Sovereign Nations. Different Laws. One Complicated Payments System.
Sovereign Nations. Different Laws. One Complicated Payments System. On Indigenous Peoples' Day, it's time to examine why tribal gaming, ...
The United States Supreme Court ruled 5-4 on October 29, 2025, that a truck driver who lost his job after taking a hemp-based supplement can use federal anti-racketeering law to sue the manufacturer he said falsely advertised its product as not containing THC, according to USA TODAY reporting.
Douglas Horn took the supplement Dixie X, marketed as a "CBD-rich medicine," to help manage chronic back and shoulder pain. The manufacturer, Medical Marijuana Inc., promised the hemp-based product did not contain THC, the psychoactive compound in marijuana that triggers positive results on drug tests commonly used in safety-sensitive positions.
Horn failed a drug test following supplement use, resulting in termination from his trucking position. He contends the supplement caused the failed test and seeks to recover lost wages using the Racketeer Influenced and Corrupt Organizations Act (RICO), a federal law created primarily to fight organized crime.
Under RICO, Horn could receive triple damages and attorney fees if he proves his case, making the statute's applicability to personal injury claims economically significant for both plaintiffs and defendants in product liability contexts.
Justice Amy Coney Barrett, writing for the majority, rejected Medical Marijuana Inc.'s argument that RICO applies only to harm to "business or property" rather than personal injuries. The manufacturer contended Horn's claim represented personal injury outside RICO's scope.
Horn argued the harm affected his ability to earn a living, which meets the plain definition of "business" under the statute. Barrett stated Medical Marijuana Inc. "tried valiantly to engineer a rule that yields its preferred outcomes."
"When 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," Barrett wrote. "That is a battle it cannot win."
The majority opinion focused on statutory text interpretation, finding that the plain language of RICO's provision allowing suits for injury to "business or property" encompasses harm to one's capacity to conduct business through earning a living, even when that harm stems from what defendants characterize as personal injury.
Justices Clarence Thomas, Brett Kavanaugh, Samuel Alito, and Chief Justice John Roberts dissented. Kavanaugh wrote the dissent, joined by Alito and Roberts, while Thomas filed separately.
"This case should have been reasonably straightforward. RICO does not authorize personal-injury suits − period," Kavanaugh wrote. "That is true even when a personal injury leads to losses related to one's business or property, as personal injuries often do."
The dissent expressed concern that the majority's interpretation expands RICO beyond its intended scope by allowing personal injury claims when those injuries produce economic consequences affecting business or property interests—a connection that could apply to many personal injury situations.
During October 2024 oral arguments, some conservative justices expressed concern that allowing Horn's interpretation would open floodgates to lawsuit types the law was not intended to cover. The U.S. Chamber of Commerce raised similar concerns in a legal filing urging the court to rule against Horn, warning of "devastating consequences" from increasing businesses' exposure to lawsuits.
The floodgates argument suggested that if personal injuries producing economic losses qualify as business or property injuries under RICO, the statute's triple damages and attorney fee provisions could apply to vast categories of product liability, employment, and consumer protection claims previously litigated under different legal frameworks with more limited damages.
Horn's attorneys argued significant hurdles remain for using RICO despite the favorable ruling. Easha Anand, an attorney for Horn, told the Supreme Court that anyone making a RICO claim must show a pattern of racketeering activity and demonstrate that illegal activities caused the injury.
These requirements—proving a pattern of racketeering rather than isolated misconduct, and establishing causation between racketeering activity and injury—create substantive barriers preventing routine personal injury claims from qualifying as RICO cases even under the majority's interpretation.
The pattern requirement typically necessitates showing multiple related predicate acts over time, distinguishing RICO claims from single-incident product defects or isolated false advertising that might constitute ordinary tort or consumer protection violations.
Created primarily to fight organized crime, RICO was seldom used until a 1981 Supreme Court decision expanded its interpretation to apply to both legitimate and illegitimate enterprises, according to Jeffrey Grell, a RICO law expert who previewed the case for the American Bar Association.
After federal courts were deluged with RICO cases following that expansion, the Supreme Court has attempted to limit the statute's application through subsequent decisions narrowing various RICO provisions and requirements.
Barrett acknowledged in her majority opinion that RICO has "undeniably evolved" beyond original legislative intent. However, she wrote that addressing this evolution is an issue best resolved by Congress rather than through judicial reinterpretation that contradicts the statute's plain text.
The statement suggests the Court majority views statutory amendment as the appropriate remedy for perceived overexpansion rather than judicial interpretation that departs from textual meaning to achieve policy outcomes.
The decision creates potential liability exposure for CBD and hemp supplement manufacturers whose products cause consumers to fail drug tests despite marketing claims of being THC-free. Many CBD products contain trace THC amounts due to extraction processes or full-spectrum formulations, even when marketed as THC-free or containing only CBD isolate.
The supplement industry lacks comprehensive federal regulation of CBD product testing, labeling accuracy, and THC content verification. Manufacturers' quality control practices vary significantly, creating scenarios where products marketed as THC-free may contain sufficient THC to trigger positive drug test results.
Workers in safety-sensitive positions including transportation, healthcare, law enforcement, and certain manufacturing roles face mandatory drug testing and employment consequences for positive THC results. If CBD products cause failed tests despite THC-free marketing claims, RICO liability could apply beyond traditional product liability or false advertising frameworks.
The U.S. Chamber of Commerce's involvement as amicus curiae reflects broader business community concerns about RICO's application to conventional commercial disputes. The statute's treble damages provision and mandatory attorney fee awards create litigation risk exceeding typical tort or contract damages, potentially affecting settlement values and litigation strategies.
Whether the decision will significantly increase RICO litigation remains uncertain. The requirement to prove racketeering patterns and causation may limit successful claims to situations involving systematic false advertising or quality control failures rather than isolated incidents.
Barrett's suggestion that Congress should address RICO's evolution raises questions about whether legislative action will follow the decision. Congress could amend RICO to explicitly exclude personal injury claims or clarify the "business or property" language to prevent applications the legislature considers inappropriate.
However, congressional action on complex statutory amendments often requires significant political will and consensus that may not exist for RICO reform given competing priorities and stakeholder interests in maintaining or restricting the statute's scope.
The case is Medical Marijuana Inc. v. Horn.
As Supreme Court decisions expand potential liability for CBD manufacturers whose products cause drug test failures despite THC-free marketing claims, comprehensive quality management and testing verification become essential.
Qredible's Q-Trust quality management platform provides batch testing documentation, label claim verification, third-party lab result management, and COA accuracy tracking for CBD and hemp supplement manufacturers.
Contact our team to learn how our quality management solutions can help your business maintain rigorous testing protocols, verify THC content accuracy, document quality control processes, and reduce liability exposure from labeling claims through comprehensive testing and documentation systems that support regulatory compliance and consumer protection.
