Supreme Court Ruling Expands Reach of Civil RICO Statute

The U.S. Supreme Court issued an opinion on April 2, 2025, that has expanded the type of claims that can be raised under the federal Racketeer Influenced and Corrupt Organizations Act (RICO).

The case involved a commercial truck driver who lost his job when he failed a drug test after taking a CBD product he claims was falsely marketed as not containing THC. The opinion, drafted by Justice Amy Coney Barrett, resolves a prior split among the circuits of the U.S. Courts of Appeals as to whether RICO's limitation on recovery for injury to "business or property" (and not personal injury) allows a plaintiff to recover for economic harm flowing from personal injury. The Supreme Court held that a plaintiff can bring a RICO claim for economic harm caused by personal injury, explaining that the injury limitation in the civil RICO statute is focused on the kind of harm for which a claim may be brought, not the cause of that harm.

The Court offered a hypothetical example to demonstrate the practical effect of the ruling, explaining that "a gas station owner beaten in a robbery cannot recover for his personal pain and suffering. But if the injuries from the robbery force him to shut his doors, he can recover for the loss of his business." The appellant, Medical Marijuana Inc., argued that interpreting the RICO statute in this manner would allow personal injury plaintiffs to recast their bodily harm into economic harm and significantly broaden RICO liability (including the potential for treble damages).

The Supreme Court acknowledged that the breadth of the statute may lead to "the undue proliferation of RICO suits," but it made clear that it is up to Congress to limit the claims if needed.

For more information or specific questions about the opinion or a related matter, please contact the author.

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