Labor & Employment Law Daily Wrap Up, SUPREME COURT NEWS—Court rules in favor of truck driver who lost his job after failed drug test caused by CBD product use, (Apr 3, 2025)

By Brandi O. Brown, J.D.

Under civil RICO, 18 U.S.C. section 1964(c), the Court explained, a plaintiff may seek treble damages for business or property loss even if the loss resulted from a personal injury.

Yesterday, the U.S. Supreme Court issued a decision in a case in which a commercial truck driver who lost his job sued the makers of the CBD product under the Racketeer Influenced and Corrupt Organizations Act (RICO), which creates a cause of action, under 18 U.S.C. section 1964(c), for “[a]ny person injured in his business or property” by reason of a criminal RICO violation. The product he used is a hemp-derived CBD oil called “Dixie X Dew Drops” (hereinafter “Dixie X”) that, in spite of extraction and distillation processes and information indicating that it contained “0” percent THC, still contained a small, but detectible amount of THC. The driver was seeking relief from pain stemming from a motor vehicle accident.

Tested positive, lost job. Instead, he lost his job after submitting to a random drug test at the instruction of his employer. He tested positive for THC. His wife, who worked for the same employer, also resigned because she believed it would be unsafe to work alone. They filed suit, alleging that the product maker caused the driver’s positive drug test and caused him to lose his employment. Among other claims, the driver alleged violation of the Racketeer Influenced and Corrupt Organizations Act (RICO).

District court dismisses claim. At the district court level, the court concluded that the truck driver could not recover “loss of earnings” damages under a civil RICO claim, agreeing with the makers of the THC-containing product—Dixie Holdings, Medical Marijuana, Inc., and Red Dice Holdings—that the driver’s requested “loss of earnings” damages was not recoverable in a civil RICO action because they were predicated on a personal injury (the bodily invasion he sustained when THC was introduced into his system) rather than an injury to his “business or property,” (Horn v. Medical Marijuana, Inc., No. 15-CV-701-JWF (Sept. 14, 2021, Feldman, J.)).

Second Circuit reinstates. On appeal to the Second Circuit, that court reinstated the RICO claim, explaining that because the term “business” encompassed “employment” under the ordinary meaning of that term at the time of codification of 18 U.S.C. § 1964(c), he suffered an injury “in his business” as contemplated by RICO. It explained that the “negative implication that RICO excludes recovery for personal injury does not mean that a plaintiff cannot sue for injuries to business or property simply because they flow from, or are derivative of, a personal injury” and that an “antecedent-personal-injury bar” would ignore context by precluding recovery for injuries to a victim’s business whenever a personal injury was a “necessary precursor.”

Cert granted, arguments heard. The U.S. Supreme Court granted a petition for certiorari to consider: “Whether economic harms resulting from personal injuries are injuries to ‘business or property by reason of’ the defendant’s acts for purposes of civil RICO.” In October, the Court heard arguments by the parties.

Loss resulting from personal injury included. In the Court’s opinion, delivered by Justice Barrett on April 2, 2025, it held that under civil RICO, section 1964(c), a plaintiff may seek treble damages for business or property loss even if the loss resulted from a personal injury. The Court noted that the “sole question before” it was whether civil RICO categorically bars recovery for business or property losses that derive from a personal injury and that it did not address issues implicated by the case but outside the scope of the question presented, such as whether the driver suffered a personal injury when he consumed THC, whether the term “business” encompasses all aspects of “employment,” and what “injured in his... property” means for purposes of section 1964(c).

The Court explained that the meaning of section 1964(c) is “straightforward” and that a plaintiff has been “injured in his business or property” if his business or property has been harmed or damaged. It “requires nothing more,” the Court explained. Moreover, while recognizing that section 1964(c) does not allow recovery for all harms—noting that by explicitly permitting recovery for harms to business and property, the provision implicitly excludes recovery for harm to one’s person—the Court explained that the business or property requirement operates with respect to the kinds of harm for which the plaintiff can recover, not the cause of the harm for which he seeks relief. “In short, a plaintiff can seek damages for business or property loss regardless of whether the loss resulted from a personal injury.”

Justice Jackson filed a concurring opinion. Justice Thomas filed a dissenting opinion and Justice Kavanaugh filed a dissenting opinion, in which Chief Justice Roberts and Justice Alito joined.

The case is No. 23-365.

Companies: Medical Marijuana, Inc.; Dixie Holdings, LLC; Red Dice Holdings, LLC; Dixie Botanicals

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