and clarifies the scope of civil RICO claims in the context of personal injuries. In a 5-4 decision on April 2, 2025, the Court held that damages can be available under civil RICO for harm to business or property by reason of a racketeering activity, even when such harm stems from a personal injury. The Court stated that “a plaintiff can seek damages for business or property loss regardless of whether the loss resulted from a personal injury.”

The case involved Douglas Horn, a commercial truck driver who was fired after failing a drug test. Horn had ingested a hemp-derived CBD product marketed as containing no THC (the psychoactive compound in marijuana). He subsequently sued the manufacturers of the product under RICO, alleging that they engaged in mail and wire fraud that caused him to suffer injury to his business or property, namely, the loss of his job.

The district court initially ruled against Horn, concluding that he was seeking recovery for a personal injury (unwitting consumption of THC) and not an injury to “business or property.” However, the Second Circuit reversed, holding that Horn could recover under RICO because his lost employment constituted an injury to business, even if it flowed from a personal injury. The Supreme Court affirmed the Second Circuit’s decision.

Key Takeaways from the Supreme Court’s Ruling

Expansion of RICO’s Reach: The Court’s decision expands the types of civil actions that can be brought under RICO, asserting that claims stemming from personal injuries are redressable if they can be shown to have caused economic harm.
Focus on Economic Harm: The Court emphasized that the key inquiry is whether the plaintiff suffered an injury to their business or property, regardless of whether that injury was preceded by a personal injury.
Rejection of Strict Limitation: The Court rejected the argument that an injury to “business or property” must be entirely separate from any personal injury, thus opening the door for RICO claims in cases where economic harm arises from a personal injury.
Direct Relation Required: The Court cautioned that RICO requires a “direct” relation between the injury and the racketeering conduct, meaning that foreseeability is not enough.
Pattern of Racketeering Activity: The Court also pointed to the requirement of a “pattern” of racketeering activity, which may be an obstacle in some cases.

Implications for Personal Injury Claims

This ruling has several important implications for personal injury claims:

New Avenue for Recovery: Plaintiffs who have suffered economic harm as a result of a personal injury may now have an additional avenue for recovery under RICO. This could be particularly relevant in cases involving product liability, fraud, or other intentional misconduct.
Treble Damages and Attorney’s Fees: RICO allows for the recovery of treble damages (three times the actual damages) and attorney’s fees, which can significantly increase the potential value of a claim.
Increased Complexity: The decision may lead to more complex litigation, as plaintiffs attempt to fit their claims within the framework of RICO.
Potential for Abuse: There is a concern that the expanded reach of RICO could be exploited by plaintiffs seeking to inflate their claims or harass defendants.
Impact on Insurance: Insurers are likely to scrutinize personal injury claims more closely, looking for evidence of fraud or racketeering activity.

Examples of Personal Injury Claims That Might Now Fall Under RICO

Product Liability: If a defective product causes a personal injury that leads to lost wages or business opportunities, the injured party might be able to bring a RICO claim against the manufacturer if they can demonstrate a pattern of racketeering activity, such as concealing the product’s defects through mail and wire fraud.
Fraudulent Schemes: If a person is injured in an accident that was intentionally staged as part of a larger fraudulent scheme, they might be able to bring a RICO claim against the individuals involved in the scheme.
Medical Malpractice: If a medical provider engages in fraudulent billing practices or unnecessary treatments that result in a personal injury and economic harm, the injured party might be able to bring a RICO claim.

Navigating the New Legal Landscape

The Supreme Court’s decision in Medical Marijuana, Inc. v. Horn has created a new legal landscape for personal injury claims. Plaintiffs and defendants alike need to understand the implications of this ruling and how it may affect their rights and obligations.

For plaintiffs, this decision may open new doors to recovery, but it also requires a careful analysis of the facts and the law to determine whether a RICO claim is viable. It is essential to work with an experienced attorney who understands the complexities of RICO litigation.

For defendants, this decision may increase the risk of exposure to RICO claims, particularly in cases involving product liability or allegations of fraud. It is crucial to review business practices and ensure compliance with all applicable laws and regulations.

Need Assistance?

If you have suffered a personal injury that has resulted in economic harm, it is important to seek legal advice to determine whether you may have a claim under RICO. Contact our firm today for a consultation. We can help you understand your rights and explore your options for recovery.