Supreme Court to Decide on RICO Lawsuit Against Marijuana Product Manufacturer
The Supreme Court will review a case involving a truck driver fired for failing a drug test after using a CBD product claimed to be THC-free. Douglas Horn, a long-time driver, filed the lawsuit, alleging misrepresentation by companies like Medical Marijuana Inc. The lawsuit includes claims of violating federal laws and fraud in the production of the Dixie X elixir. The Supreme Court will examine a case where a truck driver was dismissed for failing a drug test due to using a supposedly THC-free CBD product. Douglas Horn, a seasoned driver, initiated the lawsuit, accusing companies such as Medical Marijuana Inc. of false claims. Allegations encompass breaches of federal regulations and fraudulent activities in manufacturing the Dixie X elixir.
The Supreme Court on Monday agreed to consider whether the maker of a CBD marijuana product can be sued under the federal Racketeer Influenced and Corrupt Organizations Act after a truck driver said he was fired for using an elixir that made him fail a drug test.
Douglas Horn, who has been a truck driver for 14 years, alleges a CBD elixir advertised to contain no THC, the psychoactive ingredient in marijuana, caused him to fail a drug test that resulted in his termination in 2012. Horn contends that he has never used marijuana or a THC product other than the elixir he used to help alleviate his pain, known as “Dixie X.”
Horn initially filed suit in the Western District of New York in 2015, alleging in part that Medical Marijuana Inc. and other companies involved in the production and distribution of the elixir known as Dixie X violated the Controlled Substances Act and engaged in mail and wire fraud.
The Supreme Court agreed to consider whether Horn was allowed to file his lawsuit under the RICO Act, which allows plaintiffs in civil lawsuits to seek triple damages in some instances.
Some federal appeals courts have held that civil suits cannot be filed based on personal injury claims, but the U.S. Court of Appeals for the 2nd Circuit allowed the suit to move forward.
“Because the term ‘business’ encompasses ’employment,’ Horn has suffered an injury ‘in his business,’ as contemplated by the RICO statute,” Circuit Judge Gerard Lynch wrote for a three-judge panel, adding that the truck driver’s termination “cost him current and future wages and his insurance and pension benefits — all of which were tied to his employment.”
Medical Marijuana Inc. appealed to the Supreme Court in October, arguing that the RICO Act was never intended to be used in this way and that allowing the case to move forward would expand the number and type of “civil RICO” lawsuits.
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President Richard Nixon initially signed the RICO Act in 1970 to open up more avenues for the federal government to tackle heads of organized crime. Several states have enacted their own versions of the law, including Georgia, where a state version of the law is at the core of the Fulton County election subversion case against former President Donald Trump.
The Supreme Court will hear arguments in the case sometime in the fall 2024-25 term.
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