Trucker’s CBD lawsuit gutted after RICO claims dismissed

A trucker suffered a significant setback in a federal court after a judge tossed his RICO claims in a lawsuit against a CBD oil company after testing positive for marijuana and losing his job.

On Aug. 3. U.S. District Court Judge Jonathan Feldman of the Western District of New York issued a text order dismissing Douglas Horn’s civil Racketeer Influenced and Corrupt Organizations (RICO) claims. With other claims dropped in previous court proceedings, only a single claim remains in Horn’s lawsuit.

Trucker tests positive for THC after taking CBD product

In February 2012, Horn, an over-the-road hazmat trucker at the time, suffered injuries from a vehicle crash. Several months after the crash, Horn looked into natural medicine as an alternative to the prescription medication he was taking because of the crash.

Approximately six months later, Horn responded to a “High Times” magazine ad from Dixie Botanicals regarding an industrial hemp product called Dixie X. The ad stated the product contained “0.00 THC.” THC, or tetrahydrocannabinol, is the main psychoactive compound in marijuana.

Rather, the product contained CBD, formally known as cannabidiol. Along with THC, CBD is one of 113 cannabinoids in marijuana. Dixie claimed that the product treats inflammation and pain.

In October 2012, Horn submitted a random drug screening as required by the U.S. Department of Transportation. A few days later, he was told that he had tested positive for a high level of THC. Horn was subsequently fired. He had worked for the company for 10 years and had driven professionally for nearly 30 years.

Following his termination, Horn bought some more of the Dixie X CBD oil to have a laboratory independently test the product for THC. The laboratory explained to Horn that they could not return the product to him after discovering it contained levels of THC well over the federal limit per U.S. Drug Enforcement Administration regulations and therefore illegal.

From nine claims down to one

In August 2015, Horn filed a lawsuit against CBD companies Medical Marijuana Inc., Dixie Holdings, Red Dice Holdings and Dixie Botanicals claiming the following:

• Deceptive business practices/false advertising.
• RICO violation.
• Fraudulent inducement.
• Violations of products liability statutes.
• Breach of contract.
• Breach of express warranty.
• Unjust enrichment.
• Negligence.
• Negligent infliction of emotional harm.

In an April 2019 court decision and order, six motions were decided, including summary judgements filed by both parties. Horn’s attorneys decided to drop the breach of contract, breach of express warranty, and unjust enrichment claims. Additionally, the judge agreed with some of the CBD companies’ motions and removed the deceptive business practices/false advertising, products liability, negligence, and negligent infliction of emotional distress claims from the lawsuit.

In November 2019, the district court let some of Horn’s RICO claims survive. However, the latest text order overrides that decision. With all RICO claims dismissed, the only claim left for trial is fraudulent inducement.

The district court will issue a decision and order explaining the dismissal of RICO charges on a later date. Also, the court will need to reschedule trial dates. However, the court must first decide whether to consider the lone claim remaining. LL