https://www.cnn.com/2025/04/02/politics/cbd-trucker-supreme-court/index.html

“DIXIE X”

Douglas Horn sued the manufacturers of a CBD product called “Dixie X” that the companies proclaimed included no THC, the psychoactive ingredient in marijuana. Horn took the product to manage debilitating pain after a serious accident, but he later failed a drug test and was fired. The Supreme Court’s decision will allow Horn’s case to move forward in lower courts.

Justice Amy Coney Barrett wrote the opinion for a 5-4 majority that included both liberal and conservative justices.

“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 RICO Act

Horn sued under the Racketeer Influenced and Corrupt Organizations, or RICO, Act, a 1970 law targeted at organized crime that also authorizes civil lawsuits – and allows plaintiffs to collect triple damages – for harm to their business or property. The question for the Supreme Court was whether Horn’s loss of employment qualified as a business harm.

Medical Marijuana, Inc.’s Argument

Medical Marijuana, Inc., and other companies involved in distributing Dixie X, argued that Horn’s injury was a personal one – and therefore not a business or property harm as required in the law. Congress, the companies argued, did not intend for Americans to be able to collect triple damages under the RICO law for run-of-the-mill injury claims.

Horn sued in the Western District of New York in 2015, alleging in part that Medical Marijuana Inc. engaged in mail and wire fraud. The district court ruled against Horn, but the New York-based Second U.S. Circuit Court of Appeals allowed his suit to move forward.

The companies appealed to the Supreme Court.

Allowing Horn to sue, the companies said, would vastly expand the number and type of “civil RICO” lawsuits permeating through federal courts. Concern over a flood of new lawsuits appeared to resonate with several of the court’s conservatives during the oral arguments in October.

The Ordinary Definition of “Business”

But other justices suggested during arguments that a loss of employment would fall under what most Americans view as an ordinary definition of “business.”

“If you’re harmed when you lose a job, then you’ve been injured in your business, haven’t you?” Justice Elena Kagan, a member of the court’s liberal wing, asked the lawyer for the companies.

The law, Kagan said, “just says if you’ve been injured by a RICO violation in your business, which includes your employment, then you’re entitled to threefold damages.”

President Richard Nixon signed the federal RICO Act in 1970 to give prosecutors more power to go after the heads of organized crime families. Several states have enacted their own versions of the law.

Discussion Questions

1. Describe the Racketeer Influenced and Corrupt Organizations (RICO) Act.

RICO is an acronym for the Racketeer Influenced and Corrupt Organizations Act, a federal legislation adopted in the United States in 1970 to fight organized crime. It establishes harsher criminal penalties and a civil cause of action for conduct committed as part of an ongoing criminal enterprise.

When a person engages in a pattern of racketeering behavior, such as bribery, extortion, money laundering, or fraud, they commit a RICO violation. The statute permits criminal prosecution and civil litigation, which empowers private parties to seek triple damages and expenses.

RICO’s goal is to destroy criminal organizations and discourage future criminal activity by applying harsh penalties for racketeering acts.

Racketeering is a white-collar crime in which unlawful or unethical commercial methods are used for personal or financial advantage. It refers to a pattern of recurrent illicit action carried out by a group or organization, frequently in a systematic and organized way. The RICO Act defines racketeering activities as any act or threat involving murder, abduction, gambling, arson, robbery, bribery, extortion, or trading in obscene stuff, among other offenses.

Racketeering is typically connected with organized crime, such as the Mafia. Still, it may also be found in other sectors of commerce and industry, such as securities fraud, insider trading, and health care fraud. Racketeering involves several people, firms, and sometimes whole industries in unlawful operations that frequently yield enormous profits.

The use of intimidation and violence to control unlawful operations is a major feature of racketeering. Threats against persons or companies, as well as actual acts of violence, are examples of this.

Racketeering is often used to gain control of a certain market or sector, allowing the criminal organization to collect illicit revenues via extortion, fraud, and other criminal actions.

The RICO Act gives law enforcement the tools they need to investigate and prosecute racketeering offenses while enabling victims to seek compensation in civil court. As a result, it has become a potent instrument in the battle against white-collar crime, leading to the successful prosecution of several high-profile racketeering cases in recent years.

According to the Racketeer Influenced and Corrupt Organizations Act, individuals and organizations may be prosecuted with a RICO offense if they are engaging in a pattern of racketeering conduct. Racketeering activity is defined as any act or threat that includes, among other things, murder, abduction, gambling, arson, robbery, bribery, extortion, or trading in obscene material and is undertaken as part of a continuous operation.

Individuals and organizations that are often accused of a RICO violation include:

(1) Organized Criminal Syndicates: One of the RICO Act’s principal objectives was organized crime syndicates such as the Mafia. Members of these groups who are proven to be participating in a pattern of racketeering conduct may face RICO charges.

(2) Corporations: Corporations and other commercial entities may also be charged with RICO offenses if they engage in unlawful or immoral business operations as part of a continuing enterprise, such as securities fraud, insider trading, or health care fraud.

(3) Politicians and public officials: Politicians and public officials may also face RICO charges if they utilize their positions of authority to engage in unlawful or immoral conduct, such as bribery or extortion, as part of a continuous enterprise.

(4) Street gangs: Street gangs may face RICO charges if they engage in a pattern of illegal behavior, like drug trafficking or violence, as part of an ongoing operation.

(5) Individuals: Individuals participating in a pattern of racketeering behavior, whether as part of an organized criminal syndicate, company, street gang, or other forms of operation, may also be prosecuted with RICO offenses.

It is vital to remember that to be charged with a RICO offense, the person or organization must have engaged in a pattern of racketeering conduct, not just a single act. Individuals and organizations found to have committed RICO breaches to face both criminal and civil sanctions under the RICO Act, including heightened criminal penalties and triple damages and costs for victims in civil suits.

 

2. Describe the procedural history of this case, beginning at the U.S. district court level, and ending at the Supreme Court level.

In terms of understanding a case, it is always a good idea to track its procedural history. As indicated in the article, in the subject case, Horn (the plaintiff) sued the manufacturers (the defendants) of a CBD product called “Dixie X” that the manufacturers proclaimed included no THC, the psychoactive ingredient in marijuana, in the Western District of New York in 2015. Horn alleged (in part) that the defendants engaged in mail and wire fraud. The district court ruled against Horn, but the New York-based Second U.S. Circuit Court of Appeals allowed his suit to move forward.

The companies appealed to the U.S. Supreme Court. In a 5-4 opinion written by Justice Amy Coney Barrett, the Supreme Court found in favor of Horn, allowing his case to proceed in the lower courts.

 

3. In your reasoned opinion, do you believe that if you are harmed when you lose a job, you have been “injured in your business?”

In your author’s opinion, this is a fascinating question, with its answer subject to debate. A business is typically defined as a person’s regular occupation, profession, or trade, or the practice of making one’s living by engaging in commerce. What complicates the issue is the fact that Horn was not working for himself; instead, he was fired by his employer. With that being said, has Horn been injured in “his” business, or in another party’s business (namely, his employer’s)?

Your author sides with Justice Elena Kagan’s view on the matter, which was illustrated in the article by her question and comment during oral arguments before the Court:

Justice Kagan’s Question: “If you’re harmed when you lose a job, then you’ve been injured in your business, haven’t you?”

Justice Kagan’s Comment: “(The law) just says if you’ve been injured by a RICO violation in your business, which includes your employment, then you’re entitled to threefold damages.”