- The U.S. Supreme Court ruled in favor of truck driver Douglas Horn, allowing him to sue Medical Marijuana Inc. for not disclosing THC in its product. Horn tested positive for THC after using their advertised THC-free CBD medicine, leading to his termination.
- The court’s 5-4 decision could allow individuals to bring RICO charges against companies, which authorities typically use in organized crime cases.
- The justices emphasized that the RICO law has evolved beyond its original scope, and Congress must address its future application in cases.
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The U.S. Supreme Court ruled in favor of a truck driver who was fired after testing positive for THC and failing a drug test.
The ruling on Wednesday, April 2, allows the driver, Douglas Horn, to sue the manufacturer of the product for not disclosing it contained THC, the psychoactive chemical found in cannabis.
How can individuals use the RICO law to argue personal injury?
Horn can now bring federal racketeering charges against Medical Marijuana Incorporated under the Racketeer Influenced and Corrupt Organizations Act, commonly known as RICO.
The justices ruled 5-4, potentially opening the door for individuals to sue companies under the RICO Act. Prosecutors typically use the act in cases of organized crime, such as drug trafficking, murder and extortion. This decision could allow a customer to sue a business for harm caused by its products.
The court ruled a plaintiff could seek treble damages for business or property loss, even if the loss stemmed from a personal injury. Treble damages are legal remedies that require the court to pay the plaintiff three times the amount of actual damages determined by the jury.
Medical Marijuana Inc. argued that the word “injury” in the RICO law refers to harm caused to a business, not an individual. They believe Horn is arguing a personal injury rather than harm to his business.
Why was Horn fired?
In 2012, after an injury, Horn found a product that helped alleviate his chronic pain. Medical Marijuana Inc. advertised “Dixie X,” claiming it was a THC-free CBD medicine.
Court documents show that Horn’s company randomly selected him for a drug test, which detected THC in his system. The company later terminated him for refusing to enter a substance abuse program, as doing so would require him to admit he was a drug user.
Horn suspected the medicine was the cause of the positive result. He purchased another bottle and sent it to a testing lab, and the results showed THC was present in the product despite claims it was THC-free.
In their ruling, the justices noted Horn’s argument that Medical Marijuana’s false advertising amounted to mail and wire fraud, constituting a “pattern of racketeering activity.”
A district court initially sided with the company, stating RICO could only be applied when a person was harmed in business or property. However, an appeals court reversed the decision, asserting that Horn was harmed in his business when he lost his job.
In the majority opinion, the justices stated the RICO law has evolved to include cases broader than initially intended but emphasized that Congress must ultimately address the law moving forward.
