Supreme Court expands RICO liability to economic loss arising out of personal injury

On April 2, 2025, the Supreme Court issued a significant decision in Medical Marijuana v. Horn,¹ impacting civil claims under the Racketeer Influenced and Corrupt Organizations Act (RICO). In a 5 – 4 decision with concurring and dissenting opinions, the Court rejected an attempt to circumscribe the types of injuries that can support a private civil action under RICO.

RICO was famously (or infamously) designed to combat organized crime by providing severe criminal penalties and forfeiture provisions.² In the decades since its enactment, however, RICO’s civil provisions have become a popular vehicle for plaintiffs to turbocharge otherwise ordinary common law claims into treble-damages threats. In addition to criminal liability, the Act creates a private right of action, allowing “[a]ny person injured in his business or property by reason of a violation” of its substantive provision to recover treble damages and attorney’s fees.³ The central question in Horn was whether a plaintiff who suffered a personal injury that led to economic harm, or an injury to “business or property,” could recover under RICO. The Supreme Court held that he could.

In 2016, in addressing RICO’s extraterritorial application, the Supreme Court recognized a key limitation on civil RICO claims: it “excludes recovery for harm to one’s person.”⁴ Since then, appellate courts have disagreed on whether civil RICO also bars recovery for losses resulting from personal injury. The Second and Ninth Circuits held that, although RICO excludes recovery for personal injury, it allows recovery for “business or property” losses stemming from personal injury.⁵ The Sixth, Seventh and Eleventh Circuits disagreed, barring recovery for any losses flowing from personal injury.⁶

In Horn, the Supreme Court resolved this split, adopting the Second and Ninth Circuits’ more expansive interpretation. The case involved Douglas Horn, a truck driver who bought “Dixie X,” a CBD product advertised as “0% THC” by the defendants.⁷ After using the product, Horn failed a workplace drug test and was subsequently fired. Horn alleged that, confirmed by later testing and contrary to the advertising, the product contained THC. Horn sued, alleging mail and wire fraud predicate acts in the form of false advertising that caused him to lose his job, supporting a civil RICO claim.⁸ The district court granted summary judgment in favor of the defendants, holding that Horn’s job loss derived from a personal injury (THC consumption, although Horn himself did not assert that as a personal injury) and thus was not actionable under RICO.⁹ The Second Circuit reversed, holding that civil RICO allows recovery for business injuries, even when they result from personal injuries.¹⁰

The Supreme Court affirmed the Second Circuit’s judgment. The “‘business or property’ requirement,” the Court explained, “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.”¹¹ For example, “if 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.”¹²

The Court concluded by acknowledging that “civil RICO has undeniably evolved into something quite different from the original conception of its enactors,” resulting in “[m]ore suits … brought against ordinary businesses.”¹³ But, as the Court has recognized in its past RICO jurisprudence, only Congress can correct “the undue proliferation of RICO suits.”¹⁴

While the Court’s decision could lead to attempts by creative plaintiffs to invoke threats of RICO liability in areas further and further removed from RICO’s original core purpose, the Court was careful to note that defendants have other tools in their toolbox that could limit the impact of the decision. For example, the Court left open the possibility that the loss of employment that Horn relied on may not qualify as a “business” injury and that not every pecuniary loss may qualify as a “property” injury.¹⁵ Additionally, the Court highlighted other limits on RICO claims, particularly the requirement that plaintiffs plead and prove a “direct relation” between their injury and the RICO violation, which the Court noted “may present an insurmountable obstacle” for Horn on remand.¹⁶As lower courts interpret Horn, businesses confronting RICO civil claims could see increased RICO litigation and new injury theories, but maintain defenses against such claims.