Supreme Court sides with truck driver on CBD claims

The U.S. Supreme Court recently sided with a truck driver who was fired after using a CBD product and testing positive for THC. However, the Supreme Court decision does not mean that truck drivers are now immune from concerns over CBD products.

On April 2, the Supreme Court allowed truck driver Douglas Horn to proceed with civil Racketeer Influenced and Corrupt Organizations (RICO) Act claims against CBD product company Medical Marijuana Inc. Horn was fired for testing positive for marijuana after ingesting a CBD product that claimed “0.00 THC.”

Although the lawsuit dealt with a truck driver’s experience with CBD, the case before the Supreme Court had very little to do with CBD products and trucking. Rather, the high court decided whether injuries to business or property that derive from personal injury are subject to RICO claims.

Horn used a CBD product by Medical Marijuana called Dixie X in 2012 after suffering injuries from a crash. The driver found the product through an advertisement that claimed Dixie X contained “0.00 THC.”

Shortly after using the product, Horn was called in for a random drug test, which registered a positive result for marijuana. He was subsequently fired. Lab tests of Dixie X CBD oil discovered levels of THC well over the federal limit per U.S. Drug Enforcement Administration regulations, making the product illegal.

Horn sued Medical Marijuana in federal court, claiming violations of the RICO Act. Specifically, the company conducted mail and wire fraud through its deceptive CBD advertisements, according to the lawsuit.

Although RICO violations are typically associated with criminal charges, civil claims can be pursued to recover damages to “business or property” resulting from racketeering activity. In RICO cases, plaintiffs can recover damages threefold.

Medical Marijuana argued that the RICO Act implicitly excludes personal injury claims. In this case, Horn’s loss of business due to being fired is the result of a personal injury, i.e. unknowingly ingesting THC, and not the direct result of racketeering activities. In other words, damages to business or property cannot derive from a personal injury.

The district court agreed and dismissed the case. However, the Second Circuit Court of Appeals reversed that ruling, finding that a personal injury preventing a RICO Act claim undermines the law.

Three circuit courts have adopted Medical Marijuana’s interpretation of the RICO Act. They argue that if damages flowing from a personal injury are allowed, it would open the floodgates to RICO cases. The logic is that run-of-the-mill personal injury cases will find a RICO angle to recover three times the damages.

Two circuit courts favor including damages stemming from personal injuries. If, for example, business owners lose their business due to extortion and bribery, they are entitled to RICO civil claims. On the other hand, if a mobster puts them in a coma and they lose their business as a result, they would not be entitled to damages under the “antecedent-personal-injury bar.”

Essentially, the Supreme Court was asked to settle the circuit court split.

In a narrow 5-4 decision, the high court found that a personal injury cannot prevent a civil RICO claim, allowing Horn to proceed with his case. Justice Amy Coney Barrett wrote the majority opinion, joined by Neil Gorsuch, Sonia Sotomayor, Elena Kagan and Ketanji Brown Jackson.

“By explicitly permitting recovery for harms to business and property, (the RICO Act) implicitly excludes recovery for harm to one’s person,” Barrett wrote in the opinion. “But 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. For example, a gas station owner beaten in a robbery cannot recover for his pain and suffering. But if injuries from the robbery force him to shut his doors, he can recover for the loss of his business. A plaintiff can seek damages for business or property loss, in other words, regardless of whether the loss resulted from a personal injury.”

The Supreme Court did not decide on the merits of Horn’s claims. Rather, the court allowed only for the truck driver to move forward with civil RICO claims. But Barrett and even Horn himself acknowledged he faces “a heavy burden on remand.”

Even if a label on a CBD product says there is only a small amount of THC in it, the U.S. Department of Transportation has warned that “there is no federal oversight to ensure that the labels are accurate.”

In fact, the Food and Drug Administration does not certify levels of THC in CBD products. According to the FDA, “It is currently illegal to market CBD by adding it to a food or labeling it as a dietary supplement.”

If a driver’s mandated drug testing comes back positive for illegal THC in the driver’s system, the driver saying he or she used CBD products is not an accepted explanation, the U.S. DOT warned.

“Medical review officers will verify a drug test confirmed at the appropriate cutoffs as positive, even if an employee claims they only used a CBD product,” the agency said. LL