Labor & Employment Law Daily Wrap Up, PROCEDURE—7th Cir.: Group of professionals cannot revive RICO claims over alcohol screening test, (Jun 16, 2025)

By Todd Harrison, J.D.

They had failed to show that their employment-related injuries were directly caused by the defendants’ alleged misrepresentations regarding the accuracy and efficacy of the test.

Affirming a district court’s dismissal of RICO claims brought by a group of professionals who asserted that they had suffered employment-related injuries due to faulty alcohol screening tests, the Seventh Circuit found that the plaintiffs did not adequately allege that the defendants’ purportedly fraudulent scheme was the proximate cause of their injuries. The complaint was devoid of any allegation that the plaintiffs’ employers or similar decisionmakers were aware of the testing lab’s marketing materials or any other statements regarding the efficacy of its alcohol screening test, explained the court. Also affirmed was the dismissal of the plaintiffs’ state-law claims (Ratfield v. United States Drug Testing Laboratories, Inc., No. 24-1858 (7th Cir. Jun. 13, 2025)).

Alcohol screening. Eleven pilots, a physician, a nurse, and an attorney were all required to undergo alcohol testing to maintain their employment and professional licenses. The testing came in the form of a dried blood spot test developed by United States Drug Testing Laboratories (USDTL). The tests came back positive which the group alleged caused them significant professional harm.

RICO claims. Underpinning the plaintiffs’ RICO claims was their allegation that USDTL marketed its blood test as a reliable indicator of continuing alcohol use when, in fact, the company had failed to confirm the test’s validity and reliability.

Company players. USDTL is a business-to-business specimen testing lab that developed the test at issue. The pilots in the group of plaintiffs participated in the Human Intervention Motivational Study (HIMS) program, a substance abuse program that helps pilots return to cockpits after recovering from alcohol or other substance use disorders. HIMS requires pilots to submit to frequent drug and alcohol testing.

CLS is a company that performs drug testing and recovery monitoring services. HIMS used CLS to oversee the testing of program participants for alcohol consumption. CLS directed the pilots to certain labs and instructed those labs to use USDTL’s blood test. According to the plaintiffs, USDTL compensated CLS for funneling individuals in occupational substance abuse treatment programs to these labs and for supplying the labs with USDTL’s test.

Lawsuit. A lawsuit was initially filed in December 2022 against USDTL asserting claims for common law fraud and negligence. The complaint was later amended to include RICO claims for mail and wire fraud. The plaintiffs alleged that USDTL fraudulently misrepresented that their blood test was accurate and reliable and had reaped financial gains as a result. The case was dismissed without prejudice, with the district court concluding that the complaint had failed to adequately allege that the RICO enterprise had been sufficiently distinct from the corporate individuals or that USDTL had caused the purported harm. A second amended complaint was filed, this time adding CLS as a defendant. This complaint was also dismissed for failure to state a claim, leading to this appeal.

Causation. At the outset, the court explained that its RICO analysis begins and ends with causation. To state a claim for civil RICO, a claimant must not only show “but for” causation but also proximate causation. The court found that the plaintiffs fell short in making this showing.

No direct link. In this instance, the plaintiffs failed to adequately allege that the defendants’ fraudulent scheme—which the court assumed for purposes of its analysis—proximately caused their injuries.

According to the plaintiffs, USDTL misrepresented—in marketing statements, informational materials, research articles, and documents provided to clients—the efficacy of its blood test in detecting alcohol consumption as well as how to properly administer the test. Even assuming the plaintiffs’ allegations were correct, the court noted that they still must draw a direct causal link between these statements and the professional injuries they suffered.

“The causal chain between USDTL’s alleged fraud and Plaintiffs’ injuries is circuitous at best,” said the court. There was no evidence that the plaintiffs’ employers or similar decisionmakers were aware of USDTL’s marketing materials or other statements regarding the efficacy of its blood test. Nor was there any allegation that HIMS or other treatment program administrators knew of these assurances.

Further, although the complaint pointed to CLS as a knowing middleman between USDTL and the various program administrators, nowhere did the plaintiffs claim that CLS conveyed any of the alleged misinformation to the program administrators or the employers. “Such a tenuous, serpentine causative path does not satisfy RICO’s proximate causation requirement,” explained the court.

Lack of specificity. Finally, the court found that, despite the plaintiffs’ conclusory assertions that USDTL’s misstatements caused their injuries, nothing in the complaint created a plausible inference that the employers reasonably relied on these misstatements in making their decisions about the plaintiffs’ employment and licensing status.

According to the court, “the complaint does not explain how the employers learned of the misstatements, what exactly they learned, from whom they learned of them, when they learned of them, or whether they would have made the same decisions anyway.” As such, the complaint fell far short of satisfying Rule 9(b)’s specificity requirement, and thus the plaintiffs’ RICO claims were properly dismissed.

State-law claims. Having dismissed the plaintiffs’ RICO claims, the district court declined to exercise supplemental jurisdiction over the state-law claims, a decision that was also affirmed by the appellate court.

The case is No. 24-1858.

Judge: Lee, J.

Attorneys: Terry P. Roberts (Fischer Redavid) for Andrea Ratfield. Phillip G. Litchfield (Litchfield Cavo) for United States Drug Testing Laboratories, Inc.

Companies: United States Drug Testing Laboratories, Inc.

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