Must We All Become RICO Attorneys?

Written by: Donald Patrick Eckler and Charlotte J. Meltzer, Freeman Mathis & Gary LLP, Chicago

On April 2, 2025, the United States Supreme Court expanded the scope of the Racketeer Influenced and Corrupt Organizations Act (“RICO”) in a move that may affect the practice of defense attorneys. In what should have arguably been a fraudulent inducement case, the Court instead held that plaintiffs may recover under RICO for harm to their business or property, even where that harm stems from a personal injury. This article discusses Medical Marijuana, Inc. et al. v. Horn, No. 145 S. Ct. 931(2025), its expansion of RICO, and its impact on defense litigation.

Background Facts: Termination of Douglas Horn

The plaintiff in Medical Marijuana, Douglas J. Horn, worked as a commercial truck driver. Med. Marijuana, Inc., 145 S. Ct. 931 (Apr. 2, 2025). In 2012, Horn was in an accident that resulted in shoulder and back injuries. Id. Although Horn tried physical therapy and traditional medicine for months, he experienced no relief from his pain. Id. Thus, Horn turned to “Dixie X,” a tincture sold by Medical Marijuana, Inc. (“Medical Marijuana”) which contained cannabidiol (CBD). Id. While CBD naturally occurs in the cannabis plant, it does not result in mind-altering effects like tetrahydrocannabinol (THC), another chemical compound in the cannabis plant, does. Id. at 936.

Horn’s employer conducted random drug screening tests of its drivers. Id. at 937. As such, Horn ensured he did not consume any product containing THC. Id. Dixie X, advertised as a “‘CBD-rich,” non-psychoactive medicine that is ‘0% THC,’” seemed to be a product that could alleviate Horn’s pain without impacting his employment. Med. Marijuana, Inc., 145 S. Ct. at 937 (quoting Horn v. Med. Marijuana, Inc., No. 22-349-cv, 2023 WL 5339572, at *1 (2d Cir. Aug. 21, 2023)). Medical Marijuana even expressly advertised Dixie X as legal in the United States. Med. Marijuana, Inc., 145 S. Ct. at 937. Horn began taking Dixie X. Id. However, when his employer selected him for a random drug screening a few weeks later, Horn was shocked to learn the test detected THC in his system. Id. His employer requested that he undergo a substance-abuse program, but Horn refused, believing participation in the program would constitute an admission to doing drugs. Id. His employer, in turn, fired him. Id.

Complaint and Proceedings before District Court

Horn brought suit against Medical Marijuana, bringing a host of claims alleging: (1) deceptive business practices and false advertising; (2) fraudulent inducement; (3) RICO violations; (4) strict products liability; (5) breach of contract; (6) breach of express warranty; (7) unjust enrichment; (8) negligence; and (9) negligent infliction of emotional distress. Horn et al. v. Med. Marijuana, Inc. et al., 383 F. Supp. 3d 114, 121 (W.D.N.Y. 2019). This article only discusses the merits of the RICO claim, however, as that claim is the focus of the Supreme Court’s analysis.

Horn relied upon 18 U.S.C. § 1962(c) for his RICO claim, a provision that “makes it unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise’s affairs through a pattern of racketeering activity.” Id. at 131 (quoting Ferri v. Berkowitz, 678 F. Supp. 2d 66, 72-73 (E.D.N.Y. 2009)). RICO defines “racketeering activity,” in part, as any offense involving “the felonious manufacture, importation, receiving, concealment, buying, selling, or otherwise dealing in a controlled substance . . . punishable under any law of the United States.” 18 U.S.C. § 1961(1)(D). As a controlled substance under the Controlled Substance Act (CSA) (21 U.S. C. § 802(16)), “cultivating marijuana for sale . . . is by definition racketeering activity.” Safe Sts. All. v. Hickenlooper, 859 F. 3d 865, 882 (10th Cir. 2017) (citing 18 U.S.C. § 1961(1)(D)). To establish a civil RICO claim, “a plaintiff must allege (1) conduct, (2) of an enterprise, (3) through a pattern (4) of racketeering activity, as well as injury to business or property as a result of the RICO violation.” Horn, 383 F. Supp. 3d at 131 (emphasis added) (quoting Flexborrow LLC v. TD Auto Fin. LLC, 255 F. Supp. 3d 406, 414 (E.D.N.Y. 2017).

The District Court held Horn provided sufficient evidence to prove racketeering activity by Medical Marijuana: Horn’s purchase of two bottles of Dixie X, a controlled substance that, in 2012, squarely fell within the definition of “marijuana” under the CSA. Horn, 383 F. Supp. 3d at 132. However, the District Court granted summary judgment to Medical Marijuana on the RICO claim, finding Horn failed to prove a necessary element of RICO: Horn had to “establish that the RICO offense was the ‘proximate cause’ of [his] injuries” to his business or property. Id. at 133 (quoting Empire Merchs., LLC v. Reliable Churchill LLLP, 902 F.3d 132, 141 (2d Cir. 2018)).

Historically, plaintiffs cannot recover under RICO if they seek “to recover a loss that flows from, or is derivative of, a personal injury,” i.e., the antecedent-personal-injury bar. Horn, et al., v. Med. Marijuana, Inc. et al., 15-CV-701, 2021 WL 4173195, at *3 (W.D.N.Y. Sept. 14, 2021) (citing Jackson v. Sedgwick Claims Mgmt. Servs., Inc., 731 F. 3d 556, 565-66 (6th Cir. 2013)). Accordingly, the District Court barred Horn’s RICO claim, as “what connects defendants’ fraudulent scheme to plaintiff’s loss of employment and earnings is a personal injury: the bodily invasion that plaintiff suffered when he unwittingly ingested THC.” Horn, et al., v. Med. Marijuana, Inc. et al., 15-CV-701, 2021 WL 4173195, at *3.

Holding of the Second Circuit

The Second Circuit, unpersuaded by the antecedent-personal-injury bar, reversed. Indeed, “‘[w]hile it seems undisputed that RICO liability will not attach where the injuries alleged are personal ones, there is no textual reason to extend that bar’ to an injury to business or property ‘for which a personal injury was a necessary precursor.’” Horn v. Med. Marijuana, Inc., No. 22-349-cv, 2023 WL 5339572, at *5 (2d Cir. Aug. 21, 2023) (quoting Jackson, 731 F. 3d at 571-72 (Clay, J., concurring)). The Second Circuit emphasized that Horn sought no damages for personal injury; rather, he only sought damages stemming from his employment termination. Id. at *8. RICO expressly permits recovery for “[a]ny person injured in his business or property by reason of a violation of section 1962,” the section providing prohibited activities. 18 U.S.C. § 1964(c). The Second Circuit thus held:

[T]here is no ‘misuse’ of RICO when a victim sues a criminal enterprise for violence inflicted upon him that results in injury in his business or property, and thus no reason to be dismayed by the number of claims that may be filed alleging such injury. Such suits . . . are core applications of RICO.

Horn, 2023 WL 5339572, at *8. In so holding, the Second Circuit joined the Ninth in rejecting the antecedent-personal-injury bar, contrary to holdings by the Sixth, Seventh, and Eleventh Circuits. Med. Marijuana, Inc. et al. v. Horn, No. 23-365, slip op. at 4 (U.S. Apr. 2, 2025).

SCOTUS Decision: Barring the Antecedent-Personal-Injury Bar

Supreme Court granted certiorari to addresses whether civil RICO bars recovery for all business or property harms that derive from a personal jury.

Justice Barrett, authoring the opinion for the court, interpreted RICO plainly: “[a] plaintiff has been ‘injured in his business or property’ if his business or property has been harmed of damaged. Section 1964(c) requires nothing more.” Med. Marijuana, Inc., 145 S.Ct. at 939 (Apr. 2, 2025) (quoting 18 U.S.C. § 1964(c)). Indeed, RICO’s “‘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.” Id. In other words, a plaintiff may recover under RICO if they experience harm to their business or property regardless of the cause of the harm, but a plaintiff may not recover under RICO absent a harm to their business or property. In reaching this holding, Justice Barrett relied in part upon a 2023 decision in which the Supreme Court “adopted a contextual, fact-intensive inquiry that accounts for ‘the nature of the alleged injury, the racketeering activity and directly caused it, and the injurious aims and effects of that activity.’” Id. at 935 (quoting Yegiazaryan v. Smagin, 599 U.S. 533, 544 (2023)).

Medical Marijuana chiefly argued that “injury” in RICO’s business or property requirement means “invasion of a legal right,” thus barring RICO claims stemming from personal injuries. Med. Marijuana, Inc., 145 S.Ct. at 939. The Court was unpersuaded by Medical Marijuana’s arguments, noted that “[w]hen all is said and done, Medical Marijuana is left fighting the most natural interpretation of the text—that ‘injured’ means ‘harmed’—with no plausible alternative in hand. That is a battle it cannot win.” Id. at 945. Although Medical Marijuana’s statutory interpretation was unconvincing, the Court appeared nearly persuaded by its arguments concerning the implications of extending RICO to cover Horn’s claim.

Medical Marijuana, as well as Justice Kavanaugh’s dissent, argued that this outcome will result in plaintiffs characterizing any economic harm flowing from a personal injury as a harm to their business or property: “plaintiffs can easily transform garden-variety personal-injury claims into RICO suits for treble damages.” Id. To quell these concerns, Justice Barrett clarifies § 1964(c) demands a “direct relation between the injury asserted and the injurious conduct alleged.” Id. (quoting Holmes v. Sec. Inv. Prot. Corp., 503 U.S. 258, 268 (1992)). Thus, to succeed on a RICO claim stemming from a personal injury, a plaintiff must (1) establish a pattern of racketeering activity; (2) prove a direct relationship between the injury and the racketeering activity; and (3) demonstrate harm to business or property. Id. at 945-946. The demonstrated harm “may not include every aspect of employment” and “may not include every penny in the plaintiff’s pocketbook.” Id at 946.

Accordingly, the Supreme Court affirmed the Second Circuit’s judgment—thereby rejecting the antecedent-personal-injury bar and remanded Horn’s case. In so holding, the majority remarked on the “distance between the first link in the chain (Medical Marijuana’s misrepresentations) and the last (Horn’s job loss)” and opined the direct relationship requirement set by its opinion “may present an insurmountable obstacle in this case.” Id. at 945. Justice Jackson concurred. Med. Marijuana, Inc., 145 S.Ct. at 945 (Jackson, J., concurring).

The Principal Dissent

The dissent by Justice Kavanaugh, joined by Chief Justice Roberts and Justice Alito, raised the question likely foremost in the minds of defense attorneys: do “business or property losses from a personal injury transform a traditional personal-injury suit into a business-injury or property-injury suit that can be brought in federal court for treble damages under RICO”? Id. at 952 (Kavanaugh, J., dissenting). While the majority, in essence, argued the answer in the affirmative, Justice Kavanaugh disagreed, siding with Medical Marijuana, as well as the Sixth, Seventh, and Eleventh Circuits. Id. at 953. “As the Eleventh Circuit rightly said, if ‘Congress intended to create a federal treble damages remedy for cases involving bodily injury, injury to reputation, mental or emotional anguish, or the like, all of which will cause some financial loss, it could have enacted a statute referring to injury generally, without any restrictive language.’ Congress did not enact such a statute.” Id. (citation omitted) (quoting Grogan v. Platt, 835 F. 2d 844, 847 (11th Cir. 1988)).

The majority’s holding, according to Justice Kavanaugh, “leaves substantial confusion in its wake.” Med. Marijuana, Inc., 145 S.Ct. at 953. Thus, he would have instead “heed[ed] the text of the statute, recognize[d] that the term ‘injured’ in RICO is a longstanding tort-law term of art, and [kept] things relatively simple: RICO excludes suits for personal injuries, regardless of what losses or damages ensure from those personal injuries.” Id.

First, Justice Kavanaugh argued the term “injured” in RICO must be given its established common-law meaning, which, for tort-law purposes, is “the invasion of any legally protected interested of another.” Id. at 952 (quoting Restatement (Second) of Torts § 7(1) (AM. L. INST. 1965)). Accepting this definition indicates Congress’s intent to limit RICO’s scope to business and property injuries. See Med. Marijuana, Inc., 145 S.Ct. at 952-953. By way of example, “when a victim suffers only a personal injury (such as from a car accident or defective product), his lost wages and medical expenses are merely the losses or damages that result from that personal injury, not themselves a separate business or property injury—that is, not a distinct infringement of a legal right in one’s business or property.” Id. at 952.

Judge Kavanaugh then argued that the federalism canon requires courts to respect the federal-state balance in the absence of express language from Congress. Id. at 958. Unlike Justice Barrett, who believed Congress must correct or otherwise revise RICO to evade the majority’s holding, Justice Kavanaugh argues its traditional interpretation must not be disturbed without direction from Congress. Compare id. at 946 (majority opinion), with id. at 953-954 (Kavanaugh, J., dissenting).

Notably, Justice Kavanaugh made “crystal clear” he did not adopt the antecedent-personal-injury bar, nor did he believe that a plaintiff is barred from recovering damages for a business or property injury where a plaintiff at some point suffered a personal injury. Id. at 964-965 (Kavanaugh, J., dissenting). “The correct rule therefore remains the one that civil RICO expressly provides: In a RICO suit, a plaintiff can recover ‘damages’ from a ‘business or property’ injury, but not damages from a personal injury.” Med. Marijuana, Inc., 145 S.Ct. at 964.

The majority’s holding effectively invites personal-injury lawsuits seeking treble damages into federal court, allowing plaintiffs to bypass state-law limits. See id. at 945. Indeed, “[i]n Horn’s world, plaintiffs could routinely bring RICO claims for personal injuries from drug mislabeling, dangerous products, medical malpractice, car accidents, and health consequences from pollution, to name a few.” Id. at 964. The majority does not clearly resolve whether lost wages and medical expenses qualify as injuries to business or property under civil RICO. See id. at 951. In the Court’s decision to permit RICO claims stemming from personal injury, the Court did not clarify RICO’s new scope, “a punt that will leave substantial confusion and litigation in its wake.” Id. at 966.

Ultimately, Judge Kavanaugh opined that the majority “charts an unusual middle way,” as it “neither fully agrees with plaintiff Horn and the Second Circuit, nor fully agrees with defendant Medical Marijuana and the Sixth, Seventh, and Eleventh Circuits.” Id. at 953.

Justice Thomas’ Dissent

Justice Thomas primarily takes issue with the grant of certiorari, opining that “this case has proved ill-suited for deciding the question presented” given that the parties first argued over whether Horn suffered a personal injury at all. Id. at 946 (Thomas, J., dissenting). As such, rather than opining on “ancillary issues,” Justice Thomas would have instead dismissed the writ of certiorari as improvidently granted. Med. Marijuana, Inc., 145 S.Ct. at 946.

Justice Thomas grounds his dissent in the fact that Medical Marijuana initially moved for summary judgment based on Horn’s alleged failure to prove that he suffered any bodily injury from ingesting Dixie X. See id. at 947. Medical Marijuana did not argue that Horn’s civil RICO claim failed as a matter of law—on the grounds that it was based on a personal injury rather than solely a business injury—until the eve of trial. Id.. The District Court adopted Medical Marijuana’s newly raised theory, and both the Second Circuit and the majority opinion focused solely on whether Horn’s RICO claim was barred because his loss of employment stemmed from a personal injury—without addressing whether Horn had, in fact, suffered a personal injury at all. See id. at 947-948. Justice Thomas, personally, “would not decide whether losses flowing from personal injuries to business or property in a case where no one knows whether the plaintiff suffered a personal injury in the first place.” Id. He contrasted Horn’s facts with a hypothetical case “in which racketeering activity inflicts a classic personal injury—such as a broken arm—and as a result, the plaintiff suffers economic loss in the form of medical expenses,” a case that would be more apt for the majority’s analysis. Id. at 949.

Further, Justice Thomas took issue with both the majority’s and the parties’ failure to definitively define “injured in his business or property.” Med. Marijuana, Inc., 145 S.Ct. at 948. (quoting 18 U.S.C. § 1964(c)). Justice Thomas does not dispute the majority’s conclusion that civil RICO does not categorically bar recovery for all economic harms resulting from personal injuries; rather, he takes issue with the majority’s holding in the absence of clear interpretations of key terms within the statute. Id. at 948-952.

A Whole New RICO?

To many, RICO appears entirely out of place in the context of Horn’s injury. On its face, Horn’s claim likely should have been primarily a fraudulent inducement claim brought squarely in state court. Despite RICO seeming unfit for Horn’s injury, an examination of records from the House of Representatives and the Senate indicates “the legislative history of civil RICO from both chambers is largely silent regarding the purpose of § 1964(c).” Patrick Wackerly, Personal Versus Property Harm and Civil Standing, 73 U. CHI. L. REV. 1513, 1525 (2006). As such, as Justice Barrett notes, “civil RICO has undeniably evolved ‘into something quite different from the original conception of its enactors.’” Med. Marijuana, Inc., 145 S.Ct. at 936 (quoting Sedima, S.P.R.L. v. Imrex Co., 473 U.S. 479, 500 (1985)).

The majority held that “[a] plaintiff has been ‘injured in his business or property’ if his business or property has been harmed of damaged. Section 1964(c) requires nothing more.” Med. Marijuana, Inc., 145 S.Ct. at 935 (quoting 18 U.S.C. § 1964(c)). While its interpretation may lack clarity and direction in certain areas, it does establish certain guardrails to quell concerns raised by the dissents, particularly Justice Kavanaugh’s dissent. Notably, the direct-relationship requirement should dissuade the influx of new plaintiffs in federal courts that Justice Kavanaugh anticipates will follow this decision. In so holding, Justice Barrett establishes new precedent that is unlikely to significantly disrupt the status quo.

Nonetheless, Justice Kavanaugh is likely right in that, at the very least, the majority’s holding invites plaintiffs to file in district court and try to overcome the hurdles identified by majority in Part III of the opinion. “[P]laintiffs could routinely repackage many state personal-injury suits as RICO suits (so long as the defendant committed two or more predicate acts) and obtain treble recovery for medical expenses, lost wages, and other pecuniary losses.” Id. at 964 (Kavanaugh, J., dissenting). Justice Kavanaugh posits the majority’s holding “would likely produce significant cascading effects on the American economy and federal and state court systems.” Id. These alleged “significant cascading effects” may be overstated, however, as plaintiffs typically avoid federal courts when possible.

The majority’s decision arguably raises more questions than it answers. Acknowledging the nuances with the decision, Justice Barrett herself notes that “[i]f the breadth of the statute ‘leads to the undue proliferation of RICO suits, the “correction must lie with Congress.”’” Id. at 946 (majority opinion). Congress may choose to amend RICO, but until then, defense attorneys must be aware of Medical Marijuana v. Horn and the potential impact it may have on their practice. Very seldom do straight tort cases come from the Supreme Court, and Medical Marijuana v. Horn very well may require defense attorneys to expand their practices to include RICO. Given the potential for RICO claims to become more prevalent in cases traditionally considered tort actions, defense attorneys must stay vigilant and prepared for the broader implications Medical Marijuana v. Horn may have on future litigation.

About the Authors

Donald Patrick Eckler is a partner at Freeman Mathis & Gary LLP, handling a wide variety of civil disputes in state and federal courts across Illinois and Indiana. His practice has evolved from primarily representing insurers in coverage disputes to managing complex litigation in which he represents a wide range of professionals, businesses and tort defendants. In addition to representing doctors and lawyers, Mr. Eckler represents architects, engineers, appraisers, accountants, mortgage brokers, insurance brokers, surveyors and many other professionals in malpractice claims.

Charlotte J. Meltzer is an Associate at Freeman Mathis & Gary, LLP and is located in the Chicago office. She is part of the firm’s Tort & Catastrophic Loss and Insurance Coverage & Extra-Contractual Liability practice sections and is involved in the firm’s Products Liability and Mass Tort Litigation interdisciplinary teams. Ms. Meltzer regularly works on high-exposure cases and manages complex tort litigation, including toxic torts, premises liability, and product liability. Ms. Meltzer is admitted to practice in both Illinois and Wisconsin. She received her J.D. from the University of Wisconsin Law School and her B.A. from the University of Michigan.

About the IDC

The Illinois Defense Counsel (IDC) is the premier association of attorneys in Illinois who devote a substantial portion their practice to the representation of business, corporate, insurance, professional and other individual defendants in civil litigation. For more information on the IDC, visit us on the web at www.IDC.law or contact us at PO Box 588, Rochester, IL 62563-0588, 217-498-2649, 800-232-0169, admin@IDC.law.