Several U.S. Supreme Court justices seemed sympathetic during Oct. 15 oral argument to a truck driver who was fired after failing a drug test following consumption of a product marketed as drug-free.
Respondent Douglas Horn was let go from his job as a commercial truck driver because he tested positive for tetrahydrocannabinol (THC)—the psychoactive compound in marijuana that produces a high—after consuming a hemp-based product that was advertised as THC-free. The hemp plant is a relative of marijuana.
Horn said he unknowingly consumed THC when he used the “Dixie X” pain-alleviation elixir from petitioner Medical Marijuana Inc. He also said he had never used marijuana or any THC-based products.
Horn sued in federal court in New York in 2015, claiming injury under the Racketeer Influence and Corrupt Organizations (RICO) Act. He alleged that other companies in the product’s supply chain violated the Controlled Substances Act and committed mail and wire fraud.
The RICO Act targets organized criminal activity. The law imposes criminal penalties and creates civil causes of action for activities done as part of an organized criminal enterprise. RICO’s civil provisions allow a private individual claiming injury to recover triple damages.
If Horn wins at the Supreme Court, his case will likely be sent back to the lower courts for further proceedings, with the eventual outcome remaining uncertain.
The legal issue is whether Horn may sue the product’s manufacturers under RICO. He has to show that he was injured in his “business or property,” but Justice Sonia Sotomayor said during oral arguments that “there’s a whole lot more to RICO than simply damages,” as many other conditions have to be met.
A federal district court found in January 2022 that Horn lacked RICO standing because he litigated over economic injuries from loss of earnings related to being exposed to THC. Standing refers to the right of someone to sue in court. The parties must show a strong enough connection to the claim to justify their participation in a lawsuit.
The U.S. Court of Appeals for the Second Circuit reversed the decision in August 2023, finding that even though RICO allows lawsuits only by a plaintiff “injured in his business or property” by racketeering activity, an economic injury resulting from a personal injury was enough to bring a case under the RICO statute.
“Because the term ‘business’ encompasses ‘employment,’ Horn has suffered an injury ‘in his business,’ as contemplated by the RICO statute,” a three-judge panel of the Second Circuit ruled. Being fired cost the driver “current and future wages and his insurance and pension benefits—all of which were tied to his employment.”
Medical Marijuana argues that interpreting the RICO statute as broadly as Horn urges would open the floodgates to a wave of new RICO lawsuits.
Company attorney Lisa Blatt told the justices that any injury that Horn may have experienced was “unwanted ingestion of THC,” and that as a result, his lawsuit was limited to “a personal injury claim outside civil RICO.”
To Justice Ketanji Brown Jackson, the case seemed clear-cut.
Horn “relied” on the claim that the elixir was THC-free “and he got fired as a result,” she told Blatt.
Blatt said Horn’s RICO claim isn’t “covered by this case because there’s no personal injury.” At most, if Horn was injured by the product “he’s entitled to three times his purchase price.”
According to Supreme Court precedents, Horn can’t win because “there has to be a direct relationship between the conduct that was done to the plaintiff and the loss claim,” the attorney said.
The other side’s argument that “all personal injuries are recoverable under RICO ... is an absurd ... proposition” that cannot have been intended by Congress, she said.
“We all take products that can be mislabeled. We take them and we either get sick or we don’t,” Blatt said.
Jackson said Horn wasn’t claiming that the product made him sick or that “he was personally injured. He didn’t even know that he had ingested THC until the testing and firing,” the justice said.
Justice Elena Kagan said, “If you’re harmed when you lose a job, then you’ve been injured in your business.”
Horn’s attorney Easha Anand told the justices that if her client wins at the Supreme Court, “we recognize we have a heavy burden” when the case returns to the lower courts, “but that’s not the argument before you.”
“Here, we’re trying to redress the loss of income from being fired,” she said.
But Medical Marijuana was not the one that fired Horn, Justice Clarence Thomas said.
Justice Brett Kavanaugh asked Anand if she agreed that RICO “excludes damages for personal injuries,” to which Anand replied “yes.”
The justice asked, what’s stopping a plaintiff from getting around that limitation by “characterizing the lost wages or medical expenses as separate injuries to your business or property?”
The Supreme Court is expected to hand down its decision by June 2025.
