The Racketeer Influenced and Corrupt Organizations Act (“RICO”) authorizes the filing of civil suits for treble damages and attorney fees by “[a]ny person injured in his business or property by reason of” engaging in certain prohibited activities. 18 U.S.C. § 1964(c). RICO was enacted as a prosecutorial tool for fighting organized crime. The Second and Ninth Circuits have held, however, that a civil RICO treble-damages claim can be filed for lost wages or other employment-related economic injuries resulting from a personal injury—such as in a product liability case—even though it is well settled that personal injury claims themselves are excluded from civil RICO. Plaintiffs’ lawyers have seized upon these holdings, with which at least three other circuits disagree, to attempt to transform ordinary product liability suits into civil RICO actions. Civil RICO’s broad venue and jurisdictional provisions enable plaintiffs to “forum shop” to courts that allow such personal injury-related civil RICO claims, and thereby not only seek treble damages, but also circumvent various States’ tort reform measures.
Horn v. Medical Marijuana, Inc. is a seemingly ordinary product liability suit involving a legal, non-psychoactive, CBD wellness product. The Second Circuit held, however, that the truck driver plaintiff, who lost his job after ingesting the product and then failing a routine drug test, can maintain a civil RICO claim for lost wages and other employment-related economic harm against the product’s producers. They have filed a certiorari petition requesting the Supreme Court to rule that civil RICO claims do not encompass economic harms resulting from personal injuries.
The Atlantic Legal Foundation, joined by the DRI Center for Law and Public Policy, has filed an amicus brief urging the Supreme Court to grant review and hold that civil RICO does not extend to personal injury-related economic harms, and cannot be exploited by the plaintiffs’ bar to circumvent state tort reform laws, such as those which place caps on damages. The ALF/DRI amicus brief was authored by Sarah Spencer of Christensen & Jensen and ALF Executive Vice President & General Counsel Larry Ebner. Valuable pro bono assistance also was provided by Joe Hollingsworth, Bill Cople, and Elyse Shimada of Hollingsworth LLP.
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.
ALF’s Amicus Brief:
The ALF/DRI amicus brief argues that the Supreme Court should grant certiorari and reverse the Second Circuit to deter forum-shopping plaintiffs from circumventing state tort reform laws by transforming product liability suits into civil RICO treble-damages actions. Civil RICO’s expansive venue provision allows plaintiffs to sue practically anywhere. Unless the Supreme Court intercedes, plaintiffs will try to avoid state product liability reforms by filing in circuits that allow civil RICO claims for personal injury-related economic harms. Allowing such suits would greatly exacerbate the already skyrocketing costs of product liability litigation, and adversely affect product innovation and the public.
Status:
The Court granted the petition for a writ of certiorari on April 29, 2024.
Contact:
Email ALF Executive Vice President & General Counsel Lawrence Ebner.
