On April 2, 2025, the Supreme Court significantly expanded the scope of injuries entitled to treble damages under the Racketeer Influenced and Corrupt Organizations Act (“RICO”).  The Supreme Court held in Medical Marijuana, Inc. v. Horn that “a plaintiff may seek treble damages for business or property loss even if the loss resulted from a personal injury.”¹  For example, if a technology company makes misrepresentations about its products’ risks and those risks result in harm to a small-business owner, that business owner may recover for lost business revenue if the injuries force him to close his business.  The Supreme Court’s holding therefore increases the risk of treble damages for defendants and may weaken defendants’ ability to dismiss RICO claims without extensive discovery.

Congress enacted RICO to provide legal recourse for individuals or entities harmed by organizations engaged in racketeering activity.  Racketeering activity encompasses most criminal statutes, including mail and wire fraud.²  But in enacting RICO, Congress limited the cause of action to “[a]ny person injured in his business or property.”³  Medical Marijuana, Inc. resolved a circuit split among the Sixth, Seventh, and Eleventh Circuits, which precluded relief for any economic loss that resulted from a personal injury, and the Second and Ninth Circuits, which permitted relief from economic injuries that derived from a personal injury.⁴

In Medical Marijuana, Inc., Douglas Horn, a truck driver, ingested a product marketed as containing only legal CBD (cannabidiol) when in fact it also contained federally illegal THC (tetrahydrocannabinol).  To his surprise, Mr. Horn failed his employer’s drug test and was subsequently terminated.  He sued the product manufacturer, alleging a civil RICO claim (among others) premised on his lost employment.  But the district court concluded that the RICO claim could not proceed because Mr. Horn’s loss of employment derived from a personal injury that he suffered when the THC was introduced into his system.  On appeal, the Second Circuit reversed and held that § 1964(c)’s use of “business” encompassed an individual’s employment, and nothing in “RICO’s text or structure” required that an injury to “business” not derive from a personal injury.⁵

In a 5-4 decision authored by Justice Amy Coney Barrett, the Supreme Court affirmed the Second Circuit’s decision.  The Court homed in on the ordinary meaning of “injure” in the context of § 1964(c) and concluded that a plaintiff has been “injured in his business or property” for purposes of § 1964(c) “if his business or property has been harmed or damaged.”⁶  Notably, the Court held that RICO does not limit recovery based on the “cause of the harm[.]”⁷  In so holding, the Court rejected the manufacturer’s attempt to confine the meaning of “injured” to the “invasion of a business or property right.”  The Court noted that the manufacturer’s own dictionary undermined its limited construction because it distinguished between “injured,” which is used in § 1964(c), and “injury,” which is not.  The Court also found that its RICO precedent supported its interpretation of the term “injured.”

Justices Clarence Thomas and Brett Kavanaugh filed separate dissenting opinions.  Justice Thomas maintained that the Court should dismiss the writ of certiorari as improvidently granted because the parties had failed to brief a threshold issue: whether Mr. Horn had even suffered a personal injury to begin with.  Whereas Justice Kavanaugh—joined by Chief Justice John Roberts and Justice Samuel Alito—agreed with the manufacturer’s argument that “‘injured’ means to have suffered ‘the invasion of any legally protected interest.’”⁸  And RICO’s emphasis on “business or property” necessarily excludes invasions of “personal” interests.

While the Court’s decision maintains the status quo in the Second and Ninth Circuits, other circuits may grapple with an uptick in RICO lawsuits alleging derivative injuries to the person.  Indeed, as some courts have acknowledged, “the civil provisions of [RICO] are the most misused statutes in the federal corpus of law.”⁹  These lawsuits carry substantial incentives to plaintiffs and risks to defendants considering the prospect of treble damages and attorney’s fees and costs if a plaintiff is successful.  But RICO affords countermeasures to guard against claims premised on speculative personal injuries, including a narrow proximate cause standard with which courts readily engage at the motion-to-dismiss stage.  Clients should be aware of these risks and countermeasures prior to commencing costly discovery.