RICO-Based Hemp Case Headed for Supreme Court

For the first time since the 2018 Farm Bill became law, the Supreme Court of the United States will decide a case about hemp. The lawsuit, Medical Marijuana, Inc., et al. v. Douglas J. Horn, involves the Racketeer Influenced and Corrupt Organizations Act (RICO) and asks whether product manufacturers can be held responsible for a person’s lost earnings and other job benefits under that powerful statute.

The plaintiff is a commercial truck driver who was fired for failing a random drug test after taking a CBD product that was marketed as THC-free. The plaintiff then filed a RICO claim and state law claims against the companies that marketed the CBD product. He asserted that his lost job earnings and benefits are “business or property” damages that are recoverable under RICO.

The federal district court dismissed the plaintiff’s RICO claim, finding for the companies that RICO does not provide for personal injury losses. However, the Second Circuit Court of Appeals reversed the district court and reinstated the RICO claim. The Supreme Court agreed to take up the case. If the Supreme Court affirms the Second Circuit’s ruling, the plaintiff could recover up to three times his lost earnings, plus attorney’s fees.

The U.S. Hemp Roundtable has filed a “friend of the court” brief supporting the defendants’ position that Congress did not intend RICO to apply to personal injury losses. As the brief argues, expanding RICO has major implications for the hemp products industry.

Industry experts have stated that increased costs will be passed on to consumers, potentially making products unavailable to people who need them. Additionally, more liability may cause manufacturers, distributors, or retailers to exit the industry entirely, which will reduce economic opportunities for hemp farmers and businesses.

The case is expected to be heard during the court’s next session, which begins in October.